Purcari Wineries Public Co., Ltd. · BVB:WINE
Purcari Wineries Public — Purcari Wineries — 9M2018 Earnings Presentation
28 slides from Purcari Wineries Public's earnings presentation, Nov 15, 2018
Slide 1: Purcari Wineries Plc 9M2018 results presentation
Purcari Wineries Plc 9M2018 results presentation November 15, 2018 Page 1
Slide 2: Disclaimer
Disclaimer THIS PRESENTATION IS MADE AVAILABLE ON THIS WEBSITE BY PURCARI WINERIES PUBLIC COMPANY LIMITED (the Company) AND IS FOR INFORMATION PURPOSES ONLY. This presentation and its contents do not, and are not intended to, constitute or form part of, and should not be construed as, constituting o
Slide 3: Today's Presenters
TODAY’S PRESENTERS Victor Bostan Victor Arapan John Maxemchuk Diana Durnescu Vasile Tofan CEO, Founder CFO COO IR Manager Chairman ▪ Founded the Group ▪ 20 years of experience ▪ 20 years of ▪ Over 5 years of ▪ Over 10 years in 2002 in banking, audit, management experience in experience in FMCG ▪ Ove
Slide 4: Agenda
AGENDA Rose de Purcari, 1 Our Group 90 points by Wine Enthusiast, #1 premium Rosé in Romania 2 9M2018 Operational Results 3 Update on 2018 Outlook 4 Q&A Page 4
Slide 5: Our Group: Competitive Advantage in a Great Market
1 OUR GROUP: COMPETITIVE ADVANTAGE IN A GREAT MARKET Attractive Secular shift from Competitive #1 premium wine beer, spirits to brand in market wine, especially advantage Romania in CEE Wine growth ’16- Plenty to catch up: #1 fastest growing #1 most awarded ’20F in Romania wine consumption large win
Slide 6: Our Business Model: Affordable Luxury
1 OUR BUSINESS MODEL: AFFORDABLE LUXURY Modern, cost-competitive Purcari is positioned at the winemaking intersections of three themes: ▪ Modern winemaking: the company is brand-, as opposed to appellation-centric and runs a cost-efficient business ▪ Affordable luxury: as an aspirational brand, Purc
Slide 7: Our Mission, Vision and Values
1 OUR MISSION, VISION AND VALUES Our mission Our values To bring joy in people’s lives, by Hungry offering them high quality, inspiring, We win in the marketplace because we want it more ethical wines and excellent value for Ethical money. Always do the right thing and the money will follow Thrifty
Slide 8: Vision: Be the Consolidator of a Fragmented Market
1 VISION: BE THE CONSOLIDATOR OF A FRAGEMENTED MARKET Volume share top-3 players by country, % 79 77 82 74 #3 67 63 68 #2 41 39* 36 18 #1 10 Beer Spirits Wine Beer Spirits Wine Beer Spirits Wine Beer Spirits Wine As wine market moves from terroir- to brand-centric and leaders build scale / sophistic
Slide 9: Clear #1 in Premium in Romania, Keep Gaining Share
1 CLEAR #1 IN PREMIUM IN ROMANIA, KEEP GAINING SHARE Overall, Purcari has tripled MS in 4 years…. …while becoming a clear #1 in Premium Value share of TOTAL retail market, Romania, % Value share of Premium (RON 30+/liter) retail market, % 18 28 Purcari (Brand) Samburesti 26 16 26 25 16 16 Segarcea 1
Slide 10: Track Record in Growth, Profitability Strong, Improving
1 TRACK RECORD IN GROWTH, PROFITABILITY STRONG, IMPROVING Revenues EBITDA1 Net Income RON m RON m RON m +25% 142.3 29.0 +34% 43.6 +68% 106.8 23.1 37.1 71.2 59.6 17.7 9.2 neg 0.17 2014 2015 2016 2017 2014 2015 2016 2017 2014 2015 2016 2017 15% 25% 35% 31% neg 0% 22% 20% EBITDA margin Net Income margi
Slide 11: Fastest Growing Among Large Romanian Wineries
1 FASTEST GROWING AMONG LARGE ROMANIAN WINERIES Purcari Group – #1 fastest growing and #1 most profitable among large Romanian wineries Revenue CAGR’15-17 in RON vs. profit margin in 2017 of top 10 wineries in Romania in terms of revenue in 2017 Profit margin in 2017, % 30 Purcari Group 25 Recas 20
Slide 12: Topping Competition at Engagement, Quality
1 TOPPING COMPETITION AT ENGAGEMENT, QUALITY Aspirational brand which consumers like sharing about Highest number of ratings and highest scores on Vivino Number of #brand uses on Instagram, by key Romanian brands X axis – number of Vivino ratings; Y axis – average Vivino score 8,522 4.1 4.0 3.9 3.8
Slide 13: Agenda
AGENDA Crama Ceptura – Astrum, the latest 1 Our Group introduction in the Ceptura line-up, targeting the 15-20 RON/bottle segment, 2 9M2018 Operational Results which accounts for circa 20% of market sales, which the Group started 3 Update on 2018 Outlook pursuing only in 2017 4 Q&A Page 13
Slide 14: Key Operational Highlights for 9M18
2 KEY OPERATIONAL HIGHLIGHTS FOR 9M18 • Sales up 20% yoy in 9M18, to RON 113m, on high base in comparative period last year Solid revenue • Balanced growth across markets, with Romania still pulling highest weight, +32% in 9M18 growth • Maintained premiumization trend, with Purcari, Bardar, Ceptura
Slide 15: Consistent Revenue Growth, Expanding Margins
2 CONSISTENT REVENUE GROWTH, EXPANDING MARGINS Revenues EBITDA1 Net Income RON m RON m RON m +20% 113.3 +26% 39.5 +16% 25.6 94.6 22.1 31.3 9m 2017 9m 2018 9m 2017 9m 2018 9m 2017 9m 2018 33% 35% 23% 23% EBITDA margin Net Income margin Note: (1) For 9M 2018, un-normalized EBITDA is RON 38.6m, while A
Slide 16: Markets: Romania Largest and Highest Growth Market
2 MARKETS: ROMANIA LARGEST AND HIGHEST GROWTH MARKET Share of sales, Growth, Market 9M18, % 9M18 yoy, % Comments RO 38% +32% • RO: growth continues to be driven by premium Purcari brand, +35% yoy with long-term upside for the Crama Ceptura brand, playing in both mainstream and premium segments. Soft
Slide 17: Continuing Shift to Premium, Focusing on Purcari Growth
2 CONTINUING SHIFT TO PREMIUM, FOCUSING ON PURCARI GROWTH Share of sales, Growth, Brand 9M18, % 9M18 yoy, % Comments • PURCARI: continue to see strong growth, including the 37% +22% core Romanian market, where Purcari remains still largely a Bucharest-based brand, with significant potential for grow
Slide 18: Romania Still Offers Plenty of Headroom for Growth
2 ROMANIA STILL OFFERS PLENTY OF HEADROOM FOR GROWTH Focus on growth beyond Bucharest Big headroom for increasing distribution Global peer group Purcari Group market share by region, 2017 Crama Ceptura brand – weighted distribution vs. peers, 2017 Market share, % Supermarkets Traditional retail 12%
Slide 19: Excellent Feedback from Digital Natives
2 EXCELLENT FEEDBACK FROM DIGITAL NATIVES #1 presence in the RON <30 and RON 30-60 segment; Hold 5 out of TOP-10 positions in the crucial RON 30-60 segment, 7 in TOP-25 #1 #1 1 – as per Vivino breakdowns as of Nov 14, 2018 Page 19
Slide 20: Margins: Solid Despite Adverse FX Effects
2 MARGINS: SOLID DESPITE ADVERSE FX EFFECTS ∆ Comments RON m 9M17 9M18 ’18/’17 • Gross margin up 3pp, on effect of strong 2017 harvest, Revenue 94.6 113.3 +20% increasingly showing up in the 2018 sales and improving mix. This comes despite ongoing adverse effects of an ever strengthening Cost of Sal
Slide 21: MDL Appreciated Strongly, Adversely Impacting Margins
2 MDL APPRECIATED STRONGLY, ADVERSELY IMPACTING MARGINS MDL vs RON: 2016 – 2018 FX evolution MDL vs EUR: 2016 – 2018 FX evolution MDL vs USD: 2016 – 2018 FX evolution 5.2 24.0 21.0 18.5% 14.0% 18.6% 9.9% 8.4% 7.4% 23.0 5.0 20.0 22.0 4.8 19.0 21.0 4.6 18.0 20.0 4.4 17.0 19.0 4.2 16.0 18.0 4.0 17.0 15
Slide 22: We Remain the Most Awarded Winery in CEE, Keep Improving
2 WE REMAIN THE MOST AWARDED WINERY IN CEE, KEEP IMPROVING Leading medal-winning winery in CEE at Decanter, Increasing number of medals won from year to year the Wine ”Olympics” # of Decanter medals in 2015 - 18(1) # of medals #1 43 Concours Mondial de Bruxelles 50 Challenge International du Vin Bor
Slide 23: With Global Supplies Constrained, 2018 Has Been a Turning Year for Eastern European Wines
WITH GLOBAL SUPPLIES CONSTRAINED, 2018 HAS BEEN A TURNING YEAR 2 FOR EASTERN EUROPEAN WINES, TO CAPITALIZE ON IN YEARS TO COME Victoria Mason, Wine Buyer Paul Attwood-Philippe, Richard Siddle, wine journalist Waitrose regional director Harpers Wine & Spirit VINEX Marketplace “Romanian wine is a real
Slide 24: Strong 2018 Harvest, Positioning Well for Ambitious 2019
2 STRONG 2018 HARVEST, POSITIONING WELL FOR AMBITIOUS 2019 Strong 2018 harvest was complemented by aggressive sourcing of third party grapes from partner-farmers Comments Own harvest and 3rd party purchases of grapes, million kg • There are three generic option for securing wine inventories: (1) gro
Slide 25: Agenda
AGENDA Negru de Purcari 2013, 4.4 score on 1 Our Group Vivino, top 1% wine globally 2 9M2018 Operational Results 3 Update on 2018 Outlook 4 Q&A Page 25
Slide 26: We Update Our Revenue Guidance
3 WE UPDATE OUR REVENUE GUIDANCE Year start Updated Target guidance guidance 9M18 fact Status Comments • Expected delays for sales in Asia, uncertainty on a new strategic distributor relationship in Moldova Organic may negatively impact relative growth in FY2018 +24-28% 18-22% 20% • We are revising
Slide 27: Agenda
AGENDA Cuvée de Purcari, 1 Our Group the extension to sparkling launched in 2017. 2 9M2018 Operational Results Made according to the traditional, Champenoise method, with in- 3 Update on 2018 outlook bottle fermentation 4 Q&A Page 27
Slide 28: Thank you.
PURCARI Thank you. MERLOT DE PURCARI see Page 28