Davide Campari-milano N.v. · MIL:CPR
Davide Campari-milano — 9M 2018 Earnings Presentation
43 slides from Davide Campari-milano's earnings presentation, Nov 6, 2018
Slide 1: 2018 Nine Month Results
2018 Nine Month Results Investor Presentation 6 November 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 nine months ended 30 September 2018
Slide 3: Results for nine months ended 30 September 2018
Results for nine months ended 30 September 2018 Very positive growth across organic topline and profit indicators, partly offsetting the FX and disposal effects 9M 2018 Change vs. 9M 2017 (1) Q3 2018 (2) (3) Key figures € million % on sales Reported Organic FX Perimeter Organic change Net sales 1,20
Slide 4: Key highlights
Key highlights Solid organic growth in 9M, reflecting accelerated topline growth in Q3 by high-margin Global Priorities > Net Sales • Solid organic grow th in 9M (+6.6%) thanks to a continued acceleration in Q3 (+8.9%), driven by the Global Priorities • Continuous im provement in sales m ix thanks t
Slide 5: Very positive organic sales growth
Very positive organic sales growth Continuous sales mix improvement driven by key high-margin Global and Regional Priorities in core developed markets > Americas: solid growth driven by North America, particularly > Global Priorities: very strong 9M performance (+10.3%) with the core US market, up +
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 nine months ended 30 September 2018
Slide 7: Net sales results for 9M 2018
Net sales results for 9M 2018 Growth drivers Organic change +6.6% +6.8% -0.2% -5.4% -3.7% % change +81.3 -66.0 -45.9 €million 1,231.2 1,816.0 1,200.6 > Organic change of +6.6% (excluding the price effect in Argentina)(1) or €81.3 million, largely driven by high-margin Global Priorities. Organic chan
Slide 8: Net sales by regions & key markets in 9M 2018
Net sales by regions & key markets in 9M 2018 US remains the largest market with 27.2% of Group Net Sales 9M 2018 Group Net Sales €1,200.6 million Organic growth +6.6% Americas: 43.3% of total SEMEA: 28.8% of total Organic growth: +4.6% Organic growth: +5.8% Asia Pac: 7.3% of total NCEE: 20.6% of to
Slide 9: Americas: +4.6% organic
Americas Americas: +4.6% organic 43.3% % change 4.6% -9.5% -2.3% Regional net sales organic grow th €million 560.8 +25.7 -53.4 -12.9 520.3 by quarter Q1 Q2 Q3 2017 8.0% 7.4% 5.6% 2018 2.9% 6.0% 4.7% (1) Organic grow th by key m arket > US +4.3% • Positive perform ance in the 9M (+4.3%) thanks to the
Slide 10: SEMEA: +5.8% organic
(1) SEMEA: +5.8% organic SEMEA 28.8% % change +5.8% -0.1% -8.6% Regional net sales organic grow th €million 356.1 +20.7 -0.4 -30.7 345.7 by quarter Q1 Q2 Q3 2017 1.4% 3.8% 7.4% 2018 1.1% 6.3% 9.6% (2) Organic grow th by key m arket > Italy +3.7% • Very satisfactory result in 9M , w ith a solid Q3 re
Slide 11: NCEE: +9.3% organic
NCEE: +9.3% organic % change +9.3% -2.2% -1.0% NCEE 20.6% Regional net sales organic grow th €million 232.9 +21.6 -5.1 -2.3 247.1 by quarter Q1 Q2 Q3 2017 11.5% 15.5% 3.8% 2018 -3.8% 14.4% 13.9% (1) Organic grow th by key m arket > Germany +8.8% • Solid grow th in the nine months, w ith Q3 accelerat
Slide 12: Asia Pacific: +16.3% organic
Asia Pacific: +16.3% organic Asia Pacific % change +16.3% -8.7% 7.3% 0.0% Regional net sales organic grow th €million 81.4 +13.3 -7.1 0.0 87.6 by quarter Q1 Q2 Q3 2017 -1.1% 6.4% -3.5% 2018 17.8% 11.7% 19.2% Organic grow th by key m arket > Australia +12.9% • Very satisfactory grow th accelerating i
Slide 13: Net sales by key brand
Net sales by key brand Global Priorities Regional Priorities Local Priorities 58% of Total 15% of Total 12% of Total Organic change: +10.3% Organic change: +5.6% Organic change: -1.9% Rest of Portfolio: 15% (1) Agency brands & Co-packing 7% Rest of own brands 8% 9M 2018 Group Net Sales €1,200.6 mill
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 2018 in 9M 2018 in Q3 2018 > Continued positive performance in core established markets (Italy, Germany, Austria) with an acceleration in Q3 18% +31.0% +42.9% > Sustained stro
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 2018 in 9M 2018 in Q3 2018 > Overall positive performance in 9M, impacted by an unfavourable comparison base in Q3 in core US market 8% +0.7% -15.2% where depletions are perfo
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 2018 in 9M 2018 in Q3 2018 Tequila > Sustained strong double-digit growth in the core US market 3% +31.5% +26.6% (+34.4%) and continued positive trends in seeding markets
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 2018 in 9M 2018 in Q3 2018 > Very positive performance of Braulio, driven by the core markets of Italy, GTR and the US Italian bitters and > Cynar grew positively thanks t
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 2018 in 9M 2018 in Q3 2018 > Weakness in core Italian market 3% -1.9% -1.6% > Overall negative performance due to core Italy, impacted by a tough comparable base in Q3 due to th
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 nine months ended 30 September 2018
Slide 20: 9M 2018 consolidated P&L
9M 2018 consolidated P&L (1) 9M 2018 9M 2017 (4) Organic margin Organic Forex Perimeter Q3 2018 € million % of sales € million % of sales Reported change accretion/(dilution) change impact effect Organic change (bps) Net sales 1,200.6 100.0% 1,231.2 100.0% -2.5% 6.6% -5.4% -3.7% 8.9% COGS (2) (468.8
Slide 21: EBIT adjusted - Key highlights
EBIT adjusted - Key highlights > Gross profit: on a reported basis up +1.0% in value, at 61.0% on sales (+210 bps accretion): Organic growth of +8.0% in value, +80 bps margin expansion (+10 bps in Q3 2018). Organic growth ahead of topline thanks to favourable sales mix by brand and market: outperf
Slide 22: EBIT adjusted – summary effects
EBIT adjusted – summary effects €m illion 22.4 (5.6) (15.0) % change +8.7% -2.2% -5.8% 257.3 259.2 +0.7% % on sales (1) 20.9% +40 bps +70 bps -40 bps 21.6% > EBIT adjusted of €259.2 million, up +0.7% on a reported basis, at 21.6% on net sales (+70 bps accretion). Key drivers: • Organic growth of +8.
Slide 23: 9M 2018 Consolidated P&L – Pre-tax profit
9M 2018 Consolidated P&L – Pre-tax profit 9M 2018 9M 2017 Reported €million % of sales €million % of sales Change Operating profit = EBIT 271.5 22.6% 295.5 24.0% -8.1% Net financial income (charges) (22.4) -1.9% (29.7) -2.4% -24.4% Financial adjustments (charges) 1.6 0.1% (24.6) -2.0% -106.4% Put op
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 nine months ended 30 September 2018
Slide 25: Net financial debt decreased by €67.8 million
Net financial debt decreased by €67.8 million € million 30 September 2018 31 December 2017 Change Short-term cash/(debt) 581.3 496.9 84.4 - Cash and cash equivalents 590.7 514.5 76.2 - Short-term debt (9.4) (17.5) 8.1 Medium to long-term cash/(debt) (1,288.2) (1,260.3) (27.9) Debt relating to operat
Slide 26: Debt maturity
Debt maturity > Net debt of €913.8 million as of 30 September 2018 > Long-term gross debt at €1.3 billion - Overall long-term gross debt average coupon at 2.44% - Fixed interest rate debt accounts for c.76% of the overall gross debt 26 Results for the nine months ended 30 September 2018
Slide 27: 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 27 Results for the nine months ended 30 September 2018
Slide 28: Campari – an artistic summer
Campari – an artistic summer ’75th Venice International Film ‘Campari Creates’ - UK Festival’ - Italy With the aim of confirming its ever-stronger bond w ith the w orld of cinem a, Cam pari chose to w alk the Red Carpet of the 75th Venice International Film Festival of La Biennale di Venezia as thei
Slide 29: Aperol US – coast to coast
Aperol US – coast to coast US – turning orange This year the US market was bathed in orange, with Aperol Spritz hosting events from coast to coast, literally. After the very successful Aperol Spritz activation campaign in the Hamptons, NY, last year, 32 separate Aperol Spritz events in particular we
Slide 30: Aperol – activations in established and seeding markets
Aperol – activations in established and seeding markets Central Europe Brazil This summer, the launch of the brand- Over the summer period, the new Aperol TV-com mercial took Brazilian market has engaged in place, prem iering in Germ any. Being a m ultiple Aperol activations w ith the co-production
Slide 31: Other brand building initiatives
Other brand building initiatives Appleton Estate: 30 year old Amari Club Jamaican rum In September, 35 key m ixologists and bartenders from 17 different geographies In September 2018, Appleton Estate 30 Year Old Jam aican Rum w as engaged in a full im m ersion across Italy to discover the full ‘Am a
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 nine months ended 30 September 2018
Slide 33: Conclusion & outlook
Conclusion & outlook > Very positive organic growth in sales and profit indicators in 9M, reflecting an accelerated topline growth in Q3 and continuous sales mix improvement driven by the outperformance of key high-margin brands in core developed markets > On a reported basis, in 9M 2018 the positiv
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 Conclusion & Outlook Annex 34 Results for the nine months ended 30 September 2018
Slide 35: Annex contents
Annex - 1 IAS 29 Hyperinflation in Argentina Annex - 2 Net sales by region and key market Annex - 3 Q3 2018 consolidated P&L Annex - 4 9M 2018 consolidated P&L Annex – 5 Exchange rates effects 35 Results for the nine months ended 30 September 2018
Slide 36: Adoption of IAS 29
Annex - 1 Adoption of IAS 29 Adoption of IAS 29 ‘Financial reporting in Hyperinflationary econom ies’ in Argentina A consensus has been reached w hereby Argentina, after a long period of observation of inflation rates and other indicators, has been globally recognized as a country w ith a hyperinfla
Slide 37: Net sales by region & key market
Annex - 2 Net sales by region & key market Consolidated Net sales by region 9M 2018 9M 2017 Change of which: Q3 2018 €m % €m % % total organic perimeter forex total organic Americas 520.3 43.3% 560.8 45.5% -7.2% 4.6% -2.3% -9.5% -1.5% 4.7% Southern Europe, Middle East & Africa 345.7 28.8% 356.1 28.9
Slide 38: Net sales by region & key market
Annex - 2 Net sales by region & key market Southern Europe, Middle East & Africa by market v 9M 2018 9M 2017 Change a of which: Q3 2018 r €m % €m % %totale organic perimeter forex total organic Italy 254.7 73.7% 274.7 77.1% -7.3% 3.7% -11.0% 0.0% -11.5% 5.2% Other countries 90.9 26.3% 81.4 22.9% 11.
Slide 39: Q3 2018 consolidated P&L
Annex - 3 Q3 2018 consolidated P&L Q3 2018 Q3 2017 Reported accretion/(dilution) change Organic change Forex impact Perimeter effect ( € million % of sales € million % of sales % % % % b Net Sales 422.4 100.0% 414.9 100.0% 1.8% 8.9% -3.4% -3.7% COGS (1) (162.5) -38.5% (167.2) -40.3% -2.8% 8.8% -5.5%
Slide 40: 9M 2018 consolidated P&L
Annex - 4 9M 2018 consolidated P&L Consolidated income statement for the nine months 2018 1 January-30 September 2018 1 January-30 September 2017 € million % € million % Change Net sales 1,200.6 100.0% 1,231.2 100.0% -2.5% COGS (2) (468.8) -39.0% (506.4) -41.1% -7.4% Gross profit 731.8 61.0% 724.8 5
Slide 41: Exchange rates
Annex - 5 Exchange rates Average exchange rate Period end exchange rate 9M 2018 9M 2017 30 September 2018 change vs 31 December 2017 : 1 Euro % : 1 Euro % US Dollar 1.195 -5.5% 1.158 3.6% Canadian Dollar 1.538 -4.8% 1.506 -0.2% Jamaican Dollar 153.989 -6.2% 155.747 -4.1% Mexican Peso 22.741 -6.2% 21
Slide 42: 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 43: EIR
TE = 1 EIR
Davide Campari-Milano — 9M 2018 Earnings Presentation on 6ix