Vina Concha Y Toro S.a. · BCS:CONCHATORO
Vina Concha Y Toro — Q3 2021 Earnings Presentation
35 slides from Vina Concha Y Toro's earnings presentation, Nov 4, 2021
Slide 1: 3Q21 Results
EARNINGS 3Q21 · INVESTOR PRESENTATION 1 3Q21 Results PRESENTATION FOR INVESTORS
Slide 2: Agenda
EARNINGS 3Q21 · INVESTOR PRESENTATION 2 AGENDA 01. HIGHLIGHTS / Osvaldo Solar, CFO 02. SALES ANALYSIS / Blanca Bustamante, Director of IR 03. FINANCIAL RESULTS / Osvaldo Solar, CFO
Slide 3: Highlights
EARNINGS 3Q21 · INVESTOR PRESENTATION 3 01. Highlights Osvaldo Solar, CFO
Slide 4: Third quarter 2021 sales mix improved and revenues held near 2020 levels
EARNINGS 3Q21 · INVESTOR PRESENTATION 4 During the third quarter of 2021, the Company has managed to improve its sales mix and maintain revenues at similar levels of 2020. Results came against a challenging backdrop for exports given the current global supply chain crisis.
Slide 5: Consolidated Revenue 3Q21
EARNINGS 3Q21 · INVESTOR PRESENTATION 5 CONSOLIDATED REVENUE 3Q21 NET SALE S (Ch$ MILLIO N) -2.9% 210,601 204,440 3Q20 3Q21
Slide 6: Sales Mix Premiumization in 3Q21
EARNINGS 3Q21 · INVESTOR PRESENTATION 6 SALES MIX PREMIUMIZATION IN 3Q21 The decline in sales does not alter the performance of our strategy, which is reflected in a greater participation of the Principal and Invest brands (Premium and Superior wine) in the mix: 3Q20 vs 3Q21 45.4% 47.6%
Slide 7: Impact of the Global Supply Chain Crisis
EARNINGS 3Q21 · INVESTOR PRESENTATION 7 • Implications of the pandemic on mobility and logistics IMPACT OF THE have generated intermittency of shipments and have GLOBAL SUPPLY collapsed the entire supply chain. CHAIN CRISIS • Inventory stocks in our distribution offices have allowed us to mitigate p
Slide 8: Main Operational Figures
EARNINGS 3Q21 · INVESTOR PRESENTATION 8 MAIN OPERATIONAL FIGURES (Ch$ MILLION) 3Q21 3Q20 % YOY CONSOLIDATED REVENUE 204,440 210,601 -2.9% GROSS PROFIT 82,929 83,253 -0.4% GROSS MARGIN 40.6% 39.5% +100 bp SG & A 52,421 46,311 +13.2% SG & A / SALES 25.6% 22.0% +370 bp OTHER INCOME / EXPENSE 5,383 -771
Slide 9: Sales Analysis
EARNINGS 3Q21 · INVESTOR PRESENTATION 9 02. Sales Analysis Blanca Bustamante, Director of IR
Slide 10: Sales Value by Market Segment
EARNINGS 3Q21 · INVESTOR PRESENTATION 10 SALES VALUE BY MARKET SEGMENT Strong momentum in Chile’s domestic market and mix SALES (Ch$million) 3Q21 3Q20 Var (%) improvement. Export Markets 129,388 141,290 (8.4%) Chile 42,832 34,241 25.1% Exports and USA market declined Wine 29,486 26,340 11.9% due to
Slide 11: Sales Mix Premiumization in 3Q21
EARNINGS 3Q21 · INVESTOR PRESENTATION 11 SALES MIX PREMIUMIZATION IN 3Q21 % OF SALES REVENUE 38,6% 45,4% 47,6% 3Q21 vs. 3Q19 Better sales revenue mix +900bp 61,4% 54,6% 52,4% From 38.6% to 47.6% 9M19 3Q19 9M20 3Q20 9M21 3Q21 Principal+Invest Other
Slide 12: Volume Mix Premiumization in 3Q21
EARNINGS 3Q21 · INVESTOR PRESENTATION 12 VOLUME MIX PREMIUMIZATION IN 3Q21 % OF TOTAL VOLUME 24,5% 29,6% 31,3% 3Q21 vs. 3Q19 Better sales volume mix 75,5% +680bp 70,4% 68,7% From 24.5% to 31.3% 3Q19 3Q20 3Q21 Principal+Invest Other
Slide 13: Brand Matrix Performance
EARNINGS 3Q21 · INVESTOR PRESENTATION 13 BRAND MATRIX PERFORMANCE S A L E S GR OW TH B Y B R A N D C A T E GOR Y Our Principal category brand, Casillero del Diablo, was affected by the logistics Value YoY Volume YoY crisis and a high comparison base in its main market, UK. Principal (7.9%) (18.0%) I
Slide 14: Strong Growth Rates in Super and Ultra Premium Wines
EARNINGS 3Q21 · INVESTOR PRESENTATION 14 STRONG GROWTH RATES IN SUPER AND ULTRA PREMIUM WINES (SALES VALUE) 3Q21 vs 3Q20 Higher mobility and on-premise reopening led to a DON MELCHOR +55.9% recovery in the Super and Ultra premium categories. TERRUNYO +49.8% CARMIN DE PEUMO +32.6% AMELIA +450.3% MARQ
Slide 15: Financial Results
EARNINGS 3Q21 · INVESTOR PRESENTATION 15 03. Financial Results Osvaldo Solar, CFO
Slide 16: Financial Results
EARNINGS 3Q21 · INVESTOR PRESENTATION 16 Financial Results I. Operating Margin and EBITDA Margin II. Non-Operating Profit and Associated Companies 1. Financial Costs and Exchange Differences 2. Currency Diversification 3. Associated Companies III. Net Income IV. Financial Ratios 1. Return on Investe
Slide 17: In 3Q21, EBIT margin was 17.6%
EARNINGS 3Q21 · INVESTOR PRESENTATION 17 In 3Q21, EBIT Ch$ million 3Q21 3Q20 Var (%) margin was 17.6% GROSS INCOME 82,929 83,253 (0.4%) • In a challenging quarter for logistics, GROSS MARGIN 40.6% 39.5% 100 bp results and margins reflected higher average prices, and lower volume. SG & A 52,421 46,31
Slide 18: Sales Mix, Exchange Rate and EBIT Margin
EARNINGS 3Q21 · INVESTOR PRESENTATION 18 SALES MIX, EXCHANGE RATE AND EBIT MARGIN 132,1 129,9 130 128,0 123,5 32% 120 117,8 116,7 115,9 111,4 27% 115,9 114,6 110 105,7 112,8 112,1 103,7 112,5 109,2 100,0 106,8 100 107,0 22% 100,0 101,6 96,6 17,5% 17,6% 90 17,2% 15,8% 16,1% 17% 13,6% 14,1% 80 13,3% 1
Slide 19: In 3Q21, EBITDA grew 0.4% with a margin of 21.4%
EARNINGS 3Q21 · INVESTOR PRESENTATION 19 In 3Q21, EBITDA grew 0.4% with a margin of 21.4% The continuous EBITDA 1Q 2Q 3Q 4Q 12M improvement in margins Margin* reflects 2017 11.1% 15.1% 14.7% 16.2% 14.5% advances in our strategy. 2018 12.9% 14.9% 13.5% 15.9% 14.5% 2019 12.1% 16.8% 17.3% 17.8% 16.4% 2
Slide 20: Financial Results
EARNINGS 3Q21 · INVESTOR PRESENTATION 20 Financial Results I. Operating Margin and EBITDA Margin II. Non-Operating Profit and Associated Companies 1. Financial Costs and Exchange Differences 2. Currency Diversification 3. Associated Companies III. Net Income IV. Financial Ratios 1. Return on Investe
Slide 21: Non-Operating Profit
EARNINGS 3Q21 · INVESTOR PRESENTATION 21 NON-OPERATING PROFIT The Company got important (Ch$ Millions) 3Q21 3Q20 Var (%) Var (Ch$) incomes from its affiliated companies, related to the successful Net Financial Expenses (*) (2,680) (3,768) (28.9%) 1,088 wine sales of Almaviva and Real Exchange Differ
Slide 22: II.1 Financial expenses and exchange differences
EARNINGS 3Q21 · INVESTOR PRESENTATION 22 II.1 Financial expenses and exchange differences Financial Expenses decreasing in line with debt reduction Non-operating income improved by Ch$ 6,254 million, as a result of : • Lower financial expense of Ch$ 1,088 million • Lower loss due to exchange differe
Slide 23: II.2 Currency Diversification
EARNINGS 3Q21 · INVESTOR PRESENTATION 23 II.2 Currency Diversification CURRENCY DIVERSIFICATION IN 2021 INVOICED SALES MXN CNY Currency diversification mitigates exchange ARG 0,6% 3,6% 1,0% BRL CLP variations compared to use of the USD as a 7,2% 18,4% NOK SEK 1,6% 2,3% single currency. CAD 2,7% 3Q21
Slide 24: II.3 Associated Companies Results: Almaviva and Corchera
EARNINGS 3Q21 · INVESTOR PRESENTATION 24 II.3 Associated Companies Results: Almaviva Ch$ 5,035 million and Corchera Ch$2,717 million ALMAVIVA INDUSTRIA CORCHERA (Ch$ mill) (Ch$ mill) 5,035 2,717 3,122 3,139 2,804 2,107 2,142 626 269 231 344 218 2017 2018 2019 2020 3Q20 3T20 3Q21 3T21 2017 2018 2019
Slide 25: Financial Results
EARNINGS 3Q21 · INVESTOR PRESENTATION 25 Financial Results I. Operating Margin and EBITDA Margin II. Non-Operating Profit and Associated Companies 1. Financial Costs and Exchange Differences 2. Currency Diversification 3. Associated Companies III. Net Income IV. Financial Ratios 1. Return on Investe
Slide 26: Results 3Q21: Net Income
EARNINGS 3Q21 · INVESTOR PRESENTATION 26 RESULTS 3Q21 : NET INCOME (Ch$ million) 3Q21 3Q20 Var (%) Var $ Income 204,440 210,601 (2.9%) (6,161) Gross Profit 82,929 83,253 (0.4%) (324) SG & A 52,421 46,311 13.2% (6,109) Operating Profit 35,891 36,171 (0.8%) (280) Non-Operating Profit 4,894 (1,360) 6,2
Slide 27: Accumulated net income grew 23% as of September
EARNINGS 3Q21 · INVESTOR PRESENTATION 27 During 2021, accumulated net income grew +23% as of September and the net margin increased 180 bp NET INCOME 68,062 77,994 55,324 49,575 49,111 52,500 10.1% 11.8% 10.0% 8.0% 8.0% 8.1% 2017 2018 2019 2020 9M20 Acum 2020 Acum 2021 9M21 Net Profit Utilidad Net M
Slide 28: Financial Results
EARNINGS 3Q21 · INVESTOR PRESENTATION 28 Financial Results I. Operating Margin and EBITDA Margin A GE N D A II. Non-Operating Profit and Associated Companies 1. Financial Costs and Exchange Differences 2. Currency Diversification 3. Associated Companies III. Net Income IV. Financial Ratios 1. Return
Slide 29: IV.1 Return on Invested Capital
EARNINGS 3Q21 · INVESTOR PRESENTATION 29 IV.1 Return on Invested Capital RETURN ON INVESTED CAPITAL 10.4% 10.2% 9.5% 7.3% 7.1% 7.2% 2017 2018 2019 2020 sept-20 sept-21 ROIC: (Operating margin – Taxes + Exchange differences) / (Equity – Other financial liabilities – Cash) *Income Statement accounts f
Slide 30: IV.2 Net financial debt remains at historic lows
EARNINGS 3Q21 · INVESTOR PRESENTATION 30 IV.2 Net financial debt remains at historic lows: FINANCIAL STRENGTH NET FINANCIAL DEBT IN CH$ MILL 266,898 250,413 245,511 242,042 221,101 201,374 Increases by: Ch$ 3,469 mill vs Sept-20 Increases by: Ch$ 44,137 mill vs Dec-20 2017 2018 2019 2020 sept-20 sep
Slide 31: IV.3 Debt levels relative to equity is maintained
EARNINGS 3Q21 · INVESTOR PRESENTATION 31 IV.3 Debt levels relative to equity is maintained: FINANCIAL STRENGTH NET DEBT RATIO (NET FINANCIAL DEBT(*) / EQUITY) 1.2 0.49 0.52 0.52 0.48 0.43 0.36 2017 2018 2019 2020 sept-20 sept-21 Ratio Endeudamiento Net Debt Ratio Neto Covenants (*) Net Financial Deb
Slide 32: IV.3 Debt and financial expense vs cash generation
EARNINGS 3Q21 · INVESTOR PRESENTATION 32 IV.3 Debt and financial expense vs cash generation: FINANCIAL STRENGTH NET FINANCIAL DEBT / EBITDA EBITDA / FINANCIAL EXPENSES 3.3 3.0 2.7 11.6 2.5 9.7 9.5 2.2 8.6 2.1 8.4 7.4 1.6 2.5 2017 2018 2019 2020 sept-20 sept-21 2017 2018 2019 2020 sept-20 sept-21 Otr
Slide 33: IV.4 Recent upgrade in credit rating
EARNINGS 3Q21 · INVESTOR PRESENTATION 33 IV.4 Recent upgrade in credit rating: FINANCIAL STRENGTH In the third quarter of the year, the Company’s credit rating agencies, Humphreys and Feller Rate, raised their rating for its debt bonds from: AA- AA
Slide 34: Slide 34
Slide 35: Focus on premium brands with high growth potential
EARNINGS 3Q21 · INVESTOR PRESENTATION 35 Focus on premium brands with high growth potential • Brand Matrix is the reference framework for defining sales targets and marketing investment. • In 2020, 25 brands accounted for 80.5% of sales. • Continuous revision seeking greater focus. HIGH INVEST PRINC