Endeavour Group Ltd · ASX:EDV
Endeavour — Investor Day (December 2023)
130 slides from Endeavour's investor day presentation, Dec 6, 2023
Slide 1: Endeavour Group Investor Day
Endeavour Group Investor Day 6 December 2023
Slide 2: Disclaimers
Disclaimers This presentation is dated 6 December 2023 and unless stated otherwise is current as at that date. This presentation contains summary and general information about Endeavour Group Limited and its controlled entities (together, Endeavour, the Group, or Endeavour Group), and Endeavour Grou
Slide 3: Introduction and Endeavour Strategy
Introduction and Endeavour Strategy Steve Donohue, CEO 3
Slide 4: Acknowledgement of country
Acknowledgement of country Artwork: Celebration Place by Riki Salam (Mualgal, Kaurareg, Kuku Yalanji)
Slide 5: Welcome to the Forest Hotel
Welcome to the Forest Hotel The Forest Hotel, Frenchs Forest, NSW
Slide 6: Agenda
Agenda Time Item Who 9:00-10:00 Introduction and Endeavour Strategy Steve Donohue, Chief Executive Officer 10:00-10:30 Capital Allocation Framework Kate Beattie, Chief Financial Officer 10:30-10:50 Pinnacle Drinks Steve Donohue, Chief Executive Officer 10:50-11:15 Morning tea 11:15-12:00 Understandi
Slide 7: We connect people through our products and venues
We connect people through our products O4 and venues, enabling great experiences and positive, memorable moments. We're pioneering, entrepreneurial and always innovating. Creating a more sociable We work as one team to contribute to the communities we serve and collaborate with our partners to help
Slide 8: We are positioned to deliver value for shareholders
We are positioned to deliver value for shareholders Portfolio of leading brands and businesses Proven track record of growth and profitability Strategy that positions us for strong shareholder returns Ambitious performance targets Unlocking the next phase of growth Isabel Estate Winery, Marlborough,
Slide 9: We operate in stable and regulated markets that are complementary
We operate in stable and regulated markets that are complementary The markets we operate in are… Alcohol and gambling expenditure as a % of disposable income Defensive Regulated Complementary … and our core markets work together Shared infrastructure Integrated offers and capability Food Alcoholic b
Slide 10: We have a strong history of organic and strategic growth
We have a strong history of organic and strategic growth Takeover of Acquisition of Acquisition of +41 hotels Launch of My Acquisition of Endeavour Acquisition of Australian Taverner Hotel Langton’s, acquired Dan’s program Chapel Hill & Group listed Josef Chromy Leisure and Group +33 hotels Cellarma
Slide 11: 11
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Slide 12: Our vision is to be the leading platform enabling social occasions
Our vision is to be the leading platform enabling social occasions Network Assets Digital & Analytics Team 12
Slide 13: Our strategy to deliver our vision and future growth
Our strategy to deliver our vision and future growth Leading customer Efficient end-to-end Capital allocation to One team living our Positive and offer and brands business drive growth purpose and values sustainable imprint Drive revenue growth Grow earnings ahead of Deliver growth and Attracting, r
Slide 14: We invest in our portfolio to respond to market trends
We invest in our portfolio to respond to market trends and serve customers across a wide range of occasions… Meaningful omnichannel Attract and engage customers experiences Customer proposition Understand our customers 14
Slide 15: … and in our business to drive sustainable earnings growth
… and in our business to drive sustainable earnings growth Delivering sustainable margin Deliver sustainable cost Simplify our business expansion reduction Balance sales growth and margin Zero-based approach to costs Simplifying our technology landscape expansion Optimising in-store and in-venue Str
Slide 16: Our Scorecard
Our Scorecard Measuring the value we deliver to shareholders through the cycle 16
Slide 17: Our Scorecard
Our Scorecard Measuring the value we deliver to shareholders through the cycle Shareholder value creation Deliver long-term shareholder value of 10%+ per year from F26 2 17
Slide 18: Our Scorecard
Our Scorecard Measuring the value we deliver to shareholders through the cycle Leading customer Efficient end-to- Capital allocation to drive One team living our Positive and sustainable Shareholder value offer and brands end business growth Purpose and Values imprint creation Drive revenue growth t
Slide 19: Our Scorecard
Our Scorecard Measuring the value we deliver to shareholders through the cycle Leading customer Efficient end-to- Capital allocation to drive One team living our Positive and sustainable Shareholder value offer and brands end business growth Purpose and Values imprint creation Drive revenue growth t
Slide 20: Our Scorecard
Our Scorecard Measuring the value we deliver to shareholders through the cycle Leading customer Efficient end-to- Capital allocation to drive One team living our Positive and sustainable Shareholder value offer and brands end business growth Purpose and Values imprint creation Drive revenue growth t
Slide 21: Our Scorecard
Our Scorecard Measuring the value we deliver to shareholders through the cycle Leading customer Efficient end-to- Capital allocation to drive One team living our Positive and sustainable Shareholder value offer and brands end business growth Purpose and Values imprint creation Drive revenue growth t
Slide 22: Our Scorecard
Our Scorecard Measuring the value we deliver to shareholders through the cycle Leading customer Efficient end-to- Capital allocation to drive One team living our Positive and sustainable Shareholder value offer and brands end business growth Purpose and Values imprint creation Drive revenue growth t
Slide 23: Our Scorecard
Our Scorecard Measuring the value we deliver to shareholders through the cycle Leading customer Efficient end-to- Capital allocation to drive One team living our Positive and sustainable Shareholder value offer and brands end business growth Purpose and Values imprint creation Drive revenue growth t
Slide 24: Our Scorecard
Our Scorecard Measuring the value we deliver to shareholders through the cycle Leading customer Efficient end-to- Capital allocation to drive One team living our Positive and sustainable Shareholder value offer and brands end business growth Purpose and Values imprint creation Drive revenue growth t
Slide 25: Unlocking the next phase of growth
Unlocking the next phase of growth Earnings growth through a balance of sales growth, gross margin management, and cost control Disciplined approach to capital management Continuous focus on team and sustainability The Brook Hotel, Mitchelton, QLD 25
Slide 26: Leading customer offer and brands
Leading Building an efficient Optimising capital customer offer end-to-end allocation to drive and brands business growth 26
Slide 27: Capital Allocation Framework
Capital Allocation Update picture to Kate Framework Beattie Kate Beattie, CFO 27
Slide 28: Prudent capital allocation in line with Group Strategy
Prudent capital allocation in line with Group Strategy Clear capital management framework Flexible asset base provides optimisation opportunities Structured approach to allocating capital Highly cash generative business Capital funded from free cash flow Chapel Hill Winery, McLaren Vale, SA 28
Slide 29: Capital management framework supports growth and shareholder returns
Capital management framework supports growth and shareholder returns Operating cash flow (90-110% cash realisation) Targeting investment grade credit metrics ● Free cash flow deployed to dividends, Dividends Sustaining CAPEX capex, and debt reduction or returned 70–75% ● Stay-in One Endeavour to sha
Slide 30: ROFE expansion will be delivered through EBIT expansion and improved Funds Employed efficiency
ROFE expansion will be delivered through EBIT expansion and improved Funds Employed efficiency F23 Funds employed $9.6bn, ROFE 11.8% ● Unique combination of assets are a competitive advantage providing a platform for growth Intangible Assets (incl. $2.4b Liquor & Gaming licences; $1.8b Goodwill) ● F
Slide 31: Retail investments are focused on driving sales and expanding margins
Retail Investments are focused on driving sales and expanding margins Growth (F23: $138m) Capital Sustaining allocation (F23: $124m) Grow our portfolio and Sustainably grow trading Drive operational efficiency customer presence margin Build capability and agility to Strategic Protecting shareholder
Slide 32: Hotels investments are focused on unlocking further value from the portfolio
Hotels Investments are focused on unlocking further value from the portfolio Growth (F23: $101m) Capital Sustaining allocation (F23: $147m) Network expansion Network optimisation Drive operational efficiency Strategic Protecting shareholder Create compelling customer Unlocking the value of the Lever
Slide 33: Robust governance, benefits tracking, and capital management
Robust governance, benefits tracking, and capital management Capital management framework Investment Governance Supports business growth and delivery of Investments are subject to financial strong shareholder returns hurdles and a robust governance process Capital allocation cycle Benefits tracking
Slide 34: Growth capex prioritised based on risk/return profiles
Growth capex prioritised based on risk/return profiles, earnings impact and qualitative factors 1 2 3 Projects are assessed based Risk weighted capital allocation Capital allocation also on returns and risk profile to achieve Target EPS growth considers qualitative factors Return hurdles Target EPS
Slide 35: Sufficient cash generated to fund dividends and capital requirements
Sufficient cash generated to fund dividends and capital requirements F24 context Our areas of focus Target results Lower capital expenditure in F24 Investing behind our strategy Earnings growth ● Lower level of hotel acquisitions ● Capital allocation to drive short ● Targeting mid-to-high single ● F
Slide 36: Prudent capital allocation in line with Group Strategy
Prudent capital allocation in line with Group Strategy Clear capital management framework Flexible asset base provides optimisation opportunities Structured approach to allocating capital Highly cash generative business Capital funded from free cash flow Chapel Hill Winery, McLaren Vale, SA 36
Slide 37: Q&A
Q&A 24 endeavour 2,5 Group
Slide 38: Pinnacle Drinks
Pinnacle Drinks Steve Donohue, CEO 38
Slide 39: Scale, high growth drinks supplier
Scale, high growth drinks supplier Market-leading wine portfolio, profitable at all price points Deep customer insights delivering products customers love Unique end-to-end wine value chain Paragon Wine Estates driving strong returns, with further growth potential 39 Josef Chromy, Tasmania
Slide 40: Together we craft brands people love
Together we craft brands people love 40
Slide 41: Pinnacle is a scale, high growth drinks supplier
Pinnacle is a scale, high growth drinks supplier with a market-leading wine portfolio, delivering products customers love Pinnacle at a glance Sales mix2 RTD (2%) Cider (6%) $1.8b #4 60% A scale growth Total Sales1 Branded liquor Growth in business in F23 supplier in Australia Pinnacle sales2 (leadi
Slide 42: Leadership in wine requires deep understanding of consumer preferences
Leadership in wine requires deep understanding of dynamic consumer preferences and the ability to meet them efficiently Customers value choice and are willing to try new products 80% wine customers have a brand repertoire of 5+ vs. 90% of beer customers with brand repertoire of <5 brands Winning req
Slide 43: Our approach to branding and new product development is unique
Our approach to branding and new product development is unique Insights driven Agile approach to Unique approach fuels grape-to-shelf-to-glass innovation opportunities with approach and brand building external partners e.g. Cat Amongst the Pigeons e.g Paradox (no/low alc) e.g. Lobster Reef Lighter (
Slide 44: We have removed material risk from the winemaking value chain
We have removed material risk from the winemaking value chain, and deliver new products faster Scale internal & external Insight enabled, dynamic distribution network & customer led Leading capability, Rapid development of supply & production customer-led brands 44
Slide 45: Our wine portfolio expanded into the luxury space
Our wine portfolio was built on the commercial and premium segments. We have now expanded into the high margin, fast growing, luxury space Segment1 F23 Pinnacle growth Our mix Model Brands Ownership of iconic 21% 7% Luxury brands and >$25 vineyards Mix of own assets Premium 13% 66% and partners $10-
Slide 46: Paragon Wine Estates
PARAGON WINE ESTATES CAPE ISABEL , / MENTELLE ae re _EStATE bare crr id ROUND ORF one. are we BLESSED BY REGION. CRAFTED WITH BRILLLANCE. PARAGONWINES.COM.AU 46
Slide 47: Our Paragon luxury portfolio was expanded to deliver higher returns
Our Paragon luxury portfolio was expanded to deliver even higher returns Grow product Expand Build on winemaking range distribution excellence Existing export Cost capabilities synergies We apply our model to each luxury brand acquisition Notes: 1) IRI MarketEdge Retail Liquor Weighted, MAT to Janua
Slide 48: Isabel Estate and Chapel Hill have grown to 3x sales
Isabel Estate and Chapel Hill have both grown to 3x sales and are consistently delivering 15%+ return on investment ‘Isabel Estate’ (acq. 2014) ‘Chapel Hill’ (acq. 2019) ● Premium & luxury Sauvignon Blanc ● Heritage brand (1972) ● Sauvignon Blanc represents Australia's largest white wine ● Grower re
Slide 49: Q&A
Q&A tos ves ONDOR KRONDORI OUD Sates Kixcsiir | f ee es “ KRONDORI Righ KRONDORF 4 WG KRONDORI ° KING’s mant 24 endeavour Zs group 49
Slide 50: Morning tea
Morning tea 10:50-11:15 50
Slide 51: Understanding our network
Understanding our Update picture to Kate network Beattie Kate Beattie, CFO 51
Slide 52: Understanding our network
Understanding our network Our hotel and retail portfolios are deeply interconnected Investment decisions are made on the basis of all income that can be derived from a hotel licence Endeavour is uniquely positioned to maximise the returns from a hotel licence Good returns can be achieved across vary
Slide 53: Hotel licences support almost half of total group sales
Hotel licences support almost half (~45%) of total group sales Sales $ # Venues # Stores % of total Type F23 F23 F23 Standalone 257m Hotel 46 0 2% Attached 2,056m 166 174 ● Large portion (~45%) of group sales ALH Hotels Retail 17% from Hotels with associated liquor retail 349 venues1 stores ● Synerg
Slide 54: We are uniquely positioned to maximise the returns from Hotel licences
We are uniquely positioned to maximise the returns from Hotel licences Internal Retail brands & Operational scale Shared group Market leading Responsibility + + + + complementary + offer benefits capabilities digital enablers framework brands v Stronger retail Better margin and Strengthened Customer
Slide 55: All revenue drivers can deliver good returns
All revenue drivers can deliver good returns WA CGUs1 (non-gaming) Rest of Australia CGUs1 (full driver mix) National CGUs1 Total: $352m Total: $5,225m Total: $5,577m 2 2 Hotel : $132m (38%) Hotel : $1,847m (35%) Hotel2: $1,979m (35%) Bars Bars Bars 9.8% 10.7% 22.7% Food Food 7.6% 8.0% F23 Sales Gam
Slide 56: Majority of CGUs deliver moderate to leading returns
Majority of CGUs deliver moderate to leading returns, with overall portfolio uplift opportunities Number of Invested CGUs capital 2($m) Action Leading 173 (50%) 1,889 (46%) Capture learnings and apply to rest of portfolio Performance cohorts Moderate Performance interventions (e.g. adjust driver off
Slide 57: Understanding our network
Understanding our network Our hotel and retail portfolios are deeply interconnected Investment decisions are made on the basis of all income that can be derived from a hotel licence Endeavour is uniquely positioned to maximise the returns from a hotel licence Good returns can be achieved across vary
Slide 58: Hotels strategy
Hotels strategy Paul Walton, MD Kirribilli Hotel, Kirribilli, NSW Kirribilli Hotel, NSW
Slide 59: Hotels Strategy
Hotels Strategy Serving the largest profit pools in the hotel market Since demerger, reset the business and created a platform to enable growth Despite solid platform, significant further opportunities for value Strategy addresses both organic operational opportunities and capital driven property op
Slide 60: Source: x
… Source: x 60
Slide 61: Creating Pub Experiences Locals Love
Creating Pub Experiences Locals Love 61
Slide 62: We have an unrivalled network in the resilient middle market
We have an unrivalled network, and are positioned well in the most structurally resilient 'middle market’ Indicative visual F&B TAM of ~$26b1 Large and fragmented led market The top 5 Australian hotel operators represent less than 20% of the ~6,700 total hotels Resilient mid-market 349 (excluding cl
Slide 63: Our hotels each have their own brand and local identity
Our hotels each have their own brand and local identity, we apply segmentation to inform investment and operational growth decisions Largest, core segments Hotel Inner city Suburban Regional Destination Entertainment segments e.g. Elsternwick e.g. Greenwood e.g. Kalamunda Hotel e.g. Breakfast Creek
Slide 64: We have a highly engaged team committed to the best guest experiences
We have a highly engaged team who are committed to delivering the best guest experiences Voted as #2 Team of ~12,000 Across ~350 venues employer in Australia1 Our teams are empowered to create hotel experiences locals love From the basics to leadership, we invest in our people Defined career pathway
Slide 65: Our senior leadership team blends hotels experience with other industries
Our senior leadership team blends hotels experience with capabilities from other industries, and is committed to delivering enhanced value Paul Walton Lukas McKay Phil Oneile Marc Costabile Natasha Cavanagh Managing Director GM Operations GM Marketing & Loyalty GM Transformation GM People Pinnacle D
Slide 66: Since demerger we have reset the business
Since demerger we have reset the business and focused on creating a platform to enable sustainable growth Changing and simplifying the way Driving the performance we support & operate our venues of the business Updated our Built the operational Revenue ($b) responsible gaming team required to drive
Slide 67: We have significant opportunities to deliver further value
We have significant opportunities to deliver further value Grow our understanding of guest needs Lift underperforming venues ● pub+ enabling better guest insights ● Segmentation for benchmarking ○ Adapt range, promotions, price ● Improved F&B execution ○ Shape enhanced guest offers Leverage Group ca
Slide 68: Growth driven by operational improvements and disciplined capital deployment
Our growth will be driven by operational improvements and disciplined capital deployment, underpinned by our approach to responsibility Operational growth Network opportunities Responsibility Maximising the value of assets Deploying capital to unlock growth Leading in responsible gaming Portfolio ma
Slide 69: Step change EBIT opportunity, accelerating over 5 years
We believe we have a step change EBIT opportunity, accelerating over 5 years $150m+ pub+ & trade plan F&B menus & range ~ 50% Operational growth (limited capital needed) Advanced analytics endeavourGO Accommodation Repositionings ~ 50% Renewals and acquisitions (capital driven) 1-2 driver renewal Ac
Slide 70: Hotels Strategy
Hotels Strategy Serving the largest profit pools in the hotel market Since demerger, reset the business and created a platform to enable growth Despite solid platform, significant further opportunities for value Strategy addresses both organic operational opportunities and capital driven property op
Slide 71: Q&A
Q&A
Slide 72: Lunch
Lunch 12:45-1:45
Slide 73: Operational Growth Levers
Operational Growth Levers Jarrod Holt, GM Commercial Lukas McKay, GM Operations
Slide 74: Operational growth levers
Operational growth levers We have identified opportunities to drive margin improvement We apply our market leading capabilities at scale to deliver value We use our structured approach to drive growth These opportunities will deliver together $75m+ EBIT for F24-28 74
Slide 75: Tangible operational growth opportunities across initiatives
There are tangible operational growth opportunities across a number of initiatives National hotels Engaging guest Analytics and data Segmentation driven Sustainable cost trade plan experiences led decision making venue improvement improvement National hotels trade App enabled program Using new syste
Slide 76: National hotels trade plan
National hotels trade plan | National trade plans bring together our teams to elevate customer experience Activate with national hotels trade plan Tanqueray Spring Race Carnival Promo @ Crow’s Nest ● Creates unique guest experiences, by leveraging supplier relationships and connecting Hotels through
Slide 77: pub+
pub+ | Our app launching in 2024 offers personalisation, convenience and value Launch pub+ app centred on experience ● App enabled program that improves guest experience ● Enables personalisation, communication, pricing & promotions ● Value: Encourages extra occasions, enables trade-up, increases sp
Slide 78: Advanced analytics
Advanced analytics | We are using new systems and processes to optimise our offers Pipeline of advanced analytics use cases ● Leveraging our group advanced analytics capabilities proven in retail ● Strong results from initial use cases ● Pipeline of use cases across bar, food and gaming Advanced ana
Slide 79: Segmentation
Segmentation | Our segmentation strategy drives operational improvements Performance Refreshed, systemised Leading menu benchmarking - Margin cocktail lists architecture F&B GP % Margin improvement opportunity > + Enter Destination Inner City Suburban Regional tainment ● Performance benchmark releva
Slide 80: Delicate balance of taking out cost and enhancing guest experience
“Delicate balance of taking out cost and enhancing guest experience” ● Our venues perform a wide variety of ● ALH has grown via M&A, with limited work (cleaning, re-stocking, preparation, standardisation of systems and receiving supplies) ● We are reducing our surplus systems and ● Optimising these
Slide 81: endeavour GO
endeavour GO | We have already realised cost savings at our venues and we have a clear runway of further opportunities Our initiatives delivered Initiatives planned for $11m of savings over F23 F24 onwards Improved rostering and workforce Targeting labour and non-labour planning spend Reduced labour
Slide 82: Operational growth levers
Operational growth levers We have identified opportunities to drive margin improvement We apply our market leading capabilities at scale to deliver value We use our structured approach to drive growth These opportunities will deliver together $75m+ EBIT for F24-28 82
Slide 83: Gaming and responsibility
Gaming and responsibility Paul Walton, MD ALH
Slide 84: Gaming and responsibility
Gaming and responsibility EGMs are a source of recreation for a sizeable portion of Australians Revenue has steadily grown over the last 20 years, with taxes on gaming expenditure delivering $5b of state government tax revenue Regulation continues to evolve; Endeavour is committed to responsibility
Slide 85: EGMs in Australia
EGMs in Australia | Guests see EGMs as recreation and play, part of the overall hotel entertainment experience; the industry makes a significant contribution to the economy Guest experience Economic contribution ● A source of recreation, entertainment as part of a visit that ● EGMs generate over $5b
Slide 86: Responsible Gaming
Responsible Gaming | Gaming is a form of social entertainment, and we want it to stay that way for all our guests We offer gaming as entertainment for the vast majority of adult Australians who enjoy it responsibly Our focus is on keeping responsible players responsible and preventing gaming becomin
Slide 87: Gaming market: expenditure growth
Gaming market | Expenditure has grown steadily in an evolving regulatory landscape; state budgets project growth in tax revenue F23-F27: Total Australian EGM spend ($b)1,2,3 ~3.8% CAGR Tax growth forecast4 COVID and Post- (average of major states: 2001-02 to 2022-23: COVID impacted NSW, QLD, VIC, SA
Slide 88: Gaming market: value of an EGM entitlement is increasing
Gaming market | The value of an EGM entitlement is increasing Number of approved EGM entitlements (cap)1,2 vs. Annual expenditure per approved EGM entitlement (cap)3 ($k, excl. ACT and WA) # of approved Avg. decrease = 284 EGM Annual exp. per s p.a. EGM entitle- EGM entitle- 186,295 186,191 185,998
Slide 89: Gaming market: EGM return to player and state tax
Gaming market | EGM return to player is relatively high compared to other forms of gambling, and a high proportion of proceeds are paid in state tax (45-65%) Illustrative waterfall1 - Turnover versus hotel revenue EGM RTP is at par or higher than many other popular forms of gambling (e.g. wagering ~
Slide 90: EGM regulation continues to evolve
Gaming market | EGM regulation continues to evolve 2003 NSW: 6 hour shutdown introduced 2014 SA: $250 ATM withdrawal limit introduced 2004 SA: Alcohol service at EGMs prohibited VIC: Yourplay pre-commitment scheme 2015 introduced 2006 NT: $5 maximum bet introduced 2016 NT: Territory-wide EGM cap int
Slide 91: Varying harm minimisation solutions proposed across the states
Varying Harm Minimisation solutions have been proposed across the states Applied population wide Considers & supports individual circumstances Trading hours Load limits Loss limits Identified play Self exclusion Pre-commitment Set cash Mandated maximum Fixed period Set individual loss feed-in pace l
Slide 92: We work in partnership with government and regulators
We work in partnership with government, regulators, industry associations, and suppliers to progress responsibility initiatives Prioritisation logic Key principles Better for overall Government, operators, industry, and communities player experience Collaboration should work together to develop solu
Slide 93: Player Protect
Player Protect is our commitment to a holistic and evolving approach to responsible gaming A whole-of-business Responsibility as a key commitment to responsibility pillar of strategy Team Education and A Commitment to Innovation Training Programs Enabled by new technology and includes support for pl
Slide 94: Initiatives underway to progress responsible gaming
We have a number of initiatives underway that can help progress responsible gaming Self Exclusion, incl. Voluntary Pre- Focal ALeRT Facial Recognition Commitment (VPC) Technology (FRT) ● ALH’s ALeRT Bettor system detects ● VPC allows players to set limits on ● FRT installed in all our SA venues to p
Slide 95: Gaming and responsibility
Gaming and responsibility EGMs are a source of recreation for a sizeable portion of Australians Revenue has steadily grown over the last 20 years, with taxes on gaming expenditure delivering $5b of state government tax revenue Regulation continues to evolve; Endeavour is committed to responsibility
Slide 96: Q&A
Q&A
Slide 97: Afternoon tea
Afternoon tea 3:15-3:30
Slide 98: Network Opportunities
Network Opportunities Kate Beattie, CFO Shaun Dunleavy, Head of Format Operations Matt Toohey, Director Property
Slide 99: Network opportunities summary
Wrapping slide for the full section Network opportunities Multiple property levers to drive network performance Acquisitions and divestments will be used to optimise portfolio composition Deep pipeline of renewals (brownfield investments) with opportunity to drive strong returns Development / redeve
Slide 100: Long runway of attractive property capital deployment opportunities
Long runway of attractive property capital deployment opportunities Portfolio Optimisation Renewals Developments Large-scale, one-off Acquisitions and divestments Accretive brownfield investment redevelopment of brownfield sites Example: The Tower Hotel Example: The Sunnybank renewal of sports Examp
Slide 101: Portfolio Optimisation
Portfolio Optimisation S Oa Z ALH Hotels
Slide 102: Hotels are attractive, readily tradable assets in a fragmented market
Hotels are attractive, readily tradable assets, in a highly fragmented market The Hotels market is large and highly fragmented… ….and actively traded Total Hotels Fragmented ~6,700 80%+ There is a large and active market for Hotels outside largest 5 players in Australia, both freehold and leasehold
Slide 103: Defined set of commercial criteria for acquisitions
We have a defined set of commercial criteria for acquisitions Hotel acquisitions must satisfy commercial criteria… …and can support further growth Primary criteria Retail growth Hotel growth Investment Enables retail growth by: Accesses further growth from: Meet hurdle rates of 15%+ ROI hurdle rates
Slide 104: Acquisition case study: Rainbow Beach Hotel, QLD
Acquisition case study: Rainbow Beach Hotel, QLD Acquired February 2023 ● Balanced multi-driver pub with 2 detached retail liquor stores ● 65 years of lease available1 Post acquisition improvements support target ROI ● Retail sales growth, with GP margin +190bps ● F&B GP margin +1000bps Continue to
Slide 105: Acquisitions since demerger are on track to reach ROI hurdle
Acquisitions since demerger (<24mths) are on track to reach ROI hurdle Hotel leasehold acquisition performance (incl retail) Capital Current Current ROI (%) by leasehold acquisition #Venue investment ROI ($m) Out performing 3 9 39% Hotel leasehold On track 7 76 12% On track to reach ROI hurdle acqui
Slide 106: Renewals
Renewals s PFS Z EE nn ALH Hotels
Slide 107: Where we are today - The Forest Hotel renewal
Where we are today - The Forest Hotel renewal Before After > 107 107
Slide 108: Three key reasons for renewals
Three key reasons for renewals Shape guest experience Maintain our competitive offer Deliver strong capital returns Provides differentiated guest We operate in a competitive Strong returns from renewal experiences environment that evolves activity rapidly Showcases the unique history Ability to cont
Slide 109: Large opportunity for renewals and broad pipeline of projects
We have a large opportunity for renewals and a broad pipeline of projects to select from Average age of network1 per year ranges by driver (Nov 2023) Bars (3492) Gaming rooms (309) Food (317)3 Accommodation (116) Legend: no investment within last 7 years Venues for renewal have to be carefully selec
Slide 110: Three types of renewals with different characteristics
Three types of renewals with different characteristics Refurb (1-2 driver) Repositioning Accommodation Lighter touch improvements to the Purposeful effort to redevelop and Expand our accommodation offer: venue aimed at improving individual reposition entire venues Rebrand (to “Nightcap”) or reopen D
Slide 111: Examples of each category for recent renewals
Examples of each category for recent renewals Refurb - 1–2 driver Whole venue repositioning Redbank Plains Tavern, QLD Sunnybank Hotel, QLD ● Pillar in the community, located 30 mins from Brisbane’s ● 15 mins drive from Brisbane and 1 hour from Gold CBD and 18 mins from the centre of Ipswich Coast,
Slide 112: Differentiated accommodation platform that delivers strong returns
We have a differentiated accommodation platform that delivers strong returns Case study | Hotel Victor, SA Our accommodation platform ● In heart of South Australia’s Victor ● 5th largest accommodation provider (by sites) in Australia Harbor seaside destination ● 1,686 rooms under three Nightcap bran
Slide 113: Renewals
Renewals 113
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Slide 115: Developments
Developments 2, endeavour “ays Group a &
Slide 116: We have 54 freehold sites and 300 leaseholds across Australia
We have 54 freehold sites and 300 leaseholds across Australia Freehold Total freehold sites1 54 NT High development potential 0 5 QLD freehold sites 10 WA 22 115 9 19 SA Leasehold 4 35 NSW 7 48 Total leasehold sites 300 VIC 11 74 In consultation with our strategic partners, we have identified a rang
Slide 117: Detailed review of development opportunities across freehold and leasehold sites
We have undertaken a detailed review of development opportunities across our freehold and leasehold sites Detailed re-development plan and business case to be developed for the first wave of development sites… Freehold sites Opportunities at many of our 54 freeholds sites1 across Review Town Plannin
Slide 118: 10 freehold sites have high development potential
10 freehold sites have high development potential Development pipeline Site State Land Area m2 Commentary The Forest – Frenchs Forest NSW 18,970 Potential addition of freestanding accommodation Chelsea Heights VIC 49,377 DA approved for a supermarket to accompany Hotel & Dan Murphy’s Camberwell1 (Da
Slide 119: Case study | Chelsea Heights
Case study | Chelsea Heights Chelsea Heights Current use Hotel, Dan Murphy’s, Mitre 10 Land area m2 49,377 Building area State VIC Potential dev. Subdivision and Supermarket 11,577 m2 Current Site Proposed Site > 119
Slide 120: Case study | Camberwell
Case study | Camberwell Dan Murphy’s - Camberwell Current use Dan Murphy’s Land area m2 5,200 Building area State VIC Potential dev. Hotel, Dan Murphy’s & Apartments 1,300 m2 ● Affluent Eastern Suburbs of Melbourne ● Site zoned Activity Centre and allows mixed use, retail, office and residential ● 1
Slide 121: Case study | Camberwell
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Slide 122: Case study | Morrison Hotel – Woolloongabba (Brisbane)
Case study | Morrison Hotel – Woolloongabba (Brisbane) State QLD Land area m2 1,670 Building area m2 1,537 ● Owned site at Woolloongabba (Brisbane) ● Located 3km south of Brisbane CBD and 600 metres from the ‘Gabba’ which is being knocked down and rebuilt for the 2032 Olympics ($2.7 billion investme
Slide 123: Case study | Morrison Hotel – Woolloongabba
Case study | Morrison Hotel – Woolloongabba Development Development Opportunities opportunities Short-term accommodation: ● Potential for two new Motel Towers providing ~200 rooms of accommodation and ground floor retail ● One of the closest accommodation offers to the new Gabba Stadium for sporting
Slide 124: Case study | Shoppingtown – Doncaster
Case study | Shoppingtown – Doncaster State VIC Land area m2 23,730 Building area m2 5,725 Current Site Proposed Site Current use: Hotel, BWS & Accomodation Potential development: Hotel, Dan Murphy’s, Accommodation & Apartments > 124
Slide 125: Case study | Shoppingtown – Doncaster
Case study | Shoppingtown – Doncaster 125
Slide 126: Network opportunities summary
Wrapping slide for the full section Network opportunities Multiple property levers to drive network performance Acquisitions and divestments will be used to optimise portfolio composition Deep pipeline of renewals (brownfield investments) with opportunity to drive strong returns Development / redeve
Slide 127: Q&A
Q&A 24 endeavour 2,5 Group
Slide 128: Key messages from today
Key messages from today Clear Group Unlocking the Delivering strong strategy opportunity in Hotels shareholder value ● Leverage unique portfolio of ● Uniquely positioned to deliver ● Shareholder value creation of leading brands and businesses superior returns from hotel 10%+ from F26 licences – High
Slide 129: Summary of forward looking statements
Summary of forward looking statements Area Description Our strategy is focused on delivering long-term shareholder value of 10%+ per year from F26. We have shared a scorecard with targets covering our financial, sustainability and responsibility goals which reflect Scorecard our commitment to delive
Slide 130: Creating a more sociable future, together
Creating a more sociable future, together 130