2016/17 Full Year Results Analyst & Investor Presentation June 2017
2016/2017 Full Year Results Disclaimer • This Document comprises the written materials/slides for a presentation concerning Majestic Wine PLC (the “Company”) and its audited Full Year results for the 53 weeks ended 3 April 2017 (the “Full Year Results”) . • By reviewing this presentation you agree to be bound by the conditions set out below. • No reliance may be placed for any purposes whatsoever on the information in this document or on its completeness. The presentation is intended to provide a general overview of the Company’s business and does not purport to deal with all aspects and details regarding the Company. Accordingly, neither the Company nor any of its respective directors, officers, employees or advisers nor any other person makes any representation or warranty, express or implied, as to, and accordingly no reliance may be placed on, the fairness, accuracy or completeness of the information contained in the presentation or of the views given or implied. Neither the Company nor any of its respective directors, officers, employees or advisers nor any other person shall have any liability whatsoever for any errors or omissions or any loss howsoever arising, directly or indirectly, from any use of this information or its contents or otherwise arising in connection therewith. • Certain statements in this presentation regarding the Company are or may be forward-looking statements. These forward-looking statements are neither historical facts or guarantees of future performance. Such statements are based on current expectations and belief and, by their nature, are subject to a number of known and unknown risks and uncertainties which may cause the actual results, prospects and developments of the Company to differ materially from those expressed or implied by these forward-looking statements. • The information contained in this presentation is for background purposes only. The subject matter of the presentation may be subject to change and the Company does not take any responsibility for updating or amending the contents to reflect such changes. The material contained in this presentation reflects current legislation and the business and financial affairs of the Company which are subject to change without notice and audit, and is subject to the provisions contained within legislation. • This presentation summarises information contained in the Interim Results. Without prejudice to the generality of these conditions, this summary information, including any views given or implied, or any statement made, in relation to such information should not be relied upon, nor should it be treated as accurate or complete. This presentation and all such information contained herein should be read subject to the Interim Results. • The information contained in this presentation has been obtained from Company sources and from sources which the Company believes to be reliable but it has not independently verified such information and does not guarantee that it is accurate or complete. • No statement in this presentation is intended to be a profit forecast and no statement in this presentation should be interpreted to mean that earnings per Company share for current or future financial years would necessarily match or exceed the historical published earnings per Company share. 2
2016/2017 Full Year Results We are past the tipping point 1 2 3 Reiterate £500m Past the tipping Past the tipping sales target – point financially point operationally affirming current profit expectations • H2 EBIT 51% up on prior • Completed the riskiest and • We are in better shape than year most cost intensive phase we were two years ago • 8th year for Naked and • Costs and risks coming • So we are keeping guidance 8th quarter for Majestic down consistent • Test and learn delivered • Despite expecting tougher of compounding sales clear winners and losers trading environment • Substantial progress made on heavy lifting 3
2016/2017 Full Year Results Where we are in the transformation timetable – lots to do but costs and risks are coming down 1 2 3 4
2016/2017 Full Year Results The superficial view… £461.1m £10.8 m Underlying Sales up PBT down +11.4% -29.2% 5
2016/2017 Full Year Results H2 illustrates long term potential +51% 139% +12% H2 Adjusted Naked Wines H2 Sales EBIT H2 ROI The first period where transformation costs are Up from 48% in H1 +5.7% LFL in Retail fully annualised and +26.3% in Naked benefits coming through 6
2016/2017 Full Year Results We are past the tipping point 1 2 3 Reiterate £500m Past the tipping Past the tipping sales target – point financially point operationally affirming current profit expectations 7
2016/2017 Full Year Results Reminder: Our goal is to achieve sustainable growth by growing our customer base Growth in Sustained LFL Sustained Customer Base Sales Growth Shareholder value Customer Retention Wine 5* Service Availability 75% Quality Team Retention 8
2016/2017 Full Year Results The plan is working: we are achieving sustainable growth Majestic Active customers vs Sales 400 160 270 500 350 140 250 300 120 400 Angels (‘000) Customers (‘000) Sales (£m) 250 100 230 Sales (£m) 300 200 80 210 150 60 200 0 stores 29 stores opened 190 opened 100 40 100 170 50 20 0 0 0 150 FY13 FY14 FY15 FY16 FY17 FY13 FY14 FY15 FY16 FY17 Mature Angels Sales Customers Sales Reminder – we are not claiming we can walk on water. Just that we can grow sales faster than the market for as long as we can retain customers better than average 9
2016/2017 Full Year Results Lay & Wheeler - the plan even works in a 160 year old business model! Sales Trend FY16 – FY17* 16 14 12 Sales (£m) 10 8 6 4 2 0 FY16 FY17 10 * On a management basis, excluding En Primeur
2016/2017 Full Year Results Retail growth underpinned by input KPIs +5.7% +7% Sustained Growth in Sustained LFL Shareholder Customer Base Sales Growth value 68%* *NOTE: This is a mix variance, dragged down by the growth in customers buying 5 or fewer bottles. Customer Retention for customers buying 6 or Retention more bottles of wine remains stable 87% Wine 5* Service Availability Quality 74% 82% 91% Team Retention 11
2016/2017 Full Year Results Which are in turn underpinned by strategic initiatives … Growth in Sustained LFL Sustained Customer Base Sales Growth Shareholder value 76,000 hours of dull task removed Enhanced bonus scheme Customer Enhanced career Retention path Wine 5* Service Availability 75% Quality 74% Team Team Retention Retention 12
2016/2017 Full Year Results 5* Service Staff measured & rewarded on 5* service = Improvement in multi Growth in Sustained LFL Sustained bottle customer retention Customer Base Sales Growth Shareholder value Improved store environment – estate looks & feels more loved Refits: reducing task hours and improving customer experience Customer Retention 87% Wine 5* Service 5* Service Availability 75% Quality Team Retention 13
2016/2017 Full Year Results Wine Quality Growth in Sustained LFL Sustained Range tailored to store – engaging Customer Base Sales Growth Shareholder value staff as well as customers 45 own label products – 4.7% of sales 91% average Buy it Again rating Customer Retention Wine Wine 5* Service Availability 75% Quality Quality 91% Team Retention 14
2016/2017 Full Year Results Availability Growth in Sustained LFL Sustained Customer Base Sales Growth Shareholder value Availability up from 66% to 82% National fulfilment centre = next day delivery on 1250 SKU’s £0.9m cost saving opportunity Customer Retention Wine 5* Service Availability Availability 75% Quality 82% Team Retention 15
2016/2017 Full Year Results Growth in the customer base Personalised CRM +7% introduced Growth in Growth in Sustained LFL Sustained New high Customer Base Customer Base Sales Growth Shareholder value engagement CRM introduced 15% improvement in 68% welcome process Customer Customer Retention Retention Wine 5* Service Availability 75% Quality Team Retention 16
2016/2017 Full Year Results Overview – the plan is working 1 2 3 Reiterate £500m Past the tipping Past the tipping sales target – point financially point operationally affirming current profit expectations 17
2016/2017 Full Year Results ‘Test and Learn’ delivered answers Improving Wine Personalised CRM Next day delivery £2.5m under Quality = higher = 15% uplift in = incremental performing BIA ratings = welcome process sales spend higher LTV redeployed Own label works Focus on quality 20 stores refitted & – and supports Angels improving 15 stores shelved margins US retention +5pps = 4,000 man hours saved 18
2016/2017 Full Year Results Heavy Lifting: costs reducing and benefits starting to come through IT infrastructure and platform Systems investment has improved for multichannel growth our efficiency created First heavy lifting More effective projects complete processes & tools • Data warehouse created Huge impact on store • Annual reviews, talent labour e.g. no more identification and career double-keying commercial & internet orders progression • In house team replacing dated and outsourced systems 19
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