05/11/2025 Results Presentation Transcription 9M25 Download

Speakers

→ Osvaldo Solar - CFO

→ Daniela Lama - IRO

→ Ma. José Undurrage - Moderator

Moderator

María José Undurraga analysis with Daniela Lama, IRO the company, and

→ Good morning everyone. My name is María we will finish again with Osvaldo who will bring us

José Undurraga, your moderator representing Viña the financial results.

Concha y Toro. Thank you for joining us for this presentation of results corresponding to the 3Q, For a more detailed quarterly or cumulative

2025. analysis, please refer to the press release published yesterday, Tuesday, November 4. If you have any

Before we begin, please note that on the right side additional questions or doubts, please contact of your screen you may select the language in which Daniela Lama. you wish to listen. The presentation we will review To wrap up today’s presentation, we will take some today is already available on our website in Spanish time to answer the questions you can send us and English. through the platform’s chat.

First, let me read a brief disclaimer. This presentation I will now leave you with Osvaldo Solar. contains forward-looking statements based on the (The presentation begins) information available at this time and should be considered as made in good faith. Such statements Speaker: Osvaldo Solar are subject to risks and uncertainties beyond the company’s control, which could cause the actual → Good morning and good afternoon to some of

Viña Concha y Toro results to differ materially from you. It is a pleasure for us to comment on the results those indicated in these statements. for this quarter and also to share a bit about the effects of the year. And I say it is a pleasure because

Today, we will take a closer look at the results for we believe these results show a rather consistent the first nine months of the year. We will begin with trajectory for the company; one that differs, in fact, the highlights of the period together with Osvaldo quite clearly from much of the information we have

Solar, CFO of Viña Concha y Toro. After that, we will seen coming from the wine industry and alcohol move on to the quarterly and year-to-date sales industry in general, presenting us a Concha y orot y ahcnoc añiv noitatneserp stluser

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Toro that has, as we will discuss, the elements that For that reason, we also wanted to highlight four explain why these results differ significantly from brand groups that reflect what Concha y Toro is other companies in the sector. generating and that account for the growth we are discussing in average terms.

First, as a highlight for the period, we saw a growth in wine sales revenue of 10.1%, a fact we consider First, Casillero del Diablo and the Diablo brand, quite relevant when analyzing and comparing which together increased during the quarter overall sales performance. by 13.2%. Secondly, we would like to highlight

Trivento Golden, a brand at the level of Marques

On the other hand, the strategy we designed de Casa Concha, originating from our Argentine several years ago with respect to the company’s vineyard, which grew by 33.3% and, at the same premiumization remains fully valid. Let us remember time, surpassed Marques de Casa Concha in sales. that this is a premiumization where our great So, we have managed to position Trivento Golden, flagship brand is Casillero del Diablo. Therefore, a relatively new brand, at a similar price point to it represents an entry level premiumization, not a Marques, while exceeding it in volume. case of great wines with a different trajectory. But this reflects the strength that Concha y Toro holds in We also wanted to mention Amelia, a white wine market segments where today approximately 57.1% with a retail price of around CLP$35,000, which has of total wine sales come from the brands we classify been growing very strongly. This fills a gap we had of as premium or super-premium. white wines in that segment, and we believe Amelia is an excellent reflection of what can be achieved

What did this mean at the gross profit level? It there, as well as of the growing recognition our resulted in a growth of 9.8%, achieving a gross products are receiving from specialists. margin over sales of 39.1%.

And finally, Bonterra and its line extensions in the

As for EBITDA, it increased by 22.1% percent, and United States, our organic brand, which grew by the EBITDA margin reached 16.4%, figures we will 14.9% in the quarter. So, we can see that there is a explain in greater detail shortly. set of brands providing solid support for Concha y

Toro’s overall growth.

As for the bottom line, the net profit shows a growth of 13.4%. In addition, we wanted to highlight something that we have previously discussed with you regarding

In this context, we wanted to highlight some key the company’s new products. Here, we have elements of the quarter, which are also a reflection included a reference framework to show what these of our strategy and part of the continuity that first nine months of the year have meant compared

Concha y Toro has been developing, allowing us to to the same period two years ago, in 2023, as we continue to show growing results over time. believe it clearly illustrates the company’s direction and its ability to identify and respond to market

A first aspect, which we had mentioned before, trends, where Concha y Toro, through the strength was the recent recognition of Don Melchor as the of its brands, and how the market effectively takes number one wine in the world, as awarded by the advantage of these reactions.

Wine Spectator guide, which for these purposes is considered the most prestigious ranking. This As a result, the share of these new products, which recognition translated into Don Melchor sales that have a lower alcohol content, has increased in increased by 119.4% during the quarter. We want to total sales (Chile origin) from 4.5% two years ago emphasize this because it carries a double message: to 14.3% today. We consider this to be particularly on one hand, Concha y Toro’s capacity to produce relevant, as it reflects the company’s accurate wines in the uppermost range such as Don Melchor, reading of market trends combined with its capacity the recognition of that excellence in quality that the to respond effectively, always through the strength company has consistently instilled in its products, of its brands, which convey that message directly to and on the other hand, this acknowledgment consumers. strengthens the positioning of our brands. orot y ahcnoc añiv noitatneserp stluser

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On the other hand, we also wanted to touch on a by the orange line on the chart on the left and the market concept that Daniela Lama will cover in bars below, representing 2025, in the quarter we more detail when we go over the sales figures for exceeded the level of last year by 4.4%, and by the period. What I want to highlight specifically here 0.9% in the year-to-date total. is the low per capita consumption levels in many markets where Concha y Toro holds the number What we have mainly seen is an increase in premium one position and that today represents major growth and superior wines. Let us remember that, for the potential for the company. company, a premium wine is Casillero del Diablo and above.

For example, we have included Brazil and Mexico, which together account for almost 15% of the Looking at the volume figures for that specific company’s total sales, and yet per capita wine category, you can see how we have exceeded consumption in Brazil is about 2.1 liters, or Mexico, the volumes of all our previous years. This is very for instance, where it does not even reach 1 liter. important, as this is where the company’s main

Why do we emphasize this? Because it reflects focus has been in recent years. Thus, we recorded the reality of Concha y Toro’s strong position as 4.9% increase in volume for the quarter and 4.3% number 1 in various markets, as shown in the growth year-to-date. fourth column of this slide, where we hold the

relative positions

number 1 or 2, supported by our If we now turn to sales in value terms, we can operational strength and the power of our brands; see that this year has been a historic one, the last so, even in these markets with extremely low per three quarters have all exceeded the results of the capita consumption, these are regions that are now previous three years. We are up 5.2% year-to- beginning to grow, where Concha y Toro has a very date, and in the quarter we achieved a growth of strong position to capitalize on this growth. 10.1%, which was quite strong. This is thanks to

Finally, within these highlights, we have included the company’s strategic focus in recent years on this chart, which reflects a longer-term trajectory. premium and superior products. In fact, looking

It shows how, in the past eight quarters, Concha specifically at the premium and superior segment, y Toro has continued to grow its revenue in an it grew by 11.7% in the quarter and 8.3% year-to- interesting and consistent way, fully in line with what date. Here too, we can see how it has clearly pulled we have been communicating about the strength of away upward compared with previous years. the company and the reasons behind our sustained growth. If we now look at the main markets that represent the majority of total wine sales, we can see that

This provides a broader context that demonstrates during the quarter we also experienced growth not just the result of one particular quarter but a clear in these five markets, although we had volume growth trajectory over eight quarters, something declines in the United Kingdom, Chile and Mexico. few companies are showing today. In the case of This is mainly explained by the effect of the mix

Concha y Toro, it reflects the combined strength of and by variations in exchange rates, as well as our brands, our distribution, and other factors that the company’s strategic focus on more premium we have already discussed, all of which continue to products. These factors have allowed us to improve support steady and consistent growth. our overall sales mix in the Principal & investment

With that, we close the highlights section and will segment. now move on to review the sales performance for the period, before going over the results for both the In particular, we can see that the United Kingdom third quarter and the first nine months of the year. and Chile have followed a growth trend, while Brazil and Mexico, which had shown volume growth in

Speaker

Daniela Lama the first and second quarters, has not behaved accordingly on value growth, due to currency

→ Hello, good morning, everyone. Continuing with devaluation. In this two markets we can see that the sales analysis, here we can see the company’s we have a stronger third quarter. In the US we saw wine sales volume, which represents the main the impact of the shift in sales, where a promotional and priority segment of our business. As shown campaign originally scheduled for the second orot y ahcnoc añiv noitatneserp stluser

52M9 quarter was postponed to the third. This adjustment year-to-date results. The first aspect to consider took effect here and balanced out the results for the is the operational performance. What have we year. seen at the operational level? As we may see, the quarterly operating result reached CLP$30,121

Looking at the cumulative results, the five main million, showing a growth of 17.4% compared with countries are all growing. As mentioned above, the same quarter last year. With this, the cumulative among the top 20 markets, seven are growing at operating profit has practically reached the level rates greater than 10%, another seven between 3% of the previous year. Let us recall that earlier in the and 10%, and only four are declining, but even in year, particularly in the second quarter, we were those cases, there are specific factors: for example, having a lower number, which we explained at that

Japan, which shows a decrease, but mainly due to time. But with this quarter’s results, the company inventory timing, which makes that sales are not has now practically recovered to last year’s level. often perceived until the end of the year. At the margin level, there is also an element worth

If we now turn to the seven main brands, which highlighting, which I will comment on in more together represent 62.8% of our wine sales, these detail later when discussing EBITDA. However, we brands continue to perform well. For example, achieved a one-point increase, going from 11% in

Casillero del Diablo grew by 11.9% in the quarter, sales to 12%, up 100 basis points. In cumulative and Diablo by 19.5%. We have two brands that terms, the figure is still slightly lower, 60 basis

saw declines

Frontera mainly due to the Japan points, but that has to do with certain write-offs inventory timing mentioned earlier and, in the case the company made during 2025, which affected of Bonterra, due to Canada, given that current US that cumulative number. Since those adjustments tariff policies have affected sales in that market, occurred mainly during the first quarters of the which led to a temporary drop in Bonterra sales. year, the current results already reflect a different

However, as we can see here, on a cumulative basis reality in that regard, showing the improvement I

Bonterra still showing growth of 4.5%. mentioned in this third quarter.

Among the seven main brands, the only one that Here we include a detailed breakdown, although shows a year-to-date decline is Frontera, but this that is not the purpose of today’s meeting, because is mainly due to timing effects and also remember we wanted to highlight that in the third quarter of that Frontera is not part of the company’s Principal this year, the margin was 12%, but if we adjust for

& Invest mix. It is a more mass-market brand that certain write-off factors, it reaches 12.6%, which contributes to volume but is not a strategic priority. we consider to be very relevant to understand the

In contrast, the other brands are today the main evolution of Concha y Toro’s margins. focus of the company.

Finally, looking at the Principal & Invest mix, we see That operating result we showed, which was a 0.8% a cumulative growth of 170 basis points, moving below, becomes a 4.7% above when compared with from 55.4% in 2024 to 57.1%. This is mainly driven the following year, once we make that adjustment. by our key Principal & Invest brands, as we can see Regarding the company’s EBITDA, it increased to here with Casillero del Diablo with a 5.8%, Diablo CLP$41,057 million, representing a 22.1% growth going up 17.5%, which continues to grow at double variation compared with last year, with a 4.0% in the digits, and Don Melchor, which after being named cumulative figure, which also reflects what we have

The Best Wine in the world last year, and once again been discussing. receiving high recognition this year, has continued to post triple-digit growth, something that has been In terms of the EBITDA margin, I want to digress briefly very positive for us, and we are very pleased with to explain this 16.4%, a figure that incorporates two these results. factors that did not exist or were not foreseeable at the beginning of the year. The first is the U.S. tariffs

Thank you very much. applied to their imports, which had an impact of

Speaker

Osvaldo Solar 0.2%. The second is a tax introduced in the U.K., not specific to wine or liquor, but a general one, related

→ After reviewing sales performance, the next to the recovery of packaging materials, known as the step is to assess their impact on quarterly and EPR scheme, which had a 1.3% impact. So, when we orot y ahcnoc añiv noitatneserp stluser

52M9 look at this 16.4% margin, in comparative terms it as we have reiterated in previous opportunities and would actually have been closer to 17.9%, virtually a reiterated here, which is its inflation-hedging policy:

18%, but we considered these two aforementioned fixing inflation at around 2.82% annually. During the factors, which have real impacts: the U.K. tax and nine-month period under analysis, actual inflation in the U.S. tariffs, that were not present last year. Chile was 3.74%, which generated implicit profits of

CLP$1,290 million, due to this policy of maintaining

In the case of the EPR, we initially thought that the inflation fixed at 2.82%. This is interesting, especially cost could be absorbed, but it is now clear that this considering how the convergence process towards is a lasting market reality. There may be changes the 3% has been gradually delayed as a Central going forward, but as of now, even incorporating Bank’s policy, and at this moment, the available those effects, we see the company capable of information, according to the latest IPoM, shows growing its EBITDA by roughly 200 basis points that inflation is expected to converge toward the compared with the previous year in the third quarter, third quarter of next year. That means we still have in line with previous discussions on the topic. practically a full year ahead in which inflation will remain above 3%. And even if it does converge to

Another relevant point, which we have always that level, our fixed inflation rate remains below it, included here, is the company's currency which is important for future calculations. diversification policy. During this third quarter, there was an improvement in the effective exchange On the other hand, interest rates, while now in a rate of 5.3% when compared with the basket of flatter, more stable phase, are returning to much more currencies from the same quarter last year. On the normal levels, far below the figures we experienced left, we can see that the British pound remains our in 2022 and 2023 in particular. They are likely to not number one currency, representing roughly 29.1% reach the very low levels of 2020 or 2021, when of total sales, followed by the U.S. dollar with a the cost of borrowing was practically zero. But what

23.9%, the Chilean peso at around 17% and so we are seeing is a kind of steady normalization. on, and we may see a growing importance of the Once again, we would like to emphasize that the

Brazilian real at 8% and the Mexican peso at 5.1%. company maintains a natural hedge between its

We see this diversification as a strength

while it may assets and liabilities so that exchange rate risk is not soften both upsides and downsides, it allows for a a determining factor once sales are recognized. In much smoother currency evolution and therefore terms of debt, we have seen a gradual reduction, reduces exchange rate risk, which is significant for which is relevant here because we will discuss it in the export industry. relation to the company’s target indexes.

Moving to what are defined as non-operational Here we have included only financial expenses, and results, we would like to highlight a couple of points. as you can see, the orange line is substantially lower

First, as we have discussed and shown in the chart, than the blue and light blue lines, which reflect the financial expenses have been steadily decreasing. two previous years. The expectation for the fourth

In this case, we see an 8.8% decrease. And we also quarter is to maintain a figure similar to that of the have that last year we achieved extraordinary profits third quarter, with a slight downward trend. in Argentina, of CLP$935 million; a profit that did not repeat this year due to their exceptional nature. Regarding affiliated companies, this is a relevant

Nevertheless, the downward trend in financial note during this third quarter, mainly due to costs continues to be steady. Even without such Almaviva, our main joint venture, whose all their exceptional items, we expect the fourth quarter to sales are carried on basically during this quarter. show a similar result to 2024, given the reduced Its results for the third quarter were practically the financial expenses we should have. same as those for last year. There had been some concern at one point that sales might drop, given

That said, we should briefly mention perspectives the current global context for ultra-premium and for this section of the results, which is also relevant, icon wines, but we saw that Almaviva was able to not only for the operational part but also for this non- sustain its sales and therefore maintain results in operational one due to its strength. We are talking line with last year. Additionally, we show the cork about one of Concha y Toro’s enduring strengths, industry, which has its own proportion of results, orot y ahcnoc añiv noitatneserp stluser

52M9 which showed a stronger performance of a 27%. show consistent progress, reflecting that the

Still, the key point here is that Almaviva maintained company’s strategic direction is paying off and a situation equivalent to last year, with no additional allowing sales to continue to develop positively. declines. That is something we want to highlight as we close this quarter.

This brings us to the company’s net income. As we mentioned in the highlights, net income grew Second, we believe that the company has read the by 13.2% to reach CLP$20,206 million in the third market correctly. This is reflected in the success of quarter. As of this date, the cumulative result now products with a lower alcohol content, which now shows growth, something we hadn't seen in the net represent more than 14% of total sales (Chile origin), income up to June of this year, which underlines an indication of a clear consumer trend. The strength the importance of the results that the company has of the Concha y Toro brands allows us to capture managed to maintain over time. and serve this shift by offering a broader portfolio that responds to changing consumer demands

One aspect we continuously monitor, and where while complementing our traditional product lines, we still have room for improvement, is return on which allows this growth we can appreciate. invested capital, which is measured in terms of twelve rolling months. We are at about 7.7%, which Finally, we would like to emphasize one more remains below our cost of capital and our internal concept aligned in the same direction. On the one targets. It is important to note, however, that a hand are the brands associated with our products, significant portion of our assets are currently under and on the other hand, the global distribution development, mainly in the agricultural sector, network of Concha y Toro, which continues to which would correct that 7.7% into a 8.1% or 8.2%, strengthen as a world-class system. This network which is in the correct direction, but should improve gives us a presence in the main markets and moving forward. allows us to closely follow emerging trends, acting with agility and coordination, especially with our

Regarding the company’s financial debt, we have marketing teams. This ensures that the company already discussed this. can reach consumers with innovative products that the consumer requires over time.

This leads us to the final section, which we always like to highlight, regarding the company’s financial With that, we conclude this presentation of our third position. We can see what we define as solidity: quarter and nine-month results. Thank you very

On the one hand, the net debt ratio, the line in navy much. blue represents the company’s covenant, which is very manageable. The net debt ratio is 0.54, in (End of presentation) contrast to 0.56 last year. That is why we emphasize the term “solidity.” On the other hand, our financial Speaker: María José Undurraga expense coverage increased from 6.1x to 7.1x, with a covenant of 2.5x. Regarding our net debt-to- → We have now reached the end of this earnings

EBITDA, this is not a covenant, but rather an internal presentation. We appreciate your participation and target set by the board, we are currently at 2.4x, wish you all a very good afternoon. slightly below that target of 2.5x, moving in the right direction.

So, in this context, with strong quarterly results and a solid financial position, we would like to make a couple of closing remarks to wrap up this presentation.

First, we are seeing an acceleration in sales growth.

Although these accelerations are moderate, they