Purcari Wineries Public Co., Ltd. · BVB:WINE
Purcari Wineries Public — Institutional Investors Conference, Zürs, April 2023
48 slides from Purcari Wineries Public's conference presentation, April 2023
Slide 1: Purcari Wineries Institutional Investors Conference
Purcari Wineries Public Company Limited BVB: WINE Institutional Investors Conference April 2023, Zürs
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: Today's agenda
Today’s agenda Negru de Purcari 2019 Nominated by Caroline Gilby, Master of Wine, for the Decanter Magazine, Wines of the Year 2021: The Top 1 Purcari Wineries Group Key Info Classic Wines, with a score of 93 pts. 4.4 score on Vivino, ranked among the top 1% wines globally. Gold at 2 Vision and Stra
Slide 4: Purcari Wineries Group at a glance
1 Purcari Wineries Group 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 2022, % RO MD PL UA CN Other #1 World’s most awarde
Slide 5: Strong track record of growth year to year
1 Strong track record of growth year to year Sustainable profitability accompanying strong growth Comments 2017 2018 2019 2020 2021 2022 ▪ IPO’d on Bucharest Stock Exchange in February 2018 Revenue 142.3 168.1 199.1 203.7 248.1 302.5 ▪ 75% increase in revenues since pre-IPO CoS (74.5) (85.5) (100.2)
Slide 6: Continuous growth in 2022
1 Continuous growth in 2022 Revenues EBITDA Net Income RON m RON m RON m +22% +27% 302 96 59 57 141 51 248 141 75 82 63 262 204 65 41 46 199 38 43 60 169 54 142 29 33 42 2017 2018 2019 2020 2021 2022 2017 2018 2019 2020 2021 2022 2017 2018 2019 2020 2021 2022 (1) RON 14 million one-off gain from bar
Slide 7: Strong balance sheet, providing a solid footing for current macro environment
1 Strong balance sheet, providing a solid footing for current macro environment Cash Position Net Debt RON m RON m 50.8 109 98 Cash and 32.1 76 66 Receivables 21.8 23.5 46 12.6 31-Dec-18 31-Dec-19 31-Dec-20 31-Dec-21 31-Dec-22 31-Dec-18 31-Dec-19 31-Dec-20 31-Dec-21 31-Dec-22 Current Ratio Cash Rati
Slide 8: Today's agenda
Today’s agenda Viorica de Purcari 2020 A velvety wine with a fresh, memorable aroma of acacia and basil flowers. 1 Purcari Wineries Group Key Info Gold at Decanter World Wine Awards 2022, Gold at International Wine & Spirit Competition 2022 2 Vision and Strategy 3 Q4 2022 Operational Results 4 Guida
Slide 9: Our business model: Affordable Luxury
2 Our business model: Affordable Luxury Modern cost-competitive winemaking Purcari is positioned at the 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, Pur
Slide 10: Our mission, vision and values
2 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 11: Purcari formula: operational excellence meets sound marketing
2 Purcari formula: operational excellence meets sound marketing Operational excellence Clever marketing ▪ Location: low-cost production platform in Romania, ▪ Philosophy: be genuine, talk to the consumer, don’t sell to Moldova; very competitive vs. other EU, New world them ▪ Scale: large and growing
Slide 12: CEE consumption especially strong, on shifting drinking patterns
2 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 13: Wine markets evolve, as wine moves from novelty to masses
2 Wine markets evolve, as wine moves from novelty to masses Stage 3: “Mass appeal” Stage 2: “Beyond early adopters” ▪ Customer taste highly developed, abundance of offers ▪ Wine treaded as as day-to-day item ▪ Local brands highly developed, Stage 1: high export activity, domination ▪ Customer taste
Slide 14: Vision: be the consolidator of a fragmented market
2 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 15: Moldova has the largest vineyard area per capita globally
2 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 Japan
Slide 16: Global wine belt does leave ample space for pushing New Frontier ahead
2 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 16
Slide 17: Quality highly commended; most awarded winery in the World in 2021
2 Quality highly commended; most awarded winery in the World in 2021 Leading medal-winning winery in CEE at Decanter, Increasing number of medals won from year to year, the Wine ”Olympics” In 2021 the most awarded winery in the World # of Decanter medals in 2015 − 2022 # of medals #1 Mundus Vini 129
Slide 18: Topping competition at engagement and quality
2 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 14.5 4.2
Slide 19: Vivino feedback remains very strong, essential for online sales
2 Vivino feedback remains very strong, essential for online sales #1 presence in the crucial RON 30-60 segment, holding 14 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 20: Growth in Vivino usage, key for consumer engagement, ecommerce
2 Growth in Vivino usage, key for consumer engagement, ecommerce 4.22 80% Top 1% Average score out of Scores equal or Global ranking based on 5.0 in 12M 2022 above 4.0 avg. score received 132,053 +10% 122 Vivino scans in 12M 2022 YoY scans # of countries where 12M 2022 Purcari has been scanned Page
Slide 21: Today's agenda
Today’s agenda Alb de Purcari 2020 A sensual, slightly velvety experience that seduces your senses like a first 1 Purcari Wineries Group Key Info love. Gold at Mundus Vini Summer Tasting 2022, Best in show Moldova 2 Vision and Strategy Red 3 Q4 2022 Operational Results 4 Guidance 5 Purcari Wineries
Slide 22: Key operational highlights for 2022
3 Key operational highlights for 2022 ▪ Revenue up 22% YoY to RON 302.5m exceeding the guidance, with Core Wine revenues +18% YoY and Ecosmart contributing additionally with 4% YoY. Ongoing organic ▪ Concluding the year on a high note, with a robust +26% in revenues in 4Q22 YoY. Incorporating effect
Slide 23: P&L: Strong performance, despite inflationary pressures, geopolitics
3 PL: Strong performance, despite inflationary pressures, geopolitics Comments 4Q 12M RON m 2022 2021 ∆ 4Q 2022 2021 ∆ 12M ▪ Gross margin at 43% in 2022, with 4Q22 margins up 2pp Revenue 102.7 81.7 26% 302.5 248.1 22% vs. same period last year. Inflation, more expensive wine stock of 2020 vintage, a
Slide 24: Segment reporting: growing strong in WINE, turning around Ecosmart
3 Segment reporting: growing strong in WINE, turning around Ecosmart Purcari Group Ecosmart WINE Business RON m 2022 2021 ∆ 12M 2022 2021 2022 2021 ∆ 12M Revenue 302.5 248.1 22% 21.4 10.8 281.1 237.3 18% ▪ Overall strong performance of Cost of Sales (171.1) (132.3) 29% (16.2) (10.1) (154.9) (122.2)
Slide 25: Waste recycling segment – turnaround on track, expect profitability in 2023
3 Waste recycling segment – turnaround on track, expect profitability in 2023 Financials History and actions taken Short-term plan ▪ In 2017 Crama Ceptura contributed to the foundation of ▪ Recover the misappropriated Revenues, RON m Ecosmart Union SA with 108k RON for a 27% share, to funds (ongoing
Slide 26: Upward trajectory in Q4, robust annual figures, amid global turmoil
3 Upward trajectory in Q4, robust annual figures, amid global turmoil Market Share of sales, 2022 ∆ ‘22/’21 YoY Comments RO 53% +20% ▪ RO: Sales surged by 45% in Q4, accounting for 34% of total annual sales. Strong double-digit growth for Purcari and Bardar. Nocturne series being a tremendous succes
Slide 27: Premium brands: Purcari and Bardar, lead the growth
3 Premium brands: Purcari and Bardar, lead the growth Brand Share of sales, 2022 ∆ ’22/21 YoY Comments ▪ PURCARI: +25% YoY, with Q4 sales representing 36% of annual sales. Doubling sales YoY in Asia, Czech and Slovakia, 53% +25% albeit from a smaller base. Moldova upward trend +29%, closely followed
Slide 28: Continuous increase in market share in Romania
3 Continuous increase in market share in Romania Jumped to #3 in overall market, reaching 10%+ share… …while distancing by 20+ percentage points vs #2 in premium Value share of TOTAL retail market, Romania, % Value share of Premium (RON 30+/liter) retail market, Romania, % 18 26 25 16 24 23 16 16 22
Slide 29: Implementing irrigation systems to secure yield and quality
3 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 30: Exceptional 2022 agricultural season: high quality vintage and good yield
3 Exceptional 2022 agricultural season: high quality vintage and good yield Good 2022 harvest Comments Own harvest and 3rd party purchases of grapes, million kg 35.1 ▪ Own vineyards fully recovered after an unprecedent draught 34.1 in 2020. ▪ High attention in maintaining the vineyards has paid off,
Slide 31: Continuing investing in both: growth and sustainability
3 Continuing investing in both: growth and sustainability Solar panels and dedicated warehouse ▪ Solar Panels installed on the roof of the Purcari Winery, to provide 15% of annual electricity consumption for the winery. ▪ 1,025 m2 area covered by solar panels. ▪ Annual production 240 000 kw. ▪ Aimin
Slide 32: Portfolio development: continue creating inspired products
3 Portfolio development: continue creating inspired products PURCARI NOCTURNE ACADEMIA PROCIANO, NATIVE WINE CRIME, BARDAR HoReCa – focused edition ambitious oeno-project adapting to wine trends expanding the growth pillars in RO ▪ Launched in 2021, a bet on ▪ Launched in 2022, ▪ NATIVE – wine from
Slide 33: Outstanding results at most reputable wine competitions
3 Outstanding results at most reputable wine competitions Best Producer from Moldova 2022 Decanter Top Classic Wines 2021 TOP 10 BEST Sparkling Wines Mundus Vini among 50 much pricier wines Effervescents du Monde 2021 Grand Gold: Rosé de Purcari Wine of the week in UK: Freedom Blend #1 Worldwide: Co
Slide 34: Continue creating, engaging, inspiring
3 Continue creating, engaging, inspiring The Secret of Bardar Cuvée de Purcari White Brut Union of the Romanian Principalities Promotional campaign for Bardar Platinum 25 A New Year campaign with one of the Top 10 A Domeniile Cuza campaign with Horia Brenciu years that emphasized the importance of t
Slide 35: Acquisition of Angel's Estate in Bulgaria
3 Acquisition of Angel’s Estate in Bulgaria Key info on Angel’s Estate Revenues, EUR m ▪ 26/09/2022 – Signed SPA for 76% stake in Angel’s Estate. ▪ Full cycle winery CAGR +13% ▪ Located near Stara Zagora, Thracian 2.51 2.55 Lowlands Wine region. 2.31 1.90 ▪ 14,000 m² – production facilities in 2 1.5
Slide 36: Becoming the undisputable Wine Champion in CEE
3 Becoming the undisputable Wine Champion in CEE Formula of becoming wine champion in CEE M&A focus map ▪ Growth components both organic and through Purcari footprint and M&A directions M&A. Directions for M&A opportunities Existing Newly added ▪ Focus on fundamentals: top- and bottom-line line grow
Slide 37: ESG Impact
3 ESG 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 ▪ Havin
Slide 38: Today's agenda
Today’s agenda Native Rosé de Purcari 1 Purcari Wineries Group Key Info 2021 A delicate wine, created with care for the environment, applying friendly techniques to the biodiversity and 2 Vision and Strategy fertility of the soil in the vineyards. Gold at Mundus Vini Summer Tasting 2022 3 Q4 2022 Op
Slide 39: Guidance 2022 – maintaining our guidance for the year
5 Guidance 2022 – maintaining our guidance for the year Target 2022 guidance 2022 actual Status Comments ▪ Revenue at RON 302.5 million in 2022, with last 3 Revenue quarters exceeding or being within the guidance. growth +15-20% +22% > Growth accelerated in 3Q and 4Q with +27% and +26% YoY. ▪ Consum
Slide 40: Guidance 2023
5 Guidance 2022 – maintaining our guidance for the year Target 2023 guidance Comments ▪ Consumer demand for premium brands remains healthy, amid inflationary pressures. Revenue growth +18-22% ▪ Consumer sentiment for low and medium market brands is weakening along with disposable income. ▪ Undertaki
Slide 41: Today's agenda
Today’s agenda 1 Purcari Wineries Group Key Info Academia Purcari Saperavi 2019 Produced in a limited number – 6,000 bottles Gold at Mundus Vini 2 Vision and Strategy Summer Tasting 2022, Best in show Moldova Red 3 Q4 2022 Operational Results 4 Guidance 5 Purcari Wineries Stock Page 41
Slide 42: Stock performance
4 Stock performance WINE (Purcari Wineries) BET (index) DIGI (Digi Communications) SFG (Sphera Franchise Group) 200 “Consumer” peers = relevant companies outside of financials, utility and energy sectors, dominating the BET index 180 160 154 | BET 140 120 95 | DIGI 100 94 | WINE 80 60 40 40 | SFG 20
Slide 43: 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 44: EBITDA profitability relative to WINE listed peers
4 EBITDA profitability relative to WINE listed peers Purcari vs selected Wine public companies EBITDA LTM Margin, % 26.9% 23.4% 17.6% 17.0% 16.7% Average margin: 13.6% 12.7% 12.2% 10.9% 10.4% 7.5% 4.4% 3.0% 1 Source: Capital IQ, Company Data as per Capital IQ as of February 9th, 2023 (1) Italian Win
Slide 45: Low valuation relative to wine peers
4 Low valuation relative to wine peers Purcari vs Selected wine public companies P/E LTM Multiples 38.2 28.8 20.6 19.7 17.5 15.8 Average P/E: 16.2x 15.1 14.4 11.3 10.1 9.3 8.9 8.4 8.4 1 Source: Net Income and Market Cap as per Capital IQ as of February 20th, 2023 Note: Diluted EPS excluding extra it
Slide 46: Average valuation relative to Romanian listed peers
4 Average valuation relative to Romanian listed peers Purcari vs selected Romanian public companies P/E LTM Multiples 47.8 25.3 Average P/E: 14.3x 10.3 10.4 8.4 7.2 7.0 7.0 5.2 1 Source: Capital IQ, Company Data as per Capital IQ as of February 20th, 2023 Note: Diluted EPS excluding extra items used
Slide 47: Learn more about our products
Learn more about our products Page 47
Slide 48: Investor Relations Contact
INVESTOR RELATIONS CONTACT: Eugeniu Baltag Investor Relations Manager Phone: +373 60 449 213 Email: investor.relations@purcari.wine PURCARI WINERIES PUBLIC COMPANY LIMITED 8 Calea Iesilor St., 5th floor Chisinau, MD-2069 Republic of Moldova www.purcari.wine
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