Vina Concha Y Toro S.a. · BCS:CONCHATORO
Vina Concha Y Toro — H1 2023 Earnings Presentation
43 slides from Vina Concha Y Toro's earnings presentation, Aug 1, 2023
Slide 1: 1H23 Earnings Presentation
1H23 Earnings Presentation
Slide 2: Agenda
AGENDA Chapter 01 Overview and 1H23 Operating Result EDUARDO GUILISASTI, CEO Chapter 02 1H23 Financial Results OSVALDO SOLAR, CFO Chapter 03 2H23 Outlook EDUARDO GUILISASTI, CEO
Slide 3: Overview and 1H23 Operating Result
2Q23 EARNINGS PRESENTATION VIÑA CONCHA Y TORO CHAPTER 01 – OVERVIEW AND 1H23 OPERATING RESULT Chapter 01 EDUARDO GUILISASTI, CEO Overview and 1H23 Operating Result 3
Slide 4: A challenging scenario that is already beginning to improve
CHAPTER 01 – OVERVIEW AND 1H23 OPERATING RESULT 4 A challenging scenario that is already beginning to improve The complex world situation marked by higher interest rates, inflationary VIÑA CONCHA Y TORO pressures, an overstock of inventories due to logistical disruptions, economic slowdown, increase
Slide 5: Overview: Chile and Argentina export declines
CHAPTER 01 – OVERVIEW AND 1H23 OPERATING RESULT 5 1H23 OVERVIEW The global figures for exports from Chile and Argentina are a clear indicator of the situation our Industry is going through. VIÑA CONCHA Y TORO (24%) (27%) CHILE AR G E N T I N A 2Q23 EARNINGS PRESENTATION
Slide 6: Drop in consumption in most markets
CHAPTER 01 – OVERVIEW AND 1H23 OPERATING RESULT 6 1H23 DROP IN CONSUMPTION OVERVIEW IN MOST MARKETS (latest information available) VAR (%) VOLUME UK (2.3%) CHILE (5.9%) US (5.6%) BRAZIL 14.3% CHINESE IMPORTS (32.2%) VIÑA CONCHA Y TORO MEXICO 2.9% SOUTH KOREA (56.0%) CANADA (8.0%) 2Q23 EARNINGS PRESE
Slide 7: High interest rates
CHAPTER 01 – OVERVIEW AND 1H23 OPERATING RESULT 7 1H23 OVERVIEW 1-YEAR AVERAGE 2009 AVERAGE 2023 BASE RATES TO MAY 2021 TO JUNE, 30 H I G H I N T E R E S T R AT E S UK 0.5% 4.8% High interest rates and their impact on VIÑA CONCHA Y TORO seeking to sharply reduce inventories: COLOMBIA 4.5% 12.4% • Ge
Slide 8: Mix change, new products, inventories
CHAPTER 01 – OVERVIEW AND 1H23 OPERATING RESULT 8 1H23 OVERVIEW M I X C H AN G E NEW PRODUCTS INVENTORIES Consumers buying lower Launch of new products with Excess of low-priced red wine in value products. alcohol by other categories. producing countries. In the UK, the segment under 5 pounds grows
Slide 9: 1H23 Operating Result
2Q23 EARNINGS PRESENTATION VIÑA CONCHA Y TORO CHAPTER 01 – OVERVIEW AND 1H23 OPERATING RESULT 1H23 Operating Result 9
Slide 10: Sales Revenue
CHAPTER 01 – OVERVIEW AND 1H23 OPERATING RESULT 10 1H23 SALES REVENUE VALUE VO LUME VAR VAR 400,236 (8.8%) 16,068 (9.4%) VALUE VOL 364,820 14,559 VIÑA CONCHA Y TORO 1H22 1H23 1H22 1H23 (million of Ch$) (thousand of 9LC) 2Q23 EARNINGS PRESENTATION (6.5%) (13.4%) 0.7% PREMIUM AND UP VARIETALS AND LOW
Slide 11: Market Performance
CHAPTER 01 – OVERVIEW AND 1H23 OPERATING RESULT 11 MARKET 1H23 VAR (%) VALUE PERFORMANCE CANADA (31.6%) EUROPE (19.5%) 1H23 VAR (%) VALUE LATAM (55.0%) UK 1.3% CONO SUR (39.2%) CHILE 1.0% US (17.1%) CONCLUSIONS BRAZIL (6.0%) STRENGTH OF HAVING OUR OWN DISTRIBUTION VIÑA CONCHA Y TORO CHAIN MEXICO 6.3
Slide 12: Brand Performance
CHAPTER 01 – OVERVIEW AND 1H23 OPERATING RESULT 12 BRAND PERFORMANCE P E R F O R M AN C E B Y C AT E G O R I E S 1H23 VAR (%) VALUE VAR (%) VALUE DON MELCHOR 12.9% (7.8%) (3.5%) (10.3%) CASILLERO DEL DIABLO (7.0%) PRINCIPAL INVEST PROTECT DIABLO 23.9% CONCLUSIONS FRONTERA (15.7%) BRAND STRENGTH VIÑA
Slide 13: Operating Costs
CHAPTER 01 – OVERVIEW AND 1H23 OPERATING RESULT 13 1H23 OPERATING COSTS (million of Ch$) 1H23 1H22 VAR (Ch$) VAR (%) OPERATING COSTS (232,002) (243,225) (11,223) (4.6%) % COGS / SALES (63.6%) (60.8%) (280 PB) VIÑA CONCHA Y TORO Ch$ 9,230 m Ch$ 7,256 m Ch$ 1,491 m OF EXTRAORDINARY COSTS FOR INTERNATI
Slide 14: Operating Costs: dry goods and freight
CHAPTER 01 – OVERVIEW AND 1H23 OPERATING RESULT 14 1H23 OPERATING COSTS DRY GOODS IN THE MONTH OF JUNE 2023 VS JUNE 2022: 6% (7%) (10%) ARGENTINA CHILE US CONCLUSIONS VIÑA CONCHA Y TORO The costs of dry goods began to drop and will be reflected more intensely in the following months, SHIPPING FREIGH
Slide 15: Gross Profit and Gross Margin
CHAPTER 01 – OVERVIEW AND 1H23 OPERATING RESULT 15 GANANCIA BRUTA Y MARGEN BRUTO (million of Ch$) 1H23 1H22 VAR (CH$) VAR (%) GROSS PROFIT 132,818 157,011 24,193 (15.4%) GROSS MARGIN 36.4% 39.2% (280bp) VIÑA CONCHA Y TORO Extraordinary costs as of June 2023 affect the margin by 2.5 points. Without t
Slide 16: SG&A and SG&A / Sales
CHAPTER 01 – OVERVIEW AND 1H23 OPERATING RESULT 16 SG&A AND SG&A / SALES (million of Ch$) 1H23 1H22 VAR (CH$) VAR (%) SG&A (112,705) (106,867) 5,836 5.5% % SG&A / SALES (30.9%) (26.7%) (420 PB) VIÑA CONCHA Y TORO Ch$ 2,508 m Ch$ 1,900 m 16.0% OF EXTRAORDINARY EXPENSES, MAINLY FOR RECYCLING TAX IN UK
Slide 17: EBIT
CHAPTER 01 – OVERVIEW AND 1H23 OPERATING RESULT 17 1H23 EBIT (million of Ch$) 1H23 1H22 VAR (%) % / SALES % / SALES % / SALES CONSOLIDATED SALES 364,820 400,236 (8.8%) GROSS PROFIT 132,818 36.4% 157,011 39.2% (15.4%) (280 bp) (112,705) (30.9%) (106,869) (26.7%) (5.5%) (420 bp) VIÑA CONCHA Y TORO SG&
Slide 18: 1H23 Financial Results
2Q23 EARNINGS PRESENTATION VIÑA CONCHA Y TORO CHAPTER 02 – 1H23 FINANCIAL RESULTS 1H23 Chapter 02 OSVALDO SOLAR, CFO Financial Results 18
Slide 19: Currency Diversification
CHAPTER 02 – 1H23 FINANCIAL RESULTS 19 CURRENCY DIVERSIFICATION 2.3% 5.8% CNY 1.1% MXN ARG 18.1% Diversification of currencies attenuates the 7.6% CLP 1.5% BRL variations of the dollar as a single currency NOK 2.0% SEK EXCHANGE RATE VARI ATION 1H23 VS 1H22 2.3% VIÑA CONCHA Y TORO CAD USD: (3.1%) (5,
Slide 20: Non-Operating Result
CHAPTER 02 – 1H23 FINANCIAL RESULTS 20 A CHALLENGING AND COMPLEX SEMESTER NON-OPERATING RESULT (million of Ch$) 1H23 1H22 VA R ( C h $ ) VA R ( %) NET FINANCIAL EXPENSE (*) (8,161) (4,467) (3,694) 82.7% EXCHANGE DIFFERENCES 828 1,408 (580) (41.2%) NON-OPERATING RESULT (**) (7,333) (3,059) (4,274) 13
Slide 21: Non-Operating Result
CHAPTER 02 – 1H23 FINANCIAL RESULTS 21 NON-OPERATING RESULT Ch$ 4,274 m Ch$ 3,694 m Ch$ 580 m INCREASE IN THE NON FOR HIGHER NET FOR EXCHANGE OPERATIONAL EXPENDITURE (*) FINANCIAL EXPENSE DIFFERENCES VIÑA CONCHA Y TORO * Does not consider results of affiliated companies HIGHLIGHTS 2Q23 EARNINGS PRES
Slide 22: Effects of Interest Rate Increases
CHAPTER 02 – 1H23 FINANCIAL RESULTS 22 NON-OPERATING RESULT EFFECTS OF INTEREST RATE INCREASES 2023 2022 1-YEAR BASE INTEREST RATES (SOFR IN USD, TAB IN CLP, SONIA IN GBP AND EONIA IN EUR) INTEREST RATES 14,0% RATE PROPORTION RATE PROPORTION 12,0% CLP 5.5% 39.7% 4.9% 57.1% 10,0% USD 4.9% 44.7% 2.0%
Slide 23: Inflation Effect
CHAPTER 02 – 1H23 FINANCIAL RESULTS 23 NON-OPERATING RESULT INFLATION EFFECT CUMULATIVE INFLATION 2023 V/S 2022 115% 113% 111% 106.8% 109% 107% 105% 103% 102,8% 101% VIÑA CONCHA Y TORO 101,4% 99% 97% 95% Dic Ene Feb Mar Abr May May Jun Jul Ago Sept Oct Oct Nov Dic 2022 2023 2023 Swap 2Q23 EARNINGS P
Slide 24: Income Tax Effect
CHAPTER 02 – 1H23 FINANCIAL RESULTS 24 INCOME TAX EFFECT (million of Ch$) 1H23 1H22 VAR (Ch$) VAR (%) INCOME TAX EXPENSE (1,388) (4,869) (3,481) (71.5%) % TAX / PROFIT (LOSS) BEFORE TAX (12.4%) (10.5%) 190 PB VIÑA CONCHA Y TORO In 1H22 there was an extraordinary benefit due to inflation of 6.8%, 2Q2
Slide 25: Net Profit and Net Margin
CHAPTER 02 – 1H23 FINANCIAL RESULTS 25 NET PROFIT (million of Ch$) AND NET MARGIN (%) 11.8% 10.1% 10.2% 98,810 10.0% 87,213 8.1% 8.0% 8.0% 77,994 40,878 VIÑA CONCHA Y TORO 52,500 49,575 49,111 2.6% 9,492 2Q23 EARNINGS PRESENTATION 2017 2018 2019 2020 2021 2022 1H22 1H23 Net profit Net margin
Slide 26: CAPEX
CHAPTER 02 – 1H23 FINANCIAL RESULTS 26 CAPEX SOLID INVESTMENTS MADE Una adecuada inversión en CAPEX nos permitirá seguir siendo líderes en el largo plazo. 80.000 75,548 2020 2021 2022 2022 2023 70.000 FY (REAL) 1H (REAL) 1H (REAL) 60.000 52,987 CAPEX 32,463 52,987 75,548 36,335 18,125 50.000 (50.1%)
Slide 27: Inventories
CHAPTER 02 – 1H23 FINANCIAL RESULTS 27 INVENTORIES DECREASE OF Ch$ 10,800 m ( J U N E 2 3 V S J U N E 2 2 ) INVENTORIES IN THOUSAND OF MILLION OF CH$ 600 -10.8 500 400 300 485.3 VIÑA CONCHA Y TORO 474.4 200 411.1 352.1 304.9 100 2Q23 EARNINGS PRESENTATION 0 2020 2021 2022 jun-22 jun-23 Inventario IN
Slide 28: Return on Invested Capital
CHAPTER 02 – 1H23 FINANCIAL RESULTS 28 RETURN ON INVESTED CAPITAL ROIC 11.3% 10.8% 10.3% 9.1% 7.5% 7.4% 7.2% 6.0% VIÑA CONCHA Y TORO 2Q23 EARNINGS PRESENTATION 2017 2018 2019 2020 2021 2022 1H22 1H23 ROIC: (Operating Margin – Taxes + Exchange Differences) / (Equity – Net Financial Debt – Cash) 12 mo
Slide 29: Net Financial Debt
CHAPTER 02 – 1H23 FINANCIAL RESULTS 29 NET FINANCIAL DEBT (million of Ch$) +59,297 375,335 321,915 316,038 266,898 250,413 240,573 221,101 201,374 VIÑA CONCHA Y TORO 2Q23 EARNINGS PRESENTATION 2017 2018 2019 2020 2021 2022 1H22 1H23 Net Financial Debt: Gross Financial Debt including the effect of De
Slide 30: Net Debt Ratio
CHAPTER 02 – 1H23 FINANCIAL RESULTS 30 LOW LEVEL OF INDEBTEDNESS RELATIVE TO THE SIZE OF EQUITY FINANCIAL STRENGTH NET DEBT RATIO 1.2 0.67 VIÑA CONCHA Y TORO 0.55 0.58 0.52 0.53 0.49 0.43 0.36 2Q23 EARNINGS PRESENTATION 2017 2018 2019 2020 2021 2022 1H22 1H23 Ratio endeudamiento NET DEBT RATIOneto C
Slide 31: Financial Cost Coverage
CHAPTER 02 – 1H23 FINANCIAL RESULTS 31 FINANCIAL COST COVERAGE FINANCIAL STRENGTH FINANCIAL COST COVERAGE RATIO 12.3 11.3 9.8 8.5 8.8 8.2 7.0 VIÑA CONCHA Y TORO 5.8 2.5 2Q23 EARNINGS PRESENTATION 2017 2018 2019 2020 2021 2022 1H22 1H23 Razón cobertura FINANCIAL de costos COST financieros COVERAGE RA
Slide 32: Net Financial Debt / EBITDA
CHAPTER 02 – 1H23 FINANCIAL RESULTS 32 NET FINANCIAL DEBT / EBITDA COMPANY OBJECTIVE NET FINANCIAL DEBT * / EBITDA 3.6 2.9 2.6 2.6 2.4 2,5 2.0 VIÑA CONCHA Y TORO 1.4 1.5 2Q23 EARNINGS PRESENTATION 2017 2018 2019 2020 2021 2022 1H22 1H23 Deuda financiera neta NET FINANCIAL DEBT/ EBITDA / EBITDA Objet
Slide 33: 2H23 Outlook
2Q23 EARNINGS PRESENTATION VIÑA CONCHA Y TORO CHAPTER 03 – 2H23 OUTLOOK 2H23 Chapter 03 Outlook EDUARDO GUILISASTI, CEO 33
Slide 34: We expect a strong improvement in 2H23
2Q23 EARNINGS PRESENTATION VIÑA CONCHA Y TORO CHAPTER 03 – 2H23 OUTLOOK We expect a strong improvement in 2H23 34
Slide 35: Reasons to believe in solid growth in sales and results
CHAPTER 03 – 2H23 OUTLOOK 35 REASONS TO BELIEVE IN A SOLID GROWTH IN SALES AND RESULTS O P E R AT I O N A L E F F I C I E N C Y ENCOURAGE THE COMERCIAL MODEL SOUTHERN HEMISPHERE HARVEST VIÑA CONCHA Y TORO PRODUCTIVE MODEL 2Q23 EARNINGS PRESENTATION $ SG&A REDUCTION AND DILUTION E X C H A N G E R AT
Slide 36: Operational efficiency of the company
CHAPTER 03 – 2H23 OUTLOOK 3636 REASONS TO BELIEVE OPERATIONAL EFFICIENCY OF THE COMPANY This process began in September 2022, and will have an approximate impact of $5,000 thousand for the second semester. SEPTEMBER 2022 CH $5.000 m CH $20.000 m INICIO IMPACT AT 2H23 IMPACT TO THE TRIENNIUM 2023-202
Slide 37: Encourage the commercial model
CHAPTER 03 – 2H23 OUTLOOK 37 REASONS TO BELIEVE ENCOURAGE THE COMERCIAL MODEL Strengthen our commercial model to insert our Company in the new world scenario, always with an important emphasis on the PREMIUMIZATION AND NEW RELEASES VIÑA CONCHA Y TORO 2Q23 EARNINGS PRESENTATION We are currently in th
Slide 38: Southern Hemisphere harvest
CHAPTER 03 – 2H23 OUTLOOK 38 REASONS TO BELIEVE SOUTHERN HEMISPHERE HARVEST (24%) (24.5%) (14.4%) (10%) AUSTRALIA ARGENTINA SOUTH AFRICA CHILE (E) THE LOWEST SINCE 2000 VIÑA CONCHA Y TORO (1,0%) 2Q23 EARNINGS PRESENTATION VIÑA CONCHA Y TORO´S OWN PRODUCTION E: Estimate
Slide 39: Productive model
CHAPTER 03 – 2H23 OUTLOOK 39 REASONS TO BELIEVE PRODUCTIVE MODEL Our production model, with a high level of own production, will give us a very significant competitive advantage. 178% PRICE GROW TH IN PREMIUM An example is our operation in Argentina, a market where MALBEC GRAPE the prices of the Mal
Slide 40: SG&A reduction and dilution
CHAPTER 03 – 2H23 OUTLOOK 40 REASONS TO BELIEVE SG&A REDUCTION AND DILUTION A level of Administrative and Sales Expenses is expected for the 80% second semester of around 26%, much lower than the 30.9% of OF THE SG&A ARE FIXED the first semester. EXPENSES AND MARKETING EXPENSES VIÑA CONCHA Y TORO 2Q
Slide 41: Exchange rate
CHAPTER 03 – 2H23 OUTLOOK 41 REASONS TO BELIEVE EXCHANGE RATE MAIN AVERAGE EXCHANGE RATE SPOT EXCHANGE RATE VAR CURRENCIES 1H23 2ND JULY FORTNIGHT (%) 28.6% GBP: $993.6 $1,060.0 6.7% 5.9% EUR: $868.8 $913.0 5.1% 5.8% MXN: $44.2 $48.7 10.2% 7.6% BRL: $160.0 $171.6 7.3% VIÑA CONCHA Y TORO 24.8% USD: $
Slide 42: Outlook 2H23
CHAPTER 03 – 2H23 OUTLOOK 42 OUTLOOK 2H23 • The situation that the industry is facing will bring adjustments throughout the production and comercial chain. • Like any extreme situation, it will also bring great opportunities. • At Viña Concha y Toro we are very optimistic about our future VIÑA CONCH
Slide 43: Slide 43