Vina Concha Y Toro S.a. · BCS:CONCHATORO
Vina Concha Y Toro — BTG Pactual Conference (Santiago) 2017
50 slides from Vina Concha Y Toro's conference presentation, June 2017
Slide 1: Corporate Presentation
Corporate Presentation June 2017
Slide 2: I. Concha y Toro: At a Glance
I. Concha y Toro: At a Glance 2
Slide 3: Viña Concha y Toro Today
Viña Concha y Toro Today • Largest Chilean and Latin American Winery. • Top 10 world’s winery in volume commercialized. • Unique business model within the wine industry. • Production facilities in 3 countries: CL, US & AR. • Distribution subsidiaries in 12 countries and 2 commercial offices. • Globa
Slide 4: Viña Concha y Toro in Numbers
Viña Concha y Toro in Numbers Net Sales (million US$) • 2006: $404 2016: $977 CAGR: 9.1% Volume (million 9 liter cases, wine) • 2006: 21.7 2016: 36.2 CAGR: 5.3% EBITDA* (million US$) • 2006: $66.9 2016: $138 CAGR: 7.5% Net Income (million US$) • 2006: $30.5 2016: $72 CAGR: 8.9% * Gross Profi
Slide 5: II. Global Wine Industry
II. Global Wine Industry 5
Slide 6: Wine Industry: Top wine producers
Wine Industry: Top 10 wine producers • Global Production remained flat since 2000 • 3.3% decrease in 2016 Source: OIV 6
Slide 7: Wine Industry: Top wine consumers
Wine Industry: Top 10 wine consumers • Global Consumption Increasing 0.4% in 2016 • USA, China, Russia leading the growth Consumption (Lts) 10 42 34 25 1 20 24 22 6 23 Source: OIV 7
Slide 8: Wine Industry: Global Exports
Wine Industry: Global Exports • Global Export Value (€) increased 111% in 16 years • Global Export Volume increased 74% in 16 years CAGR: +4.8% CAGR: +3.5% Source: OIV 8
Slide 9: Wine Industry: Global Exports
Wine Industry: Global Exports • Top 6 exporters by value • Top 6 exporters by volume +2.2% +3.9% +1.6% +5.3% +0.3% +3.6% +5.6% +0.9% +8.0% +1.2% 9.2% -0.3% Source: OIV 9
Slide 10: Wine Industry: Global Imports
Wine Industry: Global Imports • Top 6 importers by value • Top 6 importers by volume +0.4% +5.8% +0.8% +3.8% -0.4% +1.4% +3.9% +20.9% +27.9% +4.8% -4.5% +5.1% Source: OIV 10
Slide 11: Wine Industry: Top Wineries
Wine Industry: Top 10 Wineries • The top ten players reached 13% of commercialized volume worldwide. Volume Market Share Ranking Company 2016 1° E&J Gallo Winery Inc 2.71% 2° Constellation Brands Inc 1.70% 3° Wine Group Inc, The 1.50% 4° Treasury Wine Estates Ltd 1.12% 5° Viña Concha y Toro SA 1.03%
Slide 12: III. Investment Attractiveness
III. Investment Attractiveness 12
Slide 13: Investment Attractiveness
Investment Attractiveness 1. Lead by an experienced controlling group 2. Successful track record through years 3. A business model which has supported the growth 4. Market diversification 5. Growth that improves profitability 6. Export Markets Leading the Growth 7. Leading Position 13
Slide 14: 1. Lead by an experienced controlling group
1. Lead by an experienced controlling group Current Controlling Group is part of CyT since the 50’s. Three families integrate the controlling group. Exclusive focus on wine Leading the growth and expansion through years. Passion for wines Experienced Management Management in the Company fo
Slide 15: 2. Successful track record through years
2. Successful track record through years 1883 Foundation 1966 Launch of 1994 First 1997 Strategic 2010 Partnership 2013 World’s Most of Concha y Toro Casillero del Winery to trade Alliance: Almaviva Manchester United Admired Wine Diablo in NYSE Winery Brand 1933 Listed in 1993 Launch of 1996 Launch
Slide 16: 3. A business model which has supported the growth
3. A business model which has supported the growth a. Quality Strong Portfolio of Wines Multiorigin Brands VERTICAL INTEGRATION Strong Distribution Network Control of the production and b. Brand Market Diversification supply chain Building c. Global Strong Global Brand Recognition Presence VERTICAL
Slide 17: a. The importance of Quality Assurance and Consistency
a. The importance of Quality Assurance and Consistency CHILE ARGENTINA CALIFORNIA 9 valleys 3 valleys 3 valleys 54 vineyards 9 vineyards 14 vineyards 9,388 1,140 462 HECTARES HECTARES HECTARES 17
Slide 18: Leading Company in planted hectares
...Leading Company in planted hectares Planted Hectares (Total includes leases) Source: Information available in Companies Fact Sheet, Web Site Information, Annual Reports, SEC Fillings (20-F & 10-K) 18
Slide 19: Investments supporting the growth
…Investments supporting the growth Sustained Investment Over Time Capex Disclosure (2012-2016) (US$ million) (*) Inorganic Growth: Fetzer (216.0) + Kross (2.7) 19
Slide 20: Investments supporting the growth
…Investments supporting the growth Planted Hectares Wine Storage & Ageing Capacity (million liters) 20
Slide 21: b. Brand Building… built on a strong portfolio…
b. Brand Building… built on a strong portfolio… Multi-origin Brands… The America’s Wine Portfolio Chile Argentina USA 21
Slide 22: …development of brands & history…
…development of brands & history … SUCCESSFUL POSITIONING OF A GLOBAL BRAND IN THE PREMIUM CATEGORY Main market, Top 10 in sales (UK) #1 sales Cabernet Sauvignon (UK) Casillero del Diablo Reserva. Preferred Wine (China) Volume (million cases) 2003 2016 CAGR Viña Concha y Toro 15.9 36.2 6.5% Ca
Slide 23: … development of brands & history…
… development of brands & history… Don Melchor 2014 96 pts Don Melchor 2013 Don Melchor 2012 98 pts Don Melchor 2013 97 pts 23
Slide 24: Independent strong brands with the endorsement of Concha y Toro
…Independent strong brands … … with the endorsement of Concha yToro SUPER ULTRA VARIETALS PREMIUM ICON PREMIUM PREMIUM USD 5 – 6 / USD 7 - 8 USD 10 / USD 13 USD 14.99 / USD 19.99 USD 25 - 45 / USD 40 USD 65 / USD 95 / USD 135 £4 – 5 / £5 - 6 £7 / £9 £11 / £14 £18 - 32 / £29 £47 / £68 / £97 % of sale
Slide 25: … a recognized winery obtaining global awards
… a recognized winery obtaining global awards “#2 Most Admired Wine Brands 2017” (Drinks International, 2017) “World’s Most Powerful Wine Brand” (Intangible Business, 2014 & 2015) “International Best Drinks Company of the Year” 2015 (The Drinks Business). 25
Slide 26: Volume Th. cases
Volume Th. cases +72 +72% 83,602 % +4116% 534 462 353 377 310 15,957 1,983 2012 2013 2014 2015 2016 2014 2015 2016 26
Slide 27: … strategic partnerships…
2.3 … strategic partnerships… Viña Maipo official Strategic partnership Cono Sur Bicicleta is sponsor of the ATP Casillero del Diablo the official wine of World Tour de with Manchester “Le Tour de France”. Tokio. United. Concha y Toro Trivento official Official wine sponsor sponsor or the of Dallas
Slide 28: … fine wines recognition…
… fine wines recognition… JAMES SUCKLING DELIVERS THE HISTORIC HIGHEST HIGHEST SCORES TO VIÑA SCORE OF CONCHA Y TORO FINE WINES DON MELCHOR 28
Slide 29: … the highest accolades for our Portfolio…
… the highest accolades for our Portfolio… 29
Slide 30: c. Global Presence… getting closer to markets
c. Global Presence… getting closer to markets North Europe America 34.4% Asia 17.2% 9.8% Africa 2.0% Latin America 14.8% Chile 21.8% +140 2 12 COMMERCIAL DISTRIBUTION COUNTRIES OFFICES SUBSIDIARIES 30
Slide 31: … sales that build brand equity…
… sales that build brand equity… Distribution Subsidiaries: Driving the growth • 68% of CyT’s sales carried out by direct distribution • 32% of CyT’s sales carried out by third parties distributors • 12 distribution subsidiaries • 2 commercial offices • UK started operations on 2001 • Since 2012 in
Slide 32: 4. Market diversification…
4. Market diversification… Chilean Destination of Bottled Exports Concha y Toro’s – Currencies and Markets Currency Mix 3M17 3M16 CLP 20.9% 21.7% USD 34.9% 32.2% GBP 18.1% 21.9% EUR 10.7% 11.2% CAD 4.1% 3.1% BRL 3.1% 2.1% MXN 2.9% 2.9% SEK 2.7% 3.2% ARG 1.6% 0.6% NOK 1.0% 1.1% • Export Markets inclu
Slide 33: … leading the Chilean export categories.
… leading the Chilean export categories. The Chilean Bottled Export Industry – Concha y Toro Leading Position Share over Chilean % Part of CyT in Rank Chilean exports Rank CyT over Country bottled exports Chilean bottled 3M17 growth 3M17/3M16 Chilean Exports (volume) exports 1 USA 15.6% 11.5% 32.8%
Slide 34: 5. Growth that improves profitability
5. Growth that improves profitability Export Volume Domestic Volume (thousand cases, wine) (thousand cases, wine) Premium Wines Export Volume (thousand cases, wine) Premium Wines Domestic Volume (thousand cases, wine) 34
Slide 35: 6. Export Markets Leading the Growth
6. Export Markets Leading the Growth Export Sales (million Ch$, Wine) Average Export Price Average Export Price (US$ / 9 liter Case, Wine) (Th. Ch$ / 9 liter Case, Wine) 35
Slide 36: 7. Leading Position
7. Leading Position Concha y Toro’s Exports over Chilean Bottled Wine* Volume Value 2004 29.2% 25.8% 2005 32.2% 27.2% 2006 33.4% 28.3% 2007 34.9% 30.2% 2008 37.0% 31.4% Volume Pro-forma (including wine 2009 38.3% 32.3% bottled in UK): 2010 36.6% 31.5% 36.9% (as of Dic. 2016) 2011 33.7% 29.7% 2012 35
Slide 37: Maintaining solid volume growth…
Maintaining solid volume growth… Consolidated Sales (million 9 liter cases, wine) Net Sales (billion Ch.$) 2013: $475.6 2016: $658.4 CAGR: +11.5% 37
Slide 38: … and remaining profitable through years.
… and remaining profitable through years. Consolidated EBITDA Consolidated EBITDA Margin (million Ch$) (% over sales) Consolidated Net Profit (million Ch$) 38
Slide 39: IV. Financial Position
IV. Financial Position 39
Slide 40: Strong Capital Structure
Strong Capital Structure Net Financial Debt / EBITDA (1) Net Financial Debt / Equity EBITDA (1) / Financial Expenses (1) Liabilities: Current Liabilities + Non Current Liabilities Financial expenses excludes financial income Financial Debt: Other current financial liabilities + Other non current fin
Slide 41: Financial Debt
Financial Debt Financial Debt* Mar-17 Mar-16 as of: Ch$ MM Av. Interest rate Ch$ MM Av. Interest rate USD 151,144 2.58% 104,954 2.86% EUR GBP CLP 34,166 5.12% 40,350 5.17% UF 52,944 2.40% 54,205 3.43% ARS 5,344 20.28% 3,860 27.66% BRL 5,300 17.80% 4,683 15.92% MXN 47 9.42% 2 5.96% SEK Total 248,944
Slide 42: Financial Debt
Financial Debt Financial Debt by Currency Expected Maturity Date (1), as of March 31, 2017 As of March 31, 2017 (Billion Ch$) Source: The Company (1) Considers current and non current financial liabilities excluding derivatives. • EBITDA, Last 12 Months. • As of March 31, 2017, Concha y Toro had a C
Slide 43: We are ready to keep 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 keep growing… 43
Slide 44: V. Exhibits
ONC V. Exhibits exci VINA CONCHA Y TORO
Slide 45: Viña Concha y Toro
Viña Concha y Toro Board of Directors Shareholder Structure (Mar 31, 2017) Alfonso Larraín Santa María (Chairman) Rafael Guilisasti Gana Rafael Marín Jordán Mariano Fontecilla de Santiago Concha Andrés Larraín Santa María Pablo Guilisasti Gana Jorge Desormeaux Jiménez 45
Slide 46: Bottled Sales 1Q2017
Bottled Sales 1Q2017 (1) Export Volume include exports to third parties and sales volume of the company's distribution subsidiaries (UK, Nordics, Brazil, Singapore, Mexico). (2) This figure excludes shipments to the company’s distribution subsidiaries. (*) This figure includes bulk wine sales. 46
Slide 47: Chilean Harvest through years
Chilean Harvest through years Historical Harvest Volume (million liters) 47
Slide 48: Cabernet Sauvignon Bulk Wine (Maule Valley)
Cabernet Sauvignon Bulk Wine (Maule Valley) 48
Slide 49: Investments supporting the growth
…Investments supporting the growth Currently Plantings Total Vineyards Total Producing 2012-2015 Planted Fallow Arable Vineyards (in hectares) Chile Limarí Valley 921 85 1,006 244 1,250 Casablanca Valley 380 44 424 - 424 Aconcagua Valley 97 - 97 - 97 Leyda Valley 130 - 130 - 130 Maipo Valley 771 81
Slide 50: Corporate Presentation
Corporate Presentation June 2017
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