Press Releases 2008
2007 Full Year Results
Sales: € 957.5
Organic sales growth: +7.1%
EBITDA before one off’s: € 223.0 million (+5.9%), 23.3% of sales
EBIT before one off’s: € 203.4 million (+6.3%), 21.2% of sales
Group net profit: € 125.2 million (+6.9%)
Excellent cash flow generation from operating activities: € 169.9 million
Proposed dividend: € 0.11 per share (+10%)
Bob Kunze-Concewitz, Chief Executive Officer: “2007 was a highly successful year, with accelerating organic growth, improved marginality and excellent cash flow generation. Looking forward, we expect our businesses to maintain its positive evolution”
Consolidated results for 2007
In 2007, Group sales totalled € 957.5 million, an increase of 2.7% (+4.9% at constant exchange rates).
The overall change in sales resulted from an organic growth of 7.1%, a negative exchange rate effect of 2.2% and a negative perimeter effect of 2.2%. The last was due to the announced termination of the Lipton Ice Tea distribution contract on the Italian market, in part offset by Glen Grant and Old Smuggler (whose sales started on 15 March 2006) and the newly acquired X-Rated brands (whose sales started on 1 August 2007).
Trading profit increased by 5.3% to € 270.6 million (+7.8% at constant exchange rates), or 28.3% of sales. Organic growth accounted for 7.1% and external growth for 0.7%, while exchange rate effects negatively contributed 2.5%.
EBITDA before one-off’s increased by 5.9% (+8.6% at constant exchange rates) to € 223.0 million, or 23.3% of sales.
EBITDA rose by 4.9% (+7.6% at constant exchange rates) to € 220.1 million, or 23.0% of sales.
EBIT before one-off’s went up by 6.3% (+9.2% at constant exchange rates) to € 203.4 million, or 21.2% of sales.
EBIT increased by 5.3% (+8.2% at constant exchange rates) to € 200.6 million, or 20.9% of sales.
The Group’s profit before tax and minority interests was € 183.3 million, an increase of 4.4% (+7.2% at constant exchange rates).
Group’s net profit was € 125.2 million, an increase of 6,9% (+9,1% at constant exchange rates).
Group shareholders equity as of 31 December 2007 was € 878.6 million.
As of 31 December 2007, net debt stood at € 288.1 million, a decrease of € 91.4 million from 31 December 2006, following the dividend payment (€ 29 million paid on 4 May 2007) and the acquisition of X-Rated (€ 29 million), closed on 1 August 2007. This significant improvement was achieved thanks to the very strong cash flow generation from operating activities: €169.9 million. The net debt to equity ratio as of 31 December 2007 was 32.8%.
As regards events taking place after the end of 2007, it’s worth mentioning that on 2 January 2008, the Group finalised the acquisition of a 80% stake in Cabo Wabo Tequila, ultra premium brand in the US spirit market. The total value, paid in cash, was of US$ 80.8 million (approx. € 55 million at closing’s exchange rate). A more detailed disclosure of the acquisition was circulated following the announcement of the deal on 7 May 2007.
The spirits segment (71.8% of total sales) recorded growth of 4.6%, the combined result of organic growth of 6.3%, a negative exchange rate effect of 3.0% and external growth of 1.3% (Glen Grant, Old Smuggler and X-Rated). The Campari brand posted growth of 3.5% at constant exchange rates, thanks to a positive performance, in particular, in Brazil and Italy. SKYY sales rose by 11.1% at constant exchange rates, thanks to a positive performance on both the US and international markets. Regarding the other main brands, the spirits segment benefited from strong performances from Aperol (+21.8% at constant exchange rates), Cynar (+11.9% at constant exchange rates), the Brazilian brands (+9.4% at constant exchange rates), and Ouzo 12 (+2.7% at constant exchange rates). CampariSoda’s sales decreased by 1,3%. Glen Grant and Old Smuggler posted growth of 22.2% at costant perimeter and exchange rates. Regarding agency brands, 1800 and Gran Centenario tequilas posted a growth of 3.1% at constant exchange rates in USA.
The wines segment, which contributed 15.8% of total sales, registered growth of 12.2%, due to the combination of strong organic growth of 12.5% and a negative exchange rate effect of 0.3%. The segment’s strong performance was driven by Cinzano vermouth (+18.7% at constant exchange rates) and by Cinzano sparkling wines (+12.7% at constant exchange rates). The wines segment also benefited from positive performances from Sella & Mosca (+6.8% at constant exchange rates) as well as Mondoro, Riccadonna and Cantina Serafino.
Sales of soft drinks (10.7% of total sales), which are generated almost entirely on the Italian market, recorded an organic growth of 3.5%, driven by strong performance of Crodino (+6.1%), the Lemonsoda range (+1.1%) and other carbonated drinks. The overall change was negative by 20.0% due to a negative perimeter effect of 23.5%, attributable to the termination of Lipton Ice Tea sales on the Italian market.
Looking at results by region, in 2007 sales on the Italian market (41.1% of total Group sales) recorded an organic growth of +5.2%. The overall change was negative by 2.0%, due to a negative perimeter effect (-7.2%), attributable to Lipton Ice Tea. Sales in Europe (20.6% of consolidated sales) grew by 12.8%, boosted by organic sales growth of 10.6%, thanks to positive performances from markets such as Germany and Russia and external growth of 2.6%. In the Americas (33.7% of total sales), the US market registered organic growth of 4.9%, a negative exchange rate effect of 8.7% and external growth of 1.7%. In Brazil, sales registered organic growth of 11.8% and a positive exchange rate effect of 2.8%. Sales in the rest of the world, which accounted for 4.6% of total sales, grew by 6.3% overall, driven by organic growth of 8.2%.
Dividend. The Board of Directors has voted to propose a dividend of € 0.11 per share to the Shareholders' meeting scheduled for 29 April 2008. This corresponds to an increase of 10% on last year’s dividend of € 0,10. The dividend will be paid on 8 May 2008 (coupon no. 4 to be detached on 5 May 2008) except on own shares.
Own shares. The Board of Directors has approved the report to be presented to the Shareholders’ meeting relating to the resolution to authorise the purchase and/or sale of own shares, mainly to be used to service the stock option plans. The authorisation concerns the purchase and/or sale of shares, which including existing own shares, will not exceed a maximum of 10% of the share capital. As of today’s date, the proportion of own shares held is close to zero. The authorisation will remain valid until 30 June 2009. The unit price for the purchase and/or sale of own shares will not differ by more than 25% (whether higher or lower) from the weighted average closing price in the three stock market trading sessions prior to each transaction.
The Board of Directors has granted to 113 Group managers a total of 7.653.738 stock options, in accordance with the existing stock option plan as approved by the Shareholders' meeting. The company will disclose an information document regarding the issuance of stock options pursuant to applicable law ( art. 84-bis, Regolamento Emittenti).
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