Purcari Wineries Public Co., Ltd. · BVB:WINE
Purcari Wineries Public — Q3 2023 Earnings Presentation
45 slides from Purcari Wineries Public's earnings presentation, November 2023
Slide 1: Purcari Wineries Corporate Presentation 3rd Quarter 2023 Financial Results
Purcari Wineries Public Company Limited BVB: WINE Corporate Presentation 3rd Quarter 2023 Financial Results 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 agenda
Today’s agenda Freedom Blend Our manifesto. A courageous blend that has the heart of Georgia, the terroir of Moldova, and the free spirit of 1 Purcari Wineries intro Ukraine. 65% Saperavi 20% Rară Neagră 15% Bastardo 2 3Q 2023 Operational Results Matured for 1 year in new, french Barrique Seguin Mor
Slide 5: 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 3Q 2023, % The most successful winery from CEE at Decante
Slide 6: 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 7: Sound fundamentals and strong profitability
1 Sound fundamentals and strong 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 on
Slide 8: 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 9: Our mission, vision and values
1 Our mission, vision and values Our mission Our values To bring joy in people’s lives by offering Hungry them high quality, inspiring, ethical wines We win in the marketplace because we want it more. and excellent value for money. Ethical Always do the right thing and the money will follow. Thrifty
Slide 10: Purcari formula: operational excellence meets sound marketing
1 Purcari formula: operational excellence meets sound marketing Operational excellence Clever marketing ▪ Location: low-cost production platform in Romania, Moldova; ▪ Philosophy: be genuine, talk to the consumer, don’t sell to very competitive vs. other EU, New world them ▪ Scale: large and growing
Slide 11: CEE consumption especially strong, on shifting drinking patterns
1 CEE consumption especially strong, on shifting drinking patterns Plenty of catch up for CEE countries Wine steals share from beer Wine consumption, litres per capita, selected countries Forecast growth by category, by country 2016-2020F, % 43 9.0 Wine Beer 33 25 5.1 20 16 15 3.2 2.9 1.9 6 1.1 1.1
Slide 12: Wine markets evolve, as wine moves from novelty to masses
1 Wine markets evolve, as wine moves from novelty to masses Stage 3: “Mass appeal” Stage 2: ▪ Customer taste highly “Beyond early adopters” developed, abundance of offers ▪ Wine treaded as as day-to- day item Stage 1: ▪ Customer taste evolves, ▪ Local brands highly diversity increases developed, hig
Slide 13: Vision: be the consolidator of a fragmented market
1 Vision: be the consolidator of a fragmented market Volume share top-3 players by country, % 79 82 74 #3 68 63 #2 41 39 18 #1 10 Beer Spirits Wine Beer Spirits Wine Beer Spirits Wine Unlike beer or spirits, wine market remains very fragmented; players who have the scale and sophistication needed –
Slide 14: Moldova has the largest vineyard area per capita globally
1 Moldova has the largest vineyard area per capita globally Per Capita vineyard area worldwide, 2018 Hectares per capita Europe Rest of the World 4.1 2.0 1.8 1.5 1.2 1.2 1.0 0.9 0.9 0.8 0.8 0.7 0.6 0.5 0.5 0.5 0.5 0.2 0.2 0.2 0.2 0.2 0.1 0.1 0.1 0.1 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Italy
Slide 15: Global wine belt does leave ample space for pushing New Frontier ahead
1 Global wine belt does leave ample space for pushing New Frontier ahead (5) Napa (US); (6) Bordeaux (FR); (7) Mendoza (AR); Marlborough (NZ). Source: Vinepair – The World’s Coffee & Wine Belts Page 15
Slide 16: 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 16.5 4.2
Slide 17: 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 13 out of TOP-25 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 18: Growth in Vivino usage, key for consumer engagement, ecommerce
1 Growth in Vivino usage, key for consumer engagement, ecommerce 4.16 12,347 Top 1% Average score out of Rara Neagra 1827, most Global ranking based on 5.0 in Q3 2023 ratings among Purcari wines avg. score received 8,501 71% 97 Vivino scans in Scoring conversion # of countries where Q3 2023 rate out
Slide 19: Today's agenda
Today’s agenda Maluri de Prut A rich wine with a strong, yet tender character, that combines the best from 1 Purcari Wineries intro both sides of the Prut river. 65% Fetească Neagră 35% Rară Neagră 2 3Q 2023 Operational Results Matured for 6 months in french Barrique Seguin Moreau. 3 Guidance 4 Purc
Slide 20: 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 +24% +19% 43.8 72.2 +26% 60.7 252.5 58.2 34.9 35.4 199.8 44.2 25.6 166.4 138.3 9M20 9M21 9M22 9M23 9M20 9M21 9M22 9M23 9M20 9M21 9M22 9M23 32% 35% 30% 29% 19% 21% 18% 17% EBITDA margin Net Incom
Slide 21: Key operational highlights for 3Q 2023
2 Key operational highlights for 3Q 2023 ▪ Revenues up 26% to RON 252.2m on higher volumes, better mix and select price increases, exceeding guidance. Core Wine revenues +23% YoY, Ecosmart contributing additionally with RON 22.4m. ▪ Purcari and Crama Ceptura performing strong, with Purcari leading t
Slide 22: PL: Strong performance, despite macroeconomic volatility
2 PL: Strong performance, despite macroeconomic volatility Comments Purcari Group Purcari Group ▪ Gross margin at 41%, on higher packaging prices YoY and RON m 3Q23 3Q22 ∆ 3Q 9M'23 9M'22 ∆ 9M still meaningful share of expensive bulk from 2020-2021 Revenue 91.1 75.9 20% 252.5 199.8 26% vintages. Gros
Slide 23: Segment reporting: positive contribution from Ecosmart
2 Segment reporting: positive contribution from Ecosmart Purcari Group Ecosmart WINE Business ▪ Overall strong performance of RON m 9M'23 9M'22 ∆ 9M 9M'23 9M'22 ∆ 9M 9M'23 9M'22 ∆ 9M core WINE business, while Revenue incorporating negative effects 252.5 199.8 26% 22.4 13.1 71% 230.1 186.6 23% from t
Slide 24: 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 50.8 142 Cash and 32.1 98 109 Receivables 76 21.8 23.5 66 12.6 18.2 46 Dec-18 Dec-19 Dec-20 Dec-21 Dec-22 Sep-23 Dec-18 Dec-19 Dec-20 Dec-21 Dec-22 Sep-23 Current Ratio Cash Ratio 2.08x
Slide 25: Ongoing growth, driven by excellent performance in Romania
2 Ongoing growth, driven by excellent performance in Romania Market Share of sales 9M23 ∆ 9M23 YoY Comments ▪ RO: Strong growth for all brands, with Purcari being an outstanding RO 59% +37% performer. Nocturne series continues its tremendous success in a good HoReCa environment, strong dynamics for
Slide 26: Premium wine segments proving resilient
2 Premium wine segments proving resilient Brand Share of sales, 9M23 ∆ 9M23 YoY Comments ▪ PURCARI: Significant volume growth coupled with price increases. Consumer demand proved resilient and premiumization strategy continues to deliver excellent results. 55% +31% Romania leads the growth, with str
Slide 27: Strong 2023 results, amid low harvest worldwide
2 Strong 2023 results, amid low harvest worldwide Good 2023 harvest1 Comments Own harvest and 3 party purchases of grapes, million kg rd 37.6 ▪ Strong own harvest in unfavorable weather conditions of 35.1 moderate rains and heat waves just before harvesting. 34.1 ▪ Fulfilling required stocks from 3r
Slide 28: Implementing irrigation systems to secure yield and quality
2 Implementing irrigation systems to secure yield and quality ▪ Pioneering in irrigation of technical grapes vineyards in Moldova. ▪ Deployed an irrigation system for 300ha of vineyards at Chateau Purcari. ▪ Opted for an intelligent, fully automated sub-surface drip irrigation system. ▪ Two storage
Slide 29: Continuing investing in both: growth and sustainability
2 Continuing investing in both: growth and sustainability Solar panels and dedicated warehouse ▪ Existing 200 kW Solar System, installed on the roof of Purcari Winery, extended with additional 300 kW; current total capacity of 500 KW, supplying 40% of the winery’s electricity consumption. ▪ Photovol
Slide 30: 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 31: Active marketing agenda, exploring worldwide opportunities
2 Active marketing agenda, exploring worldwide opportunities Japan’s Food Export Fair 2023 Crama Ceptura at Chefi la Cutite Academia Purcari - Podcast Visited by a great number of wine enthusiasts and Product placement within the prime time of the Partnership with Fain si Simplu esteemed guests cook
Slide 32: 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 33: Today's agenda
Today’s agenda Vinohora Rară Neagră & Malbec A perfect harmony between the 1 Purcari Wineries intro Moldovan and Argentinian red varieties. A wine of unique character, with emotional 2 3Q 2023 Operational Results accents of cherry and chocolate. 51% Rară Neagră 49% Malbec 3 Guidance Matured for 6 mo
Slide 34: Expect 2023F at top of announced guidance or slightly above it
3 Guidance 2023: comfortably above as of 3Q milestone Target 2023 guidance 9M 2023 Status Comments ▪ Growth in 9M above guidance, amid a challenging Revenue macro backdrop and geopolitical volatility. growth +18-22% +26% > ▪ Affordable luxury positioning coping well also in current environment. ▪ Ch
Slide 35: Today's agenda
Today’s agenda Nocturne Rară Neagră A noble wine, the true expession of the virtues of the Rară Neagră variety, made from grapes manually 1 Purcari Wineries intro harvested in the cool of the night. An elegant wine of an intense and bright ruby 2 3Q 2023 Operational Results color, distinguished by a
Slide 36: Purcari's share
4 Purcari’s share Backed by Reputable shareholders Consensus forecasts Rating Target Price Date Wood&Company Buy 17.80 Oct-23 Raiffeisen Buy 11.30 Aug-23 BT Capital Outperform 12.26 Aug-23 Ipopema Buy 11.50 Aug-23 Goldring1 na 10.10 April-23 ▪ #4 best performing among companies in BET index, with +5
Slide 37: Stock performance, WINE stock +56% YTD, well ahead BET index
4 Stock performance, WINE stock +56% YTD (as of Nov-13), well ahead BET index WINE (Purcari Wineries) AQ (Aquila Part) BET (index) SFG (Sphera Franchise Group) DIGI (Digi Communications) M (Med Life) 180 “Consumer” peers = relevant companies outside of financials, utility and energy sectors, dominat
Slide 38: 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 39: 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 40: Valuation relative to wine peers
4 Valuation relative to wine peers Purcari vs Selected wine public companies P/E LTM Multiples 81.8 32.2 31.9 25.8 Average P/E: 20.7x 15.4 14.3 13.3 13.3 12.3 12.1 12.1 11.9 7.3 6.1 Source: Net Income and Market Cap as per Capital IQ as of November 9 th, 2023 Note: Diluted EPS excluding extra items
Slide 41: Valuation relative to Romanian listed peers
4 Valuation relative to Romanian listed peers Purcari vs selected Romanian public companies P/E LTM Multiples 14.3 12.4 11.7 11.3 9.2 Average P/E: 8.7x 7.9 7.3 7.1 6.2 5.0 3.7 1 Source: Capital IQ, Company Data as per Capital IQ as of November 9th, 2023 Note: Diluted EPS excluding extra items used f
Slide 42: 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 1 Energy companies 35 35 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 50 55 60 65 7
Slide 43: Today's agenda
Today’s agenda Academia de Purcari Rară Neagră An identity card of the Rară Neagră variety. A wine of an intense 1 Purcari Wineries intro ruby color with purple reflections, perfumed with aromas of cherries and plums. 2 3Q 2023 Operational Results 100% Rară Neagră Matured for 8 months in italian 3 G
Slide 44: 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 45: Thank you!
Thank you!
Purcari Wineries Public Company — Q3 2023 Earnings Presentation on 6ix