ENDEAVOUR GROUP LIMITED — Earnings Release 2024

Aug 25, 2024

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F24 Profit and Dividend Announcement
For the 53 weeks ended 30 June 2024 [1]
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Resilient trading and disciplined execution

F24 Group Highlights

Group	Group	Group	Cash	Earnings per	Dividend per
Sales	EBIT	NPAT2	realisation	share	share
$12.3b	$1.1b	$512m	108%	28.6c	21.8c
↑3.6% vs F23	↑3.1% vs F23	↓3.2% vs F23	↑38 ppts vs F23	↓3.1% vs F23	In line vs F23
52W↑1.8%	52W↑1.8%	52W↓4.3%

• ＞ Resilient trading performance delivers sales growth in Retail and Hotels

• ＞ EBIT growth driven by gross margin expansion and cost optimisation

• ＞ Focused strategy execution with emphasis on streamlining and simplifying the business

• ＞ Disciplined capital management and strong cash generation underpins consistent dividend

• ＞ Well positioned to perform through the cycle despite near-term headwinds

Endeavour Group Managing Director and CEO, Steve Donohue, said: “Endeavour Groupʼs F24 financial results demonstrate the resilience of our brands and businesses in response to challenging trading conditions, with both our Retail and Hotels segments delivering sales and EBIT growth in a softening consumer environment.

“With household budgets under pressure, value-conscious consumers continue to seek out Dan Murphyʼs for its well-known Lowest Liquor Price Guarantee, expert service and market-leading range. Our My Danʼs membership program has enhanced its range of member-exclusive discounts and personalised offers for its 5.4 million active members, delivering a strong 83% scan rate, with members spending 80% more per transaction than non-members.

“BWS remains Australiaʼs most convenient drinks retailer with more than 1,400 stores, and an expanded range of delivery partners. We delivered even more value for customers with the launch of ‘Appy Dealsʼ, our new member pricing digital offer that increased monthly active app users by 155%.

“Pinnacle Drinks continued to leverage customer insights to drive product innovation, with circa 400 new products launched during the year driving over 50% of Pinnacleʼs growth. Using a capital light model, Pinnacle generated $1.8 billion of Retail sales, with over half coming from wine where growth was driven by the premium and luxury segments.

“In Hotels, optimised food and bar menus and upgrades to accommodation delivered sales and gross profit margin improvement. Gaming returned to growth in H2, supported by investment in new games. We made progress on our pipeline of targeted renewals, with renovated venues delivering an enhanced guest experience and improved performance.

“We remained focused on tight cost management in an inflationary environment, with our optimisation program endeavourGO achieving $100 million in savings in the year. Our investments in enhancing our capability to drive efficiency across the business, including deploying AI and other technology, continue to contribute to both cost efficiency and GP margin expansion.

1 Financial year 2024 results included a 53rd trading week. All references to 52 weeks changes are adjusted for the additional 53rd week in the current financial year.

2NPAT attributable to equity holders of the Company.

Endeavour Group Limited ACN 159 767 843 | 26 Waterloo Street, Surry Hills, NSW, 2010 ASX Announcement | 26/08/2024 ‘Creating a more sociable future togetherʼ

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“During the year, we progressed work on our One Endeavour program to separate from Woolworths systems and simplify our technology landscape, with a new Property Lease Management System implemented. We expect to complete People Systems and commence Store systems in F25, with our ERP build to commence in F26.

“Our capital discipline was reflected in capital expenditure coming in line with our guidance and $64 million lower than F23. $1.2 billion operating cash flow and improved working capital reduced our leverage ratio to within our target range at 3.5x. In light of the Groupʼs strong cash generation, the Board declared a final dividend in line with F23, representing a full year payout ratio of 76.3%, slightly above our target 7075% payout range.ˮ

Outlook

Underlying sales momentum in both the Retail and Hotels segments improved slightly through the first seven weeks of trading compared with Q4, with our focus on offering the best prices across both the Retail and Hotels segments continuing to attract an increasingly value-conscious consumer.

It should be noted that the FIFA Womenʼs World Cup and associated social occasions in early F24 limit the comparability between the same periods in F24 and F25, with headline sales growth in the first seven weeks 0.6% in Retail and 2.0% in Hotels.

We continue to respond to inflationary pressures by tightly managing CODB, including progressing optimisation initiatives under our endeavourGO program, which is targeting $290 million plus in cumulative savings by F26.

The structural resilience of our businesses, combined with our high cash generation and strong balance sheet, position us well to deliver through the cycle. We remain focused and committed to delivering our target of 10%total shareholder value[3] from F26.

Commenting on the outlook for F25, Endeavour Group Managing Director and CEO, Steve Donohue, said: “With our brands and venues being Australiaʼs go-to destinations for social occasions and events, we look forward to key upcoming first half trading events such Fatherʼs Day, Cyber Week and the festive season, with our unrivalled value proposition, growing loyalty base and compelling consumer offer positioning us to perform well. We will continue to focus on tightly managing our costs as we execute our strategy scorecard commitments to deliver value for shareholders.ˮ

A summary of forward looking statements and financial inputs is provided on page 8 of this announcement and page 42 of the accompanying investor presentation lodged today on ASX.

3 Sum of EPS growth and dividend yield; Assuming stabilised interest rates and inflation environment.

Endeavour Group Limited ACN 159 767 843 | 26 Waterloo Street, Surry Hills, NSW, 2010 ASX Announcement | 26/08/2024

‘Creating a more sociable future togetherʼ

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Group Performance

	F24	F23		CHANGE
$ million	53 WEEKS	52 WEEKS	CHANGE	52 WEEKS
Sales	12,309	11,884	3.6%	1.8%
Operating Retail EBIT	717	677	5.9%	4.7%
Operating Hotels EBIT	451	435	3.7%	1.8%
Other EBIT	68	63	7.9%	6.3%
Operating EBIT	1,100	1,049	4.9%	3.4%
One Endeavour Costs	45	26	73.1%	65.4%
EBIT	1,055	1,023	3.1%	1.8%
Finance costs	306	250	22.4%	20.0%
Profit before income tax	749	773	3.1%	4.1%
Income tax expense	238	244	2.5%	3.3%
Non-controlling interests	1	-	n.a.	n.a.
Profit for the period (after income tax)	512	529	3.2%	4.3%

• F24 sales of $12.3 billion, 3.6% vs F23, or 1.8% on a 52-week basis.

• Earnings before interest and tax EBIT of $1,055 million, 3.1% vs F23 or 1.8% on a 52-week basis.

• Operating EBIT of $1,100 million was 4.9% vs F23, or 3.4% on a 52-week basis, excluding $45 million of One Endeavour Technology OETprogram opex in F24.

• endeavourGO savings of $100 million materially offset cost inflation, taking total cumulative program benefits to $190 million.

• Work has ramped up on our One Endeavour program to separate from Woolworths and establish our own technology infrastructure. Procurement and lease management systems are implemented, with People systems aiming to complete in F25. Store systems will complete design and progress to the implementation phase in F25. Targeting ERP design to complete in F25, with implementation to begin in F26.

• Investments in data science, loyalty and digital technology delivered value and convenience for customers, with endeavourX, Endeavour Data and AI contributing to margin improvement and cost optimisation.

• Finance costs of $306 million were in line with guidance, increasing due to higher interest rates and increased average net debt.

• Profit for the year after income tax was $512 million, 3.2% lower than F23, or down 4.3% on a 52-week basis, driven by increased finance costs. The effective tax rate for F24 was 31.8%.

• Return on Funds Employed ROFE of 11.6% compared to 11.8% for F23. Excluding the impact of One Endeavour program costs, Group ROFE was stable at 12.1%.

• Strong cash realisation of 108% was supported by improved working capital. Disciplined capital expenditure of $446 million[4] was within the guided range and $64 million lower than F23. As a result, net debt reduced by $55 million, bringing the leverage ratio at year end to within target at 3.5x.

• On 26 August 2024, the Board determined to pay a fully franked final dividend of 7.5 cents per ordinary share, bringing full year dividend payments to shareholders of $390 million, or 21.8 cents per ordinary share, equating to a full-year payout ratio of 76.3%. Endeavour shares will trade ex-dividend from 3 September 2024, the record date is 4 September 2024 and the distribution is expected to be paid to shareholders on 10 October 2024. The Board has determined that a Dividend Reinvestment Plan will not be activated for the F24 final dividend.

4 Excludes $5m purchase price allocation revaluation for a prior period acquisition and $4m goodwill arising from the recognition of deferred tax liabilities on acquisition.

Endeavour Group Limited ACN 159 767 843 | 26 Waterloo Street, Surry Hills, NSW, 2010 ASX Announcement | 26/08/2024

‘Creating a more sociable future togetherʼ

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Segment Performance - Retail

	F24	F23		CHANGE
$ million	53 WEEKS	52 WEEKS	CHANGE	52 WEEKS
Sales	10,246	9,905	3.4%	1.7%
Operating EBITDA	1,033	973	6.2%	4.7%
Depreciation and amortisation	316	296	6.8%	4.7%
Operating EBIT	717	677	5.9%	4.7%
One Endeavour Costs	32	19	68.4%	63.2%
EBIT	685	658	4.1%	3.0%
Gross profit margin %	24.4%	23.8%	66bps	65bps
Operating Cost of doing business %	17.4%	16.9%	50bps	45bps
Operating EBIT to sales %	7.0%	6.8%	16bps	20bps
EBIT to sales %	6.7%	6.6%	4bps	9bps

VOC NPS	Dan Murphy's & BWS sales	Number of renewals	Number of stores	Operating ROFE
DM 812 BWS 75 1	↑3.7%	68	1,728	15.6% (↑14 bps)
vs F23	52W↑1.9%	vs 122 in F23	↑27 vs F23	52W↓3 bps

• Retail sales of $10.2 billion in F24, 3.4% vs F23 or 1.7% on a 52-week basis.

• Gross profit margin improved by 66 bps to 24.4%, driven by enhanced promotional effectiveness supported by AI, data and new product innovation, in which Pinnacle Drinks continued to play a key role leveraging our unique customer insights.

• Operating EBIT of $717 million was 5.9% vs F23, or 4.7% on a 52-week basis, with an Operating EBIT to sales ratio of 7.0% 16bps vs F23.

• On a comparable store basis, sales for BWS and Dan Murphyʼs grew by 1.1%.

• Ecommerce sales grew 5.9% 52-week) to comprise 8.9% of total Retail sales.

• Total network of 1,728 stores, with 9 net new Dan Murphyʼs stores and 16 stores renewals, and 18 net new BWS stores, 52 renewals and expanded delivery offers via ultra-convenience partners.

• MyDan's total active member base grew by 250,000 to 5.4 million, with a strong scan rate of 83%.

• MyDanʼs expanded member-exclusive offers, with personalised offers delivering a 29% sales uplift and members purchasing baskets 80% bigger than non-members.

• Dan Murphyʼs launched “Nobody Beatsˮ marketing campaign to reinforce its Lowest Liquor Price Guarantee.

• Dan Murphyʼs retained its market-leading Voice of Customer score of 81, with BWS at 75.

• BWS launched value-focused campaigns: ‘A Winʼs a Winʼ and “Mega Wins, Mini Effortˮ. The launch of Appy Deals exclusive prices contributed to a 155% increase in Monthly Active User in the following month.

• Pinnacle Drinks delivered $1.8 billion of sales[5] in F24, with 400 new products launched contributing over 50% of growth. With a capital light model and Premium and Luxury focus 75% of wine portfolio), Pinnacle delivers strong returns that are accretive to Retail segment ROFE.

5 Retail sales of Pinnacle products.

Endeavour Group Limited ACN 159 767 843 | 26 Waterloo Street, Surry Hills, NSW, 2010 ASX Announcement | 26/08/2024

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Retail Operating Metrics by Quarter

Retail Operating Metrics by Quarter
	F24	Q4 F24	Q3 F24	Q2 F24	Q1 F24
	53 WEEKS	13 WEEKS	13 WEEKS	13 WEEKS	14 WEEKS
Customer Metrics
BWS VOC NPS Store and Online)	75	75	74	75	74
Dan Murphyʼs VOC NPS Store and Online)	81	82	80	80	81
My Danʼs active members (million)	5.4	5.4	5.4	5.4	5.3
Sales Metrics
BWS and Dan Murphy's $ million)	9,990	2,195	2,350	2,976	2,469
Specialty $ million)	256	62	56	69	69
Total Retail sales $ million)	10,246	2,257	2,406	3,045	2,538
Total Retail sales growth	3.4%	7.0%	2.4%	3.0%	1.9%
Combined BWS and Dan Murphy's sales growth	3.7%	6.7%	2.7%	3.2%	2.6%
52 weeks total Retail sales growth	1.7%	0.8%6	0.9%7	3.0%	1.9%
52 weeks combined BWS and Dan Murphy's sales growth	1.9%	0.7%6	1.0%7	3.2%	2.6%
52 weeks combined BWS and Dan Murphy's comparable
store sales growth / (decline)	1.1%	0.2%6	0.0%6	2.4%	1.8%
	F24	Q4 F24	Q3 F24	Q2 F24	Q1 F24
	53 WEEKS	13 WEEKS	13 WEEKS	13 WEEKS	14 WEEKS
eCommerce Customer Metrics
Dan Murphy's Online VOC NPS	75	77	75	73	77
BWS Online VOC NPS	72	72	71	72	71
eCommerce Sales Metrics
Online sales $ million)	916	194	207	294	221
Online sales growth8	7.6%	10.9%	8.4%	8.9%	2.8%
Online penetration	8.9%	8.6%	8.6%	9.7%	8.7%
BWS and Dan Murphy's Pick-up mix (orders)	46.6%	42.5%	44.0%	50.7%	48.0%

6 Adjusted for non comparable Easter timing.

7 Adjusted for non comparable Easter and New Yearʼs Day timing.

8 52-week online sales growth is 5.9%.

Endeavour Group Limited ACN 159 767 843 | 26 Waterloo Street, Surry Hills, NSW, 2010 ASX Announcement | 26/08/2024

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Segment Performance - Hotels

		F24		F23		CHANGE	CHANGE
$ million		53 WEEKS	52	WEEKS	CHANGE	52	WEEKS
Sales		2,063		1,979	4.2%		2.3%
Operating EBITDA		741		712	4.1%		2.1%
Depreciation and amortisation		290		277	4.7%		2.5%
Operating EBIT		451		435	3.7%		1.8%
One Endeavour Costs		13		7	85.7%		85.7%
EBIT		438		428	2.3%		0.5%
Gross profit margin %		84.8%		84.1%	64bps		65bps
Operating Cost of doing business %		62.9%		62.1%	76bps		77bps
Operating EBIT to sales %		21.9%		22.0%	12bps		10bps
EBIT to sales %		21.2%		21.6%	40bps		39bps
Voice of	Number of hotels	Number	of		Operating ROFE
Customer	(incl clubs)	renewals
8.7/10	354	24			10.3% (↓9bps)
↑0.2 vs F23	Flat vs F23	vs 46 in F23			52W↓28 bps vs F23

• Hotels sales of $2.1 billion were 4.2% in F24, or 2.3% on a 52-week basis.

• Operating EBIT was 3.7%, or 1.8% on a 52-week basis, with Operating EBIT to sales ratio of 21.9% broadly in line with F23.

• Optimised food and bar menus increased gross profit margins by 64 bps in F24 and 104 bps in H2 vs F23.

• We have continued to invest in our accommodation offering, with 7 accommodation sites renewed in F24 189 rooms), as well as the redevelopment of the Brook 40 rooms) which launched in September, bringing our Nightcap Brand to 83 venues nationally.

• The Gaming market remains resilient, with our gaming sales growing broadly in line with the market, with the exception of Victoria, which was impacted by our early adoption of the government's changes to trading hours. The trading hours change will be mandated across Victoria from 30 August 2024.

• Investment in latest trending games supporting sales.

• Cost inflation partly mitigated by endeavourGo program, with more savings to come from simplification and greater automation of our Hotel processes.

• Customer satisfaction improved to 8.7/10 0.2, driven by our continued focus on value and service.

• The new pub+ app launched successfully to NSW guests in May and was rolled out nationally in August. This investment in digital, data and analytics will offer guests personalisation, convenience and value.

• Continued focus on strong renewals pipeline , with 24 renewals completed in F24. Two new hotels were added to the portfolio, with two leases discontinued (and one further lease discontinued post balance date). This contributed to substantially reduced Hotels capex versus F23.

Endeavour Group Limited ACN 159 767 843 | 26 Waterloo Street, Surry Hills, NSW, 2010 ASX Announcement | 26/08/2024 ‘Creating a more sociable future togetherʼ

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Hotels Operating Metrics by Quarter

	F24	Q4 F24	Q3 F24	Q2 F24	Q1 F24
	53 WEEKS	13 WEEKS	13 WEEKS	13 WEEKS	14 WEEKS
Sales metrics
Total sales $ million)	2,063	492	487	531	553
Total sales growth	4.2%	11.1%	1.5%	2.5%	2.8%
52 weeks sales growth	2.3%	2.2%9	1.7%9	n.a.	n.a.
52 weeks comparable hotel sales growth	1.5%	2.2%9	1.5%9	1.3%	1.2%

9 Adjusted for non comparable Easter timing.

Endeavour Group Limited ACN 159 767 843 | 26 Waterloo Street, Surry Hills, NSW, 2010 ASX Announcement | 26/08/2024

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Summary of forward-looking statements

Area	Description
Group optimisation	We are targeting cumulative optimisation savings of $290 million+ by F26, with $190 million delivered as at end F24, to mitigate inflationary pressures and enable continued investment in line with strategy.
Effective tax rate	We expect the F25 full year effective tax rate to be in the range of 3132%.
Finance costs	F25 finance costs are expected to be within the range of $310 $325 million, based on interest rates current at the date of this announcement.
Capital expenditure	Capital expenditure in F25 is anticipated to be between $450 - $500 million, including One Endeavour program capital.
One Endeavour	Refer to One Endeavour program guidance provided on page 14 of the accompanying investor presentation lodged today on ASX.
53rd trading week	F24 was a 53-week reporting period, and our H2 F24 results include an extra week of trading. Growth rates in F25 will be impacted with a 52-week year being compared to a 53-week year.

ENDS

Endeavour Group Managing Director and CEO, Steve Donohue, and Chief Financial Officer, Kate Beattie, will host an analyst and investor conference call today at 1030am AEST. Analysts, investors and media can access the management briefing via the following

Webcast URL https://webcast.openbriefing.com/edv-fyr-2024/

• • Teleconference registration: https://s1.c conf.com/diamondpass/10039999 hg7y6s.html

Participants will need to pre-register for the call at the link above. You will receive a calendar invite and a unique code which is to be quoted when dialling into the call.

The release of this announcement has been authorised by the Board.

Further Information

Investors	Media
Anna Collins	Lizzy Bold
Mobile: 61422 529 104	Mobile: 61421 765 446
anna.collins@edg.com.au	lizzy.bold@edg.com.au

Endeavour Group Limited ACN 159 767 843 | 26 Waterloo Street, Surry Hills, NSW, 2010 ASX Announcement | 26/08/2024

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Appendices

Appendix 1Non-IFRS Financial Information

This profit and dividend announcement for the 53 weeks ended 30 June 2024 F24contains certain non-IFRS financial information related to historical performance, position and cash flows. Non-IFRS financial information is financial information that is not defined or specified under any relevant accounting standards. This information may not be directly comparable with other companiesʼ information but is commonly used in the industry in which Endeavour operates.

Non-IFRS information is also included to provide meaningful information on the underlying drivers of the business, performance and trends (for example, comparable sales growth). This information is used by management and directors to assess the financial performance of Endeavour Group and its segments. Non-IFRS information should be considered in addition to and is not intended to substitute IFRS measures.

The presentation of non-IFRS measures is in line with Regulatory Guide 230 issued by the Australian Security and Investments Commission in December 2011 to promote full and clear disclosure for investors and other users of financial information and minimise the possibility of being misled by such information.

Appendix 2New stores and renewals

Appendix 2New stores and renewals
F24 FULLYEAR	GROSS NEW STORES / HOTELS INCL. ACQUISITIONS	NET NEW STORES / HOTELS INCL. ACQUISITIONS	RENEWALS
Retail	42	27	68
Hotels	2	0	24
Endeavour Group	44	27	92

Endeavour Group Limited ACN 159 767 843 | 26 Waterloo Street, Surry Hills, NSW, 2010 ASX Announcement | 26/08/2024 ‘Creating a more sociable future togetherʼ

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Appendix 3F24 Group Funds Employed

Appendix 3F24 Group Funds Employed
	F24	F23
$ million	30 JUNE 2024	25 JUNE 2023	CHANGE
Trade working capital	725	778	53
Lease assets	3,201	3,197	4
Property, plant and equipment	2,234	2,095	139
Intangible assets	4,274	4,260	14
Other liabilities (net)	710	731	21
Funds employed	9,724	9,599	125
Tax liabilities (net)	208	162	46
Other (assets)/liabilities (net)	39	60	21
Lease liabilities	3,913	3,897	16
Net debt	1,872	1,927	55
Equity	3,770	3,673	97
Total funding and tax	9,724	9,599	125
Operating ROFE %	12.1	12.1	2bps
ROFE %	11.6	11.8	22bps

Appendix 4F24 Group Cash Flow

	F24	F23
$ million	53 WEEKS	52 WEEKS	CHANGE
EBIT	1,055	1,023	32
Depreciation and amortisation expenses	607	573	34
Changes in trade working capital	68	261	329
Changes in assets and liabilities and other non-cash items	17	67	84
Finance costs on borrowings paid	117	61	56
Payment for the interest component of lease liabilities	194	180	14
Income tax paid	192	394	202
Operating cash flows	1,210	767	443
Payments for property, plant and equipment and intangible assets	419	408	11
Payments to acquire businesses, net of cash acquired	26	110	84
Repayment of lease liabilities	307	280	27
Dividend paid	390	394	4
Other	10	2	8
Free cash flow	58	427	485
Cash realisation ratio %	108	70	38 pp

Endeavour Group Limited ACN 159 767 843 | 26 Waterloo Street, Surry Hills, NSW, 2010 ASX Announcement | 26/08/2024

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Appendix 5Glossary

TERM	DESCRIPTION
Cash realisation ratio	Operating cash flow as a percentage of Group net profit after tax before depreciation
	and amortisation
Comparable sales	Retail: Measure of sales which excludes stores that have been opened or closed in
	the last 12 months and demonstrable impact on existing stores from store disruption
	from new store openings/closures
	Hotels: Measure of sales which excludes hotels opened or closed in the last 12
	months
Cost of doing business	Expenses which relate to the operation of the business
CODB
EBITDA	Earnings before interest, tax, depreciation and amortisation
EGM	Electronic Gaming Machines
Funds employed	Net assets excluding net debt, leases liabilities and other financing-related assets
	and liabilities and net tax balances
Gaming	Refers to the operation of Electronic Gaming Machines
My Danʼs active	My Dan's active members are the number of unique members who have transacted
members	in the last twelve months
n.m.	Not meaningful
Online penetration	Online penetration is calculated as total online sales as a percentage of total Retail
	sales for the same time period
Renewals	A significant upgrade to the store / hotel environment, enhancing customer
	experience, range and process efficiency (including digital)
Return on Funds	ROFE is calculated as EBIT for the previous 12 months as a percentage of 13 month
Employed ROFE	average funds employed
Operating EBIT / ROFE /	Operating EBIT/ROFE/CODB excludes the impact of the One Endeavour Technology
CODB	program
VOC NPS	Voice of Customer Net Promoter Score VOC NPSis based on feedback from
	customers, and represents the number of promoters (score of nine or 10less the
	number of detractors (score of six or below).This includes scores from in-store and
	online customers.

Endeavour Group Limited ACN 159 767 843 | 26 Waterloo Street, Surry Hills, NSW, 2010 ASX Announcement | 26/08/2024 ‘Creating a more sociable future togetherʼ

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