Purcari Wineries Public Co., Ltd. · BVB:WINE
Purcari Wineries Public — H1 2023 Earnings Presentation
35 slides from Purcari Wineries Public's earnings presentation, Aug 25, 2023
Slide 1: Purcari Wineries 1st Half 2023 Financial Results
Purcari Wineries Public Company Limited BVB: WINE Corporate Presentation 1st Half 2023 Financial Results 25th of August 2023 Page 1 1
Slide 2: Disclaimer
Disclaimer THIS PRESENTATION IS MADE AVAILABLE ON THIS WEBSITE BY PURCARI WINERIES PUBLIC COMPANY LIMITED (the Company) AND IS FOR INFORMATION PURPOSES ONLY. This presentation and its contents do not, and are not intended to, constitute or form part of, and should not be construed as, constituting o
Slide 3: Our Board
Our Board Vasile Tofan Victor Bostan Chairman of the Board of Directors CEO, Founder, Executive Director ▪ Senior Partner at Horizon Capital, with over 15 ▪ Founder of the Group, since 2002. years of experience in investments in Consumer ▪ Over 35 years of experience in the wine industry. Goods and
Slide 4: Today’s presenters
Today’s presenters Victor Bostan Victor Arapan Eugeniu Baltag Victoria Moldovan Vasile Tofan Chief Executive Officer, Chief Financial Officer Investor Relations Manager Investor Relations Officer Chairman of the Board Founder ▪ Founder of the ▪ Over 20 years of ▪ Over 15 years of ▪ Investments Exper
Slide 5: Today’s agenda
Today’s agenda Academia Purcari Saperavi 2020 The essence of the 1 Purcari Wineries intro Georgian variety, reinterpreted by the terroir of Purcari. Gold at Decanter 2 1H 2023 Operational Results World Wine Awards 2023 (96 pts), Gold at Challenge International du Vin 2023, Gold at Berliner 3 Guidanc
Slide 6: Purcari Wineries at a glance
1 Purcari Wineries at a glance Leading wine player in Central and Eastern Europe... … with a strong & expanding regional footprint Founded in 1827 by French colonists, Purcari group is now... Geographical breakdown of sales in value terms for 1H 2023, % RO MD PL UA CN Other #1 World’s most awarded w
Slide 7: Strong track record of growth year to year
1 Strong track record of growth year to year Sustainable profitability accompanying strong growth Comments ▪ IPO’d on Bucharest Stock Exchange in February 2018 2017 2018 2019 2020 2021 2022 Revenue 142.3 168.1 199.1 203.7 248.1 302.5 ▪ Doubled sales since pre-IPO CoS (74.5) (85.5) (100.2) (105.9) (1
Slide 8: Long history of growth, high profitability
1 Long history of growth, high profitability Revenues EBITDA Net Income RON m RON m RON m +22% 303 69 +47% 111 248 281 59 281 51 199 204 75 83 63 262 169 65 40 46 60 38 41 142 54 42 29 33 2017 2018 2019 2020 2021 2022 2017 2018 2019 2020 2021 2022 2017 2018 2019 2020 2021 2022 (1) RON 28 million one
Slide 9: Our business model: Affordable Luxury
1 Our business model: Affordable Luxury Modern cost-competitive Purcari is positioned at the winemaking intersections of three themes: ▪ Modern winemaking: the company is a brand, as opposed to appellation- centric and runs a cost- efficient business. ▪ Affordable luxury: as an aspirational brand, P
Slide 10: Topping competition at engagement and quality
1 Topping competition at engagement and quality Aspirational brand which consumers like sharing about Highest number of ratings and highest scores on Vivino Number of #brand uses on Instagram, thousand, by key Romanian brands X axis – number of Vivino ratings; Y axis – average Vivino score 16.2 4.2
Slide 11: Vivino feedback remains very strong, essential for online sales
1 Vivino feedback remains very strong, essential for online sales #1 presence in the crucial RON 30-60 segment, holding 8 out of TOP-16 positions #1 ▪ We remain obsessed with the quality of our wines, which pays off in excellent consumer feedback. ▪ In our core premium segment, 30-60 RON per bottle
Slide 12: Growth in Vivino usage, key for consumer engagement, ecommerce
1 Growth in Vivino usage, key for consumer engagement, ecommerce 4.15 72% Top 1% Average score out of Scores equal or Global ranking based on 5.0 in Q2 2023 above 4.0 avg. score received 10,900 +21% 80 Vivino scans in Q2 2023 YoY scans # of countries where Q2 2023 Purcari has been scanned Page 12
Slide 13: Today’s agenda
Today’s agenda Limited Edition Saperavi de Purcari 2021 An authentic wine with 1 Purcari Wineries intro a strong character and a fulminant taste. Gold at Decanter World Wine Awards 2 1H 2023 Operational Results 2023 (95 pts), Gold at Challenge International du Vin 2023, Gold at Mundus Vini Spring Ta
Slide 14: Continue delivering double digit growth and strong margins
2 Continue delivering double digit growth and strong margins Revenues EBITDA Net Income RON m RON m RON m +15% +22% 44.5 25.5 38.6 +30% 20.9 161.4 35.1 20.4 28.3 123.9 15.6 106.5 84.9 1H20 1H21 1H22 1H23 1H20 1H21 1H22 1H23 1H20 1H21 1H22 1H23 33% 33% 31% 28% 18% 19% 17% 16% EBITDA margin Net Income
Slide 15: Key operational highlights for 1H 2023
2 Key operational highlights for 1H 2023 ▪ Sales grew by 30% for the second quarter in the row. Revenues up to RON 161.4m on higher volumes and price increases. Core Wine revenues +29% YoY, Ecosmart contributing additionally with RON 13.2m. ▪ All brands performing well, with Purcari leading the grow
Slide 16: Strong performance in a disrupted environment
2 PL: Strong performance in a disrupted environment Comments Purcari Group Purcari Group ▪ Gross margin at 41% (46% normalized for EcoSmart and RON m 2Q23 2Q22 ∆ 2Q 1H'23 1H'22 ∆ 1H Angel Estate, both yielding lower GM%), on higher Revenue 88.1 67.7 30% 161.4 123.9 30% packaging prices and still mea
Slide 17: Segment reporting: growing strong in WINE, first IFRS profits for Ecosmart
2 Segment reporting: growing strong in WINE, first IFRS profits for Ecosmart Purcari Group Ecosmart WINE Business ▪ Overall strong performance of RON m 1H'23 1H'22 ∆ 1H 1H'23 1H'22 ∆ 1H 1H'23 1H'22 ∆ 1H core WINE business, while Revenue 161.4 123.9 30% 13.2 8.9 48% 148.2 115.0 29% incorporating nega
Slide 18: Strong balance sheet, providing a solid footing for current macro environment
2 Strong balance sheet, providing a solid footing for current macro environment Cash Position Net Debt RON m RON m 50.8 Cash and 109 32.1 98 109 Receivables 28.0 76 21.8 23.5 66 12.6 46 Dec-18 Dec-19 Dec-20 Dec-21 Dec-22 Jun-23 Dec-18 Dec-19 Dec-20 Dec-21 Dec-22 Jun-23 Current Ratio Cash Ratio 2.08x
Slide 19: Strong growth continue, top-tier brands performing best
2 Strong growth continue, top-tier brands performing best Market Share of sales 1H23 ∆ 1H23 YoY Comments ▪ RO: Strong growth with Purcari being an outstanding performer. Nocturne RO 57% +40% series continues its tremendous success in a good HoReCa environment, 1827 series registering strong dynamics
Slide 20: Strong performance, despite challenging market conditions
2 Strong performance, despite challenging market conditions Brand Share of sales, 1H23 ∆ 1H23 YoY Comments ▪ PURCARI: Significant volume growth coupled with price increases. Consumer demand proved resilient and 53% +38% premiumization strategy continues to deliver excellent results. ▪ BOSTAVAN: Pric
Slide 21: Outstanding results at most reputable wine competitions
2 Outstanding results at most reputable wine competitions Best Producer from Moldova 2023 Gold at Concours Mondial de 10 Gold Medals Collected As well as 24 distinctions granted by Bruxelles - Rosé Selection Berliner Wein Trophy 2023 Mundus Vini Spring Tasting The only Rosé from MD awarded with Gold
Slide 22: Continue supporting, engaging, inspiring
2 Continue supporting, engaging, inspiring Donation through Purcari Foundation Nocturne Night Run at Château 2nd European Political Community More than 400 tablets sent to Ukrainian children Purcari Summit from 9 regions within Kherson - donation made Relaunch of the first nocturne running Purcari r
Slide 23: Today’s agenda
Today’s agenda Maluri de Prut (Feteasca Neagra & Rara Neagra) 2021 A rich wine that combines the best from both sides of the Prut 1 Purcari Wineries intro river. Gold at Decanter World Wine Awards 2023 (95 pts), Gold at Mundus 2 1H 2023 Operational Results Vini Spring Tasting 2023, Gold at Vinarium
Slide 24: Guidance 2023: maintaining guidance ahead of seasonally key 2H
3 Guidance 2023: maintaining guidance ahead of seasonally key 2H Target 2023 guidance 1H 2023 Status Comments • Growth in 1H significantly above guidance, amid a Revenue challenging macro backdrop. growth +18-22% +30% > • Affordable luxury positioning coping well also in current environment. • Chall
Slide 25: Today’s agenda
Today’s agenda Vinohora de Purcari Fetească Neagră – Pinot Grigio 2022 A rosé blend of a festive pink color, that exudes romance and freshness. A wine of a velvety flavor, 1 Purcari Wineries intro full and fruity, with notes of vanilla. Gold at Mundus Vini 2 1H 2023 Operational Results Spring Tastin
Slide 26: Purcari’s share
4 Purcari’s share Backed by Reputable shareholders Consensus forecasts Rating Target Price Date Wood&Company Buy 18.70 Aug-23 Raiffeisen Buy 11.30 March-23 BT Capital Outperform 12.26 May-23 Ipopema Buy 11.50 Feb-23 Goldring1 na 10.10 April-23 ▪ #5 best performing among companies in BET index, with
Slide 27: Stock performance, WINE stock +37% YTD, well ahead BET index
4 Stock performance, WINE stock +37% YTD (as of Aug 23), well ahead BET index WINE (Purcari Wineries) DIGI (Digi Communications) M (Med Life) SFG (Sphera Franchise Group) BET (index) AQ (Aquila Part) 170 “Consumer” peers = relevant companies outside of financials, utility and energy sectors, dominat
Slide 28: Purcari shares liquidity
4 Purcari shares liquidity Rapid rise of stock’s liquidity after starting working with Relative to Market Cap, our stock is top-ranked among Market Makers for Purcari shares BET components Daily volume Ratio of daily trade value to Market Capitalisation, 2021-2023 YTD average, bps BRK 1 Purcari Wine
Slide 29: EBITDA profitability relative to WINE listed peers
4 EBITDA profitability relative to WINE listed peers Purcari vs selected Wine public companies EBITDA 2022 Margin, % * Adjusted for one-off gain Purcari FY2022 margin 27.3% 23.4% 16.7% 15.6% 14.6% Average margin: 13.7% 12.7% 12.6% 10.2% 9.7% 7.5% 7.2% 6.8% 1 Source: Capital IQ, Company Data as per C
Slide 30: Valuation relative to wine peers
4 Valuation relative to wine peers Purcari vs Selected wine public companies P/E LTM Multiples 79.0 33.3 26.5 25.9 Average P/E: 19.4x 16.9 15.1 14.9 13.1 12.5 11.9 11.6 11.1 7.0 6.9 5.1 Source: Net Income and Market Cap as per Capital IQ as of August 16th, 2023 Note: Diluted EPS excluding extra item
Slide 31: Valuation relative to Romanian listed peers
4 Valuation relative to Romanian listed peers Purcari vs selected Romanian public companies P/E LTM Multiples 24.7 15.5 13.9 11.2 10.2 Average P/E: 9.53x 6.9 6.7 6.1 5.7 4.9 4.8 3.7 1 Source: Capital IQ, Company Data as per Capital IQ as of August 16th, 2023 Note: Diluted EPS excluding extra items u
Slide 32: High growth not reflected in valuation yet
4 High growth not reflected in valuation yet Purcari vs selected wine public companies Purcari vs selected Romanian public companies 35 35 1 Energy companies 30 30 25 25 Revenue CAGR’19-22 in USD Revenue CAGR’19-22* in USD 20 20 15 15 10 10 5 5 0 -5 0 -10 -5 0 5 10 15 20 25 30 35 40 45 65 70 75 80 0
Slide 33: Today’s agenda
Today’s agenda Cuvée de Purcari Rosé Brut 2020 1 Purcari Wineries intro An elegant blend, completed by a floral bouquet with a subtle flavour of blackcurrant. 2 1H 2023 Operational Results Gold at Challenge International du Vin 2023 3 Guidance 4 Purcari Wineries Stock 5 ESG and Impact Page 33
Slide 34: ESG and Impact
5 ESG and Impact Purcari Wineries is building up its foundation in sustainability and ESG management, by aligning its business and model to the UN Sustainable Development Goals (SDGs). ENVIRONMENT SOCIAL GOVERNANCE ▪ Launched the irrigation system at Purcari ▪ Launched Purcari Foundation in July ▪ E
Slide 35: Thank you!
Thank you!
Purcari Wineries Public Company — H1 2023 Earnings Presentation on 6ix