Davide Campari-milano N.v. · MIL:CPR
Davide Campari-milano — H1 2021 Earnings Presentation
62 slides from Davide Campari-milano's earnings presentation, Jul 27, 2021
Slide 1: 2021 First Half Results
July 27, 2021 2021 First Half Results Investor Presentation
Slide 2: Table of contents
Table of contents Results Summary Sales Results Operating Results by Region Consolidated P&L Cash Flow & Net Financial Debt Marketing Initatives & business developments Conclusion & Outlook Annex 2
Slide 3: Strong double-digit growth across all indicators vs H1 2020 & H1 2019
Strong double-digit growth across all indicators vs both H1 2020 & H1 2019, with acceleration in Q2 H1 2021 vs. H1 2020 Q2 2021 H1 2021 Organic change vs. H1 2019 € million Reported change Organic change Organic change Net sales 1,000.8 +30.2% +37.1% +54.0% +22.3% Gross profit 603.6 +33.3% +40.1% +5
Slide 4: Strong momentum across key markets and brands
Strong momentum across key markets and brands, thanks to sustained home consumption and gradual on-premise reopening Net Sales > Overall organic growth of +37.1% vs H1 2020 after an acceleration in Q2 (+54.0%), benefiting largely from the consumption bounce back in the on-premise channel upon its gr
Slide 5: Table of contents
Table of contents Results Summary Sales Results Operating Results by Region Consolidated P&L Cash Flow & Net Financial Debt Marketing Initatives & business developments Conclusion & Outlook Annex 5
Slide 6: Healthy brand momentum continues in the off-premise despite on-premise reopening
Healthy brand momentum continues in the off-premise despite on-premise reopening Consumer comfort with home mixology driving solid brand momentum visible by 2yr stack (1) (1) Sell-out data source: US: Nielsen data XAOC+Liquor+Conv YTD W/E 24 26/06/2021; Italy: IRI Totale Italia Iper+Super+LSP YTD Ju
Slide 7: Double-digit sales growth across all regions and brand clusters
Double-digit sales growth both vs. H1 2020 and H1 2019 across all regions and brand clusters H1 2021 Net sales organic performance by Region H1 2021 Net sales organic performance by Priority Organic sales growth vs. H1 2020 Organic sales growth vs. H1 2019 (1) (1) Including Rest of Portfolio, up +32
Slide 8: US remains the largest market
US remains the largest market H1 2021 Net sales €1,000.8 million Organic growth: +37.1% Asia Pac: 8% of total Organic growth: +30.8% Americas: 44% of total Organic growth: +34.2% NCEE: 19% of total Organic growth: +23.5% SEMEA: 29% of total Organic growth: +57.4% > Developed vs. emerging markets in
Slide 9: Americas +34.2% thanks to resilient home consumption
Americas (1) +34.2% thanks to resilient home consumption and gradual on-premise reopening Change Change vs. H1 2020 vs. H1 2019 organic organic USA 29.0% 24.6% Canada 20.7% 32.3% Jamaica 33.9% 20.9% Other countries 74.4% 21.8% Americas 34.2% 24.2% Perimeter 0.1% Forex -11.7% Organic growth by key ma
Slide 10: SEMEA +57.4% driven by bounce-back of aperitifs in Q2
SEMEA (1) +57.4% driven by bounce-back of aperitifs in Q2 Change Change vs. H1 2020 vs. H1 2019 Organic organic Italy 55.8% 4.3% France 61.8% 108.5% GTR 24.3% -52.1% Other countries 67.5% 11.2% Southern Europe, Middle East & Africa 57.4% 10.2% Perimeter 3.2% Forex 0.0% Organic growth by key market T
Slide 11: NCEE +23.5% sustained strong performance
NCEE (1) +23.5% sustained strong performance helped by on- premise reopening Change Change vs. H1 2020 vs. H1 2019 organic organic Germany 11.9% 15.4% United Kingdom 37.1% 86.8% Russia 44.1% 66.6% Other countries 28.1% 24.3% North, Central & Eastern Europe 23.5% 30.3% Perimeter -9.5% Forex -2.4% Tot
Slide 12: APAC +30.8% continued growth
APAC (1) +30.8% continued growth helped by shipment recovery driven by route-to-market changes in Asia Change Change vs. H1 2020 vs. H1 2019 organic organic Australia 11.5% 31.8% Other countries 92.6% 54.5% Asia Pacific 30.8% 38.7% Perimeter 0.8% Forex 5.5% Total Change 37.2% Organic growth by key m
Slide 13: Net Sales by Brand
Net Sales by Brand H1 2021 Net sales €1,000.8 million Organic growth: +37.1% Rest of Portfolio: 11% Rest of own brands 6% Agency brands & Co-packing 5% Local Priorities, 13% Organic change: +39.0% (Organic change +24.7% vs H1 2019) Global Priorities, 58% Organic change +35.7% (Organic change +22.5%
Slide 14: Global Priorities sales review: Aperitifs
Global Priorities sales review: Aperitifs Organic sales growth vs. H1 2020 Organic sales growth vs. H1 2019 > Positive performance (+42.1%) across Aperol’s core markets as the brand renews recruitment of consumers, benefiting from both sustained home consumption and the partial reopening of the on-
Slide 15: Aperitifs confirmed strength vs. 2019 unaffected base
Aperitifs confirmed strength vs. 2019 unaffected base Key markets registered strong growth in both shipment and consumption data vs. H1 2019 (1) Sellout Source: US: Nielsen data XAOC+Liquor+Conv YTD W/E 24 26/06/2021; Italy: IRI Totale Italia Iper+Super+LSP YTD June 28/06/2021; Germany NielsenIQ RMS
Slide 16: Global Priorities sales review
Global Priorities sales review Organic sales growth vs. H1 2020 Organic sales growth vs. H1 2019 > Wild Turkey: very strong growth against an easy comparison base, driven by the core US market, thanks to solid category momentum. Canada grew double-digits while Australia was slightly down due to toug
Slide 17: Regional Priorities sales review
Regional Priorities sales review Organic sales growth vs. H1 2020 Organic sales growth vs. H1 2019 > Espolòn: strong growth driven by the core US market, also helped by anticipated sales ahead of a price increase in July. Seeding markets also grew, such as Australia, Canada, Italy and Russia > Bulld
Slide 18: Local Priorities and other brands sales review
Local Priorities and other brands sales review Organic sales growth vs. H1 2020 Organic sales growth vs. H1 2019 > Campari Soda: positive performance driven by home consumption in core Italy thanks to its cocktail-to-go format as well as on-premise reopening > Crodino: return to positive performance
Slide 19: Table of contents
Table of contents Results Summary Sales Results Operating Results by Region Consolidated P&L Cash Flow & Net Financial Debt Marketing Initatives & business developments Conclusion & Outlook Annex 19
Slide 20: Net Sales & EBIT analysis by region
Net Sales & EBIT (1) analysis by region H1 2020 H1 2020 H1 2021 H1 2021 • The Americas remain the Group’s largest region in terms of net sales and profitability (43.9% of Group’s net sales and 45.6% of Group’s EBIT(1) in H1 2021) • SEMEA, the region heavily hit by Covid-19 in 2020 given its strong e
Slide 21: EBIT by region - Americas
€million 69.0 74.0 (19.5) (3.7) (18.0) 101.9 EBIT (1) by region - Americas Margin/ 0 bps +470 bps -180 bps 23.2% 19.3% bps (2) +100 bps H1 2021 H1 2020 Reported change Organic change € million % of sales € million % of sales % % Net sales 438.9 100.0% 358.1 100.0% +22.6% +34.2% Gross profit 247.1 56
Slide 22: EBIT by region - SEMEA
€million (1.8) 68.2 (13.1) (10.5) (2.7) 40.2 EBIT (1) by region - SEMEA Margin/ bps (2) Organic change: €44.6 million, +1590 bps (2) +1270 bps -120 bps 13.7% H1 2021 H1 2020 Reported change Organic change € million % of sales € million % of sales % % Net sales 293.2 100.0% 182.6 100.0% +60.6% +57.4%
Slide 23: EBIT by region - NCEE
EBIT (1) by region - NCEE €million 57.4 31.4 (8.6) (3.9) (3.6) 72.7 37.9% Margin/ 33.4% bps (2) +190 bps H1 2021 H1 2020 Reported change Organic change +250 bps -120 bps +130 bps € million % of sales € million % of sales % % Net sales 191.9 100.0% 172.0 100.0% +11.6% +23.5% Gross profit 137.9 71.8%
Slide 24: EBIT by region - Asia Pacific
€million 5.7 7.9 (4.7) (2.0) 1.5 8.4 EBIT (1) by region - Asia Pacific Margin/ 10.2% -20 bps -380 bps +320 bps +150 bps 11.0% bps (2) H1 2021 H1 2020 Reported change Organic change € million % of sales € million % of sales % % Net sales 76.7 100.0% 55.9 100.0% +37.2% +30.8% Gross profit 36.6 47.6% 2
Slide 25: Table of contents
Table of contents Results Summary Sales Results Operating Results by Region Consolidated P&L Cash Flow & Net Financial Debt Marketing Initatives & business developments Conclusion & Outlook Annex 25
Slide 26: EBIT adjusted
EBIT adjusted Change vs. H1 2020 vs. H1 2019 Reported Organic Perimeter Forex Organic H1 2021 H1 2020 change change effect impact change € million % of sales € million % of sales % % % % % Net Sales 1,000.8 100.0% 768.7 100.0% 30.2% 37.1% -1.3% -5.6% 22.3% Gross Profit 603.6 60.3% 452.9 58.9% 33.3%
Slide 27: EBIT adjusted
EBIT adjusted Change vs. H1 2020 > Gross margin: on a reported basis up +33.3% in value, +140 bps accretion • Organic change of +40.1% in value, stronger than topline growth, leading to +130 bps margin accretion due to favourable sales mix thanks to the outperformance of aperitifs (starting to benef
Slide 28: Profit before tax
Profit before tax H1 2021 H1 2020 Reported change €million % of sales €million % of sales % Financial income/(charge) breakdown: EBIT adjusted 223.2 22.3% 130.4 17.0% 71.2% H1 2021 H1 2020 Operating adjustments (6.1) -0.6% (27.4) -3.6% - Operating profit = EBIT 217.1 21.7% 103.0 13.4% 110.8% Interes
Slide 29: Group net profit adjusted
Group net profit adjusted H1 2021 H1 2020 Change H1 2021 vs. H1 2020 €million Reported Adjustments Adjusted Reported Adjustments Adjusted Reported Adjusted (2) Profit before tax 214.4 1.4 213.1 101.0 (9.2) 110.1 112.4% 93.5% Total taxation (1) (54.9) 1.5 (56.4) (28.2) 4.5 (32.7) 94.6% 72.4% Net prof
Slide 30: Table of contents
Table of contents Results Summary Sales Results Operating Results by Region Consolidated P&L Cash Flow & Net Financial Debt Marketing Initatives & business developments Conclusion & Outlook Annex 30
Slide 31: Recurring free cash flow up +117.7% vs. H1 2020
Recurring free cash flow up +117.7% vs. H1 2020 and +64.2% vs. H1 2019 H1 2021 H1 2020 Δ H1 2021 vs. H1 2020 Δ H1 2021 vs. H1 2020 Total Recurring Total Recurring Total Recurring € million € million € million € million € million % € million % EBITDA 255.7 142.4 113.3 79.6% EBITDA adjusted 261.7 169.
Slide 32: Operating Working Capital
Operating Working Capital(1) 98.8 2.5 11.0 731.2 618.9 (2) OWC at 31/12/2020 Organic Perimeter Forex OWC at 30/6/2021 % on sales 34.9% 36.5% > OWC increase of €112.3 million as of 30 June 2021 vs. 31 December 2020 (2). Key drivers: • Organic increase of €98.8 million, due to: - Increase in inventory
Slide 33: Net debt reduction thanks to positive business performance
Net debt reduction thanks to positive business performance 82.9 (61.6) 20.6 (2.8) (1,103.8) (1,064.8) Total: €39.0 million Net debt at 31/12/2020 FCF Dividend Net (purchase)/sale of own Others Net debt at 30/6/2021 shares > Net financial debt at €1,064.8 million as of 30 June 2021, down by €39.0 mil
Slide 34: Debt maturity
Debt maturity(1) > Net debt of €1,064.8 million as of 30 June 2021 > Long-term Eurobonds & term loan amounted to €1,150 million: • Average nominal coupon of 1.42% • Fixed interest rate debt accounts for ca. 78% of the overall gross debt Net debt maturity as of 30 June 2021 (€million) 550.0 8.6 550.0
Slide 35: Table of contents
Table of contents Results Summary Sales Results Operating Results by Region Consolidated P&L Cash Flow & Net Financial Debt Marketing Initatives & business developments Conclusion & Outlook Annex 35
Slide 36: Introducing The Bitter note – the non-alcoholic bitter
Introducing The Bitter note – the non-alcoholic bitter The Notes Collection is creativity unshackled by the revolutionary work of Campari Group’s Italian Herbalist and Master Blender. Bitter Note is the first of three launches, taking place this summer, with the other two planned for later in the ye
Slide 37: Accolades for unrivaled quality liquids; Bulldog 'Begin Bold' campaign
Accolades for unrivaled quality liquids Beverage Testing Institute Competition 2021: -Appleton Estate 15 Year Old Black River Casks received a Gold Medal -Appleton Estate 21 Year Old Nassau Valley Casks received the Platinum Medal, the highest accolade possible -Appleton Estate 12 Year Old Rare Cask
Slide 38: Brand launches: Espolòn and The GlenGrant
Brand launches: Espolòn and The GlenGrant Espolòn Cristalino was launched in June in the domestic Mexican market. This ultimate offering made from 100% Blue Weber Agave, is a unique blend of Añejo with a touch of extra Añejo artfully filtered through charcoal. International rollout is planned for la
Slide 39: SKYY Vodka: US brand relaunch campaign
SKYY Vodka: US brand relaunch campaign The SKYY brand relaunch started on June 1st in the United States via full digital execution, through media sites such as Hulu, Spotify, YouTube and TrueX as well as TV networks such as Fox, FX, Comedy Central, Lifetime, ESPN and Disney. Alongside the campaign r
Slide 40: Aperol – Together again across key markets!
Aperol – Together again across key markets! ‘Aperol Bar Walking Tour’ & the ‘Aperol Pool Concert Tour’ across 7 cities in Germany Tomavistas Music Festival in Spain ‘Aperol Together Again’ across all UK channels USA: full summertime Aperol activation across key cities Australia Après Ski: wintertime
Slide 41: Terrazza Aperol – coming soon!
Terrazza Aperol – coming soon! Terrazza Aperol : 2021 A space in the heart of Venice (Campo Santo Stefano) was acquired in November 2020. It’s set to be the first directly managed Aperol Flagship, after the renovation and marketing activities are completed in 2021. This initiative is part of Campari
Slide 42: Creation of premium pan-European Wines & Spirits e-commerce player through Tannico
Creation of premium pan-European Wines & Spirits e-commerce player through Tannico (1) In July 2021, Campari Group and Moët Hennessy were pleased to announce the formation of a 50/50 joint venture (JV) with the purpose of investing in Wines&Spirits e-commerce companies and build a European e-commerc
Slide 43: ESG: Campari Group MSCI rating upgrade – from BBB to A
ESG: Campari Group MSCI rating upgrade – from BBB to A In July 2021, Campari Group are pleased to announce an upgrade to A rating from MSCI, one of the most respected and leading providers of critical decision support and services for the global investment community regarding ESG. An MSCI ESG Rating
Slide 44: Table of contents
Table of contents Results Summary Sales Results Operating Results by Region Consolidated P&L Cash Flow & Net Financial Debt Marketing Initatives & business developments Conclusion & Outlook Annex 44
Slide 45: Celebrating 20 years on the stock exchange
Celebrating 20 years on the stock exchange – thanks for your continued support! Since the initial public offering on the Italian Stock Exchange in July 2001, Campari Group has evolved from a local company into a top global spirits player. Looking back at these last 20 years of success, we wish to th
Slide 46: Conclusion and Outlook
Conclusion and Outlook > Positive business momentum continued in H1 2021, driven by buoyant consumption combined with the partial on-premise bounce back and sustained home drinking, as well as amplification by an easy comparison base > Looking at the remainder of 2021: > Underlying performance: • Po
Slide 47: Table of contents
Table of contents Results Summary Sales Results Operating Results by Region Consolidated P&L Cash Flow & Net Financial Debt Marketing Initatives & business developments Conclusion & Outlook Annex 47
Slide 48: Annex index
Annex - 1 Net sales by region and key market Annex - 2 Net sales by brand cluster Annex - 3 H1 2021 consolidated income statement Annex - 4 Q2 2021 consolidated income statement Annex - 5 Balance sheet at 30 June 2021 - Invested capital and financing sources Annex - 6 Consolidated balance sheet at 3
Slide 49: Net sales by region & key market
Annex - 1 Net sales by region & key market Consolidated Net sales by region H1 2021 vs. H1 2021 H1 2020 Change of which: Q2 2021 H1 2019 €m % €m % % organic perimeter forex organic Organic Americas 438.9 43.9% 358.1 46.6% 22.6% 34.2% 0.1% -11.7% 48.4% 24.2% Southern Europe, Middle East & Africa 293.
Slide 50: Net sales by region & key market
Annex - 1 Net sales by region & key market Southern Europe, Middle East & Africa by market H1 2021 vs. H1 2021 H1 2020 Change of which: Q2 2021 H1 2019 €m % €m % % organic perimeter forex organic Organic Italy 190.8 65.1% 122.3 67.0% 55.9% 55.8% 0.1% 0.0% 106.5% 4.3% France 60.5 20.6% 34.5 18.9% 75.
Slide 51: Net sales by brand cluster
Annex - 2 Net sales by brand cluster H1 2021 vs. H1 2021 H1 2020 Change of which: Q2 2021 H1 2019 €m % €m % % organic perimeter forex organic Organic Global Priorities 583.1 58.3% 452.1 58.8% 29.0% 35.7% 0.0% -6.7% 52.4% 22.5% Regional Priorities 172.7 17.3% 124.5 16.2% 38.7% 44.3% 1.3% -7.0% 61.1%
Slide 52: H1 2021 Consolidated P&L
Annex - 3 H1 2021 Consolidated P&L Organic margin Reported Perimeter Forex H1 2021 H1 2020 accretion/ Organic change change effect impact (dilution) € million % of sales € million % of sales % (bps) (3) % % % Net Sales 1000.8 100.0% 768.7 100.0% 30.2% 37.1% -1.3% -5.6% (1) COGS (397.3) -39.7% (315.8
Slide 53: Q2 2021 Consolidated P&L
Annex - 4 Q2 2021 Consolidated P&L Reported Organic Perimeter Forex Q2 2021 Q2 2020 change change effect impact € million % of sales € million % of sales % % % % Net Sales 602.9 100.0% 408.5 100.0% 47.6% 54.0% -1.7% -4.7% (1) COGS (231.0) -38.3% (164.5) -40.3% 40.4% 46.0% -3.7% -1.9% Gross Profit 37
Slide 54: Reclassified balance sheet
Annex - 5 Reclassified balance sheet Invested capital and resources € million 30 June 2021 31 December 2020 Change Fixed assets 3,042.3 2,944.2 98.1 Other non-current assets (liabilities) (379.4) (370.3) (9.2) Operating working capital 731.2 618.9 112.3 Other current assets (liabilities) (138.0) (90
Slide 55: Consolidated balance sheet (1 of 2)
Annex - 6 Consolidated balance sheet (1 of 2) Assets 30 June 2021 31 December 2020 (1) Change € million € million ASSETS Non-current assets Property, plant and equipment 535.6 482.7 52.8 Right of use assets 75.4 71.5 3.9 Biological assets 8.0 8.9 (0.9) Goodwill 1,384.3 1,354.1 30.2 Brands 967.2 956.
Slide 56: Consolidated balance sheet (2 of 2)
Annex - 6 Consolidated balance sheet (2 of 2) Liabilities and shareholders’ equity (1) 30 June 2021 31 December 2020 Change € million € million LIABILITIES AND SHAREHOLDERS’ EQUITY Shareholders’ equity Issued capital and reserves attributable to Shareholders of the parent Company 2,188.1 1,996.6 191
Slide 57: H1 2021 consolidated cash flow
Annex - 7 H1 2021 consolidated cash flow H1 2021 H1 2020 Change € million € million € million EBITDA 255.7 142.4 113.3 Effects from hyperinflation accounting standard adoption 1.8 0.7 1.1 Accruals and other changes from operating activities 33.5 4.5 29.0 Goodwill, trademark and sold business impairm
Slide 58: Financial debt details
Annex - 8 Financial debt details Net financial debt composition as of 30 June 2021 € million 30 June 2021 31 December 2020 Δ 30 June 2021 vs. 31 December 2020 - Cash and cash equivalents 668.3 548.1 120.3 - Bonds (50.0) 0.0 (50.0) - Bank loans (241.6) (244.3) 2.7 - Lease payab les (13.9) (13.9) (0.0
Slide 59: Operating working capital
Annex - 9 Operating working capital Reported Organic Perimeter Forex 30 June 2021 31 December 2020 change change effect impact € million % sales € million % sales €million Trade receivables 331.4 16.5% 281.8 15.9% 49.6 44.0 2.7 2.9 Total inventories, of which: 716.2 35.7% 658.3 37.2% 57.9 45.1 1.7 1
Slide 60: Exchange rates effects
Annex - 10 Exchange rates effects Average exchange rate Period end exchange rate change H1 2021 vs H1 change 30 June 2021 vs H1 2021 H1 2020 30 June 2021 31 December 2020 2020 31 December 2020 : 1 Euro : 1 Euro % : 1 Euro : 1 Euro % US Dollar 1.206 1.101 -8.6% 1.188 1.227 3.3% Canadian Dollar 1.504
Slide 61: 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 62: Thanks.
Thanks. 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
Davide Campari-Milano — H1 2021 Earnings Presentation on 6ix