Results for the first nine months to 30 September 2004
Milan, 8 November 2004 - The Board of Directors of Davide Campari-Milano S.p.A. has approved the results for the first nine months to 30 September 2004. Growth in sales and at all levels of operating profitability continued, thanks to the consolidation of the newly-acquired Barbero 1891 S.p.A. and to a good performance from the Group’s existing business, despite the ongoing impact of negative exchange rate movements.
Moreover, if sales and main profitability indicators were considered before the impact of exchange rates (i.e. using average rates for the first nine months of 2003), they would show double-digit growth versus the same period of last year.
CONSOLIDATED RESULTS FOR THE FIRST NINE MONTHS OF 2004
In the first nine months of 2004, Group sales totalled € 544.7 million, an increase of 7.7% (+10.6% at constant exchange rates). Organic growth was 1.8%, while exchange rate movements had a negative effect of 2.9%, mainly because of the fall in value of the US dollar. External growth of 8.8% was due almost entirely to the newly-acquired Barbero 1891 S.p.A.
Trading profit increased by 12.7% (+16.5% at constant exchange rates) to € 153.8 million, or 28.2% of sales.
EBITDA rose by 7.4% (+11.2% at constant exchange rates) to € 127.4 million, or 23.4% of sales.
EBITA increased by 7.2% (+11.3% at constant exchange rates) to € 114.1 million, or 20.9% of sales.
EBIT went up by 2.5% (+7.7% at constant exchange rates) to € 87.7 million, or 16.1% of sales.
Profit before taxes and minority interests was € 81.7 million, a fall of 28.4%. This was due entirely to the significant drop in extraordinary income, which last year included the capital gain resulting from the sale of the building in Via Filippo Turati, Milan, for € 33.7 million, in July 2003.
Group profit before tax (i.e. profit before tax and after minority interests) was € 70.5 million, a fall of 30.9% (-27.9% at constant exchange rates).
At 30 September 2004, net debt stood at € 256.6 million (€ 303.0 million at 30 June 2004).
SALES IN THE FIRST NINE MONTHS OF 2004
The spirits segment, which accounted for 64.7% of total sales, recorded growth of 9.1%, determined by organic growth of 2.7%, external growth of 10.5% and a negative exchange rate effect of 4.2%. The Campari brand posted growth of 5.1% at constant exchange rates (3.3% at actual exchange rates): the positive performances registered in Brazil, Italy, Japan and other important European markets more than offset the contraction of sales in Germany, where particularly adverse weather conditions led to a sharp fall in consumption. Sales of SKYY Vodka rose by 4.0% at constant exchange rates. The SKYY flavoured vodka range, which accounted for 15% of total SKYY brand sales, fell by 7.2% at constant exchange rates, owing to an unfavourable comparison base with the same period last year (several new line-extensions were launched in the second quarter of 2003, causing sales to jump). Overall, SKYY brand sales, including the flavoured range, rose by 2.1% at constant exchange rates (-7.1% at actual exchange rates). Regarding the other main brands, the spirits segment also benefited from a good performance from CampariSoda (+4.1%), the Brazilian brands (+16.1% at constant exchange rates), Ouzo 12 (+17.1% at constant exchange rates) and Cynar (+5.5% at constant exchange rates). The group’s major brands under licence also performed well, including 1800 tequila (+26.6% at constant exchange rates) and Jägermeister (+1.9%). External growth was entirely due to Barbero 1891 S.p.A., whose brands all made a positive contribution, especially the main brand Aperol, which recorded volume growth of 20.3% compared with the same period of last year.
The wines segment (13.5% of total sales) posted growth of 24.8%. Organic growth (+16.3%) was boosted by a positive performance from all main brands: Cinzano sparkling wines saw growth of +7.3% at constant exchange rates, thanks to a good performance in Italy and other important markets. Cinzano vermouth posted growth of +14.1% at constant exchange rates, thanks to a positive trend on the main European markets and in Japan. Wines were also supported by the significant growth recorded by Sella & Mosca (+11.0%), also due to a good sales mix, and by Riccadonna, up 20.0% at constant exchange rates on the international markets. External growth (+10.4%) was almost entirely due to Barbero 1891 S.p.A., particularly the Mondoro and Enrico Serafino brands.
Soft drinks (20.4% of total sales, almost entirely on the Italian market) saw their sales fall by 5.9%. The 5.7% increase posted by Crodino, due to the brand’s strength, was more than offset by a decline in all the Group’s other soft drinks resulting from adverse weather. Sales of the Lemonsoda, Oransoda and Pelmosoda range dropped by 14.4%, while Lipton Ice Tea sales slid by 13.4%.
By region, Italy accounted for 51.8% of Group sales in the first nine months of 2004. Sales posted an organic decline of 0.5%, owing to the sharp drop in soft drinks and Campari Mixx sales in the third quarter. However, the domestic market benefited from the acquisition of Barbero 1891 S.p.A. (+13.4%), whose sales are mainly concentrated in Italy. Sales in Europe, accounting for 18.7% of the total, also benefited from the contribution of acquisitions (+9.1%), generated almost entirely by Barbero 1891 S.p.A. Growth was down by 4.8% in like-for-like terms, however, owing to a poor performance from the German market also after the distribution of Campari Mixx was suspended because of a sharp rise in duty on ready-to-drink products in Germany. In the Americas, which account for 26.5% of total sales, the US market posted growth of 4.7% at constant exchange rates, which was completely wiped out by negative exchange rate movements (-9.8%), while sales in Brazil grew by 11.9% in local currency terms (+6.9% at actual exchange rates). Sales to the rest of the world, accounting for 3% of the total, shot up by 42.5% in organic terms at constant exchange rates. The performance here was boosted in particular by the expected turnaround on the Japanese market.