Campari approves first quarter results to 31 March 2006

Milan, 11 May 2006 - The Board of Directors of Davide Campari-Milano SpA has approved the results for the quarter ending 31 March 2006. The Group’s results for the first quarter of 2006 were extremely positive.

A very positive performance in the first quarter of 2006

Consolidated net sales: € 182,1 million (+24,0%)
EBITDA: € 43,2 million (+14,3%), 23,7% of sales
EBIT: € 38,6 million (+15,3%)
Group’s profit before taxes:  € 34,6 million (+15,5%)

CONSOLIDATED RESULTS FOR THE FIRST QUARTER OF 2006
In the first quarter of 2006, Group sales totalled € 182.1 million, with an increase of 24.0% (+20.6% at constant exchange rates).
The overall change in consolidated sales resulted from organic growth of 9.3% and a positive exchange rate effect of 3.3%. External growth, which came in at 11.3%, was driven by sales of third-party brands covered by new distribution agreements (Jack Daniel’s and other Brown-Forman brands on the Italian market, Martin Miller’s Gin and Midori liqueur on the US market, and the spirits portfolio of the C&C Group on the US and Brazilian markets), as well as by recent acquisitions (Teruzzi & Puthod wines and, to a lesser extent, Glen Grant Scotch whisky).
Trading profit rose by 17.4% (+14.9% at constant exchange rates), to € 54.3 million, or 29.8% of sales. Organic growth accounted for 10.5% of the total, external growth for 4.4% and positive exchange rate effects for 2.5%.

EBITDA before one-offs increased by 16.3% (+14.4% at constant exchange rates) to € 43.5 million, or 23.9% of sales.
EBITDA rose by 14.3% (+12.4% at constant exchange rates) to € 43.2 million, or 23.7% of sales.
EBIT before one-offs went up by 17.5% (+15.8% at constant exchange rates) to € 38.9 million, or 21.4% of sales.
EBIT increased by 15.3% (+13.6% at constant exchange rates) to € 38.5 million, or 21.2% 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 € 35.6 million, with an increase of 16.8% (+15.1% at constant exchange rates).
The Group’s profit before tax was € 34.6 million, with an advance of 15.5% (+14.4% at constant exchange rates).
At 31 March 2006, net debt stood at € 461.6 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 € 130 million. The acquisition was financed by bank debt.

CONSOLIDATED SALES IN THE FIRST QUARTER OF 2006
The spirits segment, which accounts for 70.9% of total sales, recorded growth of 32.6%, the combination of organic growth of 11.5%, due to a good performance from the main brands, external growth of 16.3% and a positive exchange rate effect of 4.8%. External growth was driven by new distribution agreements, notably for Jack Daniel’s whisky on the Italian market, Midori liqueur on the US market and the spirits portfolio of the C&C Group on the US and Brazilian markets. The Campari brand registered growth of 8.8% at constant exchange rates (+12.1% at actual exchange rates), owing to a positive performance on all key markets. Sales of SKYY Vodka rose by 22.7% at constant exchange rates (+32.8% at actual exchange rates), thanks to a positive performance on both the US (+24.0% at constant exchange rates) and international markets. In other key markets, the spirits segment was boosted by excellent performances from CampariSoda (+28.6%), Aperol (+10.4%) and Ouzo 12 (+67.0%). However, Cynar and the Brazilian brands put in negative first-quarter performances, at -17.2% and -12.3% respectively (at constant exchange rates). Of the brands under licence, 1800 Tequila (+14.9% at constant exchange rates) and the Scotch whiskies (+11.1% at constant exchange rates) performed well; Jaegermeister declined by 10.7% at constant exchange rates.
The wines segment, which contributed 10.9% of total sales, registered growth of 1.0%, due to the combination of a slight decline in existing business of 2.5%, a positive exchange rate effect of 0.8% and external growth of 2.7%, generated by the newly-acquired Teruzzi & Puthod. The segment’s positive performance was driven by Sella & Mosca wines (+22.6%), while the vermouths and Cinzano sparkling wines registered respective declines of 15.8% and 1.0% at constant exchange rates. As for the Group’s other brands, Mondoro sales grew, but Riccadonna suffered a decline..
Sales of soft drinks, which came in at 17.0% of total sales and were generated almost entirely on the Italian market, show a positive performance by Crodino (+7.5%), the Lemonsoda, Oransoda and Pelmosoda range (+13.2%) and the third-party brand Lipton Ice Tea (+14.7%).
Looking now at results by region, first-quarter sales on the Italian market, which account for 50.8% of total Group sales, recorded an increase of 13.2% in the first quarter of 2006. Italian sales were boosted by external growth of +6.1%, deriving mainly from the distribution of Jack Daniel’s and the other Brown-Forman brands (from May 2005), and organic growth of 7.1%, thanks to a positive performance from all key brands. European sales, which came in at 15.2% of total consolidated sales, registered growth of 12.4%, combining organic growth of 9.5%, driven by the positive results achieved in strategically important European markets, including Germany, a negative exchange rate effect of 0.1%, and external growth of 3.0%, chiefly generated by Teruzzi & Puthod. In the Americas, which account for 30.2% of total sales, the US market registered organic growth of 20.9% at constant exchange rates, external growth of 40.7% and a positive exchange rate effect of 10.9%. In Brazil, sales registered decline in existing business of 12.8% at constant exchange rates, a positive exchange rate effect of 28.3% and external growth of 0.3%. Sales in the rest of the world (including duty free sales), which account for 3.7% of total sales, grew by 16.8% in total, driven by organic growth of 10.4%.

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CONFERENCE CALL
Please note that at 17.00 today, Thursday 11 May 2006, Campari’s management will hold a conference call to present the Group’s first quarter 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 on Thursday 11 May until 19.00 on Thursday 18 May. To hear it, please call +44 1296 618 700 (access code: 755896).