Endeavour Group Ltd · ASX:EDV
Endeavour — Investor Presentation (September 2023)
51 slides from Endeavour's investor presentation, September 2023
Slide 1: Endeavour Group
Endeavour Group ASX: EDV September 2023
Slide 2: We connect people through our products and venues
ot noord yf We connect people through our products and venues, enabling great experiences and positive, memorable moments. We're pioneering, entrepreneurial and always innovating. ~~ Creating a more sociable — future, together We work as one team to contribute to the communities we serve and collabo
Slide 3: Contents
Contents Overview of Endeavour pages 4 - 18 Including: Our investment proposition Our market Our strategy Retail pages 19 - 29 Retail Overview Dan Murphy’s BWS Pinnacle Drinks Hotels pages 30 - 34 Hotels overview Latest Financial Results pages 35 - 49 3
Slide 4: Our purpose, vision and strategy
Our purpose, vision and strategy: Delivering strong returns Our strategy One team living our purpose and values Our purpose &, Positive and sustainable imprint Tobe the leading platform enabling social occasions
Slide 5: Our set of unique assets and capabilities
Our set of unique assets and capabilities Highly recognised, Leading Leading Unparalleled Unparalleled scale scale and trusted Strong digital Strong digital Deepcustomer Deep customer in–house production in–house production and network network customer-facing customer-facing retail capability capabi
Slide 6: Our network
Our network 1 266 Dan Murphy’s stores 17 5 54 424 1,435 BWS stores 26 147 137 28 1 19 97 39 354 Hotels (incl. managed clubs) Key: 2 3 84 390 55 Dan Murphy’s BWS 80 325 85 1 6 Wineries Hotels (incl clubs) Wineries 3 35 05 1 1 3 Bottling facilities Bottling facilities 1. As at 25 June 2023 6
Slide 7: A strong history of organic and strategic growth
A strong history of organic and strategic growth Retail Hotels Endeavour Group F01 F02 F05 F06 F09 - F11 F12 - F13 F13 F15 F18 F20 F21 F22 - F23 BWS brand Joint venture Takeover of ALH Group Acquisition of Acquisition of Woolworths Sale and Acquisition of Acquisition of Established Acquisition of cr
Slide 8: Strong returns to shareholders
Strong returns to shareholders Operating cash flow (high cash realisation) Targeting investment grade credit metrics Since Demerger we have delivered: Dividends Sustaining CAPEX ● Sustain the core ● Stay-in-business ● Sales growth of $289m (+2.5%) 70-75% ● Technology transition Target full-year payo
Slide 9: We operate across stable and regulated markets that are complementary
We operate across stable and regulated markets that are complementary Long-term historical trends demonstrate the resilience of The markets we operate in are: alcohol and gambling expenditure as a percentage of disposable income over time Defensive, providing long-term business stability Select cate
Slide 10: The Unique Australian Market
The Unique Australian Market Retail Liquor Drinks retail ● Elevated through COVID - Endeavour Retail grew sales in F19-F23 Size and $23b F16-19 CAGR 3% market size (pre-COVID)1 by 4% CAGR Growth (revenue)1 ● The majority of licences to sell packaged liquor are held by independent operators, includin
Slide 11: The Unique Australian Market
The Unique Australian Market Hotels Food Bars Relatively ● Stable market pre-COVID; significant impacts through closures Size and Hospitality equal mix of market size $19b revenue in F20 - F22 Growth (revenue)1 drivers Gaming Accommodation ● Strong recovery underway - Endeavour Hotels delivered F23
Slide 12: The Australian hotel and our market leading integrated offer
The Australian hotel and our market leading integrated offer Australian hotels are unique in that they offer a variety of experiences including bars, BARS GAMING food, gaming, accommodation and more Tap and drink lists optimised Improved player experience by based on customer data and our reducing t
Slide 13: We're well positioned to achieve our vision through the combined retail and hotels offerings
We’re well positioned to achieve our vision through the combined retail and hotels offerings 3 Decide to head into 4 Try your luck in the 5 Order and pay for 6 Notice on a media the Forest Hotel to newly renovated dinner using the screen that your watch the Sunday gaming room or me&u app, prepared f
Slide 14: Our Strategy: bringing our Purpose to life to deliver value
Our Strategy: bringing our Purpose to life to deliver value One team living our purpose Positive and sustainable and values imprint ● Highly engaged team ● Continued progress in sustainability ● Purpose driven culture journey ● Focused on responsibility and compliance Leading customer offer An effic
Slide 15: Bringing our strategy to life
Bringing our strategy to life What we’re doing This will deliver ● Using our leading customer understanding to create meaningful omnichannel experiences, by bringing together retail and hotel formats customers love, innovative Grow comparable sales Leading customer web and app assets, and trend-lead
Slide 16: Group optimisation program delivering material cost savings
Group optimisation program delivering material cost savings F24-F26 F23 F22 $200m+ Target ofsavings target $200m+savings $60m savings delivered $30m savings delivered Technology enabled Group wide program,targeting efficiencies across the Evolved into endeavourGO, a Center of end to end value chain
Slide 17: Our sustainable imprint is integral to who we are
Our sustainable imprint is integral to who we are, with compliance and responsibility at the core of what we do Responsibility People Planet and Community Championing individuality, human and personal rights Reducing our impact on the planet Advocating responsible choices and supporting positive cha
Slide 18: Progress in sustainability, focusing on responsibility
Progress in sustainability, focusing on responsibility ● Second annual Sustainability Report released on 16 August 2023 ● Continuing progress against 2030 strategy, including core area of Player Protect is our commitment to leading the way in responsible Responsibility and Community gaming ● Evoluti
Slide 19: Retail Segment Overview
Retail Segment Overview > endeavour 19 = group
Slide 20: Our retail brands
Our retail brands Key retail brands One of Australia’s most trusted destinations for drinks discovery, with 258 stores and 28,000+ products online Offers some of the most convenient ways to buy drinks, with ̴1.4k stores supporting an expanding on-demand digital offer Specialty retail brands Australi
Slide 21: Dan Murphy's helps you Drink Better
First on new trends and support local innovation Guarantee the lowest price and best value for customers while achieving a higher average selling price than market Enable drinks discovery through innovative store formats, knowledgeable team members and personalised, rich content online Dan Murphy’s
Slide 22: Dan Murphy's Strategic Growth Drivers
Dan Murphy’s Strategic Growth Drivers Discovery Memorable Experiences Personal Interactions Team & Community ● Elevate customer experience with ● Drive growth through network ● Drive personalised discovery across ● Empower our team with enhanced best-in-class service, engaging renewal and diversifie
Slide 23: Destination of choice for value, range and service
Destination of choice for value, range and service F23 Highlights Loved brand with a highly Nobody beats Dan Growing and innovative Large and profitable engaged customer base Murphy’s Lowest Liquor store network eCommerce business Price Guarantee Market +54 NPS Delivering ~2m Growing +8 to 266 Perso
Slide 24: Drinks Your Way.
Well known, trusted and loved brand in the local community that offers some of the most convenient ways to buy drinks Valued connections with local communities through hyper localised range and format Expansive footprint across Australia, underpinned by a large store network in convenient locations
Slide 25: BWS strategic growth drivers
BWS strategic growth drivers Team Local Convenience ● Empower in-store staff with advanced digital ● Activate store format innovation and ● Grow BWS On tAPP to become a market leading tools for superior customer interactions differentiation to resonate with each local app ● Accelerate our listening
Slide 26: Delivering value and convenience
Delivering value and convenience F23 Highlights The most convenient Doing drinks Fresh and innovative Digitally enhanced store network your way store formats customer shopping experience Largest network 1,435 Increased ‘Refreshingly Always 95 Store network facilitating of liquor stores Stores Brand
Slide 27: Pinnacle operates end-to-end across Endeavour's value chain
Pinnacle operates end-to-end across Endeavour’s value chain Raw Materials Production Assets & Insights, NPD & Brand Distribution Owned strategic super Supplier Partnerships Building Channels premium vineyards Premium commercial winery Customer insights and category Endeavour core retail AU/NZ premiu
Slide 28: The opportunity in premium wine
The opportunity in premium wine Through credential-led brands from leading wine regions, Endeavour is building an increasing presence in the premium and luxury wine segments Our evolving Paragon Wine Estates brand portfolio has seen significant growth and continues to build credentials through Krond
Slide 29: Innovating for our customers
Innovating for our customers F23 Highlights Trend leadership, quality Creating choice for our Investing in brands and Expanding industry and innovation Retail and Hotels production partnerships customers 730+ Innovative, owned 7/10 Retail customers Brand acquisitions 300+ Supplier and exclusive purc
Slide 30: Australian Leisure & Hospitality
Australian Leisure & Hospitality Our Hotels business The Rogue Squire, Wheelers Hill, VIC 30
Slide 31: Our strategic growth drivers
Our strategic growth drivers We are community minded, with a deep commitment to our responsibilities. Our People Our Experience Our Platform Moments That Matter Local & Authentic Easy & Convenient Simplify & Fly Portfolio Management 31
Slide 32: Market leading integrated offer
Market leading integrated offer FOOD BARS GAMING ACCOMODATION DIGITAL 300+ 900+ 300+ 110+ 2m Bistros Bars Rooms Properties Social media followers 250+ 480+ 300+ & 290+ 2,500+ 42% Function rooms Events TAB & Keno outlets Rooms Food sales enabled by order and pay technology Bistros tailored to the Tap
Slide 33: Creating pub experiences locals love
Creating pub experiences locals love F23 Highlights Creating Leading in memorable Responsibility Expanding and improving Enhancing and leveraging Leading in Responsibility moments for our guests our network Group capabilities At the centre 86,000 Expanding 11 new hotels Activity F24 Launch of of soc
Slide 34: Our Hotels investment strategy delivers growth and diversification of earnings
Our Hotels investment strategy delivers growth and diversification of earnings Renewals Acquisitions Redevelopments ● Restoring post period of ● $89m investment to acquire 11 ● The Brook Hotel reopened in May underinvestment hotels with 15 associated Retail ● Currently top 10 F&B Hotel in ● Increasi
Slide 35: F23 Results
F23 Results Our latest Financial results 35
Slide 36: F23 Financial result highlights
F23 Financial result highlights Cash and Delivering Financial results capital foundations for shareholders $11.9b +2.5% YoY $767m F22: $949m 29.5c +6.9% YoY Sales Operating cash inflow Earnings per share $1,023m +10.7% YoY $820m 21.8c +7.9% YoY EBIT Debt headroom Dividend per share $529m +6.9% YoY $
Slide 37: Group financial performance
Group financial performance +6.9% ● Contribution to EBIT from Hotels and Increase in year-on-year profit after income tax Retail returning to normal post pandemic ● Optimisation program mitigating inflation (8) 113 (6) (45) (20) ● Continued execution and investment in $529m line with strategy $495m
Slide 38: Comparatives to Pre-Pandemic financial results
Comparatives to Pre-Pandemic financial results1 Retail F23 F19 CHANGE 4 Year CAGR Sales ($M) 9,905 8,453 17.2% 4.0% ● First uninterrupted financial year of EBIT 658 538 22.3% 5.2% trading since F19 EBIT to Sales (%) 6.6% 6.4% +28 bps ● Strong growth in both segments ● Margin expansion in Retail driv
Slide 39: Retail financial performance
Retail financial performance ● Pandemic cycling impacting year on year comparatives F23 F22 CHANGE Sales ($m) 9,905 10,086 (1.8%) ● Gross profit margin strength continued EBITDA ($m) 954 944 1.1% ● Effective cost management, with optimisation Depreciation and amortisation ($m) (296) (278) 6.5% progr
Slide 40: Hotels financial performance
Hotels financial performance ● Swift recovery following pandemic restrictions F23 F22 CHANGE ● Sales composition rebalanced with Food, Bars Sales ($m) 1,979 1,511 31.0% and Accommodation rebounding EBITDA ($m) 705 561 25.7% ● Cost profile reflects return to full operations Depreciation and amortisat
Slide 41: Capital expenditure
Capital expenditure Delivering returns ROFE 11.8% (+35 bps vs F22) $11m $32m $18m $48m $6m $52m Retail: Hotels: $52m $72m $262m1 $61m $248m2 $95m $48m $15m Stay In Business Renewals Technology Pinnacle Network Property/ Digital, Data & Transformation Expansion Redevelopment eCommerce 1. Excludes $6m
Slide 42: Our capital allocation aligns to our strategic priorities
Our capital allocation aligns to our strategic priorities F23 Capex1 Targeted ROI ● Consistent with previous year; efficiencies targeted through procurement and lifecycle Stay in Business $100m n/a management ● Initiation phase for multi-year transition ‘One Endeavour’ ● Group-wide spend system impl
Slide 43: Our 'One Endeavour' transition to standalone technology capabilities continues
Our ‘One Endeavour’ transition to standalone technology capabilities continues Strategic Rationale Progress update F23 F24 F25+ Completed and Inflight Transition and simplify technology landscape as a foundation for growth and innovation Spend Management Completed ● Modern, fit-for-purpose, lower co
Slide 44: Cash and Net Debt
Cash and Net Debt Net debt of $1.9b increased by $706m, of which $237m was non-cash ● Bank debt rose $465m with the normalisation of tax payments and investment in working capital ● Non-cash debt increased by $237m with the renewal of Victorian Gaming entitlements Operating cash inflows of $767m and
Slide 45: Funding to deliver strategy
Funding to deliver strategy Long-term debt facilities in place Debt maturity profile ($ million)1 ● Healthy balance sheet consistent with investment grade credit metrics. Leverage ratio2 of 3.6x ● Committed undrawn debt facilities of $820m plus material cash balances ● Debt facilities increased by $
Slide 46: Group financial performance
Group F23 F22 financial $ million (52 WEEKS) (52 WEEKS) CHANGE Sales Retail 9,905 10,086 (1.8%) performance Hotels Total sales 1,979 11,884 1,511 11,597 31.0% 2.5% Profit for the period Retail EBIT 658 666 (1.2%) Hotels EBIT 428 315 35.9% Other (63) (57) 10.5% Total EBIT 1,023 924 10.7% Finance cost
Slide 47: Balance sheet
Balance sheet F23 F22 $ million 25 JUNE 2023 26 JUNE 2022 Change Trade working capital 778 546 232 Lease assets 3,208 3,173 35 Property, plant and equipment 2,095 1,935 160 Intangible assets 4,260 3,830 430 Other liabilities (net) (731) (677) (54) Funds employed 9,610 8,807 803 Tax liabilities (net)
Slide 48: Cash flow
Cash flow F23 F22 $ million (52 WEEKS) (52 WEEKS) CHANGE EBIT 1,023 924 99 Depreciation and amortisation expenses 573 525 48 Changes in trade working capital (261) (63) (198) Changes in assets and liabilities and other non-cash items 67 26 41 Finance costs on borrowings paid (61) (45) (16) Payment f
Slide 49: Historical financial performance
Historical financial performance Pre COVID-19 COVID-19 COVID-19 unwind Retail H1 F19 H2 F19 H1 F20 H2 F20 H1 F21 H2 F21 H1 F22 H2 F22 H1 F23 H2 F23 Sales ($M) 4,564 3,889 4,777 4,509 5,690 4,488 5,657 4,429 5,446 4,459 EBIT 316 222 338 231 419 250 461 204 418 240 EBIT Margin (%) 6.9% 5.7% 7.1% 5.1%
Slide 50: Disclaimers
Disclaimers This presentation is dated 4 September 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, the Group or Endeavour Group), and Endeavour Group’s activit
Slide 51: Key contacts
Key contacts Steve Donohue Chief Executive Officer Kate Beattie Chief Financial Officer Sean O’Sullivan Head of Investor Relations Mobile: (61) 412 139 711 Email: sean.osullivan@edg.com.au 51
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