Davide Campari-Milano N.V. · MIL:CPR
Davide Campari-Milano — Merger or Acquisition (September 2012)
36 slides from Davide Campari-Milano's merger presentation, Sep 3, 2012
Slide 1: Acquisition of controlling stake in Lascelles deMercado
Acquisition of controlling stake in Lascelles deMercado 3 September 2012
Slide 2: Agenda
Strategic Rationale Transaction Structure Acquired Business Spirits Merchandise Financials Key Financials and Ratios Historic Financials Conclusion
Slide 3: Campari acquires "The Pearl of the Caribbean"
Campari acquires “The Pearl of the Caribbean” Acquisition of controlling stake in LdM > Gruppo Campari has reached an agreement with CL Financial Limited (‘CLF’) to acquire its 81.4% ownership in Lascelles deMercado & Co. Limited (‘LdM’), a publicly traded holding company, based in Kingston, Jamaica
Slide 4: Strategic rationale
Campari acquires “The Pearl of the Caribbean” Strategic rationale > Perfect fit with our acquisition framework • Build our critical mass further in key North American markets, including the US, Canada, Mexico, the Caribbean • Provide a leading market position in Jamaica, major tourist destination in
Slide 5: Campari expands into a new, important growth category
Campari expands into a new, important growth category Global premium brands (1) categories by volume 2011 and volume growth rate (CAGR 2006-2011) CAGR +6.9% +2.1% +2.8% -0.2% +2.6% -1.5% +3.0% +0.3% +5.1% +1.1% -0.1% +0.9% 140 120 100 80 m 9 Litre Cases 60 Gruppo Campari brands: Category presence 40
Slide 6: Agenda
Strategic Rationale Transaction Structure Acquired Business Spirits Merchandise Financials Key Financials and Ratios Historic Financials Conclusion
Slide 7: Transaction structure
Transaction structure LdM’s ownership and Acquired Business transaction perimeter for Campari > Gruppo Campari has reached an agreement with CLF to acquire its 81.4% ownership in LdM > Pursuant to the agreement, at the time of closing, CL Financial Public Shareholders the Acquired Business will cons
Slide 8: Key transaction parameters
Key transaction parameters Price and acquisition multiple > Total purchase price for 100% of shares in LdM is US$ 414,754,200 (1) (or approximately € 330 million at current exchange rate) • Acquisition on cash and debt free basis > Historic multiple of 15.0x last twelve months June 2012 EBITDA (2) ,
Slide 9: Agenda
Strategic Rationale Transaction Structure Acquired Business Spirits Merchandise Financials Key Financials and Ratios Historic Financials Conclusion
Slide 10: Agenda
Strategic Rationale Transaction Structure Acquired Business Spirits Merchandise Financials Key Financials and Ratios Historic Financials Conclusion
Slide 11: Overview of the large and attractive rum category
Overview of the large and attractive rum category > Global rum volumes exceeded 137 million 9 litre cases in 2010, with more than ten straight years of positive volume growth (source: IWSR) > Category growth driven by premiumisation, innovation and broad international appeal • Recruiting new consume
Slide 12: Unrivaled portfolio of world-class premium rums
Unrivaled portfolio of world-class premium rums Super premium designed for Sipping Special / White designed for mixing Limited Edition 30 Year Old Appleton Special • Hand-crafted by Master Blender Joy Spence • Medium-bodied golden rum ideal for mixing • Created from individual rum marques over 30 ye
Slide 13: Portfolio of local champions
Portfolio of local champions Smooth and flavourful Rums Popular & other alcoholic drinks Captain Morgan Magnum Tonic Wine • Owns brand rights for Captain Morgan in Jamaica • First sold in 1999, Magnum has grown tremendously and is • A favourite Jamaican treasure one of LdM’s top performing brands •
Slide 14: Appleton Estate - multiple global awards winner
Appleton Estate - multiple global awards winner 2011 World Spirits Award – 2010 World Spirits Award – 2009 Monde Selection – Appleton Estate Best in category and Gold Medal Gran Gold Medal 21 Year Old “Spirit of the year” Award Appleton Estate 2012 World Spirits Award – 2011 World Spirits Award – 20
Slide 15: Portfolio price positioning in U.S. market
Portfolio price positioning in U.S. market (1) Competitors Acquired Business Campari portfolio Prestige Ron Zacapa Mount Gay Appleton Estate Appleton Estate >US$45 Glen Grant Russell’s XO 1703 21 Year Old 30 Year Old 16 year old Reserve Premium US$30-45 Mount Gay Ron Zacapa Appleton Estate Cabo Wabo
Slide 16: Analysis of LdM spirits volume - FYE 30 Sept 11
Analysis of LdM spirits volume - FYE 30 Sept 11 > Total volumes in FY 2011: 3.5 million 9 litre cases Total sales by brand (volume) Domestic sales by brand (volume) Appleton Special Domestic Other Brands 16.4% 49.9% W&N White 32.0% Overproof 30.6% Other Local 28.1% 31.8% 28.4% Appleton Estate Coruba
Slide 17: A market leader in Jamaica
A market leader in Jamaica > LdM is the leading player in the Jamaican market • Best in class route-to-market for rest of Campari brand portfolio > Jamaica is an attractive and dynamic market • Total retail value of rum has exhibited growth of 4.1% in Jamaica over the last 5 years • Key Caribbean to
Slide 18: Agriculture and distilling
Agriculture and distilling > Upstream supply chain operations including agriculture facilities spread across Jamaica > LdM grows and harvests sugar cane on its own farms, from which it extracts sugar and molasses • Cane fields: 4,251 hectares owned plus 2,147 hectares leased • 9 farms • 1 state-of-t
Slide 19: Ageing and bottling
Ageing and bottling > Established complex of production facilities supporting the blending, storage, ageing and bottling of rum • 18 warehouses (storage of raw materials, ageing and blending of rums) • 1 blending and bottling facility > Plenty of capacity to support future expansion > Versatility of
Slide 20: Complete and deep inventory supporting expansion
Complete and deep inventory supporting expansion Analysis of inventory by ageing period 20+ Y 10-20 Y Current year 1% 9% 9% 5-10 Y 27% 1-5 Y 54% Volume (’000s laa’s (1)) Notes: (1) laa = liter of absolute alcohol LdM acquisition - 15
Slide 21: Agenda
Strategic Rationale Transaction Structure Acquired Business Spirits Merchandise Financials Key Financials and Ratios Historic Financials Conclusion
Slide 22: Merchandise division
Merchandise division > Total sales of US$ 61.2 million in fiscal FY 2011 Sales by Source year ending 30 September 2011 Other 3.4% 8.4% > LdM distributes a wide range of third 26.1% party branded consumer products from well-known consumer goods companies (personal care) and 18.4% pharmaceuticals and
Slide 23: Agenda
Strategic Rationale Transaction Structure Acquired Business Spirits Merchandise Financials Key Financials and Ratios Historic Financials Conclusion
Slide 24: Agenda
Strategic Rationale Transaction Structure Acquired Business Spirits Merchandise Financials Key Financials and Ratios Historic Financials Conclusion
Slide 25: EBITDA reconciliation - LTM June 2012
EBITDA reconciliation - LTM 30 June 2012 (1) (US$ million) Acquired Business Acquired Business Profit Before Tax Acquired Business EBITDA Reported Profit Before Tax Pro Forma for Divested Assets Pro Forma for Divested Assets 4.0 (4.7) 5.3 27.7 23.9 (2.2) 1.4 21.0 (2) (4) (3) EBITDA Financial Charge
Slide 26: Balance sheet reconciliation – June 2012
Balance sheet reconciliation – 30 June 2012 Total Assets (1) Key Items 237.6 Pro Forma (US$m) 480.7 Reported LdM Divested Acquired Group Assets Adjustments (4) Business 420.4 (88.4) Fixed assets 48.6 (3.3) – 45.2 3.4 (92.3) Goodwill 1.2 (1.3) 237.6 237.6 Investments 28.4 (23.2) (5.0) 0.2 Inventories
Slide 27: Key financial ratios
Key financial ratios Acquisition multiple > Total purchase price for 100% of shares is US$ 414,754,200 (1) (or approximately € 330 million at current exchange rate) • Acquisition on cash and debt free basis > Historic multiple of 15.0x last twelve months June 2012 EBITDA (2), excluding any potential
Slide 28: Acquisition financing
Acquisition financing > Acquisition will be fully financed via credit facilities underwritten by three major banks: Banc of America Securities, Banca Intesa, Deutsche Bank > Credit facilities are priced at an average spread of +265bps over Euribor > Gruppo Campari will evaluate opportunities to term
Slide 29: Agenda
Strategic Rationale Transaction Structure Acquired Business Spirits Merchandise Financials Key Financials and Ratios Historic Financials Conclusion
Slide 30: EBITDA reconciliation - FYE September 2011
EBITDA reconciliation - FYE 30 September 2011 (1) (US$ million) Acquired Business Acquired Business Profit Before Tax Acquired Business EBITDA Reported Profit Before Tax Pro Forma for Divested Assets Pro Forma for Divested Assets 6.4 (4.2) 24.2 4.9 (2.1) 1.1 18.2 18.2 (2) EBITDA Financial Charge Mer
Slide 31: Acquired Business P&L - FYE September 2011
Acquired Business P&L - FYE 30 September 2011 (1) LdM segments reclassified as per Campari Financial Reporting format Pro Forma Acquired Business % margin (4) (US$m) Spirits Merchandise Corporate Costs US$ million on net sales (2) Net sales 204.2 61.2 - 265.4 100.0% Cost of goods sold (126.4) (45.4)
Slide 32: Acquired Business P&L - Campari segment reporting
Acquired Business P&L - FYE 30 September 2011 (1) Reclassified to Campari Segment Reporting (2) Pro Forma Spirits & Wine Other (3) Acquired Business % margin % margin % margin US$m on net sales US$m on net sales US$m on net sales Net sales 178.1 100.0% 87.3 100.0% 265.4 100.0% Cost of goods sold (10
Slide 33: Acquired Business sales segment - FYE Sep 11
Acquired Business sales segment - FYE 30 Sep 11 Reclassified to Campari segment reporting (1) Appleton Estate 19.6% (3) Other Brands (2) Other 37.9% 32.0% Analysis US$ 87.3m Spirits & Wine US$ 178.1m Appleton Special by segment 32.9% 67.1% 12.4% Coruba Rum W&N White 7.7% Overproof Rum 30.0% 22.3% US
Slide 34: Agenda
Strategic Rationale Transaction Structure Acquired Business Spirits Merchandise Financials Key Financials and Ratios Historic Financials Conclusion
Slide 35: Conclusion
Conclusion > Through the acquisition of Lascelles deMercado, the award winning distiller of world class premium Jamaican rums, Gruppo Campari: • Enters the new, attractive and growing rum category • Adds further critical mass in key North American markets, acquires a leading market position in Jamai
Slide 36: For additional information: Investor Relations
For additional information: Investor Relations - Gruppo Campari Phone: +39 02 6225 330; Fax: +39 02 6225 479 E-mail: investor.relations@campari.com www.camparigroup.com
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