Vina Concha Y Toro S.a. · BCS:CONCHATORO
Vina Concha Y Toro — Q1 2019 Earnings Presentation
18 slides from Vina Concha Y Toro's earnings presentation, June 2019
Slide 1: Investor Presentation 1Q19 Results
Investor Presentation 1Q19 Results June, 2019
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation contains forward-looking statements, that should be considered as good faith estimates. Such statements are subject to risks and uncertainties outside of Viña Concha y Toro’s control that could cause Viña Concha y Toro’s actual results to differ materiall
Slide 3: Agenda
Agenda I. 1Q2019 Results II. Outlook
Slide 4: 1Q2019 Results: Top line consistent with new commercial strategy
1Q2019 Results 1. TOP LINE CONSISTENT WITH THE NEW COMMERCIAL STRATEGY • WINE SALES: +10.2%, ON HIGHER PRICE, BETTER MIX AND POSITIVE F/X • WINE VOLUME: -2.6% DECREASES MAINLY IN NON PRIORITY BRANDS. • PRINCIPAL AND INVEST CATEGORIES SHOWED POSITIVE PERFORMANCE. • OTHERS SALES DECLINED 38% ON THE
Slide 5: 1Q2019 Results: New commercial strategy reflected in brands performance
1Q2019 Results 2. NEW COMMERCIAL STRATEGY REFLECTED IN BRANDS PERFORMANCE BRAND MATRIX, VALUE GROWTH BY CATEGORY: • PRINCIPAL: +15% • INVEST: +15% • PROTECT: +6% • WATCH: -6% KEY BRAND VALUE GROWTH LED BY: • CASILLERO DEL DIABLO +15% • MARQUES DE CC: +23% • DON MELCHOR: +14% • TRIVENTO RESERVE +33%
Slide 6: Brand Matrix: Higher focus in Principal and Invest brands
Brand Matrix: Higher focus in Principal and Invest brands Brand matrix: 25 brands, represent 78% of group sales INVEST PRINCIPAL High • Don Melchor • Trivento Golden • MCC • Trivento Reserve • Casillero del Diablo • Diablo • 1,000 Stories • CdD Reserva • Bonterra Especial1 • CS Orgánico Potential •
Slide 7: Brand Matrix - Implications
Brand Matrix - Implications – Portfolio rationalization: Exit from 82 brand out of 304. – Special focus on Casillero del Diablo brand (PRINCIPAL). – Investments in brands with the highest potential from our 3 origins (INVEST). – Commercial and marketing focus on new brands development to support gro
Slide 8: Market Matrix: Specialized commercial areas
Market Matrix: Specialized commercial areas A MARKETS B MARKETS C MARKETS Continuous Accelerated Priority Growth Growth Next wave Others Presence & Priority > Market COMMERCIAL AND DISTRIBUTION OFFICES Manager 9 MARKETS 9 MARKETS 115 MARKETS Markets > +107 COUNTRIES % of Sales > 77% 11% 12% Commerci
Slide 9: 1Q2019 Results: Performance across markets
1Q2019 Results 3. PERFORMANCE ACROSS MARKETS EXPORT MARKETS: DRIVEN BY UK, MEXICO, AND BRAZIL. • VALUE +13% BETTER MIX +1% VOLUME FAVORABLE F/X CHILE DOMESTIC LED BY CASILLERO DEL DIABLO AND UPPER BRAND EXTENSIONS • VALUE +6% • VOLUME: -1% 9
Slide 10: 1Q2019 Results: Operations in USA and Argentina
1Q2019 Results OPERATION IN USA: IMPACT FROM THE INTEGRATION OF EXCELSIOR TO FETZER PORTFOLIO, AND STRATEGIC CHANGES. • VALUE +4% • VOLUME: -23% OPERATION IN ARGENTINA: FOCUS ON KEY MARKETS. POSITIVE PERFORMANCE IN DISTRIBUTION OFFICES, DECLINE IN DIRECT EXPORTS AND DOMESTIC MARKET. • VALUE +52% • V
Slide 11: 1Q2019 Results: Operating profit
1Q2019 Results 4. OPERATING PROFIT MAINLY REFLECTING • LOWER VOLUME • HIGHER COST OF WINE • HIGHER SG&A (Ch$ million) 1Q19 1Q18 Var % Sales 130,686 124,442 5.0% EBIT 9,406 9,671 (2.7%) EBIT margin 7.2% 7.8% (60 bp) Adj. EBIT * 10,420 10,652 2.2% Adj. EBIT margin* 8.0% 8.6% (60 bp) * Adjusted by non
Slide 12: 1Q2019 Results
1Q2019 Results (Ch$ million) 1Q19 1Q18 Var % Sales 130,686 124,442 5.0% Gross profit 43,161 39,401 9.5% Gross margin 33.0% 31.7% 140 bp EBIT 9,406 9,671 (2.7%) EBIT margin 7.2% 7.8% (60 bp) Non-operating profit (1,862) (689) (170%) Net profit 5,328 6,462 (17.5%) Net margin 4.1% 5.2% (110 bp) EBITDA
Slide 13: Agenda
Agenda I. 1Q2019 Results II. Outlook
Slide 14: 2018 harvest - Chile
2018 harvest - Chile Following two low-volume vintages, 2018 harvested volume increased 36% in Chile. The 2019 harvest, recently completed looks average in size at around 1.00-1.10 billion lts. Chile Harvest - (MM liters) 1.400 1,282 1,287 1,290 1,255 1.200 1,046 1,014 990 949 1.000 915 800 600 400
Slide 15: 2018 harvest - Argentina
2018 harvest - Argentina In Argentina, the harvested volume increased 31% in 2018. The 2019 harvest is estimated at 2.45 million tons, in line with last year’s. Argentina Harvest – (th. tons) 3.000 2,807 2,786 2,539 2,587 2,516 2.500 2,338 2,174 1,922 2.000 1,704 1.500 1.000 500 0 2010 2011 2012 201
Slide 16: 2018 harvest - USA
2018 harvest - USA The 2018 California crush reveals a bountiful 2018 winegrape harvest up 6.6% in volume to 4,282 thousand tons. USA vintage – thousand tons. 5.000 4.282 4.500 4.246 4.018 3.894 4.031 4.016 4.000 3.589 3.705 3.500 3.347 3.000 2.500 2.000 1.500 1.000 500 0 2010 2011 2012 2013 2014 20
Slide 17: Global wine production
Global wine production • Preliminar data for global wine production in 2018 point to 279 Mhl, an increase of 13% YoY. • Strong rebound of main producers: Italy (+14%), France (+27%), and Spain (+26%). 320 300 300 281 282 292 280 280 284 275 279 272 266 268 Millions of HL 267 269 269 260 267 268 264
Slide 18: Conclusions
Conclusions • Inventory stocks have recovered after an abundant harvest in 2018. • Wine prices for 2019 harvest have declined. • 2019 vintage: In Chile the 2019 harvested volume was in line with the last 5 years average. Evidence of downward trend for grape prices. • In Argentina a slightly lowervol