Foley Wines 2020 ASM Presentation

Annual Shareholders Meeting 2 0 2 0
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Introduction
Formalities
CEO’s presentation
Shareholder questions
Resolutions
Conduct of voting
General business
Meeting close
Agenda
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FOLEY WINES ASM 2020

Paul Brock – Deputy Chairman
Mark Turnbull – Director and CEO
Tony Anselmi– Director
Grant Graham – Director
Jane Trought– CFO
Introductions
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FOLEY WINES ASM 2020

Annual Shareholders Meeting | 2 0 2 0
CEO’s annual results presentation
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FOLEY WINES ASM 2020

+ Remained focused on premiumisation strategy
+ Significant progress despite global headwinds
+ A strong foundation for growth
Positive momentum maintained despite global headwinds
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FOLEY WINES ASM 2020 | CEO’s Presentation

Case
sales
533,000
+ 2%
Bottled sales
revenue
$50m
+13.4%
Operating
earnings
$7.8m
+53.2%
HIGHLIGHTS
Domestic
cases
157,000
+ 32.8%
Reported profit
after tax
$6.9m
+96.7%
Cases = 9L equivalents (i.e. 12x750ml bottles)
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Significant progress despite global headwinds
Operating
EBITDA
$15.2m
+53.2%
FOLEY WINES ASM 2020 | CEO’s Presentation

⏤Operating Cashflow
$10.8m vs $6.4m
⏤Capex
$4.42m vs $2.9m
⏤Dividend
of 3 cents per share (fully imputed) maintained
2020 Results
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These results reflect our value over volume strategy: Volume +2%, Revenue +13.4%
FOLEY WINES ASM 2020 | CEO’s Presentation

New Zealand
157,000 cases
+33%
Australia
132,000 cases
(4)%
USA/Canada
121,000 cases
(17)%
UK/Europe
92,000 cases
(5)%
Rest of world
31,000 cases
+29%
MARKET OVERVIEWS
Focused on market and channel diversification
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FOLEY WINES ASM 2020 | CEO’s Presentation

Business as usual despite significant implications
COVID-19
Able to harvest grapes during level 4 under strict conditions.
Hard-hit restaurant and airline sectors impacted our premium portfolio.
Case sales up 2% for year, but final quarter down 27,000 cases on previous year.
Wage subsidy ensured no redundancies and cellar doors able to quickly open for normal
operation.
We have maintained positive momentum and genuine progress despite global challenges
– still highly volatile for global hospitality, tourism and airlines.
Finally, Covid-19 was t he catalyst f or creating our new direct-to-consumer offer, Foley Rewards.
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FOLEY WINES ASM 2020 | CEO’s Presentation

Strategy recap
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FOLEY WINES ASM 2020 | CEO’s Presentation

Making great wine that people love to drink
around the world.
OUR PURPOSE
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FOLEY WINES ASM 2020 | CEO’s Presentation

To be New Zealand’s most revered wine group
OUR AMBITION
Satisfying the most discerning retailers and restaurants
around the world with brands that are authentic,
sustainable and of exceptional quality.
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FOLEY WINES ASM 2020 | CEO’s Presentation

Five exceptional wineries and one craft distillery
from three acclaimed regions, managed from one point.
OUR BUSINESS MODEL
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MARLBOROUGH
CENTRAL OTAGO
MARTINBOROUGH
FOLEY WINES ASM 2020 | CEO’s Presentation

Our long term strategic priorities
+
Continuing to realiseour
premiumisationstrategy
Leveraging the power
of our portfolio
Nurturing strong, long term
distribution relationships
Investing in brands built on real
places and people that are
sustainable and people can trust.
Investing in the spiritual home of our
brands.
High quality winemaking.
Sell more at higher price points.
Cross-selling the portfolio.
A ‘one stop shop’ portfolio of brands
across price points and regions.
Delivering real value to our customers
and distributors.
A collaborative and agile partner
delivering real value for our
distribution partners.
Working with par tners who can
deliver our ambition.
An efficient supply chain for exports.
Focus on geographical diversification
of sales.
Building our direct-to-consumer offer.
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PREMIUMISATION
PORTFOLIO
RELATIONSHIPS
STRATEGY RECAP
FOLEY WINES ASM 2020 | CEO’s Presentation

Significant progress on our premiumisationstrategy
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FOLEY WINES ASM 2020 | CEO’s Presentation

WHY IS PREMIUMISATION CRITICAL?
9L Export Price$76.77$34.02
Packaging allowance$15.00
Comparative revenue$61.77$34.02
80% premium for brand builders
A premium for brand builders
57% shipped as bulk
New
ZealandWinegrowers
FOLEY WINES ASM 2020 | CEO’s Presentation
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SUSTAINABILITY
Acting sustainably is urgent, not a nice to have
FOLEY WINES ASM 2020 | CEO’s Presentation
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SUSTAINABILITY
We’re taking practical, tangible steps to safeguard our
environment for future generations
RECYCLED NEW ZEALAND GLASS
POWERED BY SOLAR
SMALL FOOTPRINTS, PART OF THE LANDSCAPE
INDUSTRY- LEADING WATER
CONSERVATION SYSTEMS
RESTORING LOCAL HABITATS
PACKAGING
FOLEY WINES ASM 2020 | CEO’s Presentation
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New direct relationships secured
CONTINUING OUR PREMIUMISATION STRATEGY
Significant new routes to market secured in Australia, UK and Asia.
New channels for our premium brands.
Focusing on direct channels that create mutual value.
FOLEY WINES ASM 2020 | CEO’s Presentation
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Development of our direct-to-consumer offering
CONTINUING OUR PREMIUMISATION STRATEGY
Refreshed Foley Wine Club and Shareholders websites
Have already seen the benefits of the introduction of Foley Rewards programme
FOLEY WINES ASM 2020 | CEO’s Presentation
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Continuing to building powerful brands
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CONTINUING OUR PREMIUMISATION STRATEGY
Building the premium positioning and profile of our brands to ensure our
multi-channel distribution delivers strong rate of sale for our customers.
FOLEY WINES ASM 2020 | CEO’s Presentation

Packaging refreshes
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CONTINUING OUR PREMIUMISATION STRATEGY
Reflecting both quality and our emphasis on the environment
FOLEY WINES ASM 2020 | CEO’s Presentation

Continuing to building powerful brands
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CONTINUING OUR PREMIUMISATION STRATEGY
Focusing on high relevant reach activity that builds awareness and appetite
amongst premium wine lovers – outdoor, print, digital and PR.
PONSONBY CENTRAL
FOLEY WINES ASM 2020 | CEO’s Presentation

Continued recognition of quality
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CONTINUING OUR PREMIUMISATION STRATEGY
FOLEY WINES ASM 2020 | CEO’s Presentation

Investing in the spiritual home of our brands
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CONTINUING OUR PREMIUMISATION STRATEGY
A destination for Te Kairanga, Martinborough Vineyard and Lighthouse Gin all under one roof.
Including a new custom-designed distillery to meet Lighthouse’s growing demand.
FOLEY WINES ASM 2020 | CEO’s Presentation

The first full year of trading
$11.3m sales revenue at an average selling price of $157 per case.
Probably the most adverslyaffected by Covid-19 in t he por tf olio due to on-premise focus,
however in the first quarter we are seeing an uplift in markets, particularly Australia, as
hospitality reopens.
Pivotal in securing new relationships for our portfolio solutions in Asia.
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MT DIFFICULTY
FOLEY WINES ASM 2020 | CEO’s Presentation

Outlook
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FOLEY WINES ASM 2020 | CEO’s Presentation

Extremely uncertain times mean the ability to give guidance is difficult, however we firmly believe we
have made significant progress in the past 18 months with our distribution gains.
Our target for the full year is 600,000 cases.
By the end of November we expect to have shipped approximately 250,000 cases. A lack of shipping
availability is compounding the situation.
Markets continue to be extremely volatile, particularly for brands that have a high hospitality focus.
Last year, we stated we were focused on improving our EBITDA margin and had a goal of exceeding
the Treasury Wine Estates margin of 25%. We achieved this in the June 20 year with 27%.
EBITDA margin improvement continues to be a key focus for us and a fundamental strategy to improve
this is through premiumisation.
Upon achieving 600,000 cases we will be in a position to review the dividend payout.
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FOLEY WINES ASM 2020 | CEO’s Presentation
Outlook

Shareholder questions
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FOLEY WINES ASM 2020

1.Auditor’s remuneration
2.Re-election of Bill Foley
Resolutions
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FOLEY WINES ASM 2020

General business
THANK YOU
Shareholders not yet receiving Shareholder Offers, please email:
MARKETING@FOLEYWINES.CO.NZ
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FOLEY WINES ASM 2020