Davide Campari-Milano N.V. · MIL:CPR
Davide Campari-Milano — FY2023 Earnings Presentation
49 slides from Davide Campari-Milano's earnings presentation, Feb 27, 2024
Slide 1: Results Presentation Full Year ended 31 December 2023
Results Presentation Full Year ended 31 December 2023 February 27, 2024
Slide 2: Contacts
CONTACTS i n ve s t o r. r e l a t i o n s @ c a m p a r i . c o m www.camparigroup.com @camparigroup CampariGroup @camparigroup CampariGroup
Slide 3: FY 2023: another year of strong and profitable growth
Another year of strong and profitable growth, consistently FY 2023 delivering on strategy Net sales > Best-in-class organic sales growth (+10.5%) in FY2023 (+10.6% in Q4) €2,918.6 million • solid brand momentum driven by aperitifs, tequila and bourbon, continuing in Q4 (+10.5% organic) • sustained a
Slide 4: Business scale increased by c.60% organically vs. 2019
Business scale increased by c.60% organically vs. 2019; strong brand momentum off a new base across core categories and key markets supported by enhanced commercial capabilities and boosted infrastructure 2019-2023 Organic Sales CAGR 30.3% > Core exposure across three top outperforming spirits categ
Slide 5: Consistently outperforming spirits sector in Total Shareholder Return
Consistently outperforming spirits sector in terms of Total Shareholder Return Annualised Total Shareholder Return vs. main indexes and industry 13.6% 11.2% 10.3% 9.9% 8.3% 7.5% 7.6% 6.6% 5.6% 4.5% 4.1% 3.7% Campari Group Average Spirits Sector MSCI Europe Eurostoxx 600 Food & Bevs Since IPO (July 2
Slide 6: Best-in-class growth: primed for the next stage of growth
Best-in-class growth: the Group is primed for the next stage of growth in a consistent strategic framework with focused core strategies Continued brand building Continued reinvestment and M&A continues to be a Enhanced focus on core strategic investments via proprietary development of commercial cap
Slide 7: Positive growth across all regions
Positive growth across all regions, with the aperitifs, tequila and premium bourbon outperforming FY 2023 net sales Organic Performance and Weight Breakdown AMERICAS 7.7% GLOBAL PRIORITIES 10.8% SEMEA 6.8% REGIONAL PRIORITIES 13.4% NCEE 18.7% LOCAL PRIORITIES 3.9% APAC 20.7% Others , 4% Australia, 4
Slide 8: FY 2023 net sales organic performance by key market (Americas)
FY 2023 net sales organic performance by key market AMERICAS Organic Sales Growth by Key Market • Strong end to the year in the core US, with Q4 up +12.8%, largely thanks to Espolòn, aperitifs, Russell’s Reserve and Appleton Estate, while Grand Marnier also returned to growth. We continued to outper
Slide 9: FY 2023 net sales organic performance by key market (NCEE)
FY 2023 net sales organic performance by key market NCEE Organic Sales Growth by Key Market • Strong outperformance in core Germany largely thanks to continued growth of the core aperitif portfolio, helped also by robust pricing, with Aperol, Aperol Spritz RTE, Campari and Crodino all growing double
Slide 10: Aperol: +23.1% organic growth
Aperol: +23.1% organic growth (24% of Group sales) > Strong growth across all key markets thanks to continued healthy brand momentum, despite a weaker Q3 due to unfavourable weather in Europe, boosted by price repositioning and strong consumption, in particular core Italy (+8.2%), Germany (+32.9%),
Slide 11: Campari: +10.7% organic growth
Campari: +10.7% organic growth (11% of Group sales) > Very positive overall performance, boosted by price repositioning, with growth largely driven by core Italy (+8.9%), the US (+8.5%), Brazil (+34.8%) and Germany (+18.1%) thanks to continued momentum and high Top 5 markets consumption in the on-tr
Slide 12: Wild Turkey: +8.8% organic growth
Wild Turkey: +8.8% organic growth (8% of Group sales) > Strong brand momentum in a premiumising category, which is also picking up momentum internationally, thanks to a positive performance driven by core US, Australia, Japan and South Korea Top 5 markets as well as GTR by value > Sustained outperfo
Slide 13: Jamaican Rums: +7.0% organic growth
Jamaican Rums: +7.0% organic growth (5% of Group sales) > Appleton Estate was positive overall (+13.5%) driven by very positive category trends and the premiumisation of the brand in the core US Top 5 markets by value > Wray&Nephew Overproof only grew by +1.9% largely due to the shipment decline in
Slide 14: Grand Marnier: -16.5% organic decline
Grand Marnier: -16.5% organic decline (5% of Group sales) > Overall decline due to negative shipments performance impacted by the destocking in the core US in the first nine months while the brand registered low-single-digit growth in Q4 Top 5 markets by value > Continued marketing investment behind
Slide 15: SKYY Vodka: +1.5% organic growth
SKYY Vodka: +1.5% organic growth (4% of Group sales) > Positive overall thanks to growth in international markets, driven by China, Italy and GTR while core vodka grew in the US. Q4 registered a decline largely driven by the flavours Top 5 markets by value > International development picking up pace
Slide 16: Espolòn: +35.7% organic growth
Espolòn: +35.7% organic growth (8% of Group sales) > Sustained momentum in the core US (Q4 +30.9%) as the brand continues to gain market share driven by both volume share gain and positive pricing. Elsewhere, seeding international markets, benefitting from increased volume Top 5 markets allocation,
Slide 17: Regional priorities net sales grew +13.4% organically
Regional priorities net sales grew +13.4% organically in 2023 REGIONAL PRIORITIES 35.7% (1) ESPOLON 26% 9.0% > Sparkling Wine & vermouth: positive performance largely thanks to good SPARKLING WINE & VERMOUTH momentum of Riccadonna in France and Cinzano Sparkling wine in core Germany -3.9% ITALIAN SP
Slide 18: Local priorities net sales grew +3.9% organically
Local priorities net sales grew +3.9% organically in 2023 LOCAL PRIORITIES CAMPARI > Campari Soda: positive overall after a more positive Q4 result 2.3% SODA in core Italy as well as favourable trends in international markets 8% such as Austria and Switzerland WILD TURKEY RTD 3.4% > Wild Turkey RTD:
Slide 19: Business development initiatives and new investments
Business development initiatives and new investments > Strengthening of commercial capabilities in China • New route-to-market model in China with a targeted regional distribution model, ahead of the Courvoisier integration • With a strong portfolio of brands, confident in successfully building the
Slide 20: Financial Review
9 ae 3 OBE ee Lit NANCIAL REVIEW
Slide 21: Double-digit EBIT-adjusted organic growth
Double-digit EBIT-adjusted organic growth 600.7 +30bps +80bps (20bps) (80bps) (+20bps on normalised basis) €159.3 24.7% (1) +90bps organic (+30bps on normalised basis) > EBIT-adj. organic growth of +15.5%, +90bps organic margin accretion (Q4: +45.5%, +350bps accretion): - gross profit increase of +1
Slide 22: EBIT-adjusted by region
EBIT-adjusted by region Margin growth drivers EBIT-adj. REGIONAL WEIGHT (% of Group EBIT-adj.) Change vs EBIT-adj Net sales EBIT-adj. EBIT-adj. margin Gross margin org. A&P org. SG&A organic FY 2022 margin organic growth organic growth org. progression progression progression progression FY 2023 (%)
Slide 23: Profit before taxation
Profit before taxation total FY 2023 FY 2022 change € million % sales € million % sales % EBIT-adjusted 618.7 21.2% 569.9 21.1% 8.6% Financial income/(expenses) FY 2023 FY 2022 Operating adjustments (78.5) -2.7% (58.3) -2.2% 34.7% breakdown: Operating profit = EBIT 540.2 18.5% 511.5 19.0% 5.6% Finan
Slide 24: Group net profit-adjusted
Group net profit-adjusted change FY 2023 vs FY FY 2023 FY 2022 2022 Reported Adjustements Adjusted Reported Adjustements Adjusted Reported Adjusted Profit before taxation 466.5 (77.7)(3) 544.2 475.0 (63.0) 538.0 -1.8% 1.2% Taxation (1) (134.0) 17.7 (151.8) (143.5) 8.2 (151.6) -6.6% 0.1% Net profit 3
Slide 25: Free cash flow reflects working capital evolution and extraordinary capex
Free cash flow reflects working capital evolution and extraordinary capex FY 2023 FY 2022 Δ FY 2023 vs FY 2022 Δ FY 2023 vs FY 2022 Total Recurring Total Recurring Total Recurring € million € million € million € million € million % € million % EBITDA 650.4 602.0 48.4 8.0% EBITDA adjusted 728.9 660.3
Slide 26: Operating Working Capital increase driven by temporary step-up in inventory
Operating Working Capital increase largely driven by temporary step-up in inventory (1) (10.8) (24.0) 362.2 1,105.6 778.3 € million Total: €327.4 million OWC at 31 December (2) Organic Perimeter Forex OWC at 31 December 2022ʿ¹ʾ 2023 % on net sales rolling 28.8% 37.9% > OWC as % of net sales at 37.9%
Slide 27: Continued CAPEX investments to unlock further supply chain capacity
Continued CAPEX investments to unlock further supply chain capacity FY 2023 FY 2022 Change 2024-25 Guidance € million € million € million € million Total capex 295.7 213.3 82.4 of which: Maintenance capex 112.4 107.5 4.9 c. 4% of sales Extraordinary capex (mainly incl. capacity expansion, c. €500-55
Slide 28: Increase in net debt
Increase in net debt mainly due to strong cash absorption by temporary working capital increase and extraordinary capex 2.5x 2.4x (67.5) (13.0) (37.8) (180.0) (1,853.5) (1,555.3) € million Total: €(298.2) million Net debt at 31 FCF Dividend Acquisitions Other including Net debt at 31 (3) December 20
Slide 29: Acceleration in achievement of key environmental targets
Strong acceleration in achievement of key environmental targets(1), recognition by CDP in 2023 with new elevated rating • 2023 award of excellence: CDP-Climate Change score to A- up from B, higher than the Food & Beverage processing sector average of B- Environment (2) Responsible Practices People &
Slide 30: Conclusion & Outlook
Conclusion & Outlook > Conclusion for 2023 • Continued best-in-class organic topline performance was achieved in 2023, despite macroeconomic challenges and the expected consumption normalization after exceptional growth post-pandemic, thanks to very healthy brand momentum • Trend in operating margin
Slide 31: Annex
Annex
Slide 32: Net sales by region & key market; by brand cluster
Net sales by region & key market FY 2023 FY 2022 Change of which: Q4 2023 % Group % Group % organic €m €m % organic perimeter forex sales sales growth Americas 1,282.6 43.9% 1,229.4 45.6% 4.3% 7.7% 1.0% -4.4% 11.1% USA 813.1 27.9% 746.1 27.7% 9.0% 10.1% 1.7% -2.8% 12.8% Jamaica 151.0 5.2% 151.9 5.6%
Slide 33: EBIT-adjusted by region
EBIT-adjusted by region Americas North, Central & Eastern Europe Reported Organic Reported Organic FY 2023 FY 2022 Perimeter FX FY 2023 FY 2022 Perimeter FX change change change change € million % of sales € million % of sales % % % % € million % of sales € million % of sales % % % % Net sales 1,282
Slide 34: FY 2023 Consolidated P&L
FY 2023 Consolidated P&L Organic margin FY 2023 FY 2022 Reported change accretion Organic change Perimeter effect Forex impact (dilution) (3) € million % sales € million % sales % bps % % % Net sales 2,918.6 100.0% 2,697.6 100.0% 8.2% 10.5% 1.2% -3.5% COGS (1) (1,218.5) -41.7% (1,109.0) -41.1% 9.9%
Slide 35: Q4 2023 Consolidated P&L
Q4 2023 Consolidated P&L Organic margin Reported Organic Perimeter Forex Q4 2023 Q4 2022 accretion change change effect impact (dilution) (3) € million % sales € million % sales % bps % % % Net sales 717.3 100.0% 691.9 100.0% 3.7% 10.6% 0.7% -7.6% COGS (1) (320.3) -44.7% (313.5) -45.3% 2.2% 160 6.8%
Slide 36: FY 2023 EPS adjusted: basic and diluted
Annex Annex FY 2023 EPS adjusted: basic and diluted FY 2023 FY 2022(2) Adjusted Reported Adjusted Reported € million € million € million € million Group net profit adjusted € million 390.4 387.8 Group net profit ` 330.5 333.0 Weighted average of ordinary share outstanding number 1,127,727,622 1,126,
Slide 37: Reclassified balance sheet
Reclassified balance sheet Invested capital and resources (1) € million 31 December 2023 31 December 2022 total change fixed assets 4,115.4 3,981.0 134.4 other non-current assets and (liabilities) (375.9) (360.7) (15.2) operating working capital 1,105.6 778.3 327.4 other current assets and (liabilit
Slide 38: Consolidated balance sheet (1 of 2)
Consolidated balance sheet (1 of 2) Assets (1) 31 December 2023 31 December 2022 Change € million € million € million ASSETS Non-current assets Property, plant and equipment 964.5 781.3 183.1 Right of use assets 65.4 68.4 (3.1) Biological assets 22.8 17.5 5.3 Goodwill 1,850.8 1,878.5 (27.7) Brands 1
Slide 39: Consolidated balance sheet (2 of 2)
Consolidated balance sheet (2 of 2) Liabilities and shareholders’ equity 31 December 31 December (1) Change 2023 2022 € million € million € million LIABILITIES AND SHAREHOLDERS' EQUITY Shareholders' equity Issued capital and reserves attributable to shareholders of the 2,925.2 2,676.2 249.0 parent C
Slide 40: Reclassified Cash flow statement
Reclassified Cash flow statement FY 2023 FY 2022 Change € million € million € million EBITDA 650.4 602.0 48.4 Effects from hyperinflation accounting standard adoption 14.6 6.7 7.9 Accruals and other changes from operating activities 36.7 26.6 10.2 Goodwill, trademark and sold business impairment 11.
Slide 41: Operating working capital
Operating working capital Reported Organic Perimeter Forex 31 December 2023 31 December 2022ʿ¹ʾ change change effect impact € million % sales € million % sales € million € million € million € million Trade receivables 374.3 12.8% 308.2 11.4% 66.1 80.3 8.3 (22.5) Total inventories, of which: 1,252.5
Slide 42: Financial debt details
Financial debt details Eurobonds and Term loans composition as of 31 December 2023 Outstanding Outstanding As % of Issue date Maturity Type Currency Coupon Amount Original tenor Amount (LC) total (€ million) Apr 5, 2017 Apr-24 Unrated Eurobond EUR 2.165% 150 150 7 years 8% Apr 30, 2019 Apr-24 Unrate
Slide 43: Exchange rates effects
Exchange rates effects Average exchange rates Period end exchange rate change 31 change FY 2023 FY 2023 FY 2022 31 December 2023 31 December 2022 December 2023 vs vs FY 2022 31 December 2022 1 Euro 1 Euro % 1 Euro 1 Euro % US Dollar 1.082 1.054 -2.6% 1.105 1.067 -3.5% Canadian Dollar 1.460 1.370 -6.
Slide 44: Proforma 2023 net sales by region following regions reclassification
Proforma 2023 net sales by region following regions reclassification RESTATED 2023 SALES BY REGION EUR m Q1 23 Q2 23 Q323 Q4 23 H1 23 9M 23 FY 23 AMERICAS 316.8 315.3 326.6 324.0 632.1 958.6 1,282.6 EMEA 299.9 420.5 357.6 327.8 720.4 1,078.0 1,405.8 APAC 51.2 54.1 59.3 65.5 105.4 164.7 230.2 Group 6
Slide 45: Proforma 2023 net sales by priority following Espolón reclassification
Proforma 2023 net sales by priority following Espolón reclassification and other minor reclassifications (1) RESTATED 2023 SALES BY PRIORITY EUR m Q1 23 Q2 23 Q323 Q4 23 H1 23 9M 23 FY 23 GLOBAL PRIORITIES 438.3 531.8 497.3 430.4 970.1 1,467.4 1,897.8 REGIONAL PRIORITIES 127.9 138.2 136.2 167.9 266.
Slide 46: Proforma 2023 segment reporting following regions reclassification
Proforma 2023 segment reporting following regions reclassification after reclassification published FY 2023 net sales EBIT-adj. net sales EBIT-adj. € million % € million % € million % € million % Americas 1,282.6 43.9% 261.1 42.2% 1,282.6 43.9% 261.1 42.2% SEMEA (Southern Europe, Middle East and Afr
Slide 47: Extra information regarding our environmental achievements, next steps and targets
Extra information regarding our environmental achievements, next steps and targets (1) 2019 2023 Next Steps – activities to reach targets Target 2025 Target 2030 Target 2050 • efficiency projects, including energy recovery across all 0.082 (-47% production sites GHG emissions intensity vs. 2019 and
Slide 48: Disclaimer
Disclaimer This document contains forward-looking statements that relate to future events and future operating, economic and financial results of Campari Group. By their nature, forward-looking statements involve risk and uncertainty because they depend on the occurrence of future events and circums
Slide 49: Thanks.
Thanks. CONTACTS i n ve s t o r. r e l a t i o n s @ c a m p a r i . c o m www.camparigroup.com @GruppoCampari CampariGroup @camparigroup CampariGroup