LARK DISTILLING CO. LTD — AGM Information 2019

Dec 1, 2019

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ASX Announcement: Australian Whisky Holdings Limited (ASX Code AWY)

Annual General Meeting Presentation - Amended

2 December 2019

Australian Whisky Holdings Limited ( Company ) ( ASX: AWY ) provides the attached Annual General Meeting Presentation as an amendment to the original released on 25 November 2019 noting information in relation to inventory valuation has been updated to correct a minor error.

Geoff Bainbridge Managing Director +61 3 6231 9088

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AUSTRALIAN WHISKY HOLDINGS LIMITED 14-16 Davey St, Hobart TASMANIA 7000 ASX AWY ABN 6210 4600 544 W australianwhiskyholdings.com P +61 (3) 6231 9088

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CEO PRESENTATION BRAND and BARRELS The Road to Whisky Riches

2019 Annual General Meeting

Australian Whisky Holdings Limited Nov 2019

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INTRODUCTION TO THE BOARD & HOW WE WORK

DAVID DEARIE

} BOARD OVERSIGHT / GOVERNANCE

} STRATEGY & BRAND

} INTERNATIONAL

} RELATIONSHIPS

GEOFF BAINBRIDGE (CEO)

} MANAGEMENT OVERSIGHT

} STRATEGY & BUSINESS MODEL

} FINANCIALS / COMPLIANCE

• } RELENTLESS EXECUTION

EXECUTIVE DIRECTORS

NON-EXECUTIVE DIRECTORS

WARREN RANDALL

• } ENTREPRENEURIAL

• } LIQUID, BARRELS & WOOD

LAURENT LY

} CORPORATE FINANCE

} ASIAN PERSPECTIVE & CONTACTS

• } RELATIONSHIPS

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RECAP ON AUSTRALIAN WHISKY HOLDINGS ASSETS

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SINCE THE BOARD CHANGE IN LATE MAY 2019 …….

JUN ’19 NEW BOARD INSTALLED , ACTING CEO / CFO RESIGNED NEW AUDITOR (DELOITTE), NEW LEGAL (GADENS) JUL ‘19 CLOSED SYDNEY HQ AND RELOCATED TO HOBART COMMENCED CEO SEARCH WITH HEIDRICH & STRUGGLES FOCUS AND PRIORITY WAS ON GETTING TO KNOW THE MANAGEMENT TEAM TRADEMARK PROTECTION

AUG ’19 ADVANCY BRAND REVIEW NANT INVESTOR BARREL STEP PLAN INCREASED TO A 2[ND] PRODUCTION SHIFT AT CAMBRIDGE DISTILLERY BILL LARK RETURNS AS BRAND AMBASSADOR

SEP ’19 FINALISED 10 YEAR MODEL INC. DEFINED BRAND STRATEGY AND VISION BRIEFED AGENCY RE: FORTY SPOTTED RELAUNCH & SECURED NEW GIN BAR IN HOBART CEO INTERVIEWS (1[ST] AND 2[ND] ROUND) SECURED BROOKE STREET PIER IN HOBART OPPORTUNITY TO FEATURE LARK NEW COMPANY SECRETARY (LEYDIN FREYER)

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QUICK UPDATE
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QUICK UPDATE
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SINCE THE BOARD CHANGE IN MAY 2019 …….

OCT ’19 EXECUTIVE DIRECTOR APPOINTMENT (CEO AND CHAIRMAN)

SALES, MARKETING & HOSPITALITY RESTRUCTURE

COMPLETED A DETAILED F20 REFORECAST

BOARD APPROVAL OF COMPANY VISION, STRATEGIC FRAMEWORK AND PLAN

NOV ’19 SCOPE OF THE CAMBRIDGE DISTILLERY UPGRADE WITH BUSINESS CASE BY DECEMBER RE: 350,000 LTRS PA FORMED AN INTERNALLY QUALIFIED PROJECT TEAM TO DEVELOP NEW PRODUCTS (NOT NEW BRANDS) FINALISED NANT INVESTOR BARREL DETAILED IMPLEMENTATION PLAN AND UPDATED RECEIVER SECURED NEW HEAD OF HOSPITALITY, THREE REDUNDANCIES AND CLOSED LOSS MAKING NANT CELLAR DOOR FINALISED CREATIVE FOR THE FIRST ABOVE THE LINE CAMPAIGN FOR LARK WITH NATIONAL ADVERTISERS FIRST AGENCY PRESENTATION FOR THE FORTY SPOTTED RELAUNCH SCHEDULED FOR JUN’20 OPENED THE “LARK EXPERIENCE” AT THE BROOKE STREET PIER HEADS OF AGREEMENT FOR EXTERNAL BOND STORE ARRANGEMENT

DEC ’19 INVESTOR ROADSHOW INC. FUNDING OPTIONS

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CEO PRESENTATION AGENDA

} THE LANDSCAPE REMAINS POSITIVE

• } THE VISION : “BRAND & BARRELS - THE ROAD TO WHISKY RICHES”

• } IMPLEMENTATION OF THE VISION / STRATEGY

• } THE ACQUISITION PLAYBOOK – IT’S A PROVEN MODEL

• } SUMMARY & QUESTIONS

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BRAND AND BARRELS – THE ROAD TO WHISKY RICHES

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THE LANDSCAPE REMAINS POSITIVE

• } GLOBALLY THE WHISKY CATEGORY IS HOT AND WILL BE FOR THE FORESEEABLE FUTURE

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• } GROWING AT 4% PA AND 8% PA IN THE PREMIUM SPACE WHERE AWH PLAYS

• } DRIVEN BY ………..

NEW MARKETS AND IN PARTICULAR ASIA

NEW CONSUMERS RE: WOMEN

NEW OCCASIONS RE: HIGHBALL, COCKTAILS

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NEW FLAVORS & PRODUCT INNOVATION

• } TASMANIA IS STILL CONSIDERED AN EMERGING PRODUCER OF WHISKY ON THE GLOBAL MAP

• } REPUTATION IS BASED ON PURITY, SECURITY AND INTEGRITY

• } > 10X CURRENT SUPPLY OF TASMANIAN WHISKY OVER NEXT DECADE

• } INDUSTRY CONTINUES TO WORK COOPERATIVELY

• } AWH POSITIONED FOR FIRST MOVER ADVANTAGE DUE TO BRAND AND BARRELS

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Source: IWSR, Industry Journals, Company Information / Interviews

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CEO PRESENTATION AGENDA

• } THE LANDSCAPE REMAINS POSITIVE

} THE VISION : “BRAND & BARRELS - THE ROAD TO WHISKY RICHES”

• } IMPLEMENTATION OF THE VISION / STRATEGY

• } THE ACQUISITION PLAYBOOK – IT’S A PROVEN MODEL

• } SUMMARY & QUESTIONS

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BRAND AND BARRELS – THE ROAD TO WHISKY RICHES

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AWH’s Vision is to Build “Lark” as the Tasmanian Whisky Hero Brand Globally

“LARK” SINGLE DARK SPIRIT HERO BRAND | 10-YEAR VISION / 5-YEAR PLAN

• LARK

• “THE FIRST TASMANIAN WHISKY”

• PRODUCTS GEOGRAPHIES FACILITIES ECONOMICS PEOPLE AND PROCESSES

• PORTFOLIO GEOGRAPHIES PRODUCTION ECONOMICS ECONOMICS } Rationalise portfolio to a } Build a global Tasmanian } Offer a unique DTC / } Reach profitability and } Business leadership now single dark spirit brand brand through a online, offline and operating cashflow settled with Executive

• } Build ‘Lark’ as the sequenced geographic hospitality experience positive ASAP Director appointments Tasmanian whisky hero expansion: } Ramp-up production at } Unique sourcing model } Build out talent aligned

• } Build ‘Lark’ as the Tasmanian whisky hero brand, through a 3-tier price strategy

• } Ramp-up production at existing Cambridge site up to 350,000L per annum while

• } Unique sourcing model utilising expected excess production in Tasmania in the coming years

   - } Build out talent aligned to vision and with relevant Asian brand experience
  

• § FY20-FY22:

  • Strengthen the Australian footprint and seed China

• § Lark Luxury

maintaining whisky quality, leveraging the uniqueness of the Tasmania nature (e.g. water, peat)

• } Brand investment levels } Continuous to reflect global industry improvement of systems benchmarks and processes

• § Lark Classic

  • § FY23 onwards: Accelerate in Greater China

• § Lark Blend

• } Keep Forty Spotted as the Tasmanian Hero gin

• § FY25 onwards: Accelerate Other Export Markets

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BRAND AND BARRELS – THE ROAD TO WHISKY RICHES

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Make Lark Whisky What “Penfolds Is to Australian Wine”

“LARK” SINGLE DARK SPIRIT HERO BRAND | 10-YEAR VISION / 5-YEAR PLAN

• } Premium

• } Multi-Tiered Price Point

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} Strong Asian Consumer & Trade Appeal

} Flexible Sourcing Model

• } Focused Execution and Superior Returns

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BRAND AND BARRELS – THE ROAD TO WHISKY RICHES

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Key Strategic Assumptions – Financial & Non-Financial

Build “Lark” as the Tasmanian Whisky Hero Brand Globally

PORTFOLIO | ASSUMPTIONS

FACILITIES | ASSUMPTIONS

GEOGRAPHIES & CHANNELS | ASSUMPTIONS

• } Single dark spirit brand portfolio with Lark as the “Hero” brand (exact brand architecture yet to be defined)

• } 350,000L Cambridge distillery upgrade with cost competitive economics (COGS) to be operational from FY22 with a Budget of A$5m

• } Win the domestic market first (FY20FY22) including Travel Retail in Australian airports

• } Lark will undergo a significant brand transformation in the coming years to properly build the story and differentiate from competitors

  • } Build the Direct-to-Consumer channel / community through experiential marketing, personalised brands and other initiatives

• } Bothwell distillery remains unchanged with constant production volumes and stock being laid down at 75,000ltrs p.a.

• } 3 tier pricing strategy for Lark spanning: Luxury $300 + Classic $179 Blend $ 99

• } Developing an outsourced production model to reduce AWH capex and accelerate laying down of barrels for Lark portfolio

• } Focus on exports to select Chinese provinces with seed sales from FY21 (after rebranding) and acceleration from FY23

• } Outsourced bond storage and 3PL logistics for finished goods based out of Melbourne

• } Extend export reach in F24/F25 onwards when ‘Lark New’ becomes available

• } Existing Overeem inventory and Nant inventory are being considered for use in the Lark portfolio

• } Investment in Lark Visitor Centre in the heart of Hobart and a small cellar door at Cambridge – net more cost effective, more visible and will attract more consumers

• } Master Distiller working with CEO and Board on blend options that match the targeted style of whisky

• } Forty Spotted to be relaunched and thereafter sustained as long as it’s providing positive cash !

• } Total CAPEX $7m made up of distillery $5m and Lark visitor centre $2m

LARK AS THE TASMANIAN WHISKY HERO BRAND, THROUGH A 3-TIER PRICE ~~STRATEGY~~

MAXIMISE DISTILLING CAPACITY AND FROM A TASMANIAN BRAND MOSTLY SUPPLEMENT WITH AN OUTSOURCED DISTRIBUTED LOCALLY TO A GLOBAL HERO ~~PRODUCTION MODEL BRAND, WITH A FOCUS ON ASIA~~

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BRAND AND BARRELS – THE ROAD TO WHISKY RICHES

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Lark To Become a Globally Distributed 3-Tier Price Strategy / Offer With a Strong Australian Footprint, Exports and DTC

Build “Lark” as the Tasmanian Whisky Hero Brand Globally With 400,000+ Ltrs of Sales Per Annum by F27

LARK 3-TIER PRICE BAND | 10-YEAR VISION / 5-YEAR PLAN

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Target volume
Price band Brand architecture RRP Value proposition
FY27
} Not only whisky, but a luxury
product/experience
Varies by
Prestige Plus “Lark 10,000ltrs limited } Limited release and single cask release,
>$300 RRP Luxury” 0.5% Global MS release personal collection, etc…
2.1% Australia MS >$300 } Mostly Asia and Direct-to-Consumer
} Celebrate Lark story and Tasmania
“Lark Classic” heritage (peat, water, sustainability,
100,000ltrs etc…) through Lark Classic
Prestige
1.0% Global MS $179 } Drive the emergence of the Tasmanian
$150-300 RRP 6.2% Australia MS whisky category in export markets and
benefit from a first mover advantage
} Global brand
Ultra- } Product innovation team working on a
blended Lark offer
Premium ~300,000ltrs
$80-150 “Lark Blend” 0.3% Global MS $99 } Major piece of brand work required in
RRP 5.0% Australia 2020 with an appealing and
MS differentiated story, targeting a broader
and younger audience with a focus on
Asia
} Utilise “Nant” Experiments in the
formulation of Lark Blend
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- - MAJOR PIECE OF BRAND WORK REQUIRED IN 2020 - -

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Widely Accepted Industry Definitions = Prestige Plus, Prestige, Ultra Premium, MS = Market share

BRAND AND BARRELS – THE ROAD TO WHISKY RICHES

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Target is to Hit 400,000ltrs in Sales by F27 with an Achievable 0.3% Global Market Share With Room to Grow

LARK MARKET SHARE BY GEOGRAPHY SHARE IN THE ULTRA PREMIUM SEGMENT AT 400,000LTRS | MARKET VOLUME, 2018

GLOBAL MARKET SHARE IN THE ULTRA PREMIUM SEGMENT AND ABOVE BY LARK MARKET SHARE BY GEOGRAPHY X BRAND | VOLUME, 2018[2] PRICE POINT | VOLUME, 2018

				Market share %	RRP3
			Macallan	10.1%	$119.99 12yo
4.5%			Johnnie Walker Chivas (incl. Royal Salute) Glenfiddich Talisker Nikka	9.7% 6.6% 4.5% 1.9% 0.8%	$212.99 Blue Label $104.99 18yo $119.99 15yo $96.99 10yo $89.99 From The Barrel	Market share Total Ultra Premium Plus Prestige plus	Australia 4.5% 2.1%	Asia1 1.6% 0.8%	Americas 0.2% 0.3%	Global 0.3% 0.5%
	1.6%		Bruichladdich Aberlour	0.6% 0.5%	$101.99 Classic Laddie $139.99 A’bunadh	Prestige	6.2%	1.7%	0.5%	1.0%
		0.2% 0.3%	Bunnahabhain Lark FY27 Kavalan	0.4% 0.3% 0.3%	$92.99 12yo $99.99 Lark New $109.88 Single Malt	Ultra- premium	5.0%	1.8%	0.2%	0.3%
Australia	Asia1	North America Global	Sullivans Cove	0.0%	$299.99 Double Cask4
WEIGHTED TOWARDS THE ASIAN		THE DOMESTIC AND MARKET	COMPARABLE TO BUNNAHABHAIN, BRUICHLADDICH AND KAVALAN IN PRICE AND MARKET SHARE			FURTHER GROWTH OPPORTUNITIES, ESPECIALLY IN THE ULTRA-PREMIUM SEGMENT

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Notes: (1) Addressable countries only: China, Taiwan, HK, Singapore

(2) Includes Direct to Consumer volumes (3) Dan Murphy’s (4) Nick’s Sources: AWH financial modelling, IWSR

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BRAND AND BARRELS – THE ROAD TO WHISKY RICHES

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We Have Commenced The Investment and Prioritisation of Lark with First Ever National ATL Campaign, Relaunch of the Website and New Hospitality

Total Reach of National Advertising c. 6M People Through Nov ‘19 & Oct ‘20

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• } Re-Launched Website and Optimised for Smartphone in Nov 19

• } Brooke Street Pier Opened in Nov 19

• } New On Premise Brand Premiums in Dec 20

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CEO PRESENTATION AGENDA

• } THE LANDSCAPE REMAINS POSITIVE

• } THE VISION : “BRAND & BARRELS - THE ROAD TO WHISKY RICHES”

• } IMPLEMENTATION OF THE VISION / STRATEGY

• } THE ACQUISITION PLAYBOOK – IT’S A PROVEN MODEL

• } SUMMARY & QUESTIONS

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BRAND AND BARRELS – THE ROAD TO WHISKY RICHES

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AWH Vision Is To Be Sequenced in Three Phases ………

1/ Setup The Foundations 2/ Build Inventory and Selected Export Seeding 3/ Accelerate Distribution and Broaden Brand

3. ACCELERATE DISTRIBUTION

• } Launch Lark Blend at $99 and unlock a 7x larger market

• } Accelerate exports into greater Asia and selected North American

• 2. BUILD INVENTORY cities } Execute Phase 2 Distillery

• } Scale up inhouse production with Upgrade

• upgraded distillery and build

• 1. FOUNDATIONS significant inventory } Strengthen brand awareness with

• } Drive the F20 Results awards and brand } Own the Domestic Market ambassadors/influencers } Define Lark Brand and Product Story } Export seeding and drive growth } Formulation of Lark Blend in selected China provinces and Travel Retail

• } Relaunch Forty Spotted Gin } Upgrade Cambridge to 350,000L } Drive Direct To Consumer and hospitality

• } Secure Outsourced Distilling Capacity } Develop plans for Phase 2

• } Define the Direct To Consumer model distillery upgrade

• FY22 FY24 FY29 FY23 FY26

• Positioned for Acquisition by Large Regional or a Global Beverage Player BECOME A VALUABLE ASSET BECOME A LEADING,

• BECOME THE PREEMINENT WITH MID-TERM HIGH-GROWTH INNOVATIVE & GLOBAL SUPER

• DOMESTIC WHISKY BRAND POTENTIAL PREMIUM WHISKY BRAND

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BRAND AND BARRELS – THE ROAD TO WHISKY RICHES

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F20 – Driving Top Line, Managing Costs and Investing In Brand & Relationships

STEP 1 – SET UP THE FOUNDATIONS

FY20 KEY INITIATIVES | VS. F19

F19 Actual $5.5m

• } Driving Top Line Sales Growth

F20 Forecast In Excess of 50% Growth

eg. Lark is Effectively Sold on Allocation for Remainder of F20

eg. Tasmanian Doors Grown From 187 to 255

• } Managing Costs

Closed Sydney Head Office

Restructured Hospitality w Reduction in Head Count Closed Loss Making Nant Cellar Door Appointed Appropriate External Advisors

• } Manage the Cash

Cash for Whisky, Not for Opex

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• } Investing In Brand & Relationships

Marketing Spend

F19 Actual $300k F20 Forecast up to 3X

National Advertising Campaign of Lark Shareholder Ambassador Club Bill Lark Has Returned as Ambassador

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BRAND AND BARRELS – THE ROAD TO WHISKY RICHES

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Valuation of Whisky In Barrels as at 31.10.2019

STEP 1 – SET UP THE FOUNDATIONS

INVENTORY VALUATION AT COST AT 31.10.19 | $M, AUD

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REALISABLE VALUE AT LIQUIDATION & MATURATION CALCULATION

• } Sliding scale based on age of the spirit in the barrel

• } For example 6 year old and above are valued at approx. $145 per litre (the current avg NSR per litre achieved by AWH)

• } For example a 2 Year old is value at $41 at Liquidation and at $144 per litre at Maturation

• } Please note the NSV applied is what AWY currently achieves across it’s multi channel distribution strategy

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BRAND AND BARRELS – THE ROAD TO WHISKY RICHES

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Upgrade Cambridge to 350,000L PA @ $5m Capex and Secured External Bond Stores

STEP 1 – SET UP THE FOUNDATIONS

CAMBRIDGE UPGRADE AND EXTERNAL BOND STORES |

• } Cambridge Upgrade

} Secured External Bond Stores

Existing 2 x Bond Stores Proposed 5 x Bond Stores Budget No Capex Timing Mid 2020

Existing 140,000 per annum Proposed 350,000 per annum Budget up to $5m Timing Open Mid 2021

• } Commenced Negotiation for Additional Land with University of Tasmania

• } Lease Agreement Under Negotiation

• } Using Excess Bothwell Equipment

• } Formal Business Case in Early 2020

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BRAND AND BARRELS – THE ROAD TO WHISKY RICHES

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We Are Presently Making Approx. 4,000 ltrs per Week @ 63.4% ABV

STEP 1 – SETUP THE FOUNDATIONS

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An Example of the Outsourced Distilling Model Being Pursued

• } Up to An Additional 100,000 ltrs in F21

• } Up to An Additional 200,000 + ltrs from F22 and Beyond

• } Outsourced Under AWY Supervision

• } Option of Long Term Contract

• } Presently Under Negotiation

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CEO PRESENTATION AGENDA

• } THE LANDSCAPE REMAINS POSITIVE

• } THE VISION : “BRAND & BARRELS - THE ROAD TO WHISKY RICHES”

• } IMPLEMENTATION OF THE VISION / STRATGEY

• } THE ACQUISITION PLAYBOOK – IT’S A PROVEN MODEL

• } SUMMARY & QUESTIONS

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BRAND AND BARRELS – THE ROAD TO WHISKY RICHES

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Market Demand for Acquisitions of Spirits Brands Remains Strong

Exit/Strategic Partnership

RECENT DEALS FOR SPIRIT BRANDS |

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FOUR TYPES OF BUYERS …….

} Spirit strategics acquiring craft brands

} Wine strategics acquiring spirit brands

• } Privately funded companies building premium spirits portfolio

• } Brewing strategics exploring spirits

PREMIUM SPIRIT BRANDS COMMAND MULTIPLES IN EXCESS OF 19.0 X EBITDA …….

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|||||
|---|---|---|---|
|EBITDA X|EV/SALES|
|}|Ben Riach|20.1x|6.9x|
|}|Beam|20.5x|6.3x|
|}|Glenmorangie|23.1x|4.9x|
|}|Tullamore Dew|28.2x|4.4x|
|}|Bruichladdich|35.0x|6.6x|
|}|High West Distilleries|69.6x|10.0x|

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A proven opportunity to accelerate sales and inventory are the key valuation drivers Remy Cointreau « »

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Source: Investment Bank, IWSR, Company Information

BRAND AND BARRELS – THE ROAD TO WHISKY RICHES

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A Number of Acquisitions Have Taken Place at Different Stages of Maturity

Exit/Strategic Partnership

LIFECYCLE WHISKY BRANDS POSITION AT ACQUISITION | ILLUSTRATIVE

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Creation of the
brand Production ramp-up Accelerated distribution
BRANDS ACQUIRED AT EARLY STAGE
§ Tomatin, acquired by Takara Shuzo in
1986 (less than 3k cases)
§ Redbreast, acquired by Pernod Ricard
in 1988 (less than 1k cases) BRANDS ACQUIRED AT LATER STAGE
§ Glen Deveron, acquired by Bacardi in
1992 (less than 1k cases in SP+) § Castle Brands, acquired by Pernod
§ The Ardmore, acquired by Beam in Ricard in 2019 (430k cases total, 123k
2006 (less than 1k cases) cases in whisky)
§ Stranahan’s, acquired by Proximo in § Angel’s Envy, acquired by Bacardi in
2010 (less than 5k cases) 2015 (47k cases)
§ Hudson whiskey, acquired by William
Grant & Sons in 2010 (less than 3k
cases)
BRANDS ACQUIRED AT RAMP-UP STAGE
§ Bruichladdich, acquired by Remy
Cointreau in 2012 (22k cases)
§ Bunnahabhain, acquired by Distell in
2014 (28k cases)
BRANDS LAUNCHED BY LARGE CORPORATES § BenRiach, acquired in 2016 by Brown
Forman (17k cases)
§ Suntory Whisky, launched in 1923 § GlenDronach, acquired by Brown
(Beam Suntory) Forman in 2016 (23k cases)
§ Russel’s Reserve, launched 1998
(Campari)
§ Monkey Shoulder, launched in 2005
(William Grant & Sons)
§ Kavalan, launched in 2008 by King Car
Pernod Ricard is planning to invest US$150 million in a new distillery in China
(Sichuan) over the next ten years, which will also include an immersive visitor
centre to draw in more tourists to the area
IWSR, Advancy analysis
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Sources: IWSR, Advancy analysis

BRAND AND BARRELS – THE ROAD TO WHISKY RICHES

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Bruichladdich Was Acquired by Remy Cointreau for 7x Sales and 35x EBITDA

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Bruichladdich Case Study Able to Successfully Accelerate Growth Through Remy Cointreau Ownership Thanks
to the Brand and Inventory Foundations Built Pre-Acquisition
BRUICHLADDICH GLOBAL SALES | VOL., ‘000 9LE, 2000-2018
LEVERAGE REMY COINTREAU
ACCESS TO DISTRIBUTION TO
5
‘000 9LE ACCELERATE GLOBALLY
55
ACQUISITION BY
4
REMY COINTREAU
45
EXPORT
3
SEED SALES
35
REBRANDING
2
IN 2010
Export
25
ACCELERATION OF THE INVENTORY
1
RAMP-UP FROM EARLY 2000’S
15
5
Domestic
2000 2005 2010 2015 2018
Bruichladdich distillery had built up significant inventory before CAGR: 7% CAGR: 23%
-
we acquired it in 2012. It allowed us to ramp up sales quickly,
while accelerating an inventory build-up
Remy Cointreau
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Source: Company Information
«
»
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Bruichladdich Case Study Able to Successfully Accelerate Growth Through Remy Cointreau Ownership Thanks to the Brand and Inventory Foundations Built Pre-Acquisition

Source: Company Information

BRAND AND BARRELS – THE ROAD TO WHISKY RICHES

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The Acquisition Playbook – It’s A Proven Model

Exit/Strategic Partnership

PITFALLS TO BE AVOIDED |

THE CASE FOR ACQUISITION |

POTENTIAL GAME CHANGERS |

• } Having too many brands

• } Annual sales of > 25,000 9Ltr Cases

• } Secured outsourced distilling model which accelerates the number of barrels that can be laid down each year

• } Excessive overheads

• } Single power brand across multiple offers / tiers

• } Not maximising margin during period of limited supply

  • } Meaningful direct to consumer channel / community driving sales in priority markets (ie. Asia) and moving up the value chain

• } Unique and innovative brand / product / story

• } Imitating Scotland

• } Footprint in key markets with proven sell thru and recurring revenues

• } Running out of cash

• } Effective story telling behind the brand with innovative product offer

• } Not investing in brand

• } Sufficient inventory stocks to drive future sales & distribution growth

• } Not laying down enough inventory

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Most of the big guys have too many brands and are currently trying to clean their portfolios. They are unlikely to buy too many brands, they want to pick the hidden gems Investment bank « »

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Source: Alantra Sept 2019, Company Interviews

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CEO PRESENTATION AGENDA

• } THE LANDSCAPE REMAINS POSITIVE

• } THE VISION : “BRAND & BARRELS - THE ROAD TO WHISKY RICHES”

• } IMPLEMENTATION OF THE VISION / STRATEGY

• } THE ACQUISITION PLAYBOOK – IT’S A PROVEN MODEL

• } SUMMARY & QUESTIONS

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BRAND AND BARRELS – “THE ROAD TO WHISKY RICHES”

THE PLAYBOOK ………..

1. UNDERSTAND THE WHISKY LANDSCAPE

_ PRESENT AND IMPENDING 3 YRS / 5 YRS / 10 YRS

• _ DOMESTIC AND GLOBAL

2. EXECUTE THE PLAN AND GENERATE SUPERIOR SHAREHOLDER RETURNS

3. IMPLEMENT A PROVEN BUSINESS STRATEGY WITH STRONG APPEAL TO POTENTIAL SUITORS / ACQUIRORS

4. BUILD LARK INTO A POWER BRAND WITH BROAD CONSUMER & TRADE APPEAL AND ASIAN RELEVANCE

5. INNOVATE THE PRODUCT & TELL MEANINGFUL BRAND STORIES

6. ESTABLISH A FOOTPRINT IN KEY EXPORT MARKETS WITH PROVEN SELL THRU

7. BUILD & STOCKPILE INVENTORY TO MEET FUTURE DEMAND (& ACQUISITION CRITERIA)

8. MAXIMISE REVENUES, MANAGE COSTS AND LEVERAGE BALANCE SHEET

9. RAISE ENOUGH CAPITAL AND/OR DEBT TO FUND THE JOURNEY

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CAPITAL STRUCTURE, SHARE PRICE AND SUBSTANTIAL SHAREHOLDERS

CAPITAL STRUCTURE

24 MONTH SHARE PRICE CHART

$0.060 $0.055 $0.050 $0.045 $0.040 $0.035 $0.030 $0.025 $0.020 Nov-17 Feb-18 May-18 Aug-18 Nov-18 Feb-19 May-19 Aug-19

CAPITAL STRUCTURE
as at 21 November 2019, unless otherwise stated
Shares outstanding (‘000)	1,630,579
Performance rights and options (‘000)	128,310
Cash balance, at 30 September 2019 (A$’000)	5,227
Share price ($ps)	0.034
Undiluted market capitalisation (A$’000)	55,440
52 week share price range:
…Low	0.032
…High	0.050

SUBSTANTIAL SHAREHOLDERS

Chris Malcolm	9.9%
Bruce Neil	9.4%
Ace Cosmo	8.7%
Hillhouse	6.3%
Warren Randal	4.4%
Top 20	71.30%

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INTRODUCTION TO THE BOARD

} EXECUTIVE DIRECTORS

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MR DAVID DEARIE - EXECUTIVE CHAIRMAN

• } Qualifications — MHCIMA, Glasgow College of Food and Technology, Institute of Marketing Diploma, University of Hull

• } Experience — A global beverage industry leader with over 30 years experience in alcohol retailing, distribution and brand building. Founding CEO of Treasury Wines estates Ltd (TWE), and senior executive positions with Fosters Group Ltd and Brown-Forman Ltd.

• } Mr Dearie was the founding CEO of TWE, spending 5 years positioning it for its current success and was responsible for the listing of TWE on the Australian Stock Exchange. David is a nonexecutive director of Taylors Wine Group, McQueen Finance Group and an advisor and investor to businesses in the wine, spirits, distribution, finance, packaging, and digital sectors.

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MR GEOFF BAINBRIDGE – MANAGING DIRECTOR

• } Qualifications — Bachelor of Business from RMIT with a major in Accounting and ASIC Graduate Certificate in Applied Finance

• } Experience — Over 10 years at Fosters Group Pty Ltd with experience in group strategy and business development in Australia, China, India and Vietnam; and Managing Director for the domestic Continental Sprits business.

• } Shortly after leaving Foster's he went onto to establish his own portfolio of brands including among others Grill'd Burgers, Bounce Trampolines, Happy Socks and Studio Ongarato. Mr Bainbridge is a sales and marketing specialist with extensive experience in business and people strategy across multiple sectors and multiple geographies.

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INTRODUCTION TO THE BOARD

} NON-EXECUTIVE DIRECTORS

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MR WARREN RANDALL – NON EXECUTIVE DIRECTOR

• } Experience — over 40 years’ involvement in the Australian wine operations and management including Wynn Winegrowers, Seaview Champagne, Lindemans and Seppeltsfield, and has completed international vintages in California, Champagne, Bordeaux and Spain. Mr Randall currently operates the Randall Wine Group, the largest private, premium vineyard holding in Australia, which includes Seppeltsfield Estate, Tinlins Wines and Ryecroft Wines in McLaren Vale, and encompasses approximately 8,500 acres of premium South Australian vineyards.

• } Warren was selected as the Ernst and Young “Entrepreneur of the Year” in the South Australian category, as recognition for his wine business acumen. He also received the “Len Evans Award” for “exemplary leadership in the Australian Wine Industry”.

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MR LAURENT LY – NON EXECUTIVE DIRECTOR

• } Qualifications — Master’s Degree in Management from Dauphine University, post graduate degree in International Management from the Sorbonne University and a post graduate degree in Finance from ESCP-EAP

• } Mr Ly is the founder of Spica Capital, a Hong Kong based food and beverage focused investment holding company with investments ranging from alcoholic beverages to restaurants, bakery and vending machines. Prior to Spica, Mr Ly spent 11 years in Corporate Finance in the consumer & retail investment banking division of Lehman Brothers and Nomura in London and Hong Kong, where he advised clients across a wide range of M&A and financing transactions in food and beverages, retail and hospitality in Europe and Asia.

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DISCLAIMER

The information contained in this presentation has been prepared by Australia Whisky Holdings Limited (“AWY”). This presentation is not an offer, invitation, solicitation or other recommendation with respect to the subscription for, purchase or sale of any securities in AWY. This presentation has been made available for information purposes only and does not constitute an offering document of any type.

This presentation may contain certain forward looking statements, projections, strategies and corporate objectives. Such forward looking statements/projections are estimates for discussion purposes only and should not be relied upon as representation or warranty, express or implied, of AWY. They are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors many of which are beyond the control of AWY. The forward looking statements/projections are inherently uncertain and may therefore differ materially from results ultimately achieved.

While the information contained in this presentation has been prepared in good faith, neither AWY, nor any of its respective directors, officers, agents, employees or advisors make any representation or give any warranty, express or implied, as to the fairness, accuracy, completeness or correctness of the information, forward looking statement, opinions and conclusions contained in this presentation. Accordingly, to the maximum extent permitted by law, AWY nor any of its respective directors, officers, employees, agents or advisers, nor any other person accepts any liability whether direct or indirect, express or limited, contractual, tortuous, statutory or otherwise, in respect of the accuracy or completeness of the information or for any of the opinions contained in this presentation or for any errors, omissions or misstatements or for any loss, howsoever arising, from the use of this presentation. APH disclaims any obligation to update or revise any forward looking statements based on new information, future events or otherwise except to the extent required by applicable laws.

Investors should exercise caution when dealing in the securities of APH. In the case of any doubt, they should seek their own professional advice and consult with their own bank manager, stockbroker, solicitor, accountant, tax adviser or other professional adviser.

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