Purcari Wineries Public Co., Ltd. · BVB:WINE
Purcari Wineries Public — Purcari Wineries — H1 2022 Earnings Presentation
30 slides from Purcari Wineries Public's earnings presentation, Aug 30, 2022
Slide 1: Purcari Wineries 1H 2022 Corporate Presentation
Purcari Wineries 1H 2022 Corporate Presentation 30th August 2022
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 presenters
Today’s presenters Victor Bostan Eugen Comendant Victor Arapan Eugeniu Baltag Vasile Tofan Chief Executive Officer, Chief Operating Officer Chief Financial Officer Investor Relations Manager Chairman of the Board Founder ▪ Founded the Group in ▪ Over 15 years of ▪ 20 years of experience in ▪ Over 10
Slide 4: Today's agenda
Today’s agenda Rosé de Purcari Grand Gold at 1 Concours Mondial Our Group, Vision and Strategy de Bruxelles – 2022 Edition, 4.3 score on Vivino 2 1H 2022 Operational Results 3 Full year guidance and Q&A Page 4
Slide 5: 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, 1H22, % RO MD PL UA CN #1 World’s most awarded winery
Slide 6: Strong track record of growth
1 Strong track record of growth Sustainable profitability accompanying strong growth Comments ▪ IPOed on Bucharest Stock Exchange in February 2018 ▪ 75% increase in revenues since pre-IPO ▪ Strong operating results and cost-efficient production ▪ SG&A stable over time at 22% of revenue ▪ Maintained
Slide 7: 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 8: Our mission, vision and values
1 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 9: Purcari formula: operational excellence meets sound marketing
1 Purcari formula: operational excellence meets sound marketing Operational excellence Clever marketing • Location: low-cost production platform in • Philosophy: be genuine, talk to the consumer, don’t Romania, Moldova; very competitive vs. other sell to them EU, New world • On a shoestring: focus o
Slide 10: Vision: be the consolidator of a fragmented market
1 Vision: be the consolidator of a fragmented market Volume share top-3 players by country, % 79 77 82 74 #3 67 63 68 #2 41 39* 36 #1 18 10 Beer Spirits Wine Beer Spirits Wine Beer Spirits Wine Beer Spirits Wine Unlike beer or spirits, wine market remains very fragmented; players who have the scale
Slide 11: Quality highly commended, remain the most awarded winery in CEE
1 Quality highly commended, remain the most awarded winery in CEE 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 #1 103 Mundus Vini 97
Slide 12: Topping competition at engagement and quality
1 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 13.8 4.2
Slide 13: 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 10 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 14: Growth in Vivino usage, key for customer engagement
1 Growth in Vivino usage, key for customer engagement, ecommerce 4.20 77% Top 1% Average score out of Scores equal or Global ranking based on 5.0 in 2Q22 above 4.0 avg. score received 29,021 +7% 96 Vivino scans in 1H22 YoY scans # of countries where 2Q22 Purcari has been scanned Page 14
Slide 15: Today's agenda
Today’s agenda Negru de Purcari 2015 1 Our Group, Vision and Strategy GOLD at Decanter 2020 with 95 pts and a 2 4.4 score on 1H 2022 Operational Results Vivino, ranked among the top 1% wines 3 Full year guidance and Q&A globally. Page 15
Slide 16: Continue delivering double digit growth and strong margins
2 Continue delivering double digit growth and strong margins Revenues EBITDA Net Income RON m RON m RON m +46% +16% +10% +2% 123.9 38.6 20.4 20.9 35.1 106.5 28.3 15.6 84.9 1H20 1H21 1H22 1H20 1H21 1H22 1H20 1H21 1H22 33% 33% 31% 18% 19% 17% EBITDA margin Net Income margin Page 16
Slide 17: Key operational highlights for 1H22
2 Key operational highlights for 1H22 • Revenues up 16% YoY on better mix and gradual price increases applied Upward sales, • Strong performance for high premium brands Purcari and Bardar despite regional • Moldova showing strong evolution, brands performing well across all channels challenges • Chi
Slide 18: Maintain strong margins, proving resilient in current turmoil
2 Maintain strong margins, proving resilient in current turmoil Comments RON m 1H22 1H21 ∆ '22/'21 ▪ Gross margin at 47%. Premiumization strategy and Revenue 123.9 106.5 16% better mix partly offset the adverse effects of inflationary pressures, higher depreciation and Cost of Sales (65.2) (53.2) 23
Slide 19: 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 98 Cash and 77 81 32.1 66 Receivables 24.5 23.8 46 12.6 31-Dec-19 31-Dec-20 31-Dec-21 31-Mar-22 30-Jun-22 31-Dec-19 31-Dec-20 31-Dec-21 31-Mar-22 30-Jun-22 Current Ratio Cash Ratio
Slide 20: Sustainable growth, despite the global turmoil
2 Sustainable growth, despite the global turmoil Market Share of sales, 1H22 ∆ 1H22 YoY Comments • RO: overall market weaker during 2Q, but started showing improving RO 53% +7% demand as of June. Good traction for our national Crama Ceptura brand. Purcari mid single-digit growth with strong traction
Slide 21: Premium Purcari and Bardar brands lead the growth, helping mix
2 Premium Purcari and Bardar brands lead the growth, helping mix Brand Share of sales, 1H22 ∆ 1H22 YoY Comments • PURCARI: Upward sales in all markets, except Ukraine. Moldova leading the growth +47% YoY. The expansion in 50% +9% new markets and investment in new partnerships is paying off: Poland d
Slide 22: Continue creating, supporting, inspiring…
2 Continue creating, supporting, inspiring… Freedom and Solidarity Domeniile Cuza campaign Wine Crime campaign Over 100 unsponsored mass media news, Listed in all major IKA in Romania, 3 TV Shows and influecers integration including CNN, DW, BBC, The Washington Post, Wines awarded at Decanter 2022 D
Slide 23: Made it to the Decanter Classic Wines 2021 list
2 Made it to the Decanter Classic Wines 2021 list, among much pricier alternatives Wine Origin Vintage Vivino Points Price (in UK) Negru de Purcari (Chateau Purcari) 2019 4.4 93 £26 Enclave Cabernet Sauvignon (Ventisquero) 2014 4.3 93 £45 Testamatta Toscana IGT (Bibi Graetz) 2018 4.3 90 £65 Teperber
Slide 24: Continue to demonstrate robust liquidity
2 Continue to demonstrate robust 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, 2021-2022 YTD average, bps BR
Slide 25: Valuation relative to wine peers
2 Valuation relative to wine peers Purcari vs Selected wine public companies P/E LTM Multiples 37.0 22.1 21.9 21.2 20.4 19.2 15.6 Average P/E: 16.2x 11.7 10.8 10.6 10.1 10.0 8.4 7.7 1 Source: Net Income and Market Cap as per Capital IQ as of August 19 th, 2022 Note: Diluted EPS excluding extra items
Slide 26: Valuation relative to Romanian listed peers
2 Valuation relative to Romanian listed peers Purcari vs selected Romanian public companies P/E LTM Multiples 47.3 25.7 14.3 Average P/E: 14.2x 10.2 9.7 9.0 7.7 7.7 6.4 4.2 1 Source: Capital IQ, Company Data as per Capital IQ as of August 19th, 2022 Note: Diluted EPS excluding extra items used for P
Slide 27: High growth not incorporated in valuations yet
2 High growth not incorporated in valuations yet Purcari vs selected wine public companies Purcari vs selected Romanian public companies 30 30 25 25 Revenue CAGR’16-21 in USD Revenue CAGR’16-21* in USD 20 1 20 15 15 2 10 10 5 5 0 0 0 10 20 30 40 0 10 20 30 40 50 P/E Multiple P/E Multiple Source: Cap
Slide 28: Today's agenda
Today’s agenda 1 Our Group, Vision and Strategy Cuvée de Purcari Alb Brut, 4.2 score on Vivino, top 2% 2 wine globally. 1H 2022 Operational Results BEST IN SHOW at Mundus Vini 2021. 3 Full year guidance and Q&A Page 28
Slide 29: Guidance 2022 – maintaining our guidance for the year
3 Guidance 2022 – maintaining our guidance for the year Target 2022 guidance 1H2022 fact Status Comments • Growth in 2Q accelerated vs. 1Q, expect trend to Revenue continue into the seasonally more important 2H growth +15-20% +16% = • Consumer demand remains healthy, across markets, despite inflatio
Slide 30: Thank you.
Thank you.