Australian Vintage Ltd · ASX:AVG
Australian Vintage — H1 FY2024 Earnings Presentation
20 slides from Australian Vintage's earnings presentation, Feb 21, 2024
Slide 1: FY 2024 Half Year Results
FY 2024 HALF YEAR RESULTS February 2024 Presenters: Craig Garvin, CEO Adam Rigano, CFO
Slide 2: Disclaimer
Disclaimer The presentation has been prepared by Australian Vintage Limited (ACN 052 179 932) (“AVG”) (including its subsidiaries, affiliates and associated companies) and provides general background information about AVG’s activities as at the date of this presentation. The information does not pur
Slide 3: Highlights: half year 2024 results
Highlights: half year 2024 results Improved earnings despite extremely challenging environment • Revenue in line with prior year despite challenging market • Margin and underlying earnings improvement from brand growth, innovation, and cost out measures • Improved performance across key markets • Gl
Slide 4: Highlights: half year 2024 results
Highlights: half year 2024 results Innovation, Brand Growth and Cost Outs improving underlying performance Revenue Gross Margin EBITDAS (underlying) $136M 31% $16.5M Flat with pcp +2pp on pcp +$3.5m on pcp EBITS (underlying) NPATS (underlying) Net Debt $8.6m $4.2m $67.7M +$3.2m on pcp +$1.9m on pcp
Slide 5: Our strategic plan continues to position us well for growth in a challenging industry
Our strategic plan continues to position us well for growth in a challenging industry Consumers and Brands Markets and Customers People ESG Return on Assets 5
Slide 6: Strategic investment in brands and innovation offsetting declines in value segment
Strategic investment in brands and innovation over last 5 years offsetting declines in value segment Strategic pillar brands focus Premiumisation strategy over Winning in key geographies Summary driving margin last 5 years is working over prior year $M Sales • Portfolio growth in line with 5yr CAGR
Slide 7: Improved underlying performance across all key metrics
Improved underlying performance across all key metrics Total Revenue EBITDAS EBITS $136.1m $16.5m (underlying) $8.6m (underlying) Other Pillar Brands 150 30 25 25 20 100 20 15 15 28.4 72% 77% 77% 79% 24.1 10 20.3 50 65% 10 20.2 16.5 16.5 11.8 5 13.0 5 8.6 5.4 0 0 0 1H20 1H21 1H22 1H23 1H24 1H20 1H21
Slide 8: Reported income statement: Prior year results included asset sales to reduce debt
Reported income statement: Prior year results included asset sales to reduce debt One off costs incurred to drive transformational opportunities into the future $m 1H24 1H23 Fav/ (Unfav) % Revenue 136.1 137.1 (1) Reported 1H23 to 1H24 EBITDAS Gross Margin % 30 29 1pp $ million 28.3 EBITDAS 14.4 28.3
Slide 9: Underlying income statement: Significant improvement over prior year
Underlying income statement: Significant improvement over prior year Management action on taking price, innovation and cost outs are offsetting ongoing inflation $m 1H24 1H23 Fav/ (Unfav) % Revenue 136.1 137.1 (1) Underlying 1H23 to 1H24 EBITDAS Gross Margin % 31 29 2pp $ million EBITDAS1 16.5 13.0
Slide 10: Cost out from FY23 program in place
Cost out from FY23 program in place A focus on reducing controllable costs taking full affect in second half, ensuring AVG's earnings improve into FY24 • Efficiencies and cost outs more than offset inflation in 1H • Sea freight costs improvement but still watching brief • Dry goods negotiations comp
Slide 11: Cash flow
Cash flow Free cash flow improvement over prior half with work underway to improve cash further $m 1H24 1H23 • Free cash flow pre asset sales and dividends has improved over Net cash from operations prior to working 13.1 5.5 the prior year capital movements Movement in working capital (22.1) (25.7)
Slide 12: Net Debt
Net Debt Reducing net debt through a range of management actions Underlying 1H24 1H23 FY23 • 1H24 net debt in line with internal expectations and increased over FY23 from grower payments Net Debt (excl leases) $m 67.7 53.1 48.1 Facilities Available $m 89.4 92.5 89.4 • Net debt for FY24 expected to b
Slide 13: Outlook
Outlook AVG remains profitable with a sustainable business model standing up against significant headwinds • Business fundamentals well placed for future • Continued investment in innovation and Brands driven by consumer needs (ranked No 1 for Innovation UK Advantage Survey) • Rest of Asia and China
Slide 14: Strategic Review: Agenda
Strategic Review: Agenda 1 Industry state of play and how AVG is positioning for success 2 Industry findings 3 Benchmarking of identified Initiatives 4 Progress update on Initiatives 14
Slide 15: Strategic Review: Industry state of play and how AVG is positioning for success
Strategic Review: Industry state of play and how AVG is positioning for success External shocks have created a uniquely challenging …AVG is taking active steps to enhance its operating environment for the Australian wine industry… resilience and growth prospects; strategy is working Trade tariffs
Slide 16: Strategic Review: Industry findings
Strategic Review: Industry findings Industry is currently challenged which is impacting …but there is a real opportunity to create a more overall profitability… sustainable environment 1 2 3 4 Surplus processing Pockets of irrational Three core attributes Sector consolidation is infrastructure compe
Slide 17: Strategic Review: Initiatives considered against the core success factors
Strategic Review: A number of Initiatives were identified and were considered against the core ‘success factors’ Market & geographic Minimising debt/ access to Scale / efficiency Premiumisation Synergy unlock positioning capital Cash sale of company N/A Cost-out program ? Monetisation of ass
Slide 18: Strategic Review: In process of executing and reviewing Initiatives
Strategic Review: In process of executing and reviewing Initiatives Cash sale of company AVG open to constructively exploring proposals potential to maximise shareholder value No change of control proposals received since announcement of Strategic Review in July 2023 Cost-out program On-track
Slide 19: Australian Vintage
AUSTRALIAN VINTAGE ee
Slide 20: Strong balance sheet
Strong balance sheet $m 1H24 1H23 % change FY23 Cash & equivalent 9.8 6.4 53% 6.9 Receivables 61.5 59.7 (3%) 43.4 Inventories 210.5 212.6 1% 217.1 Plant & Equipment 98.5 96.0 3% 99.2 Goodwill/ intangible 45.3 45.1 - 44.9 Other 69.8 72.3 (3%) 68.8 Total Assets 495.5 492.1 - 480.3 Payables 39.9 42.6 6