Ordinary Shareholders’ meeting of Davide Campari-Milano S.p.A.
Ordinary Shareholders'meeting of Davide Campari-Milano S.p.A
- Approval of the company's accounts for the fiscal year ending 31 December 2017
- Distribution of a dividend per share of €0.05 for the full year 2017 (+11.1% increase compared to the dividend distributed in 2016 fiscal year)
Milan, April 23rd, 2018-The Shareholders’ meeting of Davide Campari-Milano S.p.A. (Reuters CPRI.MI-Bloomberg CPR IM) approved today the company’s accounts for the fiscal year ending 31 December 2017.
The Shareholders’ meeting approved a cash dividend per share of €0.05 for the fiscal year 2017 (+11.1% increase compared to the dividend distributed in 2016 fiscal year). The cash dividend will be payable from May 23rd, 2018 (the detachment date of the coupon n. 2 will be May 21st, 2018 pursuant to the Borsa Italiana calendar), and record date May 22nd 2018.
Remuneration Report. The Shareholders’ meeting approved the Remuneration Report drawn up in accordance to article 123-terof the Consolidated Law on Financial Intermediation.
Stock options. The Shareholders’ meeting approved a stock option plan pursuant to article 114-bis of the Consolidated Law on Financial Intermediation, and in accordance with the stock option Regulation in effect, granting the relevant bodies the authorization for the plan execution by June 30th, 2019.
Own shares. The Shareholders’ meeting authorized the Board of Directors to restore the reserve of own shares, via the purchase and/or sale of own shares in the market, to be used in particular to service the stock option plans for the Group’s management, according to the limits and procedures provided by the applicable laws and regulations. The authorization will remain valid until June 30th, 2019.
2017 full year results
With reference to the consolidated results, approved by the Board of Directors on February 27th, 2018, in 2017 Group sales totalled €1,816.0 million, showing an increase of +5.2%. The organic sales growth was +6.3%, thanks to the continued outperformance of Global Priorities, up by +7.7% driven by Aperol and Campari, and the Regional Priorities up by +13.0%, driven by Espolòn, Bulldog and GlenGrant. In geographic terms the Americas, NCEE and SEMEA all contributed to the solid organic growth.
The exchange rate effect was slightly negative at -0.8%, mainly due to the progressive strengthening of the Euro against the US Dollar, particularly in the fourth quarter. The perimeter effect of -0.4% was driven by the combined effect of the Grand Marnier acquisition, the sale of non-core businesses, such as Carolans and the still wine business, and the termination of some agency brands. The acquisition of Bulldog London Dry Gin (which closed in February 2017) did not produce any perimeter effects as the brand was already integrated into the Group’s distribution network.
Gross profit was up by +9.2% to €1,075.0 million, at 59.2% on net sales. It grew organically by +8.6%, generating a margin expansion of +120 bps driven by favourable sales mix, in line with the Group’s strategy.
Advertising and Promotion spending (A&P) increased overall by +11.0% to €342.5 million, at 18.9% of sales. It grew organically by +9.2%, though normalising in the second half 2017 as planned, reflecting major investments in global campaigns and activations behind the key Global and Regional Priorities.
CAAP (Contribution after A&P)was up by +8.3% to €732.4 million (+8.3% organically), at 40.3% of sales.
Structure costs, i.e. selling, general and administrative costs, were up by +8.8% to €351.9 million, at 19.4% of sales. The organic increase was +7.9%, reflecting the route-to-market investments in US, South Africa, Global Travel Retail and Peru, which were mitigated by the efficiencies released by the Grand Marnier company integration from the second half of 2017.
EBITDA adjusted was up by +8.0% to €437.6 million (+8.9% organic growth), at 24.1% of sales.
EBIT adjusted increased by +7.9% to €380.5 million, at 21.0% of sales. Organic growth was +8.7%, ahead of sales growth, more than offsetting the re-investments into brand building and distribution enhancement initiatives, thus delivering +50 bps organic accretion on net sales.
Operating adjustments were positive by €13.9 million, mainly attributable to the capital gain on Carolans and Irish Mist disposal of €47.9 million, net of transactions costs and provisions for restructuring costs.
EBITDA reached €451.4 million, at 24.9% of sales.
EBIT reached €394.3 million, at 21.7% of sales.
Net financial costs were €40.0 million, down by €18.5 million, thanks to the reduced average cost of debt following the recent liability management transaction, which generated a one-offfinancial adjustment of €(24.8) million.
Group pre-tax profit adjusted was €337.7 million (+14.6%). Group pre-tax profit was €326.7 million, an increase of +38.0%.
Tax was a positive income of €29.7 million, driven by the ‘Patent Box’ one-off tax benefit of €44.8 million relating to the fiscal years 2015, 2016 and 2017, as well as a one-off non cash benefit of €81.9 million related to the reduction in the US deferred tax liability, recorded in previous years, due to the change in the local tax rate introduced by the US tax reform in 2018 (Tax Cuts and Jobs Act).
Group net profit adjusted3 was €233.4 million (+17.5%). Group net profit was €356.4 million, an increase of +114.3%.
Free cash flow was €227.0 million overall in 2017, of which the recurring free cash flow was €249.7 million.
Net financial debt stood at €981.5 million as of December 31st, 2017, down from €1,192.4 million as of December 31st, 20165, thanks to the healthy cash flow generation, and after disposals of non-core assets, net of the outflow effects of the Bulldog acquisition, the dividend payment, the liability management transactions and the purchase of own shares.
Net debt to EBITDA pro-forma ratio was 2.0 times as of December 31st, 2017, down from 2.9 times as of December 31st, 2016. The net debt position and EBITDA pro-forma ratio as of 2017 year end exclude the proceeds from the disposal of the Lemonsoda business, net of the Bisquit acquisition as the two transactions closed respectively in January 2nd and 31st, 2018.
IFRS 15-Revenue from Contracts with Customers (applicable from 1 January 2018)
The new accounting standard IFRS 15 will be implemented as of fiscal year 2018. Under IFRS 15 certain A&P expenses will be reclassified in deduction of sales. The reclassification is neutral on EBIT value but has an impact on margin ratios on sales post reclassification. In FY2017 restated, the reclassification under IFRS 15 implies a reduction €62.7 million in sales (-3.5%) and, by the same amount, in A&P expenses. See Appendix for FY 2017 results re-stated for IFRS 15 implementation.
Filing of documentation
The annual financial statements for the year ending 31 December 2017, and the other documents included in the Annual Report have been made available to the general public at the Company's head office and on 1Info system for the storage of Regulated Information, operated by Computershare S.p.A. (www.1info.it). The documentation is also available in the ‘Investor’ section of the website www.camparigroup.com/en and by all other means allowed by applicable regulations.
 North, Central and Eastern Europe.
 South Europe, Middle East and Africa.
 In FY 2016 negative adjustments of €(33.2) million, attributable to transaction and restructuring costs.
 Financial adjustment mainly due to the delta value between the purchase price of the bonds bought back and their nominal value.
 Overall value of the Bulldog acquisition of €82.3 million (including the estimated earn out), liability management cash outflow of €23.2 million, the value of the Chilean winery disposal of €30.0 million, the French winery disposal of €20.1 million, and Carolans & Irish Mist disposal of €139.8 million (at the exchange rate at closing date).