Slide 1: F23 Full Year Results
F23 Full Year Results 15 AUGUST 2023
Slide 2: Important information
Important information This presentation is in summary form and is not necessarily complete. It should be read together with the Company’s Annual Report and other announcements lodged with the Australian Securities Exchange, which are available at www.asx.com.au. This presentation contains informatio
Slide 3: Introduction
Introduction Tim Ford Chief Executive Officer
Slide 4: F23 Announcement Highlights
F23 Announcement Highlights 1 • Earnings growth and margin expansion in F23, with EBITS +11% to $583.5m and EBITS margin +2.9ppts to 24.1%: – Delivered through strong top-line growth for the Luxury portfolio, led by Penfolds, price increases across several brands and cost savings from the global sup
Slide 5: F23 Financial Highlights
F23 Financial Highlights 1,2,3 Earnings growth and margin expansion delivered in F23 NSR EBITS NPAT $2.4bn 2.2% $583.5m 11.4% $376.1m 16.6% NSR per case EBITS margin EPS $109.7 12.7% 24.1% 2.9 ppts 52.1cps 16.6% Cash conversion ROCE Luxury and Premium 60.6% (43.7)ppts 11.3% 0.6ppts contribution to g
Slide 6: F23 Divisional performance
F23 Divisional performance Each division delivered NSR per case growth and EBITS margin expansion in F231 Metric2 F23 % % CFX F23 % % CFX F23 % % CFX NSR (A$m) 819.7 14.3% 13.8% 820.8 (11.7)% (18.4)% 782.4 (5.7)% (4.7)% NSR per case (A$) 354.4 6.7% 6.3% 150.0 18.4% 9.4% 54.7 5.2% 6.3% EBITS (A$m) 36
Slide 7: F23 Sustainability performance
F23 Sustainability performance Cultivating a brighter future through focus on material opportunities Material topic Target F23 Progress2 Climate Change ● 100% renewable electricity by 2024 ● Renewable electricity usage ~15%, 4.5MW of capacity active in and Energy1 ● Net zero by 2030 (scope 1 and 2)
Slide 8: Consumer trends
Consumer trends Premiumisation is continuing, with Luxury trends remaining strong and the Premium segment resilient 52-week Premium segment performance2 • Long-term category trends are continuing to support wine category premiumisation through the current macro cycle − Linkage to cultural trends, ho
Slide 9: Luxury portfolio
Luxury portfolio Our strong Luxury portfolio momentum continued in F23, led by Penfolds and Treasury Americas Another year of exceptional performance for Penfolds in Treasury Americas continues to build its outstanding F23 across a number of global markets luxury platform, ahead of increased availab
Slide 10: Premium portfolio
Premium portfolio Continuing to invest behind our priority Premium brands to deliver growth A number of Premium portfolio brands continued to The new 19 Crimes Classic tier brand platform will deliver top-line growth in F23, supported by innovation launch globally throughout 1H24 F23 NSR +17% Squeal
Slide 11: Treasury Premium Brands
Treasury Premium Brands Focused on delivering margin accretive growth, led by the Premium portfolio Evolution of TPB division volume and portfolio premiumisation 70% 30 61% 58% Three-year 60% 52% volume 25 CAGR 48% 50% Priority 20 Premium 40% portfolio2: 15 30% +25% 10 Vision To bring the pleasure o
Slide 12: Treasury Premium Brands
Treasury Premium Brands Setting TPB up for future success by enhancing operational efficiency and strategic flexibility Key organisation and Commercial wine supply chain initiatives Initiative Actions Timing • Initiatives designed to deliver the following benefits: Adjust • Implement re-designed sal
Slide 13: Financial Performance
Financial Performance Matt Young Chief Financial Officer
Slide 14: Key measures of performance
Key measures of performance 1 Group NSR (A$m) and NSR per case 109.7 Group EBITS (A$m) and EBITS margin 97.3 79.8 81.9 83.8 23.5% 24.1% 19.9% 21.1% 19.3% 2,832 2,650 665 2,570 2,477 2,423 583 513 510 524 69% 71% 77% 83% 85% 31% 29% 23% 17% 15% F19 F20 F21 F22 F23 F19 F20 F21 F22 F23 Commercial Luxur
Slide 15: Revenue growth management
Revenue growth management Price increases successfully implemented across several Luxury and Premium portfolio brands1 Penfolds Treasury Premium Brands • Our portfolio contains a number of growing Premium +9% +6% +9% and Luxury brands • Targeted price increases were successfully delivered in F23 acr
Slide 16: Material items
Material items TPB operating model and Australian Commercial wine supply chain initiatives the key driver in F23 Projected Benefits one-off cost Total cost Recognised Material Items Benefits from at inception to date in F23 Status TPB operating model and Australian Enhance operational and strategic
Slide 17: Balance sheet
Balance sheet 1,2 F23 F22 A$m 30-Jun-23 30-Jun-22 Cash & cash equivalents 565.8 430.5 • Net assets increased $89.9m on a reported currency Receivables 612.9 564.4 basis in F23 Current inventories 990.3 947.9 • Adjusting for the movement in foreign exchange Non-current inventories 1,175.3 1,063.6 rat
Slide 18: Inventory analysis
Inventory analysis Inventory at book value split by price segment1,2 $990.3m $947.9m $1,175.3m $1,063.6m $2,165.5m $2,011.5m • Total inventory volume declined 4% versus the pcp • Total inventory value increased 8%: 45% 41% Total Luxury − Current inventory increased $42.4m to $990.3m, 57% 57% $1,230m
Slide 19: Cash flow and net debt
Cash flow and net debt1 A$m (unless otherwise stated) F23 F22 EBITDAS 730.8 672.3 Change in working capital (274.9) 34.0 Other items (12.8) (5.0) • Cash conversion was 60.6% in F23: Net operating cash flows before financing costs, tax & material items 443.1 701.2 − Excluding the net change in non-cu
Slide 20: Capital expenditure
Capital expenditure A$m F23 F22 Wine making equipment and facilities 31.0 24.0 • Capital expenditure (capex) $141.2m in F23: Vineyard redevelopments 22.4 22.4 − Maintenance & replacement capex of $102.1m, includes step-up in sustainability investment with Sustainability 21.1 4.9 significant implemen
Slide 21: Capital management
Capital management • Efficient and flexible investment grade capital structure retained: - Net debt / EBITDAS1 1.9x at F23, up from 1.8x in the pcp and within the target 1.5x – 2.0x range - Flexibility to support continued investment in growth and the delivery of shareholder returns • Total availabl
Slide 22: Divisional Performance
Divisional Performance Tom King Managing Director, Penfolds Ben Dollard President, Treasury Americas Peter Neilson Managing Director, Treasury Premium Brands
Slide 23: Penfolds
Penfolds The strong momentum in building distribution and growing consumer demand continues, globally Reported Currency Constant Currency Performance summary1 A$m F23 F22 % F22 % • EBITS increased 15.5% and EBITS margin increased 0.7 ppts to Volume (m 9Le) 2.3 2.2 7.1% 2.2 7.1% 44.5%: NSR 819.7 717.
Slide 24: Penfolds
Penfolds Progression against F23 strategic priorities Scale Penfolds luxury credentials to recruit and Grow global distribution and re-recruit consumers availability Continuing to execute Penfolds three-phase distribution build playbook and strategy: (i) Build target account universe and ideal range
Slide 25: Penfolds
Penfolds Progression against F23 strategic priorities (continued) Optimise the portfolio for long term growth 2023 is a milestone year for the Penfolds Collection, with the release of wine The launch of One by Penfolds was a key highlight in F23, with 100k+ cases from Australia, the US, France and f
Slide 26: Treasury Americas
Treasury Americas Positive Luxury execution in a year of constrained availability, laying the platform for growth from F25 Performance summary1 Reported Currency Constant Currency A$m F23 F22 % F22 % % Organic2 • EBITS declined 0.3% and EBITS margin improved 4.5ppts to 24.8%; on an organic basis EBI
Slide 27: Treasury Americas
Treasury Americas Progression against F23 strategic priorities Grow the Premium and Luxury portfolio Frank Family Vineyards exceeded expectations in F23, with increased BV grew NSR by 5% in F23 with release of the Georges de availability to support growth from 4Q24 Latour, rated 100pts by James Suck
Slide 28: Treasury Americas
Treasury Americas Progression against F23 strategic priorities (continued) Drive category leading innovation Supported by innovation, 19 Crimes remained in growth across scan Tapestry, a Californian red blend in the growing $20-25 price channels in F23, up 1% against the Premium segment which declin
Slide 29: Treasury Premium Brands
Treasury Premium Brands Continued focus on portfolio premiumisation, with priority brands in growth Reported Currency Constant Currency Performance summary1 A$m F23 F22 % F22 % • EBITS increased 4.0% and EBITS margin improved 0.9 ppts to Volume (m 9Le) 14.3 16.0 (10.4)% 16.0 (10.4)% 10.4%: NSR 782.4
Slide 30: Treasury Premium Brands
Treasury Premium Brands Progression against F23 strategic priorities Drive category leading innovation Take priority brands global and accelerate growth in new markets and channels Growing global distribution points and sales volume for Wynns John 19 Crimes NSR grew 8% in markets outside the America
Slide 31: Outlook
Outlook Tim Ford Chief Executive Officer
Slide 32: F24 Group priorities
F24 Group priorities Our priorities remain consistent and clearly focused on progression towards our TWE 2025 strategy The world’s most admired premium wine company Divisional priorities • Attract new consumers • Grow the Premium and • Take priority brands global Luxury portfolios and accelerate gro
Slide 33: Summary and outlook
Summary and outlook • In F23, we delivered margin accretive earnings growth while navigating the tightening economic environment across a number of key markets and making significant progress in strengthening our operating model for the future • We are well positioned to deliver growth in F24 with c
Slide 34: Questions
TREASURY WINE ESTATES Questions
Slide 35: Supplementary Information
TREASURY WINE ESTATES Supplementary Information
Slide 36: Contribution of acquired and divested brands - Treasury Americas
Contribution of acquired and divested brands - Treasury Americas F22 F23 Divested US Frank Family Frank Family brands1 Vineyards2 Vineyards3 Volume (m 9le) 0.2 0.1 0.2 NSR (A$m) 21.9 42.9 97.3 EBITS (A$m) 5.6 17.3 41.4 Unless otherwise stated, all figures are pre-material items and are subject to ro
Slide 37: Impact of foreign exchange and hedging
Impact of foreign exchange and hedging F23 EBITS constant currency impact F24 EBITS sensitivity and risk management CFX Impact (A$m) EBITS Currency Primary Currency Underlying Hedging1 Total Movement Sensitivity Pair Exposure (A$m) AUD/USD and AUD/GBP 25.2 (5.1) 20.1 AUD/USD COGS, EBITS +1% (3.5) Ne
Slide 38: Reconciliation of key performance measures
Reconciliation of key performance measures Metric (A$m unless Management calculation F23 F22 otherwise stated) Statutory net profit 254.3 263.2 Income tax expense 82.8 109.7 Net finance costs 72.7 71.4 EBITS Material items (gain) / loss 109.2 45.5 SGARA (gain) / loss 64.5 33.9 EBITS 583.5 523.7 EBIT
Slide 39: 2023 Fact Book
2023 Fact Book For further information on Treasury Wine Estates, please refer to our 2023 Fact Book, which is available at tweglobal.com 39
Slide 40: Definitions
Definitions Term Definition Cash conversion Net operating cash flows before financing costs, tax and material items divided by EBITDAS COO Country of origin CODB Cost of doing business. Gross profit less EBITS. Excludes non-cash items as well as tax, the cost of the Group’s capital structure and non