Davide Campari-milano N.v. · MIL:CPR
Davide Campari-milano — H1 2017 Earnings Presentation
64 slides from Davide Campari-milano's earnings presentation, Aug 3, 2017
Slide 1: 2017 Half Year Results Investor Presentation
2015 2017 Half Half year Year Results Results Investor InvestorPresentation Presentation 43August August2015 2017 1 Half year ended 30 June 2017
Slide 2: Table of contents
Table of contents • Results summary • Sales results - overall - by region - by brand • Operating results by region • Consolidated P&L • OWC, Cash flow and debt analysis • New developments • Conclusion and Outlook • Annex 2 Half year ended 30 June 2017
Slide 3: Results for half year ended 30 June 2017
Results for half year ended 30 June 2017 Positive first semester with strong organic gross profit increase H1 2017 Change vs. H1 2016 Key figures € million % on sales Reported Organic FX Perimeter (1) Net sales 844.7 100.0% 13.5% +6.8% +1.8% +5.0% of which: Global priorities +9.2% Regional prioritie
Slide 4: Delivering on strategy: H1 2017 results
Delivering on strategy: H1 2017 results Strong organic net sales growth balanced by re-investments into the business > Organic growth • Solid organic sales growth despite the sustained comparison base (+5.0% in H1 2016) showing an acceleration in the second quarter (Q2 2017 +7.6% vs. Q1 2017: +5.7%)
Slide 5: Positive organic growth in a tough environment
Positive organic growth in a tough environment Organic sales growth highlights by region > Americas H1 2017: +7.6% (Q2:+7.4%) • Positive growth in US (+5.0%) despite a tough comparison base vs. last year (H1 2016: +8.6%), helped by catch -up shipments in Q1, while Q2 saw positive growth of +3.0%. Co
Slide 6: Sales organic performance driven by Global & Regional brands
Sales organic performance driven by Global & Regional brands Organic sales growth highlights Global Priorities Regional Priorities Local Priorities Organic sales growth (1) +9.2% Organic sales growth +11.5% Organic sales growth +0.3% Positive growth driven by the high margin Positive growth from maj
Slide 7: Table of contents
Table of contents • Results summary • Sales results - overall - by region - by brand • Operating results by region • Consolidated P&L • OWC, Cash flow and debt analysis • New developments • Conclusion and Outlook • Annex 7 Half year ended 30 June 2017
Slide 8: Net sales results for Half Year 2017
Net sales results for Half Year 2017 Growth drivers (€ million) +6.8% +1.8% +5.0% Breakdown of change in perimeter €m - Acquisitions (1) 58.9 - Disposals (2) (14.4) 743.9 +50.6 +13.2 +37.0 844.7 - New agency brands 2.4 - Termination of agency brands (3) (10.0) Total perimeter change 37.0 (1) Acquisi
Slide 9: Table of contents
Table of contents • Results summary • Sales results - overall - by region - by brand • Operating results by region • Consolidated P&L • OWC, Cash flow and debt analysis • New developments • Conclusion and Outlook • Annex 9 Half year ended 30 June 2017
Slide 10: Net sales by regions and key markets in H1 2017
Net sales by regions and key markets in H1 2017 US is the largest market with 27.6% of Group’s sales H1 2017 net sales: € 844.7 m Organic growth: +6.8% Argentina 2.2% Canada 3.2% Others 4.0% Americas Brazil 3.1% Southern Europe, Middle East and Africa (44.5% of Group net sales) Jamaica 4.4% (30.6% o
Slide 11: Net sales by region – Americas
Net sales by region – Americas H1 2017 geographic overview €297.7 m +7.6% +2.8% +15.7% €375.5 m By market Organic Forex Perimeter (1) % Group sales USA 5.0% 3.2% 24.9% 27.6% Jamaica 10.7% -1.9% 0.2% 4.4% Brazil 29.0% 26.1% 0.1% 3.1% +22.8 +8.2 +46.8 Argentina 3.1% -5.8% -5.5% 2.2% 40.0% of 44.5% of
Slide 12: Net sales by region - Southern Europe, Middle East & Africa
Net sales by region - Southern Europe, Middle East & Africa (1) €258.7 m +2.8% +0.3% -3.0% €258.8 m H1 2017 geographic overview By market Organic Forex Perimeter (2) % Group sales +7.2 +0.8 -7.8 Italy 1.4% 0.0% -4.3% 23.1% Other markets 7.6% 1.3% 1.2% 7.6% 34.8% of 30.6% of of which GTR -5.8% 0.0% 1
Slide 13: Net sales by region - North, Central & Eastern Europe
Net sales by region - North, Central & Eastern Europe H1 2017 geographic overview €139.5 m +13.8% +1.0% -2.3% €157.0 m By market Organic Forex Perimeter (1) % Group sales Germany -0.3% 0.0% -7.4% 8.3% Russia 111.7% 52.9% 32.4% 2.5% +19.3 +1.5 -3.2 Other markets 20.4% -4.1% 0.2% 7.8% Switz. 7.3% 1.8%
Slide 14: Net sales by region - Asia Pacific
Net sales by region - Asia Pacific €48.0 m +2.8% H1 2017 geographic overview +5.7% +2.6% €53.3 m By market Organic Forex Perimeter (1) % Group sales Australia -2.7% 5.9% 0.5% 4.4% +1.3 +2.7 +1.2 Other markets 18.7% 5.0% 8.4% 1.9% Japan 94.8% 11.9% 23.6% 0.7% 6.5% of Group 6.3% of Group China 22.0% -
Slide 15: Table of contents
Table of contents • Results summary • Sales results - overall - by region - by brand • Operating results by region • Consolidated P&L • OWC, Cash flow and debt analysis • New developments • Conclusion and Outlook • Annex 15 Half year ended 30 June 2017
Slide 16: Net sales by brand - Overview
Net sales by brand - Overview H1 2017 Organic growth by category H1 2017 Organic growth by Global Priority in H1 2017 Global Priorities Regional Priorities Local Priorities Rest of portfolio H1 2017 Net sales: €844.7m Organic growth: +6.8% Regional Priorities Tequila Espolòn Rest of portfolio Loca
Slide 17: Brand sales review: Global priorities
Brand sales review Global priorities Brand sales as % Organic Global priorities of Group’s sales change in H1 2017 in H1 2017 > Continued positive trends in all core markets (including Italyand Germany) with an overall acceleration in Q2 (+24.2%). The standout 14% +22.0% performance of Aperol makes
Slide 18: Brand sales review: Global priorities (cont'd)
Brand sales review Global priorities (cont’d) Brand sales as % Organic Global priorities of Group’s sales change in H1 2017 in H1 2017 > Very substantial increase in sales, both in the US, boosted by successful 7%(1)(2) +12.9% marketing campaigns, as well as Japan, as expected. Other high-potential
Slide 19: Brand sales review: Regional Priorities
Brand sales review Regional Priorities Brand sales as % Organic Regional Priorities of Group’s sales change in H1 2017 H1 2017 Tequila > Sustained strong double digit growth overall, with positive trends in 2% +48.7% core US market (+48.5%) while also positive momentum continues in new markets (part
Slide 20: Brand sales review: Regional Priorities (cont'd)
Brand sales review Regional Priorities (cont’d) Brand sales as % Organic Regional Priorities of Group’s sales change in H1 2017 H1 2017 > Good performance recorded in the half, with Q2 registering +27.0%, Gin 1%(1) +29.9% mainly due to positive growth in Spain, Belgium, the US, the UK and Global Tra
Slide 21: Brand sales review: Local Priorities
Brand sales review Local Priorities Brand sales as % Organic Local Priorities of Group’s sales change in H1 2017 H1 2017 > Weakness in the core Italian market, despite positive performance 4% -3.2% in Q2, favoured by the Easter shift > Stability in core Italian market (around 90% of brands sales) wi
Slide 22: Table of contents
Table of contents • Results summary • Sales results - overall - by region - by brand • Operating results by region • Consolidated P&L • OWC, Cash flow and debt analysis • New developments • Conclusion and Outlook • Annex 22 Half year ended 30 June 2017
Slide 23: Net sales and EBIT analysis by region
Net sales and EBIT (1) analysis by region H1 2016 H1 2017 Net Sales breakdown by region EBIT (1) breakdown by region > Americas represent the Group’s largest region (44.5% of Group’s net sales in H1 2017, from 40.0% in H1 2016) and the largest profit pool for the Group (44.5% of Group’s EBIT (1) in
Slide 24: EBIT by region – Americas
EBIT (1) by region – Americas 17.4% 270bps 300bps 19.3% Reported Organic H1 2017 H1 2016 change change € million % of sales € million % of sales (210)bps (180)bps Net sales 375.5 100.0% 297.7 100.0% 26.1% +7.6% Gross profit 220.4 58.7% 160.8 54.0% 37.1% +13.1% (110)bps A&P (72.7) -19.4% (50.2) -16.8
Slide 25: EBIT by region – SEMEA
EBIT (1) by region – SEMEA 22.4% Reported Organic H1 2017 H1 2016 change change (20)bps (70)bps 17.1% € million % of sales € million % of sales (150)bps (290)bps Net sales 258.8 100.0% 258.7 100.0% 0.0% +2.8% Gross profit 161.4 62.4% 161.1 62.3% 0.2% +2.5% A&P (50.6) -18.2% (47.0) -18.2% -7.7% +6.7%
Slide 26: EBIT by region – NCEE
EBIT (1) by region – NCEE 23.9% 270bps 230bps 70bps 27.8% Reported Organic H1 2017 H1 2016 change change € million % of sales € million % of sales (180)bps Net sales 157.0 100.0% 139.5 100.0% 12.6% +13.8% Gross profit 99.4 63.3% 82.4 59.0% 20.7% +19.0% 320bps A&P (30.6) -19.5% (24.0) -17.2% 27.2% +2
Slide 27: EBIT by region – Asia Pacific
EBIT (1) by region – Asia Pacific 6.8% Reported Organic 140bps 5.6% H1 2017 H1 2016 change change (70)bps € million % of sales € million % of sales (140)bps Net sales 53.3 100.0% 48.0 100.0% 11.0% +2.8% (50)bps Gross profit 24.2 45.5% 21.7 45.2% 11.7% +1.3% A&P (8.8) -16.5% (7.2) -15.0% 21.9% +12.2%
Slide 28: Table of contents
Table of contents • Results summary • Sales results - overall - by region - by brand • Operating results by region • Consolidated P&L • OWC, Cash flow and debt analysis • New developments • Conclusion and Outlook • Annex 28 Half year ended 30 June 2017
Slide 29: H1 2017 Consolidated EBIT
H1 2017 Consolidated EBIT (1) COGS = cost of materials, production and logistics expenses (2) SG&A = selling, general and administrative expenses 29 Half year ended 30 June 2017
Slide 30: H1 2017 Consolidated P&L - Gross Profit
H1 2017 Consolidated P&L - Gross Profit 57.3% 150bps 120bps 59.8% (10)bps H1 2017 H1H12016 2017 H1 2016 Reported Organic Forex Reported Perimeter Organic Forex Perimeter € million % of sales € million € million %%ofofsales sales € million % of sales change change impact change effectchange impact ef
Slide 31: H1 2017 Consolidated P&L - Contribution after A&P
H1 2017 Consolidated P&L - Contribution after A&P 40.0% 0bps 70bps 40.6% H1 2017 H1 2016 Reported Organic Forex Perimeter (10)bps € million % of sales € million Reported % of sales Organic Reported Forex Organic Perimeter Forex Perimeter € million % of sales € million € million % of sales % of € mil
Slide 32: H1 2017 Consolidated P&L - EBIT and EBITDA adjusted
H1 2017 Consolidated P&L - EBIT and EBITDA adjusted 19.7% 60bps 19.3% H1 2017 H1 2016 Reported Organic Forex Perimeter € million % of sales € million % of sales Gross profit 505.4 59.8% 426.0 57.3% +18.6% change +9.6% change +1.6% impact +7.4% effect (70)bps (20)bps Contribution after A&P 342.8 40.6
Slide 33: H1 2017 Consolidated P&L – Group pretax profit
H1 2017 Consolidated P&L – Group pretax profit H1 2017 H1 2016 H1 2017 H1 2016 Change € million % € million % % Operating profit = EBIT 158.4 18.8% 131.9 17.7% 20.1% Net financial income (charges) (23.0) -2.7% (34.0) -4.6% -32.3% Adjustments to financial income (charges) (24.4) -2.9% 4.6 0.6% -98.5%
Slide 34: H1 2017 Consolidated P&L – Group net profit
H1 2017 Consolidated P&L – Group net profit H1 2017 H1 2016 Change € million % € million % % Profit before taxes and non-controlling interests 108.5 12.8% 102.5 13.8% 5.9% Taxes 0.2 0.0% (35.3) -4.7% -100.5% Net profit 108.6 12.9% 67.2 9.0% 61.7% Minority Group netinterests profit - 108.6 - 12.9% -
Slide 35: H1 2017 Consolidated P&L – Tax rate
H1 2017 Consolidated P&L – Tax rate (€ million) H1 2017 H1 2016 Profit before taxes (before minorities) A 108.5 102.5 Operating and financial adjustments (pre-tax) (1) B 29.4 14.5 Pretax profit before operating and financial adjustments C=A+B 137.8 117.0 Total tax (reported) D 0.2 (35.3) Goodwill de
Slide 36: Table of contents
Table of contents • Results summary • Sales results - overall - by region - by brand • Operating results by region • Consolidated P&L • OWC, Cash flow and debt analysis • New developments • Conclusion and Outlook • Annex 36 Half year ended 30 June 2017
Slide 37: Operating Working Capital
Operating Working Capital € million 31 30 June organic December change Forex Perimeter 2017 change 2016 (1) Receivables 248.7 306.3 (57.7) (48.3) (10.2) 0.9 Inventories 549.0 543.5 5.5 38.1 (25.7) (6.9) - Maturing inventory 285.5 293.7 (8.2) 9.1 (17.3) 0.0 - All others 263.5 249.8 13.7 29.0 (8.4) (6
Slide 38: Consolidated cash flow
Consolidated cash flow € million Notes 30 June 2017 30 June 2016 EBITDA 186.8 157.4 Other non-cash items (1) (10.7) 10.4 Changes in other receivables and payables (2) (19.1) 3.5 Income taxes paid (3) (22.2) (19.2) Cash flow from operating activities before changes in OWC 134.8 152.1 Net change in OW
Slide 39: Consolidated cash flow (cont'd)
Consolidated cash flow (cont’d) € million Notes 30 June 2017 30 June 2016 Free cash flow 70.8 203.8 Acquisitions and disposals (6) (37.8) (469.7) Net financial position arising from acquisitions and disposals (7) 23.3 36.4 Purchase and sale of trademarks and distribution rights and payment of put op
Slide 40: Net financial debt
Net financial debt € million of which perimeter, net 30 June 2017 31 December 2016 Change Short-term cash/(debt) 226.4 241.4 (15.0) 226.4 - Cash and cash equivalents 324.8 354.1 (29.3) 324.8 - Short-term debt (98.4) (112.7) 14.3 (98.4) Medium to long-term net cash/(debt) (1,259.7) (1,243.7) (16.0) (
Slide 41: Long term outstanding gross debt as of 30 June 2017
Long term outstanding gross debt as of 30 June 2017 > Long-term gross debt in line with December 31st, 2016 at € 1,296.6 million as of June 30th, 2017 > Following the liability management transaction in Q2, the overall long term gross debt average coupon declined from 2.76% at December 31st, 2016 to
Slide 42: Table of contents
Table of contents • Results summary • Sales results - overall - by region - by brand • Operating results by region • Consolidated P&L • OWC, Cash flow and debt analysis • New developments • Conclusion and Outlook • Annex 42 Half year ended 30 June 2017
Slide 43: New marketing Initiatives: Aperol
New marketing Initiatives Aperol Aperol Spritz – Perfect Serve UK Global Travel Retail – Aperol Piazza The Aperol Spritz Piazza is a new focus from Global Travel Retail which aims to engage travelers with a refreshing Aperol Spritz in a mock- up of the Italian piazza. Point of sale and visual mercha
Slide 44: New marketing Initiatives: Campari
New marketing Initiatives Campari CAMPARI: Negroni Week Now in its fifth year, the weeklong international charity initiative will once again bring bars, restaurants and vendors from around the world together over the classic Negroni cocktail – an iconic mix of Campari, gin, and sweet red vermouth –
Slide 45: New marketing Initiatives: Sagatiba and Cinzano
New marketing Initiatives Sagatiba – new positioning & Cinzano Sparkling Wine: Pro-Spritz redesign Sagatiba cachaça as gone through a complete redesign, enhancing its As part of the renewed packaging and premium credentials and looking back to the colourful and artisanal visual identity, in the seco
Slide 46: Gruppo Campari brands win big in spirits competitions – June 2017
Gruppo Campari brands win big in spirits brands competitions – June 2017 San Francisco Wolrd Spirits Competition & Ultimate Spirits Challenge Judges at the 2017 San Francisco World Spirits San Francisco World Spirits Ultimate Spirits Challenge Competition (SFWSC) and the Ultimate Spirits Competition
Slide 47: Grand Marnier update
Grand Marnier update > Grand Marnier acquisition contribution in H1 2017: • Net sales: € 58.9 million (1) • EBIT adjusted: € 12.4 million • EBITDA adjusted: € 14.2 million > Contribution in the first twelve months of consolidation (July 1 st, 2016 – June 30th, 2017): • Net sales: € 140.4 million (2)
Slide 48: Table of contents
Table of contents • Results summary • Sales results - overall - by region - by brand • Operating results by region • Consolidated P&L • OWC, Cash flow and debt analysis • New developments • Conclusion and Outlook • Annex 48 Half year ended 30 June 2017
Slide 49: Conclusion and Outlook
Conclusion and Outlook A positive first half 2017, while the full year outlook remains fairly balanced and unchanged > Macroeconomic environments in some emerging markets remain difficult and uncertain, whilst political uncertainty persisting in some regions might continue to fuel volatility of majo
Slide 50: We are off to join these familiar faces for an Aperol Spritz
We are off to join these familiar faces for an Aperol Spritz this summer….. Fancy joining….? 50 Half year ended 30 June 2017
Slide 51: Table of contents
Table of contents • Results summary • Sales results - overall - by region - by brand • Operating results by region • Consolidated P&L • OWC, Cash flow and debt analysis • New developments • Conclusion and Outlook • Annex 51 Half year ended 30 June 2017
Slide 52: Annex index
Annex - 1 Net sales by region and key market Annex - 2 H1 2017 consolidated income statement Annex - 3 Q2 2017 consolidated P&L Annex – 4 Consolidated balance sheet at 30 June 2017 – Invested capital and financing sources Annex – 5 Consolidated balance sheet at 30 June 2017 - Asset and liabilities A
Slide 53: Net sales by region and by key market
Annex - 1 Net sales by region and by key market Consolidated Net sales by region H1 2017 H1 2016 Change of which: €/ml % €/ml % % total organic perimeter forex Americas 375.5 44.5% 297.7 40.0% 26.1% 7.6% 15.7% 2.8% Southern Europe, Middle East & Africa 258.8 30.6% 258.7 34.8% 0.0% 2.8% -3.0% 0.3% No
Slide 54: Net sales by region and by key market (cont'd)
Annex - 1 Net sales by region and by key market (cont’d) Southern Europe, Middle East & Africa by market v H1 2017 H1 2016 Change a of which: r €/ml % €/ml % %totale organic perimeter forex Italy 194.8 75.3% 200.6 77.5% -2.9% 1.4% -4.3% 0.0% Other countries 64.0 24.7% 58.1 22.5% 10.1% 7.6% 1.2% 1.3%
Slide 55: H1 2017 Consolidated income statement
Annex - 2 H1 2017 Consolidated income statement CONSOLIDATED INCOME STATEMENT H1 2017 H1 2016 H1 2017 H1 2016 Change CONSOLIDATED INCOME STATEMENT € million % € million % % Net sales (1) 844.7 100.0% 743.9 100.0% 13.5% (2) COGS (339.2) -40.2% (317.9) -42.7% 6.7% Q4 2016 Q4 2015 Change Gross profit 5
Slide 56: Q2 2017 Consolidated P&L
Annex - 3 Q2 2017 Consolidated P&L CONSOLIDATED INCOME STATEMENT Q4 2016 Q4 2015 Change € m % € m % % (1) 546.1 100.0% 512.1 100.0% 6.6% Net sales COGS (2) (239.1) -43.8% (226.4) -44.2% 5.6% Gross profit 307.0 56.2% 285.7 55.8% 7.4% Advertising and promotion (99.9) -18.3% (94.8) -18.5% 5.4% Contribu
Slide 57: Consolidated balance sheet
Annex - 4 Consolidated balance sheet Invested capital and financing sources € million 30 June 2017 31 December 2016 (1) Change Inventories 549.0 543.5 5.5 Trade receivables 248.7 306.3 (57.7) Payables to suppliers (231.6) (262.5) 30.8 Operating working capital 566.0 587.4 (21.4) Tax credits 50.5 19.
Slide 58: Consolidated balance sheet (1 of 2)
Annex - 5 Consolidated balance sheet (1 of 2) Assets (€ million) 30 June 2017 31 December 2016 (1) Change ASSETS Non-current assets Net tangible fixed assets 448.7 509.6 (60.9) Biological assets 0.3 7.8 (7.5) Investment property 120.7 122.6 (1.9) Goodwill and trademarks 2,378.1 2,490.9 (112.9) Intan
Slide 59: Consolidated balance sheet (2 of 2)
Annex - 5 Consolidated balance sheet (2 of 2) Liabilities (€ million) 30 June 2017 31 December 2016 (1) Change Shareholders' equity - Share capital 58.1 58.1 (0.0) - Reserves 1,765.2 1,841.9 (76.7) Group's shareholders'equity 1,823.3 1,900.0 (76.7) Minority interests (0.0) (0.0) 0.0 Total shareholde
Slide 60: H1 2017 consolidated cash flow (1 of 2)
Annex - 6 H1 2017 consolidated cash flow (1 of 2) € million 30 June 2017 31 Dec 2016 Cash flow generated by operating activities EBIT 158.4 131.9 Depreciation 28.4 25.5 Gains on sale of fixed assets (0.7) (0.7) Write-off of tangible fixed assets 0.1 0.2 Funds provisions 2.6 1.8 Use of funds goodwill
Slide 61: H1 2017 consolidated cash flow (2 of 2)
Annex - 6 H1 2017 consolidated cash flow (2 of 2) € million 30 June 2017 31 Dec 2016 Cash flow issue Eurobond generated (used) by investing activities (64.9) 0.0 (390.7) 0.0 Liability management effect (23.2) 0.0 Repayment of private placement Campari America (0.0) (90.1) Repayment of other medium-/
Slide 62: Exchange rates effects
Annex - 7 Exchange rates effects Average exchange rate Period end exchange rate 1 Jan - 30 June change vs 30 change vs 31 change vs 2016 30 June 2017 2017 June 2016 December 2016 : 1 Euro % : 1 Euro % % US Dollar 1,082 3.1% 1,141 -2.7% -7.6% Canadian Dollar 1,444 2.9% 1,479 -2.7% -4.0% Jamaican Doll
Slide 63: 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 64: WWW.CAMPARIGROUP.COM
For additional information: Investor Relations - Gruppo Campari Phone: +39 02 6225 330; Fax: +39 02 6225 479 Website: http://www.camparigroup.com/en/investors E-mail: investor.relations@campari.com WWW.CAMPARIGROUP.COM 64 Half year ended 30 June 2017
Davide Campari-Milano — H1 2017 Earnings Presentation on 6ix