Davide Campari-Milano N.V. · MIL:CPR
Davide Campari-Milano — 9M 2019 Earnings Presentation
44 slides from Davide Campari-Milano's earnings presentation, Oct 29, 2019
Slide 1: 2019 Nine Month Results Investor Presentation
2019 Nine Month Results Investor Presentation 29 October 2019
Slide 2: Table of contents
Table of contents Results Summary Sales Results ‒ By region ‒ By brand Consolidated P&L Net Financial Debt New marketing initiatives & developments Conclusion & Outlook Annex 2 Results for the nine months ended 30 September 2019
Slide 3: Results for nine months ended 30 September 2019
Results for nine months ended 30 September 2019 Continued positive growth across organic topline and profit indicators 9M 2019 (1) Change vs. 9M 2018 Q3 2019 Key figures € million % on sales Reported Organic FX Perimeter (2) Organic change Net sales 1,303.8 100.0% +8.6% +6.9% +2.6% -0.9% +4.9% of wh
Slide 4: Key highlights
Key highlights Overall positive growth, despite a tougher Q3 comparable, driven by Global Priorities > Net Sales • Solid organic grow th in 9M (+6.9%) w ith positive grow th in Q3 (+4.9%) despite the tough com parable base (Q3 2018: +8.9%), as w ell as poor w eather conditions in Northern Europe — B
Slide 5: Positive organic sales growth
Positive organic sales growth Continued positive growth across all regions and brand clusters By Region By Brand > Americas: solid growth driven by the core US market, up > Global Priorities: strong 9M performance, against a tough +6.0%, and Jamaica +17.3% comparable base (9M 2018: +10.3%). Positive
Slide 6: Table of contents
Table of contents Results Summary Sales Results ‒ By region ‒ By brand Consolidated P&L Net Financial Debt New marketing initiatives & developments Conclusion & Outlook Annex 6 Results for the nine months ended 30 September 2019
Slide 7: Net sales results for 9M 2019
Net sales results for 9M 2019 Growth drivers Organic change (1) % change +6.9% +2.6% -0.9% €million 1,200.6 +83.2 +31.0 (10.9) 1,303.8 (3) > Organic change of +6.9% (after excluding the positive price effect in Argentina of 50bps) (1) or €83.2 million (+4.9% or €20.7 million in Q3 2019), largely dri
Slide 8: Net sales by regions & key markets in 9M 2019
Net sales by regions & key markets in 9M 2019 US remains the largest market with 28.2% of Group Net Sales 9M 2019 Group Net Sales €1,303.8 million Organic growth +6.9% Asia Pac: 6.7% of total Organic growth: +0.9% NCEE: 20.6% of total Organic growth: +8.3% Americas: 44.8% of total Organic growth: +6
Slide 9: Americas: +6.5% organic
Americas Americas: +6.5% organic 44.8% % change +6.5% +5.9% -0.1% Regional net sales organic grow th €million 520.3 +34.0 30.8 (0.4) 584.7 by quarter Q1 Q2 Q3 2019 13.1% 7.3% 0.5% 2018 2.9% 6.0% 4.7% Organic grow th by key m arket in 9M > US +6.0% • Overall positive grow th in the US market in 9M, a
Slide 10: SEMEA: +8.1% organic
(1) SEMEA: +8.1% organic SEMEA 27.8% % change +8.1% -0.1% -3.0% Regional net sales organic grow th €million 345.7 +27.9 (0.4) (10.5) 362.6 by quarter Q1 Q2 Q3 2019 6.4% 8.6% 8.9% 2018 1.1% 6.3% 9.6% (2) Organic grow th by key m arket in 9M > Italy +8.4% • Very solid performance with acceleration in
Slide 11: NCEE: +8.3% organic
NCEE: +8.3% organic NCEE 20.6% % change +8.3% +0.5% -0.0% Regional net sales organic grow th €million 247.1 +20.4 +1.2 (0.1) 268.7 by quarter Q1 Q2 Q3 2019 11.6% 4.2% 10.4% 2018 -3.8% 14.4% 13.9% Organic grow th by key m arket in 9M > Germany +5.7% • Good grow th in Germ any, w ith an acceleration i
Slide 12: Asia Pacific: +0.9% organic
Asia Asia Pacific: +0.9% organic Pacific 6.7% % change +0.9% -0.7% 0.0% Regional net sales organic grow th €million 87.6 +0.8 (0.6) 0.0 87.8 by quarter Q1 Q2 Q3 2019 -3.1% 4.9% 0.7% 2018 17.8% 11.7% 19.2% Organic grow th by key m arket in 9M > Australia +3.7% • Overall a very satisfactory performanc
Slide 13: Net sales by key brand
Net sales by key brand 9M 2019 Group Net Sales €1,303.8 million Organic growth +6.9% Rest of Portfolio: 14% (-100bps v s. 9M 2018) Agency brands & Co-packing 6% Rest of own brands 8% Local Priorities, 12% Organic change: +5.2% Global Priorities, 59% (+100bps vs 9M 2018) Organic change: +8.2% Regiona
Slide 14: Brand sales review: Global priorities
Brand sales review Global priorities Global priorities Brand sales as % Organic Organic of Group’s sales change change in 9M 2019 in 9M 2019 in Q3 2019 > Continued double-digit growth in the brand’s top three markets: Italy +15.1%, Germany +17.1% and the US +44.6% 20% +21.8% +21.5% > Strong double-d
Slide 15: Brand sales review: Global priorities
Brand sales review Global priorities Global priorities Brand sales as % Organic Organic of Group’s sales change change in 9M 2019 in 9M 2019 in Q3 2019 > Overall negative performance driven by a shipment 7% -4.3% -14.7% decline in Q3 in the core US market, despite positive Nielsen and Nabca sell-out
Slide 16: Brand sales review: Regional priorities
Brand sales review Regional priorities Regional priorities Brand sales as % Organic Organic of Group’s sales change change in 9M 2019 in 9M 2019 in Q3 2019 Tequila > Continued double-digit growth in the nine months despite 4% +24.9% -11.7% negative phasing in core US market in Q3. Nielsen and Nabca
Slide 17: Brand sales review: Regional priorities
Brand sales review Regional priorities Regional priorities Brand sales as % Organic Organic of Group’s sales change change in 9M 2019 in 9M 2019 in Q3 2019 > Flattish performance by Frangelico as positive growth in the Italian bitters and core US and Germany was offset by weakness in Spain and GTR l
Slide 18: Brand sales review: Local priorities
Brand sales review Local priorities Local priorities Brand sales as % Organic Organic of Group’s sales change change in 9M 2019 in 9M 2019 in Q3 2019 3% +6.7% +9.6% > Strong performance in core Italian market benefitting from a new marketing campaign > Continued positive performance in core Italy, w
Slide 19: Table of contents
Table of contents Results Summary Sales Results ‒ By region ‒ By brand Consolidated P&L Net Financial Debt New marketing initiatives & developments Conclusion & Outlook Annex 19 Results for the nine months ended 30 September 2019
Slide 20: 9M 2019 consolidated P&L
9M 2019 consolidated P&L (1) COGS = cost of materials, production and logistics expenses (2) SG&A = selling, general and administrative expenses (3) Bps rounded to the nearest ten 20 Results for the nine months ended 30 September 2019
Slide 21: EBIT adjusted - Key highlights
EBIT adjusted - Key highlights > Gross profit: on a reported basis up +10.5%in value, to 62.0% on sales (+110 bps accretion): Organic growth of +8.3% in value, +80 bps margin expansion in the nine months driven by favourable sales mix by brand and market. Strong third quarter (+70 bps) thanks to t
Slide 22: EBIT adjusted – summary effects
EBIT adjusted – summary effects € million 25.8 4.8 (1.8) % change +9.9% +1.9% -0.7% 259.2 +11.1% 288.0 +50 bps % on sales (1) 21.6% +60 bps (20) bps +10 bps 22.1% > EBIT adjusted of €288.0 million, up +11.1% on a reported basis, 22.1% margin on sales (+50 bps accretion). Key drivers: • Organic growt
Slide 23: 9M 2019 Consolidated P&L – Group pre-tax profit
9M 2019 Consolidated P&L – Group pre-tax profit 9M 2019 9M 2018 Reported €million % of sales €million % of sales Change Operating profit = EBIT 274.1 21.0% 271.5 22.6% 1.0% Net financial income (charges) (25.4) -1.9% (22.4) -1.9% 13.3% Financial adjustments (charges) (0.0) 0.0% 1.6 0.1% -100.1% Put
Slide 24: Table of contents
Table of contents Results Summary Sales Results ‒ By region ‒ By brand Consolidated P&L Net Financial Debt New marketing initiatives & developments Conclusion & Outlook Annex 24 Results for the nine months ended 30 September 2019
Slide 25: Net financial debt
Net financial debt € million 30 September 2019 (1) 31 December 2018 Change Short-term cash/(debt) (72.1) 404.1 (476.2) - Cash and cash equivalents 757.7 613.9 143.8 - Short-term debt (*) (829.9) (209.9) (620.0) Medium to long-term cash/(debt) (*) (652.5) (1,076.0) 423.5 Debt relating to operating ac
Slide 26: Table of contents
Table of contents Results Summary Sales Results ‒ By region ‒ By brand Consolidated P&L Net Financial Debt New marketing initiatives & developments Conclusion & Outlook Annex 26 Results for the nine months ended 30 September 2019
Slide 27: Campari – celebrating art
Campari – celebrating art Venice Film Festival Cam pari has been the main sponsor of the World renow ned Venice Film Festival. Affirming its presence as brand w ith indissoluble link w ith the Cinem a industry, Cam pari has been the protagonist not only on the Red carpet, but also in the surrounding
Slide 28: Aperol – summer activations in established and seeding markets
Aperol – summer activations in established and seeding markets Madrid & Barcelona - Spain Cologne - Germany Aperol celebrated its centenary also in Germ any w ith an unexceptional City Take Over planned in Cologne. With m ultiple activations spreading the light-hearted and positive vibe of Aperol, C
Slide 29: Other brand building initiatives
Other brand building initiatives Wild Turkey - Cornerstone Rye Grand Marnier – Cuveé du Centenaire Wild Turkey launched Master’s Keep Cornerstone Rye , the fourth release in the The new Cuvée du Centenaire was launched aw ard-winning Master’s Keep series. The w ith a premium packaging inspired by th
Slide 30: GlenGrant wins big: 2020 Whisky Bible
GlenGrant wins big: 2020 Whisky Bible Jim Murray 2020 Whisky Bible GlenGrant 18 Year Old, the rarest variant in the GlenGrant single malt range, has once again been named “Scotch Whisky of the Year", “Single Malt of the Year" and “Best Single Malt Scotch Aged 16-21 years" by the esteemed Whisky writ
Slide 31: New developments: super-premium additions
New developments: super-premium additions Trois Rivières and La Mauny Ancho Reyes and Montelobos Mezcal • On September 5th, acquisition of French company Rhum antilles SAS, ow ner • On October 9th, acquisition of a controlling interest in Ancho Reyes spicy of 96.5% of the Martinique based company Be
Slide 32: Table of contents
Table of contents Results Summary Sales Results ‒ By region ‒ By brand Consolidated P&L Net Financial Debt New marketing initiatives & developments Conclusion & Outlook Annex 32 Results for the nine months ended 30 September 2019
Slide 33: Conclusion and Outlook
Conclusion and Outlook > Positive organic growth in sales and profit indicators in the first nine months, thanks to positive underlying sales momentum in core developed markets, driving continuous sales mix improvement, enhanced by a recovery in emerging markets > For the full year 2019, the outlook
Slide 34: Table of contents
Table of contents Results Summary Sales Results ‒ By region ‒ By brand Consolidated P&L Net Financial Debt New marketing initiatives & developments Conclusion & Outlook Annex 34 Results for the nine months ended 30 September 2019
Slide 35: Annex
Annex - 1 Net sales by region and key market Annex - 2 Net sales by brand cluster Annex - 3 9M 2019 consolidated P&L Annex - 4 Q3 2019 consolidated P&L Annex - 5 Financial debt details Annex - 6 Exchange rates effects 35 Results for the nine months ended 30 September 2019
Slide 36: Net sales by region & key market
Annex - 1 Net sales by region & key market Consolidated Net sales by region 9M 2019 9M 2018 Change of which: Q3 2019 €m % €m % % organic perimeter forex organic Americas 584.7 44.8% 520.3 43.3% 12.4% 6.5% -0.1% 5.9% 0.5% Southern Europe, Middle East & Africa 362.6 27.8% 345.7 28.8% 4.9% 8.1% -3.0% -
Slide 37: Net sales by region & key market
Annex - 1 Net sales by region & key market Southern Europe, Middle East & Africa by market 9M 2019 9M 2018 Change of which: Q3 2019 €m % €m % % organic perimeter forex organic Italy 266.3 73.4% 254.7 73.7% 4.6% 8.4% -3.8% 0.0% 12.5% Other countries 96.3 26.6% 90.9 26.3% 5.9% 7.2% -0.8% -0.5% 1.4% So
Slide 38: Net sales by brand cluster
Annex - 2 Net sales by brand cluster Consolidated Net sales by brand 9M 2019 9M 2018 Change of which: Q3 2019 €m % €m % % organic perimeter forex organic Global Priorities 772.4 59.2% 693.9 57.8% 11.3% 8.2% 0.0% 3.1% 5.5% Regional Priorities 193.7 14.9% 179.7 15.0% 7.8% 5.3% 0.0% 2.5% -4.2% Local Pr
Slide 39: 9M 2019 consolidated P&L
Annex - 3 9M 2019 consolidated P&L (1) COGS = cost of materials, production and logistics expenses (2) SG&A = selling, general and administrative expenses (3) Bps rounded to the nearest ten 39 Results for the nine months ended 30 September 2019
Slide 40: Q3 2019 consolidated P&L
Annex - 4 Q3 2019 consolidated P&L Q3 2019 Q3 2018 Reported change Organic change Forex impact Perimeter effect ( € million % of sales € million % of sales % % % % b Net Sales 455.6 100.0% 422.4 100.0% 7.9% 4.9% 3.0% -0.1% COGS (1) (172.8) -37.9% (162.5) -38.5% 6.4% 3.0% 3.5% -0.1% Gross Profit 282.
Slide 41: Financial debt details
Annex - 5 Financial debt details Outstanding gross debt as of 30 September 2019 Outstanding Amount Issue date Maturity Type Currency Coupon Original tenor As % of total (€ million) Oct 25, 2012 (1) Oct-19 Unrated Eurobond EUR 4.5% 219 7 years 16% Sep 30, 2015 (1) Sep-20 Unrated Eurobond EUR 2.75% 58
Slide 42: Exchange rates effects
Annex - 6 Exchange rates effects (1) (1) Following the adoption of IAS 29 ‘Financial reporting Hyperinflationary Economies’ in Argentina, the average exchange rate of Argentine Peso for 9M 2019 was adjusted to be equal to the rate as of 30 September 2019 42 Results for the nine months ended 30 Septe
Slide 43: 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 circum
Slide 44: EIR
TE = 1 EIR
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