Treasury Wine Estates Limited · ASX:TWE
Treasury Wine Estates — Investor Day (March 2017)
127 slides from Treasury Wine Estates's investor day presentation, Mar 10, 2017
Slide 1: From Agri to Brand-led: TWE's Inaugural Investor Day, 2017
For personal use only FROM AGRI TO BRAND-LED TWE’s Inaugural Investor Day, 2017 1
Slide 2: From Agricultural to Brand-led
For personal use only From Agricultural to Brand-led Michael Clarke – Chief Executive Officer 2
Slide 3: Key takeaways from today
TWE’s journey from Agri to Brand-led Key takeaways from today For personal use only 1 TWE is on a journey from Agri to Brand-led 2 Our core asset is our organisational talent 3 We are building brand portfolios; one portfolio at a time. TWE launching French portfolio 4 Supply will meet demand sustain
Slide 4: TWE's strategic framework
TWE’s journey from Agri to Brand-led TWE’s strategic framework For personal use only To be the world’s most celebrated wine company To move from an order-taking agricultural business to a brand-led organisation Build a high Develop Transform our Win in priority Optimise our performing long-term port
Slide 5: Our journey and achievements to date
TWE’s journey from Agri to Brand-led Our journey and achievements to date For personal use only FROM: TO: Order-taking, agricultural model Brand-led with sustainable and balanced delivery SHIPMENT FOCUS STRATEGIC SHORT TERM INNOVATION PARTNERSHIPS PROFITABILITY I N E F F I C I E N T DEPLETIONS LOW A
Slide 6: Positioning all four regions for sustainable growth
TWE’s three-phased journey from Agri to Brand-led Positioning all four regions for sustainable growth For personal use only Phase 1: Phase 2: Phase 3: Fixing Growing Accelerating ANZ Asia Europe Americas Growing sustainable share in #1 imported wine business in An optimised business delivering From
Slide 7: The journey – past, present and future
TWE’s three-phased journey from Agri to Brand-led The journey – past, present and future For personal use only F14 F15 F16 F17 F18 F19 F20 Inventory write Special Continue SDA SDA hangover Rebuild US Balanced V16 sales off Depletions availability business Allowance Start Integrate Ongoing Sales (SDA
Slide 8: Key takeaways from today
TWE’s journey from Agri to Brand-led Key takeaways from today For personal use only 1 TWE is on a journey from Agri to Brand-led 2 Our core asset is our organisational talent 3 We are building brand portfolios; one portfolio at a time. TWE launching French portfolio 4 Supply will meet demand sustain
Slide 9: From Bud to Fruit
For personal use only From Bud to Fruit Megan Collins – Chief People & Communications Officer 9
Slide 10: Selecting the right bottle of wine
From bud to fruit Selecting the right bottle of wine For personal use only Varietal Packaging Awards & Scores S Red Shiraz Pinot P Cabernet Sauvignon Merlot Syrah Noir A R ‘World’s most ‘Red Winemaker of R e d B l e n d Chardonnay the Year’ Rose Sauvignon Blanc Riesling Pinot Gris K L admired wine b
Slide 11: Terroir
From bud to fruit Terroir For personal use only Climate Terrain Soil 11
Slide 12: TWE's terroir in 2013
From bud to fruit TWE’s terroir in 2013 For personal use only 12
Slide 13: What was it like working at TWE four years ago?
TREASURY WINE ESTATES What was it like working at TWE four years ago?
Slide 14: Resetting the terroir
From bud to fruit Resetting the terroir For personal use only 14
Slide 15: Resetting the terroir
From bud to fruit Resetting the terroir For personal use only 15
Slide 16: TWE's core growth behaviours
From bud to fruit TWE’s core growth behaviours 4 key growth behaviours the key enabler of TWE’s financial outperformance For personal use only BELIEF in our wines, our FOCUSED on top Build TRUST by acting with COLLABORATE with all company and our PEOPLE priorities INTEGRITY and stakeholders ACCOUNTA
Slide 17: At TWE, everyone is a leader
From bud to fruit At TWE, everyone is a leader For personal use only TWE’s Leadership Capability Framework Building authentic, self-aware Consistent communication of TWE’s resilient leaders who encourage a strategy to enhance employee safety culture engagement; encouraging innovation and being adapt
Slide 18: TWE's Talent Framework
From bud to fruit We constantly talk about talent…opportunistically and in structured talent reviews For personal use only TWE’s Talent Framework 1. PERFORMANCE 2. POTENTIAL 3. READINESS Delivery against agreed The capacity to deal Readiness for progression, deliverables and expected effectively wit
Slide 19: Buy, develop and re-build our capability
From bud to fruit Buy, develop and re-build our capability For personal use only Buy … de-risk the business Develop … build capability for the future Rebuild … define the new normal 19
Slide 20: Rewarding, retaining and attracting outperformers
From bud to fruit Rewarding, retaining and attracting outperformers For personal use only Annual business performance Long term business performance aligned with employee reward… aligns employees’ financial interests with the financial interests of shareholders … HIGHEST REWARDS FOR OUTPERFORMERS SH
Slide 21: Active investment in growing employee capability
From bud to fruit Active investment in growing employee capability, now and for the future For personal use only LEADERSHIP & PERSONAL DEVELOPMENT FUNCTIONAL CAPABILITY PROGRAMS Commercial Partnering Building Business Acumen® (BBA) 14 21
Slide 22: Our focus and investment in People
From bud to fruit Our focus and investment in People – an enabler of our results For personal use only To be the world’s most celebrated wine company To move from an order-taking agricultural business to a brand-led marketing organisation Build a high Develop Transform Win in priority Optimise our p
Slide 23: What is it like working at TWE now?
TREASURY WINE ESTATES What is it like working at TWE now? @1we
Slide 24: Questions
24 For personal use only QUESTIONS
Slide 25: Key takeaways from today
TWE’s journey from Agri to Brand-led Key takeaways from today For personal use only 1 TWE is on a journey from Agri to Brand-led 2 Our core asset is our organisational talent 3 We are building brand portfolios; one portfolio at a time. TWE launching French portfolio 4 Supply will meet demand sustain
Slide 26: Rebuilding TWE; One Portfolio at a Time
For personal use only Rebuilding TWE; One Portfolio at a Time Simon Marton – Chief Marketing Officer 26
Slide 27: Wine is growing share of total alcohol globally
Wine is growing share of total alcohol globally1 For personal use only 2016 2016 2016 11.8 Litres per capita2 26.8 Litres per capita2 2.1 Litres per capita2 1. Trend data per Euromonitor InternationaslAlcoholic Drinks Overview by Market, September 2015, Value data per Euromonitor International, 2014
Slide 28: When we began our journey, we were focusing on too many brands
When we began our Journey 3 years ago, we were focusing on too many brands For personal use only 28
Slide 29: Focused portfolio of priority brands
We have moved to a focused portfolio of 15 priority brands to maximise global growth For personal use only Luxury Centre of Gravity Masstige Centre of Gravity Commercial Centre of Gravity 29
Slide 30: Clear segmentation and investment tactics
With clear segmentation and associated investment tactics For personal use only BRAND GROUPS POWER BRANDS PRIORITY BRANDS LUXURY GEMS BRANDS Take a portfolio approach. Focus on PR INVESTMENT Deliver 360° investment plans, Invest in outstanding packaging, and 90+ platform to leverage scores/ TACTICS
Slide 31: Key strategies to deliver growth and margin accretion
We have focused on key strategies to deliver this result For personal use only Global Umbrella Engaging consumers Multi Regional Creating Apparent Innovation Brands across all channels Sourcing Scarcity • Capture Multiple • Disciplined • Keep our Brands • Improve consumer allocations process Consume
Slide 32: Rebuilding TWE's brands – one portfolio at a time
Rebuilding TWE’s brands – one portfolio at a time For personal use only Penfolds ANZ Brands Portfolio US Brands Portfolio New 4th Portfolio 32
Slide 33: Rebuilding TWE's brands – Penfolds
Rebuilding TWE’s brands – Penfolds For personal use only Brand potential limited • Limited by Mar/May release • Selling everything in Q4 every year with nothing held back for future • Poor pricing behaviours • Heavy reliance on few countries • Asia not being realised • Under investment in recruitmen
Slide 34: Penfolds – incredible global potential now being realised
Penfolds – incredible global potential now being realised For personal use only Fixing Growing Accelerating Unlocking the brand Luxury brand building and global expansion Exploding brand value globally • Change to October release • Every case allocated and pricing optimised • Introducing new proprie
Slide 35: Rebuilding TWE's brands – ANZ Portfolio of Brands
Rebuilding TWE’s brands – ANZ Portfolio of Brands For personal use only Brand potential limited • Wolf Blass – stalled growth, needed revitalisation • Lindeman's – mature brand in commercial segment • Wynns – constrained supply, needed growth model • Matua – innovating for growth • 19 Crimes – categ
Slide 36: Wolf Blass – previously underinvested, now overhauled
Wolf Blass – previously underinvested, now fully overhauled and delivering For personal use only Fixing Growing Accelerating Repositioned and reconnected Innovation and expansion of sports platform Amplifying assets with increased spend • New positioning • BLASS launch • Strategic use of sponsorship
Slide 37: 19 Crimes – an overnight success, years in the making
19 Crimes – an overnight success, 5 years in the making For personal use only Launch Growing Accelerating Millennial Disruption Rapid distribution and sales growth Rapid expansion of growth model • First launched in Canada • Built from North East and going west • Launched The Banished Dark Red Blend
Slide 38: Rebuilding TWE's brands – Regional Gems
Rebuilding TWE’s brands – Regional Gems For personal use only 38
Slide 39: Rebuilding TWE's brands – US Portfolio of Brands
Rebuilding TWE’s brands – US Portfolio of Brands For personal use only Brand potential limited • Beringer – over extended brand architecture needed fixing • BV – over extended brand architecture needed fixing • Sterling Vineyards – had lost it’s shine • Chateau St Jean – de-positioned and outcompete
Slide 40: Beringer & Beaulieu Vineyards – brand separation and pack upgrades
Beringer & Beaulieu Vineyards – brand separation and pack upgrades For personal use only 40
Slide 41: Sterling Vineyards – reinvented
Sterling Vineyards – reinvented, now polished with premium potential Fixing Growing For personal use only Complete brand overhaul Set to shine • Redefined brand positioning and new advertising campaign • All luxury wines now globally allocated and price optimised • Incredible standout new packaging
Slide 42: Rebuilding our portfolio – Multiple Region Sourcing
Rebuilding our portfolio – Multiple Region Sourcing For personal use only Coldstream Hills Etude St Huberts The Stag Lindeman's Gentlemen's Blossom Hill Truvee Collection 42
Slide 43: Investment choices continuously improving returns
It is critical that our investment choices are continuously improving returns and we measure this rigorously For personal use only Our objectives are both measurable outcomes or lead predictors LONG TERM PLANNING CATEGORY OBJECTIVES BRAND OBJECTIVES FINANCIAL OBJECTIVES AND VISION PORTFOLIO SHAPING
Slide 44: F16 example of long term integrated planning
F16 example of our long term integrated planning as the centrepiece of rebuilding the portfolio For personal use only F17 F18 Mar Apr May June July Aug Sept Oct Nov Dec Jan Feb Mar Apr Forecast April GMBR Oct FI/GMBR Jan FI/GMBR Apr FI/GMBR June PMR Mar PMR Sept PMR Dec PMR Mar PMR PMR F19 Regional
Slide 45: Rebuilding TWE's brands – adding a 4th portfolio
Rebuilding TWE’s brands – adding a 4th portfolio to TWE For personal use only New 4th Portfolio 45
Slide 46: New proposition to disrupt French category
Rebuilding TWE’s brands – new proposition to disrupt French category For personal use only A new TWE brand that breaks the traditional mould of the French category, developed with North Asia markets in mind, globally relevant with scalable supply, will be launched in 1H18. Margin accretive to TWE po
Slide 47: Our brands are desired around the world for quality and trust
So in summary, our brands are desired around the world for quality and trust, ultimately delivering profitable growth For personal use only We have a proven and repeatable strategy that builds portfolios of brands We have embedded discipline & rigour We are creating long term value, by not cha
Slide 48: Questions
48 For personal use only QUESTIONS
Slide 49: Key takeaways from today
TWE’s journey from Agri to Brand-led Key takeaways from today For personal use only 1 TWE is on a journey from Agri to Brand-led 2 Our core asset is our organisational talent 3 We are building brand portfolios; one portfolio at a time. TWE launching French portfolio 4 Supply will meet demand sustain
Slide 50: Supply Will Meet Demand; Sustainably, Safely & Simply
For personal use only Supply Will Meet Demand; Sustainably, Safely & Simply Tim Ford – Director of Supply Chain & Industry Affairs 50
Slide 51: TWE operates a world class supply chain model
Supply will meet demand sustainably, safely and simply TWE operates a world class supply chain model For personal use only United States Australia New Zealand Italy 48 Vineyards 78 Vineyards 8 Vineyards 2 Vineyards 4,000 Planted hectares1 8,939 Planted hectares1 339 Planted hectares1 145 Planted hec
Slide 52: Destination Zero Harm
Supply will meet demand sustainably, safely and simply Destination Zero Harm For personal use only Safe systems Safe plant and equipment Safe people Every employee goes home safe, everyday 52
Slide 53: Brand Accolades
Supply will meet demand sustainably, safely and simply Brand Accolades TWE’s focus on quality and consistency underpins dominance in national and international wine For personal use only shows, with 57 trophies awarded in 2016 ‘World’s Most Admired Wine Brand’ International Wine Competition (IWC) ‘R
Slide 54: Driving revenue and cost synergies through scalability and flexibility
Supply will meet demand sustainably, safely and simply Driving revenue and cost synergies through scalability and flexibility Flexible sourcing and production model For personal use only Bulk wine, External grape and shifts outsource DEMAND processing Additional shifts Bulk wine TWE will adjust its
Slide 55: Supply Chain Optimisation
Supply will meet demand sustainably, safely and simply Supply Chain Optimisation; delivering margin accretion and optimised capital employed For personal use only Supply chain optimisation review Vineyards and sourcing At least Divestment Shift sourcing for Commercial fruit to US$35m of non-core A$1
Slide 56: Project Uplift II
Supply will meet demand sustainably, safely and simply Project Uplift II For personal use only Incremental access to Luxury and Masstige Owned vineyard yield optimisation supply Viticultural excellence is improving TWE’s yield and access Organic options include: to Luxury and Masstige supply, global
Slide 57: Project Uplift II – fruit grade conversion and margin optimisation
Supply will meet demand sustainably, safely and simply Project Uplift II For personal use only Fruit grade conversion Portfolio margin optimisation Luxury Napa Cabernet strategy Minimising grade slippage through continuous improvement of fruit grade conversion between Redirect scarce fruit supply to
Slide 58: Capital Expenditure
Supply will meet demand sustainably, safely and simply Capital Expenditure Capex to achieve acquisition For personal use only Vineyards Wineries and Packaging synergies Ongoing winery and packaging $80m capex spend in F17 to consolidation through SCOR and continual optimisation of TWE’s realise run
Slide 59: Sustainability in everything we do
Sustainability in everything we do Our responsibility; making a positive contribution to our global community For personal use only Sustainable supply and sourcing Responsible consumption Community involvement Independent sustainability Alcohol education and responsibility Corporate volunteering cer
Slide 60: Summary of key takeaways
Supply will meet demand sustainably, safely and simply Summary of key takeaways For personal use only TWE produces world class wines of quality that delight consumers – and TWE will continue to have quality at the heart of what is done in every region Destination Zero Harm, a people-focused, behavio
Slide 61: Questions
61 For personal use only QUESTIONS
Slide 62: Key takeaways from today
TWE’s journey from Agri to Brand-led Key takeaways from today For personal use only 1 TWE is on a journey from Agri to Brand-led 2 Our core asset is our organisational talent 3 We are building brand portfolios; one portfolio at a time. TWE launching French portfolio 4 Supply will meet demand sustain
Slide 63: Driving Value Creation and EBITS Margin accretion
For personal use only Driving Value Creation and EBITS Margin accretion; with a bedrock of strong controls and disciplined capital structure Gunther Burghardt – Chief Financial Officer 63
Slide 64: Relentless focus on continuing EBITS margin expansion
Driving value creation and EBITS margin accretion TWE’s relentless focus on continuing EBITS margin expansion For personal use only TWE is targeting long-term sustainable EBITS margin expansion Levers to continual EBITS margin expansion include; 1 Revenue Management • Re-allocation of Luxury & Masst
Slide 65: TWE's cycle of optimising value
Driving value creation and EBITS margin accretion TWE’s cycle of optimising value For personal use only 5 Year Strategy Long Term Margin Accretion Roadmap 5 year roadmap of brand tiers pricing and margin across key markets Long Term Demand In market pricing 5 year demand planning evolution and execu
Slide 66: Statistical pricing and promotion analysis
Driving value creation and EBITS margin accretion Leveraging statistical pricing and promotion analysis to drive value accretion for TWE and its customers For personal use only Price Elasticity Curves Market Share Analysis by price point and varietal – Predictive analysis Determines TWE’s share acro
Slide 67: Embedding balance and sustainability into regions, sourcing and delivery
Driving value creation and EBITS margin accretion Embedding balance and sustainability into TWE’s regions, sourcing and quarterly delivery Capitalising and winning in high growth Luxury / Masstige For personal use only Driving balance across regions and country-of-origin (COO) segments, globally 1H1
Slide 68: Optimising capital structure
Driving value creation and EBITS margin accretion Optimising capital structure For personal use only Credit profile and capital structure Financial Risk Management Framework Maintain Balance Sheet metrics consistent with an Minimise liquidity and financing risk investment grade credit profile: O
Slide 69: TWE's journey to ROCE > WACC
Driving value creation and EBITS margin accretion TWE’s journey to ROCE > Short term/ Long term WACC For personal use only Balance Sheet strategy to optimise WACC while ensuring efficient access to capital through the cycle ROCE Pre Tax Long Term WACC Pre Tax Short Term WACC FY 1H FY 1H FY 1H FY 1H
Slide 70: Global IT systems and enhanced controls
Driving value creation and EBITS margin accretion Global IT systems and enhanced controls processes delivering long term sustainable results For personal use only Creating a fit for purpose global IT system Americas1 Europe Asia ANZ August 2016 October 2016 Q4 F17 Q4 F17 • TWE rolling out a harmoniz
Slide 71: Summary
Summary Top 5 takeaways for on how TWE will drive value while managing capital and risk effectively For personal use only We know the “levers” in our business and P&L which will drive sustainable long term EBITS margins Allocation of fruit and wines in our portfolio to “highest value use” and across
Slide 72: Questions
72 For personal use only QUESTIONS
Slide 73: Key takeaways from today
TWE’s journey from Agri to Brand-led Key takeaways from today For personal use only 1 TWE is on a journey from Agri to Brand-led 2 Our core asset is our organisational talent 3 We are building brand portfolios; one portfolio at a time. TWE launching French portfolio 4 Supply will meet demand sustain
Slide 74: Growing Sustainable Share in a Mature Market
For personal use only Growing Sustainable Share in a Mature Market Angus McPherson – Managing Director, ANZ 74
Slide 75: Australian Wine Category
Australian Wine Category Australian wine market is mature, but opportunities for volume and value growth exist Total Bottled Wine Market TWE clear #1 player by volume and value1 For personal use only TWE, 21% TWE, 21% Industry Value Industry Volume Private Label, 14% Private Label, 19% Pernod Ricard
Slide 76: Australian Wine Consumer
Australian Wine Consumer Australians tend to drink Australian wine and relatively frequently Australia; large wine consuming Per capita consumption is relatively high; For personal use only population increasing population is driving growth 2016 2016 13.9 81% 26.8 Litres per capita3 65% Million Of t
Slide 77: Australian Market Landscape
Australian Market Landscape1 Retail wine market continues to consolidate, while the E-commerce channel continues to evolve For personal use only Bricks and Mortar Retail On premise E-Commerce Direct-To-Consumer Channel Channel Channel Channel Channel split 60% 26% 11% 3% Consolidation Highly Fragmen
Slide 78: Growing share in a mature market
Growing share in a mature market Targeting 25% volume and value share For personal use only Current State Strategic Initiatives Future State Optimising a competitive and 1 efficient Route-To-Market 21% 25% Building strategic and sustainable Market 2 customer partnerships Market Share1 3 Outstanding
Slide 79: Optimising a competitive and efficient Route-To-Market
1 Optimising a competitive and efficient Route-To-Market Simplified Route-To-Market whilst evolving TWE’s Go-to-market model For personal use only Reducing cost and complexity through simplified Continuous evolution of TWE’s Go-To-Market model to Route-To-Market support sustainable future growth FRO
Slide 80: Building strategic and sustainable customer partnerships
2 Building strategic and sustainable customer partnerships Strengthening strategic partnerships through Joint Value Creation For personal use only Category Joint Joint Brilliant growth business execution Value strategy planning Creation Quantified 3-5 year category Building a collaboration agenda Su
Slide 81: Outstanding portfolio and brand building activity driving growth
3 Outstanding portfolio and brand building activity driving growth Appealing to consumers to unlock more wine occasions For personal use only Leveraging brand equity of Masstige Fewer, bigger, better brand campaigns Insight led innovation delivering and Luxury portfolio for sustainable driving shopp
Slide 82: Scale up Australian Regional Gems portfolio
3 Outstanding portfolio and brand building activity driving growth Scale up treasured Australian Regional Gems portfolio For personal use only Leverage the strength of TWE’s Capitalise on the strength of TWE’s Delivering insight-led innovation winemaking and accolades received to Regional Gems portf
Slide 83: Introducing Samuel Wynn & Co.
Outstanding portfolio and brand building activity driving growth 3 Introducing - SAMUEL WYNN & CO. For personal use only Extraordinary Stories for Experienced Seekers looking for Authenticity and Exploration 83
Slide 84: Significant market support, targeted towards Millennials
Outstanding portfolio and brand building activity driving growth 3 Significant market support, targeted towards Millennials For personal use only Above The Line Support Digital Support In Store Retail Activations Media Partnerships 84
Slide 85: Drive growth and scale of an iconic Australian wine brand
3 Outstanding portfolio and brand building activity driving growth Drive growth and scale of an iconic Australian wine brand with enviable wine credentials For personal use only Icon & Luxury Premium Masstige Still Wine Masstige Sparkling Wine • Leverage strong quality • New tier leveraging • Drivin
Slide 86: Summary – Top takeaways for TWE's ANZ region
Summary Top 5 takeaways for TWE’s ANZ region For personal use only Australian wine market is mature, but opportunities for volume and value growth exist With world class viticultural and brand assets, TWE is best positioned to capture Luxury and Masstige growth Evolving TWE’s model to adapt to chang
Slide 87: Questions
87 For personal use only QUESTIONS
Slide 88: Key takeaways from today
TWE’s journey from Agri to Brand-led Key takeaways from today For personal use only 1 TWE is on a journey from Agri to Brand-led 2 Our core asset is our organisational talent 3 We are building brand portfolios; one portfolio at a time. TWE launching French portfolio 4 Supply will meet demand sustain
Slide 89: #1 Imported Wine Business in Asia; Preserving 30-35% EBITS Margin
For personal use only #1 Imported Wine Business in Asia by Volume & Value; Preserving 30-35% EBITS Margin Robert Foye – President & MD, Asia & Europe 89
Slide 90: Asia Wine Category
Asia Wine Category Highly attractive wine market fundamentals in Asia North Asia1 Highly fragmented import category For personal use only Large and growing imported TWE 1.5% Strong value growth across all TWE 2.1% wine market Felix Solis 1.6% Castel 2.0% price segments 2.1% E & J Gallo Industry Valu
Slide 91: Asian Wine Consumer
Asian Wine Consumer Growing per capita consumption in large alcohol consuming regions; North Asia is key North Asia 2 1 Consumption by COO3 Demographics Per capita consumption Consumption by type For personal use only Illustrated using China Claimed consumer consumption Volume share of bottled wine
Slide 92: Asian Wine Market
Asian Wine Market Traditional retail format remains dominant channel; on-premise continues to be important North Asia – Illustrated using China For personal use only Wine industry sales by channel1 ~50% ~30% ~10% ~10% Bricks & Mortar Retail On-premise E - Commerce Direct to Consumer South Asia – Ill
Slide 93: TWE's volume share by key region in Asia
Asia; a snapshot of TWE’s volume share by key region Targeting share growth in all major Asia markets; China and Japan are key drivers of growth For personal use only Imported wine category; size and TWE share by volume1 China Japan TWE’s ambition TWE’s ambition share share DOUBLE TRIPLE 54m 1.6% 3%
Slide 94: #1 imported wine business in Asia by volume and value
#1 imported wine business in Asia by volume and value TWE targeting #1 wine importer into Asia by volume and value led by growth in China and Japan Current State Strategic Initiatives Future State For personal use only #2 Value share1 1 Build a competitive and efficient Route-To-Market #1 Value shar
Slide 95: Route-To-Market in China – concentric-circle approach
1 Build a competitive and efficient Route-To-Market in China TWE’s “concentric-circle” approach to expansion in China For personal use only Concentric circle model driving volume growth TWE’s current and future distribution footprint TWE’s current geographic footprint Leverage distribution infrastru
Slide 96: Growing distribution footprint across Retail, E-Commerce and On-premise
1 Build a competitive and efficient Route-To-Market in China Growing TWE’s distribution footprint across Retail, E-Commerce and On-premise For personal use only Bricks and Mortar Retail E-Commerce On premise Channel Channel Channel Channel split 80% 10% 10% F16 NSR Contribution F16 NSR Contribution
Slide 97: Strategic customer partnerships in China
2 Build strategic and sustainable customer partnerships in China Strategic customer partnerships driven by insights, category growth and brands For personal use only Delivering consumer insights and category growth Grow brands and portfolios; leveraging brand solutions to build strategic partnership
Slide 98: Sustainable customer partnerships in China
2 Build strategic and sustainable customer partnerships in China Sustainable customer partnerships in China; preserving channel & brand health For personal use only Preserving the health of TWE’s distribution infrastructure; depletions a critical tool to measure channel inventory and marketing effec
Slide 99: Outstanding brand building execution in China
Execute outstanding brand building across the portfolio in China 3 Outstanding brand building execution; winning with customers and consumers Tailored marketing & innovation to Education and training through Disruptive and engaging in-store For personal use only connect with local consumers outstand
Slide 100: Brand building supporting the US brand portfolio in China
Execute outstanding brand-building across the portfolio in China 3 Outstanding brand building execution; supporting the US brand portfolio Tailored marketing & innovation to Education and training through Disruptive and engaging in-store For personal use only connect with local consumers outstanding
Slide 101: Building TWE's French portfolio in Asia
Execute outstanding brand-building for TWE’s French portfolio 3 Outstanding brand building execution; building TWE’s French portfolio in Asia Opportunity within Imported Wine Category1 TWE Strategy For personal use only Imported Wine Category Targeting 3 key price 2.5x segments French 54m Category A
Slide 102: Route-To-Market in Japan
Build a competitive and efficient Route-To-Market in Japan 1 Similar to China – bringing TWE closer to direct retail customers & local partners For personal use only Sell direct to retail and optimise distributor partnerships to drive deep channel penetration • Leveraging the success on the China TW
Slide 103: Strategic customer partnerships in Japan
2 Build strategic and sustainable customer partnerships in Japan Strategic customer partnerships supported by insights and portfolio breadth For personal use only Delivering consumer insights to build strategic Diversify brand portfolio in Japan to deliver growth partnerships – 4 common category gro
Slide 104: Outstanding brand-building activities in Japan
3 Execute outstanding brand-building activities in Japan Outstanding brand building execution; winning with customers and consumers For personal use only Tailored marketing & innovation to Education and training through Disruptive and engaging in-store connect with local consumers outstanding experi
Slide 105: Summary – Top takeaways for TWE's Asia region
Summary Top 5 takeaways for TWE’s Asia region For personal use only Fundamentals of Asian wine market are highly attractive; wine consumption in North Asia is in rapid growth and interest in imported wine is accelerating TWE has the team, the brand portfolio and the execution excellence to capitalis
Slide 106: Questions
106 For personal use only QUESTIONS
Slide 107: Key takeaways from today
TWE’s journey from Agri to Brand-led Key takeaways from today For personal use only 1 TWE is on a journey from Agri to Brand-led 2 Our core asset is our organisational talent 3 We are building brand portfolios; one portfolio at a time. TWE launching French portfolio 4 Supply will meet demand sustain
Slide 108: An Optimised Business Delivering Double Digit EBITS Margin
For personal use only An Optimised Business Delivering Double Digit EBITS Margin Robert Foye – President & MD, Asia & Europe 108
Slide 109: Europe Insights – Category, Consumer, Market
Europe Insights – Category, Consumer, Market1 Large mature market but with some areas of opportunity Europe Consumption by COO UK total wine market UK per capita consumption For personal use only (Volume) Rank Italian 2016E Share 3YR CAGR Industry Value Industry Volume 2016 1 25% (2)% 22.7 litres pe
Slide 110: Return core brands to growth with a fit for purpose organisation
An optimised business delivering double digit EBITS margins Return core brands to growth while leveraging a fit for purpose organisation For personal use only Focus on key markets, customers and channels Deliver category growth initiatives to strengthen retail partnerships, notably UK grocery Delive
Slide 111: Questions
111 For personal use only QUESTIONS
Slide 112: Key takeaways from today
TWE’s journey from Agri to Brand-led Key takeaways from today For personal use only 1 TWE is on a journey from Agri to Brand-led 2 Our core asset is our organisational talent 3 We are building brand portfolios; one portfolio at a time. TWE launching French portfolio 4 Supply will meet demand sustain
Slide 113: From Fixing To Growth; Americas to help drive Group EBITS margin
For personal use only From Fixing To Growth; Americas to help drive Group EBITS margin Bob Spooner – President, Americas 113
Slide 114: Americas wine category
Americas wine category Highly attractive market fundamentals; large wine market, growing and premiumising Buoyant wine market in volume and value Fragmented bottled wine market (US market)3 growth For personal use only TWE, 5% TWE, 6% Industry Value Industry Volume Constellation, 15% Constellation,
Slide 115: US wine consumer
US wine consumer Large wine market with growing per capita consumption and frequency Large and growing wine market Comparatively low per capita consumption; For personal use only high frequency 2016 93 40% 11.8 2016 Million Americans Of the adult Litres per capita 2 54% drink wine1 population1 2011
Slide 116: US wine market
US wine market Complex Route-To-Market in the US with large intermediaries and concentrated retail landscape For personal use only Mandated three-tier distribution system for alcohol sale in the US1 3-tier distribution system Tier 1 Tier 2 Tier 3 Retailer Supplier Distributor Consumer On premise Dir
Slide 117: From Fixing to Growth; Americas to help drive Group EBITS margin
From Fixing to Growth; Americas to help drive Group EBITS margin Shift from Fixing to Growing now in play; Americas to help drive Group EBITS margin Strategic Initiatives For personal use only Current State Future State Fix US brand portfolio 1 FIXING GROWTH Re-engineer Diageo Wine and 2 rebuild to
Slide 118: Fix US brand portfolio
1 Fix US brand portfolio Reposition TWE’s mix and brand portfolio to enhance focus and influence with gatekeepers For personal use only Refreshed and repositioned Greater focus on fewer, bigger Realigned portfolio mix Luxury & Masstige brands Commercial brands Deliberate inventory mix shift1 From To
Slide 119: Re-engineer Diageo Wine and rebuild to grow
2 Re-engineer Diageo Wine and rebuild to grow The practical aspects of re-setting and rebuilding brands For personal use only PHASE 1 PHASE 2 PHASE 3 Showcased new packaging Re-build availability at distributor and Exited unsustainable and graphics with retail customers with improved pricing custome
Slide 120: Build strategic and sustainable customer partnerships
3 Build strategic and sustainable customer partnerships Focus on core distributor partners; performance manage to deliver joint value creation For personal use only Consolidate distributor network; focusing on fewer, high quality partners Joint demand planning and alignment of performance metrics Qu
Slide 121: Strategic retail partnerships
3 Build strategic and sustainable customer partnerships Strategic retail partnerships; leveraging promotion investment to drive front-line excellence For personal use only Beringer “Better Beckons” 19 Crimes - Out of home advertising Chateau St Jean “Spice up date night” Beaulieu Vineyard “Quality M
Slide 122: Leverage strong position in US Direct-To-Consumer channel
4 Leverage strong position in US Direct-To-Consumer channel TWE has the assets and strategies to win in growing Direct-To-Consumer channel For personal use only DTC is in growth and is TWE’s Direct-To-Consumer Leveraging assets and strategy to premiumising1 footprint capture growth and margin Value
Slide 123: Improved profitability from supply chain and acquisition synergies
Improved profitability from supply chain and acquisition synergies 5 Multiplier effect of top line growth and optimising supply chain in US For personal use only Margin improvement across Realisation of supply chain savings Realisation of revenue Luxury, Masstige and Commercial from acquisition on D
Slide 124: Summary – Top takeaways for TWE's Americas region
Summary Top 5 takeaways for TWE’s Americas region For personal use only US wine market is large, growing and premiumising; significant volume and value opportunities exist for TWE TWE has invested in Fixing brands, recruiting outstanding capability and integrating the business; region is now positio
Slide 125: Questions
125 For personal use only QUESTIONS
Slide 126: Thank You
For personal use only THANK YOU Michael Clarke – Chief Executive Officer 126
Slide 127: Disclaimer
Disclaimer Treasury Wine Estates (TWE) advises that this presentation contains forward looking statements which may be subject to significant uncertainties outside of TWE’s control. For personal use only No representation is made as to the accuracy or reliability of forecasts or the assumptions on w