Delegat Group Limited · NZX:DGL
Delegat — FY2023 Earnings Presentation
35 slides from Delegat's earnings presentation, Aug 25, 2023
Slide 1: FY23 Results
ies DELEGAT FY23 Results 25 August 2023
Slide 2: Agenda
Agenda Overview Business Review Financial Performance Priorities and Outlook 2
Slide 3: Overview
Overview
Slide 4: Our strategic goal is to build a leading global super premium wine company
OUR STRATEGIC GOAL IS TO BUILD A LEADING GLOBAL SUPER PREMIUM WINE COMPANY. 4
Slide 5: FY23 Operating highlights
FY23 Operating highlights • A record year for sales, with strong growth in the US market. Supported by targeted price increases in other markets • Over 600 million consumer impressions following increased marketing investment behind the brand both online and in-store • Vintage met expectations on yi
Slide 6: FY23 Financial highlights
FY23 Financial highlights • Record Global Case Sales of 3,676,000 Up 316,000 cases on last year (9%) • Operating NPAT of $59.3 million Up $1.2 million on last year (2%) • Operating EBITDA of $120.4 million Up $8.2 million on last year (7%) • Reported NPAT of $64.8 million Up $1.8 million on last yea
Slide 7: A long-term story of growth, especially in the key US market
A long-term story of growth, especially in the key US market Source: Delegat internal analysis 7
Slide 8: Oyster Bay is the leading Sauvignon Blanc brand in the world
Oyster Bay is the leading Sauvignon Blanc brand in the world NUMBER TWO PREMIUM SAUVIGNON BLANC IN THE UK 1 NUMBER ONE WINE IN AUSTRALIA 2 NUMBER TWO PREMIUM SAUVIGNON BLANC IN THE USA 3 NUMBER TWO PREMIUM SAUVIGNON BLANC IN CANADA 4 NUMBER ONE PREMIUM SAUVIGNON BLANC IN NEW ZEALAND 5 EL Source: 1.
Slide 9: Oyster Bay's strength extends to other varieties in key markets
Oyster Bay's strength extends to other varieties in key markets Oyster Bay ranking within NZ Premium Wine category, by variety Sauvignon Blanc Chardonnay Pinot Gris/Grigio Rosé Merlot Pinot Noir US 2 1 1 3 1 1 Canada 2 1 1 2 1 2 UK 2 1 3 6 1 2 Ireland 1 1 - - 1 1 Australia 1 1 3 2 1 2 Source: Circan
Slide 10: We are one of the world's most successful Super Premium wine brands
We are one of the world’s most successful Super Premium wine brands Global sales of world's 10 largest premium wine brands, 2022 2022 Premium wine Volume brands (000s 9LE) 1 Josh Cellars Wine 5,771 2 Apothic Wine 4,189 3 Oyster Bay Wine 3,299 4 Kendall Jackson Wine 3,045 5 Menage a Trois Wine 2,852
Slide 11: Business review
Business review
Slide 12: Global Trends: Fewer wine consumers, drinking less but better
Global Trends: Fewer wine consumers, drinking less but better Moderation Premiumization • Less but better. Less consumed • People still wanting to treat (generally) per occasion themselves • Still buying favorite brands but stocking up Shifting consumer awareness Changes in occasion of brand and reg
Slide 13: Delegat has a clear focus of the premium segment in each market
Delegat has a clear focus of the premium segment in each market it is targeting Premium wine drinkers (Millions): Tracking 2022 vs 2020 Thosewho Those who have have bought bought OB Oyster ininthe Bay theP3M2 past 3 months Thosewho Those who have have consumed consumed NZinwine NZ wine in the the pa
Slide 14: Investment in the US market to drive rate of sale and consumer loyalty
Investment in the US market to drive rate of sale and consumer loyalty Winning in key accounts with feature and display …. …. driving awareness & affinity in digital Top Tier Promotion Secured: Northern California CoSpace Safeway Premium Pinot Gris Distribution: Sauvignon Blanc Ranking +356 PODs Sau
Slide 15: Oyster Bay has outperformed the industry in the US over the last 12 months
Oyster Bay has outperformed the industry in the US over the last 12 months across its major varieties Volume growth, premium segment, US market 12 months to 31 March 2023 Variety Industry Oyster Bay Sauvignon Blanc 5.5% 16.1% Pinot Grigio 0.1% 25.9% Chardonnay -2.4% 14.3% Pinot Noir -2.1% 8.4% Sourc
Slide 16: 2023 harvest, wine making and supply chain performance
2023 harvest, wine making and supply chain performance • Consistently high quality across the Group harvest. The harvest of 45,340 tonnes was up 1% from 2022 harvest (compared to industry which was down 6% v 2022) • Recovery from Cyclone Gabrielle was rapid with minimal grape losses, reflecting qual
Slide 17: Ongoing work expanding the Group's ESG program
Ongoing work expanding the Group's ESG program Achieved 50/50 gender Carbon split in Reduce corporate certification management & through Toitu sales leadership roles 12 Hectares 60% riparian & wetland reduction in planting in Awatere lees waste to valley 17 landfill
Slide 18: Financial review
Financial review
Slide 19: Case Sales and FX
Est i947 DELEGAT Case Sales and FX Case Sales (000's) jun 2023 Jun 2022.” Change vs 2022 UK, Ireland and Europe 1,237 1,060 17% North America (USA and Canada) 1,747 1,608 9% Australia, NZ and Asia Pacific 692 692 0% Total Cases 3,676 3,360 9% Foreign Currency Rates Jun 2023 Jun 2022 % Change vs 2022
Slide 20: Revenue Growth Analysis
Est i947 DELEGAT Revenue Growth Analysis NZS millions June 2023 June 2022 % Change Actual Actual vs 2022 Sales Revenue 367.2 319.3 15% Sales movements breakdown: Volume 9% Value 6% Foreign Exchange 4% Price 3% Country/Product Mix -1%
Slide 21: Operating Performance
Operating Performance Est i947 DELEGAT one Jun 2023 Jun 2022 % Change NZS millions vs 2022 Sales Revenue 367.2 319.3 15% Operating Revenue 375.8 325.4 15% Operating Gross Profit 162.1 144.2 12% Operating Gross Margin 43% 44% Expenses (excl Promotion and Marketing) (54.1) (45.7) -18% Promotion and Ma
Slide 22: Operating EBITDA Movement – Last Year
Operating EBITDA Movement – Last Year NZ $millions $7.8m 130.0 $9.2m $120.4m 120.0 $112.2m ($4.5m) (1.5m) ($2.8m) 110.0 100.0 90.0 80.0 70.0 60.0 50.0 40.0 30.0 20.0 10.0 0.0 Jun 2022 Actual Margin Gain Net FX Impact Normalised Opex ERP Upgrade Other Jun 2023 Actual Post Covid 22
Slide 23: Operating Profit Movement – Last Year
Operating Profit Movement – Last Year NZ $millions $5.6m 70.0 $5.7m $58.1m ($3.8m) $59.3m 60.0 ($3.2m) ($1.1m) ($2.0m) 50.0 40.0 30.0 20.0 10.0 0.0 Jun 2022 Margin Gain Net FX Interest Normalised ERP Other Jun 2023 Actual Impact Opex Post Upgrade Actual Covid 23
Slide 24: Cost of Sales ($/Case)
COGS Summary of Movement 60 • COGS increased across production, shipping and packaging costs, but are predicted to stabilise over time. 50 • Cost of Grape impacted by vintage yield outcome and Cost of Sales ($/Case) 40 increase grape prices. Reducing cost reflects cycling out of low yielding 2021 vi
Slide 25: Impact of 'Fair Value' Adjustments
Impact of ‘Fair Value’ Adjustments 25
Slide 26: Reported Profit Movement – Last Year
Reported Profit Movement – Last Year NZ $millions $14.8m 80.0 70.0 $2.5m $63.0m ($9.2m) $64.8m ($3.2m) ($1.1m) 60.0 ($2.0m) 50.0 40.0 30.0 20.0 10.0 0.0 Jun 2022 Margin Gain Net FX Interest Normalised ERP Other Jun 2023 Actual Impact Opex Post Upgrade Actual Covid 26
Slide 27: Balance Sheet Summary
Balance Sheet Summary Est i947 DELEGAT NZS millions Jun 2023 Jun 2022 % Change vs 2022 Assets Current Assets 296.1 257.9 15% Fixed Assets 764.2 706.7 8% Other Non-current Assets 3.0 28 7% Total Assets 1,063.3 967.4 10% Liabilities Current Liabilities 58.1 100.9 -36% Lease Liability 93.6 79.5 11% Def
Slide 28: Net Debt Movement
Net Debt Movement NZ $millions $5.5m $319.4m $39.9m 310.0 ($1.1m) 295.0 280.0 $20.2m 265.0 $66.0m $248.7m 250.0 235.0 220.0 205.0 $31.7m 190.0 175.0 160.0 ($91.5m) 145.0 130.0 June 2022 Cash from Working Capex Dividend Dashwood Other Net FX June 2023 Actual Operations Capital vineyard financing Impa
Slide 29: Investing in Growth – Capital Expenditure Update
Investing in Growth – Capital Expenditure Update 2021: Includes vineyard and winery developments in Hawke’s Bay, Marlborough and Barossa Valley, and land acquisition in New Zealand. 2022: Includes vineyard and winery developments in Hawke’s Bay, Marlborough and Barossa Valley. Million of $ 2023: Inc
Slide 30: Key Ratios
Est i947 DELEGAT Key Ratios Jun 2023 Jun 2022 % Change NZS millions vs 2022 Funding Operating Cash Flow 59.7 65.6 -9% Net Debt 319.4 248.7 28% Key Ratios Operating Profit Measures Interest Cover 6.59 9.45 -30% Return on Equity* 12.4% 13.2% -7% Return on Capital Employed” 11.4% 11.4% 0% Reported Prof
Slide 31: Priorities & Outlook
Priorities & Outlook
Slide 32: Continued global growth with strong focus on profitability
Continued global growth with strong focus on profitability supported by ongoing brand and infrastructure investment FY24 Priorities Long Term Strategic Goals Continued sales growth in the The leading premium Sauvignon Blanc in US market and improved value capture the US, Oyster Bay Pinot Gris establ
Slide 33: Investment in infrastructure will support strong sales growth to 4.1m cases in FY26
Investment in infrastructure will support strong sales growth to 4.1m cases in FY26 and further growth beyond Thousands 9 Litre Cases, 2021 to 2026 4,000 3,500 3,000 2,500 2,000 2021 2022 2023 2024 2025 2026 33
Slide 34: FY24 Operating Profit Guidance
FY24 Operating Profit Guidance Based on prevailing exchange rates and market conditions, the Group forecasts to achieve an FY24 operating NPAT that is in the range of $62 to $67 million*. 34 * Operating NPAT is a non-GAAP measure that excludes NZ IFRS fair value items and any other one-off non-opera
Slide 35: Thank you
Thank you