Endeavour Group Ltd · ASX:EDV
Endeavour — FY2021 Earnings Presentation
35 slides from Endeavour's earnings presentation, August 2021
Slide 1: F21 Full Year Results
F21 Full Year Results August 2021
Slide 2: Creating a more sociable future together
Creating a more sociable future together We’re We’re Our Values We’re real inclusive responsible Our Ways We work We’re team We endeavour of Working with spirit players for better 2
Slide 3: Endeavour Group Overview of F21
1 Endeavour Group Overview of F21 Steve Donohue - Chief Executive Officer Location: Broadbeach Tavern 3
Slide 4: Solid results in a challenging year
Solid results in a challenging year Established Endeavour Group as an independent listed business Navigated the significant impacts of COVID-19 Delivered solid financial results with record Retail sales and Hotels trade optimisation Invested for the future Location: BWS Glebe Remained committed to rec
Slide 5: Establishing Endeavour Group
Establishing Endeavour Group Delivered one of the largest Established Endeavour as an Created our independent demergers in Australian history independent public company identity and Group purpose • Endeavour Group demerged • Established our new board and • Established our Purpose from Woolworths on
Slide 6: Navigating COVID-19
Navigating COVID-19 We remain focussed on keeping our customers and teams safe • Extensive PPE1 roll-out • COVID-19 leave options for all team members and supporting the communities we serve • Supporting vaccinations Impacts Our response • Elevated demand • Focus on in-store safety and team resourci
Slide 7: Delivering results - F21 Financial highlights
Delivering $11.6b $899m $445m 24.8c 7.0c results Total Sales1 EBIT1 Profit after tax Earnings per share Final dividend per share F21 Financial highlights +9.3% +22.1% Retail Hotels $10.2b $669m $1.4b $261m Total Sales1 EBIT1 Total Sales1 EBIT1 +9.6% +17.6% +7.3% +49.1% Powered by: 1: Year on year cha
Slide 8: Delivering results - F21 Strategic highlights
Delivering results - F21 Strategic highlights Knowing our customers Improving customer service Growing customer engagement At the heart of our Combined business is a market 75 Retail VOC NPS1 4.2 / 5 Hotels external online reviews2 5.5m My Dan’s members +20% leading customer franchise Growing digita
Slide 9: Commitment to “our imprint”
Commitment to “our imprint” Our approach to F21 Highlights responsibility • Voluntary pre-commitment for every gaming • Remain a leader in responsible service of machine alcohol and conduct of gambling • Enhanced self-exclusion enabled by facial • Go beyond minimum legal and regulatory recognition c
Slide 10: Investing for the future
Investing for the future Accelerating digital investment to drive customer engagement • Personalisation capabilities Brand building and product • Evolving web and app experience capabilities continue to drive growth • Evolving Retail experience through • Evolved Pinnacle from follower contactless pi
Slide 11: Financial Results
2 Financial Results Shane Gannon - Chief Financial Officer Chapel Hill Wines 11
Slide 12: F21 Financial Result highlights
F21 Financial Result highlights Asset base with Delivering for Strong trading in Solid cash and further potential shareholders volatile conditions capital foundations to create value $11.6b $1.1b $3.4b 24.8c Operating cash Net assets Earnings per share Sales inflow +9.3%1 $899m 117.3% $613m 7.0c EBIT
Slide 13: Group financial performance
Group $ million F21 F201 CHANGE financial Sales Retail 10,178 9,286 9.6% performance Hotels Total Sales 1,417 11,595 1,320 10,606 7.3% 9.3% Profit for the year • Group Sales +9.3%2 to $11.6b, Retail Retail EBIT 669 569 17.6% and Hotels both higher than the equivalent prior period Hotels EBIT 261 175 4
Slide 14: Retail financial performance
Retail financial F21 F201 CHANGE performance Sales ($m) 10,178 9,286 9.6% EBITDA ($m) 936 807 16.0% • Strong sales growth with shift to Depreciation and amortisation ($m) 267 238 12.2% in-home consumption (COVID-19) EBIT ($m) 669 569 17.6% • Margin gains from premiumisation, level of promotions and P
Slide 15: Hotels financial performance
Hotels financial F21 F201 CHANGE performance Sales ($m) 1,417 1,320 7.3% EBITDA ($m) 499 408 22.3% • Performed well in light of significant Depreciation and amortisation ($m) 238 233 2.1% COVID-19 closures and restrictions (195 days when all our Hotels were open for EBIT ($m) 261 175 49.1% trading) Gr
Slide 16: Balance sheet
Balance sheet $ million F21 F20 CHANGE Inventory 1,213 1,269 (56) Trade payables (889) (950) 61 Trade working capital (TWC) Trade and other receivables 1 159 158 1 • Higher Retail sales achieved without Trade working capital 483 477 6 increasing trade working capital due to strong inventory manageme
Slide 17: Cash and liquidity
Cash and liquidity Cash generative Long-term debt facilities in place • Net debt $1.3b at year end • Committed undrawn debt facilities of $625m1 plus material cash balances • On demerger, • $1.9b syndicated debt facility was established $1.1b 117.3% (oversubscribed) • $600m bilateral revolving credi
Slide 18: Capital expenditure
Capital expenditure EXAMPLE INVESTMENT TYPES SNAPSHOT OF F21 CAPEX Sustaining Capex Productivity & SIB CAPEX • Essential spend prioritised first to Core Technology Supply Chain maintain operations and minimum site standards Stay in • Optimised to lowest sustaining level Business Renewals F21 Capex $3
Slide 19: Capital allocation strategy
Capital allocation strategy Developing a financial framework to optimise shareholder returns through a disciplined approach to capital Free cash flow management Strong free cash flow generation to be deployed inline with capital allocation priorities: Targeting investment grade credit metrics • Mainta
Slide 20: F22 priorities and outlook
3 F22 priorities and outlook Steve Donohue - Chief Executive Officer 20
Slide 21: Priorities for F22
Priorities for F22 Continue to manage and respond to COVID-19 impacts Maintain stability of the business in our first year of independent operation Sustain growth momentum across the Group Invest and build to drive long-term growth Launch our Sustainability strategy 21
Slide 22: F22 - First 8 weeks
F22 - First 8 weeks • Continued significant volatility due to COVID-19 outbreaks F22 - first 8 weeks Sales vs F21 vs F201 • Retail tracking well (cycling Retail Retail (1.7%) 21.5% trading highs of Q1 F21) • Very challenging start to the year for Hotels (7.3%) (36.2%) Hotels. As at 24th August, 41% of
Slide 23: In summary
In summary Business fundamentals Innovation Excellent business fundamentals, Continuing to invest in well positioned to continue to innovations to meet customer perform and grow needs Solid F21 financial results COVID-19 Record results for Retail, Hotels Continued volatility and restrictions proving
Slide 24: Q&A
Q&A Steve Donohue - Chief Executive Officer Shane Gannon - Chief Financial Officer 24
Slide 25: Appendices
24 endeavour “ays GFOUD 96
Slide 26: 2 year and quarterly sales
2 year and quarterly sales Retail $ million • Retail sales growing strongly over two years • Benefitted from the switch to in-home +20.4% consumption, particularly in H1 F21 Retail Sales insert chart • Comparisons to F20 are distorted by 2 year change1 record Retail sales growth rates in March to Jun
Slide 27: F21 Cash flow
F21 Cash flow EBIT $ million 899 Depreciation and amortisation expenses 505 Changes in trade and other receivables 5 Changes in inventories 61 Changes in trade payables (59) Changes in assets and liabilities and other non-cash items 130 Finance costs on borrowings paid (72) Cash realisation ratio of
Slide 28: Network
Network Network Network New / Closures / as at 28 as at 27 Acquisitions disposals June 2020 June 2021 Dan Murphy's 241 11 (1) 251 16 4 BWS 1,369 40 (17) 1,392 52 406 130 Retail 1,610 51 (18) 1,643 24 139 28 17 92 33 81 383 54 2 3 Hotels (incl. clubs) 334 5 - 339 KEY 75 322 85 1 Dan Murphy’s 1x Bottl
Slide 29: Current market dynamics
Current market dynamics Tailwinds Headwinds • Shift to in-home consumption continuing • Continuing COVID-19 related trading to support Retail sales restrictions in the Hotels business • Strong returns from digital investments • Cycling F21 retail trading highs and leverage of fixed cost base • Premiu
Slide 30: Endeavour’s investment thesis
Endeavour’s investment thesis Why invest in Endeavour Group How we drive growth • Leading retail bands • Largest retail & hotel network in Australia Market leading brands • Core growth through new stores and hotels • 1,775+ Liquor Licences and ~12,400 gaming machine entitlements and renewal program
Slide 31: Comparative figures
Comparative figures F20: Statutory and Equivalent Information Statutory F20 relates to the 52-week period ended 28 June 2020. However, this 52-week period only includes the results for Woolworths’ Drinks and Hotels businesses after they were transferred to, and merged with, Endeavour Group Limited (E
Slide 32: Glossary
Glossary Term Description Cash realisation ratio Operating cash flow as a percentage of Group net profit after tax before depreciation and amortisation Comparable sales Measure of sales which excludes stores that have been opened or closed in the last 12 months and demonstrable impact on existing stor
Slide 33: Glossary (cont.)
Glossary (cont.) Term Description n.m. Not meaningful Net assets employed Net assets excluding net debt and other financial assets and liabilities Net promoter score (NPS) A loyalty measure based on a single question where a customer rates a business on a scale of zero to 10. The score is the net res
Slide 34: Disclaimers
Disclaimers This presentation is dated 26 August 2021 and unless stated otherwise is current as at that date. This presentation contains summary and general information about Endeavour Group Limited and its controlled entities (together, ‘Endeavour Group’), and Endeavour Group’s activities as at the
Slide 35: The release of this announcement has been authorised by the Board
The release of this announcement has been authorised by the Board