Treasury Wine Estates Limited · ASX:TWE
Treasury Wine Estates — H1 FY24 Earnings Presentation
31 slides from Treasury Wine Estates's earnings presentation, Feb 15, 2024
Slide 1: 2024 Interim Results Investor and Analyst Presentation
15 February 2024 ASX ANNOUNCEMENT 2024 Interim Results Investor and Analyst Presentation Enclosed are the presentation materials for the investor and analyst webcast and conference call to be hosted by Treasury Wine Estates commencing at 10:30am (AEDT) on 15 February 2024. Links to register for the
Slide 2: F24 Half Year Results
F24 Half Year Results 15 FEBRUARY 2024
Slide 3: Important information
Important information This presentation is in summary form and is not necessarily complete. It should be read together with the Company’s Appendix 4D and interim financial statements for the half year ended 31 December 2023 and other announcements lodged with the Australian Securities Exchange, whic
Slide 4: Introduction
Introduction Tim Ford Chief Executive Officer
Slide 5: Key Messages
Key Messages • 1H24 EBITS $289.8m (down 5.8%) and EBITS margin 22.6% (down 1.4ppts), reflecting the planned weighting of Penfolds Bin and Icon shipments in F24 to 2H24: – Penfolds continued its strong momentum, particularly in Asia and Australia, while Treasury Americas and Treasury Premium Brands E
Slide 6: 1H24 Financial Highlights
1H24 Financial Highlights 1,2,3 Luxury portfolio growth in Penfolds and Treasury Americas drives stable topline performance NSR EBITS NPAT $1.3bn Unchanged $289.8m 5.8% $182.3m 5.9% NSR per case EBITS margin EPS4 $118.4 9.1% 22.6% 1.4 ppts 24.6cps 7.5% Cash conversion ROCE6 Luxury and Premium 75.2%
Slide 7: 1H24 Divisional performance
1H24 Divisional performance Penfolds delivers EBITS growth despite the planned weighting of shipments to 2H24, while reduced NSR drove declines in Treasury Americas and Treasury Premium Brands Metric1, 2 1H24 % pcp % CFX 1H24 % pcp % CFX 1H24 % pcp % CFX NSR (A$m) 448.1 9.2% 8.2% 447.7 (4.3)% (6.5)%
Slide 8: China wine tariff review
China wine tariff review Prepared and well placed to re-establish our Australian COO portfolio in China, should tariffs be removed • The expedited review of tariffs on Australian wine imports is Penfolds has retained strong organisational ongoing, with a determination anticipated in March 2024 prese
Slide 9: Acquisition of DAOU
Acquisition of DAOU TWE now has the leading US Luxury portfolio following the acquisition of DAOU DAOU financial performance • Acquisition completed December 2023, establishing US$m CY23 CY22 % Treasury Americas as the leading US Luxury portfolio Volume (m 9Le) 1.1 0.9 22% including DAOU, Stags’ Lea
Slide 10: Global operating model
Global operating model Assessing the future operating model for TWE’s global portfolio of Premium brands, including how best to leverage scale across TWE’s network, with a determination to be made during CY241 Luxury Premium BIN & ICON NSR NSR/9Le EBITS margin NSR NSR/9Le EBITS margin NSR NSR/9Le EB
Slide 11: Financial Performance
Financial Performance Stuart Boxer Chief Financial and Strategy Officer
Slide 12: Key measures of performance
Key measures of performance 1 Group NSR (A$m) and NSR per case Group EBITS (A$m) and EBITS margin 23.2% 23.9% 22.6% 19.9% 20.7% 118.4 108.6 95.6 87.0 82.5 355.9 307.5 281.2 289.8 1,536.1 1,411.0 262.4 1,267.0 1,284.5 1,284.3 73% 75% 83% 85% 86% 27% 25% 17% 15% 14% 1H20 1H21 1H22 1H23 1H24 1H20 1H21
Slide 13: Material items
Material items Projected Total cost Recognised Material Items Benefits Benefits from one-off cost to date in 1H24 Status Acquisition of DAOU Established Treasury Americas as the To complete leading US Luxury portfolio, supporting 2H24 $(98.0)m1 $(53.4)1m $(35.1)m Announced 31 October 2023 in F25 pre
Slide 14: Balance sheet
Balance sheet 1,2 1H243 F23 1H234 A$m 31-Dec-23 30-Jun-23 31-Dec-22 Cash & cash equivalents 436.4 565.8 684.9 • Net assets increased $878.8m on a reported currency basis Receivables 737.5 612.9 573.6 in 1H24 Current inventories 1,059.7 990.3 1,013.3 • Adjusting for the movement in foreign exchange r
Slide 15: Inventory analysis
Inventory analysis Inventory at book value split by price segment1,2 $1,059.7m $1,014.3m $1,221.3m $1,028.5m $2,281.0m $2,042.8m • Total inventory volume is flat versus the pcp, with reduced Commercial and Premium portfolio inventory offset by higher Luxury inventory Total Luxury 53% 45% $1,464m • T
Slide 16: Cash flow and net debt
Cash flow and net debt1 A$m (unless otherwise stated) 1H24 1H23 EBITDAS 364.6 381.3 Change in working capital (93.3) (115.7) Other items 2.9 (7.5) Net operating cash flows before financing costs, tax & material items 274.2 258.2 • Cash conversion2 was 75.2% in 1H24, driven by the Cash conversion2 75
Slide 17: Capital expenditure
Capital expenditure A$m 1H24 1H23 Wine making equipment and facilities 19.6 10.6 • Capital expenditure (capex) $66.1m in 1H24: Vineyard redevelopments 14.8 6.6 − Maintenance & replacement capex of $59.9m, including focus on ongoing upgrades to wine making Sustainability 2.0 3.0 equipment and facilit
Slide 18: Capital management
Capital management • Investment grade capital structure retained post DAOU • Elevating our focus on capital allocation and capital acquisition: discipline will be a key priority moving forward: - Net debt / EBITDAS1 2.2x at 1H24, with favourable - Revenue phasing and cash flow currency translation o
Slide 19: Divisional Performance
Divisional Performance Tom King Managing Director, Penfolds Ben Dollard President, Treasury Americas Peter Neilson Managing Director, Treasury Premium Brands
Slide 20: Penfolds
Penfolds Strong momentum in Asia and Australia moderated by planned phasing of Bin and Icon shipments to 2H Reported Currency Constant Currency Performance summary1 A$m 1H24 1H23 % 1H23 % • EBITS increased 3.5% and EBITS margin decreased 1.9 ppts to Volume (m 9Le) 1.3 1.2 14.1% 1.2 14.1% 41.7%: NSR
Slide 21: Penfolds Champagne
Penfolds Champagne New Champagne Cuvée Brut and Champagne Rosé, in partnership with Champagne Thiénot • Exciting expansion of Penfolds Champagne portfolio, in collaboration with long-term partner, Champagne Thiénot • Fruit sourced from grower vineyards in Champagne, and produced to Penfolds distinct
Slide 22: Treasury Americas
Treasury Americas Modest increase in availability supporting the Luxury portfolio’s return to growth Performance summary1 Reported Currency Constant Currency A$m 1H24 1H23 % 1H23 % • EBITS declined 23.3% and EBITS margin reduced 4.6ppts to 20.8%: Volume (m 9Le) 2.8 3.0 (7.3)% 3.0 (7.3)% − Lower volu
Slide 23: Treasury Premium Brands
Treasury Premium Brands Priority Premium portfolio brands in growth, while Commercial declines continue as expected Reported Currency Constant Currency Performance summary1 A$m 1H24 1H23 % 1H23 % • EBITS decreased 14.9% and EBITS margin decreased 1.0ppts to Volume (m 9Le) 6.7 7.6 (12.1)% 7.6 (12.1)%
Slide 24: Outlook
Outlook Tim Ford Chief Executive Officer
Slide 25: Summary and outlook
Summary and outlook • Our financial objective remains to deliver sustainable top-line growth and high-single digit average earnings growth over the long-term1 • Given the deliberate half on half weighting of F24, we expect a stronger 2H24 to deliver mid-high single digit organic EBITS growth for the
Slide 26: Questions
TREASURY WINE ESTATES Questions
Slide 27: Supplementary Information
TREASURY WINE ESTATES Supplementary Information
Slide 28: Impact of foreign exchange and hedging
Impact of foreign exchange and hedging 1H24 EBITS constant currency impact 2H24 EBITS sensitivity and risk management CFX Impact (A$m) FY24 H2 EBITS Currency Pair Primary Exposure Movement Currency Underlying Hedging1 Total Sensitivity (A$m) AUD/USD and AUD/GBP 14.7 (0.1) 14.6 AUD/USD COGS, EBITS +
Slide 29: Reconciliation of key performance measures
Reconciliation of key performance measures Metric (A$m unless Management calculation 1H24 1H23 otherwise stated) Statutory net profit 166.8 188.2 Income tax expense 60.0 72.3 Net finance costs 42.1 37.6 EBITS Material items (gain) / loss 37.5 (19.7) SGARA (gain) / loss (16.6) 29.0 EBITS 289.8 307.5
Slide 30: 2023 Fact Book
2023 Fact Book For further information on Treasury Wine Estates, please refer to our 2023 Fact Book, which is available at tweglobal.com 29
Slide 31: Definitions
Definitions Cash conversion Net operating cash flows before financing costs, tax and material items divided by EBITDAS COO Country of origin CODB Cost of doing business. Gross profit less EBITS. Excludes non-cash items as well as tax, the cost of the Group’s capital structure and non-operating trans
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