Vina Concha Y Toro S.a. · BCS:CONCHATORO
Vina Concha Y Toro — Q1 2022 Earnings Presentation
57 slides from Vina Concha Y Toro's earnings presentation, May 17, 2022
Slide 1: Presentation for Investors: Results 1Q22
P R E S E N TAT I O N F O R I N V E S T O R S RESULTS 1 Q 22
Slide 2: Agenda
1Q22 RESULTS 2 AGENDA 01. Results in light of the strategy Eduardo Guilisasti, CEO 02. Sales Analysis Blanca Bustamante, Director of Investor Relations 03. Financial Results Osvaldo Solar, CFO 04. Outlook 2022 Eduardo Guilisasti, CEO
Slide 3: Results in light of the strategy
1Q22 RESULTS 3 01. Results in light of the strategy Eduardo Guilisasti, CEO
Slide 4: Main indicator set when defining our strategy
RESULTADOS 1Q22 4 The main indicator that we set when defining 2022 Ch$ 140 thousand our Strategy to evaluate its success was the million Operating Profit, with a very clear target, that was to double it in five years. 2016 Ch$ 70 thousand million
Slide 5: Operating Profit 2017-2021
RESULTADOS 1Q22 5 OPERATING PROFIT 2017-2021 (billions of pesos and as a % of sales) 132.9 CAGR 120.3 +21.0% 77.1 61.9 60.0 2017 2018 2019 2020 2021
Slide 6: Sustained improvement in the sales mix (volume)
1Q22 RESULTS 6 SUSTAINED IMPROVEMENT IN THE SALES MIX I N C R E A S E O F P R I N C I PA L + I N V E S T A S % O F S A L E S VARIATION Volume (thousands of 9l-cases) 2017 2018 2019 2020 2021 2017 – 2021 PRINCIPAL + INVEST 8,494 8,285 9,200 11,187 12,372 +3,878 % of total volume 23.0% 23.7% 26.2% 30.
Slide 7: Sustained improvement in the sales mix (sales)
1Q22 RESULTS 7 SUSTAINED IMPROVEMENT IN THE SALES MIX I N C R E A S E O F P R I N C I PA L + I N V E S T A S % O F S A L E S CAGR Sales (Ch$ million) 2017 2018 2019 2020 2021 21 VS 17 PRINCIPAL + INVEST 220,747 232,311 267,409 349,965 408,457 +16.6% % of total sales 36.0% 37.8% 40.7% 45.9% 49.2% +1,
Slide 8: Achieved despite a highly negative scenario
1Q22 RESULTS 8 This was achieved despite facing a • Internal adjustments to keep the Company fully operational, due to the effects of COVID contagion. highly negative • Unexpected and increasing difficulties in maritime scenario: transport. • Uncertainty in the supply of dry costs. • Shortage of lab
Slide 9: The success achieved has been based on three pillars
1Q22 RESULTS 9 The success achieved has been based on: THREE PILLARS: 1. 2. 3. Permanent search for Aim to continuously improve in “opportunities” in the "productivity" at the Productive Strong and persevering Commercial Areas. and Administration Areas. commitment to Sustainability.
Slide 10: Permanent search for opportunities in the commercial areas
1Q22 RESULTS 10 PERMANENT SEARCH FOR “OPPORTUNITIES” 1. IN THE COMMERCIAL AREAS. • Strengthening of our Premiumization strategy: Participation of Premium and Superior Wines over total sales in value: Year 2021 vs. Year 2017. • Participation of the origins of Argentina and California on the total sal
Slide 11: Continuous improvements in productivity
1Q22 RESULTS 11 2. ASPIRE TO CONTINUOUS IMPROVEMENTS IN “PRODUCTIVITY” IN THE PRODUCTIVE AND ADMINISTRATIVE AREAS. • High level of investment in Productive Areas over the years. • Increasing level of automation in all our facilities. • Higher levels of investment in the Center of Innovation and Deve
Slide 12: Strong and persevering commitment to sustainability
RESULTADOS 1Q22 12 STRONG AND PERSEVERING COMMITMENT TO SUSTAINABILITY 01 02 03 Since 2012, we have had a We have taken important steps in In the Agricultural Area, regenerative Sustainability Strategy with terms of sustainability: in our practices of “flora”, “fauna” and soils clear objectives and
Slide 13: Fuerte y perseverante compromiso con la sustentabilidad
RESULTADOS 1Q22 13 FUERTE Y PERSEVERANTE COMPROMISO CON LA SUSTENTABILIDAD 04 05 We are the only wine company listed in the Dow Jones ranking and we rank 4th among the companies with the best environmental performance in our Thus, we managed to achieve category. certification as a B Company for the
Slide 14: 1Q22 Results – Sales Analysis
1Q22 RESULTS 14 02. 1Q22 Results – Sales Analysis Blanca Bustamante, Director of Investor Relations
Slide 15: Sales growth in 1Q22
RESULTADOS 1Q22 15 SALES GROWTH IN 1Q22 +8.9% 178,055 • Wine: +6.1% 163,503 • Other businesses: +48.5% (Ch$ million) 1Q21 1Q22
Slide 16: Average price/mix evolution: export markets and USA
RESULTADOS 1Q22 16 Price 1Q22 vs 1Q21 AVERAGE PRICE/MIX EVOLUTION US$ / lt Export Markets 3,6 3,6 +6.7% 3,5 3,5 3,5 3,5 3,4 3,3 3,3 3,3 3,2 3,1 3,1 3,1 Mix Principal & Invest: 3,1 3,0 55.8% (-140 bp) 2,9 2,8 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 Price 1Q22 vs 1Q21 USA US$ / lt 7,0 6,5 6,0 5,5
Slide 17: Average price/mix evolution: Chile wine
RESULTADOS 1Q22 17 AVERAGE PRICE/MIX EVOLUTION Ch$ / lt Price 1Q22 vs 1Q21 CHILE WINE +14.1% 1.681 1.633 1.544 1.401 1.430 1.448 Mix Principal & Invest: 38.4% (+540 bp) 1.242 1.225 1.134 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22
Slide 18: Volume in 1Q22
RESULTADOS 1Q22 18 VOLUME IN 1Q22 7,929 -8.3% 7,273 • Wine: -11.1% • Other businesses: +25.2% (thousands of C9L) 1Q21 1Q22
Slide 19: Performance by market
RESULTADOS 1Q22 19 PERFORMANCE BY MARKET: VAR % VAR % % OF SALES VALUE VOLUME A MARKETS UK 25.0% 3.0% (21.2%) Chile 17.7% 13.7% 0.3% USA 16.7% 8.2% (14.1%) Mexico 5.0% 33.4% 19.4% Brasil 4.9% 18.0% (2.5%) Japan 3.1% 91.5% 39.5% China 2.5% (12.0%) (50.9%) Total A 74.8% 10.7% (7.9%) Total B 13.5% (11.
Slide 20: Brand matrix performance
RESULTADOS 1Q22 20 WINE: BRAND MATRIX PERFORMANCE Var. % value Var. % volume WINE PRINCIPAL 4.5% (15.9%) INVEST 11.5% (6.0%) BRAND MATRIX PROTECT 7.6% (5.3%) WATCH 10.9% (14.9%) PORTFOLIO SUPER 47.9% 14.8% & ULTRA PREMIUM OTHER BRANDS (9.2%) (21.1%) TOTAL WINE 6.1% (11.1%)
Slide 21: Premium mix
RESULTADOS 1Q22 21 PREMIUM MIX % OF SALE IN VALUE 49.9% 49.9% 50.1% 50.1% 1Q21 1Q22 Otros Principal + Invest
Slide 22: 1Q22 – Financial Results
1Q22 RESULTS 22 03. 1Q22 – Financial Results Osvaldo Solar, CFO
Slide 23: Gross margin expansion: +190 bp
RESULTADOS 1Q22 23 GROSS MARGIN EXPANSION: +190 bp. (Ch$ million) 1Q22 1Q21 Var (%) Consolidated sales 178,055 163,503 +8.9% Gross gain 71,652 62,669 +14.3% Gross margin 40.2% 38.3% +190 bp
Slide 24: GAV growth – marketing and freight impact
RESULTADOS 1Q22 24 GAV GROWTH – MARKETING AND FREIGHT IMPACT (Ch$ million) 1Q22 1Q21 Var (%) Consolidated sales 178,055 163,503 +8.9% Gross gain 71,652 62,669 +14.3% Gross margin 40.2% 38.3% +190 bp GAV 48,149 39,885 +20.7% GAV / Sales 27.0% 24.4% +260 bp
Slide 25: EBIT and EBITDA growth
RESULTADOS 1Q22 25 EBIT and EBITDA GROWTH: +6.6% y +9.7% (Ch$ millones) 1Q22 1Q21 Var (%) Consolidated sales 178,055 163,503 +8.9% Gross gain 71,652 62,669 +14.3% Gross margin 40.2% 38.3% +190 bp GAV 48,149 39,885 +20.7% GAV / Sales 27.0% 24.4% +260 bp Other income and expenses 1,076 266 +304.9% EBI
Slide 26: Evolution of EBITDA in the last 5 years
RESULTADOS 1Q22 26 Evolution of EBITDA in the last 5 years The continuous improvement of margins reflects the advances in our strategy. EBITDA margin* 1Q 12M 2017 11.1% 14.5% 2018 12.9% 14.5% 2019 12.1% 16.4% 2020 14.8% 19.3% 2021 17.9% 19.6% 2022 18.0% * Figures adjusted in previous quarters to exc
Slide 27: 1Q22: Non-Operating Result
RESULTADOS 1Q22 27 1Q22: Non-Operating Result • Lower net financial expenses • Best result of Exchange Differences (Ch$ million) 1Q22 1Q21 Var (%) Var (Ch$) Net Financial Expenses (*) (2,534) (2,794) (9.3%) 260 Exchange differences 632 (301) 933 Associated Companies (**) (171) (290) (41.0%) 119 Non-
Slide 28: Financial expenses and exchange differences
RESULTADOS 1Q22 28 FINANCIAL EXPENSES AND EXCHANGE DIFFERENCES IMPROVEMENT OF NET FINANCIAL EXPENSES: Non-operating income improves by Ch$1,312 million due to: - Lower net financial expense of Ch$260 million - Improvement in exchange difference of Ch$ 933 million - Improvement in profit from affilia
Slide 29: Diversification of currencies 1Q22
RESULTADOS 1Q22 29 MXN CNY ARG 4,8% 1,9% BRL 0,8% CLP DIVERSIFICATION OF NOK 4,8% 17,9% CURRENCIES 1Q22 SEK 1,6% 2,2% CAD Diversification of currencies attenuates the 3,5% variations of the dollar as a single currency. Exchange rate variation 1Q22 vs 1Q21 Dollar: +11.72% GBP USD 25,5% 30,3% CyT bask
Slide 30: 1Q22 Result
RESULTADOS 1Q22 30 1Q22 RESULT (Ch$ million) 1Q22 1Q21 VAR (%) Consolidated ales 178,055 163,503 +8.9% Gross gain 71,652 62,669 +14.3% GAV 48,149 39,885 +20.7% EBIT 24,579 23,050 +6.6% Non-Operating Result (2,073) (3,385) (38.8%) Net profit 17,677 14,731 +20.0% Net margin 9.9% 9.0% +90 bp
Slide 31: Net income increases 20.0% and net margin +90 bp
RESULTADOS 1Q22 31 NET INCOME INCREASES 20.0% AND NET MARGIN +90 bp (Ch$ million) 98,810 77,994 11.8% 49,575 49,111 52,500 10.1% 9.9% 9.0% 8.1% 8.0% 8.0% 14,731 17,677 2017 2018 2019 2020 2021 1Q21 1Q22
Slide 32: Return on Invested Capital – ROIC
RESULTADOS 1Q22 32 RETURN ON INVESTED CAPITAL – ROIC 11.3% 11.0% 11.3% 10.3% 7.4% 7.2% 2018 2019 2020 2021 mar-21 mar-22 ROIC: (Operating Margin – Taxes + Exchange Difference) / (Equity – Other Financial Liabilities – Derivatives – Cash). *Profit and Loss Accounts correspond to the 12 mobile months.
Slide 33: Net financial debt
RESULTADOS 1Q22 33 NET FINANC IAL DEBT 266,898 250,413 +20.5% 240,573 231,679 221,101 201,374 192,268 Increases in: Ch$ 39,411 MM vs Mar-21 Decrease in: Ch$ 8,894 MM vs Dec-21 2017 2018 2019 2020 2021 mar-21 mar-22 *Net Financial Debt corresponds to Debt Capital - Cash
Slide 34: Financial strength: net debt ratio
RESULTADOS 1Q22 34 FINANCIAL STRENGTH The level of indebtedness relative to the size of the Equity is maintained Net Debt Ratio (Net Financial Debt*/ Equity) 1.2 0.52 0.55 0.49 0.42 0.36 0.33 2018 2019 2020 2021 mar-21 mar-22 Ratio Endeudamiento Net debt ratio Neto Covenants
Slide 35: Debt and financial expense vs cash generation
RESULTADOS 1Q22 35 DEBT AND FINANCIAL EXPENSE VS CASH GENERATION: FINANCIAL STRENGTH EBITDA / Financial Expenses Net Financial Debt/ EBITDA 12.6 12.8 3.3 3.0 10.3 9.7 8.4 2.5 2.2 7.4 1.8 1.6 1.4 2.5 2018 2019 2020 2021 mar-21 mar-22 2018 2019 2020 2021 mar-21 mar-22 EBITDA/financial EBITDA/Gasto exp
Slide 36: Outlook 2022
1Q22 RESULTS 36 04. Outlook 2022 Eduardo Guilisasti, CEO
Slide 37: 2022 remains a highly challenging scenario with 3 major challenges
1Q22 RESULTS 37 In 2022, a highly challenging scenario remains for our industry, characterized by 3 major challenges: 01 Inflation, impacting costs and people's disposable income. 02 Logistics disruptions due to shipping crisis and new restrictions due to COVID in China. 03 Slowdown in global wine c
Slide 38: Focus on price increases and Premium segment
1Q22 RESULTS 38 > In this scenario, our focus will be on carrying out price increases and strengthening our position in the Premium segment. > Also, throughout the production chain, manage costs and efficiencies.
Slide 39: Positive aspects present in 2022
1Q22 RESULTS 39 POSITIVE ASPECTS PRESENT IN 2022 01. Portfolio of strong brands 02. Premiumization of the mix 03. Contribution of the focus brands to the EBIT 04. Exchange rate scenario 05. Harvest 2022
Slide 40: Casillero del Diablo
1Q22 RESULTS 40 C A SIL L E R O DE L DIA BLO • Sales leadership in its main markets. • Consistent recognition of its quality and brand power. • Strong investment in brand building over the years. US $289 MM US $205 MM +9.1% CAGR 2017 2021
Slide 41: Trivento Reserve: a world class Malbec
1Q22 RESULTS 41 TRIVENTO RESERVE : A WORLD CLASS MALBEC • Sustained growth in volume and average price in USD. • #1 Argentine brand in the world in foreign markets: º 5 º 1 UK USA USD 63 MM USD 15 MM (IWSR, Nielsen) 2017 2021
Slide 42: Bonterra: super premium brand leading organic category in USA
1Q22 RESULTS 42 B O N T E R R A : S U P E R P R E M I U M B R A N D T H AT L E A D S T H E O R G A N I C C AT E G O R Y I N T H E U S A 44% 2021: • 590,000 C9L • USD 16.0 / bottle retail price of the market share in the USA in the organic category
Slide 43: Premiumization: wine mix by value
1Q22 RESULTS 43 P R E M I U M I Z AT I O N : IN THE SALE OF WINE, MORE THAN 53% CORRESPOND TO PRINCIPAL + INVEST BRANDS WINE MIX (VALUE) 39.8% 41.0% 43.2% 48.9% 53.3% 60.2% 59.0% 56.8% 51.1% 46.7% 2017 2018 2019 2020 2021 Otros Principal + Invest
Slide 44: Growing contribution of Principal + Invest brands to EBIT
1Q22 RESULTS 44 P R E M I U M I Z AT I O N : GROWING CONTRIBUTION OF PRINCIPAL + INVEST BRANDS TO EBIT % PRINCIPAL + INVEST IN EBIT 60.1% 65.8% 53.9% 55.8% 52.9% 2017 2018 2019 2020 2021 Otros P+I Principal + Invest
Slide 45: Favorable exchange situation for the company
RESULTADOS 1Q22 45 E X C H A N G E R AT E S C E N A R I O : FAVORABLE EXCHANGE SITUATION FOR THE COMPANY CONCHA Y TORO AVERAGE EXCHANGE RATE INDEX CyT Exchange Rate Index CyT Exchange Rate Index 121.5% 119.4% 114.7% 111.4% Q1 2021 Q1 2022 2021 Spot *CyT Index corresponds to the variation of the weig
Slide 46: Harvest 2022
1Q22 RESULTS 46 HARVEST 2022 OWN PRODUCTION • In this season, the Company's harvest was carried out normally in Chile and Argentina. • In 2022, in the case of Chile, a harvest level is 5% lower than the historical figure reached in 2021. In Argentina, the Trivento harvest was 6% lower than in 2021.
Slide 47: Big question mark surrounding agriculture globally
1Q22 RESULTS 47 Big question mark surrounding agriculture globally
Slide 48: Climate change and water scarceness
1Q22 RESULTS 48 CLIMATE CHANGE AND WATER SCARCENESS We believe that the company is well prepared to face the growing water and climate challenges.
Slide 49: Climate change: Chile diversification of valleys and vineyards
1Q22 RESULTS 49 CLIMATE CHANGE CHILE - DIVERSIFICATION OF VALLEYS AND VINEYARDS: + 1,000 km. 1 0 VALLEYS 5 5 VINEYARDS 1 0 , 6 6 0 H E C TA R E S
Slide 50: Argentina diversification of valleys and vineyards
1Q22 RESULTS 50 CLIMATE CHANGE ARGENTINA - DIVERSIFICATION OF VALLEYS AND VINEYARDS: 4 VALLEYS 1 2 VINEYARDS 1,500 HECTARES
Slide 51: Water scarceness
1Q22 RESULTS 51 WAT E R S C AR C E N E S S Over recent years, investment has been made in infrastructure to ensure irrigation sources and in technology for their efficient use.
Slide 52: High efficiency in water use compared to other crops
1Q22 RESULTS 52 HIGH EFFICIENCY IN THE USE OF WATER FROM VINEYARDS COMPARED TO OTHER CROPS Water consumption for irrigation (m 3 /ha) 10,782 10,294 8,950 8,176 3,678 Uva WineVinífera grape Cerezo Cherry Palto Avocado Olivo Olive Maiz Corn Reference locality: Peumo, VI Region Source: FAO
Slide 53: Innovation in irrigation technology
1Q22 RESULTS 53 HIGH EFFICIENCY IN WATER USE: INNOVATION IN IRRIGATION TECHNOLOGY • 100% irrigation is technified • Automation irrigation systems • Remote control and monitoring of irrigation • Soil moisture sensors • Monitoring of water sources (canals, wells) • Network of weather stations • CII wa
Slide 54: Growing use of rootstocks in plantations
1Q22 RESULTS 54 HIGH EFFICIENCY IN WATER USE: GROWING USE OF ROOTSTOCKS IN PLANTATIONS • The use of rootstocks in plantations allow a EVOLUTION OF PLANTATIONS WITH ROOTSTOCKS (% HAS) better adaptation to climate change. • In years of greater drought, the rootstocks 38% 41% 44% 46% 47% are capable of
Slide 55: Water consumption: decrease of 10% to 2025
1Q22 RESULTS 55 WATER CONSUMPTION: DECREASE OF 10% TO 2025 WAT ER CO N S U M PT ION Lt. H2O/bottle 750 cc 99.2 liters/bot 89.3 liters/bot 1.9 1.7 97.3 87.6 2020 2025 VINEYARD IRRIGATION PROCESSING AND PACKAGING
Slide 56: We will continue to work with great commitment
1Q22 RESULTS 56 We will continue to work with great commitment, and in the face of great challenges we are encouraged by confidence in the strengths of our strategy and the scale of our business model.
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