ASX ANNOUNCEMENT 30 September 2016 MANAGING DIRECTORS PRESENTATION - - PDF document

asx announcement 30 september 2016 managing director s
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ASX ANNOUNCEMENT 30 September 2016 MANAGING DIRECTORS PRESENTATION - - PDF document

ASX ANNOUNCEMENT 30 September 2016 MANAGING DIRECTORS PRESENTATION ANNUAL GENERAL MEETING 2016 Please find attached Managing Director John Hoedemakers presentation to shareholders at todays Annual General Meeting. - END- Marcel


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SLIDE 1

Gage Roads Brewing Co Limited has been one of Australia’s leading craft breweries for over 14 years. The Gage Roads craft range includes Atomic Pale Ale, Sleeping Giant IPA, Little Dove New World Pale Ale, Narrow Neck Session Ale, Breakwater Australian Pale Ale, Single Fin Summer Ale, Pils 3.5% and Small Batch Lager which have grown to become one of Australia’s most popular suite of brands. Through its contract brewing services division, Australian Quality Beverages, the Company also provides specialist contract brewing and packaging services to brand owners throughout Australia.

ASX ANNOUNCEMENT 30 September 2016 MANAGING DIRECTOR’S PRESENTATION – ANNUAL GENERAL MEETING 2016 Please find attached Managing Director John Hoedemaker’s presentation to shareholders at today’s Annual General Meeting.

  • END-

Marcel Brandenburg John Gardner Company Secretary Media/Investor Relations Gage Roads Brewing Co Ltd Citadel-MAGNUS Tel: (08) 9314 0000 0413 355 997

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SLIDE 2

ANNUAL GENERAL MEETING

MANAGING DIRECTOR’S PRESENTATION 30 SEPTEMBER 2016

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SLIDE 3
  • FY1

Y16 – Str trategie ies

  • FY1

Y16 – Res esult lts

  • Opportunity
  • Sales

les & Marketin ing

  • Ca

Capital l Rais isin ing Summary

  • Outlo

tlook

OUTLINE

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SLIDE 4

FY FY 16 16 STRATEGIES Tar arget t a a sa sale les mix ix sh shift ift toward the the gr growing hig higher mar argin in cr craft ft be beer r seg segment Increase promotion of the Gage Roads’ proprietary products.  Advance our Western Australian content based event and social media marketing strategy.

Advance our Western Australian on-premise strategy  Expand our on-premise and marketing strategies to NSW and VIC in summer 2016  Work to refresh, re-position existing brands, introduce new brand opportunities and line extensions and increase promotional activity

Target new domestic and international contract and export opportunities  Tar arget t increased

  • verall
  • p
  • perating

effic iciency and and red educe

  • p
  • perating

exp xpenditure Focus on production processes that improve quality  Utilise the warehouse strategy to improve production scheduling and minimise change

  • vers

Target process change to reduce waste  Improve the HSE system  Improve the QA system 

FY16 – STRATEGIES

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SLIDE 5
  • Total sales volume 1.4 million carton equivalents

(steady on prior year comparative period).

  • Revenue $25.5 million (up 5% on prior year

comparative period).

  • Gage Roads’ proprietary craft products sales

volume 0.35 million carton equivalents (up 83% on prior year comparative period).

  • Gage Roads proprietary draught sales up 180% over

prior year comparative period.

  • Gross Profit margin 52% (up from 51% in prior year

comparative period).

  • EBITDA up 248% to $2.7 million.
  • NPAT up 174% to $0.61 million (FY15: ($0.83

million)).

“Gage Roads is the strip of ocean that separates Rottnest Island and Fremantle off the coast of Western Australia. It is home to surfers and swimmers, seagulls and sharks, ships and sailors. It’s a place where you can relax, escape, explore, or seek out adventure. We saw a lot of ourselves in that little spot. That’s why named our brewery after it.“

FY16 – RESULTS

GRB Product Sales 16% Other Contract Brewing 32% Woolworths Contract Brewing 52%

FY15 Revenue Breakdown

0.0 0.5 1.0 1.5 2.0 2.5 3.0 FY10 FY11 FY12 FY13 FY14 FY15 FY16

million litres

GRB Product Sales 25% Other Contract Brewing 19% Woolworths Contract Brewing 56%

FY16 Revenue Breakdown

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SLIDE 6

OPPORTUNITY

  • Resonating, well-supported brands
  • Growing craft beer market
  • Current channel revenues secured via supply

agreement

  • Unlock the other half of the retail market
  • Unlock the on-premise market (31% of total beer

market*)

  • Convert current volumes (11 million litres p.a.) to
  • higher-margin own brand craft range
  • higher margin draught volume
  • wider independent retail channel
  • Scale to over-deliver 6 million litres with

additional available capacity

Reta tail il Mark rket 50% 50% On On-Pre Premise 31% 31% Dis istri tributors rs 13% 13% Export rts 6% 6%

Aus Australian Beer Mar arket*

Current penetration: 46%

  • f retail market

*Source: IBISWorld

  • 5

10 15 20 FY17 FY18 FY19 FY20 FY21

Million Litres

Contract-Brewed Products Proprietary Craft Products Capacity

Capacity

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SLIDE 7

Scott t Pla Player

  • Proven record, leadership, insights
  • 18 years in the industry (Foster’s, Matilda Bay, Little Creatures,

Matso’s)

  • As National Sales Manager spearheaded the growth of multiple craft

beer brands notably taking Little Creatures to number 1 in the category.

Str trategy y Fun undamentals

  • Build a sales and marketing facing company with a strong brand

architecture

  • Establish a GRB owned national Sales & Marketing capability driving

sales volumes

  • Distribution – develop a broad and seamless route to market
  • Create brand-in-hand consumer experiences

$- $1 $2 $3 $4 $5 $6 $7 FY16 FY17 FY18 FY19 FY20 FY21

Sale ales, Mar arketin ing & & Distrib ibutio ion Investment ($m $m)

Re Resource ces

FY FY 16 16 FY FY 17 17 FY FY 18 18 FY FY 19 19 FY FY 20 20 FY FY 21 21

National Sales & Marketing Manager 1 1 1 1 1 1 National Key Account Manager 1 1 1 1 1 1 On-premise Sales 3 4 4 5 5 5 Multi Channel Sales 4 8 10 10 10 Marketing Team 3 5 5 5 5 5 Tot

  • tal Hu

Human Re Resource ces 8 15 15 20 20 23 23 23 23 23 23

Sale ales & & Mar arketin ing Hu Human Resources (Antic icip ipated)

SALES & MARKETING

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SLIDE 8

CAPITAL RAISING SUMMARY

  • Institutional placement of 63.9m shares @ $0.025

to raise $1.6m

  • Fully underwritten 4 for 5 non-renounceable

entitlement issue to existing shareholders, 341m shares @ $0.025 to raise $8.5m

  • Selective Capital Reduction - buy back and

cancellation of Woolworths' 100m shares @ $0.0156 a share

  • Retirement of debt - $4.7m applied to reducing the

Company's current facility from $9.7m to $5m

  • Refinancing to remove guarantee - remaining $5m

debt re-financed with the Commonwealth Bank of Australia, releasing Woolworths’ guarantee over the current facility

  • Issue of 129m incentive shares to up to 35

employees and management

Pl Place cement Issue price $0.025 New shares (millions) 63.9 Capital raised (millions) $1.6 Enti Entitlements Issue Issue price $0.025 New shares (millions) 341 Capital raised (millions) $8.5 Use of

  • f Fun

unds (millions) Buy-back WOW $1.6 Retire debt $4.7 Working capital $3.2 Cost of raising $0.6 Tota

  • tal Fun

unds $10.1 Po Post-Transact ction capital struct cture Shares on issue pre-transaction 426 Placement 64 Rights issue 341 Buy Back WOW shareholding

  • 100

Incentive Share issue to management 129 Tota

  • tal Shar

hares on

  • n issue pos

post tran ransact ction 860 860

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SLIDE 9
  • Continue to transition to a consumer-facing,

brand-building business

  • New independence broadens access to new

markets

  • Growing national sales & marketing capabilities

supporting all customers across Australia

  • Continued supply agreement with Endeavour

Drinks Group secures earnings base

  • Deleveraged balance sheet and capital raised

provides strong financial platform from which to execute new strategy

  • Build brand value for our proprietary brands as a

cornerstone of the Company’s future valuation

OUTLOOK

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SLIDE 10

WWW.GAGEROADS.COM.AU

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SLIDE 11

Disclaimer

GRB advises that these presentation slides may contain forward looking statements which may be subject to significant uncertainties out of GRB’s control. No representation is made as to the accuracy or reliability of forward looking statements or the assumptions on which they are based. Actual future events may vary from these forward looking statements and you are cautioned not to place undue reliance on any forward looking statement.