Purcari Wineries Public Co., Ltd. · BVB:WINE
Purcari Wineries Public — Purcari Wineries — Q1 2018 Earnings Presentation
25 slides from Purcari Wineries Public's earnings presentation, May 15, 2018
Slide 1: Purcari Wineries Plc 1Q results presentation
Purcari Wineries Plc 1Q results presentation May 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 1Q2018 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, Purca
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
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 24 Purcari (Brand) 23 Samburesti 16 22 16 16 Segarcea 16 15
Slide 10: Topping Romanian Wineries at Engagement, Quality
TOPPING ROMANIAN WINERIES 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 7,360 4.0 3.9 3.8
Slide 11: Top of Peer Group Margin Wise; Still Room to Grow
TOP OF PEER GROUP MARGIN WISE; STILL ROOM TO GROW EBITDA margin – global peer group EBITDA margin 2017, % Median 33% 32% 29% 21% 18% 18% 16% 14% 15% 13% 13% 10% 10% 6% 4% (1) (2) (1) (3) (1) Zhejiang Guyuelongshan Shaoxing Wine Source: IFRS Consolidated Financial Statements of the Group, Capital IQ
Slide 12: Agenda
AGENDA Crama Ceptura – Astrum, the latest 1 Our Group introduction in the Ceptura line-up, targeting the 15-20 RON/bottle segment, 2 1Q2018 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 12
Slide 13: Strong 1Q2018, Robust Revenue Growth, EBITDA Margin Up
3 STRONG 1Q2018, ROBUST REVENUE GROWTH, EBITDA MARGIN UP Revenues Adjusted EBITDA1 Net Income RON m RON m RON m +21% +36% +18% 33.9 11.0 5.9 27.9 5.0 8.1 1Q2017 1Q2018 1Q2017 1Q2018 1Q2017 1Q2018 29% 33% EBITDA margin Note: 1 – excluding non-recurring, IPO related costs Page 13
Slide 14: Key Operational Highlights for 1Q18
1 KEY OPERATIONAL HIGHLIGHTS FOR 1Q18 • Sales up 21% yoy, to RON 33.9m; strong shipments in 4Q17, put some pressure on 1Q deliveries Solid revenue • Romania remains largest growth driver, up 32% yoy growth • Maintained premiumization trend, with Purcari, Bardar, Ceptura growing much faster than Bost
Slide 15: Markets: Romania Largest and Highest Growth Market
3 MARKETS: ROMANIA LARGEST AND HIGHEST GROWTH MARKET Market Share of sales, 1Q18, % Growth, 1Q18 yoy, % Comments RO 43% +32% • RO: Crama Ceptura brand main growth driver up +37%; Purcari brand up +26%. MD • MD: very strong growth across brand portfolio, pushed in 20% +48% particular by successful in
Slide 16: Brands: Premium Purcari Main Growth Driver
3 BRANDS: PREMIUM PURCARI MAIN GROWTH DRIVER Brand Share of sales, 2017, % Growth, 2017 yoy, % Comments • PURCARI: solid traction across markets, including key market of Romania. Lower volumes to Asia, on 37% +14% overhang from 4Q17 • BOSTAVAN: underwhelming performance, mainly due to lower shipment
Slide 17: Margins: Solid Despite Adverse FX Effects
3 MARGINS: SOLID DESPITE ADVERSE FX EFFECTS Comments ∆ RON m 1Q17 1Q18 • Gross margin up 2.3pp, on improved mix given ongoing ’18/’17 premiumization of portfolio and select price increases Revenue 27.9 33.9 21% ‒ Improvement in margin despite adverse Fx effect, given MDL Cost of Sales (15.7) (18.3)
Slide 18: MDL Appreciated Strongly, Adversely Impacting Margins
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 21 11.4% 7.5% 19.9% 6.4% 3.3% 19.2% 23 5 20 22 4.8 19 21 4.6 18 20 4.4 17 19 4.2 16 18 4 17 15 2016 2017 2018 2016 2017 2018 201
Slide 19: Wines – Off to a Great Start in 2018
WINES – OFF TO A GREAT START IN 2018 Challenge International du Vin’s leading medal-winning winery in CEE # of medals at 2018 competition 9 #1 5 5 4 4 3 3 3 3 (1 ) Note: (1) Purcari Group (ie Purcari, Crama Ceptura & Bostavan brands) Page 19 Sources: Challenge International du Vin
Slide 20: Marketing – Continued Signature Campaigns: April 1st Examples
MARKETING – CONTINUED SIGNATURE CAMPAIGNS: APRIL 1st EXAMPLES Page 20
Slide 21: Agenda
AGENDA Negru de Purcari 2013, 4.4 score on 1 Our Group Vivino, top 1% wine globally 2 1Q2018 Operational Results 3 Update on 2018 Outlook 4 Q&A Page 21
Slide 22: We Maintain Our Guidance for 2018
3 WE MAINTAIN OUR GUIDANCE FOR 2018 Target FY18 1Q18 Status Comments • Strong shipments in 4Q17, mainly Asia, limited somewhat primary sales in 1Q18 Organic revenue growth +24-28% 21% • We stick to 24-28% guidance for FY18, given 1Q seasonally smallest quarter and 79-82% of sales are done in 2Q-4Q2
Slide 23: Ready for Summer: Superb 2017 Vintage Whites
READY FOR SUMMER: SUPERB 2017 VINTAGE WHITES; CHEERS! Vivino: among the top 7% wines in the world Very very very good rose! Full of fruits and flavors! And fresh at the sane time! Good summer wine, fresh and rich aromas, mostly floral and citric aromas, citrus is well incorporated in the taste too,
Slide 24: Agenda
AGENDA Cuvée de Purcari, 1 Our Group the extension to sparkling launched in 2017. 2 1Q2018 Operational Results Made according to the traditional, Champenoise method, with in- 3 Update on 2018 outlook bottle fermentation 4 Q&A Page 24
Slide 25: Thank you.
Thank you. Page 25