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DGL
26/08/2013 08:30
FORECAST
REL: 0830 HRS Delegat's Group Limited
FORECAST: DGL: DGL - Outlook
Operating Performance Outlook - 2014 to 2019 financial years
Investing for Future Growth
The Group is planning to grow sales from 1.95 million cases to 3.07 million
cases over the next six years. This planned growth will be primarily driven
by continuing to drive sales growth in North America and through development
of the recently acquired Barossa Valley Estate brands.
The Group has made significant progress in building an internationally
successful wine business over the last decade. It has built a strong
distribution platform to achieve long term sales growth with in-market sales
teams well established in New Zealand, Australia, Singapore, the United
Kingdom, the United States and Canada. In the 2014 financial year the Group
will establish in-market sales operations in China and Japan.
The Group has reviewed its global sales plan taking into account its market
opportunities, product mix, the global economic environment and its supply
position.
Sales volume in the United Kingdom, Ireland & Europe region is expected to be
stable over the next 3 years with modest growth targeted longer term. The
2014 financial year will be the first full year since price increases were
successfully implemented in the second half of the prior year. The sales plan
reflects the enduring strength of the Oyster Bay brand in these markets.
North America will be the key growth region for the Group over the next six
years with strong growth projected to continue in both the United States and
Canada. The region will become the Group's largest by sales volume in 2014.
The Group plans to increase sales volume in the region to 1.01 million cases
by 2016 and 1.39 million cases by 2019. This growth will provide significant
in-market distribution scale benefits.
In the Australia, New Zealand and the Asia Pacific region, sales volume is
projected to decline by 8% in 2014 primarily due lower sales in Australia
where economic conditions are weak. Sales volumes are expected to return to
growth in 2015 and 2016. Longer term sales growth in Asia and from Barossa
Valley Estate underpins projected growth in the region.
The Group is investing in significant capital expenditure to support its
growth plan. In 2013 the Group invested $40.7 million in capital expenditure
in New Zealand and $28.6 million on the acquisition of Barossa Valley Estate.
The Group will invest a further $132 million in capital expenditure over the
next three years to support the sales growth plan through until 2019. The
Group's intention is to fund this capital expenditure using a combination of
retained earnings and debt.
The Group's goal is to build a leading global Super Premium wine business
that delivers sustainable earnings growth. The Oyster Bay brand is
increasingly becoming one of the world's great Super Premium wine brands. It
is an established leader within the Super Premium Sauvignon Blanc,
Chardonnay, Pinot Noir and Merlot categories. There are significant global
growth opportunities for the brand with these varietals and with Pinot Gris
and Sparkling wine. Barossa Valley Estate provides the Group with an
opportunity to build a leading Barossa Shiraz and Cabernet Sauvignon brand
globally.
Please refer to the attachment for details of Case sales, Case Price
Realisation and Foreign Currency assumptions for 2014 - 2019.
For further information please contact:
Jim Delegat
Chief Executive Officer
Delegat's Group Limited
Telephone: +64 9 359 7300
End CA:00240146 For:DGL Type:FORECAST Time:2013-08-26 08:30:07
