Treasury Wine Estates Limited · ASX:TWE
Treasury Wine Estates — Merger or Acquisition (November 2021)
20 slides from Treasury Wine Estates's merger presentation, Nov 18, 2021
Slide 1: Acquisition of Frank Family Vineyards Investor Presentation
18 November 2021 ASX ANNOUNCEMENT Acquisition of Frank Family Vineyards Investor Presentation Enclosed are the presentation materials for the investor and analyst webcast and conference call to be hosted by Treasury Wine Estates commencing at 10:00am (AEDT) on 18 November 2021. Links to register for
Slide 2: Acquisition of Frank Family Vineyards
Acquisition of Frank Family Vineyards 18 NOVEMBER 2021
Slide 3: Important information
Important information The acquisition of Frank Family Vineyards (‘FFV’) by Treasury Wine Estates Limited (‘TWE’) as outlined in this presentation (‘Transaction’) is subject to the satisfaction or waiver of conditions precedent. Details of the key terms of the Transaction are outlined in the ASX anno
Slide 4: Transaction highlights
Transaction highlights • Treasury Wine Estates has reached an agreement to acquire Frank Family Vineyards (“FFV”) ✓ An iconic and highly acclaimed luxury wine business based in the Napa Valley, California ✓ A strong track record of growth with a compelling 35-40% EBITS margin ✓ Highly complementary
Slide 5: US wine market opportunity
US wine market opportunity The world’s largest wine market, where growth is being led by the luxury price points Ten year US wine market evolution (2015-2025F)1 Key Luxury market varietals by size2 10yr CAGR 1.8 Other varietals Luxury 20% 20% +6.3% 1.6 Cabernet Sauvignon Premium Sauvignon 37% +5.6%
Slide 6: Evolution of Treasury Americas
Evolution of Treasury Americas Treasury Americas is now a premium focused business ready to invest in growth A journey of asset, portfolio and cost optimisation that has transformed Treasury Americas Exploring opportunities to complement Delivered the future state premium wine business the TWE Ten p
Slide 7: Evolution of Treasury Americas
Evolution of Treasury Americas Disciplined capital allocation supporting the portfolio premiumisation strategy Divested: non-priority Acquired: Frank Family brands and assets1 Vineyards3 Volume (‘000 9le) 5,157.6 174.2 NSR/case (A$) $52.2 $427.4 EBITS margin 9.5% 37.9% Capital released / (invested)
Slide 8: About Frank Family Vineyards
About Frank Family Vineyards
Slide 9: Overview of Frank Family Vineyards
Overview of Frank Family Vineyards A high margin luxury wine business with a strong track record of growth • Founded in 1992 by Rich and Leslie Frank, both of whom have FFV volume by varietal (F21) committed to remaining with the business as advisors Zinfandel 8% • Award-winning, luxury wine portfol
Slide 10: Strong business with a track record of growth
Strong business with a track record of growth FFV is an iconic and highly acclaimed luxury brand with strong consumer appeal Attractive package of attributes FFV’s portfolio is centred across three collections Napa collection ✓ Iconic and highly acclaimed Napa Valley luxury brand • Largest volume co
Slide 11: Transaction assets
Transaction assets FFV has an efficient, capital-light asset base in the iconic Napa Valley Location of key Napa Valley assets FFV’s efficient and flexible Two owned vineyards in Napa Valley: sourcing model • Benjamin Vineyard (Rutherford) • S&J Vineyard (Capell Valley) Winery & Tasting Room Calisto
Slide 12: Strategic and financial highlights
Strategic and financial highlights
Slide 13: Strategic Rationale
Strategic Rationale The strategic rationale for TWE’s acquisition of FFV is compelling FFV is a strong brand with leading Fills a key chardonnay portfolio Treasury Americas multi-channel margins and a long-term track gap and strengthens Treasury national distribution network a record of growth Ameri
Slide 14: An excellent complement to the portfolio
An excellent complement to the portfolio FFV fills a key portfolio gap and strengthens Treasury Americas luxury credentials Treasury Americas priority portfolio Luxury share1 – pre and post transaction 7.0% total 9.4% total #2 share #3 share Luxury 1.7% Addresses key luxury Improved chardonnay portf
Slide 15: Enhanced growth through TWE's national platform
Enhanced growth through TWE’s national platform Treasury Americas distribution and supply platforms to drive FFV’s growth Growing FFV’s distribution is a key opportunity TWE’s asset base and sourcing model to unlock • Growth potential for FFV through Treasury new growth Americas national distributio
Slide 16: Financial impacts and benefits
Financial impacts and benefits Acquisition meets TWE’s priorities for growth, premiumisation and margin accretion Comparison of key metrics Key synergy opportunities F21 1 Treasury Americas2 • Procurement, storage and crushing benefits Supply chain efficiencies • Enhanced utilisation of TWE’s sourci
Slide 17: Shareholder value summary
Shareholder value summary The acquisition of FFV delivers strong value for TWE “The acquisition of Frank Family Vineyards represents an outstanding shareholders: complementary addition to the Treasury Americas brand portfolio and is another important step towards our ambition of becoming the • An ex
Slide 18: Transaction details
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Slide 19: Transaction details
Transaction details • Transaction to be funded via combination of US$240m underwritten acquisition bridge facility and cash, which includes proceeds of recent US asset divestments Funding • Pro forma F21 leverage of 2.2x is consistent with TWE’s target capital structure for accretive strategic initi
Slide 20: Definitions
Definitions Term Definition Commercial wine Wine that is sold at a retail price point below A$10 (or equivalent) per bottle DTC Direct to consumer EPS Earnings per share EBITDAS Earnings before interest, tax, depreciation, amortization, material items and SGARA EBITS Earnings before interest, tax, m
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