Davide Campari-Milano N.V. · MIL:CPR
Davide Campari-Milano — Gruppo Campari — Italian Investor Conference, Tokyo 2007
45 slides from Davide Campari-Milano's conference presentation, Oct 16, 2007
Slide 1: Overview of Gruppo Campari & 2007 first half results
Overview of Gruppo Campari & 2007 first half results Italian Investor Conference Tokyo, 16 October 2007 1
Slide 2: Overview of Gruppo Campari
Overview of Gruppo Campari Bob Kunze-Concewitz, CEO 2
Slide 3: Gruppo Campari is…
Gruppo Campari is… > Unique > Fast growing > Profitable > Lifestyle brands 3
Slide 4: Gruppo Campari is…. unique
Gruppo Campari is…. unique > Big enough to win, small enough to act quickly & decisively > Passionate Entrepreneurs > The “Path less travelled” > Long term Brand Builders > Unique Brands 4
Slide 5: Gruppo Campari is…. fast growing
Gruppo Campari is…. fast growing Over a decade of acquisitions 5
Slide 6: Net turnover
Gruppo Campari is…. fast growing Net turnover CAGR 2002/2004 CAGR 2004/2006 +9% +11% 1,000 932 900 810 779 751 € million 800 714 700 661 600 500 400 2002 2003 2004 2004 2005 2006 Italian GAAP IFRS 6
Slide 7: Gruppo Campari is…. profitable
Gruppo Campari is…. profitable EBITDA(1) CAGR 2002/2004 CAGR 2004/2006 +7% +8% 220 211 197 200 184 182 169 € million 180 160 160 140 120 100 2002 2003 2004 2004 2005 2006 Italian GAAP IFRS EBIT(1)(2) Net income(3) CAGR 2002/2004 CAGR 2004/2006 CAGR 2002/2004 CAGR 2004/2006 +8% +8% -1% +10% 130 118 1
Slide 8: Gruppo Campari's growth strategy
Gruppo Campari’s growth strategy Organic growth External growth • Exploit untapped markets for Selective strategic acquisitions Campari with focus on highly profitable • Maintain solid growth in US and spirit brands continue international development Continual monitoring for for SKYY Vodka oppor
Slide 9: Recent developments: evolution of US portfolio
Recent developments: evolution of US portfolio Bob Kunze-Concewitz, CEO 9
Slide 10: Campari gains long-term control over key tequila category
Campari gains long-term control over key tequila category > Campari recently announced that the US distribution contracts for the 1800 and Gran Centenario tequila brands will end on December 31, 2007 > Starting in January 2008, Gruppo Campari will refocus its tequila business on the Cabo Wabo brand
Slide 11: Campari further strengthens in the ultra premium segment via X-Rated
Campari further strengthens in the ultra premium segment via X-Rated > On 1 August 2007 Gruppo Campari finalised the acquisition of the super premium X-Rated Fusion Liqueur, Jean-Marc XO luxury vodka and X-Rated ultra premium vodka > As illustrated at the acquisition announcement on 19 July 2007, th
Slide 12: Trends in the spirits industry
Trends in the spirits industry Bob Kunze-Concewitz, CEO 12
Slide 13: The spirits industry is still highly fragmented…
The spirits industry is still highly fragmented… Breakdown of worldwide spirits industry by brand positioning and by region International premium Europe spirits 30% 12% Branded local Rest of spirits World 21% 52% North America Unbranded 9% local spirits Latin 67% America 9% > Opportunities both for
Slide 14: The spirits industry has enjoyed 10 years of continuing growth…
The spirits industry has enjoyed 10 years of continuing growth… > Increased marketing expenditure > Trend towards premium brands (premiumisation) > Favourable demographics > Industry consolidation > Positive spirits cycle 14
Slide 15: …and the future prospects remain extremely positive
…and the future prospects remain extremely positive > Profitable markets (in particular, USA) > Fast growing geographies (in particular, emerging markets) > Attractive categories (including vodka, tequila, liquors) > Trading-up trend (across markets and categories) > Local habits… but globalisation
Slide 16: A focus on the US spirits market
A focus on the US spirits market YoY growth and share of US spirits market by category (2006) Share of market Irish 16.4% 0.4% Tequila 10.2% 5.6% Vodka 6.7% 27.9% Straights 3.8% 8.3% Cordials & Liquors 3.7% 12.2% US spirits market 3.7% 100.0% Rum 3.5% 12.9% Brandy & Cognac 1.9% 5.9% Gin 0.9% 6.2% Sc
Slide 17: Premium & Superpremium spirits market
Premium & Superpremium spirits market Top Countries Premium Spirits market Ranking Volumes in .000 liter cases Country 2001 2006 CAGR 06-01 US 26,165.450 40,524.500 9.1% Russian Federation 448.100 5,101.600 62.7% United Kingdom 3,937.250 4,836.780 4.2% Brazil 3,166.250 4,075.050 5.2% Germany 3,390.5
Slide 18: Results highlights and sales review
Results highlights and sales review Bob Kunze-Concewitz, CEO 18
Slide 19: First half ended 30 June 2007
First half ended 30 June 2007 H1 2007 % change % change € million at actual forex at constant forex Net sales 440.6 +5.4% +7.8% Trading profit 123.7 +7.2% +9.4% EBITDA before one-off's 102.4 +7.5% +9.7% EBITDA 100.8 +5.9% +8.1% EBIT before one-off's 92.7 +7.9% +10.3% Operating profit = EBIT 91.1 +6.
Slide 20: 2007 first half net sales - Growth drivers
2007 first half net sales - Growth drivers € 44.6 m +10.7% € 440.6m € 417.8 m € (9.7) m (*) Breakdown of change in perimeter -2.3% €m € (12.1) m -2.9% Acquisitions (1) 4.0 Agency brands (2) (16.1) Total external growth (12.1) +5.4% (1) Glen Grant and Old Smuggler (1 Jan - 15 Mar 2007) (2) Lipton Ice
Slide 21: Net sales analysis by region
Net sales analysis by region Italy Europe € 194.2 m +8.0% € 192.6 m +18.3% € 86.5 m +0.0% -0.3% +6.4% € 69.5 m -8.8% -0.8% +24.5% H1 2006 External Organic Forex H1 2007 H1 2006 External Organic Forex H1 2007 > Solid organic growth driven by all key brands > Existing business driven by good progressi
Slide 22: Net sales analysis by segment
Net sales analysis by segment Spirits Wines € 56.9 m +20.2% € 293.2 m +10.2% -3.2% € 318.7 m € 47.5 m +1.7% +0.0% -0.5% +8.7% +19.7% H1 2006 External Organic Forex H1 2007 H1 2006 External Organic Forex H1 2007 > Solid organic growth driven by good growth on all brands > Excellent performance of all
Slide 23: Review of main brands
Review of main brands Sales as % % change in sales value of Group H1 2007 / H1 2006 H1 2007 Spirits at actual FX at constant FX at actual FX Campari 13% +10.6% +9.7% > Good progression in Italy, Germany, Brazil and major European countries SKYY 12% +13.3% +5.4% > Maintained sales growth in the US no
Slide 24: Review of main brands (cont'd)
Review of main brands (cont’d) Sales as % % change in sales value of Group H1 2007 / H1 2006 H1 2007 Wines at actual FX at constant FX at actual FX Cinzano 4% +25.3% +24.8% > Excellent performance mainly driven by innovation in major markets (Germany sparkling wines and Italy) in a low seasonality p
Slide 25: H1 2007 consolidated results
H1 2007 consolidated results Paolo Marchesini, CFO 25
Slide 26: Consolidated trading profit
Consolidated trading profit Change at Change at constant (€ million) H1 2007 H1 2006 actual forex forex Net sales 440.6 100.0% 417.8 100.0% 5.4% +7.8% COGS (185.0) -42.0% (181.6) -43.5% 1.9% Gross margin 255.6 58.0% 236.3 56.5% 8.2% Advertising and promotion (79.8) -18.1% (70.9) -17.0% 12.6% Selling
Slide 27: Consolidated EBIT
Consolidated EBIT Change at Change at constant (€ million) H1 2007 H1 2006 actual forex forex Trading profit 123.7 28.1% 115.3 27.6% 7.2% +9.4% G&A and other operating income/expenses (31.0) -7.0% (29.4) -7.0% 5.5% EBIT before one-off's 92.7 21.0% 86.0 20.6% 7.9% +10.3% (1) One-off's (1.6) -0.4% (0.
Slide 28: Consolidated Group's net profit
Consolidated Group’s net profit Change at (€ million) H1 2007 H1 2006 actual forex Operating profit = EBIT 91.1 20.7% 85.9 20.6% 6.1% Net financial income (expenses) (8.5) -1.9% (5.5) -1.3% 55.7% Income from associates 0.1 0.0% (0.0) 0.0% - Pretax profit 82.7 18.8% 80.4 19.2% 2.8% Taxes (25.7) -5.8%
Slide 29: Analysis of tax rate
Analysis of tax rate (€ million) H1 2007 H1 2006 FY 2006 Pretax profit 82.7 80.4 175.5 Minority interests (0.0) (2.4) (3.2) Pretax after minority interests (A) 82.6 78.0 172.3 Income and deferred taxes (excl. GW) (B) (20.2) (18.5) (43.9) GW deferred taxes (5.5) (4.0) (11.3) Total Taxes (C) (25.7) (2
Slide 30: Consolidated free cash flow
Consolidated free cash flow (€ million) Notes 30-Jun-07 30-Jun-06 31/12/2006 Net profit 56.9 55.5 117.1 Depreciation and other non-cash items 12.0 10.2 22.6 Net change in tax credits and liabilities and in other non financial assets and liabilities 16.2 2.1 (1.9) Cash flow from operating activities
Slide 31: Analysis of net debt and interest charges
Analysis of net debt and interest charges € million 30 June 2007 31 December 2006 Cash at bank and marketable securities 187.7 240.3 Borrowings from banks (113.0) (209.3) Real estate leases (current portion) (3.1) (3.1) Private placement and bonds (current portion) (17.8) (17.7) Other assets or liab
Slide 32: Net Working Capital
Net Working Capital (€ million) 30 Jun 2007 31 Dec 2006 Change 30 Jun 2006 Trade receivables 232.9 257.1 (24.2) 229.2 Inventories 180.4 169.9 10.5 187.0 Trade payables (131.7) (161.9) 30.2 (147.0) Net Working Capital 281.6 265.1 16.5 269.2 Last 12 months sales to 30 Jun 2007 955.1 932.4 22.8 863.9 (
Slide 33: Outlook and conclusion
Outlook and conclusion Bob Kunze-Concewitz, CEO 33
Slide 34: Outlook and conclusion
Outlook and conclusion > Results in the first half of 2007 were strong, driven by good organic growth across brands and geographies > Looking forward, we remain confident on a positive development of our business, thanks to: – Solid growth across our brand and geographies – Strong generation of cash
Slide 35: Supplementary schedules
Supplementary schedules Schedule - 1 Analysis of net sales growth by segment and region Schedule - 2 Consolidated income statement Schedule - 3 Consolidated balance sheet – Invested capital and financing sources Schedule - 4 Consolidated balance sheet Schedule - 5 Consolidated cash flow Schedule - 6
Slide 36: Net sales analysis by segment and region
Supplementary schedule - 1 Net sales analysis by segment and region Consolidated net sales by segment H1 2007 H1 2006 Change of which: € m % € m % % external organic currency Spirits 318.7 72.3% 293.2 70.2% 8.7% 1.7% 10.2% -3.2% Wines 56.9 12.9% 47.5 11.4% 19.7% 0.0% 20.2% -0.5% Soft drinks 57.4 13.
Slide 37: Consolidated income statement
Supplementary schedule - 2 Consolidated income statement H1 2007 H1 2006 Change € m % € m % % Net sales (1) 440.6 100.0% 417.8 100.0% 5.4% COGS (185.0) -42.0% (181.6) -43.5% 1.9% Gross margin 255.6 58.0% 236.3 56.5% 8.2% Advertising and promotion (79.8) -18.1% (70.9) -17.0% 12.6% Selling and distrib
Slide 38: Consolidated balance sheet: Invested capital and financing sources
Supplementary schedule - 3 Consolidated balance sheet Invested capital and financing sources (€ million) 30 June 2007 31 December 2006 Inventories 180.4 169.9 Trade receivables 232.9 257.1 Trade payables (131.7) (161.9) Operating working capital 281.6 265.1 Tax credits 11.1 9.6 Other receivables, ot
Slide 39: Consolidated balance sheet (1 of 2)
Supplementary schedule - 4 Consolidated balance sheet (1 of 2) Assets (€ million) 30 June 2007 31 December 2006 ASSETS Non-current assets Net tangible fixed assets 146.9 146.3 Biological assets 15.5 15.0 Investment property 4.0 4.0 Goodwill and trademarks 813.9 816.4 Intangible assets with a finite
Slide 40: Consolidated balance sheet (2 of 2)
Supplementary schedule - 4 Consolidated balance sheet (2 of 2) Liabilities and Shareholders’ equity (€ million) 30 June 2007 31 December 2006 Shareholders' equity Share capital 29.0 29.0 Reserves 812.4 766.8 Group's shareholders' equity 841.5 795.9 Minority interests 1.9 1.9 Total shareholders' equi
Slide 41: Consolidated cash flow (1 of 2)
Supplementary schedule - 5 Consolidated cash flow (1 of 2) (€ million) 30 June 2007 30 June 2007 Cash flow generated by operating activities Net profit 56.9 55.5 Adjustments to reconcile net profit and cash flow Depreciation 9.7 9.3 Gains on sale of fixed assets (1.4) (0.5) Fund provisions 1.5 0.6 U
Slide 42: Consolidated cash flow (2 of 2)
Supplementary schedule - 5 Consolidated cash flow (2 of 2) (€ million) 30 June 2007 30 June 2007 Cash flow generated (used) by financing activities New long-term loans 0.0 0.0 Payment of medium-long term loans (1.5) (1.7) Net change in short-term bank borrowings (96.3) 240.6 Change in other financia
Slide 43: Average exchange rates
Supplementary schedule - 6 Average exchange rates H1 2007 H1 2006 % change US dollar : 1 Euro 1.329 1.229 Euro : 1 US dollar 0.7522 0.8137 -7.6% Brazilian Real : 1 Euro 2.719 2.693 Euro : 1 Brazilian Real 0.3678 0.3714 -1.0% 43
Slide 44: Shareholders' structure
Supplementary schedule - 7 Shareholders’ structure Free float is 49% Other 38.7% Alicros S.p.A. 51% Janus Capital Cedar Rock Management Capital 2.8% 7.5% Except for those mentioned above, there are no other shareholders with interests of more than 2% of the share capital who have given notice to Con
Slide 45: Thank you
Thank you For additional information: Investor Relations - Gruppo Campari Phone: +39 02 6225 330; Fax: +39 02 6225 479 E-mail: [email protected]; Website: www.camparigroup.com/investors WWW.CAMPARIGROUP.COM 45
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