Lark Distilling Co. Ltd. · ASX:LRK
Lark Distilling — Shareholder Meeting (November 2019)
32 slides from Lark Distilling's shareholder meeting presentation, Nov 22, 2019
Slide 1: CEO Presentation: Brand and Barrels - The Road to Whisky Riches
CEO PRESENTATION BRAND and BARRELS The Road to Whisky Riches 2019 Annual General Meeting Australian Whisky Holdings Limited Nov 2019
Slide 2: Introduction to the Board & How We Work
INTRODUCTION TO THE BOARD & HOW WE WORK DAVID DEARIE GEOFF BAINBRIDGE (CEO) } BOARD OVERSIGHT / GOVERNANCE } MANAGEMENT OVERSIGHT } STRATEGY & BRAND } STRATEGY & BUSINESS MODEL } INTERNATIONAL } FINANCIALS / COMPLIANCE } RELATIONSHIPS } RELENTLESS EXECUTION EXECUTIVE DIRECTORS NON-EXECUTIVE DIRECTOR
Slide 3: Quick Recap on Australian Whisky Holdings Assets
QU IC K UP RECAP ON AUSTRALIAN WHISKY HOLDINGS ASSETS DA TE 3
Slide 4: Since the Board Change in Late May 2019
QU IC K UP SINCE THE BOARD CHANGE IN LATE MAY 2019 ……. DA TE JUN ’19 NEW BOARD INSTALLED , ACTING CEO / CFO RESIGNED NEW AUDITOR (DELOITTE), NEW LEGAL (GADENS) JUL ‘19 CLOSED SYDNEY HQ AND RELOCATED TO HOBART COMMENCED CEO SEARCH WITH HEIDRICH & STRUGGLES FOCUS AND PRIORITY WAS ON GETTING TO KNOW TH
Slide 5: Since the Board Change in May 2019
QU IC K UP SINCE THE BOARD CHANGE IN MAY 2019 ……. DA TE OCT ’19 EXECUTIVE DIRECTOR APPOINTMENT (CEO AND CHAIRMAN) SALES, MARKETING & HOSPITALITY RESTRUCTURE COMPLETED A DETAILED F20 REFORECAST BOARD APPROVAL OF COMPANY VISION, STRATEGIC FRAMEWORK AND PLAN NOV ’19 SCOPE OF THE CAMBRIDGE DISTILLERY UP
Slide 6: CEO Presentation Agenda
CEO PRESENTATION AGENDA } THE LANDSCAPE REMAINS POSITIVE } THE VISION : “BRAND & BARRELS - THE ROAD TO WHISKY RICHES” } IMPLEMENTATION OF THE VISION / STRATEGY } THE ACQUISITION PLAYBOOK – IT’S A PROVEN MODEL } SUMMARY & QUESTIONS 6
Slide 7: The Landscape Remains Positive
BRAND AND BARRELS – THE ROAD TO WHISKY RICHES THE LANDSCAPE REMAINS POSITIVE } GLOBALLY THE WHISKY CATEGORY IS HOT AND WILL BE FOR THE FORESEEABLE FUTURE } GROWING AT 4% PA AND 8% PA IN THE PREMIUM SPACE WHERE AWH PLAYS } DRIVEN BY ……….. NEW MARKETS AND IN PARTICULAR ASIA NEW CONSUMERS RE: WOMEN NEW
Slide 8: CEO Presentation Agenda
CEO PRESENTATION AGENDA } THE LANDSCAPE REMAINS POSITIVE } THE VISION : “BRAND & BARRELS - THE ROAD TO WHISKY RICHES” } IMPLEMENTATION OF THE VISION / STRATEGY } THE ACQUISITION PLAYBOOK – IT’S A PROVEN MODEL } SUMMARY & QUESTIONS 8
Slide 9: AWH's Vision is to Build Lark as the Tasmanian Whisky Hero Brand Globally
BRAND AND BARRELS – THE ROAD TO WHISKY RICHES AWH’s Vision is to Build “Lark” as the Tasmanian Whisky Hero Brand Globally “LARK” SINGLE DARK SPIRIT HERO BRAND | 10-YEAR VISION / 5-YEAR PLAN LARK “THE FIRST TASMANIAN WHISKY” PRODUCTS PORTFOLIO GEOGRAPHIES GEOGRAPHIES FACILITIES PRODUCTION ECONOMICS E
Slide 10: Make Lark Whisky What Penfolds Is to Australian Wine
BRAND AND BARRELS – THE ROAD TO WHISKY RICHES Make Lark Whisky What “Penfolds Is to Australian Wine” “LARK” SINGLE DARK SPIRIT HERO BRAND | 10-YEAR VISION / 5-YEAR PLAN } Premium } Multi-Tiered Price Point } Strong Asian Consumer & Trade Appeal } Flexible Sourcing Model } Focused Execution and Super
Slide 11: Key Strategic Assumptions – Financial & Non-Financial
BRAND AND BARRELS – THE ROAD TO WHISKY RICHES Key Strategic Assumptions – Financial & Non-Financial Build “Lark” as the Tasmanian Whisky Hero Brand Globally PORTFOLIO | ASSUMPTIONS FACILITIES | ASSUMPTIONS GEOGRAPHIES & CHANNELS | ASSUMPTIONS } Single dark spirit brand portfolio with } 350,000L Camb
Slide 12: Lark To Become a Globally Distributed 3-Tier Price Strategy
BRAND AND BARRELS – THE ROAD TO WHISKY RICHES Lark To Become a Globally Distributed 3-Tier Price Strategy / Offer With a Strong Australian Footprint, Exports and DTC Build “Lark” as the Tasmanian Whisky Hero Brand Globally With 400,000+ Ltrs of Sales Per Annum by F27 LARK 3-TIER PRICE BAND | 10-YEAR
Slide 13: Target is to Hit 400,000ltrs in Sales by F27
BRAND AND BARRELS – THE ROAD TO WHISKY RICHES Target is to Hit 400,000ltrs in Sales by F27 with an Achievable 0.3% Global Market Share With Room to Grow LARK MARKET SHARE BY GEOGRAPHY GLOBAL MARKET SHARE IN THE ULTRA SHARE IN THE ULTRA PREMIUM SEGMENT PREMIUM SEGMENT AND ABOVE BY LARK MARKET SHARE B
Slide 14: We Have Commenced the Investment and Prioritisation of Lark
BRAND AND BARRELS – THE ROAD TO WHISKY RICHES We Have Commenced The Investment and Prioritisation of Lark with First Ever National ATL Campaign, Relaunch of the Website and New Hospitality Total Reach of National Advertising c. 6M People Through Nov ‘19 & Oct ‘20 } Re-Launched Website and Optimised
Slide 15: CEO Presentation Agenda
CEO PRESENTATION AGENDA } THE LANDSCAPE REMAINS POSITIVE } THE VISION : “BRAND & BARRELS - THE ROAD TO WHISKY RICHES” } IMPLEMENTATION OF THE VISION / STRATEGY } THE ACQUISITION PLAYBOOK – IT’S A PROVEN MODEL } SUMMARY & QUESTIONS 15
Slide 16: AWH Vision Is To Be Sequenced in Three Phases
BRAND AND BARRELS – THE ROAD TO WHISKY RICHES AWH Vision Is To Be Sequenced in Three Phases ……… 1/ Setup The Foundations 2/ Build Inventory and Selected Export Seeding 3/ Accelerate Distribution and Broaden Brand 3. ACCELERATE DISTRIBUTION } Launch Lark Blend at $99 and unlock a 7x larger market } A
Slide 17: F20 – Driving Top Line, Managing Costs and Investing In Brand & Relationships
BRAND AND BARRELS – THE ROAD TO WHISKY RICHES F20 – Driving Top Line, Managing Costs and Investing In Brand & Relationships STEP 1 – SET UP THE FOUNDATIONS FY20 KEY INITIATIVES | VS. F19 } Driving Top Line Sales Growth F19 Actual $5.5m F20 Forecast In Excess of 50% Growth eg. Lark is Effectively Sol
Slide 18: Valuation of Whisky In Barrels as at 31.10.2019
BRAND AND BARRELS – THE ROAD TO WHISKY RICHES Valuation of Whisky In Barrels as at 31.10.2019 STEP 1 – SET UP THE FOUNDATIONS INVENTORY VALUATION AT COST AT 31.10.19 | $M, AUD REALISABLE VALUE AT LIQUIDATION & MATURATION CALCULATION } Sliding scale based on age of the spirit in the barrel } For exam
Slide 19: Upgrade Cambridge to 350,000L PA @ $5m Capex and Secured External Bond Stores
BRAND AND BARRELS – THE ROAD TO WHISKY RICHES Upgrade Cambridge to 350,000L PA @ $5m Capex and Secured External Bond Stores STEP 1 – SET UP THE FOUNDATIONS CAMBRIDGE UPGRADE AND EXTERNAL BOND STORES | } Cambridge Upgrade } Secured External Bond Stores Existing 140,000 per annum Existing 2 x Bond Sto
Slide 20: We Are Presently Making Approx. 4,000 ltrs per Week
BRAND AND BARRELS – THE ROAD TO WHISKY RICHES We Are Presently Making Approx. 4,000 ltrs per Week @ 63.4% ABV STEP 1 – SETUP THE FOUNDATIONS An Example of the Outsourced Distilling Model Being Pursued } Up to An Additional 100,000 ltrs in F21 } Up to An Additional 200,000 + ltrs from F22 and Beyond
Slide 21: CEO Presentation Agenda
CEO PRESENTATION AGENDA } THE LANDSCAPE REMAINS POSITIVE } THE VISION : “BRAND & BARRELS - THE ROAD TO WHISKY RICHES” } IMPLEMENTATION OF THE VISION / STRATGEY } THE ACQUISITION PLAYBOOK – IT’S A PROVEN MODEL } SUMMARY & QUESTIONS 21
Slide 22: Market Demand for Acquisitions of Spirits Brands Remains Strong
BRAND AND BARRELS – THE ROAD TO WHISKY RICHES Market Demand for Acquisitions of Spirits Brands Remains Strong Exit/Strategic Partnership RECENT DEALS FOR SPIRIT BRANDS | FOUR TYPES OF BUYERS ……. } Spirit strategics acquiring craft brands } Wine strategics acquiring spirit brands } Privately funded c
Slide 23: A Number of Acquisitions Have Taken Place at Different Stages of Maturity
BRAND AND BARRELS – THE ROAD TO WHISKY RICHES A Number of Acquisitions Have Taken Place at Different Stages of Maturity Exit/Strategic Partnership LIFECYCLE WHISKY BRANDS POSITION AT ACQUISITION | ILLUSTRATIVE Creation of the brand Production ramp-up Accelerated distribution BRANDS ACQUIRED AT EARLY
Slide 24: Bruichladdich Was Acquired by Remy Cointreau for 7x Sales and 35x EBITDA
BRAND AND BARRELS – THE ROAD TO WHISKY RICHES Bruichladdich Was Acquired by Remy Cointreau for 7x Sales and 35x EBITDA Bruichladdich Case Study Able to Successfully Accelerate Growth Through Remy Cointreau Ownership Thanks to the Brand and Inventory Foundations Built Pre-Acquisition BRUICHLADDICH GL
Slide 25: The Acquisition Playbook – It's A Proven Model
BRAND AND BARRELS – THE ROAD TO WHISKY RICHES The Acquisition Playbook – It’s A Proven Model Exit/Strategic Partnership PITFALLS TO BE AVOIDED | THE CASE FOR ACQUISITION | POTENTIAL GAME CHANGERS | } Having too many brands } Annual sales of > 25,000 9Ltr Cases } Secured outsourced distilling model }
Slide 26: CEO Presentation Agenda
CEO PRESENTATION AGENDA } THE LANDSCAPE REMAINS POSITIVE } THE VISION : “BRAND & BARRELS - THE ROAD TO WHISKY RICHES” } IMPLEMENTATION OF THE VISION / STRATEGY } THE ACQUISITION PLAYBOOK – IT’S A PROVEN MODEL } SUMMARY & QUESTIONS 26
Slide 27: Brand and Barrels – The Road to Whisky Riches
BRAND AND BARRELS – “THE ROAD TO WHISKY RICHES” THE PLAYBOOK ……….. 1. UNDERSTAND THE WHISKY LANDSCAPE _ PRESENT AND IMPENDING 3 YRS / 5 YRS / 10 YRS _ DOMESTIC AND GLOBAL 2. EXECUTE THE PLAN AND GENERATE SUPERIOR SHAREHOLDER RETURNS 3. IMPLEMENT A PROVEN BUSINESS STRATEGY WITH STRONG APPEAL TO POTEN
Slide 28: ANIA’S F
ANIA’S F E MALT WHI - EST 66 AUSTRALIAN | 28 ‘SKY HOLDINGS
Slide 29: Capital Structure, Share Price and Substantial Shareholders
CAPITAL STRUCTURE, SHARE PRICE AND SUBSTANTIAL SHAREHOLDERS CAPITAL STRUCTURE 24 MONTH SHARE PRICE CHART as at 21 November 2019, unless otherwise stated $0.060 Shares outstanding (‘000) 1,630,579 $0.055 Performance rights and options (‘000) 128,310 Cash balance, at 30 September 2019 (A$’000) 5,227 $
Slide 30: Introduction to the Board
INTRODUCTION TO THE BOARD } EXECUTIVE DIRECTORS MR DAVID DEARIE - EXECUTIVE CHAIRMAN MR GEOFF BAINBRIDGE – MANAGING DIRECTOR } Qualifications — MHCIMA, Glasgow College of Food and } Qualifications — Bachelor of Business from RMIT with a major Technology, Institute of Marketing Diploma, University of
Slide 31: Introduction to the Board
INTRODUCTION TO THE BOARD } NON-EXECUTIVE DIRECTORS MR WARREN RANDALL – NON EXECUTIVE DIRECTOR MR LAURENT LY – NON EXECUTIVE DIRECTOR } Experience — over 40 years’ involvement in the Australian } Qualifications — Master’s Degree in Management from wine operations and management including Wynn Dauphi
Slide 32: Disclaimer
DISCLAIMER The information contained in this presentation has been prepared by Australia Whisky Holdings Limited (“AWY”). This presentation is not an offer, invitation, solicitation or other recommendation with respect to the subscription for, purchase or sale of any securities in AWY. This presenta
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