Milan, 14 May 2008 - The Board of Directors of Davide Campari-Milano S.p.A. approved the results for the quarter ending 31 March 2008. Bob Kunze-Concewitz, Chief Executive Officer: “In a tougher environment we are performing as planned. Having executed important portfolio changes in the small Q1, we expect our business to build its momentum across key regions in the quarters ahead. Overall, our outlook for 2008 remains unchanged”
CONSOLIDATED RESULTS FOR THE FIRST QUARTER OF 2008
Firstly, in 2008, we adopted a new P&L format in order to be in line with our main competitors and facilitate data comparisons. Referring to the line “selling and distribution expenses”, according to the new format, distribution expenses are included in the COGS line, while selling expenses are classified in the SG&A line, together with G&A and other operating income/expenses.
In the first quarter of 2008, Group sales totalled € 190.9 million, a decrease of 2.9% (-0.7% at constant exchange rates).
The overall change in consolidated sales resulted from an organic growth of 1.3%, a negative exchange rate effect of 2.1% and a negative perimeter effect of 2.1%. The latter was due to the to the announced termination of tequila 1800 distribution contract in US, which was partially offset by Cabo Wabo, X-Rated (whose sales started on 1 August 2007), Bowmore and Flor de Cana.
Contribution after A&P (gross margin after distribution costs and A&P) increased by 1.1% to € 76.7 million (+3.3% at constant exchange rates), or 40.2% of sales. Organic growth accounted for 3.7% and external growth was a negative for 0.4%, lastly exchange rate effects negatively contributed for 2.2%.
EBITDA before one-off’s increased by 1.8% (+3.9% at constant exchange rates) to € 47.3 million, or 24.8% of sales.
EBITDA rose by 8.0% (+10.1% at constant exchange rates) to € 50.2 million, or 26.3% of sales.
EBIT before one-off’s went up by 1.1% (+3.4% at constant exchange rates) to € 42.1 million, or 22.1% of sales.
EBIT increased by 8.0% (+10.3% at constant exchange rates) to € 45.0 million, or 23.6% of sales.
Profit before tax and minority interests was € 40.6 million, an increase of 8.2%.
The Group’s profit before tax was € 40.1 million, with a progression of 6.8% (+8.6% at constant exchange rates).
As of 31 March 2008, net debt stood at € 286.2 million (€ 288.1 million as of 31 December 2007).
CONSOLIDATED SALES FOR THE FIRST QUARTER OF 2008
The spirits segment (67.6% of total sales) recorded a decrease of 7.2%, the combined result of an organic decrease of 1.6%, a negative exchange rate effect of 2.7% and a negative perimeter effect of 2.9%.
The Campari brand posted a growth of 1.4% at constant exchange rates (0.9% at actual exchange rates). SKYY sales declined by 2.3% at constant exchange rates (-13.2% at actual exchange rates), due to planned destocking in US market, ahead of SKYY Infusions and SKYY Vodka new pack launch, in April 2008. Regarding the other main brands, CampariSoda finished the first quarter with a positive performance of 2.8%; Aperol confirmed the positive trend and recorded a growth of +11.6% at constant exchange rates. The Brazilian brands (-20.3% at constant exchange rates), Cynar (-9.3% at constant exchange rates) and Glen Grant (-15.5% at constant exchange rates) registered a decrease, mainly due to the tough comparison quarter on quarter.
Regarding agency brands, Jack Daniel’s performed well (+7.0% at constant exchange rates).
The wines segment, which contributed 13.9% of total sales, registered a growth of 3.3%, due to the combination of organic growth of 3.7% and a negative exchange rate effect of 0.4%. The segment’s positive performance was driven by Cinzano vermouth (+9.7% at constant exchange rates) and by Cinzano sparkling wines (+9.3% at constant exchange rates). The still wines segment also benefited from positive performances from Sella & Mosca (+2.2%).
Sales of soft drinks (16.6% of total sales), which are generated almost entirely on the Italian market, recorded a strong organic growth of 12.8%, driven by Crodino (+14.1%), Lemonsoda range (+14.2%) and other carbonated drinks (+9.3%).
Looking at results by region, sales on the Italian market (52.0% of total Group sales) recorded an increase of 4.4%, thanks to good organic growth. Sales in Europe (20.5% of consolidated sales) grew by 6.9%, driven by the organic sales growth of 7.5%, thanks to positive performances from important markets such as Germany and Russia; the exchange rate effect was negative at 0.6%. In the Americas (23.2% of total sales), the US market registered an organic decrease of 7%, a negative exchange rate effect of 8.6% and a negative perimeter effect of 9.5%. In Brazil, sales registered an organic decrease of 23.7%. The exchange rate effect was positive at 4.7%. Sales in the rest of the world (including duty free sales), which accounted for 4.3% of total sales, grew by 7.8% overall, driven by an organic growth of 8.7%.
Gruppo Campari is a major player in the global beverage sector, trading in over 190 nations around the world with a leading position in the Italian and Brazilian markets and a strong presence in the US, Germany and Switzerland. The Group has an extensive portfolio that spans three business segments: spirits, wines and soft drinks. In the spirits segment stand out internationally renowned brands, such as Campari, SKYY Vodka and Cynar together with leading local brands, such as Aperol, Cabo Wabo, CampariSoda, Glen Grant, Ouzo 12, Zedda Piras, X-Rated and the Brazilian brands Dreher, Old Eight, Drury’s. In the wine segment together with Cinzano, known world-wide, are Liebfraumilch, Mondoro, Riccadonna, Sella & Mosca and Teruzzi & Puthod all respected wines in their category. In the soft drinks segment are Crodino, Lemonsoda and its respective line extension dominating the Italian market. The Group has over 1,500 employees. The shares of the parent company, Davide Campari-Milano, are listed on the Italian Stock Exchange.