C O R P O R AT E P R E S E N TAT I O N 2 0 1 8
HISTORY CHILE S LEADING WINE PRODUCER Public company since 1933. Main ownership in two families with a long-term vision and passion for wine. FOUNDED IN PIRQUE 2
VIÑA CONCHA Y TORO AT A GLANCE LEADING GLOBAL WINE COMPANY SALES ~ US$ 1 BILLION MARKET CAP. ~ US$ 1.7 BILLION LEADING CHILEAN EXPORTER 28.2 % by value 33.3% by volume HIGHLY RECOGNIZED WINE BRAND 3
GLOBAL WINE COMPANY 4
CONSOLIDATED SALES (US$ million) 528 AVERAGE ANNUAL GROWTH RATE 7% 872 928 957 1018 967 977 994 735 643 590 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 5
SALES VOLUME (million 9 liter cases) AVERAGE ANNUAL GROWTH RATE 3% 26.3 27.5 28.8 29.7 30.1 30.6 30.7 33.2 34.3 36.2 34.8 AVERAGE PRICE CAGR +5% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 6
SALES BY ORIGIN VOLUME VALUE CHILE 86.1% CHILE 81.6% ARGENTINA 6.7% ARGENTINA 6.6% EEUU 7.2% EEUU 11.8% 7
BREAKDOWN OF SALES BY GEOGRAPHY VOLUME IN MILLION CASES 7.3 11.9 5.7 5.1 4.2 0.6 % OF SALES VALUE 20.4% CHILE* 32.7% EUROPE 19.3% USA & CANADA 15.3% LATIN AMERICA 11.0% ASIA & OCEANIA 1.3% AFRICA & M. EAST * Chile includes sales of Other Non-Wine Products 8
EBITDA & NET INCOME (in million Ch$) EBITDA NET INCOME US$140 mm US$80.6 mm 83,425 93,432 92,701 86,267 43,051 49,797 47,931 49,575 54,973 33,174 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 Year-end exchange rate: Ch$/US$ 614.75 9
LEADING EXPORTER OF CHILEAN WINE Top 10 markets for Chilean wine COUNTRY POSITION % ON EXPORTED VALUE OF BOTTLED WINE China #1 10.6% USA #1 29.8 % 28.2% of Chilean exports by value Japan #1 30.1% Brazil #1 16.5 % UK #1 42.3 % Holland #1 23.9 % Canada #1 33.2 % Ireland #2 26.4 % South Korea #1 22.5 % Mexico #1 50.2 % Source: Vinos de Chile - December 2017 TOTAL BOTTLED WINE #1 28.2% 10
TOP 5 - LARGEST WINE COMPANIES RANKING COMPANY MARKET SHARE BY VOLUME 1 E&J Gallo Winery Inc 3.04% 2 Constellation Brands Inc 1.80% 3 Wine Group Inc, The 1.35% 4 Treasury Wine Estates Ltd 1.21% 5 Viña Concha y Toro 1.14% 6 Castel Groupe 1.07% 7 Accolade Wines Ltd 1.05% 8 Pernod Ricard Groupe 0.92% 9 Grupo Peñaflor SA 0.91% 10 FeCoVitA Coop Ltda 0.87% Source: Passport Euromonitor, The Company. (2016) 11
HIGHLY RECOGNIZED WINE BRAND #1 World s Most Powerful Wine Brand 2015 #1 Most Admired Wine Brands 2011-2012 2013 #2 Most Admired Wine Brands 2017-2018 12
STRATEGIC VISION FROM A LEADING GLOBAL WINE COMPANY TO A LEADING CONSUMER - CENTRIC PREMIUM WINE COMPANY
BUSINESS MODEL VERTICAL INTEGRATED MODEL INVOLVEMENT OVER ALL THE PRODUCTION PROCESS AND SUPPLY CHAIN, GUARANTEES THE PRODUCTION OF QUALITY WINES VINEYARDS WINEMAKING SUPPLY CHAIN DISTRIBUTION FROM THE VINEYARD TO THE BRANDS 14
OWN VINEYARDS 3 NEW WORLD ORIGINS CHILE ARGENTINA USA 10 Valleys 55 Vineyards 9,717 Hectares 3 Valleys 9 Vineyards 1,140 Hectares 2 Valleys 14 Vineyards 462 Hectares 15
TOP 2 - IN TERMS OF SURFACE OF PLANTED VINEYARDS Treasury Wine Estates (AUS/USA/NZ/IT) VIÑA CONCHA Y TORO (CHI/ARG/USA) E&J Gallo (USA) Constellation (USA/CAD/NZ/IT) Pernod Ricard (FR/AUS/ARG) 5,611 7,247 9,308 8,782 11,319 13,259 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 (HECTARES) 16
SUPPLY CHAIN Efficient and cost-effective operation to deliver world-class products to our customers with high quality standards. CHILE ARGENTINA USA 15 Cellar 4 Bonling Plants 2 Cellar 1 Bonling Plants 1 Cellar 1 Bonling Plants 17
KEY MARKETS TO DEVELOP HIGH PERFORMING BRANDS (% of sales by value) CANADA 3.5% UK 17% NORDICS 5.3% USA 15.7% MEXICO 3.0% CHINA 2.7% JAPAN 5.7% BRAZIL 5.6% CHILE 20.4% 18
BRAND BUILDING FOCUS ON VALUE 19
SALES & MARKETING STRATEGY - FOCUS ON PREMIUM WINES Focus in the high-growth and higher-margin segments of the wine industry (>US$10 retail price). Brand Matrix: Identifies Potential/Relevance of the brands and aligns sales objectives and marketing investments. 2017 SALES MIX (VALUE) CHILE ARGENTINA USA TOTAL PREMIUM 41.2% 52.5% 78.5% 46.8% NON-PREMIUM 58.8% 47.5% 21.5% 53.2% 20
WINERIES AND KEY BRANDS OF THE GROUP HOLDING CHILE CHILE ARGENTINA USA 15.8 MM CASES 5.1 MM CASES 2.2 MM CASES 2.5 MM CASES 21
CONCHA Y TORO BRAND FINE WINE PORTFOLIO Heritage and Innovation CASILLERO DEL DIABLO Premium global brand 22
DON MELCHOR 96 Pts WINE SPECTATOR Hot Wine 96 Pts TIM ATKIN 94 Pts WINE ENTHUSIAST Editor s Choice 23
MARQUES DE CASA CONCHA Revelation Wine ROSÉ BLACK LABEL CABERNET SAUVIGNON 90 Pts TIM ATKIN 92 Pts JAMES SUCKLING 93 Pts TIM ATKIN 93 Pts JAMES SUCKLING 90 Pts TIM ATKIN 93 Pts JAMES SUCKLING 24
CASILLERO DEL DIABLO BRAND SUCCESSFUL POSITIONING OF A GLOBAL BRAND IN THE PREMIUM CATEGORY USD 205 mm 2017 25
CASILLERO DEL DIABLO BRAND UTRA PREMIUM LEYENDA FOB 200 USD SUPER PREMIUM RESERVA PRIVADA FOB 60 USD PREMIUM PLUS DEVIL S COLLECTION FOB 45 USD PREMIUM RESERVA FOB 35 USD PREMIUM:93%US$ PP,SP,UP: 7% US$ 26
CASILLERO DEL DIABLO (THOUSAND CASES) 2017 SALES US$: + 2.1% AV. PRICE: + 5.7% CAGR : 9% 4,431 4,992 5,424 5,224 3,115 3,360 3,777 2011 2012 2013 2014 2015 2016 2017 27
LINE EXTENSIONS TO HIGHER PRICE SEGMENTS 28
BRAND RECOGNITION #2 World s Most Powerful Wine Brand WINE INTELLIGENCE LEYENDA RESERVA PRIVADA 93 Pts JAMES SUCKLING 91 Pts ROBERT PARKER 91 Pts JAMES SUCKLING 90 Pts WINE SPECTATOR 29
WINERIES AND GROUP BRANDS - CONO SUR Expressive and innovative wines that convey the spirit of the New World. Leading producer of Pinot Noir. #1 Pinot Noir in the UK Strong commitment with the environment. 30
PREMIUM FOCUS - CONO SUR BICICLETA (THOUSAND CASES) 2017 SALES US$: + 4.8% CAGR : 12% 1,120 1,260 1,326 1,394 706 800 928 2011 2012 2013 2014 2015 2016 2017 31
WINERIES AND GROUP BRANDS- TRIVENTO Top 3 exporter from Argentina #1 Malbec in the UK Europe s Most Sold Argentine Wine Brand 32
PREMIUM FOCUS - TRIVENTO RESERVE (THOUSAND CASES) 2017 SALES US$ + 14.4% CAGR +64% 642 713 469 199 265 88 2012 2013 2014 2015 2016 2017 33
WINERIES AND GROUP BRANDS - FETZER VINEYARDS Largest wine company B Corp certified Leading producer of organic grapes 34
PREMIUM FOCUS - BONTERRA (THOUSAND CASES) 2017: SALES US$ + 16.9% 310 353 377 446 486 559 230 2011 2012 2013 2014 2015 2016 2017 35
PREMIUM FOCUS - 1000 STORIES (THOUSAND CASES) 2017 SALES US$ + 33.1% VOLUME + 36% 113 84 2 16 2014 2015 2016 2017 36
STRONG DISTRIBUTION NETWORK Diversification of markets and global presence Focus the commercial strategy on priority markets: Those important in value today and those with high future potential. Define and execute the best RTM for each of the priority markets. Develop and maintain strong relationships with key customers and distributors. 37
VISION OF SUSTAINABILITY THE COMPANY INCORPORATES INITIATIVES WHICH CONTRIBUTE TO MANAGING ECONOMIC, ENVIRONMENTAL AND SOCIAL FACTORS IN A BALANCED WAY IN THE ENTIRE PRODUCTION PROCESS. RATIONAL USE OF NATURAL RESOURCES COMMITMENT TO PEOPLE AND COMMUNITIES RESPONSIBLE WITH THE ENVIRONMENT 38
VISION OF SUSTAINABILITY DOW JONES SUSTAINABILITY INDEX Top 10 Beverages category Viña Concha y Toro SUSTAINABILITY STATEGY 2020 Sustainability Strategy aligned with the United Nations SDGs. OUR JOURNEY CARBON FOOTPRINT Measured since 2007 Light botles, 99% of total portfolio. 30% reduction of the Carbon Footprint since 2012. RESPONSIBLE SUPPLY 15% of suppliers respond to a program of good social and environmental practices. RENEWABLE ENERGIES 65% clean energy supply. moving towards the certification of the Energy Footprint aiming to reach 100% in 2020. WATER FOOTPRINT Measured since 2010 100% drip irrigation system in own vineyards. Water Footprint 40% lower than the average of the global industry. NATIVE FOREST Conservation of 3,372 certified and protected hectares, 100% with biodiversity inventories. 39
VISION OF SUSTAINABILITY FETZER VINEYARDS UNITED NATIONS Momentum For Change Climate solution Award 2017 CARBON NEUTRAL First North American winery certified as Carbon Neutral". BIDA BIOFILTER 100% waste water reuse. 85% more efficient. First California winery that works completely with renewable energy. 40
CENTER FOR RESEARCH AND INNOVATION Unique R+D+i winemaking research center in Latin America MM $ 2,513 Investment in R+D Scientific-technological innovation to face the challenges of the business. Technological development and knowledge exchange, for a more competitive wine industry. More than 70 R+D projects in course 54 extension activities during 2017 1,500m2 of modern modular building Cuning-edge equipment 41
CENTER FOR RESEARCH AND INNOVATION STATEGIC R+D PROGRAMS Plant production health Quality of grapes and wines Water resources and climate change New product design Smart wine industry STATEGIC PARTNERSHIPS 42