Milan, 8 August 2008 - The Board of Directors of Davide Campari-Milano S.p.A. approved the results for the first half ending 30 June 2008.
Sales: € 431.2 million (-2.1%)
Organic sales growth: +3.0%
EBITDA before one-off’s: € 100.4 million (-2.0%), 23.3% of sales
EBIT before one-off’s: € 90.8 million (-2.1%), 21.1% of sales
Organic EBIT before one-off’s growth: +4.1%
Group net profit: € 59.8 million (+5.1%)
Bob Kunze-Concewitz, Chief Executive Officer: “In a very tough environment we achieved solid results, improving in the second quarter the momentum of our key brands across all regions. Overall, our outlook for 2008 remains unchanged”
Consolidated results for the first half of 2008
In 2008 we introduced a new P&L format. Referring to the line selling and distribution expenses, according to the new format, distribution expenses are included in the COGS line, while selling expenses are classified in the SG&A line, together with G&A and other operating income / expenses.
In the first half of 2008, Group sales totalled € 431.2 million, a decrease of 2.1% (+0.3% at constant exchange rates).
The overall change in consolidated sales resulted from an organic growth of 3.0%, a negative exchange rate effect of 2.5% and a negative perimeter effect of 2.7%. The latter was due to the announced termination of tequila 1800 distribution contract in US, which was partially offset by Cabo Wabo and X-Rated (whose sales started on 1 August 2007), as well as Bowmore and Flor de Caña.
Contribution after A&P (gross margin after distribution costs and A&P) increased by 1.6% to € 162.2 million (+4.4% at constant exchange rates), or 37.6% of sales. Organic growth accounted for 5.3% and external growth was a negative for 0.8%, lastly exchange rate effects negatively contributed for 2.8%.
EBITDA before one-off’s decreased by 2.0% (+1.0% at constant exchange rates) to € 100.4 million, or 23.3% of sales.
EBITDA rose by 1.2% (+4.2% at constant exchange rates) to € 102.0 million, or 23.7% of sales.
EBIT before one-off’s went down by 2.1% (+1.1% at constant exchange rates) to € 90.8 million, or 21.1% of sales. Organic growth accounted for 4.1%
EBIT increased by 1.5% (+4.6% at constant exchange rates) to € 92.5 million, or 21.4% of sales. Organic growth accounted for 7.7%
Profit before tax and minority interests was € 83.7 million, an increase of 1.3%.
The Group net profit was € 59.8 million, with a progression of 5.1% (+7.4% at constant exchange rates).
As of 30 June 2008, after payments of € 31.8 million as dividends and US$ 80.8 million (approximately € 57 million) for 80% of Cabo Wabo, net debt stood at € 354.8 million (€ 288.1 million as of 31 December 2007). The net debt includes €18.4 million estimated debt for possible exercise of put option on remaining 20% minority stake in Cabo Wabo.
Consolidated sales for the first HALF of 2008
The spirits segment (70.6% of total sales) recorded a decrease of 4.5%, the combined result of an organic growth of 2.2%, a negative exchange rate effect of 3.1% and a negative perimeter effect of 3.7%.
The Campari brand posted a growth of 4.8% at constant exchange rates (4.3% at actual exchange rates). SKYY sales grew by 8.5% at constant exchange rates (-4.4% at actual exchange rates). Regarding the other main brands, CampariSoda finished the first half with a slight decrease of 1.1%; Aperol confirmed the positive trend and recorded a strong growth of +12.0% at constant exchange rates. The Brazilian brands (-15.8% at constant exchange rates) and Cynar (-8.5% at constant exchange rates) registered a decrease, a short term effect due to a tax change in Sao Paulo state; while Glen Grant ended up the first half almost in line with last year (-0.6% at constant exchange rates). Regarding agency brands, Jack Daniel’s performed well (+6.5% at constant exchange rates).
The wines segment, which contributed 13.9% of total sales, registered a growth of 5.6%, due to the combination of organic growth of 6.2% and a negative exchange rate effect of 0.6%. The segment’s positive performance was driven by Cinzano vermouth (+5.6% at constant exchange rates) and by Cinzano sparkling wines (+4.8% at constant exchange rates). The still wines segment also benefited from the positive performance of Sella & Mosca (+5.3%).
Sales of soft drinks (13.5% of total sales), which are generated almost entirely by the Italian market, recorded an organic growth of 1.8%, driven by Crodino (+6.5%), while the Lemonsoda range registered a decrease (-1.6%) due to poor weather condition in Q2.
Looking at results by region, sales on the Italian market (45.9% of total Group sales) recorded an increase of 2.8%, thanks to good organic growth. Sales in Europe (21.0% of consolidated sales) grew by 4.8%, driven by the organic sales growth of 5.6%, thanks to positive performances from key markets; the exchange rate effect was negative at 0.8%. In the Americas (28.2% of total sales), the US market registered an organic growth of 1.3%, a negative exchange rate effect of 9.6% and a negative perimeter effect of 11.6%. In Brazil, sales registered an organic decrease of 11.7%. The exchange rate effect was positive at 4.2%. Sales in the rest of the world (including duty free sales), which accounted for 4.8% of total sales, grew by 14.9% overall, driven by an organic growth of 16.8%.