Australian Vintage Ltd · ASX:AVG
Australian Vintage — Investor Presentation (June 2024)
30 slides from Australian Vintage's investor presentation, Jun 11, 2024
Slide 1: Trading update and capital structure initiatives
Australian Vintage Ltd Trading update and capital structure initiatives 11 June 2024
Slide 2: Important notice and disclaimers (1 of 3)
Important notice and disclaimers (1 of 3) ▪ This presentation (and the associated announcement released to ASX) has been prepared by Australian Vintage Ltd (ACN 052 179 932) (AVG or Company) in relation to a capital raising comprising an institutional placement (Placement) of ordinary shares in AVG
Slide 3: Important notice and disclaimers (2 of 3)
Important notice and disclaimers (2 of 3) Not for distribution or release in the United States ▪ This presentation may not be distributed or released in the United States. The Shares have not been, and will not be, registered under the US Securities Act of 1933, as amended (US Securities Act) or the
Slide 4: Important notice and disclaimers (3 of 3)
Important notice and disclaimers (3 of 3) Forward looking statements (continued) ▪ None of AVG or the Lead Manager or any of their directors, officers or employees provide any assurance that the assumptions underlying such forward looking statements are free from errors nor do any of them accept any
Slide 5: Contents
Contents 01 Company highlights 02 Current state of play and strategic priorities 03 Capital structure initiatives 04 Equity raising details Appendices
Slide 6: AVG is a world-class consumer orientated business
AVG is a world-class consumer orientated business One of Australia’s lowest cost wine producers of scale1 Leader in product innovation and the ‘no and low’ emerging growth category2 Flexible and diversified grape supply arrangements providing production agility Trusted long-term relationships with g
Slide 7: Even in a challenging environment, AVG achieved significant milestones in FY24
Even in a challenging environment, AVG achieved significant milestones in FY24 ✓ Revenue in line with the prior year in a challenging market 1 ✓ Margin and underlying earnings improvement from brand growth, innovation and cost out measures ✓ Global leader in ‘no and low’ supported by our technology
Slide 8: Strategic plan is positioning the business for long-term success
Strategic plan is positioning the business for long-term success Creating a differentiated business through market leadership of emerging growth categories, premiumisation and sustainability ‘No and low’, premium brand margin, Winning market share ▪ AVG continues to win or maintain market share in k
Slide 9: Current state of play and strategic priorities
01 Company highlights 02 Current state of play and strategic priorities 03 Capital structure initiatives 04 Equity raising details Appendices
Slide 10: The wine industry is cyclical; conditions are currently challenging
The wine industry is cyclical; conditions are currently challenging A confluence of external shocks has created a unique set of challenges for market participants Several forces have converged, creating challenging conditions… …the Australian wine industry has emerged from several periods of oversup
Slide 11: Active measures have been taken to protect and enhance the resilience of the business
Active measures have been taken to protect and enhance the resilience of the business Thorough evaluation and execution of initiatives to enhance operating efficiency and generate internal liquidity Cost-out program ▪ $9 million of recurring cost removed from the business since July 20231 ▪ Continui
Slide 12: Trading update and outlook
Trading update and outlook Near-term conditions likely to remain challenging; margin pressure is expected; Strategic Review to continue FY24 trading update Outlook ▪ FY24 total sales is expected to be in the range of $257 – 261 million, in line with FY23 but lower than expectations1 1 Market remains
Slide 13: Looking ahead
Looking ahead Disciplined execution of strategy and pursuit of opportunities with the potential to unlock shareholder value Focus on brands, Maintain Export market Identify Board refresh premiumisation discipline on cost diversification transaction program and innovation base and pricing including S
Slide 14: Board refresh program
Board refresh program AVG announces the following proposed changes to its Board of Directors ▪ Richard Davis to retire from the Board at completion of the equity raising ▪ John Davies to be appointed Interim Chair at completion of the equity raising ▪ Naseema Sparks will not be seeking re-election a
Slide 15: Capital structure initiatives
01 Company highlights 02 Current state of play and strategic priorities 03 Capital structure initiatives 04 Equity raising details Appendices
Slide 16: Overview of capital structure initiatives
Overview of capital structure initiatives AVG is executing a comprehensive capital structure reset to protect the company amidst a challenging industry cycle Comprehensive funding package providing increased liquidity and financial flexibility Equity raising Debt facility increase and extension ▪ Eq
Slide 17: Strengthened balance sheet
Strengthened balance sheet Reset of debt to more appropriate levels to withstand market volatility and meet forward liquidity requirements Pro forma as at 31 December 2023 ✓ ✓ ✓ $53.7 million $54.6 million 1.8x Net debt1 Available liquidity2 Net debt / EBITDAS5 Reduction of $14.0 million Increase of
Slide 18: Equity raising details
01 Company highlights 02 Current state of play and strategic priorities 03 Capital structure initiatives 04 Equity raising details Appendices
Slide 19: Equity raising details
Equity raising details Offer structure ▪ Total equity raising of up to ~$19.9 million: – ~$5.5 million institutional placement (Placement) – ~$9.5 million 2 for 7 accelerated, non-renounceable entitlement offer (Institutional Entitlement Offer) – ~$4.9 million 2 for 7 non-renounceable entitlement of
Slide 20: Sources and uses of funds
Sources and uses of funds Net proceeds from the Equity Raising will be used to provide increased liquidity and working capital capacity, providing AVG with enhanced financial flexibility to help navigate challenging industry conditions and continue to execute on its strategic objectives Sources A$m
Slide 21: Equity raising timetable
Equity raising timetable Events Dates Lodgment of Prospectus and capital structure initiatives and equity raise presentation Tuesday, 11 June 2024 Institutional Offer and Placement bookbuild Wednesday, 12 June 2024 Announcement of results of the Institutional Offer and Placement Thursday, 13 June 20
Slide 22: Appendices
01 Company highlights 02 Current state of play and strategic priorities 03 Capital structure initiatives 04 Equity raising details Appendices
Slide 23: Appendix 1: Pro-forma balance sheet – as at 31 December 2023
Appendix 1: Pro-forma balance sheet – as at 31 December 2023 Equity Raising (net 31 December 2023 $m 31 December 2023 Goodwill impairment5 proceeds) (pro forma) Cash & equivalent 9.8 14.0 - 23.8 Receivables 61.5 - - 61.5 Inventories 210.5 - - 210.5 Plant and equipment 98.5 - - 98.5 Goodwill / intang
Slide 24: Appendix 2: Pro-forma liquidity – as at 31 December 2023
Appendix 2: Pro-forma liquidity – as at 31 December 2023 $10m increase debt Equity Raising (net New $15m debt 31 December 2023 $m 31 December 2023 facilities (May-24)2,4 proceeds) facility4 (pro forma) Debt (drawn) Bank overdrafts - - - - - Bank facilities1 77.5 - - - 77.5 Total debt 77.5 - - - 77.5
Slide 25: Appendix 3: Key risks (1 of 4)
Appendix 3: Key risks (1 of 4) ▪ This Appendix 3 discusses some of the key risks associated with an investment in AVG. A number of risks and uncertainties may adversely affect the operating and financial performance or position of the Company and in turn affect the value of the Company's shares. ▪ T
Slide 26: Appendix 3: Key risks (2 of 4)
Appendix 3: Key risks (2 of 4) e) Share price lower than net tangible assets The share price has been lower than the net tangible assets per share, tracking in line with overall ASX market movements. This places AVG as a takeover target with a potential risk that fair value will not translate in the
Slide 27: Appendix 3: Key risks (3 of 4)
Appendix 3: Key risks (3 of 4) l) Potential for Dilution In the future, the Company may elect to issue Shares or other securities. While the Company will be subject to the constraints of the ASX Listing Rules regarding the issue of Shares or other securities, shareholders may be diluted as a result
Slide 28: Appendix 3: Key risks (4 of 4)
Appendix 3: Key risks (4 of 4) General risks p) Economic General economic conditions, movements in interest and inflation rates and currency exchange rates may have an adverse effect on the Company's activities, as well as on its ability to fund those activities. p) Market conditions Share market co
Slide 29: Appendix 4: Foreign Selling Restrictions (1 of 2)
Appendix 4: Foreign Selling Restrictions (1 of 2) ▪ This document does not constitute an offer of new ordinary shares (“New Shares”) of the Company in any jurisdiction in which it would be unlawful. In particular, this document may not be distributed to any person, and the New Shares may not be offe
Slide 30: Appendix 4: Foreign Selling Restrictions (2 of 2)
Appendix 4: Foreign Selling Restrictions (2 of 2) Singapore ▪ This document and any other materials relating to the New Shares have not been, and will not be, lodged or registered as a prospectus in Singapore with the Monetary Authority of Singapore. Accordingly, this document and any other document
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