Slide 1: Interim 2016 Results
For personal use only TREASURY WINE ESTATES Interim 2016 Results 18 February 2016 0
Slide 2: Michael Clarke, Chief Executive Officer
For personal use only Michael Clarke Chief Executive Officer
Slide 3: Result headlines
Result headlines1,2 • For personal use only Statutory net profit after tax $60.6m, up 42% on prior year on a reported currency basis • Net sales revenue (NSR) up 22% on a reported currency basis and by 11%3 on a constant currency basis • Priority Brand portfolio4 delivered 15% NSR growth; portfolio
Slide 4: TWE's journey to a balanced & sustainable model continues
TWE’s journey to a balanced & sustainable model continues For personal use only From where we started To where we are today Maturing brands losing relevance 15 Priority Brands – rejuvenated and built globally Short term, trading driven Medium and long-term business partnerships Shipment focus Deplet
Slide 5: Noel Meehan, Chief Financial Officer
For personal use only Noel Meehan Chief Financial Officer
Slide 6: Profit & Loss
Profit & Loss EBITS growth and regional contribution Movement in NPAT For personal use only $146.8m $107.1m Balanced EBITS contribution across all regions • NPAT before material items up $24.4m (+39%) driven by higher EBITS and lower net finance costs partially offset by increased tax and a higher S
Slide 7: Balance Sheet
Balance Sheet1 A$m H1 16 FY 15 H1 15 Cash & cash equivalents 1,101.2 122.1 35.1 For personal use only Receivables 593.8 506.5 473.4 Current inventories 710.9 704.2 727.2 Non-current inventories 461.0 533.8 549.6 Property, plant & equipment 961.3 928.8 983.3 Agricultural assets 255.5 255.1 255.7 Inta
Slide 8: Cash flow and net debt
Cash flow and net debt1 Strong cash conversion Continued investment in premiumisation For personal use only A$m 1H16 1H15 A$m 1H16 1H15 Opening net debt (213.9) (209.4) IT spend 9.2 3.7 Total cash flows from activities 168.8 (59.3) Oak purchases 7.6 6.7 Proceeds from equity componenet of Diageo acqu
Slide 9: Inventory analysis
Inventory analysis For personal use only Inventory at book value split by segment – 1H16 & 1H15 Lower inventory; improved mix • Continued improvement in inventory composition during the period. Total inventory decreased $104.9m Total Luxury at cost comprising: $601m – $88.6m reduction in non-current
Slide 10: Regional presenters: ANZ, Americas, Asia & Europe, Brands & Outlook
Angus McPherson – ANZ For personal use only Bob Spooner – Americas Robert Foye – Asia & Europe Michael Clarke – Brands & Outlook
Slide 11: Australia & New Zealand
Australia & New Zealand Regional performance Historical EBITS & EBITS margin performance1 For personal use only A$m H1 16 H1 15 % H1 15 % Reported Constant currency currency Reported currency Volume (m 9Le) 4.2 4.0 4% 4.0 4% NSR (A$m) 318.1 304.0 5% 304.0 5% NSR per case (A$) 76.37 75.67 1% 75.67 1%
Slide 12: Americas
Americas Regional performance Historical EBITS & EBITS margin performance1 For personal use only A$m H1 16 H1 15 % H1 15 % Reported Constant currency currency Shipments (m 9Le) 7.1 7.2 (1)% 7.2 (1)% NSR (A$m) 450.8 368.4 22% 439.7 3% NSR per case (A$) 63.87 51.49 24% 61.46 4% EBITS (A$m) 56.2 33.6 6
Slide 13: Europe
Europe1 Historical EBITS & EBITS margin performance2 For personal use only Regional performance A$m H1 16 H1 15 % H1 15 % Reported Constant Reported currency currency currency Volume (m 9Le) 3.4 3.3 2% 3.3 2% NSR (A$m) 153.2 142.2 8% 156.7 (2)% NSR per case (A$) 45.50 42.99 6% 47.37 (4)% EBITS (A$m)
Slide 14: Asia
Asia1 Asia regional performance Historical EBITS & EBITS margin performance2 For personal use only A$m H1 16 H1 15 % H1 15 % Reported Constant Reported currency currency currency Volume (m 9Le) 1.2 0.6 >100% 0.6 >100% NSR (A$m) 157.3 69.5 >100% 70.5 >100% NSR per case (A$) 131.65 119.25 10% 120.97 9
Slide 15: Innovation accelerating Priority Brand portfolio performance
Innovation accelerating Priority Brand portfolio performance For personal use only F15 Results Announcement 1H16 Progress 2H16 plans • All launched • Max’s launch ANZ, Asia and Europe (Americas in 1H17) • All achieved expectations • BLASS, Rosemount Food • Several significantly ahead of Wine and 19
Slide 16: Initiatives to strengthen brands globally
Initiatives to strengthen brands globally For personal use only Wolf Blass NBA China Sponsorship Penfolds Max’s Acceleration • Large integrated program driving • Penfolds key initiative for all markets to awareness and consumer trial expand the franchise • Continues Wolf Blass history of partnering
Slide 17: Initiatives to strengthen brands globally
Initiatives to strengthen brands globally For personal use only 90+ Campaign Australian Gems • Niche brands previously lacking focus, • Adopting successful 90+ campaign investment, activity and excitement • Global rollout • Apply TWE brand building model to • Integrated into retail and on-trade acti
Slide 18: Summary and outlook
Summary and outlook For personal use only • Transition from an order-taking, agricultural company to a brand-led, marketing organisation continues • TWE actively pursuing balance across its brand portfolio, regional and sourcing mix as well as driving a sustainable earnings profile across the fiscal
Slide 19: Questions
For personal use only Questions
Slide 20: Disclaimer
Disclaimer For personal use only Treasury Wine Estates (TWE) advises that this presentation contains forward looking statements which may be subject to significant uncertainties outside of TWE’s control. No representation is made as to the accuracy or reliability of forecasts or the assumptions on w
Slide 21: Supplementary Information
Supplementary For personal use only Information
Slide 22: Definitions
Definitions For personal use only 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
Slide 23: Impact of foreign exchange rate movements & hedging
Impact of foreign exchange rate movements & hedging For personal use only • Overall foreign exchange rate gain in 1H16 was $21.9m (versus $2.2m in 1H15) • TWE has a diversified portfolio of currency exposures where production cost currencies and revenue generating currencies are not matched • Moveme
Slide 24: Foreign currency risk management
Foreign currency risk management For personal use only Foreign exchange risk management strategy: • Partial hedge of exposures; focused on Commercial and lower Masstige where limited ability exists for TWE to increase price following adverse movements in foreign exchange rates • Participating approa