Campari Group

Milan, 11 September 2006 - The Campari Group’s results for the period were positive, thanks to the recent acquisitions (Glen Grant and Teruzzi & Puthod), the distribution of new brands (Jack Daniel’s, C&C brands and Midori), and organic growth in the first half of 2006, Group sales totalled € 417.8 million, an increase of 14.8% (+12.2% at constant exchange rates).
The overall change in consolidated sales resulted from organic growth of 2.5% and a positive exchange rate effect of 2.6%. External growth, which came in at 9.8%, was driven by recent acquisitions (Glen Grant Scotch whisky and Teruzzi & Puthod wines) and third-party brands covered by new distribution agreements (C&C’s spirits portfolio on the US and Brazilian markets, Jack Daniel’s and other Brown-Forman brands on the Italian market and Midori liqueur and Martin Miller’s gin on the US market).

Trading profit increased by 7.3% to € 115.3 million (+5.2% at constant exchange rates), or 27.6% of sales. Organic growth accounted for 2.0%, external growth for 3.2% and positive exchange rate effects for 2.1%.

EBITDA before one-off’s increased by 6.6% (+4.8% at constant exchange rates) to € 95.3 million, or 22.8% of sales.
EBITDA rose by 3.5% (+1.7% at constant exchange rates) to € 95.2 million, or 22.8% of sales.
EBIT before one-off’s went up by 6.2% (+4.4% at constant exchange rates) to € 86.0 million, or 20.6% of sales.
EBIT increased by 2.8% (+1.0% at constant exchange rates) to € 85.9 million, or 20.6% of sales.

With regard to depreciation and amortisation, please note that following the adoption of IAS / IFRS, the amortisation of intangible assets no longer includes goodwill and trademark amortisation.
Profit before tax and minority interests was € 80.4 million, an increase of 2.3% (+0.4% at constant exchange rates).
Net profit attributable to the Group was € 55.5 million, a rise of 4.0% (+2.0% at constant exchange rates).
Shareholders’ equity was € 725.1 million at 30 June 2006.
At 30 June 2006, net debt stood at € 479.5 million (€ 371.4 million at 31 December 2005). On 15 March 2006, the Campari Group completed the acquisition of the Glen Grant, Old Smuggler and Braemar Scotch whisky brands and related assets, for a cash consideration of € 128.9 million. The acquisition was financed by bank debt.

CONSOLIDATED SALES IN THE FIRST HALF OF 2006
The spirits segment, which accounts for 70.2% of sales, recorded growth of 20.6%, the combined result of organic growth of 3.7%, a positive exchange rate effect of 3.7% and external growth of 13.3%. External growth was driven by the newly acquired Glen Grant, Old Smuggler and Braemar Scotch whiskies and by new distribution agreements, notably for C&C’s spirits portfolio on the US and Brazilian markets, Jack Daniel’s whisky on the Italian market and Midori liqueur on the US market. Campari brand sales dipped by 6.7% at constant exchange rates (-4.6% at actual exchange rates), because of a slowdown in sales in the second quarter, as stocks were reduced in view of the introduction of new packaging. Sales of SKYY Vodka rose by 12.9% at constant exchange rates (+17.9% at actual exchange rates), thanks to a positive performance on both the US (+12.3% at constant exchange rates) and international markets (+17.9%). Regarding the other main brands, the spirits segment benefited from strong performances from Aperol (+23.2%), Ouzo 12 (+13.8%) and Brazilian brands (+10.4% at constant exchange rates), while Campari Soda and Cynar put in negative first-half performances (-1.7% and -12.9% respectively at constant exchange rates). Of the brands under licence, Scotch whiskies (+12.6% at constant exchange rates), 1800 tequila (+9.2% at constant exchange rates) and Jägermeister (+5.3% at constant exchange rates) performed well.

The wines segment, which contributed 11.4% of sales, registered growth of 3.9%, due to the combination of negative organic growth of 0.8%, a positive exchange rate effect of 0.8% and external growth of 3.9%, generated by the newly-acquired Teruzzi & Puthod. The segment’s positive performance was driven by Cinzano sparkling wines (15.7%) and Sella & Mosca wines (+3.5%), while Cinzano vermouth registered a decline of 9.1% at constant exchange rates. As for the Group’s other brands, Mondoro registered sales growth, but Riccadonna suffered a decline in sales.

Sales of soft drinks, which came in at 17.2% of sales and were generated almost entirely on the Italian market, show a positive performance by Crodino (+3.3%) and the third-party brand Lipton Ice Tea (+1.4%). Sales of the carbonated soft drinks dropped by 3.4%.
Looking now at results by region, first-half sales on the Italian market, which account for 46.5% of sales, recorded an increase of 4.6%. Italian sales were boosted by external growth of 4.8%, deriving mainly from Glen Grant and the distribution of Jack Daniel’s and the other Brown-Forman brands (since May 2005); organic sales growth was negative at 0.2%. Sales in Europe (16.6% of consolidated sales) grew by 7.9%, entirely due to external growth (+9.1%) mainly generated by the new brands Glen Grant and Teruzzi & Puthod. In the Americas, which account for 32.9% of total sales, the US market registered organic growth of 10.5%, external growth of 28.0% and a positive exchange rate effect of 5.1%. In Brazil, sales registered organic growth of 3.7% at constant exchange rates and a positive exchange rate effect of 23.4%. External growth was a negative 0.9%. Sales in the rest of the world (including duty free sales), which account for 4.0% of total sales, grew by 14.0% in total, driven by organic growth of 9.4%.

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CONFERENCE CALL
Please note that at 17.00 (CET) today, Monday 11 September 2006, Campari’s management will hold a conference call to present the Group’s first-half results for 2006 to analysts, investors and journalists. To participate, please dial one of the following numbers:

• from Italy: 800 914 576 (toll free number)
  
• from abroad: +39 02 3700 8208

The presentation slides can be downloaded before the conference call from the main investor relations page of Campari’s website, at www.campari.com/investors.
A recording of the conference call will be available from 21.00 (CET) on Monday 11 September until 21.00 (CET) on Monday 18 September. To hear it, please call +44 1296 618 700 (access code: 631317).