Vina Concha y Toro S.A. · BCS:CONCHATORO
Vina Concha y Toro — 3rd annual J.P. Morgan Chile Conference 2011
49 slides from Vina Concha y Toro's conference presentation, August 2011
Slide 1: Investor Presentation, 3rd annual J.P. Morgan Chile Conference
VIÑA Investor Presentation 3rd annual J.P. Morgan Chile Conference August, 2011 Disclaimer: All the figures refered to first half 2011 are based on our preliminary sales data. 1 1/ 1
Slide 2: Second place among the most powerful wine brands in the world
Second place among the most Official Sponsor of powerful wine brands in the Manchester United world. (“The Power 100”, Intangible Business, May 2011) Ranking Brand Country Wine Brands Gallo USA 1 Concha y Toro Chile 2 Robert Mondavi USA 3 Yellowtail Australia 4 Hardy’s Australia 5 Beringer USA 6 Sut
Slide 3: Operating plants, subsidiaries, sales, volume and EBITDA 2010
• Operating plants in 3 countries • 9 Distribution Subsidiaries • 135 countries reached • 268 independent distributors Total Sales 2010: US$ 735 million Volume 2010: 29.2 million cases EBITDA 2010: US$ 119 million 3 3/ 3
Slide 4: Concha y Toro Performance
Concha y Toro Performance Income Statement 2003 (*) 2010 CAGR Sales (Ch$ million) $ 190.303 $ 374.019 10% Exports ** (Ch$ million) $ 133.472 $ 278.414 11% Exports ** (US$ million) $ 151 $ 547 20% % Exports 70.1% 74.4% Export volume ** ('000 cases) 7.802 20.514 15% Operating Result (Ch$ million) $ 27
Slide 5: Consolidated Sales and Sales Breakdown
Consolidated Sales Sales Breakdown Million Ch$ Exports Domestic 2010 Average Annual 69.9% Market Wine 15.9% Growth: 11.0% Domestic Market 374,019 Other 354,419 314,756 products 304,067 5.4% 246,640 Argentina Annual Growth: 10.7 % 6.9% Others 179,979 1.8% 162,489 Domestic 1H 2011 Market Wine Exports
Slide 6: Business Model: Key Factors & Growth Drivers
Concha y Toro Business Model: Key Factors & Growth Drivers Exclusive focus on wine Strong Distribution Strong Portfolio of Network: Global Reach / Wines across all Leading Position in Key market segments Markets Quality Assurance and Consistency: Market Own Vineyards Diversification and Processes In
Slide 7: Business Model: Key Factors & Growth Drivers
Concha y Toro Business Model: Key Factors & Growth Drivers Exclusive focus on wine Strong Distribution Strong Portfolio of Network: Global Reach / Wines across all Leading Position in Key market segments Markets Quality Assurance and Consistency: Market Own Vineyards Diversification and Processes In
Slide 8: Export Sales (Bottled Wine)
Concha y Toro Export Sales (Bottled Wine) Million Ch$ Thousand US$ Average Annual Average Annual Growth: 15.1% Growth: 16.6% 543,942 266,566 277,068 246,683 483,405 453,287 218,592 403,531 Annual Growth: 11.2% 157,620 Annual Growth: 0.4 % 294,666 264,265 125,019 125,568 237,519 2006 (*) 2007 (*) 200
Slide 9: Export Sales (Chile + Argentina) – Total Volume
Concha y Toro Export Sales (Chile + Argentina) – Total Volume (Volume Cases ´000) Average Annual Growth: 12.2% 20,514 18,955 17,642 16,279 12,924 Annual Growth: 1.3% 9,166 9,281 2006 2007 2008 2009 2010 …. 1H 2010 1H 2011 9 9/ 9
Slide 10: Export Sales – Premium Wines
Concha y Toro Export Sales – Premium Wines (Volume Cases ´000) Average Annual Growth: 14.3% 4,155 3,692 3,620 3,542 Annual Growth: 3.0% 2,433 1,716 1,769 2006 2007 2008 2009 2010 .. 1H 2010 1H 2011 After the economic downturn of 2009, in which Concha y Toro experienced a trade down in their portfoli
Slide 11: Export Sales (Average Price US$/9lt Case)
Concha y Toro Export Sales (Average Price US$/9lt Case) Annual Growth: 9.9% Average Annual 28.47 Growth: 4.4% 26.90 25.69 25.91 25.50 24.79 22.80 21.73 2005 2006 2007 2008 2009 2010 …. 1H 2010 1H 2011 11 11/ 11
Slide 12: Business Model: Key Factors & Growth Drivers
Concha y Toro Business Model: Key Factors & Growth Drivers Exclusive focus on wine Strong Distribution Strong Distribution Strong Portfolio of Network: Global Reach / Wines across all Leading Position in Key market segments Markets Quality Assurance and Consistency: Market Market Own Vineyards Diver
Slide 13: Increasing market share over Chilean Exports
Increasing market share over Chilean Exports Exports of bottled wine* Volume Value 2004 29.2% 25.8% 2005 32.2% 27.2% 2006 33.4% 28.3% 2007 34.9% 30.2% 2008 37.0% 31.4% 2009 38.3% 32.3% 2010 36.6% 31.5% Ac-jun 2011 32.9% 29.0% Source: Vinos de Chile (*) Includes bottled & Bag in Box 13 13/ 13
Slide 14: The Chilean Bottled Industry – Leading Position
The Chilean Bottled Industry – Concha y Toro Leading Position: Share over chilean % Part of CyT in total Country bottled export Growth 2010/2009 Chilean bottled Exports Rank (volume) (volume) United Kingdom 21.8% 2.9% 49.5% 1° USA 16.0% 1.8% 38.9% 1° Canada 4.5% 15.6% 36.6% 1° Netherland 5.8% 15.6%
Slide 15: Strong Distribution Network
Strong Distribution Network • Direct Distribution: • Concha y Toro UK (Since 2001) UK • 5.6 million cases to Dec 2010, 27.2% of total export volume • Concha y Toro Nordics (Sweden, Finland & Norway – Since 2009) Nordics • 1.0 million cases to Dec 2010, 4.9% of export volume • VCT Brasil (Since 2008)
Slide 16: Distribution Subsidiaries: Driving the growth
Distribution Subsidiaries: Driving the growth Volume in Thousand 9 liter cases Value in Thousand US$ 2009 2010 % Change 2010/2009 Volume Value Volume Value Volume Value Total Exports & Sales of our Distribution Subsidiaries to 18.955 $ 483.405 20.514 $ 543.942 8.2% 12.5% third parties Export to Thir
Slide 17: Export growth by Region – by Volume
Concha y Toro export growth by Region – by Volume Mix of Export Sales % Change Volume Region 2010 1H 2010 1H 2011 2008 2009 2010 1H 2011 Continental Europe 19.4% 21.5% 19.0% 11% -3% 4% -11% Nordics (SWE, FIN, NOR) (1) 4.9% 5.3% 5.0% 0% 0% 15% -4% U.K. 27.2% 22.4% 23.0% 7% 20% 6% 4% U.S.A. 16.2% 17.5
Slide 18: Total Chilean exports by category
Total Chilean exports by category Jan - Mar 2011 % Change 2011/2010 Liters US$ Av. Price Liters US$ Av. Price ('000) ('000) US$/Ltr Bottled 103,999 322,456 $ 3.10 18.5% 23.8% 4.5% Bulk 43,713 38,679 $ 0.88 -51.6% -30.7% 43.1% Total 147,712 $ 361,135 $ 2.44 -17.0% 14.2% 37.6% Jan - Jun 2011 % Change
Slide 19: Export – New World Producers
Export – New World Producers (Bottled wine exports by volume – million liters) % Change % Change 2007 2008 2009 2010 Ac Jun%2011 Change 2010/09 % Change 1H 2011/10 Australia 579 513 2007 2008 471 2009 416 2010 181 2009/08 -11.8% % Change 2010/09 % Change % Change -13.0% Australia 579 513 471 425 -8.
Slide 20: UK Market – Consumption (Volume) Off Trade by Origin
UK Market – Consumption (Volume) Off Trade by Origin Off - Trade Wines by Country 1,000cs Negative - decrease in overall 25,000 consumption: -1% Chile decreasing volumes by 20,000 1% 15,000 10,000 5,000 - NEW Light AUSTR SOUTH GERMA ARGEN PORTU HUNGA BULGA ITALY USA FRANCE CHILE SPAIN ZEALAN Wines A
Slide 21: UK Market – Consumption (Value) Off Trade by Origin
UK Market – Consumption (Value) Off Trade by Origin Off - Trade Wines by Country £m 1,200 Positive - overall value of consumption growing 4% 1,000 Chile increasing 4% in terms of value. 800 600 400 200 - NEW Light AUSTRA SOUTH GERMA ARGENT PORTU HUNGA BULGA ITALY USA FRANCE CHILE SPAIN ZEALAN Wines
Slide 22: UK Market – Market Share by Origin Off Trade
UK Market – Market Share by Origin Off Trade Off - Trade Wine by Country % vol - 5.0 10.0 15.0 20.0 25.0 20.4 AUSTRALIA 21.3 14.4 ITALY 15.2 - Australia recovering mkt share after a 14.5 USA 14.4 weak year2010 FRANCE 12.1 - Chile mantains mkt share 12.4 - Italy, Spain & New Zeland post increases in
Slide 23: UK Market – Average Price per Origin Off Trade
UK Market – Average Price per Origin Off Trade Off - Trade Wine by Country £ per 75cl equiv. - 1.00 2.00 3.00 4.00 5.00 6.00 7.00 4.37 Light Wines 4.58 Positive - Average price 4.55 AUSTRALIA 4.65 increasing 4.8% 4.08 ITALY 4.29 Chile: Increase in Average 4.33 price above overall trend: USA 4.55 5.3
Slide 24: US Market – Consumption
US Market – Consumption • Despite the economic dowturn, in the US, the wine market has continued increasing in volume. • Around 6% growth in Volume up to May 2011. • Bulk decreases a 20% on 2010 and Bottled increases an 8%. (million 9 liter cases) % Change % Change 2008 2009 2010 Ac May 2011 2010/20
Slide 25: Moderate increase in Chilean bottled table wine imports
Moderate increase in Chilean bottled table wine imports 12,000 16.4% 11,000 -Up to June 2011, bottled wine 10,000 imports increasing by 7% 9,000 -Bulk wine imports decreasing 9% Thousand 9 ltr Cases 8,000 -12.8% 7,000 6,000 5,000 4,000 8.3% 9.4% 13.1% 3,000 17.1% 4.9% 15.8% 2,000 -2.9% 1,000 0 Spain
Slide 26: Business Model: Key Factors & Growth Drivers
Concha y Toro Business Model: Key Factors & Growth Drivers Exclusive focus on wine Strong Portfolio of Strong Distribution Network: Global Reach / Wines across all market segments Leading Position in Key Markets Quality Assurance and Consistency: Market Own Vineyards Diversification and Processes In
Slide 27: Concha y Toro portfolio
Concha y Toro portfolio Category Bi Varietal & Varietal Premium Super Premium Ultra Premium Icon RRP USA US$ 4.99 US$ 6.99 US$ 7.99 US$ 9.99 US$ 13 US$ 16 US$ 20 US$ 30 US$ 35 US$ 70 US$ 110 US$ 125 RRP UK £ 4.99 £ 5.99 £ 6.99 £ 7.99 £ 8.99 £ 11.99 £ 11.99 £ 15.99 £ 18.99 £ 45 £ 60 £ 65 % sales 78.6
Slide 28: Cono Sur portfolio
Cono Sur portfolio £12.99 £30 | | Sug. retail £9.99 price 28
Slide 29: Domestic market Chile – Volume & Value
Domestic market Chile – Volume & Value Thousand Liters Million Ch$ Average Annual Average Annual Growth: 2.7% Growth: 4.0% 77,291 74,235 71,742 59,100 70,435 53,221 53,705 63,261 50,467 50,184 Annual Decrease: 4.0% Annual Growth: 9.8% 32,356 27,831 31,071 25,342 2006 2007 2008 2009 2010 …. 1H 2010 1
Slide 30: Domestic market Chile – Premium Wine growth
Domestic market Chile – Premium Wine growth Thousand Liters Average Annual Growth: 10.6% % Premium/Total % Premium/Total Year Volume Value 10,346 2006 3.1% 13.0% 2007 2.7% 13.2% 8,743 2008 3.1% 15.2% 7,638 7,004 2009 3.5% 16.3% 6,543 Annual Growth: 41.9% 2010 4.1% 17.5% 5,046 Ac Jun 2011 4.3% 18.1%
Slide 31: Domestic Market Share
Domestic Market Share (by volume) 2005 2006 2007 2008 2009 2010 Ac May 2011 Concha y Toro 27.1 28.6 30.0 29.7 31.5 30.7 30.9 Santa Rita 24.4 25.5 27.9 28.7 28.9 29.4 29.2 San Pedro - Tarapacá 21.7 21.9 21.8 23.0 22.5 24.4 24.1 Santa Carolina 3.2 3.1 2.3 2.0 1.8 1.8 1.6 Others 23.6 20.9 18.0 16.6 15.
Slide 32: Trivento Export Sales: Argentina – Volume & Value
Trivento Export Sales : Argentina – Volume &Value Thousand Liters Thousand US$ Average Annual Growth: 5.0% Average Annual Growth: 11.9% 13,307 13,700 12,254 12,244 32,976 11,271 28,425 28,432 24,296 Annual Decrease: -0.6% Annual Decrease: -18.4% 20,996 6,452 14,844 14,752 5,268 2006 2007 2008 2009 2
Slide 33: Trivento Export Sales – Argentina Average Price
Trivento Export Sales - Argentina (Average Price US$/Case) Quarterly Growth: 21.7% Average Annual 25.20 Growth: 6.6% 21.66 20.90 20.71 19.23 17.84 16.77 2006 2007 2008 2009 2010 1H 2010 1H 2011 33 33/ 33
Slide 34: Total Argentinean exports by category
Total Argentinean exports by category (2010, January – June 2011) Jan - Dec 2010 % Change 2010/2009 Liters US$ Av. Price Liters US$ Av. Price ('000) ('000) US$/Ltr Bottled 230,659 $ 699,088 $ 3.03 3.9% 17.0% 12.6% Bulk 44,580 $ 37,335 $ 0.84 -35.5% 2.9% 59.4% Concentrated Must 69,137 $ 128,087 $ 1.8
Slide 35: Trivento Domestic Sales: Argentina – Volume & Value
Trivento Domestic Sales : Argentina – Volume &Value Thousand Liters Thousand AR$ Average Annual Average Annual Growth: 4.9% Growth: 18.9% 66,898 8,492 8,313 60,008 7,780 7,768 51,798 6,409 42,316 Annual Decrease: -1.2% Annual Decrease: -22.7% 33,426 3,492 26,838 26,514 2,698 2006 2007 2008 2009 2010
Slide 36: Trivento – portfolio
Trivento – portfolio Sug. Retail price USA USD 10 USD 15 USD 20 USD 79 Bi-varietal Tribu Reserve Amado Sur Golden Reserve Eolo Category Bi-varietal Varietal Premium Super Ultra Icon Premium Premium Price per case FOB USD18.5 USD 24 USD 34 USD 50 USD 75 USD 300 36 36/ 36
Slide 37: Business Model: Key Factors & Growth Drivers
Concha y Toro Business Model: Key Factors & Growth Drivers Exclusive focus on wine Strong Distribution Strong Portfolio of Network: Global Reach / Wines across all Leading Position in Key market segments Markets Quality Quality Assurance Assurance and Consistency: Market Own Vineyards Diversificatio
Slide 38: Sustained Investment over time
Sustained Investment over time • US$ 647 million between 2005 – 2011 - Vineyard expansion Chile - Increasing cellar and vinification capacity - Improvements in bottling capacity and efficiency - Supply Chain - 2011: Record year of investment for Viña Concha y Toro Investment US$ Million (*) 2011 Cap
Slide 39: Capacity Increase – Support Growth
Capacity Increase – Support Growth • Planted area growth of 114% in the last 7 years (CAGR = 11.5%) • 93% increase in Wine Storage & Ageing Capacity in the last 7 years (CAGR = 9.8%) 39 39/ 39
Slide 40: Concha y Toro vineyard holdings
Concha y Toro vineyard holdings (hectares) Vineyards Hectares to Total Planted 2010 be planted Hectares Valley - Chile Limarí 896 322 1,218 Casablanca 415 11 426 San Antonio 130 - 130 Aconcagua - 129 129 Maipo 974 22 997 Cachapoal - Rapel 1,306 525 1,831 Colchagua - Rapel 1,757 13 1,770 Curicó 666 4
Slide 41: The Chilean Wine Industry: An overview
The Chilean Wine Industry: An overview Total Hectares 2010: 118,000 Total bottled wine exports 2010: 458,498 thousand liters Concha y Toro: 36.6% Mkt Share Volume Exported bottled wine 2010 30.7% Mkt Share Vol Domestic Market (Dec 2010) 8,445 Hectares Planted (2010) 355.5 Storage capacity (million l
Slide 42: Area planted – largest wineries
Area planted – largest wineries (hectares planted) TWE (AUS/USA/NZ/IT) 11,839 Concha y Toro (CHI/ARG/USA) 9,513 + 429 E&J Gallo (USA) 8,100 Pernod Ricard (FR/AUS/ARG) 8,000 7,244 Constellation (USA/AUS/NZ/CAD) Grupo Peñaflor (ARG) 5,215 0 2,000 4,000 6,000 8,000 10,000 12,000 Source: Companies Fact
Slide 43: Exchange Rate Sensitivity
Exchange Rate Sensitivity As a % of Total Sales: Currency Mix Ac Jun 2010 Ac Jun 2011 Includes Fetzer since 04/15/2011 CLP 22.2% 22.9% USD 32.3% 37.3% GBP 17.6% 15.2% EUR 11.7% 10.3% CAD 3.9% 3.5% ARG 2.2% 1.8% SEK 3.4% 2.8% NOK 1.0% 0.8% BRL 5.7% 5.4% 43 43/ 43
Slide 44: Exchange Rate main producers
Exchange Rate main producers From From 12/30/2009 to 06/30/2011 12/30/2009 to 30/06/2011 Against USD Against GBP Against EUR 10% 20% 17% 8,1% 15% 5% 12% 9,4% 10% 7,9% 7% 0% 5% Euro Zone South Africa New Zeland Australia Argentina Chile 2% -5% -1% Euro Zone South Africa New Zeland Australia Argentina
Slide 45: Income Statement
Income Statement Ac Dec 2009 Ac Dec 2010 Change Ac Mar 2010 Ac Mar 2011 Change Million. Ch$ Million. Ch$ % Million. Ch$ Million. Ch$ % Operating Results Sales revenues 354.419 374.019 5.5% 67.773 79.607 17.5% Cost of sales - 223.444 - 241.776 8.2% - 43.250 - 53.593 23.9% % of sales 63.0% 64.6% 63.8%
Slide 46: Shareholder structure (June 2011)
Shareholder structure (June 2011) Other 15.2% ADR's Control Group 2.4% 39.7% Other Large Shareholders 17.1% Brokerage H, Mutual F & Insurance 13.2% Chilean AFP's 12.4% 46 46/ 46
Slide 47: Company Stock
Company Stock • US$ 2 million of Average Daily Value Traded 3M (85% Local, 15% ADR) • CAGR: 17.9% in US$ Terms $ 3.00 $ 2.50 Local share price in US$ $ 2.00 $ 1.50 $ 1.00 $ 0.50 $- Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 47 47/ 47
Slide 48: Performance 1H11 (Preliminary)
Concha y Toro Performance 1H11 (Preliminary) Change Change 2Q2011 2Q2010 1H2011 1H2010 (%) (%) Total Sales (Million Chilean Pesos)⁽*⁾ 102,501 96,503 6.2% 179,979 162,489 10.8% Export Markets 62,363 70,828 -12.0% 118,564 117,203 1.2% Domestic Market - Wine 15,534 13,886 11.9% 27,831 25,342 9.8% Domes
Slide 49: Investor Presentation, 3rd annual J.P. Morgan Chile Conference
VIÑA Investor Presentation 3rd annual J.P. Morgan Chile Conference August, 2011 Disclaimer: All the figures refered to first half 2011 are based on our preliminary sales data. 49 49/ 49
Viña Concha y Toro — 3rd annual J.P. Morgan Chile Conference 2011 on 6ix