Slide 1: Treasury Wine Estates Full Year Results
For personal use only TREASURY WINE ESTATES FULL YEAR RESULTS 21 August DRAFT 1
Slide 2: Michael Clarke, Chief Executive Officer
For personal use only Michael Clarke Chief Executive Officer
Slide 3: Result headlines
Result headlines1 • EBITS2,3 $184.6m. Currency-adjusted EBITS $193m; within guidance range4 For personal use only • Material item recognised in fiscal 2014 of $(280.6)m post tax5 • Statutory net loss after tax $(100.9)m, including $(280.6)m post-tax material item; largely non- cash • Net sales reven
Slide 4: Tony Reeves, Chief Financial Officer
For personal use only Tony Reeves Chief Financial Officer
Slide 5: Profit & Loss
Profit & Loss Reported Currency Constant Currency For personal use only $Am (unless otherwise stated) F14 F13 Change F13 Change Volume (m 9L cases) 30.0 32.1 (6.4)% 32.1 (6.4)% Net sales revenue 1,705.6 1,688.7 1.0 % 1,801.8 (5.3)% Other Revenue 109.7 72.0 52.4 % 77.6 41.4 % Cost of goods sold (1,23
Slide 6: Cost update
Cost update For personal use only Cost of goods sold per case1 • Cost of goods per case increased $2.32 on a constant $2.32 per case currency basis reflecting: increase in cost of goods per case – Lower production overhead recoveries due to planned reduction in shipments in the US and lower Commerci
Slide 7: Material items
Material items Balance For personal use only A$m P&L F14 sheet • Material item of $(384.5)m principally reflected: Intangible Other Impairment of intangible assets (233.5) assets expenses – $345.2m asset impairment driven by Impairment of IT development costs Intangible Other (39.1) historical price
Slide 8: US distributor inventory realignment
US distributor inventory realignment For personal use only Est. cost @ 30 Action June 2013 FX # of cases Progress as at F14 / comments rates Shipped 600k less than depleted in F14 1. Reduction in shipments Up to 1.5m less Excluding Masstige and Luxury growth and Up to $30.0m (EBITS) than depleted in
Slide 9: Other items included in NPAT
Other items included in NPAT For personal use only Significant other P&L items There were a number of other items included within the P&L, principally relating to: • One-off benefit of $80.5m relating to the outcomes of the tax consolidations project in 1H14 ─ $49.3m tax refund recognised in form of
Slide 10: Cash Flow
Cash Flow For personal use only A$m (unless otherwise stated) F14 F13 Improved cash conversion • Net debt largely in line with prior year at $209.4m EBITDAS 270.3 293.0 Change in working capital (78.4) (143.2) reflecting lower net working capital movement, a Other items 0.3 7.0 reduction in capital
Slide 11: Capital expenditure
Capital expenditure For personal use only A$m F14 F13 Continued investment in growth IT spend 16.2 33.0 • Total capital and investment expenditure of Oak Purchases 16.6 20.2 $112.4m in line with guidance and reflects investment in business growth and systems Penfolds Luxury Fermenters 8.9 8.8 capabi
Slide 12: Balance Sheet
Balance Sheet For personal use only Robust and flexible balance sheet maintained A$m F14 F13 • Lower assets reflect: Cash & cash equivalents 52.0 10.8 – $345.2m (pre-tax) impairment charge relating Receivables 414.9 460.9 to TWE’s Commercial brands, IT, property, Current inventories 707.1 714.5 Non-
Slide 13: Capital structure and debt profile
Capital structure and debt profile For personal use only Strong Balance Sheet Position • $565.5m of committed undrawn syndicated debt facilities versus $274.9m in fiscal 2013 • Weighted average term to maturity of committed facilities 4.4 years, with earliest maturity in April 2016 ($300m syndicated
Slide 14: Inventory analysis
Inventory analysis For personal use only Inventory at book value split by segment* – F14 and F13 Robust inventory composition to support future growth $714.5m $707.1m $446.0m $525.2m $1,160.5m $1,232.3m • Improved portfolio mix in current inventory relative 20% Total Luxury to prior year 24% at cost
Slide 15: Foreign currency impact & risk management
Foreign currency impact & risk management Foreign exchange risk management For personal use only • Realised hedge losses of $1.9m in F14 (included in COGS), principally in EMEA (AUD/GBP) AUD / USD transactional exposures • F15 exposure 51% hedged at a weighted average rate of $0.98, fully participat
Slide 16: Michael Clarke, Chief Executive Officer
For personal use only Michael Clarke Chief Executive Officer
Slide 17: ANZ – Challenging conditions in F14; improved execution for F15
ANZ – Challenging conditions in F14; improved execution for F15 A$m F14 F13 % F13 % • Disappointing F14 EBITS performance impacted by For personal use only Reported currency Constant currency reduction in in-market Reported programming, lower Penfolds currency Volume (m 9Le) 7.8 8.6 (9.4)% 8.6 (9.4)
Slide 18: Americas – Focused & consistent investment drives improvement
Americas – Focused & consistent investment drives improvement A$m F14 F13 % F13 % • EBITS reflect planned reduction in Commercial For personal use only Reported currency Constant currency shipments, partially Reported offset by improved portfolio mix currency Shipments (m 9Le) 14.3 15.4 (6.9)% 15.4
Slide 19: EMEA – Brand health and consistent in-market execution
EMEA – Brand health and consistent in-market execution A$m F14 F13 % F13 % • EBITS broadly in line with prior year on a constant For personal use only Reported currency Constant currency Reported currency basis currency Volume (m 9Le) 6.6 6.7 (1.3)% 6.7 (1.3)% • Reduced volume driven by elevated lev
Slide 20: Asia – Consistent investment; balanced momentum across the region
Asia – Consistent investment; balanced momentum across the region • EBITS in line with expectations, largely driven by For personal use only A$m F14 F13 % F13 % Reported currency Constant currency lower volume Reported currency Volume (m 9Le) 1.3 1.4 (8.0)% 1.4 (8.0)% • Lower volume reflects austeri
Slide 21: TWE's renewed strategic roadmap
TWE’s renewed strategic roadmap For personal use only Our vision “The world’s most celebrated wine company” Our core “We enrich peoples’ lives with quality wine brands” Our objectives 1 Recognised as a global, branded wine company 3 Well positioned in key growth markets and channels 2 Strongly orien
Slide 22: F15 Outlook
F15 Outlook • Fundamentals of the global wine industry remain attractive For personal use only • TWE is poised for a re-set and a return to growth in fiscal 2015 via its renewed strategic roadmap to: – Increase and accelerate consumer marketing investment in TWE’s brands – Continue to drive efficien
Slide 23: Questions
For personal use only Questions
Slide 24: Disclaimer
Disclaimer For personal use only Treasury Wine Estates (TWE) advises that this presentation contains forward looking statements which may be subject to significant uncertainties outside of TWE’s control. No representation is made as to the accuracy or reliability of forecasts or the assumptions on w
Slide 25: Supplementary Information
Supplementary For personal use only Information
Slide 26: Segment Information
Segment Information For personal use only Reported currency Constant currency A$m F14 F13 Change F13 Change 1 ANZ Volume 7,755.6 8,556.3 (9.4)% 8,556.3 (9.4)% ANZ NSR 562.2 600.8 (6.4)% 608.3 (7.6)% ANZ EBITS 75.1 110.1 (31.8)% 109.6 (31.5)% 1 Americas Shipments 14,349.2 15,407.6 (6.9)% 15,407.6 (6.
Slide 27: Foreign currency impact
Foreign currency impact For personal use only EBITS Impact of FX (translation and transaction) Primary Translation Transaction EBITS A$m Currencies Impact impact Americas result benefited by depreciation of Americas USD, CAD 6.1 7.6 13.7 AUD/USD but partially offset by weaker CAD which impacted Cana
Slide 28: Reconciliation to statutory statement of cashflows
Reconciliation to statutory statement of cashflows For personal use only Reconciliation to Statement of Cashflows F14 F13 Net operating cash flows before financing costs, 192.2 156.8 tax and material items Net interest paid (20.7) (14.7) Tax paid 36.7 (23.2) Net operating cash flows before net capit
Slide 29: Definitions
Definitions For personal use only Term Definition Throughout this presentation, constant currency assumes current and prior period earnings of Constant currency foreign operations are translated and cross border transactions are transacted at current year exchange rates NSR Net sales revenue EBITDAS