Campari Group

Milan, 8 September 2003 - The Board of Directors of Davide Campari-Milano S.p.A. has approved the half-yearly report as of 30 June 2003, showing more than satisfactory results, both in terms of sales growth and of increase at all levels of operating profitability, especially in the light of the substantial negative exchange rate impact.
In fact, before exchange rate impact, performance is even stronger, with double-digit growth as compared to the equivalent period last year.

CONSOLIDATED RESULTS FOR THE FIRST 6 MONTHS OF 2003
In the first six months of 2003 Group sales were € 332.7 million, up 8.5%. Organic growth, at constant exchange rates, was 10.7%, while the negative impact of exchange rates on sales amounted to 8.1%, mainly because of the devaluation of the US Dollar and the Brazilian Real. External growth of 6.0% is entirely due to the new distribution agreement of tequila 1800 in the US market.
Trading profit was € 91.5 million, up 6.2%, amounting to 27.5% of sales.

EBITDA was € 78.9 million, up 4.8%, amounting to 23.7% of sales.
EBITA was € 70.9 million, up 4.9%, amounting to 21.3% of sales.
EBIT was € 56.9 million, up 6.1%, amounting to 17.1% of sales.

Profit before taxes and minority interests was € 51.4 million, showing a slight decrease of 1.5%, mainly as a result of higher financial charges attributable to the different structure and amount of average financial debt in the two periods.
The Group's profit before taxes, i.e. profit before taxes and minority interests net of minority interests, was € 43.6 million, down 3.0%.
The Group's net profit was € 28.0 million, down 12.6% because of the higher tax burden as compared to the previous period, when the Company had benefited from the “DIT” and “Tremonti bis” tax breaks.
Shareholders' equity as of 30 June 2003 amounted to € 494.2 million.
As of 30 June 2003 net financial debt was € 232.9 million.

2003 FIRST HALF-YEAR SALES
The spirits segment, with sales of € 217.8 million, amounting to 65.5% of total turnover, saw 23.6% growth at constant exchange rates (+11.6% net of exchange rate impact). Organic growth, amounting to 14.2% at constant exchange rates (+2.2% net of exchange rate impact), was helped by the positive sales trend of CampariSoda (+2.1%), Ouzo 12 (+14.5%) and Jägermeister (+3.9%). The Campari brand's growth was 1.5% at constant exchange rates (-5.0% net of exchange rate impact). In geographic terms, Campari sales continue to show a positive trend in Italy (+4.5%) and in Brazil, while in Germany sales continued to recover slightly, which can be interpreted in a very positive light, as a sign that the downturn that has characterised the brand in the last few years in this market is relenting. Overall sales of Campari Mixx, which benefited from the expansion of distribution in Germany and Austria and from the introduction of the new Campari Mixx Orange line extension on the domestic market, have attained the planned goals in Italy and achieved the expected dynamic growth in the second quarter. SKYY Vodka confirmed its highly positive sales trend, with growth of 27.1% at constant exchange rates (+4.0% net of exchange rate impact), inclusive of the flavoured vodkas; as for the SKYY range, the new flavoured vodkas launched in March 2003 (SKYY Berry, SKYY Spiced and SKYY Vanilla, which joined the existing SKYY Citrus) continued their upward sales trend, achieving, in the first half-year, a percentage of about 15% of total SKYY sales. External growth, deriving from tequila 1800, was 9.4% .
The wines segment recorded 9.7% growth at constant exchange rates (+6.9% net of exchange rate effect). This result, up sharply from the first quarter of 2003, was due to an upturn in all brands: Cinzano vermouth sales, in particular, rose by 13.3% at constant exchange rates (+7.0% net of exchange rate impact), mainly due to increased distribution in Eastern European markets. Cinzano sparkling wines saw a rise of 7.4% at constant exchange rates (+6.7% net of exchange rate impact), thanks to the upward trend in the Italian market and to the recovery of consumption in the German market. Sella & Mosca saw a 2.8% increase, thanks to the particularly positive trend in the Italian market.
Soft drinks sales rose by 5.6%, a significant recovery on the first quarter. Thanks to favourable climatic conditions, Lemonsoda, Oransoda and Pelmosoda and Lipton Ice Tea grew by 9.9% and 8.6% respectively. Crodino, whose sales are less closely correlated to climatic variations, was up 3.4%.

In terms of geographic split, sales in the first half of 2003 on the Italian market accounted for 50.8% of the Group's sales and rose 6.1% thanks to the significant upturn in all business segments. Sales in the European area, 19.4% of the total, grew by 17.1%, due to the introduction of Campari Mixx in Germany and Austria, to the start of the new distribution agreement for the Russian market and to the first signs of recovery in Germany. Regarding Americas, the US market grew by 26.2%, thanks to the new distribution contract for tequila 1800 (+31.5%) and to positive organic growth (+16.6% at constant exchange rates), led by SKYY Vodka. Brazil too has undergone an upward turn, with a 14.1% increase in sales in local currency terms, due to the good results achieved by Campari and Dreher.

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CONFERENCE CALL
At 5.30 p.m. today, Monday 8 September 2003, there will be a conference call, during which Campari's management will present the results for the first half of 2003 to analysts, investors and journalists. To take part in the conference call, simply dial one of the following numbers:

• from Italy: 800 990 927 (toll-free number) 
• from abroad: +390237008210

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