Davide Campari-Milano N.V. · MIL:CPR
Davide Campari-Milano — Q1 2018 Earnings Presentation
39 slides from Davide Campari-Milano's earnings presentation, May 8, 2018
Slide 1: 2018 First Quarter Results
2018 First Quarter Results Investor Presentation 8 May 2018
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 Conclusion & Outlook Annex 2 Results for the first quarter ended 31 March 2018
Slide 3: Results for first quarter ended 31 March 2018
Results for first quarter ended 31 March 2018 Organic topline impacted by emerging market softness and phasing effects magnified in a small quarter. Profitability indicators continued to benefit from positive sales mix Q1 2018 Change vs. Q1 2017 (1) Key figures € million % on sales Reported Organic
Slide 4: Key highlights
Key highlights Positive underlying trends more than offset by the expected perimeter and FX effects overall > Net Sales • Organic grow th of +2.2% • Results impacted by emerging market softness and phasing effects magnified in a low seasonality quarter — Global Priorities, up +3.8%, with good perfor
Slide 5: Overall positive organic sales growth despite phasing effects in a small quarter
Overall positive organic sales growth despite phasing effects in a small quarter > Americas: US was up +3.5%, while Brazil and Argentina > Global Priorities: Aperol up +22.8%, mid-single digit growth in suffered macro-related declines Campari, Wild Turkey and Grand Marnier, in part offset by SKYY an
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 Conclusion & Outlook Annex 6 Results for the first quarter ended 31 March 2018
Slide 7: Net sales results for first quarter 2018
Net sales results for first quarter 2018 Growth drivers +2.2% -7.5% -2.9% % change +8.2 -27.6 -10.7 €million 366.2 1,816.0 336.0 Q1 2017 (1) Organic growth Forex Perimeter Q1 2018 > Organic change of +2.2% or €8.2 million, driven largely by high-margin Global Priorities up +3.8% despite the tough co
Slide 8: Net sales by regions & key markets in Q1 2018
Net sales by regions & key markets in Q1 2018 US remains the largest market with 28.5% of Group Net Sales Q1 2018 Group Net Sales €336.0 million Organic growth +2.2% Americas: 44.7% of total SEMEA: 30.1% of total Organic growth: +2.9% Organic growth: +1.1% Asia Pac: 7.7% of total NCEE: 17.5% of tota
Slide 9: Americas: +2.9% organic
Americas Americas: +2.9% organic 44.7% % change +2.9% -13.3% -3.3% €million 173.9 +5.1 -23.2 -5.8 150.0 (2) Organic grow th by key m arket > US +3.5% • Organic grow th of +3.5%, despite a very tough com parison base (+7.5% in Q1 2017) . The positive performance w as driven by continued solid grow th
Slide 10: SEMEA: +1.1% organic
(1) SEMEA: +1.1% organic SEMEA 30.1% % change +1.1% 0.0% -3.5% €million 103.8 +1.1 0.0 -3.6 101.2 (2) (3) Organic grow th by key m arket > Italy +3.9% • Very satisfactory grow th in the first quarter, largely driven by the continued positive trend in Aperol and Cam pari as w ell as the single-serve
Slide 11: NCEE: -3.8% organic
NCEE: -3.8% organic NCEE % change -3.8% -2.3% -1.6% 17.5% €million 63.7 -2.4 -1.5 -1.0 58.7 (1) (2) Organic grow th by key m arket > Germany -2.6% • Weak start to the year as the m arket registered a tem porary sales decline of -2.6%. The excellent grow th of Aperol (+21.0%), as w ell as good perfor
Slide 12: Asia Pacific: +17.8% organic
Asia Pacific: +17.8% organic Asia Pacific 7.7% % change +17.8% -11.7% -1.3% €million 24.8 +4.4 -2.9 -0.3 26.0 (1) Organic grow th by key m arket > Australia +9.4% • Australia started the year w ith a very satisfactory organic grow th of +9.4%, driven by double-digit grow th of Aperol, Cam pari, Wild
Slide 13: Net sales by brand – Overview
Net sales by brand – Overview Global Priorities Regional Priorities Local Priorities 55% of Total 16% of Total 12% of Total Organic sales: +3.8% Organic sales: -1.3% Organic sales: -0.3% Rest of Portfolio: 17% (1) Agency brands & Co- packing 9% Rest of own brands 8% Local Priorities 12% Global Prior
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 2018 in Q1 2018 > Continued positive performance in core markets (Italy, 14% +22.8% Germany, Austria and Switzerland) > Very strong growth in high potential and seeding markets such as the U
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 2018 in Q1 2018 > Reaping the initial benefits from the activations implemented ahead of 8% +4.2% the brand’s new campaign, Grand Marnier registered positive organic growth of +4.2% driven b
Slide 16: Brand sales review – Regional priorities
Brand sales review Regional priorities Brand sales as % Organic Regional priorities of Group’s sales change in Q1 2018 in Q1 2018 Tequila > Very strong double-digit growth in the core US market (+35.1%) 3% +28.8% and continued positive trends in new markets such as Australia, Italy, Mexico and Canad
Slide 17: Brand sales review – Regional priorities
Brand sales review Regional priorities Brand sales as % Organic Regional priorities of Group’s sales change in Q1 2018 in Q1 2018 > Strong start to the year, with solid growth in the UK, Germany, Gin 1%(1) +14.1% Portugal and Italy. Spain, a core market, continued to grow. Global Travel Retail was u
Slide 18: Brand sales review – Local priorities
Brand sales review Local priorities Brand sales as Organic Local priorities % of Group’s change sales in Q1 2018 in Q1 2018 > Flat performance in the core market of Italy, while the growth 4% +1.9% remains strong in seeding markets (Germany and the UK) > Core Italy up +1.4% driven by the continued s
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 Conclusion & Outlook Annex 19 Results for the first quarter ended 31 March 2018
Slide 20: Q1 2018 summary P&L: EBIT adjusted
Q1 2018 summary P&L: EBIT adjusted Organic margin Q1 2018 Q1 2017 (1) Reported change accretion/(dilution) Organic change Forex impact Perimeter effect € million % of sales € million % of sales % (bps) (4) % % % Net Sales 336.0 100.0% 366.2 100.0% -8.2% 2.2% -7.5% -2.9% COGS (2) (136.0) -40.5% (158.
Slide 21: EBIT adjusted – Key drivers
EBIT adjusted – Key drivers € m illion 5.7 (5.5) (3.5) % change +8.9% -8.5% -5.4% 64.4 61.1 -5.1% % on sales (1) 17.6% +110 bps -10 bps -40 bps 18.2% Organic growth of +8.9%, ahead of top line growth, leading to +110 bps accretion, as higher investments in A&P (-50 bps) and distribution capabiliti
Slide 22: EBIT adjusted - Key highlights
EBIT adjusted - Key highlights > Gross profit: on a reported basis down -3.6% in value, up +290 bps on net sales to 59.5% Organic growth of +6.7% in value, +250 bps margin expansion. Organic growth ahead of top line thanks to favourable sales mix by brand and market: outperformance of key Global a
Slide 23: Q1 2018 Consolidated P&L - Pretax profit
Q1 2018 Consolidated P&L - Pretax profit Q1 2018 Q1 2017 Reported € million % of sales € million % of sales change Operating profit = EBIT 82.7 24.6% 63.6 17.4% 30.2% Net financial income (charges) (5.8) -1.7% (10.0) -2.7% -42.7% Financial adjustments - - 0.1 - -65.4% Put option costs (0.5) -0.1% -
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 Conclusion & Outlook Annex 24 Results for the first quarter ended 31 March 2018
Slide 25: Net financial debt decreased by €42.8 million
Net financial debt decreased by €42.8 million € million 31 March 2018 31 December 2017 Change Short-term cash/(debt) 566.8 496.9 69.8 - Cash and cash equivalents 580.3 514.5 65.9 - Short-term debt (13.6) (17.5) 4.0 Medium to long-term cash/(debt) (1,290.0) (1,260.3) (29.7) Debt relating to operating
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 Conclusion & Outlook Annex 26 Results for the first quarter ended 31 March 2018
Slide 27: Grand Marnier - Live Grand
Grand Marnier - Live Grand Grand Marnier – Live Grand Grand Marnier’s major new ‘Live Grand’ campaign was launched in NY in early March. A beautiful, iconic New York location was transformed into The Grand Manor – an immersive experience that brought the brand’s sophisticatedly eccentric world to li
Slide 28: Campari
Campari Campari Cask Tales Camparino Earlier this year, Campari Group Among the initiatives aimed at building presented a unique new expression powerful and authentic Brand Houses of the classic red bitter, finished in for the Group’s key iconic brands in bourbon barrels reaffirming their historical
Slide 29: Wild Turkey: Longbranch
Wild Turkey: Longbranch Wild Turkey: Longbranch bourbon Matthew McConaughey and the legendary Wild Turkey Distillery are proud to introduce Wild Turkey Longbranch, a collaboration between the whiskey brand’s creative director and Master Distiller Eddie Russell Inspired by McConaughey’s Kentucky and
Slide 30: Table of contents
Table of contents Results Summary Sales Results ‒ By region ‒ By brand Consolidated P&L Net Financial Debt New marketing initiatives Conclusion & Outlook Annex 30 Results for the first quarter ended 31 March 2018
Slide 31: Conclusion & outlook
Conclusion & outlook > Q1 2018 sales organic results were impacted by emerging market softness and phasing effects magnified in a small quarter, whilst profitability indicators continued to benefit from a positive sales mix by brand and market. On a reported basis, the positive underlying trends wer
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 Conclusion & Outlook Annex 32 Results for the first quarter ended 31 March 2018
Slide 33: Annex
Annex - 1 Net sales by region and key market Annex - 2 Q1 2018 consolidated P&L Annex - 3 Exchange rates effects 33 Results for the first quarter ended 31 March 2018
Slide 34: Net sales by region & key market
Annex - 1 Net sales by region & key market Region breakdown by key market Americas by market v Q1 2018 Q1 2017 Change a of which: r €m % €m % %totale organic perimeter forex USA 95.8 63.8% 111.3 64.0% -14.0% 3.5% -4.2% -13.3% Jamaica 19.0 12.7% 18.9 10.9% 0.3% 13.9% 0.0% -13.6% Canada 9.7 6.5% 11.8
Slide 35: Net sales by region & key market
Annex - 1 Net sales by region & key market Note: Q1 2017 restated according to IFRS15 implementation as of 1 January 2018 35 Results for the first quarter ended 31 March 2018
Slide 36: Consolidated P&L Q1 2018
Annex - 2 Consolidated P&L Q1 2018 Q1 2018 Q1 2017 (1) Reported € million % of sales € million % of sales change Net Sales 336.0 100.0% 366.2 100.0% -8.2% COGS (136.0) -40.5% (158.8) -43.4% -14.3% Gross Profit 200.0 59.5% 207.4 56.6% -3.6% A&P (54.1) -16.1% (56.0) -15.3% -3.4% Contribution after A&P
Slide 37: Exchange rates effects
Annex - 3 Exchange rates effects Average exchange rate Period end exchange rate 2018 change vs 2017 31 March 2018 change vs 31 March 2017 : 1 Euro % : 1 Euro % US Dollar 1.229 -13.4% 1.232 -13.2% Canadian Dollar 1.555 -9.3% 1.590 -10.3% Jamaican Dollar 154.644 -11.9% 154.795 -11.5% Mexican Peso 23.0
Slide 38: 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 39: EIR
TE = 1 EIR
Davide Campari-Milano — Q1 2018 Earnings Presentation on 6ix