Vina Concha y Toro S.A. · BCS:CONCHATORO
Vina Concha y Toro — Credit Suisse Conference (August 2014)
47 slides from Vina Concha y Toro's conference presentation, August 2014
Slide 1: Corporate Presentation
Corporate Presentation August 2014
Slide 2: Concha y Toro: At a Glance
1 Concha y Toro: At a Glance
Slide 3: Concha y Toro's Timeline
Concha y Toro’s Timeline 1883 1966 Launch 1994 First 1997 Strategic 2010 Partnership 2013 World’s Foundation of of Casillero Winery to Alliance: Manchester Most Admired Concha y Toro del Diablo trade in NYSE Almaviva Winery United Wine Brand 1933 Listed in 1993 Launch of 1996 Launch of 2000 Brand 20
Slide 4: Concha y Toro: Leading Position
Concha y Toro: Leading Position Domestic Market Share 2005 2006 2007 2008 2009 2010 2011 2012 2013 1Q2014 Concha y Toro 27.1 28.6 30.0 29.7 31.5 30.7 30.4 29.6 28.5 27.5 Santa Rita 24.4 25.5 27.9 28.7 28.9 29.4 29.1 28.0 29.5 29.5 San Pedro - Tarapacá 21.7 21.9 21.8 23.0 22.5 24.4 24.6 26.7 27.3 29.
Slide 5: Holding Concha y Toro
Holding Concha y Toro Consolidated Sales (million Ch$) +25.5% Export Markets include exports to third parties and distribution subsidiaries US and ARG exports excludes shipments to the company’s distribution subsidiaries Consolidated Volume (million 9 liter cases, Wine) Currency Mix 3M14 3M13 CLP 20
Slide 6: Holding Concha y Toro
Holding Concha y Toro Consolidated EBITDA Consolidated Mg. EBITDA (million Ch$) (% of Sales) CAGR: 6.6% +63.1% Consolidated Net Profit (million Ch$) TC Wine Cost +67.4% 6
Slide 7: Concha y Toro: Performace
Concha y Toro: Performace Income Statement 1Q14 1Q13 Change % Sales (Ch$ million) $ 114,344 $ 91,081 25.5% Exports * (Ch$ million) $ 78,896 $ 59,274 33.1% Exports * (US$ million) $ 142 $ 125 13.5% % Exports 69.0% 65.1% Export volume * ('000 cases) 4,484 4,107 9.2% Operating Result (Ch$ million) $ 11
Slide 8: Global Wine Industry
2 Global Wine Industry
Slide 9: Wine Industry: Top wine producers
Wine Industry: Top 10 wine producers • Global Production decreasing 0.1% per year • 9.4% increase in 2013 7,000 CAGR: CAGR: -1.1% -2.4% CAGR: 6,000 +0.5% 5,000 million liters 4,000 2000 CAGR: 3,000 +0.2% 2006 CAGR: CAGR: +1.4% +5.1% CAGR: 2013 2,000 +3.4% CAGR: CAGR: CAGR: +0.8% +3.6% -1.3% 1,000 0
Slide 10: Wine Industry: Top wine consumers
Wine Industry: Top 10 wine consumers • Global Consumption Increasing 0.4% per year • Potential markets: Asia, US and Latin America 4,000 CAGR: -1.5% 3,500 CAGR: CAGR: -2.6% +2.5% 3,000 CAGR: 1.0% 2,500 million liters CAGR: +3.5% CAGR: 2,000 CAGR: 2000 +2.1% CAGR: CAGR: +6.3% -3.3% 2006 -1.4% 1,500 2
Slide 11: Wine Industry: Global Exports
Wine Industry: Global Exports • Global Export Value (€) Increasing 4.9% per year • Global Export Volume Increasing 3.8% per year Source: OIV 11
Slide 12: Wine Industry: Global Situation
Wine Industry: Global Situation • World Wine Consumption Increasing 0.4% per year from 2000 to 2013 • World Wine Production Decreasing 0.1% per year from 2000 to 2013 Source: OIV, Concha y Toro Estimates 12
Slide 13: Wine Industry: Main Wineries per Volume
Wine Industry: Main Wineries per Volume The top ten players reached 12.4% of total bottled volume sold in 2012 Volume Market Ranking Company Share 2012 1° E & J Gallo Winery Inc 2.60% 2° Constellation Brands Inc 2.00% 3° The Wine Group 1.70% 4° Pernod Ricard Groupe 1.00% 5° Treasury Wine Estates Ltd
Slide 14: Business Model
3. _—s Business Model
Slide 15: Key Factors & Growth Drivers
Key Factors & Growth Drivers Quality Global Brand Presence Building 15
Slide 16: Quality
Quality Exclusive focus on wine Quality Quality Assurance Investments: supports and Consistency growth and innovation 16
Slide 17: Exclusive Focus on Wine
Exclusive Focus on Wine CASILLERO DEL DIABLO SALES 2003: 1.0M cases SALES 2013: 3.8M cases CHANGE: +3.8 times CABERNET SAUVIGNON 2010 Finest Value Cabernet on the planet Matthew Jukes, Daily Mail, UK February 2012 17
Slide 18: Quality Assurance and Consistency
Quality Assurance and Consistency As of March 31, 2014 9 VALLEYS 9,086 Hectares Planted 51 VINEYARDS 24 VARIETY 18
Slide 19: Quality Assurance and Consistency
Quality Assurance and Consistency As of March 31, 2014 3 VALLEYS 8 VINEYARDS 1,154 Hectares Planted 19
Slide 20: Quality Assurance and Consistency
Quality Assurance and Consistency As of March 31, 2014 3 VALLEYS 15 VINEYARDS 464 Hectares Planted 20
Slide 21: Quality Assurance and Consistency
Quality Assurance and Consistency Hectares Planted As of March 31, 2014 TWE (AUS/USA/NZ/IT) 11,000 Concha y Toro (CHI/ARG/USA) 10,705 E&J Gallo (USA) 8,100 Pernod Ricard (FR/AUS/ARG) 8,000 Constellation (USA/AUS/NZ/CAD) 7,247 0 2,000 4,000 6,000 8,000 10,000 12,000 Source: Companies Fact Sheet, Web
Slide 22: CAPEX
CAPEX Sustained Investment Over Time (US$ million) 2013 Capex Disclosure ** Inorganic Growth: Fetzer (216.0) + Kross (2.7) 22
Slide 23: Production Capacity Through Years
Production Capacity Through Years Planted Hectares Wine Storage & Ageing Capacity (million liters) 23
Slide 24: Brand Building
Brand Building Strong Portfolio of Wines Brand Building Strong Brand Recognition 24
Slide 25: Strong Portfolio of Wines
Strong Portfolio of Wines Multi Origin Brands Chile Argentina USA 25
Slide 26: Strong Portfolio of Wines
Strong Portfolio of Wines VARIETALS PREMIUM SUPER ULTRA ICON PREMIUM PREMIUM £5,99 / £4,99 - 5,49 £7,49 - 9,99 / £8,99 £11,99 / £12,99 £12,99 - 15,99 / £18,99 £40 / £65 / £65 USD 7 / USD 5- 6 USD 10 / USD 13 USD 14.99 / USD 19.99 USD 20 – 25 / USD 40 USD 95 / USD 120 / USD135 % of sales by value 62.
Slide 27: Strong Brand Recognition
Strong Brand Recognition For the third consecutive year, Concha y Toro is recognized as the “World's Most Admired Wine Brand” (2011 – 2013) 27
Slide 28: Strong Brand Recognition
CONCHA Y TORO Strong Brand Recognition Wine Spectator eke vintages among the vintages above points Vintage Score 2005 96 pts + Top100 N° 12 2007 96 pts 2003 96 pts + Top100 N° 4 2006 96 pts 200195 pts Top100 N° 4 2004 94 pts 2000 94pts Top100 N° 26 2001 95pts 1993 91 pts Top 100 N° 12 1997 91 pts 20
Slide 29: Strong Brand Recognition
CONCHA Y TORO Strong Brand Recognition Wine Spectator Wine Spirits .First Chilean Carmenere to appear on vintages of Carmenere above the list. pts. -Cabernet Sauvignon 2011, pts. + Carmenere 2011 pts. Carmenere 2011, pts. » Sauvignon Blanc 2013, 9 pts Year's Best New World Sauvignon Blanc. Riesling
Slide 30: Global Presence
Global Presence Strong Distribution Network Global Presence Market Diversification 30
Slide 31: Global Presence: 145 Destination Countries
Global 145 Destination Presence Countries 31
Slide 32: Strong Distribution Network
Strong Distribution Network Export Sales Export Volume (million Ch$, Wine) (thousand cases, Wine) +32.1% +9.2% Average Export Price Premium Wines Export Volume (US$ / 9 liter Case, Wine) (thousand cases) +3.2% +23.6% 32
Slide 33: Strong Distribution Network
Strong Distribution Network UK Concha y Toro UK (Since 2001) - 5.6 million cases to Dec 2013 Brazil VCT Brazil (Since 2008) – 811 thousand cases to Dec 2013 Nordics Concha y Toro Nordics (Since 2009) – 1.1 million cases to Dec 2013 Asia VCT Asia (Since 2010) – 2.5 million cases to Dec 2013 USA Excel
Slide 34: Our Distribution Subsidiaries
Strong Distribution Network Distribution Subsidiaries: Driving the growth Volume Volume Volume Volume Volume Volume 2009 2010 2011 2012 2013 3M 2014 Total Volume Holding 28,108 29,203 29,658 30,196 30,266 6,299 Total Volume through our 15,630 15,883 17,332 19,925 19,839 4,403 Distribution Subsidairi
Slide 35: Market Diversification
Market Diversification The Chilean Bottled Export Industry – Concha y Toro Leading Position Share over % Part of CyT in Rank Growth Rank 2012 Country chilean bottled total Chilean Rank 2013 2013/2012 export (volume) bottled Exports st st 1 1 st # United Kingdom 15.7% -13.7% 45.3% 1 nd st 2 2 nd # US
Slide 36: Market Diversification
Market Diversification Domestic Market – Premium Wine Growth (Thousand Liters) +3.7% % Premium/ % Premium/ Year Total Volume Total Value 2006 3.1% 13.0% 2007 2.7% 13.2% 2008 3.1% 15.2% 2009 3.5% 16.3% 2010 4.1% 17.5% 2011 5.2% 20.2% 2012 6.2% 22.9% 2013 6.3% 24.3% 36 1Q14 6.7% 26.7%
Slide 37: We are ready to continue growing…
We have the brands. We have the portfolio. We have the distribution. We have the land. We have the investments. We have the expertise. We are ready to continue growing… 37
Slide 38: Corporate Presentation
Corporate Presentation August 2014
Slide 39: Exhibits
4 Exhibits
Slide 40: Holding Concha y Toro
Holding Concha y Toro Board of Directors Shareholder Structure (March 31, 2014) 7 2 6 4 1 3 5 1. Alfonso Larraín Santa María (Chaiman) 4. Francisco Marín Estévez Stock Information 2. Rafael Guilisasti Gana 5. Sergio de la Cuadra Fabres 3. Mariano Fontecilla de Santiago 6. Pablo Guilisasti Gana (June
Slide 41: Bottled Sales 1Q2014 & 3M2014
Bottled Sales 1Q2014 & 3M2014 Change Total Sales⁽*⁾ (in Ch$ million) 1Q14 1Q13 (%) Chile Domestic Market - wine 11,368 11,556 -1.6% Chile Domestic Market - new business 10,314 5,849 76.3% Export markets⁽¹⁾ 73,901 55,383 33.4% Argentina Domestic 910 1,215 -25.1% Argentina Exports⁽²⁾ 3,550 2,995 18.5%
Slide 42: Income Statement 1Q2014 & 3M2014
Income Statement 1Q2014 & 3M2014 1Q2014 1Q2013 Change Million. Ch Million. Ch % Operating Results Sales revenues 114,344 91,081 25.5% Cost of sales (72,050) (60,526) 19.0% % of sales -63.0% -66.5% Gross Profit 42,295 30,555 38.4% % of sales 37.0% 33.5% Selling & Adm. Expenses (30,764) (24,855) 23.8%
Slide 43: Financial Debt
Financial Debt Financial Debt* as of: Mar-14 Mar-13 Ch$ MM Av. Interest rate Ch$ MM Av. Interest rate USD 137,366 3.06% 148,417 2.93% EUR 1,955 1.32% GBP 3,034 1.49% 2,509 2.36% CLP 18,853 6.00% UF 81,930 3.74% 82,061 3.74% ARS 5,596 17.06% 7,350 14.58% BRL 8,678 11.63% 3,626 9.80% MXN SEK 1,013 2.1
Slide 44: Exchange Rate Main Producers
Exchange Rate Main Producers Currencies against USD TCR (base 100: 1986) – Tipo de Cambio Observado 44
Slide 45: 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$/Liter) Source: ODEPA 45
Slide 46: Chilean Harvest through the years
Chilean Harvest through the years Historical Harvest Volume (Million Liters) Source: SAG 46
Slide 47: Concha y Toro's Stock
Concha y Toro’s Stock US$ 1.5 million of Average Daily Value Traded in 2014 47
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