Vina Concha Y Toro S.a. · BCS:CONCHATORO
Vina Concha Y Toro — Investor Presentation (October 2017)
50 slides from Vina Concha Y Toro's investor presentation, October 2017
Slide 1: Investor Presentation October 2017
I N V E S T O R P R E S E N TAT I O N October 2017
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation contains forward-looking statements, that should be considered as good faith estimates. Such statements are subject to risks and uncertainties outside of Viña Concha y Toro’s control that could cause Viña Concha y Toro’s actual results to differ materiall
Slide 3: Consolidated sales volume
Consolidated sales volume Wine sales -million 9 liter cases 36.2 34.3 33.2 30.6 30.7 2012 2013 2014 2015 2016 3
Slide 4: Consolidated sales
Consolidated sales Ch$ million 658,448 636,194 583,313 475,622 448,250 2012 2013 2014 2015 2016 4
Slide 5: Operating income
Operating income Ch$ million 11.2% 12% 10.8% 10.7% 120,000 10% 100,000 8.1% 7.6% 8% 80,000 71,022 70,185 63,010 6% 60,000 40,000 36,164 36,213 4% 20,000 2% 0 0% 2012 2013 2014 2015 2016 Operating income Operating margin 5
Slide 6: EBITDA
EBITDA Ch$ million 14.7% 16% 14.3% 14.1% 120,000 14% 12.0% 100,000 11.6% 93,432 92,701 12% 83,425 80,000 10% 8% 60,000 53,852 54,973 6% 40,000 4% 20,000 2% 0 0% 2012 2013 2014 2015 2016 EBITDA EBITDA margin 6
Slide 7: Net Income
Net Income Ch$ million 120,000 10% 100,000 7.8% 7.4% 7.3% 8% 6.7% 7.0% 80,000 6% 60,000 49,797 47,931 43,051 4% 40,000 30,022 33,174 2% 20,000 0 0% 2012 2013 2014 2015 2016 Net income Net margin 7
Slide 8: Financial Results - 2016
Financial Results - 2016 12M 2016 12M 2015 Change MM Ch$ MM Ch$ % Total volume (MM cases) 38.6 36.8 4.9% Sales 658,448 636,194 3.5% Cost of sales (412,382) (391,505) 5.3% Gross Profit 246,066 244,689 0.6% Gross margin 37.4% 38.5% SG&A (182,475) (172,453) 5.8% SG&A / sales -27.7% -27.1% Operating Inc
Slide 9: Operating profit by country
Operating profit by country Sales Operating Country MM 9L Cases MM Ch$ margin Chile 33.4 470,712 12.5% Trivento 2.6 45,628 8.6% Fetzer 2.6 77,366 1.6% Total Holding 38.6 593,706 10.7% 9
Slide 10: Operating profit by country
Operating profit by country Country Exports Domestic market CHILE: Operating margin 16.0% 1.6% % of total sales 61.7% 19.4% ARGENTINA: Operating margin 13.6% -20.1% % of total sales 6.0% 1.0% 10
Slide 11: Company Targets for the next 5 years
Company Targets for the next 5 years • SALES INCREASE OF 5.5% IN AVERAGE PER YEAR • EXPANSION IN OPERATING MARGIN TO A RANGE OF 15.5% - 16.5% BY 2022 11
Slide 12: Strategy to achieve our 5-year targets
Strategy to achieve our 5-year targets 1. RESTRUCTURING PROCESS AND COST SAVINGS 2. NEW COMMERCIAL STRATEGY 3. SPECIAL FOCUS ON CASILLERO DEL DIABLO BRAND 4. FOCUS ON OTHER HIGH PERFORMING BRANDS 5. FOCUS ON KEY MARKETS TO SEEK HIGHER GROWTH 6. SEGMENT INNOVATIONS IN NON WINE CATEGORY 12
Slide 13: 1. Restructuring process and cost savings
1. Restructuring process and cost savings • Expected to be finished in 1H18 • Cost Savings • Operational Efficiency • Commercial strategy - focus on core brands • Estimated annual savings: Ch$12,000 million, approx. 1.5% to 2.0% of sales 13
Slide 14: 2. New commercial strategy for CyT group
2. New commercial strategy for CyT group • Prepared to take opportunities where industry is growing • Premium wine is driving the growth USA – Growth rate by price segment - 2016 14
Slide 15: 2. New commercial strategy for CyT group
2. New commercial strategy for CyT group • Premium wines: Seek strong growth in sales, focused in price segments >US$10 • Non-Premium wines: Low single digit growth for categories of price <US$10 Current mix Chile Argentina USA Total Premium 37.1% 44.8% 78.0% 42.5% Non-Premium 62.9% 55.2% 22.0% 57.5
Slide 16: 3. Special focus on Casillero del Diablo brand
3. Special focus on Casillero del Diablo brand 16
Slide 17: 3. Special focus on Casillero del Diablo brand
3. Special focus on Casillero del Diablo brand CURRENT PORTFOLIO UTRA LEYENDA PREMIUM FOB 200 USD SUPER RESERVA PREMIUM PRIVADA FOB 60 USD ULTRA DEVIL’S PLUS COLLECTION FOB 45 USD RESERVA PREMIUM FOB 35 USD PREMIUM:93%US$ PP,SP,UP: 7% US$ 17
Slide 18: Casillero del Diablo: strong sales growth
3. Special focus on Casillero del Diablo brand STRONG SALES GROWTH +USD 200 mm 2017 18
Slide 19: Casillero del Diablo: sales growth 2016 vs 2015
3. Special focus on Casillero del Diablo brand STRONG SALES GROWTH 2016 v/s 2015 160% 22% 29% 8% 19
Slide 20: Volume and Value
3. Special focus on Casillero del Diablo brand As a key Brand for the Company, Casillero del Diablo must be the driver for VOLUME and VALUE 20
Slide 21: Innovation = Growth
3. Special focus on Casillero del Diablo brand INNOVATION = GROWTH Highly competitive and complementary product portfolio, adding innovation to the brand 21
Slide 22: 3. Special focus on Casillero del Diablo brand
3. Special focus on Casillero del Diablo brand CURRENT PORTFOLIO UTRA LEYENDA PREMIUM FOB 200 USD SUPER RESERVA PREMIUM PRIVADA FOB 60 USD ULTRA DEVIL’S PLUS COLLECTION FOB 45 USD RESERVA PREMIUM FOB 35 USD 22
Slide 23: Largest premium wine range in the world
3. Special focus on Casillero del Diablo brand LARGEST PREMIUM WINE RANGE IN THE WORLD 23
Slide 24: Red Blend
3. Special focus on Casillero del Diablo brand Red Blend New addition to the Global Range in Reserva Line 24
Slide 25: Packaging
3. Special focus on Casillero del Diablo brand PA C K A G I N G • Different from Reserva • Modern look and more into the “Red Blend” mood 25
Slide 26: 3. Special focus on Casillero del Diablo brand
3. Special focus on Casillero del Diablo brand CURRENT PORTFOLIO UTRA LEYENDA PREMIUM FOB 200 USD SUPER RESERVA PREMIUM PRIVADA FOB 60 USD ULTRA DEVIL’S PLUS COLLECTION FOB 45 USD RESERVA PREMIUM FOB 35 USD 26
Slide 27: Red White Brut
3. Special focus on Casillero del Diablo brand RED WHITE BRUT 27
Slide 28: Price segment opportunity
3. Special focus on Casillero del Diablo brand PRICE SEGMENT OPPORTUNITY 35 USD 45 USD 60 USD 28
Slide 29: 3. Special focus on Casillero del Diablo brand
3. Special focus on Casillero del Diablo brand CURRENT PORTFOLIO UTRA LEYENDA PREMIUM FOB 200 USD SUPER RESERVA PREMIUM PRIVADA FOB 60 USD ULTRA DEVIL’S PLUS COLLECTION FOB 45 USD RESERVA PREMIUM FOB 35 USD 29
Slide 30: New Reserva Privada portfolio
3. Special focus on Casillero del Diablo brand NEW RESERVA PRIVADA PORTFOLIO CABERNET SAUVIGNON CARMENERE CHARDONNAY SAUVIGNON BLANC 30
Slide 31: Innovations
3. Special focus on Casillero del Diablo brand NEW BRAND PORTFOLIO INNOVATIONS UTRA • Incremental PREMIUM volume SUPER PREMIUM • Show a fresh and ULTRA modern brand PLUS • Stand out from PREMIUM the competition 31
Slide 32: 3. Special focus on Casillero del Diablo brand
3. Special focus on Casillero del Diablo brand 32
Slide 33: Focus on high-performing brands - Cono Sur Bicicleta
4. Focus on high-performing brands - Cono Sur Bicicleta Th 9L cases 160 0.0 CAGR: + 13% 1,334 1,263 140 0.0 120 0.0 1,116 100 0.0 938 804 800 .0 692 703 600 .0 400 .0 200 .0 - 2012 2013 2014 2015 2016 1H16 1H17 33
Slide 34: Focus on high-performing brands - Cono Sur Bicicleta
4. Focus on high-performing brands - Cono Sur Bicicleta • Target: Price increase from US$26 to US$30 in 3 years. 34
Slide 35: Focus on high-performing brands - Trivento Reserve
4. Focus on high-performing brands - Trivento Reserve Th 9L cases 700 .0 CAGR 636 +64% 600 .0 500 .0 464 400 .0 386 296 300 .0 261 199 200 .0 100 .0 88 - 2012 2013 2014 2015 2016 1H16 1H17 35
Slide 36: Trivento Reserve - key markets
4. Focus on high-performing brands - Trivento Reserve KEY MARKETS UK: USA: #1 Malbec Hot brand Growing at 32% 36
Slide 37: Focus on high-performing brands - Bonterra
4. Focus on high-performing brands - Bonterra GLOBAL LEADER IN ORGANIC WINE Th 9L cases CAGR 534 +18% 462 377 353 310 230 220 235 2011 2012 2013 2014 2015 2016 1H16 1H17 37
Slide 38: Focus on high-performing brands - 1000 Stories
4. Focus on high-performing brands - 1000 Stories SUCCESSFUL INNOVATION IN THE AMERICAN MARKET Th 9L cases 900 00.0 83,602 CAGR 800 00.0 +549% 700 00.0 600 00.0 500 00.0 47,857 400 00.0 33,573 300 00.0 200 00.0 15,957 100 00.0 1,983 - 2014 2015 2016 1H16 1H17 38
Slide 39: Focus on key markets to seek higher growth
5. Focus on key markets to seek higher growth CANADA USA UK MEXICO CHINA JAPAN UAE (Arab Emirates) BRAZIL 39
Slide 40: 6. Segment innovations in non-wine category
6. Segment innovations in non-wine category • Looking for oportunities in non-wine categories • Target: 5% of sales; operating margin of Ch$ 3,500 million 40
Slide 41: Strategy to achieve our 5-year targets
Strategy to achieve our 5-year targets We see in our vertically integrated business model, from the vineyards to the commercial network, a major competitive advantage in order to achieve our targets. 41
Slide 42: Real Estate business
Real Estate business In addition, the company is entering in the Real Estate business, focused on maximizing the profitability of its non-core properties. 42
Slide 43: Real Estate business
Real Estate business We have identified 400 hectares of non-core properties with high potential for real estate projects. In a first stage, we have targeted 74 hectares to develop in the next 10 to 15 years. 43
Slide 44: Real Estate business: Fundo Tocornal
Real Estate business: Fundo Tocornal Location: Puente Alto, RM Land area: 43.57 Ha. N Current state: feasibility study (18 months) Real Estate project: houses Project timing: 11 years TOCORNAL Est. land market value w/feasibility: UF 1.8/m2 Estimated project market value*: UF 4.5 /m2 *Considers valu
Slide 45: Real Estate business: Pirque Ross
Real Estate business: Pirque Ross Location: Pirque, RM Land area: 30 Ha. N Current state: sanitary feasibility (24 months) Real Estate project: houses Project timing: 7 years Est. land market value w/feasibility: UF 1.8/m2 URBANO Estimated project market value*: UF 4.0 /m2 PIRQUE ROSS *Considers val
Slide 46: Real Estate business: Industria Corchera (50% owned)
Real Estate business: Industria Corchera (50% owned) Location: La Cisterna, RM Land area: 10,070 m2 Current state: project draft approval (6 months) Real Estate project: apartments Project timing: 9 years Est. land market value w/feasibility: UF 19/m2 Estimated project market value*: UF 48.5/m2 *Con
Slide 47: Divestment of facilities in Chile
Divestment of facilities in Chile In line with our restructuring program, regarding logistics optimization, we expect to divest certain distribution facilities in the next 12 to 24 months. 47
Slide 48: Divestment of facilities in Chile
Divestment of facilities in Chile Sucursales Superficie Terreno Superficie Construccion Precio (UF/m2 terreno) Valorización (UF) Punta Arenas 7.500 970 4,5 UF 33.750 Curico 28.000 20.000 3,0 UF 84.000 Antofagasta 1.250 8,0 UF 10.000 Coquimbo 7.500 1.000 3,0 UF 22.500 Osorno 950 1.500 9,0 UF 8.550 Co
Slide 49: Real Estate business and divestments - Summary
Real Estate business and divestments - Summary Land area Est. value Total value (hectares) UF/m2 Tocornal: 43.5 4.5 UF 1,957,500 Pirque Ross: 30.0 4.0 UF 1,200,000 Corchera (50% CyT) 0.5085 48.5 UF 247,000 Divestments UF 200,000 Estimated total profit UF 3,604,500 before tax USD equivalent MMUSD 153
Slide 50: Investor Presentation October 2017
I N V E S T O R P R E S E N TAT I O N October 2017
Viña Concha y Toro — Investor Presentation (October 2017) on 6ix