Corporate Presentation 2019
2 Chile's leading wine producer Viña Concha y Toro has achieved a leading position in the global wine industry thanks to its focus on excellence from the vineyard to consumers in more than 130 countries. Its brands are oriented towards the production of premium wines, offering high-quality products acclaimed throughout the world.
3 Chile's leading wine producer • Company founded in 1883 and traded on the stock exchange since 1933. • Its main shareholders are two families with a long-term vision and a passion for wine. F o u n d e d i n P i r q u e
4 Viña Concha y Toro at a glance Top 5 globally in terms of sales volume • Sales ~ US$950 million • 33 million cases • Market cap. ~ US$1.6 billion #1 in exports in Chile • 33.8% of volume #3 in exports in Argentina • 5% of volume #6 in exports in the United States • 3.4% of volume Highly renowned wine brand Top 5 – The World’s Most Admired Wine Brand 2019
5 International presence
6 Consolidated Sales 636,194 628,572 614,129 613,515 (Ch$ millions) 583,313 475,622 450,545 422,735 374,019 354,419 322,166 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 The implementation of the IFRS 15 accounting standard generated an impact that reduced sales by Ch$29,900 million in 2016, Ch$30,300 million in 2017 and Ch$26,600 million in 2018.
7 Sales volume - wine Average annual growth rate 2% (millions of 9-liter cases) 36,2 34,8 34,3 33,2 33,0 30,6 30,7 30,1 29,7 28,8 27,5 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
8 Sales by origin Volume Value CHILE 81.4% 88.2% CHILE ARGENTINA 6.3% 5.9% ARGENTINA US 12.3% US 5.9%
9 Breakdown of sales by region (Wine volume in millions of cases) 7.6 3.8 0.4 11.1 5.2 4.8 % of sale 19.7% 34.0% 20.4% 14.5% 10.4% 1.0% value Chile* E urope US & Canada Latin America Asia & Oceania Africa & Middle East Wine: 13% Non-wine: 7% * Chile includes sales of “Products other than wine”
10 Wineries and key brands in the group
11 EBITDA & Net income (Ch$ millions) Net income EBITDA US$71 million US$124 million 93.432 92.701 49.797 47.931 49.575 49.111 86.267 86.025 83.425 43.051 33.174 54.973 2013 2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2018 Exchange rate as of year end: Ch$/US$ 694.77
12 Top 5 most admired wine brands Ranking Company 1 st Penfolds, Australia 2 nd Torres, Spain 3rd Villa Maria, New Zealand 4th Viña Concha y Toro 5th M. Chapoutier, France 6th Sassicaia, Italy 7th E. Guigal, France 8th Marqués de Riscal, Spain 9th Errázuriz, Chile 10th Ridge, United States #4 Most Admired Wine Brands Source: Drinks International, 2019
13 Leading Chilean wine exporter % of bottled wine Country Position value exported China No.: 1 9.2% US No.: 1 31.2 % Top 10 Chilean wine markets Japan No.: 1 29.2% UK* No.: 1 53.5 % 28.1% Brazil No.: 1 16.3 % The Netherlands No.: 1 22.4 % of Chilean wine exports Canada No.: 1 35.5 % in terms of value Ireland No.: 2 30.2 % South Korea No.: 1 24.3 % Mexico No.: 1 56.1 % Total No.: 1 28.1% bottled wine *Includes bulk exports from Viña Concha y Toro to the UK.
14 Strategic vision From a global wine industry leader to a premium wine company focused on consumers
15 Business model From the vineyard to our brands Vineyards Production Supply chain Distribution • Vertical integration model. • Participation throughout the production process and supply chain, guaranteeing the production of high- quality wines.
Proprietary vineyards - 16 3 points of origin in the New World 10 Valleys 55 Vineyards 9,918 hectares 3 Valleys 9 Vineyards 1,244 hectares 2 Valleys 14 Vineyards 462 hectares
Top 2 globally in terms 17 of planted vineyard surface area Treasury Wine Estates 13,141 (AUS/US/NZ/IT) Viña Concha y Toro 11,624 (CHI/ARG/US) E & J Gallo 9,312 (US) Constellation 8,623 (US/CAD/NZ/IT) Pernod Ricard 5,913 (FR/AUS/ARG) Peñaflor 3,400 (ARG) (Hectares) 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000
18 Supply chain • Efficient and profitable operation to deliver world-class products with high quality standards to our customers. CHILE 13 wine cellars 3 bottling plants ARGENTINA 3 wine cellars 1 bottling plant CALIFORNIA 1 wine cellar 1 bottling plant
Key markets to develop 19 high-performing brands 5.3% 3.4% 19.8% 5.0% 17.0% 2.5% 3.8% 5.0% 19.7%
20 Brand building – Focus on value
21 Commercial strategy focused on premium wines • Focus on the high-growth and higher-margin segment in the wine industry. ( >US$10 retail price). • Brand matrix: Identifies Potential / Relevance of brands, and aligns sales objectives and marketing investment. • Special focus on Casillero del Diablo: Principal brand. • Investment in high-potential brands in our three points of origin (INVEST). • Market matrix : Focus on markets with the higher relevance and potential.
Brand matrix: 22 Focus on Principal and Invest brands • Brand matrix: accounts for 78% of the holding’s sales. • • Trivento Golden Don Melchor • MCC • Trivento Reserve High • 1000 Stories • Diablo • Casillero del Diablo • Bonterra • CDD Reserva Especial • Cono Sur Organic • Cono Sur Bicicleta Potential • Anthony's Hill • Clos de Pirque • Exportación • CDD Super Premium • Fetzer • • Frontera Sunrise • • Tocornal Isla Negra • Tocornal Trivento • • Tocornal CS Maipo Entry Level • Trio (Mi Pueblo and Classic) Low High • Reservado Relevance
23 Casillero del Diablo Brand 13x US$15.3 million US$207 million 2001 2018 Successful positioning of a global brand in the premium category.
24 Casillero del Diablo Brand New portfolio strategy New consumers / occasions TRADITIONAL
Casillero del Diablo 25 Extensions and new products US$19 mm +34% yoy Account for 9% of CDD sales
26 Diablo, a successful launch • Successful launch of Diablo in Europe, Central America and Chile. • 50,000 cases in 2018. • FOB price: US$60 per case.
27 Focus on the Principal and Invest brand categories 678 509 1.318 142 2018 (thousands of cases) 2018 (sales in US$ 27.1 (+9%) 39.8 (-6%) 36.2 (0%) 15.0 (+29%) millions)
Brand matrix: 28 Focus on Principal and Invest brands • Specialized commercial structure. • Focus on the commercial strategy in priority markets: those with high value currently and those with future potential. • Definition and implementation of the best RTM for each priority market. • Development and maintenance of strong relations with key customers and distributors.
29 Brand recognition No.: 2 Wine Intelligence World’s Most Powerful Wine Brand
30 Brand recognition 90 Casillero del Diablo Cabernet Sauvignon 2018 James Suckling POINTS
31 Brand recognition 92 Marques de Casa Concha Malbec 2017 Descorchados – Patricio Tapia POINTS
32 Brand recognition 99 Don Melchor 2017 James Suckling POINTS
33 Brand recognition Gran Reserva Serie Riberas TOP Carmenere 2016 100 #70 in Top 100 Wine Spectator
34 Brand recognition Ocio 94+ Pinot Noir 2015 POINTS The Wine Advocate
35 Brand recognition Trivento 91 Reserve Malbec 2017 Highly Recommended POINTS Decanter Magazine
36 Brand recognition Bonterra 93 Biodynamic The Butler 2016 POINTS Wine & Spirits
37 Brand recognition 90 Fetzer Merlot 2016 POINTS Wine Enthusiast
38 Sustainability vision 6 strategic pillars Our objective: To return what the earth has given us in each bottle. Since 2012, the company has implemented its Sustainability Strategy 2020 , which is aligned with the UN Sustainable Development Goals, contributing to global sustainability. Through 6 pillars , our 2020 strategy incorporates initiatives that contribute to the balanced management of environmental and social factors.
39 Sustainability milestones Dow Jones The company is included in the Beverage Category Top 10 for its global sustainability performance. Sustainability Index Sustainability certification Certified since 2013, with 98 points . Wines of Chile 559 suppliers participating in The Sustainability Strategy 2020 incorporates the UN Sustainable the responsible supply program. Sustainability Strategy 2020 Development Goals. 75% of the company’s power supply originates from clean energy sources , and progress is being made towards energy Community programs Renewable energy footprint certification and the goal of achieving 100% renewable implemented in local areas. energy use in 2020. • 100% drip irrigation in proprietary vineyards. Water management Sustainability initiatives • Water footprint 48% below the global industry average . implemented for 100% of products. Conservation of 3,372 hectares of forest , 100% with Native forest program biodiversity inventories and conservation plans in place. 20% reduction in our carbon footprint since 2015 and 15% Carbon footprint reduction in the carbon footprint arising from transport to management customers.
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