How did Concha y Toro perform in 2018? - results data

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  • Full-year sales stay flat, inching up 0.1% to CLP614.13bn (US$918.9m)
  • Final three months of 2018 deliver 2.2% top-line lift, to CLP183.38bn
  • First quarter sales rise of 5% props up full year
  • Group wine sales rise, by 8.2% in Q4 and by 2.7% in 2018

A healthier final quarter for Concha y Toro has failed to stop the Chile-based group from posting stagnant sales from the 12 months of 2018.

Having started the year well, with sales in the three months to the end of March climbing by 5.1% year-on-year, CyT struggled in both the second and third quarters of last year, when sales stagnated. Late yesterday, the company reported a 2.2% increase in sales for the final three months. Subsequently, the top-line came in flat for the year, inching up 0.1%.

Despite the disappointing sales figures, CyT's total wine sales did well in the fourth quarter, climbing 8.2%. The main drag on performance came from the expiry earlier in the year of the company's distribution contract with Diageo in Chile.

Concha y Toro 2018 - Sales versus 2017 - Reported

Fourth Quarter (2017 restated)179391183375
Third Quarter153728155021
Second Quarter158916151291
First Quarter121480124442

Source: Company results

For the full-year, the group saw benefits from its "new commercial strategy", which focuses on " brands and markets with the highest profitability". A 2.7% increase in value sales for Concha's wine businesses in 2018 came with higher average prices and reduced volumes in its export markets.

Concha y Toro 2018 - Wine Sales by Region versus 2017 - Reported

Chile - DomesticChile - ExportsArgentina - DomesticArgentina ExportsThe US (Fetzer) - DomesticThe US (Fetzer) ExportsTotal
2017 (restated)69284398428827614569620356194558786

Source: Company results

Wine exports from its Chilean operations rose 1.6% in the year on a 7% fall in volumes. Europe, which accounts for half of all exports from CyT Chile, was up 5.5% in value terms, although second-largest region Asia slipped 8%.

Domestically, where CyT still has some SKUs at the lower end of the wine price spectrum, wine sales jumped almost 15% as volumes increased 4%. At the same time, "premium" bottled wine sales in Chile, including Casillero del Diablo, Cono Sur Bicicleta and Marques de Casa Concha, collectively delivered a 13% volumes jump in the country.

Across the border in Argentina, macro-economic conditions stifled the company's move to higher-end sales domestically. Exports from CyT's Trivento brand, however, were up 5% on a 2.6% decrease in volumes.

Finally, in the US, where CyT owns the Fetzer Vineyards business, both domestic sales and exports were up 3.4% in value as volumes declined.

CEO Eduardo Guilisasti

"During the last part of the year, we have continued to make progress in the 2022 strategic plan, initiated in 2017, when we set as main objectives the recovery of growth with focus on value and profitability. In 2018, we have completed the restructuring process for production, logistics, and support areas, which has been translated into significant savings and operative synergies. Additionally, the year was marked by the implementation of a new commercial strategy, with major implications, such as a transformation of the commercial structure, in order to serve our markets in a more specialised way; we have created new roles to strengthen brand positioning and a correct route to market.

"Regarding our products, we are working with a brand matrix, which has allowed us to focus on priority brands, comprised by 'Principal' and 'Invest' categories, with the highest relevance and growth potential. On the other hand, we have carried out a rationalisation of our portfolio, exiting from such brands that did not perform according to profitability requirements and added complexity to our operations. This process has not been free of difficulties; it involved a deep internal reorganisation, but we have carried it out with the conviction that they were required to achieve our ambitious objectives."

To access Concha y Toro's official 2018 results statement, click here.

How to adapt to changing trends in wine - A case-study - Click here for a just-drinks comment

Sectors: Company results, Wine

Companies: Concha y Toro

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