Purcari Wineries Public Co., Ltd. · BVB:WINE
Purcari Wineries Public — Purcari Wineries — H1 2018 Earnings Presentation
28 slides from Purcari Wineries Public's earnings presentation, Aug 13, 2018
Slide 1: Purcari Wineries Plc 1H results presentation
Purcari Wineries Plc 1H results presentation August 13, 2018 Page 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: Today's Presenters
TODAY’S PRESENTERS Victor Bostan Victor Arapan John Maxemchuk Diana Durnescu Vasile Tofan CEO, Founder CFO COO IR Manager Chairman Founded the Group 20 years of experience 20 years of Over 5 years of Over 10 years in 2002 in banking, audit, management experience in experience in FMCG Ove
Slide 4: Agenda
AGENDA Rose de Purcari, 1 Our Group 90 points by Wine Enthusiast, #1 premium Rosé in Romania 2 1H2018 Operational Results 3 Update on 2018 Outlook 4 Q&A Page 4
Slide 5: Our Group: Competitive Advantage in a Great Market
1 OUR GROUP: COMPETITIVE ADVANTAGE IN A GREAT MARKET Attractive Secular shift from Competitive #1 premium wine beer, spirits to brand in market wine, especially advantage Romania in CEE Wine growth ’16- Plenty to catch up: #1 fastest growing #1 most awarded ’20F in Romania wine consumption large win
Slide 6: Our Business Model: Affordable Luxury
1 OUR BUSINESS MODEL: AFFORDABLE LUXURY Modern, cost-competitive Purcari is positioned at the winemaking intersections of three themes: Modern winemaking: the company is brand-, as opposed to appellation-centric and runs a cost-efficient business Affordable luxury: as an aspirational brand, Purc
Slide 7: Our Mission, Vision and Values
1 OUR MISSION, VISION AND VALUES Our mission Our values To bring joy in people’s lives, by Hungry offering them high quality, inspiring, We win in the marketplace because we want it more ethical wines and excellent value for Ethical money. Always do the right thing and the money will follow Thrifty
Slide 8: Vision: Be the Consolidator of a Fragmented Market
1 VISION: BE THE CONSOLIDATOR OF A FRAGEMENTED MARKET Volume share top-3 players by country, % 79 77 82 74 #3 67 63 68 #2 41 39* 36 18 #1 10 Beer Spirits Wine Beer Spirits Wine Beer Spirits Wine Beer Spirits Wine As wine market moves from terroir- to brand-centric and leaders build scale / sophistic
Slide 9: Clear #1 in Premium in Romania, Keep Gaining Share
1 CLEAR #1 IN PREMIUM IN ROMANIA, KEEP GAINING SHARE Overall, Purcari has tripled MS in 4 years…. …while becoming a clear #1 in Premium Value share of TOTAL retail market, Romania, % Value share of Premium (RON 30+/liter) retail market, % 18 28 Purcari (Brand) Samburesti 26 16 26 25 16 16 Segarcea 1
Slide 10: Track Record of Fast, Profitable Growth
1 TRACK RECORD OF FAST, PROFITABLE GROWTH Purcari Group – #1 fastest growing and #1 most profitable among large Romanian wineries Revenue CAGR’15-17 in RON vs. profit margin in 2017 of top 10 wineries in Romania in terms of revenue in 2017 Profit margin in 2017, % 30 Purcari Group 25 Recas 20 15 Jid
Slide 11: Topping Romanian Wineries at Engagement, Quality
1 TOPPING ROMANIAN WINERIES AT ENGAGEMENT, QUALITY Aspirational brand which consumers like sharing about Highest number of ratings and highest scores on Vivino Number of #brand uses on Instagram, by key Romanian brands X axis – number of Vivino ratings; Y axis – average Vivino score 7,874 4.1 4.0 3.
Slide 12: Top of Peer Group Margin Wise; Still Room to Grow
1 TOP OF PEER GROUP MARGIN WISE; STILL ROOM TO GROW EBITDA margin – global peer group EBITDA margin 2017, % Median 33% 32% 29% 21% 18% 18% 16% 14% 15% 13% 13% 10% 10% 6% 4% (1) (2) (1) (3) (1) Zhejiang Guyuelongshan Shaoxing Wine Source: IFRS Consolidated Financial Statements of the Group, Capital I
Slide 13: Agenda
AGENDA Crama Ceptura – Astrum, the latest 1 Our Group introduction in the Ceptura line-up, targeting the 15-20 RON/bottle segment, 2 1H2018 Operational Results which accounts for circa 20% of market sales, which the Group started 3 Update on 2018 Outlook pursuing only in 2017 4 Q&A Page 13
Slide 14: Robust Revenue Growth with Expanding Margins
2 ROBUST REVENUE GROWTH WITH EXPANDING MARGINS Revenues Adjusted EBITDA1 Net Income RON m RON m RON m +19% +38% +41% 70.0 23.1 16.0 58.8 16.8 11.3 1H2017 1H2018 1H2017 1H2018 1H2017 1H2018 28.6% 33.1% 19.3% 22.8% Adjusted EBITDA margin Net Income margin Page 14 Note: 1 – excluding non-recurring, IPO
Slide 15: Key Operational Highlights for 1H18
2 KEY OPERATIONAL HIGHLIGHTS FOR 1H18 • Sales up 19% yoy in 1H, to RON 70m, on high base in comparative period last year Solid revenue • Romania remains largest growth driver, growth accelerating to +57% yoy in Q2 and +44% in 1H growth • Maintained premiumization trend, with Purcari, Bardar, Ceptura
Slide 16: Markets: Romania Largest and Highest Growth Market
2 MARKETS: ROMANIA LARGEST AND HIGHEST GROWTH MARKET Share of sales, Growth, Market 1H18, % 1H18 yoy, % Comments RO 43% +44% • RO: growth in Q2 accelerated to +57%, Purcari brand up 66%. Still, long term, we see most upside for the Crama Ceptura brand, playing in both mainstream and premium segments
Slide 17: Continuing Shift to Premium, Focusing on Purcari Growth
2 CONTINUING SHIFT TO PREMIUM, FOCUSING ON PURCARI GROWTH Share of sales, Growth, Brand 1H18, % 1H18 yoy, % Comments • PURCARI: strong growth across the board – especially 40% +24% Romania, Moldova, Poland in Q2. Brand reached 26% market share in premium segment in Romania, but still largely driven
Slide 18: Romania Still Offers Plenty of Headroom for Growth
2 ROMANIA STILL OFFERS PLENTY OF HEADROOM FOR GROWTH Focus on growth beyond Bucharest Big headroom for increasing distribution Global peer group Purcari Group market share by region Crama Ceptura brand – weighted distribution vs. peers Market share, % Supermarkets Traditional retail 12% 100% 100% 94
Slide 19: Margins: Solid Despite Adverse FX Effects
2 MARGINS: SOLID DESPITE ADVERSE FX EFFECTS ∆ Comments RON m 1H17 1H18 ’18/’17 • Gross margin down slightly on ongoing adverse effects of an ever Revenue 58.8 70.0 +19% strengthening MDL, trend continuing in Q2. Still, improved mix and select price increases have offset the negative Fx impact. Cost
Slide 20: Disciplined Approach to G&A Expenses
2 DISCIPLINED APPROACH TO G&A EXPENSES ∆ % of % of Comments RON m 1H17 1H18 ’18/’17 sales ’17 sales ‘18 • G&A costs stable, most articles continue Employee costs (1) 5.60 6.69 +19% 9.5% 9.6% declining in their share of revenue Depreciation (2) 0.47 0.86 +83% 0.8% 1.2% • (1) Employee costs increased
Slide 21: MDL Appreciated Strongly, Adversely Impacting Margins
2 MDL APPRECIATED STRONGLY, ADVERSELY IMPACTING MARGINS MDL vs RON: 2016 – 2018 FX evolution MDL vs EUR: 2016 – 2018 FX evolution MDL vs USD: 2016 – 2018 FX evolution 5.2 24.0000 21.0000 16.2% 12.8% 18.0% 8.5% 6.0% 7.8% 23.0000 5.0 20.0000 22.0000 4.8 19.0000 21.0000 4.6 18.0000 20.0000 4.4 17.0000
Slide 22: We Remain the Most Awarded Winery in CEE, Keep Improving
2 WE REMAIN THE MOST AWARDED WINERY IN CEE, KEEP IMPROVING Leading medal-winning winery in CEE at Decanter, Increasing number of medals won from year to year the Wine ”Olympics” # of Decanter medals in 2015 - 18(1) # of medals #1 43 Concours Mondial de Bruxelles 50 Challenge International du Vin Bor
Slide 23: Excellent Feedback from Digital Natives
2 EXCELLENT FEEDBACK FROM DIGITAL NATIVES 2 in top-5 and 6 in top-25 wines in Romania; we 4 in top-25 wines in Ukraine; beat many pricier ones1 undisputable #1 on this metric2 #1 #1 1 – in the RON 30-60 segment, as per Vivino breakdowns as of August 10, 2018; 2 – in the UAH 150-300 segment, as per V
Slide 24: Agenda
AGENDA Negru de Purcari 2013, 4.4 score on 1 Our Group Vivino, top 1% wine globally 2 1H2018 Operational Results 3 Update on 2018 Outlook 4 Q&A Page 24
Slide 25: We Maintain Revenue and Slightly Up Profit Guidance
3 WE MAINTAIN REVENUE AND SLIGHTLY UP PROFIT GUIDANCE Previous New Target guidance guidance 1H18 fact Status Comments • July actual sales 40%+, August orders 25%+ yoy, with growth accelerating in 2H Organic revenue growth +24-28% 24-28% 19% = • Historically, 55-62% of annual sales made in 2H, given
Slide 26: Agenda
AGENDA Cuvée de Purcari, 1 Our Group the extension to sparkling launched in 2017. 2 1H2018 Operational Results Made according to the traditional, Champenoise method, with in- 3 Update on 2018 outlook bottle fermentation 4 Q&A Page 26
Slide 27: Financial Calendar 2018
FINANCIAL CALENDAR 2018 September 6-7 Romania Investor Days in Bucharest September 13 Romania Investor Day in Warsaw September 20 Romania Investor Day in Zagreb October 9 CEE Investor Day by Erste in Stegersbach October 17-18 Romania Investor Day in Tallinn & Stockholm November 15 3Q earnings releas
Slide 28: Thank you
Thank you. Page 28