Viña Concha y Toro (CONCHATORO) Q2 2024 earnings summary

Executive summary

• Achieved substantial improvement in sales and margins in 1H24, attributed to competitive advantages, transformation measures since September 2022, and three consecutive quarters of year-over-year growth.

• Premiumization strategy increased premium and higher-end brands to 52.8% of total sales in 2Q24.

• Double-digit revenue growth in major markets, notably the US (+28.4%), Brazil (+28.6%), and UK (+17.5%) in 2Q24.

• Key brands Casillero del Diablo, Trivento Reserve, and Diablo posted double-digit value growth.

• Company is positioned for continued growth in sales and profitability, focusing on efficiency and brand innovation.

Financial highlights

• 1H24 consolidated sales rose 21.6% year-over-year to CLP $443,517 million; 2Q24 sales up 17.7% YoY to CLP $237,348 million.

• 1H24 gross margin reached 51.4%, stable YoY; 2Q24 gross margin at 39.9% (+360 bps YoY).

• 1H24 EBITDA increased 113.1% to CLP $69,695 million, margin up 670 bp to 15.7%; 2Q24 EBITDA up 109.9% YoY to CLP $41,324M, margin at 17.4%.

• 1H24 net income surged 263.4% to CLP $34,491 million, net margin at 7.8% (+520 bp YoY); 2Q24 net income up 243.1% YoY to CLP $21,751M, margin at 9.2%.

• EBIT/operating margin improved by 720 bp YoY to 12.1% in 1H24; 2Q24 operating margin at 14.0% (+800 bps YoY).

Outlook and guidance

• Double-digit sales growth is expected to continue, with management anticipating further expansion in sales and profitability for 2024.

• New organizational structure is delivering positive results, with ongoing focus on productivity and brand strength.