Endeavour Group Ltd · ASX:EDV
Endeavour — Investor Presentation (September 2022)
44 slides from Endeavour's investor presentation, September 2022
Slide 1: Endeavour Group
Endeavour Group ASX: EDV o, WA rphy’s Com Dan Mu 1
Slide 2: Our Values: Creating a more sociable future together
We’re We’re Our We’re real inclusive responsible Values Creating a more sociable future together Our Ways We work We’re team We endeavour of with spirit players for better Working 2
Slide 3: Contents
Contents Overview of Endeavour pages 4 - 15 Including: Our investment proposition Our market Our strategy Retail pages 16 - 24 Retail Overview Dan Murphy’s BWS Hotels pages 25 - 28 Hotels overview Supporting Capabilities pages 29 - 33 endeavourX Pinnacle Drinks Latest Financial Results pages 34 - 44
Slide 4: Our purpose, vision and strategy: Delivering strong returns
Our purpose, vision and strategy: Delivering strong returns 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 leading business plat
Slide 5: This is Endeavour Group
This is Endeavour Group 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 partners Highly engaged Di
Slide 6: Our investment proposition
Our investment proposition Operating Cash Flow (high cash realisation) Market leading brands and positions, with the largest F22 outcomes network of hotels and retail Targeting Investment Grade Credit Metrics liquor stores in Australia Demonstrated resilience with • Sustain the Core 70-75% Sustainin
Slide 7: The Unique Australian Market: Retail Liquor
The Unique Australian Market Retail Liquor Drinks retail ● Elevated through COVID - Endeavour Retail grew sales in F19-F22 by Size and F16-19 CAGR market size $23b 3% 6% CAGR Growth (revenue)1 (pre-COVID)1 ● The majority of licences to sell packaged liquor are held by independent operators, includin
Slide 8: The Unique Australian Market: Hotels
The Unique Australian Market Hotels Relatively Food Bars ● Stable market pre-COVID; significant impacts through closures Size and Hospitality equal mix of in F20 - F22 market size $19b revenue Growth (revenue)1 drivers Gaming Accommodation ● Strong recovery underway, with F22 EBIT growth of 20.7% Yo
Slide 9: Our Network
Our Network 258 +7 5 +1 16 4 Dan Murphy’s Stores Wineries 52 417 132 24 146 28 1,417 3 19 93 35 +25 2 3 84 389 55 BWS stores Bottling facilities 344 77 321 85 1 +5 1 Hotels (incl. 2 35 5 1 managed clubs) Dan Murphy’s BWS Hotels (incl clubs) Wineries Bottling facilities Figures as at 26 June 2022 9
Slide 10: We're well positioned to achieve this vision through our combined retail and hotels businesses
We’re well positioned to achieve this vision through our combined retail and hotels businesses 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 room or me&u app, prep
Slide 11: Where we are now: Building the foundations to deliver our vision
Where we are now: Building the foundations to deliver our vision Enhance and Expand our Step change digital engagement network Optimise the Group • Enable discovery in Dan Murphy’s • Continue to optimise our offer in the • Recently formed independently through personalised My Dan’s offers ~2,000 com
Slide 12: Where we are now: Seeding innovation
Where we are now: Seeding innovation 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 trends in the market m
Slide 13: Where we're going: Bringing our strategy to life
Where we’re going: Bringing our strategy to life 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 have created a culture
Slide 14: Commitment to our imprint
Coopers Alehouse, Gepps Cross, SA 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 14
Slide 15: Retail segment overview
Retail segment overview Including: Dan Murphy’s BWS 15
Slide 16: Our retail brands
Our retail brands 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 retail brands Australi
Slide 17: Retail at a glance
RETAIL at a glance Elevated sales since F20 due to F181 F191,2 F203 F21 F22 COVID-19 Sales normalising as COVID-19 impacts Sales ($ billion) 8.2 8.6 9.3 10.2 10.1 reverse and on-premise reopens EBIT ($ million) 516 504 569 669 666 Strong margin expansion Supported by scale, disciplined approach to c
Slide 18: Dan Murphy's at a glance
Dan Murphy’s Cellar, Lane Cove, NSW 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 VOC NPS score Trust (WS
Slide 19: Dan Murphy's helps you Drink Better
First on new trends and support local innovation 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 content online Dan Murphy’s
Slide 20: Dan Murphy's Strategic Growth Drivers
Dan Murphy’s Strategic Growth Drivers 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 relevant enabling our tea
Slide 21: BWS at a glance
BWS at a glance 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, ~3,800 ~1m with remaining
Slide 22: Drinks Your Way
Well known, trusted and loved brand in the local community that offers some of the most convenient ways 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 convenient locations
Slide 23: BWS strategic growth drivers
BWS strategic growth drivers 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 23
Slide 24: Australian Leisure & Hospitality
Australian Leisure & Hospitality Our Hotels business The Rogue Squire, Wheelers Hill, VIC 24
Slide 25: Hotels at a glance
HOTELS at a glance 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 Note: All data is either
Slide 26: Hotels at a glance: Key financials and priorities
HOTELS at a glance Key financials and future financial priorities Build a strong platform for growth post COVID-19 F181,2 F191,2,3 F202 F214 F22 Continue to invest in our hotels, retain and upskill our team members and deploy new digital Sales ($ million) 1,612 1,671 1,320 1,417 1,511 services EBIT ($
Slide 27: Market leading integrated offer
Market leading integrated offer 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 tables booked Bistros t
Slide 28: Our strategic growth drivers
Our strategic growth drivers We are community minded, with a deep commitment to our responsibilities. Our People Our Experience Our Platform Moments That Matter Local & Authentic Easy & Convenient Simplify & Fly Portfolio Management 28
Slide 29: Supporting capabilities
Supporting capabilities endeavourX Pinnacle Drinks
Slide 30: endeavourX at a glance: we manage the Group's digital platform
endeavourX at a glance: we manage the Group’s digital platform Websites & apps Membership programs eCommerce Group capabilities The front door to our brands Understanding and creating Providing easier ways to shop Providing digital capabilities to for all customers value for our most engaged as our
Slide 31: endeavourX at a glance
endeavourX at a glance Our assets 129m Total online web traffic ~1m Monthly active app users across ~4.4m Active retail loyalty members Group Our capabilities ~350 Team 7.5m Average number of personalised 35% Dan’s and BWS on-demand orders conversations initiated fulfilled via Jimmy per week (Q3 22)
Slide 32: Pinnacle operates end-to-end across Endeavour's value chain
Pinnacle operates end-to-end across Endeavour’s value chain Raw Materials Production Assets & Insights, NPD & Brand Distribution Owned strategic super Supplier Partnerships Building Channels premium vineyards Premium commercial winery Customer insights and category Endeavour core retail AU/NZ premiu
Slide 33: Pinnacle at a glance
Pinnacle at a glance Our customer reach Our growth Our premium customers and margin Top 4 +50% 116% Growth in Pinnacle sales Branded liquor supplier in Over-index with since F19 total Australian retail by premium customers sales (#1 in wine) vs. total Endeavour 69% 3x +35% Sales growth vs. Margin ac
Slide 34: FY22 Results
FY22 Results Our latest Financial results 34
Slide 35: F22 Financial result highlights
F22 Financial result highlights Financial results $11.6b Sales Flat YoY +14.9% 3-year1 $924m EBIT +2.8% $495m Profit after tax +11.2% Cash and capital foundations $949m Operating cash inflow $985m Debt headroom $349m Capital expenditure 11.4% ROFE +28bps F21: $1,114m F21: $312m Delivering for shareh
Slide 36: Drivers of F22 Retail performance
Drivers of F22 COVID-19 impacts drove volatile trading patterns ● Strong F22 sales consistent with elevated F21, Retail performance with COVID-19 impacts in both years ● Robust H1 performance driven by the closure of hospitality venues, reduced promotional activity ● Sales decelerated in H2 as more
Slide 37: Drivers of F22 Hotels performance
Drivers of F22 Robust recovery in H2 after COVID-19 impacts in H1 Hotels performance ● H1 was significantly impacted by nationwide trading restrictions including lockdowns in New South Wales and Victoria COVID-19 continued to have a ● Customers returned enthusiastically as restrictions significant i
Slide 38: Cash generative - Cash realisation ratio of 93%
CASH GENERATIVE - Cash realisation ratio of 93% LONG-TERM DEBT FACILITIES IN PLACE Strong operational performance and disciplined cost • Net debt of $1.2b was $56m lower than F21, reflecting management generated operating cash flow of $949 million a reduction of $212m in borrowings partly offset by
Slide 39: Our capital allocation aligns to our strategic priorities
Our capital allocation aligns to our strategic priorities Strategic Alignment 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 transition (~56% in F2
Slide 40: Trade working capital F22
F22 F21 $ million 26 JUNE 2022 27 JUNE 2021 CHANGE Trade working capital 546 483 63 Lease assets 3,126 3,117 9 Property, plant and equipment 1,935 1,887 48 Intangible assets 3,894 3,845 49 Other liabilities (net) (677) (610) (67) Funds employed 8,824 8,722 102 Tax liabilities (net) 273 268 5 Other (
Slide 41: F22 cash flow (52 weeks)
F22 F21 $ million (52 WEEKS) (52 WEEKS) CHANGE EBIT 924 899 25 Depreciation and amortisation expenses 525 505 20 Changes in trade working capital (63) 7 (70) Changes in assets and liabilities and other non-cash items 26 130 (104) Finance costs on borrowings paid (45) (72) 27 Payment for the interest
Slide 42: Group financial performance
$ million F22 F21 CHANGE Group Sales financial Retail 10,086 10,178 (0.9%) Hotels 1,511 1,417 6.6% performance Total sales 11,597 11,595 imm. Profit for the period Retail EBIT 666 669 (0.4%) Hotels EBIT 315 261 20.7% Other (57) (31) 83.9% Total EBIT 924 899 2.8% Finance costs (205) (247) (17.0%) Prof
Slide 43: Segment performance
Retail F22 F21 CHANGE Segment Sales ($m) EBITDA ($m) 10,086 944 10,178 936 (0.9%) 0.9% performance Depreciation and amortisation ($m) EBIT ($m) (278) 666 (267) 669 4.1% (0.4%) Gross margin (%) 23.2% 22.4% +89bps Cost of doing business (%) 16.6% 15.8% +86bps EBIT to sales (%) 6.6% 6.6% +3bps Return o
Slide 44: Key contacts
Key contacts Shane Gannon Chief Financial Officer Kate Beattie Deputy Chief Financial Officer Sean O’Sullivan Head of Investor Relations Mobile: (61) 412 139 711 Email: sean.osullivan@edg.com.au 44
Endeavour Group — Investor Presentation (September 2022) on 6ix