Vina Concha Y Toro S.a. · BCS:CONCHATORO
Vina Concha Y Toro — Q1 2023 Earnings Presentation
39 slides from Vina Concha Y Toro's earnings presentation, May 2, 2023
Slide 1: Investor Presentation 1Q23 Results
INVESTOR PRESENTATION 1Q23 Results
Slide 2: Agenda
AGENDA Chapter 01 Overview Osvaldo Solar, CFO Chapter 02 1Q23 Sales Analysis Daniela Lama, Head of IR Chapter 03 1Q23 Results Osvaldo Solar, CFO
Slide 3: Chapter 01: Overview
Chapter 01 Overview Osvaldo Solar, CFO
Slide 4: A challenging and complex quarter
RESULTADOS 1Q23 | VIÑA CONCHA Y TORO 4 A challenging and complex quarter The complex world situation marked by inflationary pressures, an overstock of inventories due to logistical disruptions, higher interest rates, economic slowdown, increases in dry goods and freight costs and lower consumption c
Slide 5: Measures implemented to deal with this scenario
1Q23 RESULTS | VIÑA CONCHA Y TORO 5 Measures implemented to deal with this scenario: • Focus on volume growth without affecting the premiumization strategy: • Take advantage of our cost advantages to drive growth in non-Premium segments. • Construction of brands with investment in marketing. • Devel
Slide 6: The impacts on costs and expenses due to transitory events begin to moderate
1Q23 RESULTS | VIÑA CONCHA Y TORO 6 The impacts on costs and expenses due to transitory events begin to moderate. Decreases in shipping rates are already being observed, 2022 LE 2023 Var which as of March 31 represent 65% of extraordinary expenses, not yet reflected in the financial statements.. COG
Slide 7: Results Analysis 1Q23
Results Analysis 1Q23
Slide 8: 1. Sales revenue
1Q23 RESULTS | VIÑA CONCHA Y TORO 8 1. Sales revenue (million of Ch$) 1Q23 1Q22 Var (Ch$) Var (%) Consolidated sales 163,172 178,055 (14,884) (8.4%) Main reasons for the drop in sales: • Adjustments to consumption in the different markets in a global context that continues to be challenging and with
Slide 9: Performance of the four main markets
1Q23 RESULTS | VIÑA CONCHA Y TORO 9 Performance of the four main markets 1Q23 % of Sales Var % Value Var % Volume UK 27.8% 2.0% 3.4% Chile 19.7% 1.7% 2.7% US 15.4% (15.3%) (11.9%) Brazil 5.8% 9.4% 20.5% Sales result impacted by: • Strong accumulation of inventories throughout the logistics chain due
Slide 10: Chapter 02: 1Q23 Sales Analysis
Chapter 02 1Q23 Sales Analysis Daniela Lama, Head of IR
Slide 11: 1Q23 sales
1Q23 RESULTS | VIÑA CONCHA Y TORO 11 1Q23 sales Drop in sales for the quarter due to lower volumes, a higher average price and slowdown in the industry. VA R (8.4%) 178,055 (9.5%) 163,172 wine 1Q22 1Q23 (million of Ch$)
Slide 12: 1Q23 volume
1Q23 RESULTS | VIÑA CONCHA Y TORO 12 1Q23 volume During this quarter, wine volume fell 11.5%, reflecting a slowdown in the industry and inventory adjustments by distributors and retailers. VA R (9.7%) 7,273 (11.5%) 6,567 wine 1Q22 1Q23 (thousand of C9L)
Slide 13: Main markets performance
1Q23 RESULTS | VIÑA CONCHA Y TORO 13 Main markets performance 1Q23 % of Sales Var % Value Var % Volume UK 27.8% 2.0% 3.4% Chile 19.7% 1.7% 2.7% US 15.4% (15.3%) (11.9%) Brazil 5.8% 9.4% 20.5% Mexico 5.6% 4.3% (9.7%) China 3.6% 32.9% 49.5% Canada 3.0% (21.3%) (33.9%) Sweden 2.3% (8.7%) 3.1% Netherlan
Slide 14: Sales results in the main markets impacted by
1Q23 RESULTS | VIÑA CONCHA Y TORO 14 Sales results in the main markets impacted by: UK (+2.0% value | +3.4% volume) • Best performance in volume driven by Invest category: Trivento Reserve (+18.7%) and Isla Negra (+5.4%). • CDD with positive performance in March (+40.7%). • CyT market share in line
Slide 15: Sales results in the main markets impacted by
1Q23 RESULTS | VIÑA CONCHA Y TORO 15 Sales results in the main markets impacted by: Brazil (+9.4% value | +20.5% volume) • Best performance driven by Principal and Invest categories. • Diablo and Don Melchor brand growth of three and two digits respectively. Mexico (+4.3% value | -9.7% volume) • Gro
Slide 16: Principal + Invest mix: +10 bp
1Q23 RESULTS | VIÑA CONCHA Y TORO 16 Principal + Invest mix: +10 bp % OF TOTAL SALES IN VALUE 50.4% 50.5% Principal + Invest 49.6% 49.5% Others 1Q22 1Q23
Slide 17: Chapter 03: 1Q23 Results
Chapter 03 1Q23 Results Osvaldo Solar, CFO
Slide 18: Operating Costs
1Q23 RESULTS | VIÑA CONCHA Y TORO 18 Operating Costs (million of Ch$) 1Q23 1Q22 Var (Ch$) Var (%) Operating cost (103,386) (106,403) 3,017 (2.8%) % Op. cost / Sales (63.4%) (59.8%) (360 bp) Main variations : • The increase in costs of dry goods, equivalent to Ch$ 3,377 mYoY. • Strong increase in shi
Slide 19: Shipping costs index
1Q23 RESULTS | VIÑA CONCHA Y TORO 19 Shipping costs index Shipping cost of finished product in USD/C9L, for distribution offices and US. Base 100 index as of 1Q20. (Distribution offices and US) +35.6% 250,0 200,0 150,0 100,0 50,0 0,0 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23
Slide 20: Gross profit: -16.6%, impacted by cost increases
1Q23 RESULTS | VIÑA CONCHA Y TORO 20 Gross profit: -16.6%, impacted by cost increases (million of Ch$) 1Q23 1Q22 Var (%) Consolidated sales 163,172 178,055 (8.4%) Operating cost (103,386) (106,403) (2.8%) Gross profit 59,786 71,652 (16.6%) Gross margin 36.6% 40.2% (360 bp) Concepts that mainly expla
Slide 21: SG&A – Higher expenses in the quarter
1Q23 RESULTS | VIÑA CONCHA Y TORO 21 SG&A – Higher expenses in the quarter (million of Ch$) 1Q23 1Q22 Var (%) Consolidated sales 163,172 178,055 (8.4%) Gross profit 59,786 71,652 (16.6%) SG&A (52,728) (48,149) 9.5% SG&A / Sales (32.3%) (27.0%) (530 bp) SG&A / Sales ratio increased due to lower sales
Slide 22: EBIT and EBITDA
1Q23 RESULTS | VIÑA CONCHA Y TORO 22 EBIT and EBITDA 1Q23 1Q22 Var (%) (millones de Ch$) % / Sales % / Sales % / Sales Consolidated sales 163,172 178,055 (8.4%) Gross profit 59,786 36.6% 71,652 40.2% (16.6%) (360 bp) SG&A (52,728) (32.3%) (48,149) (27.0%) (9.5%) (530 bp) Other incomes and expenses (
Slide 23: Non-Operating result
1Q23 RESULTS | VIÑA CONCHA Y TORO 23 Non-Operating result (million of Ch$) 1Q23 1Q22 Var (Ch$) Var (%) Net financial expense (*) (3,707) (2,534) (1,173) 46.3% Exchange differences 644 632 12 1.9% Non-Operating result (**) (3,063) (1,902) (1,161) 61.0% Associated companies (285) (171) (114) 66.5% (*)
Slide 24: Non-Operating result
1Q23 RESULTS | VIÑA CONCHA Y TORO 24 Non-Operating result Non-operating result (*) increases by Ch$ 1.161 m due to: • Higher net financial expense of Ch$ 1,173 m. • Exchange differences of Ch$ 12 m. * Does not consider results of affiliated companies FA C TO R S TO H I G H L I G H T: • Positive effe
Slide 25: Currency diversification
1Q23 RESULTS | VIÑA CONCHA Y TORO 25 Currency diversification Diversification of currencies attenuates the variations of MXN CNY the dollar as a single currency 2.7% ARG 5.7% 0.8% CLP BRL 20.1% 5.9% NOK 1.7% EXCHANGE RATE VARIATION 1Q23 VS 1Q22 SEK 2.3% CyT basket index: -4.6% CAD 2.1% Dólar: -0.1%
Slide 26: Non-Operating result: Effects of interest rate increases
1Q23 RESULTS | VIÑA CONCHA Y TORO 26 Non-Operating result: Effects of interest rate increases Tasas de Interés base a 1 año (SOFR en USD, TAB en CLP, SONIA en GBP y EONIA en EUR) Tasas de Interés 1Q 2023 1Q 2022 14,0% Tasa Propoción Tasa Propoción 12,0% CLP 5,5% 43,9% 4,8% 66,2% 10,38% UF 4,4% 0,1%
Slide 27: Non-Operating result: Inflation effect
1Q23 RESULTS | VIÑA CONCHA Y TORO 27 Non-Operating result: Inflation effect Accumulated real inflation v/s fixed inflation at 2.78% 116% 113% 110% 107% 104% 101% 98% 95% Dic Ene Feb Mar Abr May May Jun Jul Ago Sept Oct Oct Nov Dic 2022 2023 1Q23 benefits: Next months: 1) Inflation set for the year 2
Slide 28: 1Q23: Net profit and Net margin
1Q23 RESULTS | VIÑA CONCHA Y TORO 28 1Q23: Net profit (million of Ch$) and Net margin (%) 11.8% 10.1% 98,810 10.0% 9.9% 87,213 8.1% 8.0% 8.0% 77,994 17,677 52,500 49,575 49,111 1.9% 3,152 2017 2018 2019 2020 2021 2022 1Q22 1Q23 Net profit Net margin
Slide 29: Working capital: Increase of Ch$ 69,000 m
1Q23 RESULTS | VIÑA CONCHA Y TORO 29 Working capital: Increase of Ch$ 69,000 m (march 23 vs march 22) CASH CONVERSION CYCLE (days) 339 339 311 316 298 289 264 270 230 284 276 282 317 260 293 330 118 115 119 91 111 106 84 81 -84 -88 -79 -81 -95 -84 -87 -72 2017 2018 2019 2020 2021 2022 mar-22 1Q22 ma
Slide 30: Return on invested capital – ROIC
1Q23 RESULTS | VIÑA CONCHA Y TORO 30 Return on invested capital – ROIC 11.3% 11.5% 10.3% 9.1% 7.5% 7.4% 7.2% 7.5% 2017 2018 2019 2020 2021 2022 1Q22 1Q23 ROIC: (Operating Margin – Taxes + Exchange Differences) / (Equity – Net Financial Debt – Cash) 12 moving months. * Income Statement corresponds to
Slide 31: Net financial debt
1Q23 RESULTS | VIÑA CONCHA Y TORO 31 Net financial debt (million of Ch$) 321,915 +74,676 306,355 266,898 250,413 240,573 221,101 231,679 201,374 2017 2018 2019 2020 2021 2022 1Q22 1Q23 Net Financial Debt: Gross Financial Debt including the effect of Derivatives related to Financial Debt – Interest –
Slide 32: Adequate level of indebtedness relative to the size of the Equity
1Q23 RESULTS | VIÑA CONCHA Y TORO 32 Adequate level of indebtedness relative to the size of the Equity FINANCIAL STRENGTH NET DEBT RATIO 1.2 0,52 0,55 0,53 0,49 0,48 0,43 0,42 0,36 2017 2018 2019 2020 2021 2022 1Q22 1Q23 Net Debt Ratio Covenants Net Debt Ratio: (Other Current and Non-Current Financi
Slide 33: Debt and Financial Expense vs. Cash generation
1Q23 RESULTS | VIÑA CONCHA Y TORO 33 Debt and Financial Expense vs. Cash generation FINANCIAL STRENGTH FINANCIAL COST COVERAGE RATIO 12,3 12,4 9,8 8,5 8,8 8,6 8,2 7,0 2,5 2.5 2017 2018 2019 2020 2021 2022 1Q22 1Q23 Financial cost coverage ratio Covenants
Slide 34: Debt and Financial Expense vs. Cash generation
1Q23 RESULTS | VIÑA CONCHA Y TORO 34 Debt and Financial Expense vs. Cash generation FINANCIAL STRENGTH NET FINANCIAL DEBT*/ EBITDA 2,9 2,6 2,6 2,5 2,4 2,6 1,5 1,4 1,4 2017 2018 2019 2020 2021 2022 1Q22 1Q23 Net financial debt / EBITDA Company objective Net Financial Debt: Gross Financial Debt includ
Slide 35: Highlights ESG and Innovation
Highligts ESG and Innovation
Slide 36: ESG progress
36 ESG progress ENERGY BIODIVERSITY C L I M AT E C H A N G E FOSSIL INDEPENDENCE AGRICULTURAL ECOSYSTEM In 2022 we reached the goal of reducing We are making progress towards MANAGEMENT carbon emissions, which was set for 2025. establishing a clean energy matrix free of Transforming project in the A
Slide 37: Innovation progress
1Q23 RESULTS | VIÑA CONCHA Y TORO 37 Innovation progress WATER SAVINGS PLANTS 2.0 Savings of +18% with different efficient irrigation techniques. Today it is Virus-free vines and wood fungi without affecting their identity. in a pilot plan with 900 ha. This allows them to be better prepared to face
Slide 38: Outlook 2023
1Q23 RESULTS | VIÑA CONCHA Y TORO 38 Outlook 2023 After a challenging and complex first quarter, our priority objective is to refocus the company on strong sales growth, supported by our premiumization strategy and focusing on consumers. With this, we will achieve profitable and sustained growth ove
Slide 39: Slide 39