Davide Campari-milano N.v. · MIL:CPR
Davide Campari-milano — FY2021 Earnings Presentation
60 slides from Davide Campari-milano's earnings presentation, Feb 23, 2022
Slide 1: Results Presentation Full year ended 31 December 2021
Results Presentation Full year ended 31 December 2021 February 23, 2022
Slide 2: Table of contents
Table of contents Results Summary Sales Results ‒ By region ‒ By brand Consolidated P&L Cash Flow & Net Financial Debt Sustainability Update Conclusion & Outlook Annex 2
Slide 3: Strong business performance with double-digit growth across key financial indicators
Strong business performance with double-digit growth across key financial indicators vs both full years 2020 and 2019 +25.6% > Double-digit organic sales growth in FY 2021 driven by Organic Sales FY 2021 FY 2021 Org Q4 2021 Org continued strong and healthy brand momentum with overall (+22.6% reporte
Slide 4: Table of contents
Table of contents Results Summary Sales Results ‒ By region ‒ By brand Consolidated P&L Cash Flow & Net Financial Debt Sustainability Update Conclusion & Outlook Annex 4
Slide 5: Strong momentum across all regions and brand clusters
Strong momentum across all regions and brand clusters, continuing in Q4 despite the Covid fourth-wave disruption at year end affecting consumption and logistics FY 2021 Net sales Organic Performance and Breakdown By Region Organic sales growth vs. FY 2020 Organic sales growth vs. FY 2019 By Brand 23
Slide 6: Consumer comfort with home mixology driving brand momentum
Consumer comfort with home mixology driving solid brand momentum visible by 2-year stack (1) Off-premise sell-out value growth vs. overall shipments value organic growth USA ITALY Sellout FY 2021 vs. FY 2020 -4.1% Sellout FY 2021 vs. FY 2020 15.0% Sellout FY 2021 vs. FY 2019 28.2% Sellout FY 2021 vs
Slide 7: Americas +23.0% thanks to sustained home consumption
Americas (1) +23.0% thanks to sustained home consumption and healthy brand momentum in the on-premise Organic growth by key market > USA +18.9% • Solid growth across core brands with a positive performance in Q4 (+6.8% vs Q4 2020, +20.2% vs Q4 2019), benefitting from the on-premise reopening and sus
Slide 8: SEMEA +36.7% driven by on-premise recovery in Italy
SEMEA (1) +36.7% largely driven by the on-premise recovery in core Italy Organic growth by key market > ITALY +36.4% • Solid result thanks to continued ‘revenge conviviality’ in the on-premise and overall increased frequency of consumption across channels. Core aperitifs Aperol (+46.7% vs FY2020, +2
Slide 9: NCEE +18.6% continued positive momentum
NCEE (1) +18.6% continued positive momentum across markets and channels Organic growth by key market > GERMANY +10.7% • Very positive business performance against a tough comparison base (+8.6% in FY 2020) mainly driven by Aperol (+16.0%) and the launch of Aperol Spritz ready-to-enjoy. Campari grew
Slide 10: APAC +22.9% strong growth driven by enhanced investments
APAC (1) +22.9% strong growth driven by enhanced investments across all levers (2) Organic growth by key market > AUSTRALIA -0.1% • Stable performance against a very tough comparison base (FY 2020:+20.2%), driven by a strong start to the year. Q4 was down by -12.5% largely due to a tough comparison
Slide 11: Table of contents
Table of contents Results Summary Sales Results ‒ By region ‒ By brand Consolidated P&L Cash Flow & Net Financial Debt Sustainability Update Conclusion & Outlook Annex 11
Slide 12: King dethroned: Long Live the Negroni!
King dethroned: Long Live the Negroni! After 8 years as the runner-up, the Negroni finally takes top spot in the Drinks International 2022 Best Selling Cocktails while the Aperol Spritz takes #6, up from #11 last year With two proprietary cocktails in the top 10, Campari Group provides premium spiri
Slide 13: Key brands making waves: Drinks International Brands Report 2022
Key brands making waves: Drinks International Brands Report 2022 Bisquit&Dubouché is the 8th most trending Cognac Wild Turkey takes #6 in top trending Bourbon Espolόn takes #7 in best selling Tequila Montelobos takes #2 for the best selling Mezcal brands & #5 for most trending Mezcal Appleton Estate
Slide 14: Aperol (20% of Group net sales): +32.8%
Aperol (20% of Group net sales): +32.8% (1) > Strong organic performance as the brand renewed consumer recruitment in the on-premise channel alongside sustained home consumption, driving Top 5 markets by value increased penetration. Core markets such as Italy, the US, France, the UK, Russia, Switzer
Slide 15: Aperol Spritz: Back to recruiting mode during winter season
Aperol Spritz: Back to recruiting mode during the winter season & accelerating food-pairing strategy Aperol Spritzmas Xmas Jumper Spain Merry Spritzmas Digital Calendar with prizes Aperol Spritz Ski Chalets at the Oast House in Manchester UK Winter Wonderland Activation in London Germany Xmas giftin
Slide 16: Campari (10% of Group net sales): +30.1%
Campari (10% of Group net sales): +30.1% (1) Top 5 markets by > Campari registered solid growth across all major markets, benefiting from positive home mixology trends as well as positive on-premise value momentum in the brand’s core markets. Main growth drivers are the strong appreciation for the l
Slide 17: Camparino: Debut at #27 in World's 50 Best Bars
Camparino: Debut at #27 in World's 50 Best Bars Camparino in Galleria has made its first appearance in The World’s 50 Best Bars, the most renowned ranking in the international drink industry. Camparino in Galleria, which was included in the prestigious ranking for the first time, was awarded 27th po
Slide 18: Wild Turkey (7% of Group net sales): +10.9%
Wild Turkey (7% of Group net sales): +10.9% (1) Top 5 markets by value > Positive growth overall for Wild Turkey bourbon driven by the core US market and high-end offerings across markets. This growth was partly mitigated > US by a decline in core Australia and Japan, due to logistic disruption in Q
Slide 19: Fred Minnick's American Whisky Rankings 2021
Wall Street Journal’s Fred Minnick’s American Whisky Rankings 2021 Russell’s Reserve 13-year old - #1 American Whisky Wild Turkey Masters Keep - #11 American Whisky 19
Slide 20: Grand Marnier (7% of Group net sales): +43.2%
Grand Marnier (7% of Group net sales): +43.2% (1) Top 5 markets by value > Strong growth driven by the core US market (+44.6% vs FY2020, +24.5% vs FY2019), mainly driven by the home-made cocktail consumption > US trends, as well as the success of the Grand Margarita in both channels, further helped
Slide 21: SKYY (6% of Group net sales): +8.2%
SKYY (6% of Group net sales): +8.2% (1) Top 5 markets by value > Overall positive performance driven by international markets, in particular South Africa, up triple digits also helped by easy comparison base, Argentina > US (particularly SKYY Infusions), China, Canada and Mexico > Argentina > In the
Slide 22: Jamaican rums (6% of Group net sales): +22.7%
Jamaican rums (6% of Group net sales): +22.7%(1) Top 5 markets > Appleton Estate was positive overall (+31.0%) driven by the successful relaunch and favourable category trends in the premium rum, particularly in the by value US, the UK, Jamaica and Canada. The Appleton Estate range continues to prem
Slide 23: Espolòn (5% of Group net sales): +37.5%
Espolòn (5% of Group net sales): +37.5% (1) > Continued very positive performance driven by the core US market (+38.0%) as the brand continues to benefit from the consumer’s love of the brand positioning and quality of liquids, coupled with strong category momentum. Espolòn is now the #6 most sold 1
Slide 24: Regional Priorities sales review (cont.)
Regional Priorities sales review (cont.) Organic sales growth vs. FY 2020 Organic sales growth vs. FY 2019 35.1% > Bulldog: positive brand momentum with strong sell-out in core Germany Bulldog 18.7% and growth in Spain, Italy and Argentina > The GlenGrant: overall positive performance against an eas
Slide 25: Local Priorities and other brands sales review
Local Priorities and other brands sales review Organic sales growth vs. FY 2020 Organic sales growth vs. FY 2019 43.8% > Campari Soda: positive performance across channels with acceleration in Q4 21.3% following a successful brand relaunch in core Italy > Crodino: overall positive performance althou
Slide 26: Regional priorities
Regional priorities Riccadonna: promoting awareness in key Bulldog: Begin Bold global campaign & Forty Creek: Top honours at 2022 French cities & innovations G&T serve awareness in Italy via Bold Canadian Whisky Awards Nights in Milan & Rome 14 Accolades: Award of Excellence for Innovation: Forty Cr
Slide 27: Table of contents
Table of contents Results Summary Sales Results ‒ By region ‒ By brand Consolidated P&L Cash Flow & Net Financial Debt Sustainability Update Conclusion & Outlook Annex 27
Slide 28: EBIT margin expansion of +240 bps organically
EBIT margin expansion of +240 bps organically thanks to positive sales mix and operating leverage Reported Organic Change Organic Change Change € million FY2021 FY2020 vs FY2020 vs FY2020 vs FY2019 vs Q4 2020 vs Q4 2019 Net Sales 2,172.7 1,772.0 22.6% 25.6% 20.5% 20.9% 12.0% Gross profit 1,296.8 1,0
Slide 29: Double-digit EBIT organic growth across regions
Double-digit EBIT (1) organic growth across regions Margin growth drivers Of which: FY 2021 EBIT REGIONAL SPLIT (%) vs. FY2020 Net sales EBIT margin Gross Change vs. EBIT organic SG&A organic organic margin A&P organic FY2020 growth organic growth progression organic progression progression progress
Slide 30: Profit before tax
Profit before tax FY 2021 FY 2020 Reported % of % of €million €million change % sales sales Financial income/(charge) breakdown: EBIT adjusted 435.2 20.0% 321.9 18.2% 35.2% Operating adjustments (34.3) (90.1) - FY 2021 FY 2020 Operating profit = EBIT 400.8 18.4% 231.8 13.1% 72.9% Total financial exp
Slide 31: Group net profit adjusted
Group net profit adjusted FY 2021 FY 2020 Change FY 2021 vs FY 2020 €million Reported Adjustments Adjusted Reported Adjustments Adjusted Reported Adjusted Profit before tax 388.6 (26.7) 415.3 209.6 (69.3) 278.9 85.4% 48.9% Total taxation(1) (105.6) 3.6 (109.2) (22.7) 55.1 (77.9) 364.4% 40.3% Net Pro
Slide 32: Table of contents
Table of contents Results Summary Sales Results ‒ By region ‒ By brand Consolidated P&L Cash Flow & Net Financial Debt Sustainability Update Conclusion & Outlook Annex 32
Slide 33: Record recurring FCF generation and cash conversion
Record recurring FCF generation and cash conversion FY 2021 FY 2020 Δ FY 2021 vs FY 2020 Δ FY 2021 vs FY 2020 Total Recurring Total Recurring Total Recurring € million € million € million € million € million % € million % EBITDA 480.6 309.8 170.8 55.1% EBITDA adjusted 514.9 399.9 115.0 28.8% Taxes p
Slide 34: CAPEX
CAPEX FY 2020 FY 2021 FY 2022 guidance actual actual € million € million € million Total capex 79.8 135.8 c. 170 of which: Maintenance capex 64.6 81.9 c. 60% Extraordinary capex (mainly incl. bottling expansion, ESG projects, new offices, brand houses) 15.1 53.8 c. 40% > Total capex investment was e
Slide 35: Significant improvement in Operating Working Capital
Significant improvement in Operating Working Capital(1) -5.0 2.5 25.1 € million 618.9 641.5 (2) OWC at 31/12/2020 Organic Perimeter Forex OWC at 31/12/2021 % on net sales 34.9% 29.5% > OWC increase of €22.6 million as of 31 December 2021 vs. 31 December 2020 (2) driven by Forex and perimeter effects
Slide 36: Strong free cash flow drove significant de-leverage
Strong free cash flow drove significant de-leverage Net Debt/ EBITDA (x) 2.8x 332.3 (61.6) 1.6x (2.8) 5.0 € million (1,103.8) (830.9) Total: €272.8 million Net debt at 31/12/2020 FCF Dividend Net (purchase)/sale of own Others Net debt at 31/12/2021 shares > Net financial debt at €830.9 million as of
Slide 37: Table of contents
Table of contents Results Summary Sales Results ‒ By region ‒ By brand Consolidated P&L Cash Flow & Net Financial Debt Sustainability Update Conclusion & Outlook Annex 37
Slide 38: Our People: the most important asset to invest in
Our People: the most important asset to invest in Signature mix: Seizing Opportunities, Inspiring Ownership, Growing Every Day Our commitment and focus > Diversity, Equity and Inclusion (DEI): fostering DEI in the workplace with multi-functional governance at all organizational levels. Monitoring th
Slide 39: Responsible Practices: communication, serving and sourcing
Responsible Practices: communication, serving and sourcing Further education and involvement on responsible consumption Our commitment and focus The Campari Group’s Global Strategy on Responsible Drinking has been formalized in 2020, identifying internal and external initiatives to be implemented wi
Slide 40: The Environment
The Environment Responsible use of resources and reduction of the environmental impact The Group highly promotes the responsible use of resources and reduction of the environmental impact of its production activities. Over the years, the Group has managed to steadily improve key indicators in terms
Slide 41: Community Involvement
Community Involvement Exporting best practices across key markets > In 2021, the Group continued to contribute to the fight against the pandemic by supporting business partners, consumers and hospitals in its main markets (e.g. MultiMedica Marelli corporate vaccination centre in SSG-Milan, ‘Shaken N
Slide 42: Conclusion & Outlook
Table of contents Results Summary Sales Results ‒ By region ‒ By brand Consolidated P&L Conclusion Cash Flow & Net Financial Debt & Outlook Sustainability Update Conclusion and Outlook Annex 42
Slide 43: Looking forward, strong confidence in continuing business momentum
Looking forward, whilst facing cost headwinds in the short term, strong confidence in the continuing sustained business momentum > 2021 was a very successful year thanks to healthy brand momentum benefitting from revenge conviviality and home mixology, overall increased consumption and penetration a
Slide 44: Table of contents
Table of contents Results Summary Sales Results ‒ By region ‒ By brand Consolidated P&L Cash Flow & Net Financial Debt Sustainability Update Conclusion & Outlook Annex 44
Slide 45: Net sales by region & key market (1/2)
Net sales by region & key market (1/2) FY 2021 Change of which: Q4 2021 FY 2021 vs FY 2019 €m % % organic perimeter forex organic Organic Americas 927.9 42.7% 19.9% 23.0% 0.0% -3.1% 10.6% 19.9% Southern Europe, Middle East & Africa 638.8 29.4% 37.8% 36.7% 1.0% 0.1% 51.4% 15.5% North, Central & Easte
Slide 46: Net sales by region & key market (2/2)
Net sales by region & key market (2/2) Southern Europe, Middle East & Africa by market FY 2021 Change of which: Q4 2021 FY 2021 vs FY 2019 €m % % organic perimeter forex organic Organic Italy 414.6 64.9% 36.5% 36.4% 0.1% 0.0% 60.0% 12.8% France 128.5 20.1% 25.3% 22.1% 3.2% 0.0% 22.5% 94.6% Other cou
Slide 47: Net sales by brand cluster
Net sales by brand cluster FY 2021 Change % of which: Q4 2021 FY 2021 vs FY 2019 €m % total organic perimeter forex organic Organic Global Priorities 1,226.1 56.4% 24.4% 26.2% 0.0% -1.8% 22.0% 20.9% Regional Priorities 419.1 19.3% 29.2% 29.8% 0.5% -1.2% 22.2% 31.7% Local Priorities 266.9 12.3% 24.7%
Slide 48: EBIT adjusted by region
EBIT adjusted by region Americas North, Central & Eastern Europe Reported Organic Reported Organic FY 2021 FY 2020 change change Perimeter FX FY 2021 FY 2020 change change Perimeter FX € million % of sales € million % of sales % % % % € million % of sales € million % of sales % % % % Net sales 927.9
Slide 49: FY 2021 Consolidated P&L
FY 2021 Consolidated P&L Change vs FY 2020 Change vs FY 2019 Reported Organic margin Organic Perimeter Forex FY 2021 FY 2020 Organic change change accretion/(dilution) change effect impact € million % of sales € million % of sales % (bps) (3) % % % % Net Sales 2,172.7 100.0 1,772.0 100.0 22.6% 25.6%
Slide 50: Q4 2021 Consolidated income statement
Q4 2021 Consolidated income statement Reported Organic Perimeter Forex Q4 2021 Q4 2020 change change effect impact % of % of € million € million % % % % sales sales Net Sales 597.0 100.0% 489.6 100.0% 21.9% 20.9% -3.0% 4.0% COGS (1) (261.3) -43.8% (225.2) -46.0% 16.0% 18.1% -5.4% 3.4% Gross Profit 3
Slide 51: FY 2021 EPS adjusted: basic and diluted
FY 2021 EPS adjusted: basic and diluted FY 2021 FY 2020 Group net profit adjusted € million 307.9 202.1 Weighted average of ordinary share outstanding number 1,126,588,835 1,133,816,568 Basic earnings per share adjusted € 0.27 0.18 Group net profit adjusted net of dilution € million 306.1 201.1 Weig
Slide 52: Reclassified balance sheet
Reclassified balance sheet Invested capital and resources € million 31 December 2021 31 December 2020 Change fixed assets 3,090.6 2,918.0 172.6 other non-current assets and (liabilities) (365.3) (344.2) (21.1) operating working capital 641.5 618.9 22.6 other current assets and (liabilities) (161.1)
Slide 53: Consolidated balance sheet (1 of 2)
Consolidated balance sheet (1 of 2) Assets 31 December 2021 31 December 2020 Change € million € million € million ASSETS Non-current assets Property, plant and equipment 560.3 482.7 77.5 Right of use assets 71.8 71.5 0.3 Biological assets 13.4 8.9 4.5 Goodwill 1,416.3 1,354.1 62.2 Brands 974.9 956.6
Slide 54: Consolidated balance sheet (2 of 2)
Consolidated balance sheet (2 of 2) Liabilities and shareholders’ equity 31 December 2021 31 December 2020 Change € million € million € million LIABILITIES AND SHAREHOLDERS’ EQUITY Shareholders’ equity Issued capital and reserves attributable to owners of the parent 2,371.8 1,996.6 375.2 Non-control
Slide 55: Reclassified Cash flow statement
Reclassified Cash flow statement FY 2021 FY 2020 Change € million € million € million EBITDA 480.6 309.8 170.8 Effects from hyperinflation accounting standard adoption 4.5 2.4 2.1 Accruals and other changes from operating activities 64.7 (9.3) 74.1 Goodwill, trademark and sold business impairment 8.
Slide 56: Operating working capital
Operating working capital Reported Organic Perimeter 31 December 2021 31 December 2020 Forex impact change change effect € million % sales € million % sales €million Trade receivables 290.4 13.4% 281.8 15.9% 8.6 0.0 2.7 5.9 Total inventories, of which: 745.7 34.3% 658.3 37.2% 87.4 60.4 1.7 25.3 - ma
Slide 57: Financial debt details
Financial debt details Eurobonds and Term loan composition as of 31 December 2021 Outstanding Original As % of Issue date Maturity Type Currency Coupon Amount tenor total (€ million) Apr 5, 2017 Apr-22 Unrated Eurobond EUR 1.768% 50 5 years 4% Apr 5, 2017 Apr-24 Unrated Eurobond EUR 2.165% 150 7 yea
Slide 58: Exchange rates effects
Exchange rates effects Average exchange rate Period end exchange rate change FY 2021 vs FY change 31 December 2021 FY 2021 FY 2020 31 December 2021 31 December 2020 2020 vs 31 December 2020 : 1 Euro : 1 Euro % : 1 Euro : 1 Euro % US Dollar 1.184 1.141 -3.6% 1.133 1.227 8.3% Canadian Dollar 1.483 1.5
Slide 59: 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 circums
Slide 60: Contacts
CONTACTS i n ve s t o r. r e l a t i o n s @ c a m p a r i . c o m