The company presented a higher gross margin thanks to a better product mix, which partially offset the global logistics crisis that affected shipments.
November 3, 2021 – In the midst of the challenging scenario that the global shipping and land transport logistics crisis has meant, Viña Concha y Toro managed to close the third quarter with a year-on-year increase in profit of 15.4% to $30,316 million, supported by a better product mix, increases in the domestic market and income from the real estate area. In this way, it accumulated a profit of $68,062 million in the first nine months of the year, showing a year-on-year increase of 23%.
This scenario was observed despite the 2.9% drop in revenues between July and September, which were the result of lower sales in export markets and the US, in the context of the previously mentioned global logistics scenario that impacted volumes shipped.
On the contrary, the domestic market showed sales increases in value of 25.1%, reflecting a higher average price of wine and strong sales in the Beer and Spirits category, while Argentina registered an increase of 36.8%.
“In the quarter, the company has been focused on managing this supply chain crisis, leveraged on the strengths of its integrated distribution model. However, the crisis impact on our shipments was translated into a decline of 2.9% in the consolidated revenue in 3Q21. With that, revenue had an increase of 4.3% in the nine months ended September 30th, in comparison with the previous year,” explained Eduardo Guilisasti, CEO.
Premiumization
The higher average price in all markets reflects the continued focus on premiumization of the mix, which was driven this quarter by the Invest brands. Among these, the growth in value of Diablo (+100%), Marques de Casa Concha (+30.7%), Trivento Golden (+126%) and Don Melchor (+55.9%) stand out.
The sales mix improved with the Principal and Invest categories, together representing 48% of sales in value, compared to 45% in 3Q20.
Chile’s non-wine business posted strong sales growth driven by the Beers and Spirits category, which increased 68.9%.
Thus, the operating margin increased 40bp to 17.6% in the third quarter, partly reflecting the income from the sale of real estate assets – in line with the plan started in 2017 to maximize the profitability of its assets – and a higher profitability due to better sales mix. Gross margin increased 100bps to 40.6%.
Consequently, the Ebitda for the quarter was at similar levels to 3Q21, with an expansion of the margin on sales of 70bp to 21.4%.
“Looking forward, the company remains confident on its strategy, its long term fundamentals, and on its ability to adapt to change, as well as on its internal targets on results set towards 2022. At the logistics front, the company is focused on managing the supply-chain contingency,” concluded Eduardo Guilisasti.
