Davide Campari-Milano N.V. · MIL:CPR
Davide Campari-Milano — Q1 2019 Earnings Presentation
42 slides from Davide Campari-Milano's earnings presentation, May 7, 2019
Slide 1: 2019 First Quarter Results
2019 First Quarter Results Investor Presentation 7 May 2019
Slide 2: Table of contents
Table of contents Results Summary Sales Results ‒ By region ‒ By brand Consolidated P&L Net Financial Debt Marketing initiatives Conclusion & Outlook Annex 2 Results for the first quarter ended 31 March 2019
Slide 3: Results for first quarter ended 31 March 2019
Results for first quarter ended 31 March 2019 Strong results driven by organic sales growth thanks to developed markets with emerging markets recovery Q1 2019 (1) Change vs. Q1 2018 Key figures € million % on sales Reported Organic FX Perimeter (2) Net sales 370.1 100.0% +10.1% +9.6% +2.6% -2.0% of
Slide 4: Key highlights
Key highlights Outperformance of Global Priorities with recovery in low-margin emerging markets > Net Sales • Very positive organic performance in Q1 2019 (+9.6%) driven by solid growth of the Global Priorities in core developed markets, despite the late Easter, enhanced by a recovery in emerging ma
Slide 5: Table of contents
Table of contents Results Summary Sales Results ‒ By region ‒ By brand Consolidated P&L Net Financial Debt Marketing initiatives Conclusion & Outlook Annex 5 Results for the first quarter ended 31 March 2019
Slide 6: Positive organic sales growth against an easy comparison base in a low seasonality quarter
Positive organic sales growth against an easy comparison base in a low seasonality quarter > Americas: US was up +11.2% alongside strong growth in both > Global Priorities: Aperol up +26.8%, double-digit growth in Wild Jamaica and Canada while Brazil and Argentina recovered Turkey, the Jamaican rums
Slide 7: Net sales results for first quarter 2019
Net sales results for first quarter 2019 Growth drivers Organic change (1) +9.6% +10.5% -0.9% +2.6% -2.0% % change €million 336.0 +32.1 +8.8 -6.9 370.1 Q1 2018 Organic growth pre Argentina effect Forex Perimeter Q1 2019 Argentina effect > Organic change of +9.6% (after excluding the price effect in
Slide 8: Net sales by region & key markets in Q1 2019
Net sales by region & key markets in Q1 2019 The US is the largest market with 31.2% of Group Net Sales in a low seasonality quarter Q1 2019 Group Net Sales €370.1 million Organic growth +9.6% Asia Pac: 6.8% of total Organic growth: -3.1% NCEE: 17.7% of total Americas: 48.3% of total Organic growth:
Slide 9: Americas: +13.1% organic
Americas 48.3% Americas: +13.1% organic % change +13.1% +6.2% -0.1% €million 150.0 +19.6 +9.3 -0.1 178.9 Organic growth by key market North America: +11.9% > US +11.2% • Solid start to the year driven by double-digit growth in Grand Marnier, with shipments phasing ahead of depletions, the Wild Turke
Slide 10: SEMEA: +6.4% organic
(1) SEMEA : +6.4% organic SEMEA -0.1% -6.7% 27.2% % change +6.4% €million 101.2 +6.5 -0.1 -6.8 100.8 (2) Organic growth by key market > Italy +6.4% • Very solid start to the year, driven by sustained double-digit growth of Aperol (+14.5%), solid growth of Campari (+5.6%) as well as positive performa
Slide 11: NCEE: +11.6% organic
NCEE: +11.6% organic NCEE 17.7% +11.6% -0.4% +0.1% % change €million 58.7 +6.8 -0.2 +0.1 65.4 Organic growth by key market > Germany +9.7% • Very satisfactory results in Germany against an easy comparison base, driven by double-digit growth of Aperol (+24.0%) and positive performance in Ouzo 12, Fra
Slide 12: Asia Pacific: -3.1% organic
Asia Asia Pacific: -3.1% organic Pacific 6.8% % change -3.1% -0.7% 0.0% €million 26.0 -0.8 -0.2 0.0 25.0 Organic growth by key market > Australia -2.3% • Weak start to the year largely due to phasing and a tough comparison base (+9.4% in Q1 2018, which benefited from an earlier Easter timing). A dec
Slide 13: Net sales by key brand
Net sales by key brand Global Priorities Regional Priorities Local Priorities 58% of Total 16% of Total 12% of Total Organic change: +12.6% Organic change: +7.8% Organic change: +2.3% Rest of Portfolio: 15% (1) Agency brands & Co-packing 7% Rest of own brands 8% Q1 2019 Group Net Sales €370.1 millio
Slide 14: Brand sales review: Global priorities
Brand sales review Global priorities Brand sales as % Organic Global priorities of Group’s sales change in Q1 2019 in Q1 2019 > Double-digit growth in all core markets (Italy, Germany, Austria and Switzerland) with deseasonalisation activities driving growth in 16% +26.8% winter months > Excellent s
Slide 15: Brand sales review: Global priorities
Brand sales review Global priorities Brand sales as % Organic Global priorities of Group’s sales change in Q1 2019 in Q1 2019 > Positive start to the year for Wild Turkey bourbon thanks to the continued growth in the core US (+4.6%), with very positive 9% (1)(2) +10.0% contribution from premium vari
Slide 16: Brand sales review: Regional priorities
Brand sales review Regional priorities Regional priorities Brand sales as % Organic of Group’s sales change in Q1 2019 in Q1 2019 Tequila 3% +22.7% > Solid start to the year as the core US market continued to grow by sustained double digits (+20.0%) > Overall positive results driven by growth in Bel
Slide 17: Brand sales review: Regional priorities
Brand sales review Regional priorities Regional priorities Brand sales as % Organic of Group’s sales change in Q1 2019 in Q1 2019 > Averna registered positive performance driven by the US, Italian bitters and offsetting weakness in Germany. Core Italy was flat > Positive performance of Cynar with st
Slide 18: Brand sales review: Local priorities
Brand sales review Local priorities Brand sales as % Organic Local priorities of Group’s sales change in Q1 2019 in Q1 2019 4% +2.3% > Good start to the year in core Italian market > Overall negative performance due to softness in core 3% -4.7% market of Italy, partially offset by positive growth in
Slide 19: Table of contents
Table of contents Results Summary Sales Results ‒ By region ‒ By brand Consolidated P&L Net Financial Debt Marketing initiatives Conclusion & Outlook Annex 19 Results for the first quarter ended 31 March 2019
Slide 20: Q1 2019 consolidated P&L
Q1 2019 consolidated P&L Organic margin (1) Q1 2019 Q1 2018 Reported change accretion/(dilution) Organic change Forex impact Perimeter effect € million % of sales € million % of sales % (bps) (4) % % % Net Sales 370.1 100.0% 336.0 100.0% 10.1% 9.6% 2.6% -2.0% COGS (2) (146.2) -39.5% (136.0) -40.5% 7
Slide 21: EBIT adjusted - Key highlights
EBIT adjusted - Key highlights > Gross profit: on a reported basis up +11.9% in value, to 60.5% on sales (+100 bps accretion): • Organic growth of +9.9% in value, +20 bps margin expansion (+250 bps in Q1 2018). Organic growth ahead of topline thanks to very favourable sales mix, overcoming the adver
Slide 22: EBIT adjusted – summary effects
EBIT adjusted – summary effects 9.4 3.1 (1.2) € million % change +15.4% +5.1% -2.0% 72.4 61.1 +18.5% +140 bps (1) % on sales 18.2% +100 bps +40 bps 0 bps 19.6% > EBIT adjusted of €72.4 million, up +18.5% on a reported basis, 19.6% margin on sales (+140 bps accretion). Key drivers: • Organic growth o
Slide 23: Q1 2019 Consolidated P&L - Pretax profit
Q1 2018 Consolidated P&L - Pretax profit Q1 2019 Q1 2018 Reported Change Operating profit = EBIT 71.7 19.4% 82.7 24.6% -13.3% Net financial income (charges) (8.3) -2.3% (5.8) -1.7% 45.1% Financial adjustments (0.0) 0.0% 0.0 - - Profit (loss) related to companies valued at equity 0.2 0.0% - - - Put o
Slide 24: Table of contents
Table of contents Results Summary Sales Results ‒ By region ‒ By brand Consolidated P&L Net Financial Debt Marketing initiatives Conclusion & Outlook Annex 24 Results for the first quarter ended 31 March 2019
Slide 25: Net financial debt increased by €47.7 million due to IFRS 16
Net financial debt increased by €47.7 million due to the first-time application of IFRS 16-‘Leases’ Δ 31 March 2019 vs. € million 31 March 2019 (1) 31 December 2018 31 December 2018 Short-term cash/(debt) (A) 437.2 404.1 33.1 - Cash and cash equivalents 694.2 613.9 80.2 - Short-term debt (257.0) (20
Slide 26: Table of contents
Table of contents Results Summary Sales Results ‒ By region ‒ By brand Consolidated P&L Net Financial Debt Marketing initiatives Conclusion & Outlook Annex 26 Results for the first quarter ended 31 March 2019
Slide 27: Campari – Entering Red
Campari – Entering Red Campari – Red Diaries 2019 ‘Entering Red’ On February 5th 2019, Campari launched the new short movie for the Campari Red Diaries campaign, ‘Entering Red’, starring the internationally recognized actress Ana De Armas and directed by critically acclaimed Italian director Matteo
Slide 28: Aperol – orange wave continues
Aperol – orange wave continues Australian Open Tennis Aperol-ivery Tournament For the third year in a row, Aperol Spritz was a Aperol-ivery: inspiring Brits sponsor of the Australian Open Tennis to embrace the Aperol Tournament in Melbourne. Running from the end aperitivo moment, of December 2018 up
Slide 29: Marketing activities and special awards
Marketing activities and special awards BULLDOG – ‘Shine your own light’ O’ndina Gin – World Gin Awards The new Global Campaign to support Bulldog Gin named “Shine in your O’ndina gin has been awarded as “Best Italian Contemporary Style own light” has been launched in Spain during January and will b
Slide 30: Brand launches
Brand launches Cinzano Vermouth The new 1757 Vermouth di Torino, The re-launch of Cinzano a tribute to Casa Cinzano, features vermouth celebrates the secret recipes developed by the rich heritage & unique Cinzano Herbalist & Master expertise across the world Blender and crafted to be the after nearl
Slide 31: Table of contents
Table of contents Results Summary Sales Results ‒ By region ‒ By brand Consolidated P&L Net Financial Debt Marketing initiatives Conclusion & Outlook Annex 31 Results for the first quarter ended 31 March 2019
Slide 32: Conclusion and Outlook
Conclusion and Outlook > A strong start to the year, despite the late Easter, driven by a combination of positive underlying momentum in core developed markets enhanced by a recovery in emerging markets and a favourable comparison base, in a small quarter > For the full year 2019, the outlook remain
Slide 33: Table of contents
Table of contents Results Summary Sales Results ‒ By region ‒ By brand Consolidated P&L Net Financial Debt Marketing initiatives Conclusion & Outlook Annex 33 Results for the first quarter ended 31 March 2019
Slide 34: Annex
Annex - 1 Net sales by region and key market Annex - 2 Net sales by brand cluster Annex - 3 Financial debt details Annex - 4 Exchange rates effects Annex - 5 IFRS 16-‘Leases’ impact on Group key financial indicators 34 Results for the first quarter ended 31 March 2019
Slide 35: Annex - Net sales by region & key market
Annex - 1 Net sales by region & key market Region breakdown by key market 35 Results for the first quarter ended 31 March 2019
Slide 36: Annex - Net sales by region & key market
Annex - 1 Net sales by region & key market 36 Results for the first quarter ended 31 March 2019
Slide 37: Annex - Net sales by brand cluster
Annex - 2 Net sales by brand cluster 37 Results for the first quarter ended 31 March 2019
Slide 38: Annex - Financial debt details
Annex - 3 Financial debt details Outstanding gross debt as of 31 March 2019 (1) Classified as short-term debt New debt issue on 23 April 2019 38 Results for the first quarter ended 31 March 2019
Slide 39: Annex - Exchange rates effects
Annex - 4 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 Q1 2019 was adjusted to be equal to the rate as of 31 March 2019 39 Results for the first quarter ended 31 March 2
Slide 40: Annex - IFRS 16 impact on Group key financial indicators
Annex - 5 IFRS 16-‘Leases’ (1) impact on Group key financial indicators (1) Effective as of 1 January 2019, with 2018 numbers not restated. Under IFRS 16-’Leases’, all material lease contracts are re-measured to be recognized on the balance sheet: asset representing the right to use (to be depreciat
Slide 41: 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 42: EIR
TE = 1 EIR
Davide Campari-Milano — Q1 2019 Earnings Presentation on 6ix