Vina Concha y Toro S.A. · BCS:CONCHATORO
Vina Concha y Toro — Investor Presentation (November 2013)
64 slides from Vina Concha y Toro's investor presentation, November 2013
Slide 1: Corporate Presentation November 2013
Corporate Presentation November 2013 1 1/ 1
Slide 2: Wine Industry: Top 10 wine producers
Wine Industry: Top 10 wine producers • Global Production Decreasing 0.9% per year. • 5.6% decrease in 2012. 7,000 CAGR: CAGR: -2.7% -2.1% 6,000 CAGR: 5,000 -2.6% million liters 4,000 2000 CAGR: -0.1% 2006 3,000 CAGR: +2.9% CAGR: CAGR: 2012 +3.8% CAGR: CAGR: CAGR: -0.7% +5.4% 2,000 +3.1% -0.7% 1,000
Slide 3: Wine Industry: Top 10 wine consumers
Wine Industry: Top 10 wine consumers • Global Consumption Increasing 0.6% per year • Potential markets: Asia, US and Latin America 4,000 CAGR: -1.1% CAGR: 3,500 CAGR: -2.5% +2.6% 3,000 CAGR: 2,500 -0.1% CAGR: million liters +4.3% CAGR: CAGR: 2000 2,000 CAGR: +2.2% CAGR: -3.4% +6.8% 2006 -1.8% 1,500
Slide 4: Wine Industry: Global Exports
Wine Industry: Global Exports • Global Export Volume Increasing 5.2% per year • Global Export Value (€) Increasing 4.2% per year 10,000 9,955 9,820 9,286 8,953 9,000 8,654 8,545 8,143 million liters 8,000 7,569 7,313 6,961 6,865 7,000 5,999 6,103 6,000 5,000 2000 2001 2002 2003 2004 2005 2006 2007 2
Slide 5: Wine Industry: Global situation
Wine Industry: Global situation • World Wine Consumption Increasing 0.6% per year from 2000 to 2012. • World Wine Production Decreasing 0.9% per year from 2000 to 2012. 30,000 29,000 28,000 27,000 million liters 26,000 25,000 World Wine Consumption 24,000 World Wine Production 23,000 22,000 21,000 2
Slide 6: Concha y Toro: Consolidated Sales
Concha y Toro: Consolidated Sales Sales Breakdown 1H13 Million Ch$ Argentina Argentina Average Annual domestic exports Growth: 10.6% 2% 3% U.S.A. (Fetzer) domestic 11% U.S.A. 450,545 (Fetzer) 422,735 374,019 exports 354,419 314,756 1% 304,067 246,640 +0.7% Chile Export Domestic - 200,000 201,326 mar
Slide 7: Concha y Toro Performance
Concha y Toro Performance Income Statement 2006 (*) 2012 CAGR Sales (Ch$ million) $ 246,640 $ 450,545 10.6% Exports ** (Ch$ million) $ 157,620 $ 294,362 11.0% Exports ** (US$ million) $ 295 $ 606 12.8% % Exports 63.9% 65.3% Export volume ** ('000 cases) 12,924 20,549 8.0% Operating Result (Ch$ milli
Slide 8: Concha y Toro Business Model: Key Factors & Growth Drivers
Concha y Toro Business Model: Key Factors & Growth Drivers Exclusive focus on wine Strong Distribution Strong Portfolio Network: Global of Wines across Reach / Leading all market Position in Key segments Markets Strong Brand Market Recognition Diversification Quality Assurance Investment that and Co
Slide 9: Concha y Toro Business Model: Key Factors & Growth Drivers
Concha y Toro Business Model: Key Factors & Growth Drivers Exclusive focus on wine Strong Distribution Strong Portfolio Network: Global of Wines across Reach / Leading all market Position in Key segments Markets Strong Brand Market Recognition Diversification Quality Assurance Investment that and Co
Slide 10: Concha y Toro Export Sales (Bottled Wine)
Concha y Toro Export Sales (Bottled Wine) Million Ch$ Thousand US$ Average Annual Average Annual Growth: 11.0% Growth: 12.8% 294,362 266,566 277,068 279,371 606,109 246,683 576,559 543,942 218,592 483,405 453,287 403,531 157,620 -0.7% +2.4% 294,666 131,537 130,660 266,480 272,932 2006 (*) 2007 (*) 2
Slide 11: Concha y Toro Export Sales - Total Bottled Volume
Concha y Toro Export Sales - Total Bottled Volume (Volume Cases ´000) Average Annual Growth: 8.0% 20,514 20,046 20,549 18,955 17,642 16,279 12,924 -3.5% 9,059 8,738 2006 2007 2008 2009 2010 2011 2012 … 6M 6M 2012 2013 It considers total exports and the sales of our distribution subsidiaries (UK, Nor
Slide 12: Concha y Toro Export Sales
Concha y Toro Export Sales (Average Price US$/9lt Case) +6.2% Average Annual 31.23 Growth: 4.4% 29.50 29.42 28.76 26.90 25.69 25.50 24.79 22.80 2006 2007 2008 2009 2010 2011 2012 6M 2012 6M 2013 12 12/ 12
Slide 13: Concha y Toro Export Sales – Premium Wines
Concha y Toro Export Sales – Premium Wines (Volume Cases ´000) Average Annual Growth: 11.0% 4,545 4,155 4,022 3,692 3,620 3,542 -2.8% 2,433 1,928 1,874 2006 2007 2008 2009 2010 2011 2012 … 6M 6M 2012 2013 13 13/ 13
Slide 14: Total Chilean exports by category
Total Chilean exports by category Jan - Dec 2010 % Change 2010/2009 Liters US$ Av. Price Liters US$ Av. Price ('000) ('000) US$/Ltr Bottled 458,498 $ 1,350,216 $ 2.94 10.7% 11.8% 1.1% Bulk 274,754 $ 201,799 $ 0.73 -1.6% 15.9% 17.8% Total 733,252 $ 1,552,015 $ 2.12 5.7% 12.4% 6.3% Jan -Dec 2011 % Cha
Slide 15: Total Chilean exports by category
Total Chilean exports by category Jan - Dic 2012 % Change 2012/2011 Liters US$ Av. Price Liters US$ Av. Price ('000) ('000) US$/Ltr Bottled 473,391 $ 1,498,518 $ 3.17 0.2% 0.4% 0.2% Bulk 275,634 $ 291,964 $ 1.06 43.8% 47.2% 2.4% Total 749,026 $ 1,790,481 $ 2.39 12.8% 5.9% -6.1% Source: Vinos de Chil
Slide 16: Export – New World Producers
Export – New World Producers (Bottled wine exports by volume – million liters) % Change % Change % Change 2007 2008 2009 2010 2011 2012 2010/09 2011/10 2012/11 Australia 579 513 471 416 353 331 -11.8% -15.1% -6.2% Chile 375 386 414 458 472 473 10.7% 3.0% 0.2% USA 235 240 205 190 218 221 -7.1% 14.3%
Slide 17: Concha y Toro Business Model: Key Factors & Growth Drivers
Concha y Toro Business Model: Key Factors & Growth Drivers Exclusive focus on wine Strong Distribution Strong Portfolio Network: Global of Wines across Reach / Leading all market segments Position in Key Markets Strong Brand Market Recognition Diversification Quality Assurance Investment that and Co
Slide 18: Operating plants in 3 countries, 13 distribution subsidiaries
Canada USA Excelsior China South Africa • Operating plants in 3 countries • 13 Distribution Subsidiaries • 137 countries reached • 329 independent distributors 18 18/ 18
Slide 19: Strong Distribution Network: Direct Distribution
Strong Distribution Network: Direct Distribution • Concha y Toro UK (Since 2001) UK • 5.5 million cases to Dec 2012 • Concha y Toro Nordics (Sweden, Finland & Norway – Since 2009) Nordics • 1.0 million cases to Dec 2012 • VCT Brasil (Since 2008) Brazil • 643 thousand cases to Dec 2012 • VCT Asia (Si
Slide 20: Leading market share over Chilean Exports
Leading market share over Chilean Exports Exports of 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% 2009 38.3% 32.3% 2010 36.6% 31.5% 2011 33.7% 29.7% 2012 35.4% 31.3% 6M 2013 32.8% 29.2% Source: Vinos de Chile (*) Includes bottled & B
Slide 21: The Chilean Bottled Industry – Concha y Toro Leading Position
The Chilean Bottled Industry – Concha y Toro Leading Position Year 2012 Share over chilean % Part of CyT in total Rank Growth Rank Country bottled export Chilean bottled Exports Rank 2012 2012/2011 2011 (volume) (volume) st st 1 1 st United Kingdom 18.1% -6.6% 52.0% 1 nd st 2 2 nd USA 13.8% -7.2% 38
Slide 22: Our Distribution Subsidiaries
Distribution Subsidiaries: Driving the growth Volume Thousand 9L cases Volume 2009 Volume 2010 Volume 2011 Volume 2012 6M 2013 Total Volume Holding 28,108 29,203 29,658 30,196 12,966 Total Volume through our 15,630 15,883 17,332 20,085 9,024 Distribution Subsidairies % of Total Vol ume 55.6% 54.4% 5
Slide 23: Concha y Toro export growth by Region – by Volume
Concha y Toro export growth by Region – by Volume Mix of Export Sales % Change Volume Region 2011 2012 6M 13 2011 2012 6M 13 U.K. 25.3% 26.8% 25.2% -9.1% 8.5% -7.5% Continental Europe 18.5% 18.2% 19.3% -7.0% 1.0% 2.9% Nordics (SWE, FIN, NOR) (1) 4.8% 4.9% 5.9% -5.2% 6.0% 6.3% U.S.A. 16.3% 15.0% 16.4
Slide 24: UK Market – Consumption Off Trade by Origin
UK Market – Consumption Off Trade by Origin Source: Nielsen 24 24/ 24
Slide 25: US Market – Consumption
US Market – Consumption • Despite the economic dowturn, in the US, the wine market has continued increasing in volume in the last years. • 0.1% decrease in Volume up to June 2013 due to lower bulk wine imports. • Imports: Bottled increased 7.9% up to June 2013. (million 9 liter cases) % Change % Cha
Slide 26: US Market – Imported Bottled Wines by Country
US Market – Imported Bottled Wines by Country Volume Value 30,000 -0.6% 1,400,000 -3.1% 25,000 Ac Dic 11 1,200,000 Ac Dic 11 Thousand 9 ltr Cases Ac Dic 12 1,000,000 +14.2% Ac Dic 12 20,000 Thousand US$ -8.1% 800,000 15,000 600,000 -8.3% +7.0% -4.8% -5.0% 400,000 -2.4% +4.0% +2.9% 10,000 -11.6% +16.
Slide 27: Domestic Market Share
Domestic Market Share (by volume) 2005 2006 2007 2008 2009 2010 2011 2012 Ac Jul 13 Concha y Toro 27.1 28.6 30.0 29.7 31.5 30.7 30.4 29.6 29.2 Santa Rita 24.4 25.5 27.9 28.7 28.9 29.4 29.1 28.0 29.0 San Pedro - Tarapacá 21.7 21.9 21.8 23.0 22.5 24.4 24.6 26.7 27.1 Santa Carolina 3.2 3.1 2.3 2.0 1.8
Slide 28: Domestic market Chile – Volume & Value
Domestic market Chile – Volume & Value Thousand Liters Million Ch$ Average Annual Average Annual Growth: 3.4% Growth: -0.4% 77,291 74,235 71,742 59,100 61,998 61,573 70,435 53,705 63,261 65,119 50,467 53,221 50,184 61,934 -5.5% -3.4% 27,398 25,895 27,661 26,707 2006 2007 2008 2009 2010 2011 2012 … 6
Slide 29: Domestic market Chile – Premium Wine growth
Domestic market Chile – Premium Wine growth Thousand Liters % Premium/Total % Premium/Total Year Volume Value 2006 3.1% 13.0% 2007 2.7% 13.2% Average Annual 2008 3.1% 15.2% Growth: 12.1% 2009 3.5% 16.3% 3,840 2010 4.1% 17.5% 3,387 2011 5.2% 20.2% 2012 6.2% 22.9% 2,898 6M13 6.1% 23.2% 2,597 2,226 +4.
Slide 30: Concha y Toro portfolio
Concha y Toro portfolio Category Bi Varietal & Varietal Premium Super Premium Ultra Premium Icon RRP USA US$ 4.99 US$ 6.99 US$ 7.99 US$ 9.99 US$ 13 US$ 16 US$ 20 US$ 30 US$ 45 US$ 95 US$ 120 US$ 135 RRP UK £ 4.99 £ 5.99 £ 6.99 £ 7.99 £ 9.99 £ 11.99 £ 12.99 £ 15.99 £ 18.99 £ 45 £ 65 £ 65 % sales 76%
Slide 31: Concha y Toro Business Model: Key Factors & Growth Drivers
Concha y Toro Business Model: Key Factors & Growth Drivers Exclusive focus on wine Strong Distribution Strong Portfolio Network: Global of Wines across Reach / Leading all market Position in Key segments segments Markets Strong Brand Market Recognition Diversification Quality Assurance Investment th
Slide 32: Cono Sur portfolio
CO Cono Sur portfolio Organic 32
Slide 33: Maipo portfolio
SSS 5555555555555 EE —_—_—_—_—__—_E___l_=_=_=_== Maipo portfolio Ultra Premium Bi Varietales Varietales 33
Slide 34: Palo Alto portfolio
CO Palo Alto portfolio j i a Nie if Any p a PALO ALTO
Slide 35: Maycas portfolio
Maycas portfolio Reserva Especial mayoas = LIMA 35
Slide 36: Trivento portfolio
Trivento portfolio Bi-Varietal Super Ultra Espumantes Premium premium & Varietal Premium BODEGA TRIVENTO ARGENTINA 36
Slide 37: Fetzer portfolio
CO Fetzer portfolio = Premium Super Premium [Genre FETZER J RIEL VINEYARDS 37
Slide 38: Concha y Toro Business Model: Key Factors & Growth Drivers
Concha y Toro Business Model: Key Factors & Growth Drivers Exclusive focus on wine Strong Distribution Strong Portfolio Network: Global of Wines across Reach / Leading all market Position in Key segments Markets Strong Brand Market Recognition Diversification Quality Assurance Investment that and Co
Slide 39: Most admired wine brand in the world.
Most admired wine brand in the world. (“World's Most Admired Wine Brands ”, Drinks International, 2013, 2012 and 2011) 39 39/ 39
Slide 40: Concha y Toro Business Model: Key Factors & Growth Drivers
Concha y Toro Business Model: Key Factors & Growth Drivers Exclusive focus on wine Strong Distribution Strong Portfolio Network: Global of Wines across Reach / Leading all market Position in Key segments Markets Strong Brand Market Recognition Diversification Quality Assurance and Consistency: Inves
Slide 41: Sustained Investment over time
Sustained Investment over time • US$ 673.6 million between 2005 – 2012 - Vineyard expansion Chile - Increasing cellar and vinification capacity - Improvements in bottling capacity and efficiency - 2011: Record year of investment for Viña Concha y Toro Investment US$ Million (*) 2013 Capital Investme
Slide 42: Costs: Significant shift in chilean bulk wine price curve
Costs: Significant shift in chilean bulk wine price curve Average Bulk Wine price to producer ( Ch$/Liter) $ 600 $ 500 $ 400 Trend Price Ch $ / Liter Bulk Cabernet $ 300 Industry $ 200 $ 100 $0 Oct-07 Oct-08 Oct-09 Oct-10 Oct-11 Oct-12 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 J
Slide 43: Chilean Bulk Wine Exports
Chilean Bulk Wine Exports 60,000 1.20 Bulk Exports Monthly 50,000 1.00 Thousand Liters 40,000 0.80 US$/Liter 30,000 0.60 20,000 0.40 10,000 0.20 0,0_-;-* #.##0,0_-;_-* "-"??_-;_-@_- 0 0.00 Oct-07 Oct-08 Oct-09 Oct-10 Oct-11 Oct-12 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jul-07 Jul-08 Jul-09
Slide 44: Capacity Increase – Support Growth
Capacity Increase – Support Growth 12,000 Planted Hectares • Planted area growth of 10,000 USA 142% in the last 9 years 8,000 Argentina (CAGR = 10.3%) 6,000 Chile 4,000 2,000 - 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Wine Storage & Ageing Capacity (million liters) • 118% increase in Wine 5
Slide 45: Concha y Toro vineyard: Geographical Diversification
Concha y Toro vineyard: Geographical Diversification CHILE (Hectares) Vineyards Hectares to Total Planted 2012 be planted Hectares Valley - Chile Limarí 1,106 177 1,283 Casablanca 410 16 426 Aconcagua 100 - 100 Leyda 130 - 130 Maipo 954 27 981 Cachapoal 1,359 287 1,646 Colchagua 2,075 215 2,290 Curi
Slide 46: The Chilean Wine Industry: An overview
The Chilean Wine Industry: An overview Total Hectares 2012: 125,000 Total bottled wine exports 2012: 473,391 thousand liters Concha y Toro: 35% Mkt Share Volume Exported bottled wine 2012 30% Mkt Share Vol Domestic Market (Dec 2012) 9,133 Hectares Planted (2012) 361 Storage capacity (million liters
Slide 47: Main wineries per volume
Main wineries per volume Concha y Toro is the 7th worldwide in volume. • The top ten players reached 12.4% of total bottled volume sold in 2012. Volume Market Ranking Company Sahare 2012 1° E & J Gallo Winery Inc 2.6% 2° Constellation Brands Inc 2.0% 3° The Wine Group 1.7% 4° Pernod Ricard Groupe 1.
Slide 48: Area planted – largest wineries
Area planted – largest wineries (hectares planted) TWE (AUS/USA/NZ/IT) 11,000 Concha y Toro (CHI/ARG/USA) 10,750 E&J Gallo (USA) 8,100 Pernod Ricard (FR/AUS/ARG) 8,000 Constellation (USA/AUS/NZ/CAD) 7,729 Grupo Peñaflor (ARG) 5,215 0 2,000 4,000 6,000 8,000 10,000 12,000 Source: Companies Fact Sheet
Slide 49: Summary
Summary • We have the brands. • We have the portfolio. • We have the distribution. • We have the land. • We have the investments. • We have the experience. We are ready to continue growing… 49 49/ 49
Slide 50: Corporate Presentation November 2013
Corporate Presentation November 2013 2013 50 50/ 50
Slide 51: Exhibits
Exhibits 51 51/ 51
Slide 52: Exchange Rate main producers
Exchange Rate main producers From 12/31/2009 to 10/04/2013 Against USD 150 140 130 120 South African Rand 110 Chilean Peso 100 90 Australian Dollar 80 Against USD Against GBP Against EUR 30.0% 38.0% 54.4% 17.0% 28.9% 60.0% 52.0% 25.0% 50.0% 12.0% 20.0% 40.0% 7.0% 35.9% 15.0% 7.0% 30.0% 10.0% 0.3% 2.
Slide 53: Sales: Exchange Rate Sensitivity
Sales: Exchange Rate Sensitivity As a % of Total Sales: Currency Mix 6M13 6M12 CLP 21.4% 22.6% USD 35.1% 37.9% GBP 15.8% 16.1% EUR 9.8% 9.9% CAD 2.7% 3.5% ARG 1.5% 1.5% SEK 3.1% 2.8% NOK 1.0% 0.9% BRL 6.8% 4.6% MXN 2.7% 0.0% 53 53/ 53
Slide 54: Financial Debt
Financial Debt Financial Debt* as of: Jun-13 Jun-12 Ch$ MM Av. Interest rate Ch$ MM Av. Interest rate USD 141,052 3.01% 157,427 2.97% EUR 2,132 1.32% 0 GBP 2,751 2.36% CLP 2,500 5.58% 20,853 5.98% UF 80,656 3.74% 48,582 3.92% ARS 8,435 15.53% 5,447 14.35% BRL 8,074 10.00% 1,250 10.98% MXN 1,290 6.34
Slide 55: Income Statement (million Ch$)
Income Statement (million Ch$) 2Q2013 2Q2012 Change 6M 2013 6M 2012 Change Million. Ch Million. Ch % Million. Ch Million. Ch % Operating Results Sales revenues 110,245 111,142 -0.8% 201,326 200,000 0.7% Cost of sales (73,975) (73,138) 1.1% (134,501) (134,429) 0.1% % of sales -67.1% -65.8% -66.8% -67
Slide 56: Shareholder structure (September 2013)
Shareholder structure (September 2013) Other 11.8% ADR's 2.9% Control Group 40.2% Other Large Shareholders 20.8% Brokerage H, Mutual F & Insurance 16.1% Chilean AFP's 8.3% 56 56/ 56
Slide 57: Company Stock
Company Stock • US$ 1.5 million of Average Daily Value Traded 3M (85% Local, 15% ADR) $3.00 $2.50 Local Price in US$ $2.00 $1.50 $1.00 $0.50 $- 57 57/ 57
Slide 58: Bottled Sales for 2Q13
Bottled Sales for 2Q13 Change Change 2Q13 2Q12 6M 2013 6M 2012 (%) (%) Sales (in Ch$ million) Chile Domestic Market - wine 14,338 15,136 -5.3% 25,895 27,398 -5.5% Chile Domestic Market - new business 8,546 7,038 21.4% 14,393 12,763 12.8% Export Markets⁽¹⁾ 66,771 69,391 -3.8% 122,238 122,911 -0.5% Ar
Slide 59: Total Argentinean exports by category
Total Argentinean exports by category Jan - Dec 2010 % Change 2010/2009 Liters US$ Av. Price Liters US$ Av. Price ('000) ('000) US$/Ltr Bottled 230,659 $ 699,088 $ 3.03 3.9% 17.0% 12.6% Bulk 44,580 $ 37,335 $ 0.84 -35.5% 2.9% 59.4% Concentrated Must 69,137 $ 128,087 $ 1.85 -14.7% -5.6% 10.6% Total 3
Slide 60: Total Argentinean exports by category
Total Argentinean exports by category Jan - Dec 2012 % Change 2012/2011 Liters US$ Av. Price Liters US$ Av. Price ('000) ('000) US$/Ltr Bottled 206,779 $ 783,809 $ 3.79 -4.3% 2.8% 7.4% Bulk 157,297 $ 134,060 $ 0.85 54.6% 58.0% 2.2% Concentrated Must 108,753 $ 238,255 $ 2.19 -1.4% 13.8% 15.4% Total 4
Slide 61: Trivento Export Sales: Argentina – Volume & Value
Trivento Export Sales : Argentina – Volume &Value Thousand Liters Thousand US$ Average Annual Average Annual Decrease: 2.8% Growth: 5.6% 13,307 13,700 32,976 12,254 12,244 30,056 29,190 11,271 28,425 28,432 10,274 24,296 9,500 20,996 -4.3% -3.9% 13,578 12,988 4,391 4,221 2006 2007 2008 2009 2010 201
Slide 62: Trivento Export Sales - Argentina
Trivento Export Sales - Argentina (Average Price US$/Case) -0.5% Average Annual 27.65 27.83 27.69 Growth: 8.7% 26.33 21.66 20.90 19.23 17.84 16.77 2006 2007 2008 2009 2010 2011 2012 6M 6M 2012 2013 62 62/ 62
Slide 63: Trivento Domestic Sales: Argentina – Volume & Value
Trivento Domestic Sales : Argentina – Volume &Value Thousand Liters Thousand AR$ Average Annual Average Annual Decrease: 3.1% Growth: 11.6% 66,898 8,492 8,313 63,79464,414 60,008 7,780 7,768 51,798 6,409 6,107 42,316 5,311 19.6% 33,426 31,566 -4.2% 26,396 2,318 2,221 2006 2007 2008 2009 2010 2011 20
Slide 64: Trivento Domestic Sales - Argentina
Trivento Domestic Sales - Argentina (Average Price AR$/Case) Average Annual Growth: 15.1% 24.8% 127.90 109.15 102.49 94.02 77.51 64.97 54.89 46.94 48.95 2006 2007 2008 2009 2010 2011 2012 6M 2012 6M 2013 64 64/ 64
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