Endeavour Group Ltd · ASX:EDV
Endeavour — Investor Day (May 2022)
80 slides from Endeavour's investor day presentation, May 26, 2022
Slide 1: Endeavour Group's Investor Days
For personal use only Endeavour Group’s Investor Days Sydney: Thursday, 26 May 2022 Attached for release to the market are the presentations that will be given today on the first day of Endeavour Group’s Investor Days being held on 26-27 May 2022. The release of this announcement was authorised by t
Slide 2: Investor Days 26-27 May 2022 Day One
Dan Murphy’s Como, WA For personal use only Investor Days 26 - 27 May 2022 Day One
Slide 3: Introduction to Endeavour Group
Dan Murphy’s, Gawler, SA For personal use only Introduction to Endeavour Group Steve Donohue Chief Executive Officer
Slide 4: Acknowledgement of Country
For personal use only Acknowledgement of Country Calling Country Whale Gadigal People
Slide 5: Our Values and Ways of Working
For personal use only We’re We’re Our Values We’re real inclusive responsible Creating a more sociable future together Our Ways We work We’re team We endeavour of Working with spirit players for better
Slide 6: Commitment to our imprint
Coopers Alehouse, Gepps Cross, SA For personal use only Commitment to our imprint Responsibility People Planet and Community Championing individuality, Reducing our impact human and personal rights on the planet Advocating responsible choices and supporting positive change in our communities
Slide 7: This is Endeavour Group
This is Endeavour Group For personal use only Large and engaged customer base Complementary collection of assets Pivotal role in our industry Large customer base Brands Support suppliers and partners Annual ~200m ~4.4m Active loyalty ~3k Number of 730 New supplier interactions members suppliers part
Slide 8: Our vision is to be the leading platform enabling social occasions
Our vision is to be the leading platform enabling social occasions For personal use only NETWORK BRANDS ASSETS DIGITAL PRODUCTION PLATFORMS ASSETS CUSTOMERS PARTNERS
Slide 9: We're well positioned to achieve this vision
We’re well positioned to achieve this vision through our combined retail and hotels businesses For personal use only 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
Slide 10: We have started the journey to achieving our vision
We have started the journey to achieving our vision For personal use only Where Stood up Endeavour as an independent entity while maintaining we’ve been momentum in the business Where we Building foundations for future growth and seeding innovation are now Where Driving ongoing growth in our core bu
Slide 11: Where we've been: Maintained momentum while standing up Endeavour
Where we’ve been: Maintained momentum while standing up Endeavour • Grown My Dan’s active members by ~20% in the last 12 months (to end Q3 F22) For personal use only Grown customer reach • Dan Murphy’s VOC up 1pt to 79 & BWS VOC up 3pts to 74 (Q3 F22 vs. Q3 F21) • Hotels external customer online rev
Slide 12: Where we are now: Managing short-term imperatives
Where we are now: Managing short-term imperatives For personal use only Post COVID-19 Inflationary pressure and Evolving partnership Talent shortages normalisation rising interest rates with Woolworths Expect our core markets to Expect inflation to increase wages, COVID-19 has exacerbated Continue t
Slide 13: Where we are now: Building the foundations to deliver our vision
Where we are now: Building the foundations to deliver our vision For personal use only Step-change digital Enhance and Optimise the Group engagement expand our network • Enable discovery in Dan Murphy’s • Continue to optimise our offer in the • Unlock value through our end-to-end through personalise
Slide 14: Where we are now: Seeding innovation
Where we are now: Seeding innovation For personal use only Driving trend creation and Innovative customer offerings brand innovation Developing partnerships: Retail Media • Enhancing Hotels’ digital • Driving innovation to create the next • Retail Media is a new capability within experience through
Slide 15: Where we're going: Bringing our strategy to life
Where we’re going: Bringing our strategy to life For personal use only Leading customer Efficient end-to-end Partnerships that grow One team living our Positive and sustainable offer business our industry purpose and values imprint • We have a rich • We continuously grow • We have expanded our • We
Slide 16: Our purpose, vision and strategy: Delivering strong returns
Our purpose, vision and strategy: Delivering strong returns For personal use only OUR STRATEGY OUR PURPOSE OUR RESULTS Creating a more sociable future together… Sustainable shareholder value creation OUR VISION Leading Efficient Partnerships that customer offer end-to-end grow our industry To be the
Slide 17: Capital Management
For personal use only Capital Management Shane Gannon CFO Breakfast Creek Hotel, Brisbane, QLD
Slide 18: Our capital management framework supports growth and shareholder returns
Our capital management framework supports the growth and delivery of strong shareholder returns For personal use only Strong free cash flow deployed in line with our capital management Operating Cash Flow (high cash realisation) framework Targeting Investment Grade Credit Metrics 1. Target outcomes
Slide 19: Our capital allocation aligns to our strategic priorities
Our capital allocation aligns to our strategic priorities Strategic Alignment For personal use only Stay in Business (SIB) Enabler Maintenance Capex to sustain operations, core systems, safety and compliance Technology Transition Sustaining Transition and simplify technology landscape as Technology
Slide 20: Sustaining Capex
Sustaining Capex For personal use only Stay In Business Technology Transition Renewals Maintenance capex to Transition and simplify Renew the existing fleet of sustain operations, core technology landscape as stores, hotels, EGMs Focus systems, safety and a foundation for growth, aligned to target l
Slide 21: Growth Capex
Growth Capex For personal use only Network expansion Property Digital, data and and optimisation redevelopments eCommerce Expand and optimise the network: Major site redevelopments to Digital and data transformation to Focus new stores, hotels, production assets maximise value; integrated deliver en
Slide 22: Track record of multifaceted Retail investments
We have a track record of multifaceted Retail investments delivering strong returns For personal use only Format Omni-channel eg. innovations Drive-Thru and Click & Collect innovations Customer Range experience optimisation, including Pinnacle brands and NPD eCommerce penetration and In-store digita
Slide 23: Early stages of leveraging our capability across Hotels
We are in the early stages of leveraging our capability across Hotels For personal use only Longer term property redevelopment opportunities being explored to maximise value New & renewed accommodation offering Customer experience and loyalty Bar & restaurant renovations In venue digital experience
Slide 24: Forest Hotel: Applying our capital allocation and capability in practice
Forest Hotel: Applying our capital allocation and capability in practice For personal use only Investment Profile ⁓$20 million investment Complete redevelopment - site reopened December 2020 Trading ahead of expectations with >15% ROI Expanded food and beverage offering New sports bar, outdoor dinin
Slide 25: Q&A
Q&A For personal use only Broadbeach Photo Tavern, caption here QLD
Slide 26: Retail overview
For personal use only Retail overview Steve Donohue Chief Executive Officer Dan Murphy’s Double Bay, NSW
Slide 27: Our retail brands
Our retail brands For personal use only Key retail brands One of Australia’s most trusted destinations for drinks discovery, with 258 stores and 28,000+ products online Offers some of the most convenient ways to buy drinks, with ̴1.4k stores supporting an expanding on-demand digital offer Specialty
Slide 28: Our supporting Group capabilities
Chapel Hill Cellar Door Our supporting Group capabilities For personal use only Covered over the next two days… • Merchandising: manage range and value by partnering with suppliers and leveraging customer insight and data • endeavourX: manage Group’s digital platforms to deliver a seamless omnichann
Slide 29: Retail financials at a glance
Retail financials at a glance For personal use only F181 F191,2 F203 F21 Elevated sales since F20 Sales ($b) 8.2 8.6 9.3 10.2 due to COVID-19 Sales normalising as COVID-19 impacts reverse and on-premise EBIT ($m) 516 504 569 669 reopens Gross Margin (%) N/A N/A 23.1 24.2 Strong margin expansion EBIT
Slide 30: Dan Murphy's
For personal use only Dan Murphy’s Alex Freudmann Managing Director, Dan Murphy’s Dan Murphy’s Gawler, SA
Slide 31: Dan Murphy's at a glance
Dan Murphy’s Cellar, Lane Cove, NSW For personal use only Dan Murphy’s at a glance Our footprint Our customers Our online presence 258 4.0m 56% Stores Active membership Growth in online orders program users 7k 79 52% Total team members; 248 Sales originate online Wine and Spirit Education Customer V
Slide 32: First on new trends and support local innovation
First on new trends and support local innovation For personal use only 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 conten
Slide 33: Lowest Prices and market leading average sell price
Lowest Prices and market leading average sell price (‘ASP’) For personal use only Pepperjack Shiraz 750ml AV. SELLING PRICE FY22 YTD THE MARKET DAN MURPHY’S $20.16 $17.04 (-15.5%) Red Wine ASP Overall: ~$13.90 $14.81 (+6.6%) Dan Murphy’s Cellar, Prahan, VIC
Slide 34: Mil Z customers are fuelling our sales growth
Mil Z customers are fuelling our sales growth and engaging with our brand as their #1 preference For personal use only #1 Instagram following (115k+) in the liquor retailing category 25% Share of total sales from Gen Z and Millennials ~35% Total customers are Gen Z and Millennials Survey: ‘Imagine y
Slide 35: Our business model has rapidly evolved to support ecom growth
Our business model has rapidly evolved to support the growth of ecom and customer’s preferences For personal use only Where did transactions Where do transactions Where do products originate in 2010? originate today? change hands today? Bricks & Mortar 100% Customer’s Home 4% Bricks & Mortar 48% Dig
Slide 36: Dan Murphy's
Dan Murphy's Daniel Francis Murphy Dan Murphys
Slide 37: Dan Murphy's Strategic Growth Drivers
Dan Murphy’s Strategic Growth Drivers For personal use only Discovery Memorable Experiences Personal Interactions Team & Community We drive for trend leadership We enable the most We create personalised We are a responsible business to help customers discover engaging end-to-end moments that are rel
Slide 38: Drive Discovery
For personal use only We drive for trend leadership to help customers discover new drinks experiences Deliver the future customer experience with engaging in-store formats, best-in-class customer service and engaging content Continue to work with Pinnacle, our merchandising team and suppliers to lev
Slide 39: Memorable Experiences
For personal use only We enable the most engaging end-to-end customer experience Create new frictionless and memorable experiences underpinned by technology in new services like subscription, licence plate-recognition Drive-Thru’s and premium events Expand, renew and differentiate our store formats
Slide 40: Personal Interactions
For personal use only We create personalised moments that are relevant to our customers Drive personalised discovery across our digital channels with real-time recommendations and rich, relevant content Enable and scale personalisation into our stores, for example through our Signature Service platf
Slide 41: Team & Community
For personal use only We are a responsible business enabling our teams and community to perform at their best Invest in our talent and team capabilities, in particular, building our team members’ product knowledge to enable customer discovery Reinforce our diverse and welcoming culture where everyon
Slide 42: Dan Murphy's in Summary
For personal use only Dan Murphy’s in Summary Unique self-reinforcing business proposition that has created a sustainable competitive advantage Evolving our proposition to accelerate growth with Mil Z customers through trend leadership, experiential store formats and digital innovation Investing in
Slide 43: BWS
For personal use only BWS Scott Davidson Managing Director, BWS BWS, Glebe, NSW
Slide 44: BWS at a glance
BWS at a glance For personal use only Our footprint Our customers Our online presence 9,000+ 26 81% Team members Customer NPS Growth in online orders ~1,400 300,000 Stores throughout Australia Average monthly active app users 76% 76% Online Onlineorders orders delivered delivered viavia express, ~3,
Slide 45: BWS does Drinks Your Way
Well known, trusted and loved brand in the local community that offers some of the most convenient ways For personal use only 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
Slide 46: BWS store formats and network
BWS does We operate a range of store formats, all of which support Drinks our convenience led customer mission For personal use only Your Way. 790 Attached 314 Standalone 16 412 146 93 365 321 228 Drive 79 Metro 23 35 We operate in all …across a range of store formats …and offer a locally curated ra
Slide 47: BWS on tAPP positioned as front door to the brand
BWS does We know our customers and are making advances via Drinks BWS on tAPP, positioning the app as the front door to our For personal use only brand for the omnichannel customer Your Way. BWS on tAPP launch Cooler 1 Cooler 2 Cooler 3 (Aug - Oct 2019) (Nov 2019 - Feb 2020) (Nov 2020 - Feb 2021) (J
Slide 48: BWS strategic growth drivers
BWS strategic growth drivers For personal use only Team Local Convenience Enable our team to spark Lead in local trends through ultra Revolutionise convenience moments with customers local range and experience enabled and deliver a seamless by world class store formats omnichannel experience
Slide 49: Enable our team to spark moments with customers
Enable our team to spark moments For personal use only with customers Invest in digital tools that enable our in-store team members to better connect with and serve customers Accelerate our listening framework that helps bring our team members’ innovative ideas to life BWS strategic growth drivers E
Slide 50: Lead in local trends through ultra local range
Lead in local trends through ultra For personal use only local range and experience enabled by world class store formats Activate store format innovation and differentiation that are relevant to each local community Supercharge localisation through a curated and optimised range at the store level BW
Slide 51: Revolutionise convenience and deliver seamless omnichannel experience
Revolutionise convenience and deliver For personal use only a seamless omnichannel experience Grow BWS On tAPP to become a market leading app Accelerate the evolution of our delivery, pick-up, and Drive-Thru proposition that blurs the line between in-store and online BWS strategic Grow our eCommerce
Slide 52: BWS in summary
BWS in summary For personal use only Over the next few years, we’ll focus on: BWS is one of the largest Empowering our team to be themselves, have and most convenient drinks fun and spark moments with customers retailer in Australia - we do Drinks Your Way. We will continue to leverage our Superchar
Slide 53: Merchandising
Dan Murphy’s, Gawler, SA For personal use only Merchandising Tim Carroll Director, Buying and Merchandise
Slide 54: Merchandising at a glance
Merchandising at a glance For personal use only Performance / Value $680m Gross margin improvement +50% Growth in Pinnacle sales since F19 2 1.24m Prices beaten every year since F161 Range 18% Ofcommunity range connected to & purpose +40% Oftoday sales from come from 250 Average new products launche
Slide 55: Merchandising at a glance
Merchandising at a glance For personal use only Manage range and value by partnering with suppliers and leveraging customer insight and data Trading Trading Deliver commercial and customer outcomes by managing trading terms with our suppliers and overseeing our pricing structure Range and value Main
Slide 56: Our unique advantage lies in driving positive outcomes
Our unique advantage lies in our ability to drive positive outcomes for For personal use only customers, suppliers and the business while also building for the future Deliver value in Create the trends Be the preferred Leverage data and Develop an industry an inflationary that are relevant to retail
Slide 57: Deliver value in an inflationary environment
Deliver value in an inflationary environment For personal use only We are able to manage end-to-end price realisation with Delivering exceptional value for our customers our approach to better buying and pricing Liquor tracker - “offers good value for money” Cost price Sell price 70% management manag
Slide 58: Create the trends that are relevant to current and future customers
For personal use only 2. We contrast with 1. current sales Create the trends We review leading to determine local market and that are relevant to indicators category relevance current and future Trend & size of prize customers Identification • Global Trends • Social Listening & Search Trends • Macro
Slide 59: Create the trends that are relevant to current and future customers
Create the trends that are relevant For personal use only to current and future customers We have a track record of accelerating trends This ability unlocks significant (e.g. no / low alcohol drinks) growth across our retail brands • MACRO TRENDS:‘Wellbeing’ and ‘Responsible Communities’ 20152 2021
Slide 60: Be the preferred retailer to do business with
Be the preferred retailer to For personal use only do business with Supplier ranking of preferred retailers Voice of Supplier (VOS) (Annual Mirror Report) 49% 2020 2021 46 48% 46% 45% % 44% 43% 46% 41% 1 39% 3 38% 37% 36% 35% 35% 32% 29% Jul-19 Jan-20 Jul-20 Jan-21 Jul-21 Jul-21 8 5 BWS Endeavour Da
Slide 61: Supplier of the Year Awards
Supplier of For personal use only the Year Awards We recently held our first inaugural Supplier of the Year Awards on the 12th of May. Over 500+ suppliers attending our first in person event in over 2 years at the Timber Yard to celebrate all our suppliers big and small.
Slide 62: Leverage data and digital capabilities to activate new growth avenues
For personal use only Leverage data and digital capabilities to activate new growth avenues We continually innovate to unlock efficiencies and new growth by: • Building AI-driven pricing and promotions capability • Accelerating personalisation and new media assets • Continually improving our underst
Slide 63: In summary
For personal use only In summary • Merchandising is a key enabler for the Group; we have a proven track record of unlocking sales / margin growth • Our strong foundations enable us to effectively navigate the current inflationary environment • We are accelerating our investment in data and analytics
Slide 64: Retail and Merchandising Q&A
For personal use only Header here Q&A Xxxxxxxxxxx Retail and •We have 10 People commitments for example: Merchandising •Achieve senior leadership and Board diversity balance of 40:40:20 (leadership levels 4-6) and build a strong pip eline (level 3) of diverse leaders for the future •By 2025, achieve
Slide 65: Australian Leisure & Hospitality
For personal use only Australian Leisure & Hospitality Mario Volpe, Managing Director, Hotels The Rogue Squire, Wheelers Hill, VIC
Slide 66: Hotels at a glance
HOTELS at a glance For personal use only Our footprint Our customers Our digital presence 344 8.4 227k Hotel network VOC Average monthly (including clubs) order & pay at 569k table users 11k Average monthly engaged 553k Team members social media users Average monthly 12,540 website visitors EGMs Not
Slide 67: The evolution of Hotels
The evolution of HOTELS We have a rich history dating back 50 years For personal use only SHAPED BY TRENDS 1960’s 1970’s 1980’s 1990’s 2000’s 2010’s The 6 o’clock The birth of Family The emergence Masterchef Effect, Digitisation of swill era Australian Rock Dining of gaming emergence of bars Hospita
Slide 68: Our Hotels footprint
Our HOTELS footprint For personal use only We have a network of local venues that operate in a large addressable market We have 344 local venues across Australia And operate in four market segments 4 Bars 5.6 Accommodation 5.4 132 28 Australian 35 market size ($bn) 55 Gaming Food 6.2 5.9 85 5 All si
Slide 69: Hotels key financials and future financial priorities
HOTELS at a glance Key financials and future financial priorities For personal use only F181,2 F191,2,3 F202 F214 Build a strong platform for growth post COVID-19 Continue to invest in our hotels, retain and upskill our Sales ($ million) 1,612 1,671 1,320 1,417 team members and deploy new digital serv
Slide 70: Market leading integrated offer
Market leading integrated offer For personal use only FOOD BARS GAMING ACCOMODATION DIGITAL 300+ 900+ 300+ 110+ 119k Bistros Bars Rooms Properties Daily food & beverage transactions 250+ 11k 300+ & 290+ 2,450 193k Function rooms Average monthly TAB & Keno outlets Rooms Average monthly ticket sales t
Slide 71: Our strategic growth drivers
Our strategic growth drivers We are community minded, with a deep commitment to our responsibilities. For personal use only Our People Our Experience Our Platform Moments That Matter Local & Authentic Easy & Convenient Simplify & Fly Portfolio Management
Slide 72: Moments that matter
For personal use only Our teams are empowered to create memorable moments for our guests Grow team advocacy for the business by reinvigorating the Australian Leisure and Hospitality identity Provide our team with fulfilling career pathways Moments that matter Team members, Como Hotel, WA
Slide 73: Local & Authentic
We bring each pub’s story and potential to For personal use only life to create rich and fulfilling experiences for our guests Deliver a truly local experience through greater differentiation across our offer Step change the formats we deploy through our renewal program Grow our share of Gen Z and mi
Slide 74: Easy & Convenient: digital and data capabilities
We’re enhancing our digital and data For personal use only capabilities to better support our customer value proposition Unlock meaningful customer experiences through personalisation Deliver convenient, frictionless and innovative venue experiences across bookings, ordering, payment and gaming Buil
Slide 75: Simplify & Fly
We’re harnessing our group For personal use only capabilities to innovate, grow and improve productivity Optimise venue operations e.g. process simplification, tap menu optimisation Share best practices across venues e.g. marketing, rostering etc. Simplify & Fly Coopers Ale House, Gepps Cross, SA
Slide 76: Portfolio Management
Victoria Hotel, Goondiwindi, QLD We’re investing for the future with a disciplined For personal use only and progressive approach to capital and portfolio management Drive strong returns progressing against our renewal pipeline Unlock our land bank opportunity and increase our site utilisation rate
Slide 77: Sustainability & Responsibility
We have a deep commitment to responsibility For personal use only and sustainability Continue to embed our industry leading approach to responsible gaming in all venues Invest to build a predictive algorithm to identify potential problem gambling early Trial the broader use of facial recognition Sus
Slide 78: Hotels in summary
HOTELS For personal use only In summary Positive momentum as the industry bounces back from COVID-19 disruptions Growth unlocked by focusing on the customer - leveraging our digital assets, new occasions and offers Portfolio management presents a significant opportunity to drive value Elsternwick Hot
Slide 79: Q&A
For personal use only Q&A Albion Hotel, Albion, QLD
Slide 80: Disclaimers
Disclaimers For personal use only This presentation is dated 26 May 2022 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, ‘Endeavour Group’), and Endeavour Group’s a