vincor-tarin

Company Profile

Situation Analysis

Issues & Objectives

Recommendation

Time Line

Financial Justification

Key Success Factors

Conclusion

Company Profile

Situation Analysis

Issues & Objectives

Recommendation

Time Line


Key Success Factors

Conclusion

Vincor and The New World Of WinePresented By Thammasat Consulting

Chananun Manita

TarinSirunya

Company Profile

Situation Analysis

Issues & Objectives

Recommendation

Time Line


Key Success Factors

Conclusion

AGENDA

Company Profile

Situation Analysis

Issues and objectives

Recommendation


Key Success Factors

Conclusion

Company Profile

Situation Analysis

Issues & Objectives

Recommendation

Time Line


Key Success Factors

Conclusion

Total Sale of Cdn$376.6 million

Largest wine company in Canada with 22% Market share

Fourth largest in North America & the world’s 22nd largest

wine producer in term of revenue

Recent Acquisition: R.H. Phillips & Hogue Cellars (Super

Premium wine) --> Obtain US Distribution network and

Marketing expertise

Premium

Super Premium

Ultra Premium

$7-$10

$10-$15

$15-$20

Jackson-Triggs, Inniskillin, Sawmill Creek

Classification Retail Price Premium Brands

Vincor International

Company Profile

Situation Analysis

Issues & Objectives

Recommendation

Time Line


Key Success Factors

Conclusion

To become one of the world’s top ten wine companies producing Vincor-owned New World, premium brand wines, which are

marketed and sold through Vincor-controlled sales and distribution systems in all major

premium wine consuming regions.

Mission Statement

Company Profile

Situation Analysis

Issues & Objectives

Recommendation

Time Line


Key Success Factors

Conclusion

Global Market Analysis

Percentage of Global Imports

1. United Kingdom – 19 %

2. United states – 16%

3. Germany – 14%

Implication: US & UK are the most attractive Wine market

United states – $10 Bm

United Kingdom – $3.7 Bm

Australia - $3.7 Bm

Top 3 New World Wine Sales

France

Italy

US

Germany

Spain

Argentina

UK

Top Consuming Nation

3,370

3,050

2,133

1,966

1,400

1,204

1,010

Wine Consumption (million liters)

Company Profile

Situation Analysis

Issues & Objectives

Recommendation

Time Line


Key Success Factors

Conclusion

Potential Market Analysis

Current Situation

• Overall Wine Import grew

18% Last year

• Consolidation trend to obtain

distribution network

• Past 3 years Import growth

• Australia 28%

•Shifting from Old world Trend towards New World Trend

•Australian wine grew from 10% to 18% Market share within 4 yrs - replacing French wine as #1 Import

•7 of the top 10 wine brands were Australian

Implication: Strong Trend toward Australian wine

Potential Market

Company Profile

Situation Analysis

Issues & Objectives

Recommendation

Time Line


Key Success Factors

Conclusion

Current Situation Ultimate Goal

North American Player with sale of Cdn$376.6

million

Global Player with sale of Cdn$1000 million within 5

years

Global Player with sale of Cdn$830 million within 5

years

Vincor’s Ambition

Company Profile

Situation Analysis

Issues & Objectives

Recommendation

Time Line


Key Success Factors

Conclusion

Goundrey Acquisition

StrengtheningNorth American Market

Issues at Hand Objectives

Evaluate Business proposition to Vincor’s Global Strategy

Increase Sales of USMarket by CAGR 21% over the next 5 Yr.

Increase the Sales proportion from UK to 13.2% or the total sales of Cdn $110Million by 2007

Current Situation Ultimate Goal

North American Player with sale of Cdn$376.6 million

Global Player with sale of Cdn$830 million within 5 years

Global Expansion

Company Profile

Situation Analysis

Issues & Objectives

Recommendation

Time Line


Key Success Factors

Conclusion

Goundrey Production Volume

GOUNDREY – WESTERN AUSTRALIA

Domestic Product Recognition

• Largest winery in Western Australia

• Reputation for super and ultra premium wine

• Most important winery for local distributors

85% (SP)

8% (P) 7% (UP)

Sales Revenue = AUD$25 million

• One Australian winery (Goundrey) is not enough

• Complexity of Oversea Integration

• Financial Capability

*Similar product segment focus Strong Product Recognition

To Become a Global Player

Immediate Strategy: Australian Acquisition

Acquire Goundrey PLUS

an Australian Comparable

Company Profile

Situation Analysis

Issues & Objectives

Recommendation

Time Line


Key Success Factors

Conclusion

Short Term Strategy: US Acquisition

• Fragmented Market Room for Growth

• Australian imports grow at 28%

• Super premium wine growing at 17%

US Market Characteristics

Australian Wine Penetration

Implication: Domestic Winery Acquisition

• 6th largest exporter in the world

• Exports CAGR at 14% for the last 14 years

• 37% of US exports go to UK

Additional Benefit: US Exports Potential

Support Point for US acquisition

Increase ProductOfferings to International

Market esp. UK

Distribution Network Focus

Company Profile

Situation Analysis

Issues & Objectives

Recommendation

Time Line


Key Success Factors

Conclusion

US Acquisition: Network Target

OR

= Existing Distribution network

= Potential Target

NY

WA

Hogue Cellars

CA

R.H. Phillips

NY

Criteria for Choosing Winery in NY

1. At least CD$30Million Sales2. Super premium3. National distribution channel (esp. in the East Coast) with supporting sales personnel

Acquire 3 Wineries with aggregateCurrent annual sales of $90Million

Company Profile

Situation Analysis

Issues & Objectives

Recommendation

Time Line


Key Success Factors

Conclusion

Long Term Strategy: UK Penetration

Marketing Strategy: Direct Marketing

OUTSOURCE

DISTRIBUTION

International wine dominates UK market

Acquiring foreign distribution is expensive

Advertising Channel: Wine Tasting, Sponsorship

Age Range 40 and above

Income Range $50,000 and

above

Target Market

LifestyleUpper Business

Clientele

Company Profile

Situation Analysis

Issues & Objectives

Recommendation

Time Line


Key Success Factors

Conclusion

1. Top 2 GDP (per capita) in region2. Distribute at least 350,000 cases

per region 3. 3. Focus on Super Premium or

above4. “One region at a time”

Criteria for Choosing Distributors

Edinburg, Glasgow

North UK

Leeds, Manchester

Central UK

London, Bristol

South UK

Source: Barclay Statistic 2002

Long Term Strategy: UK Penetration

2007 Distributor Penetration



Company Profile

Situation Analysis

Issues & Objectives

Recommendation

Time Line


Key Success Factors

Conclusion

2003 2004 2005 2006 2007

Timeline

Immediate Strategy

Australian Wineries Acquisition

Integration

Short-term Strategy

New York Wineries Acquisition

Integration

Long-term Strategy

London and Bristol Distributors

Glasgow and Edinburgh Distributors

Leeds and Manchester Distributors

Event Marketing

Company Profile

Situation Analysis

Issues & Objectives

Recommendation

Time Line


Key Success Factors

Conclusion

0.00

100.00

200.00

300.00

400.00

500.00

600.00

700.00

800.00

900.00

2002 2003F 2004F 2005F 2006F 2007F

Revenue Growth Rate

Financial Forecast

CAGR = 17.22%

Revenue (in million Cdn$)

380 million Cdn$

830 million Cdn$

Winery Acquisitions

Company Profile

Situation Analysis

Issues & Objectives

Recommendation

Time Line


Key Success Factors

Conclusion

0.00

10.00

20.00

30.00

40.00

50.00

60.00

70.00

80.00

90.00

2002 2003F 2004F 2005F 2006F 2007F

Net Income Growth Rate

Net Income (in million Cdn$)

CAGR = 26.54%

27 million Cdn$

76.5 million Cdn$

NPM 9.2%

Financial Forecast

Interest Expense

Company Profile

Situation Analysis

Issues & Objectives

Recommendation

Time Line


Key Success Factors

Conclusion

Financing the recommendation

2003 2004 2005 2006 2007Acquiring Wineries in Australia 115Acquiring Wineries in U.S. 120Marketing Cost 20 20 20Total 115 120 20 20 20Total 5 Years 295

Total Cost295 million Cdn$

Debt FinancingTotaling Cdn$140 million

NPV190 million Cdn$

Pay Back Period6.1 Years

Costs Related to Recommendations (in million Cdn$)

Company Profile

Situation Analysis

Issues & Objectives

Recommendation

Time Line


Key Success Factors

Conclusion

Key Success Factors

Marketing Distribution

Product

Company Profile

Situation Analysis

Issues & Objectives

Recommendation

Time Line


Key Success Factors

Conclusion

Issues are solved

OBJECTIVES

PROPOSED STRATEGIES

Evaluate Business proposition Vincor’s Global Strategy

Australian Acquisition

- Goundrey + Comparable- Strategic Fits- Brand image Consistency

United States Conquest

- Acquire 3 New York wineries- Expand market coverage (East coast)- Broaden Brand Portfolio Increase the Sales

proportion from UK to 13.2% or the total sales of Cdn $110 Million by 2007

Enter United Kingdom

- Outsource Distribution- Marketing campaign- Regional Selection

Increase Sales of US market by CAGR 21% over the next 5 Yr.

Company Profile

Situation Analysis

Issues & Objectives

Recommendation

Time Line


Key Success Factors

Conclusion

Company Profile

Situation Analysis

Issues & Objectives

Recommendation

Time Line


Key Success Factors

Conclusion

Slide Navigator

• Company Profile• Mission Statement• Global Market Analysis• Market Analysis• Current position and Ultimate goal • Issues & Objective • Immediate Strategy• Short Term Strategy• Long Term Strategy• Time Line• Financial Justification

– Revenue– Net Income– Financing

• Key Success Factors• Conclusions

Company Profile

Situation Analysis

Issues & Objectives

Recommendation

Time Line


Key Success Factors

Conclusion

Back Up Navigator

Financial Data

• Historical Financial Statement

• Historical Ratio Analysis

• Overall Financial Position

• Assumptions

• Pro Forma Statement

• Ratio Analysis

• Free Cash Flow Analysis

• Revenue Break-down

• Revenue Growth Assumptions

• Revenue in UK

• Revenue Growth in Each Region

Overall Strategy

• Why can’t we achieve Cdn $1,000 millions

• Integration

• Portfolio Management

United States

• Why acquisition Not strategic alliance (US)

• Why have more than one distributor?

• Acquisition Targets

• Distribution Channels in US

• Will imported Australian wine cannibalize US wine?

United Kingdom

• Why do you need marketing campaign in the UK not US?

• Why not acquire winery plant in UK?

• UK Distributor criteria

• Opportunity Loss for Late Entry – UK

• Marketing Campaign

• GDP – UK

• Headquarters in UK

• Our Value Proposition to Distributors

Company Profile

Situation Analysis

Issues & Objectives

Recommendation

Time Line


Key Success Factors

Conclusion

Why acquisition not strategic alliance (US)

-Complete control over wineries and distribution is crucial in order to successfully

compete in the US Market- Consolidation trend

Advantages of Acquisition

-Reliability of strategic partners is likely to be controversial

-Should those partners be trusted to handle our products?

Drawbacks of Strategic Alliances

Company Profile

Situation Analysis

Issues & Objectives

Recommendation

Time Line


Key Success Factors

Conclusion

Why have more than one distributor?

• Mitigating sole distributor risk– Decrease risk of losing entire distributing

network

• Broaden the geographic market coverage– Prominent distributors from different

geographic areas– Attain geographical core competency from

each distributor

Company Profile

Situation Analysis

Issues & Objectives

Recommendation

Time Line


Key Success Factors

Conclusion

Our Value Proposition to Distributors

• Wide range of super premium product

– Australian, US, Canada

• Increase in demand of super premium Australian and US

wine

• Vincor’s marketing campaign to support “SALES”

• Brand Recognition (4th largest wine producer in North

America) + Goundrey’s recognition

Company Credibility

Great ProductMarketingSupport

Company Profile

Situation Analysis

Issues & Objectives

Recommendation

Time Line


Key Success Factors

Conclusion

Why do you need marketing campaign in the UK not US?

UK MARKET

• Lack of expertise

• Unknown market

• High competition rate for Australian wine requires marketing campaigns in order to make our product known to consumers

US MARKET

• Existing US market

• Already have local expertise

• Well established brands and network distribution

• Recent acquisitions is competent enough on their marketing campaign

• Good performance– Acquisition of Hogue added 11

sales people which immediately increased Vincor’s annual U.S. Sales volume to more than 1 million cases

Company Profile

Situation Analysis

Issues & Objectives

Recommendation

Time Line


Key Success Factors

Conclusion

Portfolio Management

Exporting Australian wine Into the US market

SHORT TERM

Integration of products from US, Canada, and Australia

LONG TERM

Rising trend of Australian wine consumption

Increasing demand for Premium and super

premium wine

Company Profile

Situation Analysis

Issues & Objectives

Recommendation

Time Line


Key Success Factors

Conclusion

Why not acquire winery plant in UK?

• UK has relatively minimal domestic wine production

• Emphasis is on UK wine distribution rather than UK

wine production

• Already established, strong portfolio with renowned

US, Australian, Canadian brands

Company Profile

Situation Analysis

Issues & Objectives

Recommendation

Time Line


Key Success Factors

Conclusion

UK Distributor criteria

At least 10 years of experience in wine distribution

within UK

One of the top 5 UK distributors

Promising future of network expansion into other

European countries (foundation for Vincor’s further

penetration into Europe)

Extensive network of super and ultra premium wine

distribution channels

Distributors’ product image are consistent with that of

Vincor (premium and above)

Company Profile

Situation Analysis

Issues & Objectives

Recommendation

Time Line


Key Success Factors

Conclusion

Will imported Australian wine cannibalize US wine?

• Inevitable loss

• Offer consumers with a wider variety of products

• Increasing trend of Australian wine consumption

• Addition of Australian brands to US brands can better solidify market base in US and UK

Company Profile

Situation Analysis

Issues & Objectives

Recommendation

Time Line


Key Success Factors

Conclusion

Opportunity Loss for Late Entry - UK

- Already established distribution network- Known market - Higher probability of Success- Room for growth in UK - Uk wine consumption is on an increasing trend - With Distribution and Marketing support - 2 years is not too late

Reasons for further penetrating into US market first

Company Profile

Situation Analysis

Issues & Objectives

Recommendation

Time Line


Key Success Factors

Conclusion

Marketing Campaign to End-consumers

-Sponsorship of sporting events (e.g. golf, polo)

-Approach cart galleries and museums

- Approach classy restaurants and hotels

-Advertisement in magazines that are parallel to target

market

- “15 days with 15 super premium brand of Vincor”

- Invite wine expert to be the spokesperson

- Contest – Blind tasting

Company Profile

Situation Analysis

Issues & Objectives

Recommendation

Time Line


Key Success Factors

Conclusion

GDP - UK

City GDP per Capita (€)

London 35,702

Edinburg 35,018

Glasgow 31,893

Bristol 29,437

Leeds 25,619

Manchester 21,099

Source: Eurostat: Region: Statistical Year book 2003

Company Profile

Situation Analysis

Issues & Objectives

Recommendation

Time Line


Key Success Factors

Conclusion

• Canadian Growth rate– Vincor existing product is growing at only 4 %– Therefore maximum = $285 millions

• US market – Meet objective: Maximum at $260 millions

• UK and Australian market generates additional $300Millions

• • Margin of Safety: Debt Ratio < 50% and TIE at 3

• Based on precedent acquisition, in order to obtain additional $180M in sales to achieve $1000M, $300M debt financing is required. This would lead our leverage position to 62%

Why can’t we achieve Cdn$1000 Million

Company Profile

Situation Analysis

Issues & Objectives

Recommendation

Time Line


Key Success Factors

Conclusion

Cultural DifferenceVision

CommunicationRetaining Key

Employee

• Global Mission

• Key Exporting Base

• No interference in Domestic plan

• Collaboration over Export Market

• Determine Key Contributor

• Increase Promotion & Salary

• make them know that we appreciate their value

• Organize Goundrey Focus Group

• Discuss potential differences with Vincor’s Expatriate

• Gradually and collaboratively implement the plan

Integration

Company Profile

Situation Analysis

Issues & Objectives

Recommendation

Time Line


Key Success Factors

Conclusion

Distribution Channels in US

• Ideally: – High-end Restaurants– Duty Free– Hotel (5 stars)

• Nevertheless, it’s heavily depend upon relationship with distributors.

Company Profile

Situation Analysis

Issues & Objectives

Recommendation

Time Line


Key Success Factors

Conclusion

Headquarters in UK

• With 2 cities in one region cover a greater market

area

• Effective distribution channel within the region

• Strength in one region will benefit another region

• Having weak market presence in a wider

geographical area is less favorable than having a

strong presence in a concentrated area

– Do not want to be perceived by consumers as inferior

to competitors’ brands present in the same area

Company Profile

Situation Analysis

Issues & Objectives

Recommendation

Time Line


Key Success Factors

Conclusion

Acquisition Targets

• Benchmark from past acquisitions

• Same firm’s characteristic, size, and revenue

Company Profile

Situation Analysis

Issues & Objectives

Recommendation

Time Line


Key Success Factors

Conclusion

F'98 F'99 F'00 F'01 F'02Revenue 206.4 253.2 268.2 294.9 376.6EBITDA 28.1 35 37.9 49.5 70.5%Revenue 13.60% 13.80% 14.10% 16.80% 18.70%Net Income 10.8 11.7 13.3 14.3 26.9Avg. Capital Employed 145.5 191.6 222.1 310.4 468.2ROCE (EBIT) 14.50% 13.80% 12.70% 13.10% 12.50%

F'98 F'99 F'00 F'01 F'02Funds EmployedReceivables 30.4 33.3 35.7 37.4 55.1Inventory 65.1 83.1 70.7 125.9 175.6Working Capital 57.8 73.3 67.9 111.9 184.9Net Fixed Asset 45.2 60 73.3 165.9 178.8Other Assets 59.8 87.1 82.7 133.4 161.5Funds Employed 162.8 220.4 223.9 411.2 525.2Turnover 1.267813 1.14882 1.197856 0.717169 0.71706

FinancingDebt (net) 50.9 92.5 80.5 254.5 110.1Deferred Tax 9.6 12.1 14.1 11.4 18.3Equity 102.3 115.8 129.3 145.3 396.8Financing 162.8 220.4 223.9 411.2 525.2

Historical Income Statement

Historical Balance Sheet

Historical Financial Statement

Company Profile

Situation Analysis

Issues & Objectives

Recommendation

Time Line


Key Success Factors

Conclusion

Historical Ratio Analysis

F'98 F'99 F'00 F'01 F'02Liquidity Ratios Current Ratio Quick RatioLeverage Ratios Debt Ratio 37.16% 47.46% 42.25% 64.66% 24.45% TIE RatioProfitability Ratios NPM 5.23% 4.62% 4.96% 4.85% 7.14% ROE 10.56% 10.10% 10.29% 9.84% 6.78% ROA 6.63% 5.31% 5.94% 3.48% 5.12%Asset Utilization Total Asset Turnover 1.267813 1.14882 1.197856 0.717169 0.71706 DSO Inventory Turnover

Historical Ratio Analysis

Company Profile

Situation Analysis

Issues & Objectives

Recommendation

Time Line


Key Success Factors

Conclusion

Overall Financial Position

• Good financial position

• Low leverage, high debt capacity

• Low asset utilization rate, due to acquisitions

Company Profile

Situation Analysis

Issues & Objectives

Recommendation

Time Line


Key Success Factors

Conclusion

Assumptions

F'02 F'03F F'04F F'05F F'06F F'07FRevenue 376.6EBITDA 70.5 18.70% 19.30% 20.50% 20.70% 20.70%%Revenue 18.70%Depre&Amor 9.00% 9.00% 9.00% 9.00% 9.00%EBIT 58.53 15% 15% 16% 17% 17.00%Interest Exp. 22.66 EBT 35.87 Tax 8.97 Net Income 26.9 8.00% 8.00% 9.00% 10.00% 10.00%Avg. Capital Employed 468.2 88.03% 88.03% 88.03% 88.03% 88.03%ROCE (EBIT) 12.50%

F'02 F'03F F'04F F'05F F'06F F'07FFunds EmployedReceivables 55.1 13.31% 13.31% 13.31% 13.31% 13.31%Inventory 175.6 35.22% 35.22% 35.22% 35.22% 35.22%Working Capital 184.9 33.00% 33.00% 33.00% 33.00% 33.00%Net Fixed Asset 178.8 0.00% 0.00% 1.50% 1.50% 1.50%Other Assets 161.5 5.00% 3.00% 3.00% 3.00% 3.00%Funds Employed 525.2Turnover 0.71706

FinancingDebt (net) 110.1Deferred Tax 18.3 20.99% 20.99% 20.99% 20.99% 20.99%Equity 396.8 0.00% 0.00% 0.00% 0.00%Financing 525.2

Income Statement

Balance Sheet

Company Profile

Situation Analysis

Issues & Objectives

Recommendation

Time Line


Key Success Factors

Conclusion

Pro Forma Statement

F'02 F'03F F'04F F'05F F'06F F'07FRevenue 376.6 479.36 598.04 704.12 773.34 833.60 EBITDA 70.5 89.64 115.42 124.35 140.08 152.55 %Revenue 18.70% 18.70% 19.30% 17.66% 18.11% 18.30%Depre&Amor 23.87 31.97 32.45 32.93 33.43 EBIT 58.53 65.77 83.45 91.90 107.15 119.13 Interest Exp. 22.66 18.09 29.70 28.74 24.14 17.15 EBT 35.87 47.69 53.76 63.16 83.01 101.98 Tax 8.97 11.92 13.44 15.79 20.75 25.49 Net Income 26.90 35.76 40.32 47.37 62.26 76.48Avg. Capital Employed 468.20 522.74 640.94 681.08 710.73 737.98ROCE (EBIT) 12.50% 12.58% 13.02% 13.49% 15.08% 16.14%

F'02 F'03F F'04F F'05F F'06F F'07FFunds EmployedReceivables 55.10 63.81 79.61 93.73 102.94 110.96 Inventory 175.60 168.84 210.64 248.00 272.38 293.60 Working Capital 184.90 158.19 197.35 232.36 255.20 275.09 Net Fixed Asset 178.80 265.18 355.18 360.51 365.92 371.41 Other Assets 161.50 170.47 175.58 180.85 186.27 191.86 Funds Employed 525.20 593.84 728.12 773.72 807.39 838.35 Turnover 0.72 0.81 0.82 0.91 0.96 0.99

FinancingDebt (net) 110.10 139.13 228.45 221.06 185.67 131.91 Deferred Tax 18.30 22.14 26.79 32.41 39.21 47.44 Equity 396.80 432.56 472.88 520.25 582.51 659.00 Financing 525.20 593.84 728.12 773.72 807.39 838.35

Pro Forma Income Statement

Pro Forma Balance Sheet

Company Profile

Situation Analysis

Issues & Objectives

Recommendation

Time Line


Key Success Factors

Conclusion

Ratio Analysis

F'02 F'03F F'04F F'05F F'06F F'07FLiquidity Ratios Current Ratio Quick RatioLeverage Ratios Debt Ratio 24.45% 27.16% 35.05% 32.76% 27.85% 21.39% TIE Ratio 2.58 3.64 2.81 3.20 4.44 6.95 Profitability Ratios NPM 7.14% 7.46% 6.74% 6.73% 8.05% 9.18% ROE 6.78% 8.27% 8.53% 9.11% 10.69% 11.61% ROA 5.12% 6.02% 5.54% 6.12% 7.71% 9.12%Asset Utilization Total Asset Turnover 0.71706 0.807224 0.821351 0.91005 0.957825 0.994324 DSO Inventory Turnover

Ratio Analysis

Company Profile

Situation Analysis

Issues & Objectives

Recommendation

Time Line


Key Success Factors

Conclusion

Free Cash Flow Analysis

F'03F F'04F F'05F F'06F F'07FEBITDA W 89.64 115.42 124.35 140.08 152.55 Investment 115.1786 120 0 0 0Tax 11.92 13.44 15.79 20.75 25.49Terminal Value 1230.815CF 37.46- 18.02- 108.55 119.33 1,357.87 EBITDA WO 75.28 78.80 82.13 84.87 87.71 InvestmentTax 12.77 12.34 11.86 10.90 10.59Terminal Value 707.6191CF 62.51 66.47 70.27 73.96 784.74 FCFF 99.97- 84.48- 38.28 45.36 573.14

NPV

WACCKd 13.00%Wd 21.72%Tax 25%Ke 16%We 78.28%WACC 14.64%

Company Profile

Situation Analysis

Issues & Objectives

Recommendation

Time Line


Key Success Factors

Conclusion

Revenue Break-down

F'02 F'03F F'04F F'05F F'06F F'07FCanadaVincor 270.00 280.80 292.03 303.71 312.82 322.21 R.H. Phillips 9.00 9.18 9.36 9.55 9.74 9.94 Hogue 11.00 11.22 11.44 11.67 11.91 12.14 Goundrey - - - 5.00 6.20 7.69 NY - - - - - - Total 290.00 301.20 312.84 329.94 340.67 351.98

U.S.Vincor 30.00 30.00 30.00 30.00 30.00 30.00 R.H. Phillips 36.00 38.88 41.99 44.09 46.29 48.61 Hogue 44.00 49.28 54.21 58.54 62.06 65.78 Goundrey - - - 15.00 20.00 22.00 NY - - 90.00 97.20 103.03 109.21 Total 110.00 118.16 216.20 244.83 261.38 275.60

AustraliaVincor - - - - - - R.H. Phillips - - - - - - Hogue - - - - - - Goundrey 50.00 60.00 69.00 79.35 87.29 96.01 NY - - - - - - Total 50.00 60.00 69.00 79.35 87.29 96.01

U.K.Vincor - - - 5.00 8.00 10.00 R.H. Phillips - - - 5.00 8.00 10.00 Hogue - - - 5.00 8.00 10.00 Goundrey - - - 20.00 36.00 50.00 NY - - - 15.00 24.00 30.00 Total - - - 50.00 84.00 110.00 Total Sales 450.00 479.36 598.04 704.12 773.34 833.60

Assumption Sales Target

Company Profile

Situation Analysis

Issues & Objectives

Recommendation

Time Line


Key Success Factors

Conclusion

Revenue Growth Assumptions

F'02 F'03F F'04F F'05F F'06F F'07FCanadaVincor 4% 4% 4% 4% 3% 3%R.H. Phillips 2% 2% 2% 2% 2% 2%Hogue 2% 2% 2% 2% 2% 2%Goundrey 24% 24% 24% 24% 24% 24%NY

U.S.VincorR.H. Phillips 8% 8% 8% 5% 5% 5%Hogue 12% 12% 10% 8% 6% 6%Goundrey 20% 20% 20% 15% 10%NY 10% 8% 6% 6%

AustraliaVincorR.H. PhillipsHogueGoundrey 20% 15% 15% 10% 10%NY

U.K.Vincor 5.00% 5.00%R.H. Phillips 12.50% 10.00%Hogue 12.50% 10.00%Goundrey 20.00% 20.00%NY 12.50% 10.00%

Assumption Sales Growth

Company Profile

Situation Analysis

Issues & Objectives

Recommendation

Time Line


Key Success Factors

Conclusion

Revenue Growth

UK

- Market penetration by establish distribution network one

region each year

- Marketing strategy helps with product acceptance

Current Market Growth ProjectionCanada Market 4% 4%US Market 10% 20%Australia Market 20% 14%UK Market 48%

Company Profile

Situation Analysis

Issues & Objectives

Recommendation

Time Line


Key Success Factors

Conclusion

Revenue in UK

Total market size of 3.7 billion pound

Growth rate is very high especially for new world wines

vincor-tarin

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