Vina Concha Y Toro S.a. · BCS:CONCHATORO
Vina Concha Y Toro — Q1 2018 Earnings Presentation
23 slides from Vina Concha Y Toro's earnings presentation, May 24, 2018
Slide 1: 1Q18 Results
Casillero Diabla 109) CONCHA Y TORO 1018 RESULTS ZINFANDEL VINA CONCHA Y TORO May 24, 2018
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: Contents
Contents I. 1Q18 Results II. 2022 Strategy Follow-Up III. Outlook
Slide 4: 1Q18 - Financial Results
I. 1Q18 - Financial Results (million Ch$) 1Q18 1Q17 Change % Sales 124,442 121,480 2.4% Gross profit 39,401 38,492 2.4% Gross margin 31.7% 31.7% +0 bp SG&A (30,074) (30,813) (2.4%) SG&A / sales (24.2%) (25.4%) +120 bp Other income - exp. by function 344 75 357.3% % of sales 0.3% 0.1% +20 bp Operatin
Slide 5: Sales growth drivers
I. 1Q18 - Sales growth drivers • Higher average price: – Exports: +12.8% (US$) – Chile domestic: +16.8% (Ch$) – Argentina: +8.6% (US$) – Fetzer V. : +5.8% (US$) • Higher sales of Premium wine: – Volume +3.0% – Value +7.8% (Ch$) 5
Slide 6: Export Markets
I. 1Q18 - Export Markets 1Q18 1Q17 Change% Revenue (million Ch$) 76.877 77.149 -0,4% Volume (million 9-liter case) 4,66 4,83 -3,5% Average Price (US$ / liter) 3,14 2,78 12,8% • Export sales in value (USD terms) increased 17.4% in Europe driven by United Kingdom (+17.8%), Belgium (155.1%), Russia (+9
Slide 7: Chile Domestic Market
I. 1Q18 - Chile Domestic Market 1Q18 1Q17 Change% Revenue (million Ch$) 15,240 13,108 16.3% Volume (million 9-liter case) 1.51 1.52 -0.7% Average Price (Ch$ / liter) 1,120 959 16.8% • Strong growth of Casillero del Diablo line +13.5% in volume and 23.3% in value. Marques de Casa Concha +17.7% in vol
Slide 8: Chile Domestic Market
I. 1Q18 - Chile Domestic Market 8
Slide 9: USA (Fetzer Vineyards)
I. 1Q18 - USA (Fetzer Vineyards) 1Q18 1Q17 Change% Revenue (million Ch$) 14,690 14,182 3.6% Volume (million 9-liter case) 0.48 0.45 6.6% Average Price (US$ / liter) 5.62 5.31 5.8% • Sales in US$ at double-digit growth rates in 1000 stories (+50%), Fetzer (+25%), and Adorada (launched in May, 2017) 9
Slide 10: Argentina
I. 1Q18 - Argentina 1Q18 1Q17 Change% Revenue (million Ch$) 4,261 5,138 -17.1% Volume (million 9-liter case) 0.27 0.37 -28.4% Average Price (US$ / liter) 3.02 2.78 8.6% • Lower volume reflecting lower availability of wine and the Company´s strategy of exiting less-profitable products. • Focus on pre
Slide 11: Adjusted Operating Profit
I. 1Q18 - Adjusted Operating Profit (million Ch$) 1Q18 1Q17 Restructuring (ROIC) Costs 221 190 Expenses 738 576 ROIC Costs + Expenses 959 766 (million Ch$) 1Q18 1Q17 Change Change% Operating profit 9,671 7,755 1,916 24.7% Operating margin 7.8% 6.4% +140 bp Restructuring costs, expenses 959 766 193 A
Slide 12: Operating margin - Quarterly Trend
I. Operating margin - Quarterly Trend Operating Margin 1Q17* 2Q17 3Q17 4Q17 1Q18 Reported 6.4% 10.2% 9.3% 11.8% 7.8% Adjusted** 7.0% 11.0% 10.2% 11.4% 8.5% *For a meaningful comparison with 1Q18, 1Q17 figures are restated according to IFRS 15 accounting rule adopted as of Jan-2018. ** Adjusted by ex
Slide 13: Non-Operating Profit
I. 1Q18 - Non-Operating Profit (million Ch$) 1Q18 1Q17 Change % Net Financial Expenses (2,486) (1,968) 26.3% Exchange Rate Differences 2,065 (148) Adjustment Units (392) (245) 59.8% Share of profit (loss) of 125 94 33.0% associates and JV Non-operating profit (689) (2,268) (69.6%) 13
Slide 14: Consolidated Results
I. 1Q18 - Consolidated Results 1Q18 1Q17 1Q18 1Q17 (million Ch$) Change % Change % Reported Reported Adjusted Adjusted Sales 124,442 121,480 2.4% 124,442 121,480 2.4% Gross profit 39,401 38,492 2.4% 39,622 38,682 2.4% Gross margin 31.7% 31.7% +0 bp 31.8% 31.8% +0 bp Operating profit 9,671 7,755 24.7
Slide 15: Contents
Contents I. 1Q18 Results II. 2022 Strategy Follow-Up III. Outlook
Slide 16: Recovery of profitability in domestic markets
II. Recovery of profitability in domestic markets Operating margin Origin 2016 2022 1Q17* 1Q18* Chile 1.6% 8.0% (4.9%) 4.0% USA 1.0% 20.0% (0.5%) 7.2% Argentina (20.1%) 3.0% (3.9%) (13.3%) *Excludes restructuring costs and expenses 16
Slide 17: Special focus on Casillero del Diablo brand
II. Special focus on Casillero del Diablo brand 1Q18: US$ Value: +16.2% Volume: +1.1% Sales driven by line extensions at higher price points: - Devils Collection - Casillero Reserva Privada Launch of Diablo in markets of Ireland and Denmark (Volume in Th. 9-l cases) 17
Slide 18: Contents
Contents I. 1Q18 Results II. 2022 Strategy Follow-Up III. Outlook
Slide 19: Company position in a tighter global supply scenario
III. Outlook - Company position in a tighter global supply scenario Outlook for Concha y Toro’s own production in 2018 • Expected increase of 20% vs. 2017. Increasing grape cost from third-party suppliers 19
Slide 20: 2018 Harvest - Chile
III. 2018 Harvest - Chile Preliminary ODEPA’s estimates (May 2018) indicate a 19% increase in harvested volume Chile harvest (mm lts) 1.400 1.255 1.282 1.287 1.200 1.129 1.046 1.014 990 1.000 949 915 800 600 400 200 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 20
Slide 21: 2018 Harvest - Argentina
III. 2018 Harvest - Argentina Preliminary estimates (to May 6th) indicate a 30% increase in the harvested volume Argentina harvest (mm lts) 3.000 2.807 2.786 2.539 2.587 2.556 2.500 2.338 2.174 1.966 2.000 1.704 1.500 1.000 500 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 21
Slide 22: 1Q18 Results
Casillero del Diablo 1018 RESULTS VINA CONCHA Y TORO
Slide 23: Sales Currency Mix
Sales Currency Mix Sales Currency 1Q16 2Q16 3Q16 4Q16 2016 1Q17 2Q17 3Q17 4Q17 2017 1Q18 mix CLP 21.7% 18.7% 19.8% 19.2% 19.7% 20.9% 19.5% 21.8% 19.8% 20.4% 23.5% USD 32.2% 35.6% 36.8% 39.2% 36.2% 34.9% 34.2% 34.5% 39.5% 36.0% 30.3% GBP 21.9% 18.0% 17.2% 15.0% 17.7% 18.1% 18.9% 17.8% 15.5% 17.5% 19.