Treasury Wine Estates Limited · ASX:TWE
Treasury Wine Estates — FY2019 Earnings Presentation
27 slides from Treasury Wine Estates's earnings presentation, Aug 15, 2019
Slide 1: Annual 2019 Results
TREASURY WINE ESTATES Annual 2019 Results 15 August 2019
Slide 2: Michael Clarke, Chief Executive Officer
Michael Clarke Chief Executive Officer 2
Slide 3: Executive Leadership Team on the call today
Executive Leadership Team on the call today Michael Clarke Chief Executive Officer Matt Young Chief Financial Officer Tim Ford Chief Operating Officer Angus McPherson Managing Director ANZ, Europe and SEAMEA 3 3
Slide 4: Results headlines
Results headlines1,2,3 • NSR $2,831.6m, up 17%; increase of 12% on a constant currency basis represents the strongest organic growth rate in company history4 • F19 EBITS $662.7m in line with guidance, up 25% • Group EBITS margin of 23.4%, up 1.6 ppts • NPAT $419.5m, up 16% • EPS of 58.4 cents per sh
Slide 5: Matt Young, Chief Financial Officer
Matt Young Chief Financial Officer 5
Slide 6: F19 result; key measures of performance
F19 result; key measures of performance1,2 1. Numbers subject to rounding 2. F16 EBITS and ROCE have been restated in accordance with revised accounting standards relating to vine depreciation 6 6
Slide 7: Balance Sheet
Balance Sheet1,2 A$m F19 F18 Balance Sheet remains efficient and flexible Cash & cash equivalents 401.8 89.4 • Net assets increased $209.8m on a reported currency basis; Receivables 662.0 593.3 Current inventories 1,024.0 1,012.3 adjusting for the movement in foreign currency, net assets Non-current
Slide 8: Inventory analysis
Inventory analysis Inventory at book value split by segment1,2 Recent investments delivering uplift in Luxury inventory • Total inventory increased $128.5m to $2,092.9m reflecting: - $116.8m increase in non-current inventory - $11.7m increase in current inventory Total Luxury • Factors impacting the
Slide 9: Cash flow and net debt
Cash flow and net debt1,2 Robust cash flow; reflects investment to drive growth Cash conversion reflects investment in premiumisation A$m (unless otherwise stated) F19 F18 EBITDAS 765.7 627.7 Change in working capital (170.2) (177.1) Other items (14.8) (23.8) Net operating cash flows before financin
Slide 10: Capital Expenditure
Capital Expenditure Investing to support growth and efficiency A$m F19 F18 IT spend 16.6 17.4 • Capital expenditure (capex) down $55.6m to $159.8m: Oak purchases 29.0 33.6 − Maintenance & Replacement capex $132.1m Vineyard redevelopments 33.0 28.5 − Growth capex including vineyard acquisitions and I
Slide 11: Investing for growth
Investing for growth TWE has delivered earnings growth well ahead of its peers, even when long-term inventory investment is treated as capex Five year EBITS CAGR performance1,2 Five year ratio of EBITS growth to average capex1,2,3 Capex only Capex + L/T inventory investment (TWE only) Exhibits leadi
Slide 12: AASB 16 Leases – Impact on F19 Key Metrics
AASB 16 Leases – Impact on F19 Key Metrics Key Metrics Reported Adjustment Restated ▪ Under AASB 16 Leases, operating leases will be Profit & Loss EBITS 662.7 18.7 681.4 recognised on the balance sheet as a right of use EBITS Margin 23.4% 0.7% 24.1% asset and a lease liability based on the discounte
Slide 13: Tim Ford, Chief Operating Officer
Tim Ford Chief Operating Officer 13
Slide 14: Americas
Americas Route-to-market changes embedded while delivering top-line driven earnings growth Americas regional performance Business headlines • US route-to-market changes have been embedded, with A$m F19 F18 % F18 % TWE building collaborative relationships with distributor and Reported currency Consta
Slide 15: Asia
Asia Outstanding execution delivering strong growth across key regional markets Asia regional performance Business headlines • Strong top-line and earnings growth driven by increased A$m F19 F18 % F18 % availability of Luxury and Masstige wine, growth in demand Reported currency Constant currency Re
Slide 16: Angus McPherson, Managing Director, ANZ & Europe
Angus McPherson Managing Director, ANZ & Europe 16
Slide 17: Australia & New Zealand
Australia & New Zealand Premiumisation and disciplined cost management driving earnings and margin performance ANZ regional performance Business headlines • Continued top-line growth momentum reflects: A$m F19 F18 % F18 % - NSR growth in Australia of 3.1%, led by gains across the Reported currency C
Slide 18: Europe
Europe Topline growth delivered through premiumisation; mid teen EBITS margin maintained Europe regional performance Business headlines A$m F19 F18 % F18 % • NSR growth reflects strong trading performance across all key Reported currency Constant currency regional Reportedmarkets currency alongside
Slide 19: Michael Clarke | Summary & Outlook
Michael Clarke | Summary & Outlook 19
Slide 20: Summary and outlook
Summary and outlook • TWE has the people, brands, wine, business models and customer partnerships to successfully execute its premiumisation strategy in F20 and beyond • Ongoing optimisation of business models remains a priority, particularly in the US and Asia where TWE is focused on growing distri
Slide 21: Questions
Questions 21
Slide 22: Supplementary Information
Supplementary Information 22
Slide 23: Capital Management
Capital Management Disciplined capital management delivering sustainable returns Strengthened financing structure enhances flexibility Investment grade credit metrics maintained: Optimised debt financing profile resulting in improved mix, spread and tenor of committed debt facilities, including: • L
Slide 24: Impact of foreign exchange rate movements & hedging
Impact of foreign exchange rate movements & hedging F19 constant currency impact F20 EBITS sensitivity and risk management CFX Impact (A$m) Currency Primary EBITS Movement Currency Underlying Hedging1 Total Pair Exposure Sensitivity (A$m) AUD/USD and AUD/GBP 28.9 (4.8) 24.1 AUD/USD COGS, EBITS +1% (
Slide 25: Volume
Volume A$m F19 F18 % (Volume, m 9Le) ANZ 7.9 7.9 0.1% Asia 4.6 4.3 6.8% Americas 14.0 13.7 2.7% Europe 8.9 8.6 2.9% TWE 35.5 34.6 2.7% Commentary • ANZ: Australia volume increase of 2.0% driven by Masstige portfolio growth, partly offset by volume decline in New Zealand due to the transitional impac
Slide 26: Definitions
Definitions Term Definition Throughout this presentation, constant currency assumes current and prior period earnings of foreign Constant currency operations are translated and cross border transactions are transacted at current year exchange rates NSR Net sales revenue EBITDAS Earnings before inter
Slide 27: Disclaimer
Disclaimer 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 with TWE’s other announce