Delegat Group Limited · NZX:DGL
Delegat — H1 FY2024 Earnings Presentation
24 slides from Delegat's earnings presentation, Feb 23, 2024
Slide 1: FY24 Half-Year Results
FY24 Half-Year Results 23 February 2024
Slide 2: Key messages
Key messages • New Zealand remains the fastest growing country of origin in premium US wine • Continued growth in consumers sales and market share in the USA market • Solid sales performance despite distributors and retailers resetting inventory holdings, resulting in lower replenishment orders for
Slide 3: Business update
Business update
Slide 4: Our strategic goal is to build a leading global super premium wine company
OUR STRATEGIC GOAL IS TO BUILD ADELEGAT ESTABLISH LEADINGAS A GLOBAL LEADINGSUPER PREMIUM GLOBAL SUPER WINEWINE PREMIUM COMPANY. COMPANY. 4
Slide 5: HY24 Operating summary
HY24 Operating summary • Solid sales performance despite lower replenishment orders s by distributors and retailers • Strong growth in US market, achieving 6.4% growth in consumer sales over the 6 months, and notable strength in the establishment of Oyster Bay Pinot Gris globally. • Inflationary ope
Slide 6: Solid sales result despite retailers resetting inventory levels
Solid sales result despite retailers resetting inventory levels December December %%Change change Case Sales (000's) 2023 2022 vsv2023 PCP UK, Ireland and Europe 579 559 4% North America (USA and Canada) 959 1,028 -7% Australia, NZ and Asia Pacific 386 383 1% Total Cases 1,924 1,970 -2% Foreign Curr
Slide 7: Delegat performing well in the current operating environment
Delegat performing well in the current operating environment % Change Case Sales (000's) H1 24 H1 23 vs HY23 New Zealand Wine Exports 16,506 21,792 -24% Delegat Total Cases 1,924 1,970 -2% % Change NZ$ Millions H1 24 H1 23 vs HY23 New Zealand Wine Exports Value 1,149.6 1,454.7 -21% Delegat Sales Rev
Slide 8: Building momentum in the USA
Building momentum in the USA • New Zealand is the fastest growing country of origin in premium US wine. (1) • Sauvignon Blanc is the fastest growing wine varietal in America and consumers are switching from other varietals (2) • Oyster Bay is the second fastest growing premium wine brand by value in
Slide 9: Premium brand enables pricing strategy
Premium brand enables pricing strategy • The Group is committed to growing profitability in key markets supported by price increases Dec Dec 2023 2022 % NZ$millions Actual Actual Chg Sales Revenue 196.8 197.1 0% Sales movement breakdown Volume -2% Value 2% Foreign Exchange 2% Price 1% Country/produc
Slide 10: Company on track against FY24 priorities
Company on track against FY24 priorities FY24 Priorities Mid-year status Continued sales growth in the 6.4% growth in retail sales in US market US market and improved value capture and strategic price increases in UK, in the more established markets Canada and New Zealand Increased investment in con
Slide 11: Financial Results
Financial Results
Slide 12: HY24 Financial summary
HY24 Financial summary • Global Case Sales of 1,924,000 Down 46,000 cases on HY23 (-2%) • Operating EBITDA of $74.8 million Up $0.6 million on HY23 (1%) • Operating NPAT of $37.8 million Down $2.4 million on HY23 (-6%) • Reported NPAT of $33.4 million Down $7.3 million on HY23 (-18%) • Cash from ope
Slide 13: Growth in Operating EBITDA
Growth in Operating EBITDA Dec 2023 Dec 2022 % Change NZ$ millions vs 2022 Sales Revenue 196.8 197.1 0% Operating Revenue 198.6 198.8 0% Operating Gross Profit 96.1 95.6 1% Operating Gross Margin 48% 48% Expenses (26.9) (26.9) 0% Promotion and Marketing (7.2) (6.5) -11% Operating EBIT 62.0 62.2 0% O
Slide 14: Operating Profit Movement - Last Year
Operating Profit Movement - Last Year NZ $millions 14
Slide 15: Cost of Sales ($/Case)
COGS Summary 60 50 40 • COGS are higher across production, Cost of Sales ($/Case) shipping and packaging costs. 30 • Cost of Grape impacted by vintage yield 20 outcomes 10 0 FY22 FY23 FY24H1 Cost of Production Packaging Shipping & Freight 15
Slide 16: Impact of 'Fair Value' Adjustments
Impact of ‘Fair Value’ Adjustments Dec 2023 Dec 2022 % Change NZ$ millions vs 2022 Operating NPAT 37.8 40.2 -6% Operating NPAT % of Revenue 19% 20% Biological Produce (Grapes) 1 (10.5) (9.6) 9% Derivative financial Instruments 4.5 10.4 -57% Total Fair Value Items (6.0) 0.8 n/m2 Taxation of NZ IFRS f
Slide 17: Reported Profit Movement - Last Year
Reported Profit Movement - Last Year NZ $millions 17
Slide 18: Balance Sheet Summary
Balance Sheet Summary Dec 2023 Dec 2022 % Change NZ$ millions vs 2022 Assets Current Assets 304.5 271.2 12% Fixed Assets 800.6 735.9 9% Other Non-current Assets 0.5 2.9 -83% Total Assets 1,105.6 1,010.0 9% Liabilities Current Liabilities 59.0 46.8 26% Lease Liability 91.0 88.7 3% Deferred Tax Liabil
Slide 19: Increased debt levels driven by capital expenditure program
Increased debt levels driven by capital expenditure program Net debt movement, June 2023 to December 2023, NZ Millions 19
Slide 20: Net Debt Overview
Net Debt Overview Est i947 DELEGAT NZ$ millions Dec 2023 Dec 2022 % Change vs 2022 Funding Operating Cash Flow 35.8 35.3 1% Net Debt 352.3 305.8 15% Key Ratios Operating Interest Cover 6.46 8.94 -28% Equity / (Equity + Net Debt) % 61.2% 62.9% -3% Senior Debt Ratio 3.16 2.68 -18% 20
Slide 21: Investing in vineyard development and winery expansion
Investing in vineyard development and winery expansion to support future earnings growth • During the year, the Group has invested $44.4m in New Zealand vineyard developments and winery expansion. • Continued investment in vineyards and wineries is planned for 2H24. 21
Slide 22: Capital Expenditure program
Capital Expenditure program 120 2H24 capital expenditure 2021: Includes vineyard and winery developments in Hawke’s Bay, Marlborough 100 and Barossa Valley, and land acquisition in New Zealand. 86 2022: Includes vineyard and winery 80 developments in Hawke’s Bay, Marlborough and Barossa Valley. NZ$
Slide 23: Full Year Guidance
Full Year Guidance The Group maintains its FY24 Operating Profit guidance in the range of $57 million to $61 million. 23
Slide 24: Thank you
Thank you