Vina Concha Y Toro S.a. · BCS:CONCHATORO
Vina Concha Y Toro — Q4 2017 Earnings Presentation
41 slides from Vina Concha Y Toro's earnings presentation, March 2018
Slide 1: 4Q17 - 2017 Results
4 Q 1 7 - 2 0 1 7 R E S U LT S March, 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. 4Q17 Results II. 2022 Strategy Follow-Up III. Outlook IV. 2017 Results
Slide 4: I. Fourth Quarter 2017 - Financial Results
I. Fourth Quarter 2017 - Financial Results (million Ch$) 4Q17 4Q16 Change % Sales 189,837 183,200 3.6% Gross profit 68,890 64,660 6.5% Gross margin 36.3% 35.3% +100 bp SG&A -51,004 -50,838 0.3% SG&A / sales 26.9% 27.7% -90 bp Other income - exp. by function 4,484 5,004 -10.4% % of sales 2.4% 2.7% -4
Slide 5: Fourth Quarter 2017 - Other Income, Expenses, Restructuring items
I. Fourth Quarter 2017 - Other Income, Expenses , Restructuring items (million Ch$) 4Q17 4Q16 Other Income, expenses Revaluation of Inv. (Kross) 2,485 Real Estate net sales 1,961 Paso Robles cellar sale 5,330 Others 38 -326 Total Other Income, expenses 4,484 5,004 Restructuring (ROIC) Costs -297 Exp
Slide 6: Fourth Quarter 2017 - Reported and Adjusted Operating Profit
I. Fourth Quarter 2017 - Reported and Adjusted Operating Profit (million Ch$) 4Q17 4Q16 Change Change% Operating profit 22.371 18.826 3.545 18,8% Operating margin 11,8% 10,3% +150 bp Extraordinary expenses ROIC 1.722 660 1.062 Other Income Adjustments -2.485 0 -2.485 Adjusted Operating profit 21.608
Slide 7: Fourth Quarter 2017 - Revenue Breakdown
I. Fourth Quarter 2017 - Revenue Breakdown 7
Slide 8: Fourth Quarter 2017 - Quarterly Trend
I. Fourth Quarter 2017 - Quarterly Trend Operating Profit 1Q 2Q 3Q 4Q 2016 9,2% 12,4% 10,4% 10,3% 2016 Adjusted* 9,2% 12,4% 9,1% 10,6% 2017 6,1% 10,2% 9,3% 11,8% 2017 Adjusted* 6,7% 11,0% 10,2% 11,4% *2016 adjusted by compensation payments in 3Q16. *2017 adjusted by expenses from restructuring progr
Slide 9: Fourth Quarter 2017 - Export Markets
I. Fourth Quarter 2017 - Export Markets 4Q17 4Q16 Change% Revenue (million Ch$) 124,314 120,920 2.8% Volume (million 9-liter case) 7.16 6.90 3.7% Average Price (US$ / liter) 3.12 2.97 5.1% • Export sales up 32.0% in Asia, boosted by Japan (35.6%) and China (+52.0%). Europe grew 6.2%, driven by Unite
Slide 10: Export Markets: China (Wines of Chile)
I. Fourth Quarter 2017 - Export Markets: China (Wines of Chile) 10
Slide 11: Fourth Quarter 2017 - Chile Domestic Market
I. Fourth Quarter 2017 - Chile Domestic Market 4Q17 4Q16 Change% Revenue (million Ch$) 19,905 18,974 4.9% Volume (million 9-liter case) 1.72 2.00 -14.2% Average Price (Ch$ / liter) 1,289 1,125 14.6% • Sales of premium wine up 10.4% in value driven by higher price of 9.8%. • Non premium sales increas
Slide 12: Chile Domestic Market - Price trend
I. Fourth Quarter 2017 - Chile Domestic Market - Price trend 12
Slide 13: Fourth Quarter 2017 - USA (Fetzer Vineyards)
I. Fourth Quarter 2017 - USA (Fetzer Vineyards) 4Q17 4Q16 Change% Revenue (million Ch$) 21,939 20,616 6.4% Volume (million 9-liter case) 0.69 0.63 8.5% Average Price (US$ / liter) 5.69 5.45 4.5% * Excludes sales through the Company’s distribution subsidiaries. 13
Slide 14: Fourth Quarter 2017 - Argentina
I. Fourth Quarter 2017 - Argentina 4Q17 4Q16 Change% Revenue (million Ch$) 5,253 6,533 -19.6% Volume (million 9-liter case) 0.34 0.46 -26.3% Average Price (US$ / liter) 2.93 2.71 8.2% * Excludes sales through the Company’s distribution subsidiaries. • Lower volume reflecting lower availability of wi
Slide 15: Fourth Quarter 2017 - Non-Operating Profit
I. Fourth Quarter 2017 - Non-Operating Profit 15
Slide 16: Fourth Quarter 2017 - Consolidated Results
I. Fourth Quarter 2017 - Consolidated Results 4Q17 4Q16 4Q17 4Q16 (million Ch$) Change % Change % Reported Reported Adjusted Adjusted Sales 189.837 183.200 3,6% 189.837 183.200 3,6% Gross profit 68.890 64.660 6,5% 69.187 64.660 7,0% Gross margin 36,3% 35,3% +100 bp 36,4% 35,3% +120 bp Operating prof
Slide 17: Contents
Contents I. 4Q17 Results II. 2022 Strategy Follow-Up III. Outlook IV. 2017 Results
Slide 18: II. 2022 Strategy Follow-Up
II. 2022 Strategy Follow-Up 1. Restructuring process and cost savings 2. Recovery of profitability in domestic markets 3. New commercial strategy 4. Special focus on Casillero del Diablo brand 5. Focus on other high-performing brands 18
Slide 19: Restructuring process and cost savings
II.1. Restructuring process and cost savings • Progress according to plan • Net estimated savings Ch$18,000 million in 2019. 2019 (Ch$ million) 2017 2018 onwards Efficiencies and synergies 4,480 13,500 18,000 from program Severance payments and -5,310 -4,891 - consultancy fees Net savings -830 8,609
Slide 20: Recovery of profitability in domestic markets
II.2. Recovery of profitability in domestic markets Operating margin Origin 2016 2022 4Q16* 4Q17* Chile 1,6% 8,0% -2,7% 3,8% USA 1,0% 20,0% 2,4% 5,2% Argentina -20,1% 3,0% -11,0% -2,2% *Excludes non-recurring income and expenses 20
Slide 21: New commercial strategy - Focus on value
II.3. New commercial strategy - Focus on value • Changes in organizational and commercial structure to attend markets in a more specialized way, and strengthen premium focus. • Brand Matrix: Identifies Potential/Relevance of the brands and aligns sales objectives and marketing investments. • Market
Slide 22: New commercial strategy - premiumization trend
II.3. New commercial strategy - premiumization trend • Premium wines: Strong growth in sales, focused in price segments >US$10 • Non-Premium wines: Low single digit growth for categories of price <US$10 22
Slide 23: Special focus on Casillero del Diablo brand
II.4. Special focus on Casillero del Diablo brand 23
Slide 24: Special focus on Casillero del Diablo brand
II.4. Special focus on Casillero del Diablo brand (Volume in Th. 9-liter cases) 2017: • Sales: + 2.1% (in USD terms) • Average price (USD): +5.7% • Volume: -3.7% 24
Slide 25: Focus on high-performing brands - Cono Sur Bicicleta
II.5. Focus on high-performing brands - Cono Sur Bicicleta (Volume in Th. 9 liter cases) 2017: +5.1% 25 25
Slide 26: Focus on high-performing brands - Trivento Reserve
II.5. Focus on high-performing brands - Trivento Reserve (Volume in Th. 9 liter cases) CAGR +64% 2017: +12.1% 26
Slide 27: Focus on high-performing brands - Bonterra
II.5. Focus on high-performing brands - Bonterra GLOBAL LEADER IN ORGANIC WINE (Volume in Th. 9 liter cases) 2017: +15.0% 27
Slide 28: Focus on high-performing brands - 1000 Stories
II.5. Focus on high-performing brands - 1000 Stories SUCCESSFUL INNOVATION IN THE AMERICAN MARKET (Volume in Th. 9 liter cases) 2017: +34.4% 28
Slide 29: Real Estate Business - Update
Real Estate Business - Update • 4Q17 divestments related to logistics/distribution in restructuring in Chile: – Punta Arenas facility • Sale of 2.5 hectares in Casablanca • Real Estate business result: Ch$1,961 million in 4Q17 • Real Estate projects progressing according to plan, currently under fea
Slide 30: Contents
Contents I. 4Q17 Results II. 2022 Strategy Follow-Up III. Outlook IV. 2017 Results
Slide 31: Outlook - Company position in a tighter global supply scenario
III. Outlook - Company position in a tighter global supply scenario Outlook for Concha y Toro’s own production in 2018 • Expected increase of 20% vs. 2017. Increasing grape cost from third-party suppliers 31
Slide 32: Outlook - Competitive advantage in tighter supply scenario
III. Outlook - Company position in a tighter global supply scenario Concha y Toro has a competitive advantage to face this current scenario due to: • High self sufficiency of grape production • Powerful brands • Distribution network 32
Slide 33: Contents
Contents I. 4Q17 Results II. 2022 Strategy Follow-Up III. Outlook IV. 2017 Results
Slide 34: 2017 Results - Consolidated Wine Volume
IV. 2017 Results - Consolidated Wine Volume (million 9-liter cases) 2017: -3.8% 34
Slide 35: 2017 Results - Consolidated Sales
IV. 2017 Results - Consolidated Sales (Ch$ million) 2017: -2.2% 35
Slide 36: 2017 Results - Operating Profit
IV. 2017 Results - Operating Profit (Ch$ million) 2017: -11.8% 2017 Adj.: -5.8% 36
Slide 37: 2017 Results - EBITDA
IV. 2017 Results - EBITDA (Ch$ million) 2017: -6.9% 2017 Adj.: -2.3% 37
Slide 38: 2017 Results - Net Profit
IV. 2017 Results - Net Profit (Ch$ million) 2017: +3.4% 2017 Adj.: +12.8% 38
Slide 39: 2017 Results - Consolidated Results
IV. 2017 Results - Consolidated Results 12M17 12M16 12M17 12M16 (million Ch$) Change % Change % Reported Reported Adjusted Adjusted Sales 643.785 658.448 -2,2% 643.785 658.448 -2,2% Gross profit 231.705 246.066 -5,8% 233.136 246.066 -5,3% Gross margin 36,0% 37,4% -140 bp 36,2% 37,4% -120 bp Operatin
Slide 40: 4Q17 - 2017 Results
Casiltero det Diablo 4Q17 - 2017 RESULTS VINA CONCHA Y TORO
Slide 41: Sales Currency Mix
Sales Currency Mix Sales Currency 1Q16 2Q16 3Q16 4Q16 2016 1Q17 2Q17 3Q17 4Q17 2017 mix CLP 21.7% 18.7% 19.8% 19.2% 19.7% 20.9% 19.5% 21.8% 19.8% 20.4% USD 32.2% 35.6% 36.8% 39.2% 36.2% 34.9% 34.2% 34.5% 39.5% 36.0% GBP 21.9% 18.0% 17.2% 15.0% 17.7% 18.1% 18.9% 17.8% 15.5% 17.5% EUR 11.2% 9.7% 11.2%