Very positive full year 2010 results with double digit growth across all key performance indicators
Highlights 2010 and recent developments
Sales: € 1,163.0 million (+15.3%, organic growth +8.4%)
Contribution after A&P: € 463.6 million (+15.6%, organic growth +8.3%, 39.9% of sales)
EBITDA before one-offs: € 298.6 million (+12.6%, organic growth +8.2%, 25.7% of sales)
EBIT before one-offs: €272.8 milion (+13.8%, organic growth +8.8%, 23.5% of sales)
Group’s net profit: € 156.2 million (+14.0%)
Net financial debt at € 677.0 million after investments in acquisitions of € 149.6 million in 2010
2010 proposed dividend confirmed at 2009 level (€ 0.06 per share)
Acquisition of a distribution platform in key strategic Russian market
Milan, March 21, 2011 - The Board of Directors of Davide Campari-Milano S.p.A. approved the consolidated full year results for the year ending 31 December 2010.
In 2010 Gruppo Campari achieved very strong results, delivering double digit growth across all performance indicators, thanks to good consumption momentum across the key brands (especially the aperitifs portfolio) and strong growth across geographies.
Bob Kunze-Concewitz, Chief Executive Officer: ‘2010 has been another consecutive year of significant progress and strong performance for Campari. The Group's ability to deliver double digit growth in challenging economic conditions demonstrates the strength of our core brands and our ability to leverage our extended route-to-market in both mature and developing economies. We have continued to invest in brand building, strengthening our brand portfolio via acquisitions and our route-to-market via new distribution platforms. In 2011 we expect market conditions to be consistent with the second half of 2010, with the Group's key brands continuing to experience positive consumption momentum. We will continue to drive growth through increased marketing investments and by further strengthening our route-to-market, such as the recent Russian acquisition. We are cautiously, though reasonably, optimistic about our full year and medium term prospects.’
In 2010 Group sales totalled € 1,163.0 million (+15.3%, +8.4% organic growth, +3.8% exchange rate effect and +3.1% perimeter effect, the latter mainly due to the acquisition of Wild Turkey and Frangelico, Carolans and Irish Mist).
Gross margin increased to € 666.8 million, up 16.4%, or 57.3% of sales, mainly thanks to a favourable sales mix driven by spirits’ double-digit growth.
Advertising and promotion (A&P) was up by +18.4% to € 203.2 million, or 17.5% of sales.
Contribution after A&P (gross margin after A&P) was up by 15.6% to € 463.6 million (+8.3% organic growth), or 39.9% of sales.
EBITDA before one-offs was up by 12.6% to € 298.6 million (+8.2% organic growth), or 25.7% of sales.
EBITDA reached € 295.3 million, an increase of 13.1%.
EBIT before one-offs rose by 13.8% to € 272.8 million (+8.8% organic growth), or 23.5% of sales.
EBIT reached € 269.5 million, an increase of 14.4%.
Profit before tax and minority interests reached € 232.9 million (+17.5%; +13.0% at constant exchange rates).
As of 31 December 2010, net financial debt stood at € 677.0 million (€ 630.8 million as of 31 December 2009). In 2010 the Group finalized investments in acquisitions for an overall amount of € 149.6 million, including the acquisition of Frangelico, Carolans and Irish Mist brands from William Grant&Sons, completed as already announced, on October 1, 2010 for a total consideration of
€ 128.5 million.
Consolidated sales of 2010
Sales of spirits (75.4% of total sales, up from 73.3% in 2009) grew +18.5%, the combined result of organic growth of +9.8%, a positive perimeter effect of +4.0% and a positive exchange rate effect of +4.7%.
Campari brand sales increased by +8.4% at constant exchange rates (+12.3% at actual exchange rates), thanks to its positive performances in key markets, in particular Italy, Germany and Brazil. SKYY sales grew by +2.8% at constant exchange rates (+8.2% at actual exchange rates), driven by a slight increase in the US, where the category was affected by strong price competition, and solid growth in key international markets. Aperol confirmed its very strong momentum (+35.7% at constant exchange rates) in Italy and in international markets (particularly Germany and Austria). The Brazilian brands posted a sales growth of +22.0% at constant exchange (+44.7% at actual exchange), thanks to the successful execution of the new commercial policy and a favourable comparison base versus 2009. In 2010 a positive performance was recorded by Cabo Wabo (+29.4% at constant exchange), GlenGrant (+8.8% at constant exchange rates), Cynar (+1.2% at constant exchange rates) and Ouzo 12 (+0.8% at constant exchange rates). Campari Soda registered a decrease of -2.0% in 2010.
Wines, which accounted for 15.0% of total sales, increased +13.0%, due to the combination of a good organic performance of +9.9%, a perimeter effect of +1.0% and an exchange rate effect of +2.1%. The Cinzano brand registered strong results: Cinzano sparkling wines sales increased by +10.5% (+9.9% at a constant exchange rates), thanks to a positive performance in its key markets, Italy and Germany, and a strong recovery in Russia; the growth of +16.7% in Cinzano vermouths (+14.2% at a constant exchange rates) was also driven by a recovery in the key Russian market, in addition to the good performance in the Italian, German and Argentine markets. Sella&Mosca sales increased by +6.0%, mainly driven by export sales, while Riccadonna suffered a temporary slow-down solely due to its transition to the newly established distribution platform in the key Australian market.
Soft drinks (8.5% of total sales) recorded a negative variation of -1.8%. The positive results achieved in the fourth quarter (+3.3%) partly offset the decline registered in the first nine months. In particular, Crodino sales were slightly down (-0.9% in 2010) suffering from weakness in the day bars channel.
Looking at sales by region in 2010, sales in the Italian market (34.2% of total Group sales, down from 38.5% in 2009) recorded an increase of +2.4%, thanks to organic growth (+3.3%), partly offset by a negative perimeter effect of -0.9%.
Sales in the rest of Europe (23.8% of consolidated sales) increased by a very strong +19.5%, thanks to positive trading both in Western and Eastern European markets. These results were driven by positive organic growth of +16.9%, a positive perimeter effect of +1.7% and a positive exchange rate effect of +0.9%. Notably strong results were driven by Germany (+23.6%), thanks to the positive momentum across the entire portfolio and an extraordinary performance of Aperol and of Russia (+53.5%) thanks to a rebound of consumption.
The Americas (34.8% of total sales) posted overall growth of +24.6%, driven by an organic increase of +9.6%, a positive exchange rate effect (+8.7%) and a positive perimeter effect (+6.3%), the latter due to the Wild Turkey acquisition and the newly acquired Frangelico, Carolans and Irish Mist. In the Americas, the US market registered an organic increase of +2.1%, a positive perimeter effect of +6.9% and a positive exchange rate effect of +4.8%. In Brazil,organic sales grew by 23.4%, thanks to a return to normal trading. Performance in Brazil was also positively affected by a perimeter effect of +2.6% and a significant exchange rate effect (+23.0%).
Sales in the rest of the world (including duty free), which accounted for 7.2% of total sales, grew by +31.7% overall, due to a positive perimeter effect of +15.7%, a positive exchange rate effect of +12.4% and a positive organic change of 3.6%, driven by a strong sales recovery in the fourth quarter (+87.5%), following the transition to the newly established distribution platform in the key Australian market.
Conclusion and outlook 2011
In 2010 Gruppo Campari achieved very strong results, delivering double digit growth across all performance indicators, thanks to good consumption momentum across the key brands (especially the aperitifs portfolio) and the benefits of our route-to-market’s further strengthening.
Looking forward to 2011, favourable business conditions characterising the second half of 2010 are expected to continue in 2011. In terms of risks the Group expects continuing competitive pressure in US vodka market, risk of rising input costs, especially in the second half of 2011, currency fluctuations, particularly in the US Dollar, and the impact of natural catastrophes on trading in Asia Pacific. In terms of opportunities the Group expects positive consumption momentum across key Group’s brands to continue, and in particular a persisting strong expansion of Aperol in both domestic and international markets. Moreover, marketing innovation is expected to hit markets in the second and third quarters of 2011. Growth is expected to be driven by continued positive impetus from stronger A&P and enhanced route-to-market (in particular Australia). Overall the Group is cautiously, though reasonably, optimistic about the full year prospects.
Dividend. The Board of Directors has voted to propose to the Shareholders' meeting a full year dividend per share of € 0.06 (unchanged versus last year’s dividend). The dividend will be paid on 26 May 2011 (after the execution of the bonus capital increase) with the prior detachment of coupon no. 8 on 23 May 2011.
Own shares. The Board of Directors has approved a resolution to be presented to the Shareholders’ meeting authorising 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, shall not exceed a maximum of 10% of the share capital. The authorisation will remain valid until 30 June 2012. The unit price for the purchase and/or sale of own shares will not differ by more than 25% (whether upwards or downwards) from the weighted average price in the three stock market trading sessions prior to each transaction.
Stock options. The Board of Directors has approved a resolution to be presented to the Shareholders’ meeting approving a stock option plan pursuant to Art. 114-bis of the Consolidated Law on Financial Intermediation and in accordance with the stock option master plan approved by the Board of Directors of 18 March 2009 and by the Shareholders’ meeting of 30 April 2009 that does not concern the company’s directors. The company will in due course and pursuant to applicable law (article 84-bis, Consob Regulation no. 11971/99) disclose an information document regarding the new stock option plan.
Events taking place after the end of 2010
It should be noted that on March 1, 2011 the acquisition of a 80% stake in Vasco CIS (a spirits and wines importation and distribution company based in Moscow) was completed for € 6.4 million. A put/call option on the residual 20% stake is to be exercised in 2012 for an estimated value of € 1.8 million. Vasco is a well established player in the Russian Federation and will form the foundation of the Group’s commercial platform in that highly strategic market. The transition of the Group’s Brands from the current distributors to Vasco CIS will start in July 2011 and will be completed by January 2012.
The Executive responsible for 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 - that the accounting disclosures in this statement correspond to the accounting documents, ledgers and entries.
The consolidated results and the draft financial statements of Davide Campari-Milano S.p.A. as of 31 December 2010 are currently under audit, to date not yet completed.
Analyst conference call
At 1:00 pm (CET) today, Monday, March 21, 2011, Campari’s management will hold a conference call to present the Group’s 2010 results to analysts and investors. To participate, please dial one of the following numbers:
- from Italy: 02 8058 811
- from abroad: +44 1212 818003
The presentation slides can be downloaded before the conference call from the main investor relations page on Gruppo Campari’s website, at
A recording of the conference call will be available from Tuesday, March 22 until Monday, March 28, 2011.
To listen to it, please call the following number:
- from Italy: 02 72495
- from abroad: +44 1212 818005
(access code: 765#).
* * *
Media conference call
At 2:30 pm (CET) today, Monday, March 21, 2011, Bob Kunze-Concewitz, Gruppo Campari’s CEO, will hold a conference call in English to present the Group’s 2010 results to the media. To participate, please dial one of the following numbers:
- from Italy: 02 8058 811
- from abroad: +44 1212 818003