Delegat Group Limited, Annual Meeting 2025

28 November 2025

Delegat Group Ltd (DGL)

The company will hold its Annual Shareholders Meeting at 2.00pm Thursday 4 December 2025.

The location is Pakuranga Hunt Room, Second Floor, Ellerslie Stand, Ellerslie Event Centre, Ellerslie Racecourse, 100 Ascot Avenue, Remuera, Auckland.

You can also join the meeting online at this link.

Company Overview

The company was founded by Jim and Rose Delegat’s father in 1947. It is now New Zealand’s largest exporter of wine under the Oyster Bay and Barossa Valley Estate and Delegat labels. It sold 3.2 million cases down 12% on FY24, with 47% going to North America, 32% UK, Ireland, and Europe and 21% New Zealand, Australia, and Asia Pacific.

The US tariffs impacted North America sales, however Oyster Bay Sauvignon Blanc remains the number 2 premium Sauvignon Blanc in the USA. The 2025 harvest produced 47,461 tonnes of grapes (up 39% on 2024) and forecast case sales for 2026 are 3.3 million.

Interests associated with Jim and Rose Delegat hold 66% of the shares. In July 2025, Murray Annabell, the former CFO who had been acting CEO since December 2024, was appointed as permanent CEO.

Current Strategy

The Group’s strategic goal is to establish Delegat as a leading global Super Premium wine company. The Group’s focus remains on wine category premiumisation and value growth, aligning to the long-term trend of Super Premium wine consumption. Goals include:

• Establish Oyster Bay as New Zealand’s leading global super-premium wine brand.
• Invest in high-growth super-premium varietals: Sauvignon Blanc, Pinot Gris, Chardonnay, and Pinot Noir.
• Sustaining the North American market as a key focus. The United States, with over 50 million premium wine consumers, is the Group’s largest market and the most significant opportunity.
• Expanding Delegat’s leadership position in China, where Oyster Bay is now the #1 New Zealand wine brand, and continue broader growth across Asia.

Based on wine consumption patterns, the Group classifies markets as Established, Growth or Emerging. Marketing activities are then tailored to the specific needs of each market and phases of brand development.

Previous Year Shareholder Meeting

NZSA recorded the following key items at last year’s annual shareholder meeting:

1. Sales continued to be well diversified by market with 48% in North America, 33% in the United Kingdom, Ireland and Europe, and 19% in Australia, New Zealand and Asia Pacific region.
2. Operating NPAT was described as ‘solid’ at $59.7m, up 1% on the prior year figure, and coming from revenue of $371.8m, also up 1% on the prior year figure.
3. Operating cashflow at $56.9m, down 5% on the prior year, was considered to be ‘strong’.

The meeting report is available at this link.

Disclaimer

To the maximum extent permitted by law, New Zealand Shareholders Association Inc. (NZSA) will not be liable, whether in tort (including negligence) or otherwise, to you or any other person in relation to this document, including any error in it.

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Key

The following sections calculate an objective rating against criteria contained within NZSA policies.

Governance

NZSA assessment against its key policy criteria are summarised below.

Directors Fees:  There is a clear disclosure that “The Group’s policy is to pay its Directors in cash.”

We note the Constitution offers broad powers for the company to make loans to Directors (9.1) and the payment of retirement benefits (9.2). Neither are positions supported by NZSA. It does not appear as if either situation applies to current Directors – perhaps signalling a need to update the Constitution in the medium-term.

There is no disclosure as to whether any ‘special exertion’ or additional payments are available for directors (or have been paid), and if so whether these are included in the Director Fee Pool. The Board Charter notes that “Non-Executive Director’s remuneration is paid in the form of Directors’ Fees. Ensuring the total fees available to be paid to Directors is in accordance with prior shareholder approval by resolution.” Special exertion benefits may have been previously approved, but this is not transparent for current shareholders.

Director Share Ownership:  Directors are not required to own shares.

CEO Remuneration:  We note the improved disclosure following our comments last year. The company discloses its remuneration policy on its website, which includes an overview of the remuneration philosophy applicable to the company. The People Culture and Safety Committee are responsible for implementing the policy.

Incentives: The CEO is paid a short-term incentive (STI) in cash. No long-term incentive (LTI) is offered. We note that no STI incentive was earned in FY25.

NZSA encourages fulsome disclosure in relation to any incentive payments made to the CEO, including disclosure of measures (or measure ‘groups’), weightings, targets, and the level of achievement versus target for each component associated with any awards. This methodology is supported by the NZX Remuneration Reporting Template.

The STI as a percentage of the base salary is not disclosed. The measures, weightings, and level of achievement against each component (ie, the methodology) are disclosed for previous years, but not for FY25. While this is largely academic given that no incentive was paid in FY25, both the targeted award and the STI methodology are areas we will look to in FY26.

The company does not disclose the gender pay gap and CEO/employee remuneration ratio.

Golden Parachutes: There is no disclosure around whether any payment is offered. In addition, in the interests of transparency, NZSA believes there should be explicit disclosure around the severance terms and notice periods associated with the CEO, including whether specific termination payments are offered.

Director Independence:  We note that following the determination that Doug McKay is an independent Director (supported by NZSA), the Board now comprises four independent Directors and two non-independent Directors – being the Chair, Jim Delegat, and Rose Delegat. A majority of independent Directors now accords with the NZX Code of Corporate Governance and NZSA policy. We encourage the company’s Board to consider electing one of the independent directors as Chair, to bring the chair independence status in line with the recommendations of the Corporate Governance Code and NZSA policy. We consider this especially relevant given the majority ownership by interests associated with Jim Delegat.

Board Composition:  We are pleased to note following our comments in previous years that the Annual Report now includes a collective skills matrix. Whilst an improvement, NZSA prefers an individual skills matrix to demonstrate who each Director contributes and adds value to the governance of the company.

Director Tenure:  NZSA looks for evidence of ongoing succession or ‘staggered’ appointment dates that reduce the risks associated with effective knowledge transfer in the event of succession. We also prefer a term maximum of 9-12 years, unless there are exceptional circumstances that may apply.

Jim and Rose Delegat were already on the Board when the company listed on the NZX in 2006. Current Director’s appointment dates range between 2012 and 2024. The four independent directors were appointed in 2012, 2020, 2022 and 2024. While this forms some evidence of succession planning, we note the re-election of Dr. Alan Jackson at the 2024 ASM indicating either a failure in this process or that the Board is unconcerned by the risks of extending his term.

Given the majority nature of the shareholding held by the Delegat family, NZSA considers that the Board should include a strong degree of independence, under all factors that may be used to assess independence.

ASM Format: Delegat Group Ltd is holding a ‘hybrid’ meeting, (i.e., physical, and virtual), a format preferred by NZSA as a way of promoting shareholder engagement while maximising participation.

Independent Advice for the Board & Risk Management: NZSA looks for evidence, through disclosures, that a Board has access to appropriate internal and external expertise to support board assurance activities. We also look to see Boards are across their risk management responsibilities.

Whilst there are adequate disclosures around access to internal advice, we could not find any disclosure that states the extent to which Directors have access to independent external advice.

The company offers good disclosure of financial risks and succinct, but effective, disclosure of key non-financial risks and their mitigations. There is good disclosure as to risk governance processes. The company has published a separate 32-page Climate-Related Risk Disclosure Report.

Audit

NZSA assessment against its key policy criteria are summarised below.

Audit Independence: Good disclosure.

Audit Rotation:  The company ensures the Lead Audit Partner is rotated at 5 years as required by the NZX Listing Rules. There is no disclosure as to the tenure of the current audit firm. NZSA also expects disclosure of the appointment dates of the Lead Audit Partner and Audit Firm in the Annual Report to improve transparency for investors.

Environmental Sustainability

Overall approach: Delegat’s second climate-related disclosure report reflects progress from its inaugural release, with evidence of deeper integration between environmental sustainability, strategic planning, and operational execution. The company again affirms its foundational role as a long-standing member of Sustainable Winegrowing New Zealand (SWNZ), with all NZ operations certified under this scheme. In addition, the company continues to structure its climate disclosures in accordance with the Aotearoa New Zealand Climate Standards, applying five out of seven adoption provisions.

NZSA encourages companies to take a broad view of environmental risks. In that context, Delegat’s sustainability framework remains centered on climate and emissions but also continues to reference water stewardship, packaging, waste and sustainable production. These areas, while voluntary under climate standards, are referenced with clearer alignment to business outcomes.

Sustainability Governance: Environmental sustainability remains governed at the board level by the Audit & Risk Committee (ARC), with operational oversight provided by the executive-level Sustainability and Climate Change Steering Committee. While the 2025 Annual Report includes a skills matrix (updated this year) that references sustainability and environmental capability, the company does not disclose in detail how these skills are applied at the board level or whether they are independently verified.

Strategy and Impact: Delegat’s long-term strategy remains focused on growing its position as a “super premium” global wine business. The company participated in the Agri-Adaptation Roadmap and disclosed the use of three long-range climate scenarios. While a formal transition plan is still being developed, the company has disclosed key capital and operational initiatives (e.g. lightweight packaging, lower diesel use) and some progress against these. Disclosure of anticipated financial impacts is deferred to the 2026 report.

Risk and Opportunity: Climate risks and opportunities are well-articulated, encompassing both physical and transition dimensions. Delegat has embedded these into its enterprise-wide risk framework, which the ARC reviews. Mitigation strategies have matured considerably since prior reports, with examples now directly linked to business impacts (e.g., water infrastructure, vineyard site diversification). Delegat also notes that climate shifts could benefit its vineyard productivity and regional flexibility, identifying this as a strategic opportunity.

Metrics and Targets: Delegat discloses Scope 1 and 2 emissions for FY21–FY25, with a stated 17% reduction in emissions intensity since its 2021 baseline. Scope 3 emissions have not yet been disclosed, but the company confirms measurement is underway and will be published in 2026. Several targets are in place for Scope 1 and 2 emissions reductions. Broader environmental performance indicators beyond GHGs remain at a high level.

Assurance: For the first time, Delegat has undertaken a limited assurance engagement for its climate disclosures. However, this assurance only applies to Scope 1 and 2 emissions data; Scope 3, which accounts for approximately 90% of the company’s footprint, remains unaudited. As Delegat builds toward full emissions reporting, NZSA encourages the company to expand the scope of assurance to encompass all material environmental disclosures.

Ethical and Social

NZSA assessment against its key policy criteria are summarised below.

Whistleblowing:  Good disclosure.

Political Donations:  The Annual Report discloses that no donations were made. NZSA also expects an explicit disclosure around whether political donations are made.

Financial & Performance

Delegats’s share price fell from $5.30 to $4.39 (as of 22^nd October 2025) over the last 12 months – a 17% decline. This compares unfavourably with the NZX 50 which rose 4% in the same period. The capitalisation of DGL is $444m placing it 53^rd out of 115 companies on the NZX by size and makes it a mid-sized company.

¹ per share figures based off actual shares at balance date (not weighted average)

2025 was a markedly better year for Delegat’s (DGL), but wine makers across the board continued to struggle and this sentiment may is likely reflected in the low PE ratio that DGL trade at.

Operating Revenues were down 8% to $350m, but cost of sales fell dramatically by 18%, leading to a large increase in gross margin to 46%. This breaks the downward trend for this metric.

Following this large increase, gross profit was up 8% to $162m and NPAT was up 56% to $49m providing shareholders with EPS of $0.485. These levels are still well below that achieved in FY2021-2023.

The company is in an extremely sound financial position, with a current ratio at 5.00 and cash balances of $8.6m. Delegats have a very manageable debt equity ratio of 0.94. During the year the company retired some long-term debt, and this stands at $337m.

In addition, operating cashflows were up 86% to $106m and the company paid a steady, fully imputed, dividend of $0.20 per share.

Shares trade at a 23% discount to its NTA which is reminiscent of the sector they operate in. Most land will be valued on a going concern basis, but would otherwise hold minimal value. Markets seem to be slightly discounting both this and the value of inventory.

Jakov Delegat (Jim), the executive chairman, holds 66.9m shares or 66.11% of the company. From a practicable point of view this means that minority and other shareholders have no say in the governance of the company.

In an outlook statement on page 37 of an investor presentation, “based on prevailing exchange rates and market conditions, the Group forecasts to achieve an FY26 operating NPAT that is in the range of $50 – $55 million.” We note operating NPAT is a non-GAAP metric. This forecast is slightly below that forecasted last year.

Resolutions

Gordon MacLeod as appointed to the Board in February 2022. He is a professional Director and was until recently a Director of Spark New Zealand Limited, and a Trustee of Breast Cancer Foundation NZ. He is also Board Advisory Chair to two privately held family businesses. He previously worked for 15 years with Ryman Healthcare until October 2021, as Chief Executive Officer and before that as Deputy Chief Executive Officer and Chief Financial Officer. He has been a corporate finance partner with PwC and was the Finance Director of a London-listed hi-tech engineering company. Gordon has a Bachelor of Commerce degree and is a Fellow of Chartered Accountants Australia and New Zealand (FCA). He is a Member of the Institute of Directors.

We will vote undirected proxies IN FAVOUR of this resolution.

This is an administrative resolution.

We will vote undirected proxies IN FAVOUR of this resolution.

Proxies

You can vote online or appoint a proxy at https://www.investorvote.com.au/

Instructions are on the Proxy/voting paper sent to you.

Voting and proxy appointments close 2.00pm Tuesday 2 December 2025.

Please note you can appoint the Association as your proxy. We will have a representative attending the meeting.

The Team at NZSA