Campari Group

• Business

Who is Campari? What are Gruppo Campari's products? What is Campari's reference market?

• Strategy

What is Gruppo Campari's growth strategy? What have been Gruppo Campari's main acquisitions in the last few years? Who are Sella & Mosca and Zedda Piras and what are the main strategic implications of this acquisition? What is Aperol and what are the strategic implications of this acquisition? What is Glen Grant and what are the main strategic implications of this acquisition? Who is Skyy Spirits and what are the strategic implications of this acquisition? What is Cabo Wabo and what are the main strategic implications of this acquisition? What is X-Rated and what are the main strategic implications of this acquisition? Does the Campari Group have plans for further acquisitions?

• Stock Exchange Listing

Where is Campari listed? What were the key elements of its IPO and why did Campari go public? What are the ticker and the ISIN code of Campari? What is the minimum trading lot? What is the current ownership structure of Campari? How and when did the stock split become effective?

• Further information

How can I get a copy of Annual and Interim reports and further information about the company and the stock?

Who is Campari?

Established in 1860, Gruppo Campari is one of the world's leading alcoholic beverage players with a leading position in the Italian and Brazilian markets and a strong presence in the USA, Germany and Switzerland. Campari has its headquarters in Milan, northern Italy. Production facilities are located in Italy, Brazil and France. An established presence in international markets enables the group to satisfy demand in more than 190 countries. The Group has about 1,600 employees, and shares of the parent company Davide Campari-Milano S.p.A. have been listed on the Milan Stock Exchange since July 2001.

What are Gruppo Campari's products?

Campari's product portfolio spans three business segments: spirits, wines and soft drinks. In 2006 the three segments contributed to consolidated net sales in the proportions of 71%, 15%, and 14% respectively. The portfolio includes internationally known brands such as Campari, Cinzano, SKYY Vodka and Cynar, as well as local market leaders like Aperol, Glen Grant, Aperol Soda, CampariSoda, Crodino, Sella & Mosca, Zedda Piras (Mirto di Sardegna), Lemonsoda, Oransoda, Pelmosoda, Tonicsoda, Biancosarti, Barbieri liqueurs and Enrico Serafino (in Italy), Teruzzi&Puthod (mainly in Germany, the US, Italy), Ouzo 12 (in Greece and Germany), Old Smuggler (in the US and Argentina), Braemar (in the Eastern Europe and Thailand), Dreher, Old Eight, Drury's, Liebfraumlich and Gold Cup (in Brazil), Gregson's (in Uruguay) and Riccadonna (in Australia and in New Zealand). Campari's portfolio includes Campari Mixx, leading brand in the new Ready-To-Drink market in Italy.

The Group's credibility has led to it being entrusted with the manufacture and distribution under licence of leading brands belonging to other leading groups in the beverage sector. They include Cacaçha 51, Carolans cream liqueur, Cutty Sark, Fernet Branca, Finlandia Vodka, Frangelico, Glenfiddich, Gran Centenario, Grand Marnier, Grant's, Henkell Trocken, Irish Mist, Jack Daniel’s, Jägermeister, Jose Cuervo,  Martin Miller’s Gin, Midori, Southern Comfort, 1800 tequila, Tullamore Dew Irish Whiskey, Vodka Gorbatschow and Woodford Reserve.

What is Campari's reference market?

Generally speaking, the beverage market is a sub-sector of the consumer industry. At a more detailed level, however, the three segments in which the Group operates are by no means homogeneous markets. Within each there are numerous sub-segments with unique characteristics and differing competitive scenarios.

In the premium spirits business, Gruppo Campari is a leading global competitor and has a strong complementary presence in the international vermouth and sparkling wines market, as well as in the Italian still wines and soft drinks market. The spirits & wines businesses rely upon strong brand identity: this justifies the significant amount of resources invested by the group in advertising and promotional initiatives to support the brands. The soft drinks market, on the other hand, is characterised by high competition and significant price elasticity.

What is Gruppo Campari's growth strategy?

Gruppo Campari pursues a growth strategy through selective acquisitions in the target sector with special focus on the spirits & wines markets, combined with organic growth through development of the existing portfolio, and partnerships with third parties for the distribution of its brands wherever the Group is not present with its own sales organization. As a result of the recent expansion programme, the Group has won new markets, enhanced its presence and strengthened its international brands, becoming an organisation with a compounded annual growth rate of approximately 11% in the last two years.

What have been Gruppo Campari's main acquisitions in the last few years?

Since 1995, Gruppo Campari has been engaged in an intense acquisition program at the international level. Key operations in this period include the acquisition from BolsWessanen of its Italian activities in 1995 (Crodino, Cynar, Lemonsoda and Oransoda), the acquisition of Ouzo 12 and subsequently Cinzano from Diageo in 1999, the acquisition from Diageo of a portfolio of leading spirits and wines brands in the Brazilian and Uruguayan markets (Dreher, Old Eight, Drury's, Liebfraumilch and Gregson's) in January 2001, and in December 2001 the acquisition of SKYY Spirits, LLC, owner of SKYY Vodka, one of the leading brands of the US vodka market. Moreover in January 2002, the Group finalised the acquisition of Sella & Mosca S.p.A., a major player in the Italian premium wine market, and Zedda Piras, the leading Sardinian spirits producer and a rapidly growing company within the Italian liqueur segment. In 2003 the acquisitions of Riccadonna and Barbero 1891 S.p.A. were completed. In December 2005, Gruppo Campari acquired Teruzzi&Puthod, one of the largest wine producers in Tuscany, thereby further strengthening its place in the Italian and international wine markets. In 2006 the acquisition of the whisky brands Glen Grant, Old Smuggler and Braemar from Pernod Ricard was completed, marking the entrance in the Scotch whisky segment. In 2007 Gruppo Campari announced the acquisition of Cabo Wabo Tequila (an 80% stake) and X-Rated, strengthening its US portfolio of super and ultra premium brands. 

Who are Sella & Mosca and Zedda Piras and what are the main strategic implications of this acquisition?

Sella & Mosca was founded in 1899 by two Piedmontese entrepreneurs, one of them - Ingegner Sella - a descendant of the famous statesman Quintino Sella. Based north of Alghero, near Sassari in Sardinia, and with around 550 hectares of vineyards, Sella & Mosca is one of Italy's leading wineries with a growing presence in the premium still wines segment. Its brands include Torbato, Terre Bianche and Cannonau and, among premium wines, the red wines Marchese di Villamarina DOC and Tanca Farrà DOC, and the white wines Monteoro and Vermentino di Gallura DOCG.

Zedda Piras, founded in 1854 and based in Alghero, is Sardinia's leading spirits company, with a growing share of the Italian liqueur market. Zedda Piras produces and distributes local specialties, and particularly the traditional Mirto di Sardegna, market leader in its segment with a higher than 50% market share.

On January 25, 2002 Gruppo Campari announced the acquisition of a 100% stake in Zedda Piras, which holds a majority stake of 67.62% (increased to 100% in June 2003) in Sella & Mosca's share capital.

The integration of Sella & Mosca into Campari aims at reinforcing Campari's wine business, where the Group already has a strong presence through the Cinzano brand. It also represents the first step in the creation of a strong portfolio of premium Italian wines, a segment where the Group sees high growth potential. The Zedda Piras acquisition adds a leading brand to Campari spirits portfolio and allows to enter the regional specialities market, a segment showing strong growth both in Italy and internationally.

The deal will also allow Campari to achieve relevant distribution synergies, since on one side the Group will acquire an extremely powerful distribution network in Sardinia - a key market for international tourism - and an important entry to the Italian restaurant market, which will be helpful for the Group's other brands, particularly Cinzano. On the other hand, the Campari distribution network provides an ideal platform for the acquired brands' growth, both in Italy and abroad.

For further information visit:

www.sellaemosca.com

What is Aperol and what are the strategic implications of this acquisition?

The deal involves a wide portfolio of brands, including Aperol, Aperol Soda and Barbieri liqueurs in the spirits segment, and Mondoro and Enrico Serafino in the wines segment.

In line with the Group’s strategy, this acquisition represents a further strengthening in the spirits and wines markets: Aperol integrates the offer in the medium-alcoholic content spirits segment which is experiencing a strong growth in Italy and internationally; at the same time, with Mondoro, the Group consolidate its strong position in the premium Asti segment on international markets.

What is Glen Grant and what are the main strategic implications of this acquisition?

Created in 1840, Glen Grant is currently the second single malt whisky brand in the world and the leading whisky brand in Italy. A successful brand for over 15 years, Glen Grant single malt whisky has a strong presence in Italy, Germany, France as well as in other important international markets.

Together with Glen Grant, Campari acquired Old Smuggler and Braemar, two brands of blended Scotch whisky present in a number of markets. In particular, Old Smuggler holds a significant position in the United States, Argentina and in the Eastern European markets, while Braemar is mostly present in the Eastern European markets and Thailand.

In addition, as part of the deal, Campari acquired the distillery where Glen Grant is produced in Rothes, Scotland.

This important deal enables the Group not only to strengthen its position in the spirits segment further, but also to mark its entrance into the key Scotch whisky segment, one of the most important spirits categories in the world, a segment with great potential internationally as well as in the domestic market.

Who is Skyy Spirits and what are the strategic implications of this acquisition?

Skyy Spirits, LLC, based in San Francisco, California, is the owner of the SKYY Vodka brand. SKYY Vodka, invented and launched in the US by Maurice Kanbar in 1992, is one of the fastest growing brands in the premium vodka market, itself one of the most dynamic segments within the spirits industry. In 2004 SKYY Vodka reached total sales of approx. 2.2 million 9-ltr cases with a compounded annual growth rate (CAGR) of 17% over the last five years. In December 2001 Campari, which had already acquired a minority stake in November 1998, acquired an additional 50% stake in Skyy Spirits, LLC, thereby becoming the company's controlling shareholder with a 58.9% stake, i.e. the absolute majority. The deal's value is USD 207.5 million (Euro 233.4 million). In 2005 Campari increased its stake to 89% by acquiring a further 30.1% for a total value of USD 156.6 millions (Euro 118 millions). In November 2006, the Group acquired a further stake of 11%, taking its interest to 100%. The deal's value is USD 62 million (Euro 49 million). This acquisition is a significant step in Campari's international expansion strategy, particularly in the US, a crucial market for the Group, and further enhances the Group's presence in the spirits market premium segment with SKYY Vodka, a leading brand in the North American premium vodka market.
For further information visit: www.skyy.com

What is Cabo Wabo and what are the main strategic implications of this acquisition?

Founded in 1996 by Sammy Hagar, Cabo Wabo Tequila was firstly imported in the US in 1998 and quickly gained loyal following and success among fans and tequila lovers.

Cabo Wabo, mainly sold in the US, is an award-winning ultra premium tequila, including Cabo Wabo Reposado, Cabo Wabo Anejo, Cabo Wabo Blanco, and new ultra luxury Cabo Uno, barrel-aged for three years. It is one of the fastest growing brands in the US spirits market.

On May 7, 2007 Gruppo Campari announced the acquisition of an 80% stake in Cabo Wabo Tequila, closing of the acquisition beginning of 2008, with the opportunity to buy the remaining 20% interest in two tranches of 15% and 5% through call / put options to be exercised in 2012 and 2015 respectively.

The deal not only contributes to build our diverse portfolio of ultra premium brands in the US, but also to increase Gruppo Campari's focus in tequila by owning a brand in a very important and growing category.

What is X-Rated and what are the main strategic implications of this acquisition?

X-Rated was launched in 2004 in the USA by award-winning spirits creator Jean-Marc Daucourt and Todd Martin. X-Rated, which since its launch has enjoyed a fast growth rate, is distributed in the USA by luxury imported spirits company Daucourt Martin Imports, LLC.

The deal includes the super premium X-Rated Fusion Liqueur, Jean-Marc XO luxury vodka and X-Rated ultra premium vodka. X-Rated Fusion Liqueur is an exotic fusion of ultra premium French vodka and blood oranges from Provence, fused with mango and passion fruit; it is one of the fastest growing brands in the industry. Jean-Marc XO Vodka is a handcrafted, leading luxury vodka, made from four different types of French wheat and distilled nine times, part of the fastest growing segment in the US vodka category. Ultra premium X-Rated Vodka is an exclusive small batch import from France made from delicate French wheat and a touch of Baies Roses (roseberry grain).

Following this acquisition Gruppo Campari further expands its US portfolio of super and ultra premium spirits, strengthening its offering in the growing liqueur and vodka categories.

Does the Campari Group have plans for further acquisitions?

Selective external expansion is an important part of Gruppo Campari's strategy. The group remains committed to pursuing potential acquisitions in order to acquire leading brands in particular markets and consolidate the group's presence by exploiting production and distribution synergies in key markets.

Where is Campari listed?

Since 6 July 2001, Davide Campari-Milano S.p.A. ordinary shares have been traded on the Italian Stock Exchange (MTA) managed by Borsa Italiana S.p.A.

What were the key elements of its IPO and why did Campari go public?

Once the offer was completed, a total of 12,705,000 existing shares (127,050,000 shares on an adjusted base after the stock split) were allocated, plus a greenshoe allotment of 1,524,600 shares.

The offer was over-subscribed over three times and the final allocation was as follows:

• 2,335,900 shares (23,359,000 shares on an adjusted base after the stock split) to private investors in Italy as part of the Italian retail offer;
• 11,893,700 shares (118,937,000 shares on an adjusted base after the stock split) to institutional investors in Italy and abroad, as part of institutional distribution.

The issue price was Euro 31 (Euro 3.1 on an adjusted base after the stock split) per share.

Deutsche Bank and UBS Warburg were joint global coordinators and joint bookrunners. IntesaBci was sponsor and lead manager of the Italian retail offer.

Campari decided to go public because of the opportunities offered to the Group by the financial market in terms of availability of resources to finance the new acquisitions; at the same time, the listing gives the group greater visibility, transparency and the means to provide incentives for company management. The IPO also allowed two of the company's minority shareholders to realise their investment.

What are the ticker and the ISIN code of Campari?

The Campari ticker is CPR (Reuters: CPRI.MI - Bloomberg: CPR IM). The ISIN code is IT0003849244.
This is the new ISIN code for the new shares resulting from the stock split effective as of 9 May 2005.

What is the minimum trading lot?

The minimum trading lot is 1 share.

What is the current ownership structure of Campari?

The Garavoglia family indirectly holds 51% of the share capital of Davide Campari-Milano S.p.A. Free float is 49%. Cedar Rock Capital holds 7.527% and Janus Capital Management holds 5.015%.

How and when did the stock split become effective?

The extraordinary Shareholders’ meeting of 29 April 2005 approved the stock split of the 29,040,000 shares with a nominal value of € 1.00, via the issue of ten new shares with a nominal value of € 0.10 each for each existing share. The new shares qualify for dividends from 1 January 2004, and the current fully paid up share capital of € 29,040,000 (which remains unchanged) is subsequently divided into 290,400,000 shares. The resolution was entered in the Milan Trade Register on 2 May 2005 and the stock split is effective as of 9 May 2005.