Saturday , January 16 2021

After Concha and Toro Brexit




In November 2017, he celebrated the Day of Encounters of Concha y Toro in his history. Years were complex. Brexit and few cuts had a tough business. On the 7th of this month, Eduardo Guilisasti, the country's largest wine producer, was marketed to the financial community. He explained the new sailing scenario, the deep experiences experienced and how he would face them. It would be a five-year strategy.

And the market was believed and trustworthy. In 2016, the company's securities -declarations- grew 3.8% and 11% in 2017, 12.8% and 34.4% were leased by Ipsa respectively; The panorama changed in 2018. The consortium grew 18.41%, $ 1,354.6, the most profitable in the country, and the national selective dropped by 8.25%.

Plan impacted "The main reasons were the positive results obtained in the first half of the year, in line with the new strategy for increasing the weight of primary company wines, adding to the restructuring plan for greater efficiency," the company said. Bise analyst, Paulina Vargas. "It was a very punished action in 2017 and came with Ipsa's delay, and when this adjustment came after the announcement of the best vintage of 2018, and after Brexit's interruption was no longer restarted," he also completed the analysis of the analyst, Bd. Fernando Domey. Concha y Toro decided to make a radical change to see the dividends.

United Kingdom choice

With great care, Concha y Toro described the director of Corporate Affairs, Blanca Bustamante, at the end of 2016. Brexitek and his book's amortization have made a profound insight. Earnings fell by 3.75% in 2016 and the fall of the first quarter of 2017 was 48%. Such a commitment made a complete business model study in the company. In England, emergency measures were profitable: 25% of the office workers in the country were disconnected and prices rose. However, this study was amplified.

The diagnosis was clear: the 2014 rates did not increase anymore and the profitability stopped. At the end of 2016, the review began. And from there 2017-2022 came a new strategy. And the clear objective: the operating profit of 140,000 million was doubled, extending the operating margin around 5.5 points to 16.4%.

Concha y Toro restructured the support areas. Jace consultant recruited the national logistic chain, reducing the number of branches in 13 and eight countries; In addition, Matrix worked to optimize the entire processing process process: the repositories between 13 and 11 were reduced; Rented from five to three and the daily capacity created in the winery was up by 20%, and reduced the packaging plants. With PwC, the entire process was conducted in the areas of Accounting, Product and Human Resources.

The former led to a change in the commercial strategy. At the beginning of 2018, Boston Consulting Group began to talk about it: it would define the wine-making axes, which Bustamante explained, like all Casillero del Diablo brands. In this way, bad harvests and high price grapes should be borne. And the peak began. They have sorted and analyzed each flag. He eliminated 82 positions in 304

As a result, volumes were down: 5.4% fell in September, and the average price increased by 8% in dollars. "It means marketing the shopping center, we need to sell more expensive products and map them, although we stopped to sell some brands that shine. It was a small volume and did not demand profitability from the company," says Bustamante.

The rest was located: Casillero del Diablo was the only brand to recover brand, potential and volume. In addition, 16 will be, among others, Don Melchor, Cono Sur, etc. Invest, who would invest in it, in order to become a Principal, as a potential. Both groups would be a focus.

These would add a third set -Protect- to the brands we keep, but to a large extent, and others -Watch- analysis. "The most important thing is that the company is turning to the premium segment, before looking at the volume, and even if it was to go to that volume. We currently sort, focus and minimal profitability for each product," explains Bustamante.

It created a new marketing area, Excellence, Analysis and Marketing Intelligence (Cemai), to develop analyzes that provide information related to trends.

In this sense, the markets have also been reorganized. Priority? United States This, after the purchase of the only Concha y Toro importer of the Excelsior Wine Company, gave a significant investment of 50%. In 2018, all the distribution of North America was established under the signing of Fetzer, and they achieved 5 million dollar synergies.

There were seven continuous growth markets (including Chile, England and Brazil) and China was in the fast-growing category. All of them are keys, 77% of sales.

He started to become the top result. In 2017, they achieved a net saving of $ 1.230 billion; In 2018, this amount came to $ 4,325 million to bring it down to 2019, saving over $ 16 million in efficiency and synergies. "The internal restructuring process was closed in 2018 and the commercial strategy was put in place. Now, the results should start in 2019," says Bustamante.

On November 16, the second day of Concha y Toro Investor took place. "After reviewing, reorganizing and following this full visual process, we have a new company, a new way of working," explains Guilisasti. And the view was very positive.

"We have seen a forecast of the plan and we have understood that the decrease of the volume due to the elimination of the brand due to the less sales, the company considered the volumes it was thinking," says Guillermo Araya, Director of Rent Studios 4. That day, it increased by 1.54%.

2019 positive

Currently, according to Bloombergen, four of the 10 runners who follow the action recommend buying. No calls to sell. In 2018, if the price was $ 1,354.6, the target price for the next 12 months was $ 1,473.75, a positive performance but less than the previous year. This adjustment was made, okay in the square. Now, we have to see if the company complies with its promise. Since January 11, the paper has rented 1.29%.

"It is necessary for the company to achieve improvements and margins and increase cost effectiveness," says Domey. "In 2019 we will see the positive results dynamics, reflecting all savings from the company's restructuring process," said Vargas.

And the company, he stressed, remains positive. The vintage of 2019 should be abundant, reflecting the cost of the grape that will be seen in the second half. ARAA said the good European crop could lead to the settlement of European wines throughout the world, but the raw material product focus would be on La Concha and Toro defenses. The less wine tendency to consume. "The add-on helps sell less, but it's expensive," she says.

In addition, the exchange rate risk would be constant. In Domeyko, Brexit continues to make noise from a pound. Araya, meanwhile, excludes this effect, despite the evolution of the commercial war and the speed of Fed's interest rate.

Right now, most of the forest fires. There are eyes on the market. Concha y Toro is a baby boy. For these reasons, Brexit stayed behind. Today it is positively seen: it is compulsory to create this new company.


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