Purcari Wineries (WINE) CMD 2024 summary

Strategic vision and growth targets

• Aims to double key financial and operational metrics by 2027, targeting 600 million RON in sales and 200 million RON EBITDA, with a focus on profitable growth and premiumization across core and new markets.

• Plans to expand from three to five countries, leveraging M&A for market entry and local brand development, while maintaining strong positions in Romania, Moldova, and Bulgaria.

• Seeks to build a global winemaking champion rooted in Central and Eastern Europe, emphasizing indigenous grape varieties and regional synergies.

• Strategy includes streamlining a portfolio of 170 brands, investing in sparkling and non-alcoholic wines, and enhancing customer experience through on-site and digital channels.

• Focus on sustainability, with investments in irrigation, ecological vineyards, and solar energy, aiming for 80% solar coverage at production sites.

Financial guidance and capital allocation

• Base scenario projects 580–630 million RON in revenues, 210–230 million RON EBITDA, and 120–130 million RON net profit by 2027, excluding M&A impacts.

• Gross margin targeted to rise from 42% in 2023 to 50% by 2027, driven by premiumization and operational efficiencies.

• ROE expected to improve to 23–25%, with prudent leverage and headroom for M&A; earnings per share to double and dividends to increase 2.3x, assuming a 45% payout.

• CapEx intensity will be sustained and project-driven, with major investments in vineyard expansion, production capacity, and technology.

• Management stock option plan is primarily funded via buybacks, with minimal dilution (0.8% historically), and no expansion planned before 2027.

Operational excellence and enablers

• Winemaking excellence prioritized through R&D in local grape varieties, precision viticulture, and a new flagship winery for emblematic wines.

• Commercial excellence to be achieved by investing in brand building, optimizing pricing, and expanding direct-to-consumer and export channels.

• Talent and culture are central, with a focus on leadership succession, cross-country collaboration, and employee development to support growth.

• Technology and data infrastructure to be upgraded, moving to cloud systems and integrated data capture from vineyard to shelf.

• ESG commitments include rural community development, transparent governance, and board diversity.