Campari Group

Net sales: € 714 million, +8.1% (+14.5% at constant exchange rates)
Sales growth in all business segments: spirits, wines and soft drinks
Growth at all levels of operating profitability
EBITDA: € 169 million, +5.8% (+12.4% at constant exchange rates), or 23.7% of net sales
EBIT: € 122 million, +6.6% (+15.3% at constant exchange rates)

Profit before taxes and minority interests: € 138.1 million, +11.9% (+19.2% at constant exchange rates)
Net profit: € 79.8 million, down slightly as a result of return of tax rate to normalised level
Proposed dividend of € 0.88 per share (unchanged)

Milan, 22 March 2004 - The Board of Directors of Davide Campari-Milano S.p.A. has approved the consolidated results for 2003, which showed strong growth in sales and at all levels of operating profitability. The results were more than satisfactory, particularly in light of the substantial impact of exchange rate movements.
It should be stressed that, in this regard, if these results were considered before exchange rates impact, they would show double-digit growth versus the previous year.

Deputy Chief Executive Officer Enzo Visone said “2003 was another year of more than satisfactory results for the Campari Group: we fully met our targets for both organic growth (despite the negative exchange rate movements) and external expansion, which continued in 2003 with the acquisitions of Barbero 1891 and Riccadonna. These results lay the foundations for further growth in 2004, despite the unfavourable economic outlook, especially with respect to Europe.”

DIVIDEND
At the ordinary and extraordinary Shareholders’ Meeting convened for 29 April 2004, the Board of Directors will propose a dividend of € 0.88 per share (unchanged from last year), for a total dividend of € 24.7 million, with the detachment of coupon no. 4 on 10 May 2004 and payable as of 13 May 2004.

2003 CONSOLIDATED RESULTS
Group sales in 2003 were € 714.1 million, up 8.1% (+14.5% at constant exchange rates). Organic growth was 9.6%, while exchange rate movements had a negative effect of 6.4%, mainly because of the fall in value of the US Dollar and the Brazilian Real. External growth, at 4.9%, was largely driven by the new distribution agreement for tequila 1800 on the US market (+4.3%). Barbero 1891 made a minimal contribution (+0.6%), as it was consolidated only for December.
Trading profit increased by 6.8% to €193.1 million, or 27% of sales.

EBITDA increased by 5.8% (+12.4% at constant exchange rates) to € 169.2 million, or 23.7% of sales.
EBITA increased by 5.8% (+12.8% at constant exchange rates) to € 150.7 million, or 21.1% of sales.
EBIT increased by 6.6% (+15.3% at constant exchange rates) to € 122.2 million, or 17.1% of sales.

Profit before taxes and minority interests was € 138.1 million, up 11.9% (+19.2% at constant exchange rates). The result was boosted by net non-operating income of € 23.1 million, which includes the capital gain generated by the sale of head office building in Milan, Via Filippo Turati, in July 2003.
Group’s profit before taxes, i.e. profit before taxes and after minority interests, was € 120.2 million, up 11.8%.
Group’s net profit fell 7.9% to € 79.8 million, because of the higher tax burden than in the previous year, when the company benefited from dual income tax relief and the “Tremonti bis” tax incentive.
Consolidated shareholders’ equity was € 548.2 million at 31 December 2003.
At 31 December 2003, net debt was € 297.1 million (€ 198.8 million at 31 December 2002). The debt to equity ratio at 31 December 2003 was 54.2%. It should be stressed that on 3 December 2003 the Group completed the acquisition of Barbero 1891 for a countervalue of € 147.1 million, paid in cash and financed with part of the proceeds from the senior notes issued in 2003.

2003 SALES
The spirits segment, which accounted for 65.5% of total sales, grew by 9.6% (+18.7% at constant exchange rates). Organic growth was 11.5%, thanks to a positive performance from all of the Group’s main brands. Sales of Campari rose by 3.4% at constant exchange rates (-1.1% at actual exchange rates). Geographically, sales performance was positive in Italy (+10.8%), Brazil and also Germany, where the upturn in sales seen in the first half of the year continued and led to much higher than expected overall growth for 2003. SKYY Vodka turned in another excellent performance: it was named as a “Hot Brand” in the US by Impact, one of the most important trade publications, for the ninth year in a row. Sales of SKYY (including the new flavoured vodka brands) continued to rise significantly, by 24.5% at constant exchange rates (+4.5% at actual exchange rates). The new SKYY flavoured vodkas launched in March 2003 (SKYY Berry, SKYY Spiced and SKYY Vanilla, which were added to the existing SKYY Citrus) showed strong sales growth and in 2003 accounted for 16% of total sales of the SKYY brand. The spirits segment also benefited from positive performances from CampariSoda (+4.3%), Ouzo 12 (+7.4%) and Jägermeister (+5.3%). Sales of Cynar dipped slightly overall (-0.7%), but recovered strongly on the Italian market. Campari Mixx benefited especially from significant growth on the Italian market. External sales growth stood at 7.2%, largely thanks to tequila 1800 (+6.6%), while Barbero 1891, consolidated only in December, contributed 0.6%.
Sales of wines, which accounted for 13.9% of total sales, grew by 2.5% at constant exchange rates (+5.5% at actual exchange rates). Organic growth was up 4.3%, following a good performance from Cinzano sparkling wines (+5.3% at constant exchange rates) and a more modest contribution from Cinzano vermouth (+0.8% at constant exchange rates). Sales of Sella & Mosca dipped by 0.6%: this was entirely due to product shortages (especially of white wines) after the poor harvest of 2002. Riccadonna sales rose by 6.2% at constant exchange rates.
Soft drink sales, which contributed 19.6% to the total and which are realised almost exclusively on the Italian market, grew by 10.2%, also thanks to last year’s particularly hot summer. Sales of Lemonsoda, Oransoda and Pelmosoda jumped by 16.1%, while Lipton Ice Tea shot up by 24.4%. Crodino’s sales, which are less affected by the weather, grew by 2.2%.

By region, sales on the Italian market accounted for 47.6% of the Group total in 2003 and increased by 9.3%. Sustained organic growth (+8.2%) was helped by a positive performance from all three business areas and to the contribution - albeit small - from Barbero 1891 (+1.1%), consolidated only in December. Sales in Europe stood at 19.4% of the total and jumped by 9.1% owing to the start-up of a new distribution agreement for the Russian market (which mainly benefited Cinzano) and to the launch of Campari Mixx in Germany and Austria. This was also helped by a sharp recovery on the German market, and by the introduction of SKYY Vodka in almost all the European markets. As for the Americas, which account for 30.6% of total sales, the US market expanded by 18.2%, owing to organic growth (+17%), which was boosted by SKYY Vodka, and to the new tequila 1800 distribution contract (+20.4%). Brazil also did well, with sales growth of 7.8% at constant exchange rates; however, this was more than offset by the devaluation of the real (-21.4%).

2004 OUTLOOK
As to 2004, the Group maintains a cautious view of the future, in the light of an unfavourable macroeconomic scenario, with particular reference to Europe. As regards the US, the market continues to be affected by an increasing competition in the premium vodka segment. Regarding Brazil, the business performance is highly correlated with the performance of the local economy. Meanwhile, the Italian business is expected to benefit from the contribution of Aperol and the other brands of Barbero 1891 acquired in December 2003.

OTHER RESOLUTIONS
Corporate governance, own shares and by-laws amendments. The Board of Directors has: (a) approved the annual report on corporate governance; (b) approved the report to the ordinary Shareholders’ Meeting concerning the purchase and/or sale of own shares;(c) resolved to submit a proposal to the extraordinary Shareholders' Meeting for the amendment of the company's by-laws also in order to comply with the recently amended Company Act (Legislative Decree 6/2003).
Merger of Campari-Crodo S.p.A. into Davide Campari-Milano S.p.A. The Board of Directors of Davide Campari-Milano S.p.A. has proposed the merger of Campari-Crodo S.p.A. into Davide Campari-Milano S.p.A.
The purpose of this operation is to rationalise the Group’s organisational structure by integrating the production activities that were previously carried out by Campari-Crodo S.p.A. with those of Davide Campari-Milano S.p.A.
Since Davide Campari-Milano S.p.A. owns 100% of Campari-Crodo S.p.A., it will not be necessary for the parent company to set a share exchange ratio or carry out a capital increase, pursuant to article 2501 of the Italian Civil Code.
The effective date of the proposed merger for accounting and taxation purposes will be 1 January 2004, in accordance with point 6) of article 2501-ter of the Italian Civil Code.
The merger act will establish the effective date vis-à-vis third parties, pursuant to article 2504-bis, paragraph 2, of the Italian Civil Code; such date may be a later date than that on which the last of the registrations referred to in article 2504 of the Italian Civil Code will be made.
No specific benefits are to be given to the directors of the companies involved in the proposed merger.

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CONFERENCE CALL
At 5.00 p.m. (CET) today, Monday 22 March 2004, there will be a conference call, during which Campari’s management will present the 2003 results to analysts, investors and journalists. To take part in the conference call, simply dial one of the following numbers:

• from Italy: 800 990 927 (freephone number)
• from abroad: +390237008210
  

The slides for the presentation can be downloaded before the conference call begins from the Investor Relations page on the Campari website.

PRESENTATION OF THE RESULTS TO THE FINANCIAL COMMUNITY AND THE PRESS
At 10.00 a.m. (CET) tomorrow, Tuesday 23 March 2004, Campari’s management will present the 2003 results at a meeting with the financial community at Banca Intesa, Piazza Belgioioso 1, Milan.