Purcari Wineries Public Co., Ltd. · BVB:WINE
Purcari Wineries Public — Q1 2023 Earnings Presentation
34 slides from Purcari Wineries Public's earnings presentation, May 15, 2023
Slide 1: Purcari Wineries Q1 2023 Financial Results
Purcari Wineries Public Company Limited BVB: WINE Corporate Presentation First Quarter 2023 Financial Results 15th of May 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 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 Technology se
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 Alb de Purcari 2020 A sensual, slightly velvety experience that seduces your senses like a first love. 1 Purcari Wineries Group Key Info Gold at Mundus Vini Spring Tasting 2023, Gold at Challenge 2 Q1 2023 Operational Results International du Vin 2023, Gold at Berliner Wine Trophy 202
Slide 6: 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 Q1 2023, % RO MD PL UA CN Other #1 World’s most awa
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 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: 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 14.9 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 15 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 12: Growth in Vivino usage, key for consumer engagement, ecommerce
1 Growth in Vivino usage, key for consumer engagement, ecommerce 4.19 78% Top 1% Average score out of Scores equal or Global ranking based on 5.0 in Q1 2023 above 4.0 avg. score received 12,774 +14% 122 Vivino scans in Q1 2023 YoY scans # of countries where Q1 2023 Purcari has been scanned Page 12
Slide 13: Today’s agenda
Today’s agenda Nocturne Viorica de Purcari 2022 A fresh, light and 1 Purcari Wineries Group Key Info memorable wine; the perfect portrayal of a warm, spring evening. Gold at Mundus Vini 2 Q1 2023 Operational Results Spring Tasting 2023, Gold at Challenge International du Vin 2023 3 Guidance 4 Purcar
Slide 14: Strong Q1 2023 growth, profitability on top of the guidance
2 Strong Q1 2023 growth, profitability on top of the guidance Revenues EBITDA Net Income RON m RON m RON m +3% +7% 21.1 12.8 20.5 12.0 19.6 +31% 73.3 17.4 10.3 8.0 56.2 49.8 46.4 1Q20 1Q21 1Q22 1Q23 1Q20 1Q21 1Q22 1Q23 1Q20 1Q21 1Q22 1Q23 37% 39% 36% 29% 17% 21% 21% 17% EBITDA margin Net Income marg
Slide 15: Key operational highlights for 1Q23
2 Key operational highlights for 1Q23 ▪ Sales up 31%, to RON 73.3m exceeding the guidance. Strongest 1Q growth since 2019. Core Wine revenues +28% YoY and Ecosmart contributing additionally with RON 6.5m. Ongoing organic ▪ Double digit growth for all brands on volume rise, mixed with effects of pric
Slide 16: P&L: Strong performance, despite sticky inflation and tighter environment
2 PL: Strong performance, despite sticky inflation and tighter environment Comments RON m 1Q23 1Q22 ∆ 1Q ▪ Gross margin at 45%, highest margin since 1Q22. Revenue Inflationary pressures, more expensive wine stock of 2020 73.3 56.2 31% vintage, along with higher depreciation fueled up the Cost of Sal
Slide 17: Segment reporting: growing strong in WINE, turning around Ecosmart
2 Segment reporting: growing strong in WINE, turning around Ecosmart Purcari Group Ecosmart WINE Business ▪ Overall strong performance of RON m 1Q23 1Q22 ∆ 1Q 1Q23 1Q22 ∆ 1Q 1Q23 1Q22 ∆ 1Q core WINE business, while Revenue 73.3 56.2 31% 6.5 4.2 57% 66.8 52.0 28% incorporating negative effects Cost o
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 112 32.1 98 109 Receivables 76 21.8 23.5 66 19.1 46 12.6 Dec-18 Dec-19 Dec-20 Dec-21 Dec-22 Mar-23 Dec-18 Dec-19 Dec-20 Dec-21 Dec-22 Mar-23 Current Ratio Cash Ratio 2.08x
Slide 19: Strong growth in core markets on high consumer confidence
2 Strong growth in core markets on high consumer confidence Market Share of sales1Q23 ∆ 1Q23 YoY Comments ▪ RO: Double digit growth for all brands, on both volume and value increases. RO 56% +32% Price increases pushed in February, certain partners stocking up to benefit from old pricing. Doubled nu
Slide 20: Excellent start to the year, amid global headwinds
2 Excellent start to the year, amid global headwinds Brand Share of sales, 1Q23 ∆ 1Q23 YoY Comments ▪ PURCARI: Strong double-digit growth in all markets, equal contribution from volumes and price increases. Romania 52% +31% accelerating +30% YoY. The brand showing resilient consumption, facing well
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 We Thank You Today and #EveryDay Wine Vernissage – 2023 Edition More than 400 tablets sent to Ukrainian children An appreciation campaing launched on the 8th of A new successful edition; Purcari Native Rosé won from 9 reg
Slide 23: Today’s agenda
Today’s agenda Native Pinot Noir de Purcari 2021 A wine produced from 1 Purcari Wineries Group Key Info grapes in conversion to organic farming, with a delicate bouquet, supported by an ample and generous taste, with 2 Q1 2023 Operational Results a refreshing undertone.. Gold at Mundus Vini Spring T
Slide 24: Guidance 2023: maintaining the guidance for the year
3 Guidance 2023: maintaining the guidance for the year Target 2023 guidance 1Q 2023 Status Comments • Growth in 1Q significantly above guidance, amid a Revenue challenging macro backdrop. growth +18-22% +31% > • Consumer demand for premium brands remains healthy. Affordable luxury positioning coping
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 Group Key Info full and fruity, with notes of vanilla. Gold at Mundus Vini 2 Q1 2023 Operational Results Spri
Slide 26: Active stock, on strong fundamentals and on upside potential
4 Active stock, on strong fundamentals and on upside potential Backed by Reputable shareholders Consensus forecasts Rating Target Price Date Wood&Company Buy 18.70 May-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 ▪ #4 best p
Slide 27: 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 28: 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 29: Low valuation relative to wine peers
4 Low valuation relative to wine peers Purcari vs Selected wine public companies P/E LTM Multiples 32.1 29.6 27.8 17.2 Average P/E: 15.4x 14.5 13.1 13.0 11.6 11.6 9.8 7.2 6.2 6.0 Source: Net Income and Market Cap as per Capital IQ as of May 10th, 2023 Note: Diluted EPS excluding extra items used for
Slide 30: 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 22.5 17.7 11.2 10.1 Average P/E: 9.25x 6.3 6.0 5.8 5.1 4.8 3.0 1 Source: Capital IQ, Company Data as per Capital IQ as of May 10th, 2023 Note: Diluted EPS excluding extra items used
Slide 31: 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 25 25 Energy companies 1 20 20 Revenue CAGR’16-21 in USD Revenue CAGR’16-21* in USD 15 15 10 10 5 5 0 0 -5 -5 0 5 10 15 20 25 30 35 0 10 20 30 P/E Multiple P/E Multipl
Slide 32: Today’s agenda
Today’s agenda Cuvée de Purcari Rosé Brut 1 Purcari Wineries Group Key Info An elegant blend, completed by a floral bouquet with a subtle flavour of blackcurrant. 2 Q1 2023 Operational Results Gold at Challenge International du Vin 2023 3 Guidance 4 Purcari Wineries Stock 5 ESG Impact Page 32
Slide 33: ESG Impact
5 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 34: Thank you!
Thank you!
Purcari Wineries Public Company — Q1 2023 Earnings Presentation on 6ix