Company Profile

Situation Analysis

Issues &
Objectives

Recommendation

Time Line

Financial
Justification

Key Success
Factors

Conclusion
Company Profile

Situation Analysis

Issues &
Objectives

Recommendation

Time Line

Financial
Justification

Key Success
Factors

Conclusion
Company Profile

Situation Analysis

Issues &
Objectives

Recommendation

Time Line

Financial
Justification
Vincor and The New World Of Wine
Presented By Thammasat Consulting
Key Success
Factors Chananun
Manita
Tarin
Conclusion
Sirunya
 AGENDA

Company Profile

Company Profile
Situation Analysis
Situation Analysis
Issues &
Objectives
Issues and objectives
Recommendation
Recommendation
Time Line
Financial Justification
Financial
Justification Key Success Factors
Key Success Conclusion
Factors

Conclusion
 Vincor International

 Total Sale of Cdn$376.6 million

Company Profile

 Largest wine company in Canada with 22% Market share

Situation Analysis
 Fourth largest in North America & the world’s 22nd largest
Issues &
Objectives wine producer in term of revenue
 Recent Acquisition: R.H. Phillips & Hogue Cellars (Super
Recommendation
Premium wine) --> Obtain US Distribution network and
Marketing expertise
Time Line

Financial
Justification Classification Retail Price Premium Brands

Premium $7-$10 Jackson-Triggs,

Key Success Inniskillin, Sawmill Creek
Super Premium $10-$15
Factors
Ultra Premium $15-$20

Conclusion
 Mission Statement

Company Profile

Situation Analysis

Issues & To become one of the world’s top ten wine

Objectives companies producing Vincor-owned New
World, premium brand wines, which are
Recommendation
marketed and sold through Vincor-controlled
Time Line sales and distribution systems in all major
premium wine consuming regions.
Financial
Justification

Key Success
Factors

Conclusion
 Global Market Analysis

Company Profile
Percentage of Global
Imports
Top Wine Consumption
Situation Analysis Consuming Nation (million liters)
1. United Kingdom – 19 %

Issues & France 3,370 2. United states – 16%

Objectives
Italy 3,050 3. Germany – 14%
Recommendation US 2,133
Germany 1,966 Top 3 New World Wine Sales
Time Line
Spain 1,400
Financial United states – $10 Bm
Justification Argentina 1,204
United Kingdom – $3.7 Bm
UK 1,010
Key Success Australia - $3.7 Bm
Factors

Conclusion Implication: US & UK are the most attractive Wine market

 Potential Market Analysis

Company Profile Potential Market Current Situation

• Overall Wine Import grew
Situation Analysis 18% Last year
• Consolidation trend to obtain
Issues &
distribution network
Objectives
• Past 3 years Import growth

Recommendation • Australia 28%

•Shifting from Old world Trend

Time Line towards New World Trend

Financial •Australian wine grew from 10% to

Justification 18% Market share within 4 yrs -
replacing French wine as #1
Import
Key Success
Factors •7 of the top 10 wine brands were
Australian

Conclusion Implication: Strong Trend toward Australian wine

 Vincor’s Ambition

Company Profile

Situation Analysis Current Situation Ultimate Goal

Issues &
Objectives
North American Global Player with
Recommendation Player with sale sale
saleof
ofCdn$1000
Cdn$830
of Cdn$376.6 million within 5
Time Line
million years
Financial
Justification

Key Success
Factors

Conclusion
 Current Situation Ultimate Goal

Company Profile North American Player with Global Player with sale of
sale of Cdn$376.6 million Cdn$830 million within 5 years
Situation Analysis

Issues &
Objectives
Issues at Hand Objectives
Evaluate Business proposition to
Recommendation Goundrey Acquisition
Vincor’s Global Strategy

Time Line
Strengthening Increase Sales of US
Financial North American Market Market by CAGR 21% over the next 5 Yr.
Justification

Key Success Increase the Sales proportion from UK to

Factors Global Expansion 13.2% or the total sales of
Cdn $110Million by 2007

Conclusion
 Immediate Strategy: Australian Acquisition

GOUNDREY – WESTERN AUSTRALIA

Company Profile
Goundrey Production Volume Domestic Product Recognition

Situation Analysis
8% (P) 7% (UP) • Largest winery in Western Australia
Issues & • Reputation for super and ultra
Objectives 85% (SP) premium wine
• Most important winery for local
Recommendation distributors

Sales Revenue = AUD$25 million

Time Line
*Similar product segment focus Strong Product Recognition

Financial
Justification
To Become a Global Player
• One Australian winery (Goundrey) is Acquire Goundrey
Key Success not enough
Factors PLUS
• Complexity of Oversea Integration
an Australian Comparable
• Financial Capability
Conclusion
 Short Term Strategy: US Acquisition

Company Profile Australian Wine Penetration

US Market Characteristics

Situation Analysis • Fragmented Market  Room for Growth

Distribution
• Australian imports grow at 28%
Issues & Network Focus
Objectives • Super premium wine growing at 17%

Implication: Domestic Winery Acquisition

Recommendation

Time Line

Financial Support Point for US acquisition

Justification
Additional Benefit: US Exports Potential
• 6th largest exporter in the world Increase Product
Key Success Offerings to International
Factors • Exports CAGR at 14% for the last 14 years
Market esp. UK
• 37% of US exports go to UK

Conclusion
 US Acquisition: Network Target

Company Profile Hogue

WA Cellars

Situation Analysis OR
NY
Issues &
Objectives

CA Criteria for Choosing Winery in NY

Recommendation
1. At least CD$30Million Sales
Time Line 2. Super premium
R.H. 3. National distribution channel
Phillips
Financial (esp. in the East Coast) with
Justification supporting sales personnel

Key Success
Factors
Acquire 3 Wineries with aggregate
= Existing Distribution network Current annual sales of $90Million
Conclusion = Potential Target
 Long Term Strategy: UK Penetration

Company Profile
DISTRIBUTION
Situation Analysis
 International wine dominates UK market
OUTSOURCE
Issues &  Acquiring foreign distribution is expensive
Objectives

Recommendation
Marketing Strategy: Direct Marketing
Time Line
Target Market
Financial
Justification
Age Range Income Range Lifestyle
40 and $50,000 and Upper Business
Key Success above above Clientele
Factors

Advertising Channel: Wine Tasting, Sponsorship

Conclusion
 Long Term Strategy: UK Penetration

Company Profile Criteria for Choosing Distributors

1. Top 2 GDP (per capita) in region

Situation Analysis North UK 2. Distribute at least 350,000 cases
Edinburg, per region
Issues & Glasgow 3. 3. Focus on Super Premium or
Objectives above
4. “One region at a time”
Recommendation Central UK
Leeds,
Manchester
Time Line

Financial South UK
Justification
London,
Bristol
Key Success
Factors
2005 Distributor Penetration
Source: Barclay Statistic 2002
2006 Distributor Penetration
Conclusion 2007 Distributor Penetration
 Timeline

2003 2004 2005 2006 2007

Company Profile
Immediate Strategy
Australian Wineries
SituationAcquisition
Analysis
Integration
Issues &
Objectives
Short-term Strategy
New York Wineries
Recommendation
Acquisition

Integration
Time Line

Long-term Strategy
Financial
London and Bristol
Justification
Distributors
Glasgow and Edinburgh
Distributors
Key Success
Factors
Leeds and Manchester
Distributors

Event Marketing
Conclusion
 Financial Forecast

Company Profile Revenue Growth Rate

Situation Analysis
CAGR = 17.22%

Issues & Revenue (in million Cdn$)

Objectives
900.00

Recommendation 800.00 Winery Acquisitions

700.00

Time Line 600.00

500.00
830 million Cdn$
Financial 400.00
Justification
300.00
200.00 380 million Cdn$
Key Success 100.00
Factors
0.00
2002 2003F 2004F 2005F 2006F 2007F
Conclusion
 Financial Forecast

Company Profile Net Income Growth Rate

Situation Analysis
CAGR = 26.54%

Issues & Net Income (in million Cdn$)

Objectives
90.00
Recommendation 80.00 76.5 million Cdn$
70.00
Time Line
Interest Expense
60.00
50.00
Financial 40.00
Justification
30.00
20.00
Key Success
10.00 27 million Cdn$
Factors NPM 9.2%
0.00
2002 2003F 2004F 2005F 2006F 2007F
Conclusion
 Financing the recommendation

Company Profile Costs Related to Recommendations (in million Cdn$)

2003 2004 2005 2006 2007

Situation Analysis Acquiring Wineries in Australia 115
Acquiring Wineries in U.S. 120
Issues & Marketing Cost 20 20 20
Objectives Total 115 120 20 20 20
Total 5 Years 295
Recommendation

Time Line Total Cost Debt Financing

295 million Cdn$ Totaling Cdn$140 million
Financial
Justification

Key Success NPV Pay Back Period

Factors 190 million Cdn$ 6.1 Years

Conclusion
 Key Success Factors

Company Profile

Situation Analysis

Issues &
Objectives Product
Recommendation

Time Line

Financial Marketing Distribution

Justification

Key Success
Factors

Conclusion
 Issues are solved

Company Profile OBJECTIVES PROPOSED STRATEGIES

Australian Acquisition
Situation Analysis  Evaluate Business
proposition Vincor’s - Goundrey + Comparable
Issues & Global Strategy - Strategic Fits
Objectives - Brand image Consistency

Recommendation
 Increase Sales of US United States Conquest
market by CAGR 21% over
Time Line - Acquire 3 New York wineries
the next 5 Yr.
- Expand market
Financial coverage (East coast)
Justification - Broaden Brand Portfolio
 Increase the Sales
proportion from UK to Enter United Kingdom
Key Success 13.2% or the total sales
Factors of Cdn $110 Million by
- Outsource Distribution
2007
- Marketing campaign
- Regional Selection
Conclusion
Company Profile

Situation Analysis

Issues &
Objectives

Recommendation

Time Line

Financial
Justification

Key Success
Factors

Conclusion
 Slide Navigator

Company Profile
• Company Profile
• Mission Statement
Situation Analysis • Global Market Analysis
• Market Analysis
Issues &
Objectives • Current position and Ultimate goal
• Issues & Objective
Recommendation • Immediate Strategy
• Short Term Strategy
Time Line • Long Term Strategy
• Time Line
Financial • Financial Justification
Justification
– Revenue
– Net Income
Key Success – Financing
Factors
• Key Success Factors
• Conclusions
Conclusion
 Back Up Navigator

Overall Strategy Financial Data

Company Profile • Why can’t we achieve Cdn $1,000 millions • Historical Financial Statement
• Integration
• Historical Ratio Analysis
• Portfolio Management
Situation Analysis • Overall Financial Position

United States • Assumptions

Issues & • Why acquisition Not strategic alliance (US) • Pro Forma Statement
Objectives • Why have more than one distributor? • Ratio Analysis
• Acquisition Targets • Free Cash Flow Analysis
• Distribution Channels in US
Recommendation • Revenue Break-down
• Will imported Australian wine cannibalize US wine?
• Revenue Growth Assumptions

Time Line • Revenue in UK

United Kingdom
• • US?
Why do you need marketing campaign in the UK not Revenue Growth in Each Region
Financial • Why not acquire winery plant in UK?
Justification • UK Distributor criteria
• Opportunity Loss for Late Entry – UK
• Marketing Campaign
Key Success • GDP – UK
Factors
• Headquarters in UK
• Our Value Proposition to Distributors

Conclusion
 Why acquisition not strategic alliance (US)

Company Profile
Advantages of Acquisition

Situation Analysis
-Complete control over wineries and
Issues &
distribution is crucial in order to successfully
Objectives compete in the US Market
- Consolidation trend
Recommendation

Time Line
Drawbacks of Strategic Alliances
Financial -Reliability of strategic partners is likely
Justification
to be controversial
-Should those partners be trusted to handle
Key Success
Factors our products?

Conclusion
 Why have more than one distributor?

Company Profile
• Mitigating sole distributor risk
Situation Analysis – Decrease risk of losing entire distributing
network
Issues &
Objectives • Broaden the geographic market
Recommendation
coverage
– Prominent distributors from different
Time Line geographic areas
– Attain geographical core competency from
Financial
Justification each distributor

Key Success
Factors

Conclusion
 Our Value Proposition to Distributors

Company Profile
Company Marketing
Great Product
Credibility Support
Situation Analysis

Issues &
Objectives
• Wide range of super premium product

Recommendation
– Australian, US, Canada

• Increase in demand of super premium Australian and US

Time Line
wine
Financial • Vincor’s marketing campaign to support “SALES”
Justification
• Brand Recognition (4th largest wine producer in North
Key Success America) + Goundrey’s recognition
Factors

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

Company Profile
UK MARKET US MARKET

Situation Analysis
• Existing US market
• Lack of expertise
• Already have local expertise
Issues & • Unknown market
Objectives • Well established brands and
• High competition rate for
network distribution
Australian wine 
Recommendation requires marketing • Recent acquisitions is
campaigns in order to competent enough on their
make our product known marketing campaign
Time Line
to consumers • Good performance
Financial – Acquisition of Hogue added 11
Justification sales people which immediately
increased Vincor’s annual U.S.
Sales volume to more than 1
Key Success million cases
Factors

Conclusion
 Portfolio Management

Company Profile SHORT TERM LONG TERM

Increasing demand for

Situation Analysis Rising trend of Australian
Premium and super
wine consumption
premium wine
Issues &
Objectives

Recommendation
Exporting Australian wine Integration of products from
Time Line
Into the US market US, Canada, and Australia

Financial
Justification

Key Success
Factors

Conclusion
 Why not acquire winery plant in UK?

Company Profile

• UK has relatively minimal domestic wine production

Situation Analysis
• Emphasis is on UK wine distribution rather than UK
Issues & wine production
Objectives
• Already established, strong portfolio with renowned
Recommendation
US, Australian, Canadian brands

Time Line

Financial
Justification

Key Success
Factors

Conclusion
 UK Distributor criteria

Company Profile
At least 10 years of experience in wine distribution

Situation Analysis
within UK
One of the top 5 UK distributors
Issues &
Objectives Promising future of network expansion into other
European countries (foundation for Vincor’s further
Recommendation
penetration into Europe)
Time Line Extensive network of super and ultra premium wine
Financial distribution channels
Justification
Distributors’ product image are consistent with that of
Key Success Vincor (premium and above)
Factors

Conclusion
 Will imported Australian wine cannibalize US wine?

Company Profile
• Inevitable loss
Situation Analysis • Offer consumers with a wider variety of
products
Issues &
Objectives • Increasing trend of Australian wine
Recommendation
consumption
• Addition of Australian brands to US brands 
Time Line
can better solidify market base in US and UK
Financial
Justification

Key Success
Factors

Conclusion
 Opportunity Loss for Late Entry - UK

Company Profile

Reasons for further penetrating

Situation Analysis
into US market first
Issues &
Objectives
- Already established distribution network
- Known market
Recommendation - Higher probability of Success
- Room for growth in UK
Time Line - Uk wine consumption is on an increasing trend
- With Distribution and Marketing support
Financial - 2 years is not too late
Justification

Key Success
Factors

Conclusion
 Marketing Campaign to End-consumers

Company Profile

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

Issues & -Approach cart galleries and museums

Objectives
- Approach classy restaurants and hotels

Recommendation -Advertisement in magazines that are parallel to target

market
Time Line
- “15 days with 15 super premium brand of Vincor”
Financial - Invite wine expert to be the spokesperson
Justification
- Contest – Blind tasting
Key Success
Factors

Conclusion
 GDP - UK

Company Profile
City GDP per Capita (€)
Situation Analysis

London 35,702
Issues &
Objectives
Edinburg 35,018
Recommendation
Glasgow 31,893
Time Line
Bristol 29,437
Financial
Justification Leeds 25,619
Manchester 21,099
Key Success
Factors
Source: Eurostat: Region: Statistical Year book 2003

Conclusion
 Why can’t we achieve Cdn$1000 Million

Company Profile • Canadian Growth rate

– Vincor existing product is growing at only 4 %
Situation Analysis – Therefore maximum = $285 millions

Issues & • US market

Objectives – Meet objective: Maximum at $260 millions

Recommendation • UK and Australian market generates additional

$300Millions
Time Line
•
• Margin of Safety: Debt Ratio < 50% and TIE at 3
Financial
Justification • Based on precedent acquisition, in order to obtain
additional $180M in sales to achieve $1000M, $300M
Key Success debt financing is required. This would lead our leverage
Factors position to 62%

Conclusion
 Integration

Company Profile

Vision Retaining Key

Situation Analysis Communication Employee Cultural Difference

Issues & • Global Mission • Determine Key • Organize Goundrey

Objectives Contributor Focus Group
• Key Exporting Base
Recommendation
• Increase Promotion
• No interference in & Salary • Discuss potential
Domestic plan differences with Vincor’s
Time Line • make them know Expatriate
• Collaboration over that we appreciate
Financial Export Market their value • Gradually and
Justification collaboratively
implement the plan
Key Success
Factors

Conclusion
 Distribution Channels in US

Company Profile

• Ideally:
Situation Analysis
– High-end Restaurants
Issues &
Objectives – Duty Free
Recommendation
– Hotel (5 stars)

Time Line
• Nevertheless, it’s heavily
Financial
depend upon relationship
Justification
with distributors.
Key Success
Factors

Conclusion
 Headquarters in UK

Company Profile
• With 2 cities in one region  cover a greater market
Situation Analysis area
Issues & • Effective distribution channel within the region
Objectives
• Strength in one region will benefit another region
Recommendation • Having weak market presence in a wider
geographical area is less favorable than having a
Time Line
strong presence in a concentrated area
Financial
Justification – Do not want to be perceived by consumers as inferior
to competitors’ brands present in the same area
Key Success
Factors

Conclusion
 Acquisition Targets

Company Profile

• Benchmark from past acquisitions

Situation Analysis

Issues &
• Same firm’s characteristic, size, and
Objectives
revenue
Recommendation

Time Line

Financial
Justification

Key Success
Factors

Conclusion
 Historical Financial Statement

Historical Income Statement

Company Profile F'98 F'99 F'00 F'01 F'02
Revenue 206.4 253.2 268.2 294.9 376.6
EBITDA 28.1 35 37.9 49.5 70.5
Situation Analysis %Revenue 13.60% 13.80% 14.10% 16.80% 18.70%
Net Income 10.8 11.7 13.3 14.3 26.9
Avg. Capital Employed 145.5 191.6 222.1 310.4 468.2
Issues & ROCE (EBIT) 14.50% 13.80% 12.70% 13.10% 12.50%
Objectives
Historical Balance Sheet
F'98 F'99 F'00 F'01 F'02
Recommendation Funds Employed
Receivables 30.4 33.3 35.7 37.4 55.1
Inventory 65.1 83.1 70.7 125.9 175.6
Time Line
Working Capital 57.8 73.3 67.9 111.9 184.9
Net Fixed Asset 45.2 60 73.3 165.9 178.8
Financial Other Assets 59.8 87.1 82.7 133.4 161.5
Justification Funds Employed 162.8 220.4 223.9 411.2 525.2
Turnover 1.267813 1.14882 1.197856 0.717169 0.71706

Key Success Financing

Factors Debt (net) 50.9 92.5 80.5 254.5 110.1
Deferred Tax 9.6 12.1 14.1 11.4 18.3
Equity 102.3 115.8 129.3 145.3 396.8
Financing 162.8 220.4 223.9 411.2 525.2
Conclusion
 Historical Ratio Analysis

Company Profile
Historical Ratio Analysis
F'98 F'99 F'00 F'01 F'02
Situation Analysis Liquidity Ratios
Current Ratio
Issues & Quick Ratio
Leverage Ratios
Objectives
Debt Ratio 37.16% 47.46% 42.25% 64.66% 24.45%
TIE Ratio
Recommendation Profitability Ratios
NPM 5.23% 4.62% 4.96% 4.85% 7.14%
ROE 10.56% 10.10% 10.29% 9.84% 6.78%
Time Line 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
Financial DSO
Justification Inventory Turnover

Key Success
Factors

Conclusion
 Overall Financial Position

Company Profile

• Good financial position

Situation Analysis

Issues &
• Low leverage, high debt capacity
Objectives
• Low asset utilization rate, due to
Recommendation
acquisitions
Time Line

Financial
Justification

Key Success
Factors

Conclusion
 Assumptions

Income Statement
Company Profile F'02 F'03F F'04F F'05F F'06F F'07F
Revenue 376.6
EBITDA 70.5 18.70% 19.30% 20.50% 20.70% 20.70%
%Revenue 18.70%
Situation Analysis 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
Issues & EBT 35.87
Objectives 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%
Recommendation
Balance Sheet
F'02 F'03F F'04F F'05F F'06F F'07F
Time Line Funds Employed
Receivables 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%
Financial 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%
Justification Other Assets 161.5 5.00% 3.00% 3.00% 3.00% 3.00%
Funds Employed 525.2
Turnover 0.71706
Key Success
Financing
Factors Debt (net) 110.1
Deferred 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
Conclusion
 Pro Forma Statement

Pro Forma Income Statement

Company Profile F'02 F'03F F'04F F'05F F'06F F'07F
Revenue 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%
Situation Analysis 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
Issues & EBT 35.87 47.69 53.76 63.16 83.01 101.98
Objectives 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 76.48
Avg. Capital Employed 468.20 522.74 640.94 681.08 710.73 737.98
ROCE (EBIT) 12.50% 12.58% 13.02% 13.49% 15.08% 16.14%
Recommendation
Pro Forma Balance Sheet
F'02 F'03F F'04F F'05F F'06F F'07F
Time Line Funds Employed
Receivables 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
Financial Working Capital 184.90 158.19 197.35 232.36 255.20 275.09
Justification 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
Key Success
Factors Financing
Debt (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
Conclusion Financing 525.20 593.84 728.12 773.72 807.39 838.35
 Ratio Analysis

Company Profile
Ratio Analysis
F'02 F'03F F'04F F'05F F'06F F'07F
Situation Analysis Liquidity Ratios
Current Ratio
Quick Ratio
Issues & Leverage Ratios
Objectives 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
Recommendation 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%
Time Line Asset Utilization
Total Asset Turnover 0.71706 0.807224 0.821351 0.91005 0.957825 0.994324
DSO
Financial
Inventory Turnover
Justification

Key Success
Factors

Conclusion
 Free Cash Flow Analysis

NPV
Company Profile F'03F F'04F F'05F F'06F F'07F
EBITDA W 89.64 115.42 124.35 140.08 152.55
Investment 115.1786 120 0 0 0
Situation Analysis Tax 11.92 13.44 15.79 20.75 25.49
Terminal Value 1230.815
CF - 37.46 - 18.02 108.55 119.33 1,357.87
Issues &
EBITDA WO 75.28 78.80 82.13 84.87 87.71
Objectives
Investment
Tax 12.77 12.34 11.86 10.90 10.59
Recommendation Terminal Value 707.6191
CF 62.51 66.47 70.27 73.96 784.74
FCFF - 99.97 - 84.48 38.28 45.36 573.14
Time Line
WACC
Kd 13.00%
Financial Wd 21.72%
Justification Tax 25%
Ke 16%
We 78.28%
Key Success WACC 14.64%
Factors

Conclusion
 Revenue Break-down
Assumption Sales Target
F'02 F'03F F'04F F'05F F'06F F'07F
Company Profile Canada
Vincor 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
Situation Analysis Goundrey - - - 5.00 6.20 7.69
NY - - - - - -
Total 290.00 301.20 312.84 329.94 340.67 351.98
Issues & U.S.
Objectives 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
Recommendation NY - - 90.00 97.20 103.03 109.21
Total 110.00 118.16 216.20 244.83 261.38 275.60

Australia
Time Line Vincor - - - - - -
R.H. Phillips - - - - - -
Hogue - - - - - -
Financial Goundrey 50.00 60.00 69.00 79.35 87.29 96.01
Justification NY - - - - - -
Total 50.00 60.00 69.00 79.35 87.29 96.01

U.K.
Key Success Vincor - - - 5.00 8.00 10.00
R.H. Phillips - - - 5.00 8.00 10.00
Factors 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
Conclusion Total Sales 450.00 479.36 598.04 704.12 773.34 833.60
 Revenue Growth Assumptions

Assumption Sales Growth

Company Profile F'02 F'03F F'04F F'05F F'06F F'07F
Canada
Vincor 4% 4% 4% 4% 3% 3%
R.H. Phillips 2% 2% 2% 2% 2% 2%
Situation Analysis Hogue 2% 2% 2% 2% 2% 2%
Goundrey 24% 24% 24% 24% 24% 24%
NY
Issues &
Objectives U.S.
Vincor
R.H. Phillips 8% 8% 8% 5% 5% 5%
Hogue 12% 12% 10% 8% 6% 6%
Recommendation Goundrey 20% 20% 20% 15% 10%
NY 10% 8% 6% 6%

Time Line Australia

Vincor
R.H. Phillips
Financial Hogue
Justification Goundrey 20% 15% 15% 10% 10%
NY

U.K.
Key Success Vincor 5.00% 5.00%
Factors R.H. Phillips 12.50% 10.00%
Hogue 12.50% 10.00%
Goundrey 20.00% 20.00%
NY 12.50% 10.00%
Conclusion
 Revenue Growth

Company Profile

Current Market Growth Projection

Situation Analysis Canada Market 4% 4%
US Market 10% 20%
Issues &
Australia Market 20% 14%
Objectives UK Market 48%

Recommendation
UK
Time Line
- Market penetration by establish distribution network one
Financial region each year
Justification
- Marketing strategy helps with product acceptance
Key Success
Factors

Conclusion
 Revenue in UK

Company Profile

Situation Analysis

Issues &
Objectives
Total market size of 3.7 billion pound
Recommendation Growth rate is very high especially for new world wines

Time Line

Financial
Justification

Key Success
Factors

Conclusion