2004 full year results

Growth continues in sales and at all levels of operating profitability

  • Consolidated net sales € 779.2 million (+9.1%)
  • EBITDA € 183.6 million (+8.5%)
  • EBIT € 129.8 million (+6.2%)
  • Net profit adjusted for exceptional items € 67.8 million (+5.1%)

Proposed stock split at the rate of 10 shares for each existing share
Proposed dividend of € 0.10 per share after the stock split, up by 13.6%

Milan, 21 March 2005 - The Board of Directors of Davide Campari-Milano S.p.A. has approved the consolidated results for 2004. Growth in sales and at all levels of operating profitability continued, thanks to the consolidation of the newly-acquired Barbero 1891 and to a good performance from the Group’s existing business, despite the impact of negative exchange rate movements.
Moreover, if sales and all profitability indicators were considered before the impact of exchange rates (i.e. using average rates for 2003), they would show double-digit growth in 2004 versus the previous year. Enzo Visone, Chief Executive Officer, said: "The Group achieved very good results again this year. We look to the development of our business with confidence for 2005 and more generally in the medium term, and expect to continue to achieve satisfactory organic growth".

In 2004, Group sales totalled € 779.2 million, an increase of 9.1% (+11.9% at constant exchange rates). Organic growth was 3.8%, while exchange rate movements had a negative effect of 2.8%, mainly because of the fall in value of the US dollar. External growth of 8.2% was due almost entirely to the newly-acquired Barbero 1891.

Trading profit increased by 13.5% to € 219.1 million (+17.0% at constant exchange rates), or 28.1% of sales.

EBITDA rose by 8.5% (+12.1% at constant exchange rates) to € 183.6 million, or 23.6% of sales.
EBITA increased by 9.5% (+13.3% at constant exchange rates) to € 164.9 million, or 21.2% of sales.
EBIT went up by 6.2% (+11.0% at constant exchange rates) to € 129.8 million, or 16.7% of sales.

Profit before taxes and minority interests was € 123.2 million, a fall of 10.8% (-6.8% at constant exchange rates). This was due entirely to the significant drop in extraordinary income, which in 2003 included the capital gain resulting from the sale of the building in Via Filippo Turati, Milan, for € 33.7 million.

Net profit attributable to the Group was € 69.3 million, a fall of 13.2% (-9.5% at constant exchange rates). However, the net profit adjusted for exceptional income, with particular reference to the capital gain mentioned above, and the associated taxes, was € 67.8 million (+5.1%).

Group shareholders’ equity was € 596.0 million at 31 December 2004.
At 31 December 2004, net financial debt was € 228.7 million (€ 297.1 million at 31 December 2003). The debt to equity ratio at 31 December 2004 was 38.4%.

2004 SALES

The spirits segment, which accounted for 65.2% of total sales, recorded growth of 8.7%, the combination of organic growth of 3.7%, external growth of 9.0% and a negative exchange rate effect of 4.0%. The Campari brand posted growth of 3.0% at constant exchange rates (1.4% at actual exchange rates). The positive performances recorded in Brazil, Italy and Japan more than offset poor sales in the German market, caused by economic factors and bad weather. Sales of SKYY Vodka rose by 8.3% at constant exchange rates. The SKYY flavoured vodka range, which accounted for 13% of total SKYY brand sales, fell by 4.6% at constant exchange rates, owing to an unfavourable comparison base with the same period of 2003 (sales jumped following some new product launches). Overall, SKYY brand sales, including the flavoured range, rose by 6.3% at constant exchange rates (-2.9% at actual exchange rates). Regarding the other main brands, the spirits segment benefited from a good performance from CampariSoda (+5.1%), the Brazilian brands (+5.1% at constant exchange rates), Ouzo 12 (+8.3% at constant exchange rates) and Cynar (+8.2% at constant exchange rates). The segment also received a boost from buoyant sales of tequila 1800, a brand sold under licence (+21.3% at constant exchange rates). External growth was entirely due to Barbero 1891, and benefited from the positive contribution made in particular by Aperol, which recorded volume growth in excess of 20% compared with 2003.

The wines segment (16.2% of total sales) posted growth of 27.5%. Organic growth (+18.2%) benefited from a good performance by all the main brands: Cinzano sparkling wines grew by +8.9% at constant exchange rates, thanks to a good showing in Italy, Japan and other major European markets. Cinzano vermouth posted growth of +13.2% at constant exchange rates, thanks to a positive trend on the main European markets and in Japan. Sales of wines were also supported by a sound performance from Sella & Mosca (+14.2%), partly because of a good sales mix, and from Riccadonna. External growth (+10.7%) was almost entirely due to Barbero 1891, particularly the Mondoro and Enrico Serafino brands.Soft drink sales (17.3% of total sales, almost entirely on the Italian market) fell by 4.0%. The 6.3% increase posted by Crodino, due to the well-established nature of the brand, was more than offset by a decline in all of the Group’s other soft drinks, which was largely the result of adverse weather conditions. Specifically, sales of the Lemonsoda, Oransoda and Pelmosoda range dropped by 12.8%, while Lipton Ice Tea sales slid by 12.4%.
Looking now at results by region, 2004 sales on the Italian market, which accounted for 50.1% of total Group sales, posted organic growth of 2.4%, thanks to a good performance from all the main wines and spirits brands. In addition, the Italian market also saw a positive contribution from the newly-acquired Barbero 1891 (+12.5%). Sales in Europe, accounting for 19.2% of the total, also benefited from external growth of 9.4%, almost entirely generated by Barbero 1891. The 1.0% contraction in organic growth was largely attributable to a negative performance on the German market. This was due to the ongoing economic slowdown and to the suspended distribution of Campari Mixx following the sharp rise in duty on ready-to-drink products. In the Americas, which accounted for 27.8% of total sales, the US market posted growth of 6.5% at constant exchange rates, which was completely wiped out by negative exchange rate movements (-9.6%), while sales in Brazil grew by 4.7% in local currency terms (unchanged at actual exchange rates). Sales to the rest of the world, accounting for 2.9% of the total, shot up by 29.8% in organic terms at constant exchange rates. The performance here was boosted in particular by the turnaround on the Japanese market and by good performances from the Australian and New Zealand markets.


On 25 February 2005, the Campari Group acquired a further 30.1% shareholding in Skyy Spirits, LLC via the exercise of a call option, under the terms agreed in January 2002 when Campari bought a majority shareholding in the company. The payment of US$ 156.6 million (equivalent to around € 118 million at the exchange rate on the date of the transaction) was made in cash. The acquisition was financed partly using own funds and partly via bank debt.


This year, economic forecasts for the Group’s main strategic areas appear generally to confirm the current trends of modest growth in the eurozone and stronger growth in the US and especially Brazil. In any case, thanks to our well-established, leading premium brands, which are our main strength, we are confident about our business performance in 2005 and for the medium term, and we expect to continue to achieve a positive development of our business.


During 2004, we began analysing the new accounting principles and the impact these will have on Group companies and the consolidated results. More particularly, we analysed individual IAS/IFRS standards and identified differences between these and the principles currently used. Where the information needed for the preparation of the annual and interim reports according to the new standards required the implementation of new IT processes, we developed and introduced these processes. The Group has almost finished quantifying the main effects of the new principles on the opening balances at the date of transition, and on the comparative figures for 2004. As regards the timing of the application of the new principles to 2005 results releases, the Group plans to take advantage of the option to draw up its first quarter 2005 report using the old criteria. IAS 34 (“Interim financial reporting”) will be adopted for the half-year report to 30 June 2005.


Stock split. The Board of Directors has voted to propose that the 29,040,000 shares with a nominal value of € 1.00 each currently making up the Group’s share capital be split, via the issue of ten new shares with nominal value of € 0.10 each for each existing share. The move will be put forward for approval at the ordinary and extraordinary Shareholders' Meeting scheduled for 29 April 2005. The new shares would qualify for dividends from 1 January 2004, and the current fully paid up share capital of € 29,040,000 (which will remain unchanged) would subsequently be divided into 290,400,000 shares.
Dividend. The Board of Directors has also voted to propose the distribution of a dividend of € 0.10 for each share resulting from the proposed stock split. This is an increase of 13.6% on last year’s dividend of € 0.088 (adjusted). The dividend will be paid from 12 May 2005 (coupon no. 1 will be detached on 9 May 2005) except on own shares. The proposed dividend totals € 28.1 million, compared with a figure of € 24.7 million last year.
Own shares. The Board of Directors has approved the report to the Shareholders’ Meeting relating to the resolution to authorise the purchase and/or sale of own shares, mainly to be used in the Group’s stock option plans. The authorisation shall concern the purchase and/or sale of a total number of shares, including existing own shares, up to 10% of the share capital. As of today, the company has own shares corresponding to 3.22% of the share capital. The authorisation shall remain valid until 30 June 2006. The corresponding minimum and maximum purchase and/or sale price will be determined at a unit price which, as regards the said price range, shall not be less than 25% and shall not exceed 25% than the average reference price determined by the three Stock Market sessions prior to each single transaction.

* * *


Please note that at 5.30 p.m. (CET) today, Monday 21 March 2005, Campari’s management will hold a conference call to present the Group’s 2004 annual results to analysts, investors and journalists. To participate, please dial one of the following numbers:
-from Italy:800 914 576 (toll free number)
-from abroad:
The presentation can be downloaded before the conference call from the investor relations homepage of Campari’s website, at www.campari.com/investors
A recording of the conference call will be available from 8.00 p.m. (CET) on Monday 21 March until 7.00 p.m. (CET) on Monday 28 March. To hear it, please call  (access code: 310050).


At 10.00 a.m. tomorrow, Tuesday 22 March 2005, Campari’s management will present the Group’s 2004 results to the financial community in the Guicciardi room at Banca Intesa, Via Monte di Pietà 8, Milan.

Publishing date: 
21 Mar 2005
Last updated May 28 2013