Vina Concha Y Toro S.a. · BCS:CONCHATORO
Vina Concha Y Toro — Q4 2022 Earnings Presentation
51 slides from Vina Concha Y Toro's earnings presentation, Mar 14, 2023
Slide 1: Investor Presentation: 4Q22 and 2022 Results
INVESTOR PRESENTATION 4Q22 and 2022 Results
Slide 2: Agenda
2 AGENDA Chapter 01 2022 Results Eduardo Guilisasti, CEO Chapter 02 4Q22 Sales Analysis Blanca Bustamante, IR Director Chapter 03 4Q22 and 2022 Financial Result Osvaldo Solar, CFO
Slide 3: Chapter 01: 2022 Results
4Q22 RESULTS | VIÑA CONCHA Y TORO 3 Chapter 01 2022 Results Eduardo Guilisasti, CEO
Slide 4: Overview
4Q22 RESULTS | VIÑA CONCHA Y TORO 4 Overview
Slide 5: A challenging and complex year 2022
5 A challenging and complex year 2022 It has been a challenging year that has led us to manage the different areas of the business, which put our resilience to the test in order to adapt quickly and with conviction to the new productive, logistical, commercial and financial environment that we have
Slide 6: Aspects that we have worked on and adapted
4Q22 RESULTS | VIÑA CONCHA Y TORO 6 Aspects that we have worked on and adapted: • Productive: Ensure the production of our products, in wines, supplies and availability of labor. • Logistics: Make a strong follow-up of our logistics chain, strengthening our relationship with the main shipping compan
Slide 7: 2022 Result less than the proposed objective
4Q22 RESULTS | VIÑA CONCHA Y TORO 7 2022 Result less than the proposed objective • Despite the efforts made, we could not achieve the great objective that we set for the year 2022: Reach an operating result of Ch$ 140,000 m. • We achieved an operating result of Ch$ 104,873 m, which represents a drop
Slide 8: 2022 Result vs 2021, impacted by extraordinary events
4Q22 RESULTS | VIÑA CONCHA Y TORO 8 2022 Result vs 2021, impacted by extraordinary events that should not be repeated with the same intensity in 2023. IMPACTS ON THE MAIN LINES: 1. Sales: 9.6% drop in volume, equivalent to 3,595 thousand cases. 2. Operating costs: Increase of Ch$ 45,056 m. 3. Sellin
Slide 9: 2022 Results Analysis
4Q22 RESULTS | VIÑA CONCHA Y TORO 9 2022 Results Analysis
Slide 10: 2022 sales volume
4Q22 RESULTS | VIÑA CONCHA Y TORO 10 1. 2022 sales volume 9.6% decrease in volume, which represents a drop of 3,595 thousands of C9L. By origin, the decrease in thousand of C9L was 2,891 in Chile, 399 in the US and 305 in Argentina. (9.6%) 37,557 VA R 33,962 (11.0%) wine 2021 2022 (thousand of C9L)
Slide 11: Quarterly evolution of volumes
4Q22 RESULTS | VIÑA CONCHA Y TORO 11 Quarterly evolution of volumes • Participation (%) of each quarter in the total fall VOLUME CONTRACTION IN THOUSANDS OF C9L 1Q 2Q 3Q 4Q 18.2% 29.7% 11.9% 40.2% (426) (655) (1,066) (1,447)
Slide 12: Quarterly evolution of volumes: wine exports
4Q22 RESULTS | VIÑA CONCHA Y TORO 12 Quarterly evolution of volumes • Wine exports variation by quarter from Chile VOLUME VARIATION IN THOUSANDS OF C9L 1Q 2Q 3Q 4Q (0.5%) 1.6% 16.2% (17.8%) Source: Wines of Chile as of December 2022.
Slide 13: Sales in value grew in 2022
4Q22 RESULTS | VIÑA CONCHA Y TORO 13 Sales in value grew in 2022 Value sales grew by Ch$ 33,869 m (+4.0%). This result reflects a higher average price and a favorable exchange rate effect, offset by lower volume. 4.0% 870,582 VA R 836,713 3.2% wine 2021 2022 (million of Ch$)
Slide 14: Principal + Invest mix: -60 bp
4Q22 RESULTS | VIÑA CONCHA Y TORO 14 Principal + Invest mix: -60 bp % OF TOTAL SALES IN VALUE 49.3% 48.7% Principal + Invest 50.7% 51.3% Others 2021 2022
Slide 15: Performance of the four main markets
4Q22 RESULTS | VIÑA CONCHA Y TORO 15 Performance of the four main markets Result that reflects lower volumes in the main markets, a higher average price and a slowdown in consumption at the industry level. 2022 % of Sales Var % Value UK 23.5% (3.0%) Chile 16.7% (0.6%) US 15.0% 3.4% Brazil 6.4% 0.5%
Slide 16: Performance by category
4Q22 RESULTS | VIÑA CONCHA Y TORO 16 Performance by category Higher-value categories grew at double-digit rates. 2022 Var % Value Ultra Premium 33.6% Super Premium 10.0% Premium 1.0% Varietals 2.7%
Slide 17: Sales result impacted by
4Q22 RESULTS | VIÑA CONCHA Y TORO 17 Sales result impacted by: • Strong accumulation of inventories throughout the logistics chain as of December 2021 due to fears of shortages. • Need to optimize working capital due to interest rate increases not seen in the last 15 years. • Slowdown in demand towa
Slide 18: 2. Operating Costs
4Q22 RESULTS | VIÑA CONCHA Y TORO 18 2. Operating Costs (million of Ch$) 2022 2021 Var (Ch$) Var (%) Operating cost (528,861) (501,793) (27,068) 5.4% % Op. cost / Sales (60.7%) (60.0%) (80 bp) Main variations: • The increase in costs of dry goods, equivalent to Ch$ 20,094 m. • Strong increase in shi
Slide 19: 3. Selling, general, and administrative expenses (SG&A)
4Q22 RESULTS | VIÑA CONCHA Y TORO 19 3. Selling, general, and administrative expenses (SG&A) 2022 2021 Var (Ch$) Var (%) SG&A (234,767) (205,736) (29,031) 14.1% Consolidated sales 870,582 836,713 33,869 4.0% % of sales -27.0% -24.6% (240 bp) Main variations: • In percentage terms, the greatest incre
Slide 20: 4. Positive effect of the exchange rate
4Q22 RESULTS | VIÑA CONCHA Y TORO 20 4. Positive effect of the exchange rate of Ch$ 29,541 m FX Rates 2022 FX Rates 2021 Var (%) USD 875 762 14.8% EUR 918 899 2.2% GBP 1,075 1,048 2.5% CAD 676 608 11.2% SEK 86 88 (2.6%) NOK 91 88 2.6% BRL 171 141 21.1% ARG 7 8 (16.3%) MXN 44 38 16.5% CNY 130 119 8.7
Slide 21: 4. CyT index
4Q22 RESULTS | VIÑA CONCHA Y TORO 21 4. CyT index CyT index Base 100: 31/12/2017 170% 160% 150% 140% 130% Índice CyT USD 120% 100% 110% 100% 90% 2017 2019 2020 2021 2022 The CyT index corresponds to the variation with respect to the Chilean peso of the weighted basket of Viña Concha y Toro's billing
Slide 22: 5. Lower results in US and Argentina
4Q22 RESULTS | VIÑA CONCHA Y TORO 22 5. Lower results in our operations originating in the US and Argentina. 22 vs 21 variation US Argentina Sales (0.9%) 2.6% Operating cost 5.4% 26.2% Gross margin (13.0%) (12.4%) SG&A 11.5% 21.0% Lower Operating Result (Ch$ 13,525 m) (Ch$ 7,643 m)
Slide 23: 6. Non-Operating result
4Q22 RESULTS | VIÑA CONCHA Y TORO 23 6. Non-Operating result (million of Ch$) 2022 2021 Var (Ch$) Var (%) Financial income 3,522 2,819 702 24.9% Financial cost (15,564) (13,060) (2,504) 19.2% Results of indexed units 297 101 196 194.3% Net financial expense (11,745) (10,140) (1,605) 15.8% % of sales
Slide 24: 7. 2022 consolidated result
4Q22 RESULTS | VIÑA CONCHA Y TORO 24 7. 2022 consolidated result (million of Ch$) 2022 2021 Var (%) Consolidated sales 870,582 836,713 4.0% Operating cost (528,861) (501,793) 5.4% Gross profit 341,721 334,920 2.0% Gross margin 39.3% 40.0% (80 bp) SG&A (234,767) (205,736) 14.1% EBIT 104,873 132,912 (
Slide 25: Chapter 02: 4Q22 Sales Analysis
25 Chapter 02 4Q22 Sales Analysis Blanca Bustamante, IR Director
Slide 26: 4Q22 sales
4Q22 RESULTS | VIÑA CONCHA Y TORO 26 4Q22 sales Drop in sales for the quarter due to lower volumes, a higher average price and slowdown in the industry. VA R (4.5%) 258,375 (5.6%) wine 246,690 4Q21 4Q22 (thousand of C9L)
Slide 27: 4Q22 volume
4Q22 RESULTS | VIÑA CONCHA Y TORO 27 4Q22 volume During this quarter, wine volume fell 16.4%, reflecting a slowdown in the industry and inventory adjustments by distributors and retailers. VA R (13.6%) 10,643 (16.4%) wine 9,196 4Q21 4Q22 (million of Ch$)
Slide 28: Main price increases in local currency
4Q22 RESULTS | VIÑA CONCHA Y TORO 28 Main price increases in local currency (does not consider mix effect) Price variation in local 4Q22 currency UK 4.7% Chile 5.1% US 4.2% Mexico 9.3% Canada 12.9% South Korea 12.2% China 14.6% Colombia 16.1% Norway 10.3%
Slide 29: Main markets performance
4Q22 RESULTS | VIÑA CONCHA Y TORO 29 Main markets performance 4Q22 % of Sales Var % Value Var % Volume UK 22.7% (12.0%) (16.2%) Chile 15.9% (4.3%) (5.0%) US 15.7% 6.1% (8.0%) Mexico 8.2% 21.9% (5.8%) Japan 6.9% 1.3% (13.8%) Brazil 4.7% (14.9%) (23.5%) Canada 2.2% (26.9%) (39.9%) South Korea 2.2% 139
Slide 30: Wine: Category performance
4Q22 RESULTS | VIÑA CONCHA Y TORO 30 Wine: Category performance 4Q22 wine Var % Value Var % Volume PRINCIPAL (13.1%) (21.6%) BRAND MATRIX INVEST 2.6% (6.7%) PROTECT (6.1%) (15.4%) WATCH 4.0% (14.1%) PORTFOLIO SUPER & ULTRA PREMIUM 1.2% 9.0% TOTAL WINE (5.6%) (16.4%)
Slide 31: Principal + Invest mix: -60 bp
4Q22 RESULTS | VIÑA CONCHA Y TORO 31 Principal + Invest mix: -60 bp % OF TOTAL SALES IN VALUE 49.9% 49.2% Principal + Invest 50.1% 50.8% Others 4Q21 4Q22
Slide 32: Chapter 03: 4Q22 and 2022 Financial Results
32 Chapter 03 4Q22 and 2022 Financial Results Osvaldo Solar, CFO
Slide 33: Gross profit: -11.9%, impacted by cost increases
4Q22 RESULTS | VIÑA CONCHA Y TORO 33 Gross profit: -11.9%, impacted by cost increases (million of Ch$) 4Q22 4Q21 Var (%) Consolidated sales 246,690 258,375 (4.5%) Operating cost (151,459) (150,235) 0.8% Gross profit 95,231 108,140 (11.9%) Gross margin 38.6% 41.9% (330 bp) 3 concepts that mainly expl
Slide 34: SG&A – Lower expenses in absolute terms in the quarter
4Q22 RESULTS | VIÑA CONCHA Y TORO 34 SG&A – Lower expenses in absolute terms in the quarter (million of Ch$) 4Q22 4Q21 Var (%) Consolidated sales 246,690 258,375 (4.5%) Gross profit 95,231 108,140 (11.9%) SG&A (65,068) (65,884) (1.2%) SG&A / Sales (26.4%) (25.5%) (90 bp) SG&A / Sales ratio increased
Slide 35: EBIT and EBITDA
4Q22 RESULTS | VIÑA CONCHA Y TORO 35 EBIT and EBITDA 4Q22 4Q21 Var (%) (million of Ch$) % / Sales % / Sales % / Sales Consolidated sales 246,690 258,375 (4.5%) Gross profit 95,231 38.6% 108,140 41.9% (11.9%) (330 bp) SG&A (65,068) (26.4%) (65,884) (25.5%) 1.2% (90 bp) Other incomes and expenses (406
Slide 36: Non-Operating result
4Q22 RESULTS | VIÑA CONCHA Y TORO 36 Non-Operating result (million of Ch$) 4Q22 4Q21 Var (Ch$) Var (%) Net financial expense (*) (3,775) (2,432) (1,343) 55.2% Exchange differences 167 273 (105) (38.6%) Non-Operating result (**) (3,608) (2,160) (1,448) 67.0% Associated companies 104 244 (140) (57.3%)
Slide 37: Non-Operating result
4Q22 RESULTS | VIÑA CONCHA Y TORO 37 Non-Operating result Non-operating result (*) decreased Ch$ 1,448 m due to: • Higher Net financial expense of Ch$ 1,343 m (capital effect Ch$ 565 m; interest rate effect Ch$ 738 m). • Lower exchange differences of Ch$ 105 m. * Does not consider results of affilia
Slide 38: Non-Operating result 2022 v/s 2021
4Q22 RESULTS | VIÑA CONCHA Y TORO 38 Non-Operating result 2022 v/s 2021 (million of Ch$) 2022 2021 Var (Ch$) Var (%) Financial income 3,522 2,819 702 24.9% Financial cost (15,564) (13,060) (2,504) 19.2% Results of indexed units 297 101 196 194.3% Net financial expense (11,745) (10,140) (1,605) 15.8%
Slide 39: 4Q22 currency diversification
4Q22 RESULTS | VIÑA CONCHA Y TORO 39 4Q22 currency diversification Diversification of currencies attenuates the variations of ARG MXN CNY 1.5% the dollar as a single currency 1.0% 5.7% CLP BRL 16.8% NOK 6.4% 1.4% EXCHANGE RATE VARIATION 4Q22 VS 4Q21 SEK CyT basket index: +4.4% 2.0% CAD USD: +10.1% 2
Slide 40: Non-Operating result: Effects of interest rate increases
4Q22 RESULTS | VIÑA CONCHA Y TORO 40 Non-Operating result: Effects of interest rate increases Short rates (1Y) 2022 2021 as of 31/12/2022 Interest rates 14,0% Rate % total Rate % total 12,0% CLP 5.2% 52.6% 4.8% 72.0% 3.6% 0.6% 3.4% 0.7% 10,0% 9.74% UF USD 2.7% 34.3% 1.8% 23.6% 8,0% BRL 12.9% 2.3% 6.
Slide 41: Non-Operating result: Inflation effect
4Q22 RESULTS | VIÑA CONCHA Y TORO 41 Non-Operating result: Inflation effect 115% Accumulated Real Inflation v/s Fixed Inflation at 2.78% 13.3% 113% 111% 109% 107% 105% 103% 2.78% 101% 99% 97% 95% Dic Ene Feb Mar Abr May May Jun Jul Ago Sept Oct Oct Nov Dic 2022 swap 2022 2022 benefits: 2023: 1) Infl
Slide 42: Associated companies results
4Q22 RESULTS | VIÑA CONCHA Y TORO 42 Associated companies results (Proportional Value for CyT – in million of Ch$) ALMAVIVA INDUSTRIA CORCHERA 6,237 3,097 4,503 2,477 3,139 2,804 2,107 2,142 929 626 269 344 231 620 2017 2018 2019 2020 2021 2022 2017 2018 2019 2020 2021 2022 Venta de terreno
Slide 43: 2022: Net profit and Net margin
4Q22 RESULTS | VIÑA CONCHA Y TORO 43 2022: Net profit (million of Ch$) and Net margin (%) 11.8% 10.1% 98,810 10.0% 87,213 8.1% 8.0% 8.0% 77,994 52,500 49,575 49,111 2017 2018 2019 2020 2021 2022 Net profit Net margin
Slide 44: CAPEX invested between 2017 and 2022
4Q22 RESULTS | VIÑA CONCHA Y TORO 44 CAPEX: Ch$ 290 billion invested between 2017 and 2022, equivalent to US$ 391 m 76,017 55,649 42% 52,986 30% 43,303 35% 32,464 26% 29,513 44% 29% 17% 37% 43% 21% 22% 19% 20% 28% 26% 21% 22% 11% 26% 13% 22% 13% 20% 15% 2017 2018 2019 2020 2021 2022 Trivento y Bonte
Slide 45: Working capital: Increase of Ch$ 67,000 m in 2022
4Q22 RESULTS | VIÑA CONCHA Y TORO 45 Working capital: Increase of Ch$ 67,000 m in 2022 v/s 2021 CASH CONVERSION CYCLE (days) 500 400 339 311 316 298 300 264 271 200 230 284 276 282 317 260 100 118 115 119 91 111 106 - -84 -88 -79 -81 -95 -84 (100) (200) 2017 2018 2019 2020 2021 2022 Días CXC Días de
Slide 46: Return on invested capital – ROIC
4Q22 RESULTS | VIÑA CONCHA Y TORO 46 Return on invested capital – ROIC 11.3% 10.3% 9.1% 7.5% 7.4% 7.2% 2017 2018 2019 2020 2021 2022 ROIC: (Operating Margin – Taxes + Exchange Differences) / (Equity – Net Financial Debt – Cash) 12 moving months. * Income Statement corresponds to the 12 moving months
Slide 47: Net financial debt
4Q22 RESULTS | VIÑA CONCHA Y TORO 47 Net financial debt (million of Ch$) +81,342 321,915 266,898 250,413 240,573 221,101 201,374 2017 2018 2019 2020 2021 2022 Net Financial Debt: Gross Financial Debt including the effect of Derivatives related to Financial Debt – Interest – Cash and cash equivalent.
Slide 48: Adequate level of indebtedness relative to Equity
4Q22 RESULTS | VIÑA CONCHA Y TORO 48 Adequate level of indebtedness relative to the size of the Equity FINANCIAL STRENGTH NET DEBT RATIO 1.2 0.52 0.55 0.53 0.49 0.43 0.36 2017 2018 2019 2020 2021 2022 Net Debt Ratio Covenants Net Debt Ratio: (Other Current and Non-Current Financial Liabilities – Cas
Slide 49: Debt and Financial Expense vs. Cash generation
4Q22 RESULTS | VIÑA CONCHA Y TORO 49 Debt and Financial Expense vs. Cash generation FINANCIAL STRENGTH FINANCIAL COST COVERAGE RATIO NET FINANCIAL DEBT*/ EBITDA 12.3 2.9 2.6 2.6 9.8 2.5 8.5 8.8 8.2 2.4 7.0 1.5 1.4 2.5 2017 2018 2019 2020 2021 2022 2017 2018 2019 2020 2021 2022 Financial cost coverag
Slide 50: Closing remarks
4Q22 RESULTS | VIÑA CONCHA Y TORO 50 Closing remarks For a year that presents itself as challenging and uncertain, our priority objective is to reorient the company towards strong sales growth in value and volume. This is based on our solid business model: • Profound transformation achieved in the f
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