Vina Concha Y Toro S.a. · BCS:CONCHATORO
Vina Concha Y Toro — Deutsche Bank Conference (London) 2017
51 slides from Vina Concha Y Toro's conference presentation, May 2017
Slide 1: Corporate Presentation
Corporate Presentation May 2017
Slide 2: I. Concha y Toro: At a Glance
I. Concha y Toro: At a Glance 2
Slide 3: Viña Concha y Toro Today
Viña Concha y Toro Today • Largest Chilean and Latin American Winery. • Top 10 world’s winery in volume commercialized. • Unique business model within the wine industry. • Production facilities in 3 countries: CL, US & AR. • Distribution subsidiaries in 12 countries and 2 commercial offices. • Globa
Slide 4: Viña Concha y Toro in Numbers
Viña Concha y Toro in Numbers Net Sales (million US$) • 2006: $404 2016: $977 CAGR: 9.1% Volume (million 9 liter cases, wine) • 2006: 21.7 2016: 36.2 CAGR: 5.3% EBITDA* (million US$) • 2006: $66.9 2016: $138 CAGR: 7.5% Net Income (million US$) • 2006: $30.5 2016: $72 CAGR: 8.9% * Gross Profi
Slide 5: II. Global Wine Industry
II. Global Wine Industry 5
Slide 6: Wine Industry: Top wine producers
Wine Industry: Top 10 wine producers • Global Production remained flat since 2000 • 3.3% decrease in 2016 Source: OIV 6
Slide 7: Wine Industry: Top wine consumers
Wine Industry: Top 10 wine consumers • Global Consumption Increasing 0.4% in 2016 • USA, China, Russia leading the growth Consumption (Lts) 10 42 34 25 1 20 24 22 6 23 Source: OIV 7
Slide 8: Wine Industry: Global Exports
Wine Industry: Global Exports • Global Export Value (€) increased 111% in 16 years • Global Export Volume increased 74% in 16 years CAGR: +4.8% CAGR: +3.5% Source: OIV 8
Slide 9: Wine Industry: Global Exports
Wine Industry: Global Exports • Top 6 exporters by value • Top 6 exporters by volume +2.2% +3.9% +1.6% +5.3% +0.3% +3.6% +5.6% +0.9% +8.0% +1.2% 9.2% -0.3% Source: OIV 9
Slide 10: Wine Industry: Global Imports
Wine Industry: Global Imports • Top 6 importers by value • Top 6 importers by volume +0.4% +5.8% +0.8% +3.8% -0.4% +1.4% +3.9% +20.9% +27.9% +4.8% -4.5% +5.1% Source: OIV 10
Slide 11: Wine Industry: Top Wineries
Wine Industry: Top 10 Wineries • The top ten players reached 16% of commercialized volume worldwide. Volume Market Ranking Company Share 2015 1° E&J Gallo Winery Inc 3.39% 2° Constellation Brands Inc 1.84% 3° Wine Group Inc, The 1.84% 4° Viña Concha y Toro SA 1.45% 5° Castel Groupe 1.44% 6° Accolade
Slide 12: III. Investment Attractiveness
III. Investment Attractiveness 12
Slide 13: Investment Attractiveness
Investment Attractiveness 1. Lead by an experienced controlling group 2. Successful track record through years 3. A business model which has supported the growth 4. Market diversification 5. Growth that improves profitability 6. Export Markets Leading the Growth 7. Leading Position 13
Slide 14: 1. Lead by an experienced controlling group
1. Lead by an experienced controlling group Current Controlling Group is part of CyT since the 50’s. Three families integrate the controlling group. Exclusive focus on wine Leading the growth and expansion through years. Passion for wines Experienced Management Management in the Company fo
Slide 15: 2. Successful track record through years
2. Successful track record through years 1883 Foundation 1966 Launch of 1994 First 1997 Strategic 2010 Partnership 2013 World’s Most of Concha y Toro Casillero del Winery to trade Alliance: Almaviva Manchester United Admired Wine Diablo in NYSE Winery Brand 1933 Listed in 1993 Launch of 1996 Launch
Slide 16: Vertical Integration
3. A business model which has supported the growth a. Quality Strong Portfolio of Wines Multiorigin Brands VERTICAL INTEGRATION Strong Distribution Network Control of the production and b. Brand Market Diversification supply chain Building c. Global Strong Global Brand Recognition Presence VERTICAL
Slide 17: The importance of Quality Assurance and Consistency
a. The importance of Quality Assurance and Consistency CHILE ARGENTINA CALIFORNIA 9 valleys 3 valleys 3 valleys 54 vineyards 9 vineyards 14 vineyards 9,388 1,140 469 HECTARES HECTARES HECTARES 17
Slide 18: Leading Company in hectares planted
...Leading Company in hectares planted Hectares Planted (Total includes leases) Source: Information available in Companies Fact Sheet, Web Site Information, Annual Reports, SEC Fillings (20-F & 10-K) 18
Slide 19: Investments supporting the growth
…Investments supporting the growth Sustained Investment Over Time Capex Disclosure (2012-2016) (US$ million) (*) Inorganic Growth: Fetzer (216.0) + Kross (2.7) 19
Slide 20: Investments supporting the growth
…Investments supporting the growth Hectares Planted Wine Storage & Ageing Capacity (million liters) 20
Slide 21: Brand Building built on a strong portfolio
b. Brand Building… built on a strong portfolio… Multi-origin Brands… The America’s Wine Portfolio Chile Argentina USA 21
Slide 22: Development of brands & history
…development of brands & history … SUCCESSFUL POSITIONING OF A GLOBAL BRAND IN THE PREMIUM CATEGORY Main market, Top 10 in sales (UK) #1 sales Cabernet Sauvignon (UK) Casillero del Diablo Reserva. Preferred Wine (China) Volume (million cases) 2003 2016 CAGR Viña Concha y Toro 15.9 36.2 6.5% Ca
Slide 23: Development of brands & history
… development of brands & history… Don Melchor 2014 96 pts Don Melchor 2013 Don Melchor 2012 98 pts Don Melchor 2013 97 pts 23
Slide 24: Independent strong brands
…Independent strong brands … … with the endorsement of Concha yToro SUPER ULTRA VARIETALS PREMIUM ICON PREMIUM PREMIUM USD 5 – 6 / USD 7 - 8 USD 10 / USD 13 USD 14.99 / USD 19.99 USD 25 - 45 / USD 40 USD 65 / USD 95 / USD 135 £4 – 5 / £5 - 6 £7 / £9 £11 / £14 £18 - 32 / £29 £47 / £68 / £97 % of sale
Slide 25: A recognized winery obtaining global awards
… a recognized winery obtaining global awards “#2 Most Admired Wine Brands 2017” (Drinks International, 2017) “World’s Most Powerful Wine Brand” (Intangible Business, 2014 & 2015) “International Best Drinks Company of the Year” 2015 (The Drinks Business). 25
Slide 26: Volume Th. cases
Volume Th. cases +72 +72% 83,602 % +4116% 534 462 353 377 310 15,957 1,983 2012 2013 2014 2015 2016 2014 2015 2016 26
Slide 27: Strategic partnerships
2.3 … strategic partnerships… Viña Maipo official Strategic partnership Cono Sur Bicicleta is sponsor of the ATP Casillero del Diablo the official wine of World Tour de with Manchester “Le Tour de France”. Tokio. United. Concha y Toro Trivento official Official wine sponsor sponsor or the of Dallas
Slide 28: Fine wines recognition
… fine wines recognition… JAMES SUCKLING DELIVERS THE HISTORIC HIGHEST HIGHEST SCORES TO VIÑA SCORE OF CONCHA Y TORO FINE WINES DON MELCHOR 28
Slide 29: The highest accolades for our Portfolio
… the highest accolades for our Portfolio… 29
Slide 30: Global Presence... getting closer to markets
c. Global Presence… getting closer to markets North Europe America 34.4% Asia 17.2% 9.8% Africa 2.0% Latin America 14.8% Chile 21.8% +140 2 12 COMMERCIAL DISTRIBUTION COUNTRIES OFFICES SUBSIDIARIES 30
Slide 31: Sales that build brand equity
… sales that build brand equity… Distribution Subsidiaries: Driving the growth • 67% of CyT’s sales carried out by direct distribution • 33% of CyT’s sales carried out by third parties distributors • 12 distribution subsidiaries • 2 commercial offices • UK started operations on 2001 • Since 2012 in
Slide 32: 4. Market diversification
4. Market diversification… Chilean Destination of Bottled Exports Concha y Toro’s – Currencies and Markets Currency Mix 2016 2015 CLP 19,7% 18,9% USD 36,2% 34,7% GBP 17,7% 20,3% EUR 10,2% 10,2% CAD 3,4% 3,2% ARG 1,1% 1,1% SEK 2,7% 2,7% NOK 0,9% 0,8% BRL 5,4% 5,7% • Export Markets include exports to
Slide 33: Leading the Chilean export categories
… leading the chilean export categories… The Chilean Bottled Export Industry – Concha y Toro Leading Position Share over chilean Chilean exports % Part of CyT in Chilean Rank CyT over Rank 2016 Country bottled exports growth 2016/2015 bottled exports Chilean Exports (volume) 1 USA 11,8% -6,9% 42,4%
Slide 34: 5. Growth that improves profitability
5. Growth that improves profitability Export Volume Domestic Volume (thousand cases, wine) (thousand cases, wine) CAGR: 1.1% Premium Wines Export Volume Premium Wines Domestic Volume (thousand cases, wine) (thousand cases, wine) 34
Slide 35: 6. Export Markets Leading the Growth
6. Export Markets Leading the Growth Export Sales (million Ch$, Wine) Average Export Price Average Export Price (US$ / 9 liter Case, Wine) (Th. Ch$ / 9 liter Case, Wine) 35
Slide 36: 7. Leading Position
7. Leading Position Concha y Toro’s Exports over Chilean Bottled Wine* Volume Value 2004 29.2% 25.8% 2005 32.2% 27.2% 2006 33.4% 28.3% 2007 34.9% 30.2% 2008 37.0% 31.4% Volume Pro-forma (including wine 2009 38.3% 32.3% bottled in UK): 2010 36.6% 31.5% 36.9% (as of Dic. 2016) 2011 33.7% 29.7% 2012 35
Slide 37: IV. Financial Position
IV. Financial Position 37
Slide 38: Recovering volume Growth
Recovering volume Growth Consolidated Sales (million 9 liter cases, wine) Net Sales (billion Ch.$) 2006: $215.8 2016: $658.4 CAGR: +11.8% 38
Slide 39: 2010-2013, a perfect storm
… 2010-2013, a perfect storm… Consolidated EBITDA (million Ch$) (*) Includes the extraordinary effect of the insurance’s payments regarding the earthquake of 2010 Consolidated Mg. EBITDA (% over sales) 39
Slide 40: Remaining profitable through years
… remaining profitable through years… Consolidated Net Profit (million Ch$) (*) Includes the extraordinary effect of the insurance’s payments regarding the earthquake of 2010 (Ch$ 19,555 million before taxes) 40
Slide 41: Strong Capital Structure
Strong Capital Structure Net Financial Debt / EBITDA (1) Net Financial Debt / Equity EBITDA (1) / Financial Expenses (1) 1.2(*) 2,5(**) Liabilities: Current Liabilities + Non Current Liabilities Financial expenses excludes financial income Financial Debt: Other current financial liabilities + Other
Slide 42: Financial Debt
Financial Debt Financial Debt* Dic-16 Dic-15 as of: Ch$ MM Av. Interest rate Ch$ MM Av. Interest rate USD 139.610 2,71% 185.989 2,93% EUR GBP CLP 34.859 5,12% 41.736 5,17% UF 52.696 2,40% 2.563 3,98% ARS 3.562 25,39% 5.478 26,87% BRL 5.146 17,80% 4.458 15,92% MXN 1.428 8,01% 1.765 5,31% SEK Total 23
Slide 43: Financial Debt
Financial Debt Financial Debt by Currency As of December 31, 2016 43
Slide 44: Financial Debt
Financial Debt Expected Maturity Date (1), as of December 31, 2016 (Billion Ch$) Source: The Company (1) Considers current and non current financial liabilities excluding derivatives. • EBITDA, Last 12 Months. • As of Dec. 31, 2016, Concha y Toro had a Cash balance of Ch$47.2 billion. 44
Slide 45: We are ready to keep growing
We have the brands. We have the portfolio. We have the distribution. We have the land. We have the investments. We have the expertise. We are ready to keep growing… 45
Slide 46: V. Exhibits
ONC V. Exhibits Conc VINA CONCHA Y TORO
Slide 47: Viña Concha y Toro
Viña Concha y Toro Board of Directors Shareholder Structure (December 31, 2016) 6 4 1 2 7 3 5 1. Alfonso Larraín Santa María (Chairman) 5. Andrés Larraín Santa María 2. Rafael Guilisasti Gana 6. Pablo Guilisasti Gana 3. Rafael Marín Jordán 7. Jorge Desormeaux Jiménez 4. Mariano Fontecilla de Santiag
Slide 48: Bottled Sales 4Q2016 & 12M2016
Bottled Sales 4Q2016 & 12M2016 Total Sales⁽*⁾ (in Ch$ million) 4Q16 4Q15 Change (%) 12M 2016 12M 2015 Change (%) Chile Domestic Market - wine 18,905 17,423 8.5% 71,265 65,078 9.5% Export markets⁽¹⁾ 120,920 131,136 -7.8% 432,953 426,188 1.6% Argentina Domestic 2,435 2,251 8.1% 7,562 6,748 12.1% Argen
Slide 49: Chilean Harvest through years
Chilean Harvest through years Historical Harvest Volume (million liters) 49
Slide 50: Cabernet Sauvignon Bulk Wine (Maule Valley)
Cabernet Sauvignon Bulk Wine (Maule Valley) 50
Slide 51: Corporate Presentation
Corporate Presentation May 2017
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