Australian Vintage Ltd · ASX:AVG
Australian Vintage — Shareholder Meeting (November 2014)
31 slides from Australian Vintage's shareholder meeting presentation, Nov 26, 2014
Slide 1: Annual General Meeting 26 November 2014
For personal use only ANNUAL GENERAL MEETING 26 NOVEMBER 2014 1
Slide 2: Disclaimer
Disclaimer For personal use only The information in this presentation is general advice, given in good faith and derived from sources believed to be accurate at this date but no warranty of accuracy or reliability is given and no responsibility arising in any other way including by reason of neglige
Slide 3: Annual General Meeting November 2014
For personal use only ANNUAL GENERAL MEETING 26 NOVEMER 2014 3
Slide 4: Today's Agenda
Today’s Agenda For personal use only Performance Summary Ian Ferrier Business Update Neil McGuigan Formal Proceedings Ian Ferrier 4
Slide 5: Performance Summary
For personal use only PERFORMANCE SUMMARY IAN FERRIER 5
Slide 6: Your company
Your company For personal use only 1. One of Australia’s largest wine producers – Crushes 140,000 tonnes a year – 8% of total Australian crush. – Sells 80 million litres of wine. – 2,900 planted hectares in 11 vineyards. – Production facilities capable of producing 1.5m casks and 6m cases of bottled
Slide 7: Australian Vintage Grows Profit
Australian Vintage Grows Profit For personal use only 1. Net Profit increased by 49% to $10.5 million. 2. Revenue up 3% to $214.8 million, reflecting higher Australasia/North America sales. 3. Fully franked dividend at 2.2 cents per share. 4. A smaller vintage at 124,000 tonnes compared to 153,000 t
Slide 8: Strong growth in Branded Sales
Strong growth in Branded Sales For personal use only 1. Total revenue up 3% to $214.8 million due mainly to the ongoing improvement in branded sales offset by reduced bulk wine sales and reduced contract processing. 2. Australasia/North America packaged sales up 11% to $88.9 million with Australian
Slide 9: Highlights and Key Points
Highlights and Key Points 1. The Australasia/North America packaged contribution increased by 53% to $8.0 For personal use only million. McGuigan branded sales 25% higher in Australia. 2. The UK/Europe segment contribution improved by 17% to $3.9 million. The contribution from bottled sales increase
Slide 10: Highlights and Key Points (continued)
Highlights and Key Points (continued) For personal use only 7. Signed a long term, strategic China – wide distribution agreement with COFCO Wine & Spirits Co Ltd – a subsidiary of China’s largest food processing, manufacturing and trader, COFCO. 8. Signed contracts for the sale of the Yaldara Winery
Slide 11: Global and Australian Market Conditions
Global and Australian Market Conditions For personal use only Global conditions remain challenging:- 1. 2014 global wine production is 6% down on last year, returning to an average level (Organisation Internationale de la Vigne (OIV) – press release ‘Global Economic Vitiviniculture Data’). 2. Total
Slide 12: Global and Australian Market Conditions (continued)
Global and Australian Market Conditions (continued) For personal use only 4. Australian 2014 Vintage - Wine quality from dry land vineyards is outstanding and the quality from irrigated regions is equal to the outstanding 2013 vintage. 5. Total domestic market wine sales have increased by 14% to 609
Slide 13: Outlook
Outlook For personal use only • Global industry conditions remain challenging. • Further weakening of the AUD should improve margins and create other profitable opportunities. • Competition remains fierce across the Australian and overseas markets. • The low 2014 vintage has resulted in a higher cos
Slide 14: Outlook (continued)
Outlook (continued) For personal use only • $15.5m Yaldara winery and brand sale delivered a net profit after tax of $5.4 million. Offsetting this one off profit will be: 1. Accelerated write off of incentive payments to overseas customers which we can no longer support; and 2. Legal costs associate
Slide 15: Business Review
For personal use only BUSINESS REVIEW NEIL MCGUIGAN 15
Slide 16: AVL's Business Strategies
1. AVL’s Business Strategies For personal use only • Growing and strengthening our distribution channels in the China / Asia region, UK and North America. • Building sales and profitability of our core brands both domestically and internationally. • Reviewing and decreasing our cost base. • Creating
Slide 17: FY14 Scorecard
2. FY14 Scorecard For personal use only • Growing and strengthening our profitable distribution channels in the China/Asia region, UK and North America. – Signed a 10 year distribution agreement with COFCO Wine and Spirits in China. – Increased resources and opened a Hong Kong office to capitalise o
Slide 18: FY14 Scorecard (cont.)
2. FY14 Scorecard (cont.) For personal use only • Building sales and profitability of our core brands both domestically and internationally. Domestically McGuigan Brand grew by 25%. “Black Label Red now the No 1 bottled red wine in Australia” Tempus Two Brand grew by 11%. Internationally Canada – Bl
Slide 19: FY14 Scorecard (cont.)
2. FY14 Scorecard (cont.) For personal use only • Reviewing and decreasing our cost base - Continuing to review long term grape supply leases/contracts to decrease grape cost. - Raised $40.8m in Capital Raising which was used to repay debt. - Sold the Yaldara Winery for $15.5m - Investment in solar
Slide 20: Buronga Hill Winery
2. FY14 Scorecard (cont.) For personal use only Buronga Hill Winery 20
Slide 21: FY14 Scorecard (cont.)
2. FY14 Scorecard (cont.) For personal use only • Creating appropriate new products for developing and emerging markets. – Release of the McGuigan super premium red called “The Philosophy”. – Miranda is a second tier brand which focuses on lower alcohol and reduced alcohol alternatives. – Continue t
Slide 22: How a $150 wine makes $10 plonk better
How a $150 wine makes $10 plonk better BLA SPEEDY IF Tony Abbott is having difficulty selling the idea that poor people will bene fit from mew costs and scrapped business. taxes, be might like to take a lesson from winemakers. Launching his company’s new $150-a-bottle “The Phiosopby.” a 2010 blend o
Slide 23: Miranda Wines: The 'Better For You' Category Leader
Miranda Wines: The ‘Better For You’ Category Leader For personal use only The Portfolio SUMMER FRESH SUMMER TONE SUMMER LIGHT Alcohol removed wines 5.5% alcohol 8.5% alcohol Less than 0.5% alcohol 60% lower in alcohol* 33% lower in alcohol* *Compared to a standard 750ml bottle of wine of
Slide 24: For personal use only
For personal use only
Slide 25: Work In Progress: Wine Quality and Innovation
3. Work In Progress a) Wine Quality and Innovation For personal use only The Show results for the three key brands have been very pleasing again this year. Here are some of the highlights – MCGUIGAN AWARDS • Runner up White Winemaker of the Year at the International Wine Challenge in London – 2014.
Slide 26: Work In Progress: Wine Quality and Innovation (cont.)
3. Work In Progress (cont.) For personal use only a) Wine Quality and Innovation (cont.) NEPENTHE AWARDS • Trophy – Best Sauvignon Blanc in show – Nepenthe Petraea Sauvignon Blanc 2013 – Royal Queensland Wine Show 2014. • Trophy – Altitude Pinot Noir 2012 – Hong Kong International Wine and Spirit Co
Slide 27: Work In Progress (cont.): Five Key Points
3. Work In Progress (cont.) For personal use only Five Key Points: * 2007 McGuigan Shortlist Semillon David Clarke Trophy at Sydney Wine Show 2014 Best Single White Variety under £15 at Decanter wine Awards 2014 * 2013 McGuigan Barossa Valley Montepulicano Trophy in Adelaide Wine Show – Best “other”
Slide 28: Work In Progress: Building relationships with retailers
3. Work In Progress (cont.) For personal use only b) Building relationships with all key retailers worldwide - AVL relationships with key retailers in the UK and in Australia have not been stronger. - Working closely with our retail partners is essential to ensure that our sales and marketing propos
Slide 29: Examples of Branded Promotional Activities
3. Work In Progress (cont.) For personal use only Examples of Branded Promotional Activities include: McGuigan • ‘Win an Alfa Romeo’ national independent sales promotion. • Sponsorship of the St George Illawarra Dragons NRL team, increasing brand awareness and sales. • Promotion of UK Masterchef Joh
Slide 30: Work in Progress (cont.)
3. Work in Progress (cont..) c) Re connecting with the consumer (cont.) For personal use only – Not being Fast moving consumable goods i. Winemaker involvement in the trade and with customers ii. Wine and Food engagement * Lyndey Milan – Nepenthe * John Torode – McGuigan made this “Vine to the Glass
Slide 31: Summary
Summary For personal use only • AVL has a very strong and experienced board that provide very clear strategies to management. • AVL continues to review its cost base to ensure it is appropriate for the size of its business. • AVL’s branded business, private label, exclusive label business and contra
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