VSPT WINE GROUP REPORTS CONSOLIDATED FIRST QUARTER 2016 RESULTS

Transcription

1 VSPT WINE GROUP REPORTS CONSOLIDATED FIRST QUARTER 2016 RESULTS 1;2;3 Santiago, Chile, May 2 nd, 2016 VSPT Wine Group announced today its consolidated financial results for the first quarter ending March 31, 2016: Consolidated Volumes when compared to the first quarter last year increased 1.6%. The Chilean Domestic segment increased 7.6% and the International segment decreased 3.1%. Net sales increased 9.3% as a consequence of a higher average USD/CLP exchange rate (1 USD=697 CLP) during the quarter, as well as higher volumes in the Chilean Domestic segment and higher average prices in the International segment. Gross profit* increased 10.6% due to a combination of 9.3% higher net sales and 8.2% higher costs of sales. EBITDA increased 22.1% due to higher sales and a better gross profit margin as a percentage of sales. Net income increased 30.2%, due to a higher EBIT. Earnings per share increased 30.2% due to a higher Net income. First Quarter 2016 Key figures Q1'16 Q1'15 Change % Volumes (Mlts) 30,036 29, % Net Sales (MMCLP) 44,597 40, % Gross Profit* (MMCLP) 19,690 17, % EBIT (MMCLP) 7,969 6, % EBITDA (MMCLP) 9,712 7, % Net income (MMCLP) 6,053 4, % Earnings per share (CLP) % * During Q MMCLP2,217 was reclassified from MSD&A to Cost of Sales. Figures for Q in the table above do not include such reclassification. In order to enable comparison with 2016 figures, the amount of approximately MMCLP680 should be deducted from MSD&A and added to Cost of Sales. Taking into account this adjustment for 2015, Gross Profit increased 15.0% during the quarter. 1 The consolidated figures of the following release are expressed in nominal Chilean Pesos and according to the rules and instructions of the Chilean Superintendence of Securities and Insurance ("SVS"), which are in accordance with IFRS. 2 For an explanation of the terms used please refer to the Glossary in Further Information and Exhibits. Figures in tables and exhibits have been rounded off and may not add exactly the total shown. 3 All references in this Press Release shall be deemed to refer to Q1 16 figures compared to Q1 15 figures, unless otherwise stated. Page 1 of 11

2 Comments from the CEO We are satisfied with the first quarter 2016 consolidated results. Consolidated EBITDA increased from CLP 7,957 million to CLP 9,712 million, and our EBITDA margin increased from 19.5% to 21.8%. Volumes increased 1.6% and Net sales increased 9.3%. The results are mainly explained by: Higher Net sales in the Chilean Domestic segment and International segment, which grew by 7.9% and 9.3% respectively harvest, causing a lower average cost of wine when compared to the first quarter of Which are compensated by: Lower volumes in the International segment, 3.1% decrease mainly explained by Brazil. Higher average cost of bottles, corks and labels due to a higher average USD/CLP exchange rate when compared to the first quarter Higher marketing expenses in all our segments, as we continue with our process of investment in brand preference. Non-Operating Result decreased CLP 495 million, from a negative result of CLP 49 million to a negative of CLP 544 million, mainly explained by foreign currency exchange differences. Income taxes decreased CLP 7 million, the decrease as percentage of sales is mainly due to deferred taxes. Net Income increased 30.2% to CLP 6,053 million, mostly explained by higher EBIT and lower income taxes as percentage of sales. We continue with the development of the expansion plan in our facilities in Molina, which contemplates to nearly double the production capacity of the plant. During the first quarter our new bottle line came into production bringing us important economies of scale that will help us in the long term profitability. During the first quarter of 2016, Viña San Pedro inaugurated a Biogas plant in the facilities of Molina. Viña San Pedro becomes the first winery in the world to generate renewable biogas energy using 100% of its harvest waste. The new Biogas plant will generate 1MW/hour of clean energy which, in other words, is the equivalent household consumption of 3,200 homes and 60% of the electric and thermal energy requirements of the winery. Page 2 of 11

3 Net Sales Q1 16 Net sales increased 9.3% to CLP 44,597 million as a result of higher sales in the International and Chilean Domestic segment. Sales by Segment MMCLP Q1'16 Q1'15 Change % Chile Domestic 14,214 13, % International* 29,183 26, % Others** 1, % TOTAL 44,597 40, % Volumes by segment MLTS Q1'16 Q1'15 Change % Chile Domestic 13,784 12, % International 16,252 16, % Prices by segment Segment Q1'16 Q1'15 Change % Chile Domestic (CLP/Lt) 1,031 1, % International (CLP/Lt) 1,796 1, % * Includes: Chile Export and Argentina winery ** Includes: Non - Branded Bulk wine and other revenues Gross Profit Q1 16 Gross Profit increased 10.6% to CLP 19,690 million as a result of 9.3% higher Net sales. Cost of sales, as a percentage of Net sales, decreased from 56.4% to 55.8%. As a consequence, Gross profit margin increased from 43.6% to 44.2%. During Q CLP 2,217 million was reclassified from MSD&A to Cost of Sales. Figures for Q in the table above do not include such reclassification. In order to enable comparison with 2016 figures, the amount of approximately CLP 680 million should be deducted from MSD&A and added to Cost of Sales. Taking into account this adjustment for 2015, Gross Profit increased 15.0% during the quarter. Page 3 of 11

4 EBIT Q1 16 EBIT increased 31.2% to CLP 7,969 million. The EBIT margin increased from 14.9% to 17.9%, mainly explained by higher sales in all our segments, higher USD/CLP exchange rates and lower cost of wine as a percentage of sales. EBITDA Q1 16 EBITDA increased 22.1% to CLP 9,712 million and EBITDA margin increased from 19.5% to 21.8%. Page 4 of 11

5 NON-OPERATING RESULT Q1 16 Non-Operating Result decreased CLP 495 million, from a negative result of CLP 49 million to a negative of CLP 545 million, mainly explained by foreign currency exchange differences that decreased CLP 534 million. INCOME TAXES Q1 16 Income taxes decreased CLP 7 million, the decrease as percentage of sales is mainly due to deferred taxes. NET INCOME ATTRIBUTABLE TO EQUITY HOLDERS OF PARENT COMPANY Q1 16 Net Income increased 30.2% to CLP 6,053 million mostly explained by a higher EBIT. Page 5 of 11

6 CHILEAN DOMESTIC SEGMENT Net sales increased 7.9% to CLP 14,214 million as a result of 7.6% higher volumes in the bottled wines and massive category. Comments: Volumes during the quarter increased 7.6% mainly explained by a good execution at points of sale and a growing industry. Following our strategy to build brands and a strong portfolio through high quality products and innovation, we highlight the launch of Castillo de Molina Rosé in order to broaden the portfolio while strengthening the brand. As part of our long term innovation strategy, brand and portfolio building, we continued investing in brand preference, which has given the results reflected in our top market position share in value terms. INTERNATIONAL SEGMENT Net sales increased 9.3% to CLP 29,183 million as a result of 3.1% lower volume of sales and higher average exchange rate due to the depreciation of the Chilean peso against the US dollar. Comments: The International Segment showed 3.1% lower volumes and 12.8% higher prices (in Chilean pesos) during the first quarter. We have had good results in the Asian Markets which positively impacted our volume, offset by a volume decrease in Brazil. Page 6 of 11

7 ABOUT VSPT WINE GROUP VSPT Wine Group is the second largest exporter of Chilean wine and is among the most important players in the Chilean market. The Group is composed by the following wineries: San Pedro, Tarapacá, Leyda, Santa Helena, Misiones de Rengo, Viñamar de Casablanca, and Casa Rivas in Chile, plus Finca La Celia and Bodega Tamarí in Argentina. VSPT is an affiliate company of CCU, the largest Chilean multi-category beverage company. For further information visit CAUTIONARY STATEMENT Statements made in this press release that relate to VSPT s future performance or forward looking financial results, involve known and unknown risks and uncertainties that could cause actual performance or results to materially differ. We undertake no obligation to update any of these statements. Persons reading this press release are cautioned not to place undue reliance on these forward-looking statements. These statements should be taken in conjunction with the additional information about risk and uncertainties set forth in VSPT s annual report submitted to the SVS and available on our web page. Page 7 of 11

8 GLOSSARY Operating segments The Operating segments are defined with respect to its revenues in the geographic areas of commercial activity: Chile: This segment commercializes wine in the Chilean market. International: This segment commercializes wine across the world reaching over 80 countries. Includes Argentina Operation. Other/Eliminations: It considers the non-allocated corporate overhead expenses, and bulk wine sales. Cost of sales Formerly referred to as Cost of Goods Sold (COGS), Cost of sales includes direct costs and manufacturing expenses. Earnings per Share (EPS) Net profit divided by the weighted average number of shares during the year. EBIT Stands for Earnings Before Interest and Taxes, and for management purposes it is defined, as earnings before other gains (losses), net financial expenses, equity and income of joint ventures, foreign currency exchange differences, results as per adjustment units and income taxes. EBITDA EBITDA represents EBIT plus depreciation and amortization. EBITDA is not an accounting measure under IFRS. When analyzing the operating performance, investors should use EBITDA in addition to, not as an alternative for Net income, as this item is defined by IFRS. Investors should also note that VSPT s presentation of EBITDA may not be comparable to similarly titled indicators used by other companies. Exceptional Items (EI) Formerly referred to as Non-recurring items (NRI), Exceptional items are either incomes or expenses which do not occur regularly as part of the normal activities of the Company. They are presented separately because they are important for the understanding of the underlying sustainable performance of the Company due to their size or nature. Marketing, Selling, Distribution and Administrative expenses (MSD&A) MSD&A include marketing, selling, distribution and administrative expenses. Net Debt Total financial debt minus cash & cash equivalents. Page 8 of 11

9 Net Debt / EBITDA The ratio is based on a twelve month rolling calculation for EBITDA. Net income Net profit attributable to parent company shareholder as per IFRS. Page 9 of 11

10 Exhibit 1: Income Statement First Quarter 2016 Income Statement Q1'16 CLP thousand 2016 % Sales 2015 % Sales Change% Net sales 44,596, % 40,815, % 9.3% Cost of sales* (24,906,061) -55.8% (23,011,337) -56.4% 8.2% Gross Profit 19,690, % 17,804, % 10.6% MSD&A (11,988,051) -26.9% (11,960,465) -29.3% 0.2% Other operating income/(expense) 266, % 231, % 15.0% EBIT 7,968, % 6,075, % 31.2% EBITDA 9,712, % 7,956, % 22.1% Net financial expenses (136,756) -0.3% (333,825) -0.8% -59.0% Foreign exchange differences (242,106) -0.5% 291, % - Results as per adjustment units (70,060) -0.2% (3,386) 0.0% % Other gains/(losses) (95,562) -0.2% (3,677) 0.0% % Income/(loss) before taxes 7,424, % 6,026, % 23.2% Income taxes (1,370,849) -3.1% (1,378,083) -3.4% -0.5% Net income from the period 6,053, % 4,648, % 30.2% Net income attributable to: The equity holders of the parent company 6,053, % 4,647, % 30.2% Non Controlling Interest % Earnings per share % * During Q MMCLP2,217 was reclassified from MSD&A to Cost of Sales. Figures for Q in the table above do not include such reclassification. In order to enable comparison with 2016 figures, the amount of approximately MMCLP680 should be deducted from MSD&A and added to Cost of Sales. Taking into account this adjustment for 2015, Gross Profit increased 15.0% during the quarter. Page 10 of 11

11 Exhibit 2: Balance Sheet Assets CLP thousand March December Change% Current assets Cash and cash equivalents 32,201,012 23,640, % Other current assets 111,882, ,304, % Total current assets 144,083, ,945, % Non current assets PP&E (net) 106,184, ,961, % Other non current assets 61,073,882 61,382, % Total non current assets 167,258, ,343, % Total assets 311,342, ,288, % Liabilities CLP thousand March December Change% Current liabilities Short term financial debt 13,050,758 13,614, % Other liabilities 58,681,208 56,484, % Total current liabilities 71,731,966 70,099, % Non current liabilities Long term financial debt 15,256,202 15,338, % Other liabilities 16,814,481 17,343, % Total non current liabilities 32,070,683 32,681, % Total liabilities 103,802, ,780, % Equity Net equity attributable to parent company shareholders Paid-in capital 123,808, ,808, % Other reserves 22,486,706 23,481, % Retained earnings 61,244,501 58,217, % Subtotal net equity attributable to parent company shareholders 207,539, ,508, % Minority interest Total equity 207,539, ,508, % Total equity and liabilities 311,342, ,288, % Page 11 of 11