2005 Full year results
Growth continues in sales and at all levels of operating profitability
- Net sales € 809.9 million (+7.8%)
- EBITDA € 201.3 million (+9.1%), or 24.9% of net sales
- Operating result € 183.9 million (+10.3%)
- Group’s net profit € 118.0 million (+21.8%)
Enzo Visone, Chief Executive Officer: "In 2005, the Group once again achieved extremely positive results. We remain confident for a positive performance in 2006 and, more generally, in the medium term."
Milan, 22 March 2006 - The Board of Directors of Davide Campari-Milano S.p.A. has approved the consolidated full year results for 2005. The 2005 results, which were prepared according to IAS / IFRS accounting standards, were very positive and showed growth in sales and at all levels of profitability compared to the previous year.
2005 CONSOLIDATED RESULTS
In 2005, Group sales totalled € 809.9 million, an increase of 7.8% (+6.6% at constant exchange rates).
The overall change in consolidated sales resulted from organic growth of 4.1% and a positive exchange rate effect of 1.2%. External growth of 2.5% came from sales of third-party brands that the Group has begun distributing (Jack Daniel’s and the other Brown-Forman brands on the Italian market, and to a lesser extent, Martin Miller’s gin in the US).
Trading profit increased by 7.1% (+6.8% at constant exchange rates), to € 234.8 million, or 29.0% of sales. The total change is composed of 5.7% organic growth, 1.1% external growth and 0.3% positive currency effect.
EBITDA before one off’s increased by 7.8% (+7.9% at constant exchange rates) to € 196.6 million, or 24.3% of sales.
EBITDA rose by 9.1% (+8.9% at constant exchange rates) to € 201.3 million, or 24.9% of sales.
EBIT before one off’s went up by 8.9% (+9.1% at constant exchange rates) to € 179.1 million, or 22.1% of sales.
EBIT increased by 10.3% (+10.3% at constant exchange rates) to € 183.9 million, or 22.7% 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 € 174.2 million, an increase of 10.9% (+10.7% at constant exchange rates).
Group’s net profit was € 118.0 million, a rise of 21.8% (+22.1% at constant exchange rates).
Shareholders’ equity was € 695.8 million at 31 December 2005.
At 31 December 2005, net financial debt stood at € 371.4 million (€ 327.5 million at 30 September 2005). The debt to equity ratio at 31 December 2005 was 53.4%.
CONSOLIDATED SALES 2005
The spirits segment, which represents 68.1% of total sales, recorded growth of 11.9%, the combination of organic growth of 6.2%, driven by good performances from the major brands, and external growth of 3.8% following new distribution agreements, especially Jack Daniel’s whisky on the Italian market. The Campari brand posted growth of 4.1% at constant exchange rates (+5.8% at actual exchange rates), thanks to positive performances in major European markets. Sales of SKYY Vodka rose by 8.9% at constant exchange rates, thanks to a positive performance in both the US and international markets. Regarding the other main brands, the spirits segment benefited from strong performances from Aperol (+23.2%), Cynar (+16.2% at constant exchange rates) and Brazilian brands (+9.6% at constant exchange rates); sales of CampariSoda and Ouzo 12 registered growth of 1.4% and 2.1% respectively in 2005. Of the brands under licence, 1800 tequila (+14.9% at constant exchange rates) and Jägermeister (+3.5% at constant exchange rates) performed well.
The wines segment, which accounts for 15.5% of total sales, recorded growth of 3.6%, resulting from organic growth of 3.7% and a negative exchange rate effect of 0.1%. The positive performance of the business was driven by sales of Cinzano vermouth, which grew by 16.0% at constant exchange rates, thanks to a good showing in major European markets. Sales of Cinzano sparkling wines rose by 1.0% at constant exchange rates. Sales of wines were also supported by a sound performance from Riccadonna (+14.1% at constant exchange rates), Mondoro (+7.6% at constant exchange rates) and Sella & Mosca (+1.3%).
Soft drink sales, 15.4% of total sales, recorded almost entirely on the Italian market, benefited from the positive performance of the core brands Crodino (+3.2%) and Lemonsoda, Oransoda and Pelmosoda (+1.2%). The slight decline in the segment’s sales of 1.9% is mainly attributable to the less profitable Lipton Ice Tea (-12.6%).
Looking now at results by region, sales on the Italian market, which account for 47.1% of total Group sales, recorded an increase of 4.9% in 2005. The Italian business benefited from a positive contribution from external growth (+4.8%), as the Group began distributing Jack Daniel’s and other Brown-Forman brands; sales growth in like-for-like terms was 0.1%, and came on the back of the positive performance on all core brands, but was negatively affected by the performances of Campari Mixx and Lipton Ice Tea, two low-margin products. Sales in Europe (18.7% of consolidated sales) grew by 6.9%, thanks to the strong performance in major European markets of strategic importance, including Germany. In the Americas, which account for 29.9% of total sales, the US market posted organic growth of 7.5% at constant exchange rates (7.7% at actual exchange rates). Sales in Brazil rose by 8.7% at constant exchange rates (+29.9% at actual exchange rates). Sales to the rest of the world, which include duty free sales and account for 4.3% of the total, posted organic growth of 13.0% at constant exchange rates. This result was boosted in particular by a positive performance on the Australian and New Zealand markets.
EVENTS TAKING PLACE AFTER THE END OF 2005
On 15 March 2006, the Campari Group completed the acquisition from Pernod Ricard of Scotch whisky brands Glen Grant, Old Smuggler and Braemar as well as related assets, including the Glen Grant distillery in Rothes, Scotland. The agreement was announced on 22 December 2005. The payment of the acquisition of € 130 million, financed via bank debt, was made in cash.
Dividend. The Board of Directors has voted to propose the ordinary and extraordinary Shareholders' Meeting scheduled for 24 April 2006 a dividend of € 0.10 per share, unchanged from the previous year. The dividend will be paid from 11 May 2006 (coupon no. 2 should be detached on 8 May 2006) 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 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 3.11% of the share capital. The authorisation shall remain valid until 30 June 2007. 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.
Corporate governance and amendments to the company's by-laws. The Board of Directors has approved the annual corporate governance report. It has also voted to propose to the extraordinary Shareholders’ Meeting an amendment to the company's by-laws to give directors the authorisation to increase the share capital, and issue convertible bonds and other financial instruments.
* * *
Please note that at 5.00 p.m. (CET) today, Wednesday, 22 March 2006, Campari’s management will hold a conference call to present the Group’s 2005 first half 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: +390237008208
The presentation can be downloaded before the conference call from the Investor Relations homepage of Campari’s website.
A recording of the conference call will be available from 9.00 p.m. (CET) on Wednesday, 22 March until 7.00 p.m. (CET) on Wednesday, 29 March. To hear it, please call (access code: 642432).