Slide 1: Annual 2016 Results
For personal use only TREASURY WINE ESTATES Annual 2016 Results 18 August 2016 0
Slide 2: Michael Clarke, Chief Executive Officer
For personal use only Michael Clarke Chief Executive Officer
Slide 3: Result headlines
Result headlines1,2,3 • Reported net profit after tax $179.4m; more than double prior year For personal use only • Reported Earnings Per Share (EPS) 25.1 cents per share; more than double prior year • Reported EBITS5 $342.0m, up 52%; slightly ahead of guidance • TWE’s base business delivered EBITS $
Slide 4: Brand and marketing highlights in 2H16
Brand and marketing highlights in 2H16 Strategic Innovation Powerful Sponsorships Activation For personal use only NBA Sponsorship in China Manchester City Sponsorship in Asia & MEA Baseball Sponsorship AFL Sponsorship in Japan & South Korea in Australia Fine Wine & Awards Penfolds Magill Cellar 3 B
Slide 5: Noel Meehan, Chief Financial Officer
For personal use only Noel Meehan Chief Financial Officer
Slide 6: Profit & Loss
Profit & Loss1 EBITS growth and regional contribution2 Historical EBITS and EBITS margin3 For personal use only $342.0m $266.1m Balanced, sustainable and quality result delivered in F16 • NPAT before material items and SGARA up $79.3m to $221.8m (+56%)3 principally driven by higher EBITS • EBITS up
Slide 7: Profit and Loss snapshot by region
Profit and Loss snapshot by region1 For personal use only ANZ ASIA Europe F16 F15 CFX F16 F15 CFX F16 F15 CFX Volume (m 9Le) 7.8 7.6 2.4 1.7 8.4 6.7 NSR (A$m) 590.7 585.5 293.2 209.9 357.7 314.3 NSR per case (A$) 75.88 77.17 123.48 123.65 42.46 47.17 EBITS (A$m) 92.3 85.5 102.0 70.6 47.7 37.0 EBITS
Slide 8: Balance Sheet
Balance Sheet1 Flexible balance sheet maintained Committed debt facility maturity profile For personal use only A$m F16 F15 Cash & cash equivalents 256.1 122.1 Receivables 611.4 506.6 Current inventories 904.0 704.2 Non-current inventories 678.4 533.8 Property, plant & equipment 1,154.5 928.8 Agricu
Slide 9: Cash flow and net debt
Cash flow and net debt1 Cash conversion maintained Investment in quality and efficient asset base A$m (unless otherwise stated) F16 F15 A$m F16 F15 For personal use only Opening net debt (213.9) (209.4) IT spend 11.5 12.0 Net operating cash flows before financing costs, tax Oak purchases 21.8 18.2 5
Slide 10: Foreign exchange exposures
Foreign exchange exposuresANZ Asia Pacific and Asia • TWE has a diversified portfolio of currency exposures where For personal use only production cost currencies and revenue generating currencies are not matched • The map illustrate TWE’s key transactional foreign exchange flows by region • Moderat
Slide 11: Impact of foreign exchange rate movements & hedging
Impact of foreign exchange rate movements & hedging F16 Constant currency impact F17 EBITS sensitivity and risk management strategy For personal use only CFX Impact (A$m) Currency Primary EBITS Movement Currency Underlying Hedging2 Total Pair Exposure Sensitivity (A$m) AUD/USD and AUD/GBP 44.3 5.1 4
Slide 12: Inventory analysis
Inventory analysis Outstanding inventory position Inventory at book value split by segment – F16 & F151 For personal use only • Total inventory increased $344m to $1,582m reflecting: – $144.6m increase in non-current inventory – $199.8m increase in current inventory • Luxury inventory increased $255
Slide 13: Regional presenters
Angus McPherson | ANZ Robert Foye | Asia & Europe Bob Spooner | Americas For personal use only Michael Clarke | Diageo Wine update, Brands & Outlook
Slide 14: Australia & New Zealand
Australia & New Zealand Regional performance1 Historical EBITS & EBITS margin performance2 For personal use only A$m F16 F15 % F15 % Reported currency Constant currency Volume (m 9Le) 7.8 7.6 2.6% 7.6 2.6% NSR (A$m) 590.7 586.3 0.8% 585.5 0.9% NSR per case (A$) 75.88 77.28 (1.8)% 77.17 (1.7)% EBITS
Slide 15: Asia
Asia Asia regional performance1 Historical EBITS & EBITS margin performance2 For personal use only A$m F16 F15 % F15 % Reported currency Constant currency Volume (m 9Le) 2.4 1.7 39.9% 1.7 39.9% NSR (A$m) 293.2 208.6 40.6% 209.9 39.7% NSR per case (A$) 123.48 122.88 0.5% 123.65 (0.1)% EBITS (A$m) 102
Slide 16: Europe
Europe Regional performance1 Historical EBITS & EBITS margin performance2 For personal use only A$m F16 F15 % F15 % Reported currency Constant currency Volume (m 9Le) 8.4 6.7 26.4% 6.7 26.4% NSR (A$m) 357.7 286.1 25.0% 314.3 13.8% NSR per case (A$) 42.5 42.9 (1.1)% 47.2 (10.0)% EBITS (A$m) 47.7 16.0
Slide 17: Americas
Americas Regional performance1 Historical EBITS & EBITS margin performance2 For personal use only A$m F16 F15 % F15 % Reported Constant currency currency Volume (m 9Le) 15.0 14.2 5.8% 14.2 5.8% NSR (A$m) 991.0 776.2 27.7% 862.5 14.9% NSR per case (A$) 66.1 54.8 20.7% 60.9 8.6% EBITS (A$m) 136.3 83.2
Slide 18: Acquisition of Diageo Wine – progress update
Acquisition of Diageo Wine – progress update Actions taken in 2H16 Financial performance F17 priorities For personal use only • Integration largely complete F16 • Complete re-set period by end of 1H17 • 12 month re-set period ongoing Volume (m 9Le) 3.4 • Enhance brand health of acquired • Aggressive
Slide 19: US brands defined, reinvigorated and positioned for growth
US brands defined, reinvigorated and positioned for growth For personal use only 18 18
Slide 20: Outstanding new brand campaigns
Outstanding new brand campaigns For personal use only 19
Slide 21: A Time-Honored Tradition at State Dinners
“faa Partin Yoregatd. BV A TIME-HONORED TRADITION AT STATE DINNERS
Slide 22: Napa Valley, California – Always Polished, Never Dull
NAPA VALLEY, CALIFORNIA ALWAYS POLISHED NEVER DULL
Slide 23: Summary and outlook
Summary and outlook For personal use only • TWE is transitioning from an order-taking, agricultural company to a brand-led, marketing organisation • TWE is delivering consistent earnings growth and margin accretion on a more balanced and sustainable base business • Priority Brand portfolio refreshed
Slide 24: Questions
For personal use only Questions
Slide 25: 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 26: Supplementary Information
Supplementary For personal use only Information
Slide 27: Definitions
Definitions Term Definition For personal use only 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