Delegat Group Limited — Annual Report 2021

Aug 26, 2021

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FY21 Results 27 August 2021

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Agenda

Introduction to meeting.

Business Performance – 2021 Year under review .

Investing for the Future.

Delegat Outlook.

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Performance Highlights

Record Operating NPAT of $65.5 million. 8% higher than last year.

Record Operating EBITDA of $122.9 million. 5% higher than last year.

Strong cash from operations of $74.7 million.

13.8% Operating Return on Capital Employed.

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Case Sales and FX

Case Sales (000's)	Jun 20211 Jun 2020 % Change vs 2020
UK, Ireland and Europe North America (USA and Canada) Australia, NZ and Asia Pacific Total Cases Foreign Currency Rates	1,074 1,101 -2% 1,487 1,438 3% 617 738 -16%
	3,178 3,277 -3%
	Jun 2021 Jun 2020 % Change vs 2020
GB£ AU$ US$ CA$	0.4988 0.5025 1% 0.9301 0.9313 0% 0.6737 0.6493 -4% 0.8838 0.8648 -2%

1Global case sales in FY21 was impacted by ongoing global port congestion and constrained shipping line capacity.

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Revenue Growth Analysis

NZ$ millions	June 2021	June 2020	% Change vs 2020
Sales Revenue	295.1	296.8	-1%
Sales movements breakdown:
Volume			-3%
Value			2%
Foreign Exchange		-2%
Price		3%
Country/Product Mix		1%

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Operating Performance

NZ$ millions Sales Revenue Operating Revenue Operating Gross Profit Operating Gross Margin Expenses (excl Promotion and Marketing) Promotion and Marketing Operating EBIT Operating EBIT % of Revenue Interest and Tax Operating NPAT Operating NPAT % of Revenue Operating EBITDA Operating EBITDA % of Revenue	Jun 2021 Jun 2020 Restated % Change vs 2020 295.1 296.8 -1% 302.8 302.9 0% 150.9 151.2 0%* 50% 50% (43.0) (48.6) 12% (8.0) (7.5) -7%
	99.9 95.1 5% 33% 31% (34.4) (34.4) 0%
	65.5 60.7 8% 22% 20% 122.9 116.7 5% 41% 39%

*The financial statements for the year ended 30 June 2020 have been restated for growing costs under NZ IAS 41: Agriculture. Refer to Note 1 of the financial statements.

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Operating Profit Movement – Last Year

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NZ $millions
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*The financial statements for the year ended 30 June 2020 have been restated for growing costs under NZ IAS 41: Agriculture. Refer to Note 1 of the financial statements.

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Impact of ‘Fair Value’ Adjustments

NZ$ millions	Jun 2021 Jun 2020 Restated % Change vs 2020*
Operating NPAT Operating NPAT % of Revenue Biological Produce (Grapes)1 Derivative financial Instruments Total Fair Value Items Taxation of NZ IFRS fair value items Reinstatement of Building tax depreciation Fair Value Items after Tax Reported NPAT	65.5 60.7 8% 22% 20% (7.3) 1.2 n/m2 2.7 1.3 108%
	(4.6) 2.5 n/m2 1.3 (0.7) n/m2 - 2.9 -100%
	(3.3) 4.7 n/m2
	62.2 65.4 -5%

1. Biological Produce (Grapes) is the difference between market value paid for grapes versus the cost to grow grapes. The harvest provision is reversed and only recognised when the finished wine is sold.

2. n/m means not meaningful.

*The financial statements for the year ended 30 June 2020 have been restated for growing costs under NZ IAS 41: Agriculture. Refer to Note 1 of the financial statements.

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Reported Profit Movement – Last Year

NZ $millions

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70.0
$3.2m
$65.4m
65.0
$6.3m
$62.2m
($2.1m) ($2.9m)
($0.7m)
($1.4m)
60.0
($5.6m)
55.0
50.0
45.0
Jun 2020 Margin Trade and Net FX Interest Other Building Tax Restatement Jun 2021
Actual impact Brand Impact Depreciation Impact Actual
Marketing
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*The financial statements for the year ended 30 June 2020 have been restated for growing costs under NZ IAS 41: Agriculture. Refer to Note 1 of the financial statements.

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Balance Sheet Summary

NZ$ millions	Jun 2021 Jun 2020 Restated % Change vs 2020*
Assets Current Assets Fixed Assets Total Assets Liabilities Current Liabilities Lease Liability Deferred Tax Liabilities Senior Debt Facilities Other Non-current Liabilities Total Liabilities Equity Shareholders' Equity Total Equity Total Liabilities and Equity Net Debt	225.3 225.6 0% 659.3 601.7 10%
	884.6 827.3 7% 44.8 46.7 -4% 93.9 79.5 18% 31.9 30.4 5% 258.0 254.3 1% 1.6 5.9 -72%
	430.2 416.8 3% 454.4 410.5 11%
	454.4 410.5 11% 884.6 827.3 7% 249.1 239.5 4%

*The financial statements for the year ended 30 June 2020 have been restated for growing costs under NZ IAS 41: Agriculture. Refer to Note 1 of the financial statements.

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Net Debt Movement

NZ $millions

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Net Debt Overview

NZ$ millions Funding	Jun 2021	Jun 2020 Restated*	% Change vs 2020
Operating Cash Flow	74.7	84.3	-11%
Net Debt	249.1	239.5	4%
Key Ratios
Operating Profit Measures
Interest Cover	10.19	8.82	16%
Return on Equity1	16.5%	17.5%	-6%
Return on Capital Employed2	13.8%	13.9%	-1%
Reported Profit Measures
Interest Cover	9.71	9.04	7%
Equity / (Equity + Net Debt) %	64.6%	63.2%	2%
Return on Equity	14.4%	17.0%	-16%
Return on Capital Employed	12.5%	13.5%	-8%

1. Return on Equity (Operating) excludes all fair value items from both NPAT and Assets/Liabilities.

2. Return on Capital Employed (Operating) excludes all fair value items from both EBIT and Assets/Liabilities.

*The financial statements for the year ended 30 June 2020 have been restated for growing costs under NZ IAS 41: Agriculture. Refer to Note 1 of the financial statements.

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2021 Harvest

Group Harvest:

• Exceptional quality across all three of our wine regions

• 37,470 tonnes, down 2% on 2020

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Agenda

Introduction to meeting.

Business Performance – 2021 Year under review.

Investing for the Future.

Delegat Outlook.

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Investing in Growth – Capital Expenditure Update

2019: Includes vineyard and winery developments in Hawke’s Bay, Marlborough and Barossa Valley.

2020: Includes vineyard and winery developments in Hawke’s Bay, Marlborough and Barossa Valley, and land acquisition in New Zealand.

2021: Includes vineyard and winery developments in Hawke’s Bay, Marlborough and Barossa Valley, and land acquisition in New Zealand.

2022: Includes vineyard and winery developments in Hawke’s Bay, Marlborough and Barossa Valley.

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Agenda

Introduction to meeting.

Business Performance – 2021 Year under review.

Investing for the Future.

Delegat Outlook.

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Delegat Sales Growth 2019 - 2024

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Thousands 9 Litre Cases
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	2021	2022	2023	2024
Case Sales(000s)	Actual	Forecast	Projection	Projection
Total Cases	3,178	3,419	3,734	3,976
% Increase		8%	9%	6%

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FY22 Operating Profit Guidance

Based on prevailing exchange rates, the Group forecasts to achieve a FY22 operating profit that is in the range of $57 to $61 million.

Ongoing supply chain disruption will be continued to be monitored closely.

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Thank you