Purcari Wineries Public Co., Ltd. · BVB:WINE
Purcari Wineries Public — 9M 2022 Earnings Presentation
40 slides from Purcari Wineries Public's earnings presentation, Nov 16, 2022
Slide 1: Purcari Wineries Corporate Presentation 9M 2022 Results
Purcari Wineries Public Company Limited BVB: WINE Corporate Presentation 9M 2022 Results 16th of November 2022
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 Eugen Comendant Victor Arapan Eugeniu Baltag Vasile Tofan Chief Executive Officer, Chief Operating Officer Chief Financial Officer Investor Relations Manager Chairman of the Board Founder ▪ Founder of the Group, ▪ Over 15 years of ▪ Over 20 years of ▪ Over 15 years o
Slide 4: Today's agenda
Today’s agenda Negru de Purcari 2019 Nominated by Caroline Gilby, Master of Wine, for the Decanter Magazine, Wines of the 1 Purcari Wineries Group Key Info Year 2021: The Top Classic Wines, with a score of 93 pts. 4.4 score on Vivino, 2 9M 2022 Operational Results ranked among the top 1% wines globa
Slide 5: Purcari Wineries Group at a glance
1 Purcari Wineries Group at a glance Leading wine player in Central and Eastern Europe... … with a strong & expanding regional footprint Founded in 1827 by French colonists, Purcari group is now... Geographical breakdown of sales in value terms, 9M 2022, % RO MD PL UA CN Other #1 World’s most awarde
Slide 6: Strong track record of growth year to year
1 Strong track record of growth year to year Sustainable profitability accompanying strong growth Comments ▪ IPO’d on Bucharest Stock Exchange in February 2018 ▪ 75% increase in revenues since pre-IPO ▪ Strong operating results and cost-efficient production ▪ SG&A stable over time at 22% of revenue
Slide 7: Our business model: Affordable Luxury
1 Our business model: Affordable Luxury Modern cost-competitive winemaking Purcari is positioned at the intersections of three themes: ▪ Modern winemaking: the company is a brand, as opposed to appellation-centric and runs a cost-efficient business. ▪ Affordable luxury: as an aspirational brand, Pur
Slide 8: Quality highly commended; most awarded winery in CEE in 2021
1 Quality highly commended; most awarded winery in CEE in 2021 Leading medal-winning winery in CEE at Decanter, Increasing number of medals won from year to year, the Wine ”Olympics” In 2021 the most awarded winery in the World # of Decanter medals in 2015 − 2022 # of medals #1 Mundus Vini 129 Conco
Slide 9: Part of Decanter Top Classic Wines 2021 among much pricier wines
1 Part of Decanter Top Classic Wines 2021 among much pricier wines Wine Origin Vintage Vivino Points Price (in UK) Negru de Purcari (Chateau Purcari) 2019 4.4 93 £26 Enclave Cabernet Sauvignon (Ventisquero) 2014 4.3 93 £45 Testamatta Toscana IGT (Bibi Graetz) 2018 4.3 90 £65 Teperberg Legacy Caberne
Slide 10: Topping competition at engagement and quality
1 Topping competition at engagement and quality Aspirational brand which consumers like sharing about Highest number of ratings and highest scores on Vivino Number of #brand uses on Instagram, thousand, by key Romanian brands X axis – number of Vivino ratings; Y axis – average Vivino score 13.9 4.2
Slide 11: Vivino feedback remains very strong, essential for online sales
1 Vivino feedback remains very strong, essential for online sales #1 presence in the crucial RON 30-60 segment, holding 13 out of TOP-25 positions #1 ▪ We remain obsessed with the quality of our wines, which pays off in excellent consumer feedback. ▪ In our core premium segment, 30-60 RON per bottle
Slide 12: Growth in Vivino usage, key for consumer engagement, ecommerce
1 Growth in Vivino usage, key for consumer engagement, ecommerce 4.21 78% Top 1% Average score out of Scores equal or Global ranking based on 5.0 in 9M 2022 above 4.0 avg. score received 33,254 +10% 89 Vivino scans in 9M 2022 YoY scans # of countries where 9M 2022 Purcari has been scanned Page 12
Slide 13: Today's agenda
Today’s agenda Freedom Blend 2020 A fascinating, distinctive blend of indigenous grapes from Moldova, Ukraine and Georgia, launched back in 2014. 1 Purcari Wineries Group Key Info Declared Wine of the week by Jancis Robinson in UK on the 4th of November 2 9M 2022 Operational Results 2022 with a 16.5
Slide 14: Strong growth amid inflationary pressure and economic uncertainty
2 Strong growth amid inflationary pressure and economic uncertainty Revenues EBITDA Adjusted Net Income1 RON m RON m RON m +4% +1% 199.8 60.7 35.4 +20% 58.2 34.9 +44% 166.4 138.3 44.2 25.6 9M20 9M21 9M22 9M20 9M21 9M22 9M20 9M21 9M22 32% 35% 30% 19% 21% 18% Core business growth vs. 9M21, +13% EBITDA
Slide 15: WINE1 segment strong growth and margins resilience
2 WINE1 segment strong growth and margins resilience Revenues EBITDA Adjusted Net Income2 RON m RON m RON m +6% +7% 36.3 +13% 186.6 60.7 34.1 +35% 57.3 165.4 138.3 44.2 25.6 9M20 9M21 9M22 9M20 9M21 9M22 9M20 9M21 9M22 32% 35% 33% 19% 21% 19% EBITDA margin Net Income margin Notes: (1) core wine segm
Slide 16: Key operational highlights for 9M 2022
2 Key operational highlights for 9M 2022 ▪ Revenue up 20% YoY to RON 199.8m in line with the guidance, with Core Wine revenues +13% YoY and Ongoing organic Ecosmart contributing additionally with 7% YoY. revenue growth, ▪ +27% in 3Q22 YoY, also incorporating the effects of price increases pushed thr
Slide 17: Maintaining healthy margins, despite inflationary pressures, geopolitics
2 Maintaining healthy margins, despite inflationary pressures, geopolitics Comments 3Q 9M RON m 2022 2021 ∆ 3Q 2022 2021 ∆ 9M ▪ Gross margin at 45% 9M22. Premiumization strategy Revenue 75.9 59.9 27% 199.8 166.4 20% and better mix partly offset the adverse effects of Cost of Sales (44.0) (28.3) 56%
Slide 18: Segment reporting: growing strong in WINE, turning around Ecosmart
2 Segment reporting: growing strong in WINE, turning around Ecosmart Purcari Group Ecosmart WINE Business ▪ Waste Recycling segment RON m 9M22 9M21 ∆ 9M22 9M21 9M22 9M21 ∆ contributing to 7% of total 9M22 '22/'21 '22/'21 revenue. Revenue 199.8 166.4 20% 13.1 1.0 186.6 165.4 13% Cost of Sales (109.2)
Slide 19: Waste recycling segment – turnaround on track, expect profitability in 2023
2 Waste recycling segment – turnaround on track, expect profitability in 2023 Financials History and actions taken Short-term plan ▪ In 2017 Crama Ceptura contributed to the foundation of ▪ Recover the misappropriated Revenues, RON m Ecosmart Union SA with 108k RON for a 27% share, to funds (ongoing
Slide 20: Strong balance sheet, providing a solid footing for current macro environment
2 Strong balance sheet, providing a solid footing for current macro environment Cash Position Net Debt RON m RON m 50.8 98 97 Cash and 81 32.1 66 Receivables 23.8 22.5 46 12.6 31-Dec-19 31-Dec-20 31-Dec-21 30-Jun-22 30-Sep-22 31-Dec-19 31-Dec-20 31-Dec-21 30-Jun-22 30-Sep-22 Current Ratio Cash Ratio
Slide 21: Sustainable sales growth, despite the economic turmoil
2 Sustainable sales growth, despite the economic turmoil Market Share of sales, 9M22 ∆ 9M22 YoY Comments ▪ RO: improved demand in 3Q amid weaker wine market dynamics. RO 52% +11% Double-digit growth for Purcari with strong traction for Nocturne series in HoReCa. Bardar fast growth YoY on increased d
Slide 22: Premium brands: Purcari and Bardar, lead the growth
2 Premium brands: Purcari and Bardar, lead the growth Brand Share of sales, 9M22 ∆ 9M22 YoY Comments ▪ PURCARI: Upward sales in all markets, except Ukraine and Baltics. Romania catching up in 3Q with low double-digit 51% +16% growth YoY. Moldova continues growing +34% YoY. The expansion in new marke
Slide 23: Implementing irrigation systems to secure yield and quality
2 Implementing irrigation systems to secure yield and quality ▪ Pioneering in irrigation of technical grapes vineyards in Moldova. ▪ Deployed an irrigation system for 300ha of vineyards at Chateau Purcari. ▪ Opted for an intelligent, fully automated sub-surface drip irrigation system. ▪ Two storage
Slide 24: Exceptional 2022 agricultural season: high quality vintage and good yield
2 Exceptional 2022 agricultural season: high quality vintage and good yield Good 2022 harvest Comments Own harvest and 3 party purchases of grapes, million kg rd 35.1 34.1 ▪ Own vineyards fully recovered after an unprecedent draught in 2020. ▪ High attention in maintaining the vineyards has paid off
Slide 25: Continuing investing in both: growth and sustainability
2 Continuing investing in both: growth and sustainability Solar panels and dedicated warehouse ▪ Solar Panels installed on the roof of the Purcari Winery, to provide 15% of annual electricity consumption for the winery. ▪ 1,025 m2 area covered by solar panels. ▪ Annual production 240 000 kw. ▪ Aimin
Slide 26: Portfolio development: continue creating inspired products
2 Portfolio development: continue creating inspired products PURCARI NOCTURNE ACADEMIA NATIVE, PROCIANO BARDAR, WINE CRIME HoReCa – focused edition ambitious oeno-project adapting to wine trends expanding the growth pillars in RO ▪ Launched in 2021, a bet on ▪ Launched in 2022, ▪ NATIVE – wine from
Slide 27: Outstanding results at most reputable wine competitions
2 Outstanding results at most reputable wine competitions Best Producer from Moldova 2022 Decanter Top Classic Wines 2021 TOP 10 BEST Sparkling Wines Mundus Vini among 50 much pricier wines Effervescents du Monde 2021 Grand Gold: Rosé de Purcari Wine of the week in UK: Freedom Blend #1 Worldwide: Co
Slide 28: Continue creating, engaging, inspiring
2 Continue creating, engaging, inspiring Chisinau Big Hearts Marathoon Winemakers’ Competition DOR: Independence day of RM Purcari Wineries Team participated with the Ambassadors, businessmen and influencers Light show organized in Chisinau as an slogan: “With open hearts for Stefan - Voda” experien
Slide 29: Today's agenda
Today’s agenda Limited Edition Saperavi 1 Purcari Wineries Group Key Info 2020 A wine with strong personality and authentic, opulent taste. 2 9M 2022 Operational Results Gold at Mundus Vini Summer Tasting 2022 3 M&A Update 4 Guidance 2022 5 Purcari Wineries Stock Page 29
Slide 30: Acquisition of Angel's Estate in Bulgaria
3 Acquisition of Angel’s Estate in Bulgaria Key info on Angel’s Estate Revenues, EUR m ▪ 26/09/2022 – Signed SPA for 76% stake in Angel’s Estate. ▪ Full cycle winery CAGR +13% ▪ Located near Stara Zagora, Thracian 2.51 2.55 Lowlands Wine region. 2.31 1.90 ▪ 14,000 m² – production facilities in 2 1.5
Slide 31: Becoming the undisputable Wine Champion in CEE
3 Becoming the undisputable Wine Champion in CEE Formula of becoming wine champion in CEE M&A focus map ▪ Growth components both organic and through Purcari footprint and M&A directions M&A. Directions for M&A opportunities Existing Newly added ▪ Focus on fundamentals: top- and bottom-line line grow
Slide 32: Today's agenda
Today’s agenda Native Rosé de Purcari 2021 1 Purcari Wineries Group Key Info A delicate wine, created with care for the environment, applying friendly techniques to the 2 9M 2022 Operational Results biodiversity and fertility of the soil in the vineyards. Gold at Mundus Vini Summer Tasting 2022 3 M&
Slide 33: Guidance 2022 – maintaining our guidance for the year
4 Guidance 2022 – maintaining our guidance for the year Target 2022 guidance 9M2022 fact Status Comments • Growth in 3Q accelerated vs. 2Q, with value Revenue component advancing faster that the volumes. growth +15-20% +20% = • Maintaining growth within the guidance, ahead of crucial 4Q quarter, mos
Slide 34: Today's agenda
Today’s agenda Academia Purcari 1 Purcari Wineries Group Key Info Saperavi 2019 Produced in a limited number – 6,000 2 9M 2022 Operational Results bottles Gold at Mundus Vini Summer Tasting 2022, 3 M&A Update Best in show Moldova Red 4 Guidance 2022 5 Purcari Wineries Stock Page 34
Slide 35: Stock performance
4 Stock performance WINE (Purcari Wineries) DIGI (Digi Communications) BET (index) SFG (Sphera Franchise Group) 200 “Consumer” peers = relevant companies outside of financials, utility and energy sectors, dominating the BET index 180 160 144 | BET 140 120 100 93 | WINE 80 88 | DIGI 60 40 35 | SFG 20
Slide 36: Purcari stock liquidity
4 Purcari stock liquidity Rapid rise of stock’s liquidity after starting working with Relative to Market Cap, our stock is top-ranked among Market Makers for Purcari shares BET components Daily volume Ratio of daily trade value to Market Capitalisation, 2021-2022 YTD average, bps BRK 1 Teraplast 11.
Slide 37: Low valuation relative to wine peers
4 Low valuation relative to wine peers Purcari vs Selected wine public companies P/E LTM Multiples 35.7 26.6 20.9 19.7 18.5 16.0 15.3 Average P/E: 15.4x 14.8 11.8 9.7 9.7 9.1 8.4 8.0 7.4 1 Source: Net Income and Market Cap as per Capital IQ as of November 11th, 2022 Note: Diluted EPS excluding extra
Slide 38: Average valuation relative to Romanian listed peers
4 Average valuation relative to Romanian listed peers Purcari vs selected Romanian public companies P/E LTM Multiples 54.4 20.8 Average P/E: 14.3x 12.4 11.7 9.6 7.4 6.9 6.9 6.9 5.6 1 Source: Capital IQ, Company Data as per Capital IQ as of November 11th, 2022 Note: Diluted EPS excluding extra items
Slide 39: High growth not incorporated in valuations yet
4 High growth not incorporated in valuations yet Purcari vs selected wine public companies Purcari vs selected Romanian public companies 30 30 25 25 Revenue CAGR’16-21 in USD Revenue CAGR’16-21* in USD 20 1 20 15 15 2 10 10 5 5 0 0 0 10 20 30 40 0 10 20 30 40 50 P/E Multiple P/E Multiple Source: Cap
Slide 40: Thank you!
Thank you!
Purcari Wineries Public Company — 9M 2022 Earnings Presentation on 6ix