Campari announces very strong results for the first quarter of 2010 Double-digit
Highlights - first quarter 2010
- Sales: € 233.6 million (+22.9%, organic growth +14.5%)
- Contribution after A&P: € 93.7 million (+17.3%, organic growth +11.5%, 40.1% of sales)
- EBITDA before one-offs: € 59.1 million (+22.6%, organic growth +18.7%, 25.3% of sales)
- EBIT before one-offs: €52.3 million (+21.3%, organic growth +19.0%, 22.4% of sales)
- Group pre-tax profit: € 43.3 million (+12.7%)
- Net financial debt: down to € 593.4 million
Milan, May 13, 2010 - The Board of Directors of Davide Campari-Milano S.p.A. approved the results for the first quarter ending 31 March 2010.
In the first quarter 2010 Gruppo Campari achieved very strong results with double-digit rises across all indicators also on an organic basis. The business benefitted from a very good performance of all key brand and market combinations and, to a lesser extent, from an easy comparison base versus last year’s first quarter, which was hit by the credit crunch and destocking activities. Moreover, the consolidation of theWild Turkey acquisition, included in the Group’s perimeter as of June 2009, positively boosted growth. All operating profit indicators also posted double-digit growth, even on a like-for-like basis, thanks to a favourable sales mix and notwithstanding a considerable increase in marketing spending.
Bob Kunze-Concewitz, Chief Executive Officer:‘Our performance in the first quarter of 2010 was very positive with significant growth across all key indicators, which enabled us to considerably increase our marketing investments without negatively impacting margins. Whilst results were helped by a return to a more normal trading patterns across the Americas as well as by the effects of the Wild Turkey acquisition, our overall performance continued to be mostly impacted by strong consumption momentum across key brand and market combinations, especially in our core aperitif business in Europe. Looking forward, we think that continued volatility might impact trading across quarters but remain cautiously optimistic about our full year prospects.’
In the first quarter of 2010, Group sales totalled€ 233.6 million (+22.9%, +14.5% organic growth, +0.2%exchange rate effect and +8.2% perimeter effect, the latter mainly due to the acquisition of Wild Turkey).
Gross margin increased to € 133.6 million, +27.9%, mainly thanks to a favourable sales mix driven by double-digit spirits growth.
Advertising and promotion (A&P) was up by +62.3% to € 39.9 million, or 17.1% of sales.
Contribution after A&P (gross margin after A&P) was up by +17.3% to € 93.7million (+11.5% organic growth), or 40.1% of sales.
EBITDA before one-offs was up by +22.6% to€ 59.1 million (+18.7% organic growth), or 25.3% of sales.
EBIT before one-offs rose by +21.3% to€ 52.3 million (+19.0% organic growth), or 22.4% of sales.
EBITDA reached € 58.6 million, an increase of +22.9%.
EBIT reached € 51.8 million, an increase of +21.5%.
Pre-tax profit reached € 43.3 million (+12.7%; +12.8% at constant exchange rates).
As of 31 March 2010, net financial debt stood at € 593.4 million (€ 630.8 million as of 31 December 2009), thus confirming the Group’s strong capability to generate cash flow (€ 37.4 million in the first quarter, notwithstanding a negative exchange rate impact on the net financial position of € 17.9 million).
Consolidated sales in the first quarter 2010
Sales of spirits (76.2% of total sales, up from 70.5% in the first quarter 2009) grew +33.0%, the combined result of organic growth of +22.2%, a positive exchange rate effect of +0.2% and a positive perimeter effect of +10.6%.
Campari brand sales increased by +18.2% at constant exchange rates (+20.8% at actual exchange rates), thanks to a strong recovery particularly in Brazil. SKYY sales grew by +17.9% at constant exchange rates (+12.4% at actual exchange rates), driven by favourable comparison base versus last year’s first quarter, a strong consumption trend of the Infusions business in the US and accelerating growth in key international markets.Aperol confirmed its very strong momentum(+36.4% at constant exchange rates) in Italy and in international markets (particularly Germany and Austria).Campari Soda was in line with the performance achieved in the first quarter 2009. The Brazilian brands’ sales experienced triple-digit sales growth, thanks to the successful execution of the new commercial policy and a favourable comparison base versus the corresponding period last year. A positive performance was achieved by GlenGrant (+50.7% at constant exchange rates) and Cynar (+3.5%at constant exchange rates).
Wines, which accounted for 11.1% of total sales, registered an increase of +7.4%, due to the combination of a positive organic performance of +2.6%, a positive perimeter effect of +4.6% and a positive exchange rate effect of +0.2%. The segment’s positive results were driven by Cinzano sparkling wines (+17.5% at a constant exchange rates), thanks to a positive performance in Germany and Italy, and Cinzano vermouth(+3.2% at a constant exchange rates), mainly thanks to a recovery in the key Russian market. Sella & Mosca was in line with last year, whileRiccadonna posted a temporary slow-down due to its transition to the newly established distribution platform in the key Australian market.
Soft drinks (11.9% of total sales) recordeda negative variation of -6.1%, attributable to the weak performance of the soda range and mineral waters and toCrodino (4.8&) due to a different phasing of promotional activities in the off trade channel.
Looking at sales by region in the first quarter 2010, sales in the Italian market (44.6% of total Group sales, down from 53.0% in the first quarter 2009) recorded anincrease of +3.4%, thanks to organic growth (+4.0%), partly offset by a negative perimeter effect of -0.6%.
Sales in Europe, excluding Italy, (18.8% of consolidated sales) increased by +18.9%, driven by a positive organic performance of +15.7%, thanks to positive trading both in Western and Eastern European markets, a positive perimeter effect of +2.9% and a positive exchange rate effect of +0.3%.
The Americas (30.9% of total sales) posted anoverall growth of +66.5%, driven by apositive organic variation of +42.3%, apositive exchange rate effect (+0.7%) and apositive perimeter effect (+23.5%), the latter due to the acquisition of Wild Turkey. In the Americas, theUS market registered anorganic increase of +18.7%, mainly driven by a favourable comparison against last year’s first quarter, anegative exchange rate effect of -7.0% andpositive perimeter effect of +28,4%. InBrazil, organic sales growth registered a triple-digitincrease, thanks to a return to regular trading after the full acceptance of the new commercial policy and a favourable comparison base. Performance in Brazil was also positively affected by a perimeter effect of +1.3% and a significant exchange rate effect.
Sales in the rest of the world (including duty free sales), which accounted for 5.8% of total sales, grew by +47.3% overall, driven by a positive perimeter effect of +55.0%, and a negative exchange rate effect of -0.1% and a negative organic change of 7.6%
Assignment of stock options. Pursuant to article 84-bis of Consob resolution no. 11971/99 (Regulations for Issuers), it should be noted that the Board of Directors has approved today the issuance of stock options for 2010 in accordance with the stock option plan approved by the Shareholders’meeting held on 30 April 2010. The information regarding the issuance of stock options is disclosed in the document‘Issuance of stock options for 2010 in accordance with the stock option plan approved by the Shareholders’ meeting held on 30 April 2010’ available on the website under‘Investors’ section.
The Manager in charge of preparing Davide Campari-Milano S.p.A.’s financial reports, Paolo Marchesini, certifies -pursuant to article 154 bis, paragraph 2 of the Legislative Decree 58/1998 (Consolidated Law on Financial intermediation) - that the accounting disclosures in this statement correspond to the accounting documents, ledgers and entries.
Please note that at 1:00 pm (CET) today, Thursday, 13 May 2010, Campari’s management will hold a conference call to present the Group’s first quarter results 2010 to analysts, investors and media. To participate, please dial one of the following numbers:
- from Italy: 02 8058 811
- from abroad: +44 203 147 47 96
The presentation slides can be downloaded before the conference call from the main investor relations page on Gruppo Campari’s website.
A recording of the conference call will be available from Friday, 14 May until Thursday, 20 May 2010.
To listen to it, please call the following number:
- from Italy: 02 72495
- from abroad: +44 207 0980 726