Lark Distilling Co. Ltd. · ASX:LRK
Lark Distilling — Investor Presentation (October 2021)
49 slides from Lark Distilling's investor presentation, Oct 18, 2021
Slide 1: Lark Distilling Investor Presentation Oct 2021
LARK DISTILLING — INVESTOR PRESENTATION — OCT 2021
Slide 2: The Lark Vision
{| ee : is <- THE LARK VISION
Slide 3: Slide 3
Slide 4: Our Vision
OUR VISION — To become a global icon in single malt whisky, renowned for being the world’s most innovative distiller STARTING FY22 BY END BY END POINT FY22 FY23 — — — — First mover ~100% net 2m+ litres Brand advantage revenue under leadership at with scale, growth YoY maturation home and credibility
Slide 5: 2021 is a continuation of winning strategies
2021 is a Increased Social Award winning Rare Cask Series: / Earned Media Limited Release The Pinnacle continuation Programme Expression of winning strategies... — Innovation Unique Diverse E-commerce in Process & Collaborations & Hospitality (New Website) Liquid Partnerships Expansion
Slide 6: 2022 is about executing new growth drivers
… and 2022 is about executing new growth drivers — The Still: a hybrid Tasmanian whisky bar & retail On-premise collaboration Whisky Bar Series (1st release sold out) Gift packaging programme Export planning and infrastructure
Slide 7: 2022 will be a celebration of all things Lark
2022 will be a celebration of all things Lark given it is our 30th anniversary
Slide 8: Evolving the brand position in readiness for export
Evolving the brand position in readiness for export —
Slide 9: Tasmanian single malt whisky
TASMANI/ SolAssiga SINGLE WAty WHIS! (NUKE MADE OF TASMAN)
Slide 10: All supported by key macro category drivers
All supported by key macro category drivers Whisky Premium- New whisky — growing at isation of all consumers— 8% p.a. globally alcoholic women, beverages more diverse continues demographic segments New drinking Proliferation Promiscuous occasions— of high end consumption highballs, on-premise based
Slide 11: Tasmania and Australia are minnows in the whisky world
TOTAL GLOBAL WHISKY Tasmania and MARKET ESTIMATED TO GROW AT 8% P.A. TO 2025 Australia are minnows in the whisky world, but are considered world-class by quality... US$17b US$18b — US$34b HIGHLY ATTRACTIVE LUXURY WHISKY CATEGORY, GROWING AHEAD OF TOTAL CATEGORY — THE LARK EXPORT OPPORTUNITY IS LIMIT
Slide 12: Lark punches above its weight on the world stage
...and Lark 1/ 2/ Renowned as the World’s Finalist punches Most Innovative Distillery - Worldwide Whisky Producer of above its SIP Innovation Award the Year - IWSC weight on 2020 2020 the world 3/ 4/ stage First certified carbon Finalist — neutral distillery in Worldwide Whisky Producer Australia of
Slide 13: Company Update
02_COMPANY UPDATE
Slide 14: 1QFY22
Company update 1QFY22 — NET REVENUE — $4.1m +80% PCP VALUE OF LITRES LITRES UNDER UNDER M ATURATION M ATURATION — — $267m* 1.2m** +150% PCP +61% PCP *At $216 NSV / litre **At 43% ABV, post angel share
Slide 15: Company update 1QFY22
Company update 1QFY22 — NET WHISKY UNDER REVENUE* MATURATION (LITRES)** 1.2m 1.1m 0.7m FY20 FY21 Q1 FY22 FY20 FY21 Q1 FY22 YOY NET $6.5m $12.9m $4.1m VALUE AT $99m $236m $267m SALES +98% +80% MATURITY +138% +13% GROWTH * NET REVENUE = SALES AFTER EXCISE ** AT 43% ABV, POST ANGEL SHARE.
Slide 16: The Acquisition of the Pontville Distillery and Estate
03_THE ACQUISITION OF THE PONTVILLE DISTILLERY AND ESTATE
Slide 17: Binding agreement to acquire the Pontville Distillery and Estate
Lark Distilling Co., today announced that it has entered into a binding agreement to acquire the Pontville Distillery and Estate (‘the Acquisition’), the construction of a new 1 million litre distillery on the acquired land and the acceleration of Lark’s export strategy
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Slide 19: Background on Pontville Distillery and Estate
Background Founded Born and based Bond Store on Pontville in 1819 in Pontville, = 483,000 litres Tasmania under maturation Distillery and Estate — Home to the Tasmania’s Natural San Francisco unique Whisky only onsite Tasmanian World Spirits Village cooperage ingredients Competition winning spirits
Slide 20: Acquisition for total consideration of $40 million
Lark has agreed to acquire the Pontville Distillery and Estate for total consideration of $40 million comprised of $38.5 million in cash and $1.5 million in Lark shares* 483,000 litres under Increases Lark’s maturation** estimated whisky under maturation as at 30 June ** At 43% ABV, post angel share
Slide 21: Financial and operational highlights
Financial and operational highlights — 1 Lark now expects to have 2+ million litres of whisky under maturation at 30 June 2022, valued at $435m* 2 Acquisition is expected to be approximately 19% accretive to Net Sales Value per share**, on a Q1 FY22 pro forma basis Rebalances the profile of litres u
Slide 22: Barrels and liquid
Barrels and liquid — REBALANCING THE PROFILE OF LITRES UNDER 1.53mL MATUR ATION WILL ENABLE LARK TO ACCELERATE ITS Estimated at EXPORT STRATEGY AND ENTER GLOBAL MARKETS FROM 30 June 2022 FY23 (PREVIOUSLY FORECAST FOR FY24) + Estimated Litres Under Maturation @ 30 June 2022 0.48mL Litres of Whisky at
Slide 23: Acquisition accretive on Net Sales Value Per Share basis
The Acquisition is highly accretive for Lark on a Net Sales Value Per Share basis — NET SALES VALUE PER SHARE AS AT NET SALES VALUE PER SHARE AT END Q1 FY22 OF FY22 Pre Acquisition Litres under maturation (m) 1.24 Estimated litres under maturation (m) 2.02 NSV per litre $216 NSV per litre $216 Value
Slide 24: Land and buildings and construction of new distillery
Land and buildings (incl. Bond Stores) and construction of new distillery — Considerable estate of 40 acres acquired Distillery increases current production capacity by 193,000 litres p.a. 1 m litre greenfield distillery expansion expected to be operational in 2023 8 onsite bond stores with scope to
Slide 25: Pontville onsite cooperage
Pontville onsite cooperage* — Only onsite cooperage in Tasmania Establishes Lark as the only Greater oversight and distiller with onsite cooperage in control of coopering Tasmania methods Significant scale of Accelerates strategy to production and vertical integration shore up barrel supply of coope
Slide 26: Pontville Acquisition consistent with Lark's approach to M&A
Pontville Acquisition consistent 100% Acquire whisky Balance out the with Lark’s Tasmanian inventories on age profile of approach to value accretive our maturing M&A — terms inventory Provide liquid to Increases Cost commence production efficiencies export strategy capacity both with minimal immedia
Slide 27: The House of Lark
E HOUSE «¥*® On ARK MADE OF TASMANIA
Slide 28: Formalising The House of Lark
Formalising The House of Lark — Business entity: – Lark Distilling Co External reference: – The House of Lark Brand: – Lark Product: – Lark will only ever create Tasmanian whisky – Lark presents whiskies from different distilleries, within The House of Lark, and at times will create whisky supported
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Slide 30: Equity Raising
04_EQUITY RAISING
Slide 31: Equity raising
Equity raising — In order to fund the acquisition, Lark Uses of funds $m is undertaking a Placement to raise approximately $53 million Acquisition of Pontville Distillery and Estate $40.0 General corporate purposes including $12.3 As part of the Acquisition construction of greenfield distillery cons
Slide 32: Equity raising details
Equity raising details — Placement Structure and Size A placement to raise approximately $53m (the Placement), comprising: - A $46.5m fully underwritten institutional placement of approximately 9.3m New Shares to be undertaken without shareholder approval (Institutional Placement) -A $6.4m non-under
Slide 33: Offer timetable
Offer timetable (subject to change) — Key Dates Record date for SPP 7:00pm (AEDT) Friday 15th October Trading halt and announcement of the Placement Monday 18 October Placement bookbuild Monday 18 October Announcement of the outcome of the Institutional Placement Tuesday 19 October Trading halt lift
Slide 34: Shop now at www.larkdistillery.com
Shop now at: www.larkdistillery.com
Slide 35: Important notice and disclaimer
Important notice and disclaimer — This presentation is dated 18 October 2021 and has been prepared by Lark Distilling Co. Limited (Lark) in connection with the proposed acquisition by Lark of the entire issued share capital in Kernke Family Shene Estate Pty Ltd (Shene Estate) and associated transact
Slide 36: Important notice and disclaimer (cont.)
Important notice and disclaimer (cont.) — The information contained in this presentation is of general background and does not purport to include or summarise all information that an investor should consider when making an investment decision. It should be read in conjunction with Lark's other perio
Slide 37: Important notice and disclaimer (cont.)
Important notice and disclaimer (cont.) — It is not intended that it be relied upon as advice to investors or potential investors, who should consider seeking independent professional advice depending upon their specific investment objectives, financial situation or particular needs before making an
Slide 38: Important notice and disclaimer (cont.)
Important notice and disclaimer (cont.) — Forward looking statements can generally be identified by the use of forward looking words such as, “expect”, “anticipate”, “likely”, “intend”, “should”, “could”, “may”, “predict”, “plan”, “propose”, “will”, “believe”, “forecast”, “estimate”, “target” and ot
Slide 39: Important notice and disclaimer (cont.)
Important notice and disclaimer (cont.) — By accepting this presentation, you represent and warrant that you are entitled to receive such presentation in accordance with the above restrictions and agree to be bound by the limitations contained herein. No action has been taken to register the securit
Slide 40: Annexure 1: Key risks
Annexure 1: Key risks — This section sets out some of the key risks associated with any investment in Lark, which may affect the value of Lark shares. The risks set out below are not listed in order of importance and do not constitute an exhaustive list of all risks involved with an investment in La
Slide 41: Annexure 1: Key risks (cont.)
Annexure 1: Key risks (cont.) — Integration risk The integration of Shene Estate carries risk, including potential delays or costs in implementing necessary changes and difficulties in integrating various operations. These risks may be exacerbated by disruptions caused by COVID-19, which may make in
Slide 42: Annexure 1: Key risks (cont.)
Annexure 1: Key risks (cont.) — Contractual risk Lark has contractual obligations and rights with respect to a number of agreements it is a party to. These agreements may include provisions which allow for termination for convenience or otherwise. No assurance can be given that all such agreements w
Slide 43: Annexure 1: Key risks (cont.)
Annexure 1: Key risks (cont.) — Regulatory risk The food and beverage manufacturing industry in Australia is heavily regulated and Lark is required to meet various standards in relation to food and beverage safety, product liability, labour laws and other matters. Furthermore there is a risk that su
Slide 44: Annexure 2: Summary of Placement Agreement
Annexure 2: Summary of Placement Agreement — Lark has entered into a placement agreement with Barrenjoey Advisory Pty Limited (Underwriter or Barrenjoey Capital Partners) in respect of the Offer (Placement Agreement) pursuant to which the Underwriter agrees to manage and underwrite the institutional
Slide 45: Annexure 2: Summary of Placement Agreement (cont.)
Annexure 2: Summary of Placement Agreement (cont.) — • any regulatory body commences any public action against any director or officer of Lark or announces that it intends to take any such action or a director or officer of Lark is charged with an indictable offence or is disqualified from managing
Slide 46: Annexure 3: Key terms of Acquisition Agreements
Annexure 3: Key terms of Acquisition Agreements — Transaction • Lark has entered into a Share Sale Agreement (SSA) to acquire 100% of the issued share capital in Kernke Family Shene Estate Pty Ltd overview (Shene Estate) from the shareholders of Shene Estate (Sellers), subject to the terms of the SS
Slide 47: Annexure 3: Key terms of Acquisition Agreements (cont.)
Annexure 3: Key terms of Acquisition Agreements (cont.) — Conditions Completion of the Share Acquisition is subject to a number of conditions. The key conditions include: precedent • finalisation of the Maturing Whisky Inspection (see description below); • the transfer of trade marks associated with
Slide 48: Annexure 4: Foreign selling restrictions
Annexure 4: Foreign selling restrictions — This document does not constitute an offer of new ordinary shares of Lark (New Shares) in any jurisdiction in which it would be unlawful. In particular, this document may not be distributed to any person, and the New Shares may not be offered or sold, in an
Slide 49: Annexure 4: Foreign selling restrictions (cont.)
Annexure 4: Foreign selling restrictions (cont.) — • meets the investment activity criteria specified in clause 38 of Schedule 1 of the FMC Act; • is large within the meaning of clause 39 of Schedule 1 of the FMC Act; • is a government agency within the meaning of clause 40 of Schedule 1 of the FMC
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