Treasury Wine Estates Limited · ASX:TWE
Treasury Wine Estates — Investor Day (September 2019)
112 slides from Treasury Wine Estates's investor day presentation, May 11, 2020
Slide 1: September 2019 Investor Day Presentation
For personal use only 11 May 2020 ASX ANNOUNCEMENT September 2019 Investor Day Presentation The presentation for the Treasury Wine Estates Ltd (ASX:TWE) September 2019 Investor Day has been relodged with the ASX today to address technical issues inherent in the document that had been initially lodge
Slide 2: 24 September 2019
For personal use only 24 September 2019 P A G E 1
Slide 3: Michael Clarke – Chief Executive Officer
For personal use only Michael Clarke – Chief Executive Officer P A G E 2
Slide 4: Destination Zero Harm – Magill Estate emergency procedures
Destination Zero Harm – Magill Estate emergency procedures For personal use only WE ARE HERE OUR EMERGENCY EVACUATION AREA P A G E 3
Slide 5: Investor Day Agenda
Investor Day Agenda For personal use only 1. Introduction 5. Americas 7. Australia & NZ 10. Investing for Growth 2. The TWE journey 6. North Asia 8. South East Asia 11. Closing 3. People & Culture Break 9. EMEA 4. Brand and Break Portfolio strategy Break P A G E 4
Slide 6: TWE's Strategic Framework
TWE’s Strategic Framework A stable and consistent strategy… driving long term, sustainable value For personal use only To be the world’s most celebrated wine company Together we boldly lead change in the world of wine High Brand-led Priority Long-term Optimised 1 performing 2 portfolio 3 market focu
Slide 7: Our journey
Our journey For personal use only Key takeaways from the 2017 Investor Day ✓ TWE is on a journey from Agri to Brand-led ✓ Our core asset is our organisational talent We are building brand portfolios; one portfolio at a time. TWE now launching French portfolio ✓ Supply will meet demand sustainably, s
Slide 8: Our journey
Our journey Earnings growth, led by premiumisation and cost optimisation, has delivered outstanding returns For personal use only Group NSR (A$m) and NSR per case Group EBITS (A$m) and EBITS margin 2,832 5yr 2,402 2,429 CAGR 2,233 +30% 5yr 1,857 CAGR +21% 5yr CAGR -2% Return on Capital Employed (ROC
Slide 9: Where are we today?
Where are we today? For personal use only Continuing to progress the strengthening of our business via a three phased approach Phase 1: Phase 2: Phase 3: Fixing Growing Accelerating ANZ Asia EMEA Americas Brands People Brands People Brands People Brands People Model Partners Model Partners Model Par
Slide 10: The journey continues
The journey continues For personal use only Taking share in key markets is TWE’s next driver of growth Our strategic priorities Our ambitions, by region Build a focused portfolio of priority brands Australia & NZ: Deliver 25% market share target Drive multi-regional sourcing Americas: Achieve a 25%
Slide 11: People and Culture
People and Culture For personal use only Our people are our greatest assets, embodying the essence of Thinkers, Makers, Doers I CARE RESILIENCE P A G E 1 0
Slide 12: People and Culture
People and Culture A diverse and high calibre global management team For personal use only Executive Leadership Team Michael Clarke Tim Ford Matt Young Angus McPherson Peter Neilson Tom King Chief Executive Chief Operating Chief Financial President, Americas Managing Director, Managing Director Offi
Slide 13: Tim Ford – Chief Operating Officer; Carolyn Coon – Global Director, Corporate Affairs
For personal use only Tim Ford – Chief Operating Officer Carolyn Coon – Global Director, Corporate Affairs P A G E 1 2
Slide 14: Global wine market context
Global wine market context Wine consumption has grown across all regions in recent years1 For personal use only United States Australia China2 Wine 110 Spirits 200 105 Wine 180 105 Spirits Wine 160 100 100 Beer 140 Beer 95 120 95 100 Spirits 90 90 80 Beer 14 15 16 17 18 14 15 16 17 18 14 15 16 17 18
Slide 15: Global wine market context
Global wine market context Premiumisation has been evident globally, and is expected to continue1 For personal use only United States Australia China2 140 140 200 Luxury Luxury 130 130 Masstige 180 Masstige Luxury Commercial 120 120 160 Masstige 110 110 140 100 100 120 Commercial Commercial 90 90 10
Slide 16: TWE's journey to date
TWE’s journey to date Over the past five years we have made substantial changes to strengthen our business models, For personal use only creating a significant competitive advantage •Changed •Acquired •Changed •Changed •Established Penfolds Diageo Wine Canada RTM US RTM Global Release Date Business
Slide 17: TWE's journey from here
TWE’s journey from here We will continue to enhance our business to deliver growth For personal use only • Sustaining organisational system capability • Embedding a culture of care and resilience • Multi-country of origin and adjacent category propositions • Focused portfolio of premium brands • Enh
Slide 18: Sustainability in everything we do
Sustainability in everything we do All decisions we make are to ensure our business is set up for long-term success For personal use only To be the world’s most celebrated wine company Together we boldly lead change in the world of wine High Brand-led Priority Long-term Optimised 1 performing 2 port
Slide 19: Our Environmental, Social and Governance journey
Our Environmental, Social and Governance journey For personal use only Create long term value for TWE and everyone who touches our Company Mission by being sustainable in everything we do Program Pillars Ambition Our stakeholders believe Our environmental impact Our peoples’ human rights, Our wines
Slide 20: Katie Hodgson – General Manager, People & Capability
For personal use only Katie Hodgson – General Manager, People & Capability P A G E 1 9
Slide 21: Thinkers, Makers, Doers
Thinkers, Makers, Doers Our people are our greatest asset, embodying the essence of Thinkers, Makers, Doers For personal use only ESSENCE CULTURAL ATTRIBUTES I CARE RESILIENCE GROWTH BEHAVIOURS P A G E 2 0
Slide 22: Approach to building capability
Approach to building capability A comprehensive approach to building organisational capability to deliver sustained performance; For personal use only the use of head and deputy roles has provided capacity to manage change while delivering growth ▪ Talent attraction ▪ Leadership ▪ Mobilise talent an
Slide 23: Employee development programs
Employee development programs A full suite of development & benefits programs to further invest in our people For personal use only P A G E 2 2
Slide 24: Performance and reward frameworks
Performance and reward frameworks Key performance and reward frameworks to reinforce our culture of high performance For personal use only Long term Annual business remuneration plans performance aligned align employee and to employee reward shareholder interest ✓ Short Term ✓ Long Term Incentive Pl
Slide 25: For personal use only
For personal use only P A G E 2 4
Slide 26: Brand and Portfolio strategy presenters
For personal use only Angus Lilley – Chief Marketing Officer Kristy Keyte – Marketing Director, Penfolds Peter Gago – Chief Winemaker, Penfolds Linnsey Caya – Chief People & Legal Officer P A G E 2 5
Slide 27: Brand Building Strategy
Brand Building Strategy Deliver a world renowned portfolio of profitable brands of scale For personal use only Strategic Priorities 1 Drive premiumisation through a focused portfolio strategy 2 Deliver scalable innovation 3 Pursue opportunities across multiple COOs and adjacent categories 4 Elevate
Slide 28: Brand Driver Model
Brand Driver Model A focused portfolio of brands led by global profit engines, regional priorities and Luxury gems For personal use only CURRENT FUTURE P A G E 2 7
Slide 29: Focus Brands
Focus Brands Regional focus brands prioritise in-market investment and execution For personal use only South East Asia only P A G E 2 8
Slide 30: Structured Approach to Investing in Brands and Markets
Structured Approach to Investing in Brands and Markets Leveraging a strategic approach to marketing investment, centred on brands and anchored in data For personal use only Market Mix Modelling – Brand Lifecycle The TWE Way – Brand Life Cycle Investment Framework Assess Brand Lifecycle Stage and Mar
Slide 31: Category Drivers
Category Drivers Leveraging category drivers derived from data and insights For personal use only P A G E 3 0
Slide 32: Engaging Consumers
Engaging Consumers Execution excellence prioritising investment in campaigns that the consumer sees For personal use only P A G E 3 1
Slide 33: Digital Transformation
Digital Transformation Leveraging the power of digital to enhance consumer engagement and drive transactions For personal use only Innovation Direct to consumer enhancement The connected consumer • Living Wine Labels platform • Improving the e-commerce • Leverage consumer data now available globally
Slide 34: Crimes Digital Campaign
19 Crimes Digital Campaign For personal use only OMNI Channel strategy Driving foot traffic to stores Creative testing • Omnichannel approach including • Use the power of digital to drive • Testing multiple creative offline and online media as well as people to store concepts and formats retailer ch
Slide 35: Penfolds
Penfolds Transition from luxury fine wine brand to global luxury powerhouse For personal use only To make extraordinary wines from the esteemed luxury winemaking regions of the world, that embody the Australian spirit of ingenuity and boldness. The Penfolds COO wine ranges will stand proudly as peer
Slide 36: Penfolds Brand Architecture
Penfolds Brand Architecture Taking the existing portfolio architecture to develop propositions for French and US COO ranges For personal use only Australia COO US COO France COO ICONS ✓ ✓ ✓ LUXURY ✓ ✓ ✓ MAX’s ✓ KOONUNGA HILL ✓ P A G E 3 5
Slide 37: TWE's French COO Architecture
TWE’s French COO Architecture A portfolio of Luxury French wine, crafted to a quality standard across a range of price points For personal use only Iconic Wines from Iconic Chateau the Finest regions Wines excl. 1st Growth Made to Penfolds style with Icon wines focused Classified Growths in Bordeaux
Slide 38: Protecting Our Brands
Protecting Our Brands TWE’s market leading intellectual property protection program For personal use only A market leading IP protection program Key Pillars Partnerships & Accolades IP protection is a top global ▪ Robust and sophisticated market ▪ Member of key anti-counterfeiting priority for TWE:
Slide 39: Protecting Our Brands
Protecting Our Brands China has been a key territory for TWE’s intellectual property protection program For personal use only Recent Highlights1 158 raids, including 4 multi-region enforcements Investigations and Raids 5 Chinese customs interceptions More than 80 arrests with 43 criminal sentences C
Slide 40: Protecting Our Brands: Multi-regional enforcement
Protecting Our Brands Case Study: Multi-regional enforcement For personal use only Criminal sentences pending Suspicious target Alibaba is engaged Case is reported Beijing Police Police initiated a identified by TWE to run ‘big data’ to Beijing Police coordinated an coordinated raid against via test
Slide 41: For personal use only
For personal use only P A G E 4 0
Slide 42: Americas
For personal use only Americas Victoria Snyder – President Americas Angus McPherson – President, Americas & Global Sales P A G E 4 1
Slide 43: Americas market context
Americas market context Large wine market dominated by Commercial, but seeing continued premiumisation growth For personal use only The Americas is the largest wine market globally1 The US remains the dominant COO consumed in the US, with Italian leading imports2 Market value Market volume 8% 8% Oth
Slide 44: TWE's competitive position
TWE’s competitive position Luxury and Masstige brand strength provide opportunity to take share For personal use only Insights and opportunities to harness TWE is the 5th largest wine supplier in the US1 ▪ Growing consumer confidence is encouraging consumers to seek premium brands Gallo 18.6% Conste
Slide 45: Our ambition for the Americas
Our ambition for the Americas Deliver a 25% EBITS margin For personal use only 19% EBITS 25% EBITS margin margin 1 Drive Luxury and explode Masstige 2 Deliver disruptive marketing and digital transformation 3 Be customer obsessed across all channels to grow availability and distribution P A G E 4 4
Slide 46: Key supporting strategic imperatives
Key supporting strategic imperatives Driving Masstige and Luxury growth through disruptive marketing and our enhanced RTM model For personal use only 1 Drive Luxury and explode Masstige • Luxury sales team to drive distribution and link DTC and trade channels • High growth Masstige brands and scaled
Slide 47: Drive Luxury and explode Masstige
Drive Luxury and explode Masstige Luxury wine education and tasting events For personal use only P A G E 4 6
Slide 48: Drive Luxury and explode Masstige
Drive Luxury and explode Masstige Luxury brand support; Wine Spectator advert highlighting impressive wine critic scores For personal use only P A G E 4 7
Slide 49: Drive Luxury and explode Masstige
Drive Luxury and explode Masstige Scaled Masstige innovation and activation For personal use only Sterling sponsorship of the Emmys. Leveraging Bourbon Heritage Month with Beringer Bros. St Huberts The Stag eye-catching in-store displays. P A G E 4 8
Slide 50: Drive Luxury and explode Masstige
Drive Luxury and explode Masstige Focus brands have delivered strong performance over the past 3 years1 For personal use only Celebration Up c.118% VINTNERS COLLECTION Refreshment Up c.60% Discovery Up >3 times Discovery Up c.52%2 Discovery More than doubled in size 3 Premiumisation Up c.10% 1 F16 t
Slide 51: Deliver disruptive marketing
Deliver disruptive marketing Sterling packaging innovation and Matua ‘Ready to Chill’ campaign For personal use only P A G E 5 0
Slide 52: Be customer obsessed: route-to-market transformation
Be customer obsessed: route-to-market transformation A key pillar to delivering our medium-term 25% EBITS margin ambition For personal use only Status Direct model (CA, WA) • Retail chains ‒ Dedicated sales and merchandising teams driving improved execution ‒ Positive, closer relationships with reta
Slide 53: Be customer obsessed
Be customer obsessed Collaborative partnership with retailers in California driving strong growth for 19 Crimes For personal use only P A G E 5 2
Slide 54: Sustainable inventory and channel management
Sustainable inventory and channel management Monthly depletions, shipments and inventory monitoring For personal use only • Customers provide inventory and depletions data • Monthly report monitors depletions performance across countries, channels, products and individual customers • Reviewed with d
Slide 55: For personal use only
ANY PICS OF WINE CELEBRATORY OCCASION? For personal use only P A G E 5 4
Slide 56: Tom King – Managing Director, North Asia
For personal use only Tom King – Managing Director, North Asia Jack Wu – General Manager, China P A G E 5 5
Slide 57: North Asia market context
North Asia market context Market dynamics remain attractive for TWE’s premium portfolio For personal use only North Asia imported wine market1 Chinese wine accounts for ~60% of sales …French and Australian COOs lead the volume in China2… China imported wine category2 Value Volume 7% 8% 5% 5% Other 1
Slide 58: TWE's competitive position
TWE’s competitive position TWE sees strong opportunity to take share in North Asia1 For personal use only Insights and opportunities to harness TWE 3.4% ▪ Legal drinking age population is increasing TWE 3.9% ▪ Economic growth and an expanding middle class Concha y 2.8% Toro Concha y 1.9% ▪ Booming e
Slide 59: TWE's competitively advantaged operating model
TWE’s competitively advantaged operating model An efficient China route-to-market driving value for TWE, its customers and the consumer For personal use only Négociant3 Margin up to 25%2 Margin up to 60%2 National Distributor Wholesaler (including SOE’s4) Retailer/E-Commerce On-Premise 1 Indicative
Slide 60: Our ambition for North Asia
Our ambition for North Asia Extend leadership as the number 1 imported wine company, by volume and value For personal use only #1 by volume1 Further expanded #1 by value leadership position 1 Expand multi-country of origin portfolio 2 Drive breadth and depth of availability of distribution 3 Strengt
Slide 61: Key supporting strategic imperatives
Key supporting strategic imperatives We will build a multi-country of origin Luxury portfolio, and drive growth with priority partners For personal use only 1 Expand multi-country of origin portfolio ▪ Strengthened Penfolds brand equity through sustained investment and innovation ▪ Australian portfo
Slide 62: Expand multi-country of origin portfolio
Expand multi-country of origin portfolio Continued focus on elevating Penfolds For personal use only P A G E 6 1
Slide 63: Expand multi-country of origin portfolio
Expand multi-country of origin portfolio Activation against key Australian brands, Wolf Blass and Rawson’s Retreat For personal use only P A G E 6 2
Slide 64: Expand multi-country of origin portfolio
Expand multi-country of origin portfolio Building our French portfolio credentials For personal use only MDGE Design Beijing Partnership MDGE GTR shop window display P A G E 6 3
Slide 65: Three-pronged China RTM model to drive distribution
Three-pronged China RTM model to drive distribution Supported by people and process enablers For personal use only 1 ▪ 40 focus cities, 200 cities in total ▪ Focus on distribution breadth and availability within cities 3 2 People Process ▪ Capability ▪ Expanded investment warehouse model ▪ Right str
Slide 66: PLACES: priority cities across four China regions
1. PLACES: 40 priority cities across four China regions Each region has a ‘hub city’ For personal use only Hub city: Beijing Hub city: Chengdu Hub city: Shanghai Hub city: Guangzhou P A G E 6 5
Slide 67: PORTFOLIO: A focused portfolio of priority brands
2. PORTFOLIO: A focused portfolio of priority brands The China ‘Great 8’ priorities For personal use only P A G E 6 6
Slide 68: Sustainable inventory and channel management
Sustainable inventory and channel management Monthly depletions, shipments and inventory monitoring For personal use only • Customers provide inventory and depletions data • Monthly report monitors depletions across countries, channels, products and individual customers • Reviewed at the Executive L
Slide 69: For personal use only
For personal use only P A G E 6 8
Slide 70: Peter Neilson – Managing Director, ANZ
For personal use only Peter Peter Neilson Neilson –– Managing Managing Director Director,ANZ ANZ P A G E 6 9
Slide 71: ANZ market context
ANZ market context Premiumisation and refreshment driving value growth For personal use only The Australian wine market is the 10th largest, globally1 Australian COO dominates the category1 Market value Market volume 2% 2% 13% 12% 3% 3% Other 11% 11% Italian French New Zealand $7.2b 58.6 m (9Le) Aus
Slide 72: TWE's competitive position
TWE’s competitive position TWE has more than double the share of the next largest supplier, excluding private label1 For personal use only Insights and opportunities to harness ▪ Premiumisation continues TWE 22.7% TWE 21.8% ▪ Preference for light and refreshing drinks ▪ Growth of rosé, chardonnay an
Slide 73: Our ambition for ANZ
Our ambition for ANZ We continue to target 25% market share in Australia For personal use only 22% Market Share1 25% Market Share 1 Be category led and consumer focused 2 Transform our portfolio 3 Prioritise strategic partnerships 1 IRI MarketEdge Weighted data to: 30 June 2019. Australia Bottled an
Slide 74: Key supporting strategic imperatives
Key supporting strategic imperatives A focus on consumer insights driven decision making For personal use only 1 Be category led and consumer focused ▪ Organisation structure and decision making centered on category growth strategy ▪ Access to technology and insights to extend knowledge of shopper j
Slide 75: Be category led and consumer focused
Be category led and consumer focused Key brand performance For personal use only 1 Connection Up 12% Refreshment More than tripled in size Discovery Up by 15 times Discovery Up by 8 times Premiumisation Up 28% Refreshment More than doubled in size P A G E 7 4 1 F16 to F19 volume growth.
Slide 76: Be category led and consumer focused
Be category led and consumer focused Partnerships to increase access to data and insights For personal use only P A G E 7 5
Slide 77: Transform our portfolio
Transform our portfolio Investment in our Luxury portfolio For personal use only P A G E 7 6
Slide 78: Yodi Mootoosamy – General Manager, South East Asia
For personal use only Yodi Mootoosamy – General Manager, South East Asia P A G E 7 7
Slide 79: South East Asia market context
South East Asia market context Smaller market with strong growth potential For personal use only South East Asia imported wine market1 Premium price points have outperformed2 Value Volume Penetration 140 130 Luxury 120 Masstige 110 Commercial $2.6b 8m (9Le) 16m wine 100 +9% PY +5%PY drinkers +4.5%PY
Slide 80: TWE's competitive position
TWE’s competitive position TWE is the leading imported wine company in South East Asia1 For personal use only Insights and opportunities to harness2 TWE 6.8% TWE 8.7% ▪ Access to the high-growth tourism sector ▪ Growing on-premise channel Gallo 6.7% Pernod 4.8% ▪ Increasing popularity of wine across
Slide 81: Our ambition for South East Asia
Our ambition for South East Asia Expanded #1 wine importer position in South East Asia For personal use only #1 by volume1 Further expanded #1 by value leadership position 1 Build consumer demand-driven model 2 Optimise and expand routes-to-market 3 Increase portfolio profitability 1 IWSR 2019. Stil
Slide 82: Key supporting strategic imperatives
Key supporting strategic imperatives Localised plans and optimised RTMs for priority markets and brands For personal use only 1 Build consumer demand-driven model ▪ Insight-led market by market plans to drive domestic demand ▪ Resources and investment to drive consumer pull ▪ Consumer A&P focused on
Slide 83: Build consumer demand-driven model
Build consumer demand-driven model Matua brand activations anchored to Refreshment For personal use only P A G E 8 2
Slide 84: Increase portfolio profitability
Increase portfolio profitability Supporting growth of Luxury and Masstige brands For personal use only P A G E 8 3
Slide 85: Michelle Brampton – Managing Director, EMEA
For personal use only Michelle Brampton – Managing Director, EMEA P A G E 8 4
Slide 86: UK market context
UK market context Large mature market with opportunities in premium price points For personal use only UK wine market1 Australian and Italian wine leading imports into the UK UK2 Europe3 Value Volume 100% 100% 90% 90% 30% 31% 80% 40% 41% 80% Other Other 70% 70% 9% 9% Spanish 60% German 60% 12% 12% 1
Slide 87: TWE's competitive position
TWE’s competitive position TWE is the third largest supplier in the UK, with premiumisation an opportunity to grow share1 For personal use only Insights and opportunities to harness ▪ Brexit uncertainty Private label 25.5% Private label 23.7% ▪ Premiumisation trend evident across Europe ▪ Consumptio
Slide 88: Our ambition for EMEA
Our ambition for EMEA Delivering EBITS margin accretion For personal use only Mid-teens 15% EBITS EBITS margin margin maintained 1 Step-change Luxury and develop multi-COO brands 2 Become category and consumer led 3 Win in priority markets P A G E 8 7
Slide 89: Key supporting strategic imperatives
Key supporting strategic imperatives Step-changing our portfolio to capitalise on category growth in key markets For personal use only 1 Step-change Luxury and develop multi-COO brands ▪ Prioritised countries, cities and optimal RTMs to unlock Luxury growth ▪ Evolved organisational structure and cap
Slide 90: Step-change Luxury and develop multi-COO brands
Step-change Luxury and develop multi-COO brands Luxury portfolio brand activations For personal use only Penfolds Beaulieu Collection Vineyard preview winemaker tour Penfolds Thienot x Grange Penfolds masterclass champagne launch P A G E 8 9
Slide 91: Step-change Luxury and develop multi-COO brands
Step-change Luxury and develop multi-COO brands Squealing Pig Globe Trotter NPD, a multi-COO proposition sourced from five countries For personal use only P A G E 9 0
Slide 92: Become category and consumer led
Become category and consumer led Brand activations against category growth drivers For personal use only Refreshment Reward Discovery P A G E 9 1
Slide 93: For personal use only
For personal use only P A G E 9 2
Slide 94: Matt Young – Chief Financial Officer
For personal use only Matt Young – Chief Financial Officer P A G E 9 3
Slide 95: TWE's value chain
TWE’s value chain Leveraging an optimised value chain to deliver strong and sustainable returns For personal use only + = Brand building across Capital Light Model, Revenue CAGR a focused portfolio including third party +11% sourcing Advantaged business models, focused on Revenue per 9LE self-distri
Slide 96: TWE's Capital Management Framework
TWE’s Capital Management Framework Disciplined capital management is a key to driving TWE’s sustainable success For personal use only Investment grade credit profile ▪ Net debt to EBITDAS up to 2.0x through the cycle and up to 2.5x for strategic initiatives ▪ Underpins TWE’s investment grade capital
Slide 97: Investment in Luxury Inventory
Investment in Luxury Inventory Age of release profiles across TWE’s product portfolio indicate typical inventory hold times1 For personal use only Lindeman’s Wolf Blass Wynns John 19 Crimes Sterling Vintners Beringer Penfolds Penfolds Bin 65 Red Label Cabernet Riddoch Cabernet The Warden Collection
Slide 98: Premiumising Inventory
Premiumising Inventory We have been successful in building the premium inventory position as a key enabler of growth For personal use only P A G E 9 7
Slide 99: China business model
China business model Accelerated growth in Asia, through the container model, has impacted cash conversion to date For personal use only ▪ FOB sale from TWE Australia to Customer ▪ Direct sales from TWE Shanghai to Customer ▪ Shipping time ranges from four to eight weeks ▪ Transportation time one to
Slide 100: US route-to-market changes
US route-to-market changes For personal use only ▪ TWE’s route to market changes in the US have resulted in approximately 25% of sales going through a self-distributed, direct to National Distributor retailer model ▪ By selling direct to a retailer, TWE effectively holds inventory longer, resulting
Slide 101: Benchmarking performance
Benchmarking performance Key metrics reflect TWE’s strong fundamentals in comparison to peers For personal use only Luxury & Revenue – 5 Year CAGR Masstige EBITS – 5 Year CAGR CAGR TWE 21% TWE Quartile 1 Quartile 1 Wine Wine Median Median Quartile 3 Quartile 3 Quartile 1 Quartile 1 Spirits Spirits M
Slide 102: Capital Management Performance
Capital Management Performance Disciplined capital management a hallmark of TWE’s success For personal use only Net Debt to EBITDAS – Last Financial Year Cash Conversion – 5 Year Average TWE TWE Quartile 1 Quartile 1 Wine Wine Median Median Quartile 3 Quartile 3 Quartile 1 Quartile 1 Spirits Spirits
Slide 103: Capital Management Performance
Capital Management Performance Disciplined capital management a hallmark of TWE’s success For personal use only Net Debt to EBITDAS – Last Financial Year Cash Conversion – 5 Year Average TWE TWE Quartile 1 Quartile 1 Wine Wine Median Median Quartile 3 Quartile 3 Quartile 1 Quartile 1 Spirits Spirits
Slide 104: Premium returns
Premium returns Premiumisation is delivering leading returns, but requires upfront capital investment For personal use only 400.0 80.0% 60.0% 300.0 40.0% Annual 200.0 Return 20.0% Per case metrics: 100.0 0.0% 0.0 -20.0% Working Long- capital -40.0% term -100.0 Capital1 Fixed -60.0% Capital -200.0 -8
Slide 105: Investment priorities
Investment priorities The next phase of premiumisation will be supported by Luxury production investments For personal use only ▪ Strong growth trends for TWE’s Luxury portfolio ▪ Winery and vineyard assets acquired in Bordeaux, support investment in new supply asset to increase France capacity and
Slide 106: The premiumisation opportunity
The premiumisation opportunity TWE’s Luxury and Masstige growth rates provide a marker for the future potential from premiumisation For personal use only Luxury & 5yr CAGR (F14 to F19) TWE Masstige Volume +16% +3% Net Sales Revenue +21% +11% Gross Profit +25% +17% EBITS N/A1 +30% Luxury and Masstige
Slide 107: For personal use only
For personal use only P A G E 1 0 6
Slide 108: Michael Clarke – Chief Executive Officer
For personal use only Michael Clarke – Chief Executive Officer P A G E 1 0 7
Slide 109: Investor Day 2019: Key takeaways from the day
Investor Day 2019 Key takeaways from the day For personal use only TWE has the team, the capability and the culture to continue delivering strong growth Global category fundamentals remain attractive, particularly at premium price points Premiumisation remains a priority, led by a portfolio of focus
Slide 110: For personal use only
For personal use only P A G E 1 0 9
Slide 111: Definitions
Definitions Term Definition For personal use only AOC Appellation d'origine controlee (appellation within France) CAGR Compound Annual Growth Rate CODB Cost of Doing Business COO Country of Origin Commercial Wine Wine that is sold at a price point below $10 per bottle Depletion Depletions refer to v
Slide 112: Disclaimer
Disclaimer For personal use only Summary information The material in this presentation is summary information about Treasury Wine Estates Limited (TWE) and its subsidiaries and their activities, current as at the date of this presentation unless otherwise stated. It should be read in conjunction wit
Treasury Wine Estates — Investor Day (September 2019) on 6ix