Campari Group

11/09/2006

Results for the first half to 30 June 2006

Milan, 11 September 2006 - The Board of Directors of Davide Campari-Milano S.p.A. has approved the half-year accounts to 30 June 2006. The Campari Group’s results for the period were positive, thanks to the recent acquisitions (Glen Grant and Teruzzi & Puthod), the distribution of new brands (Jack Daniel’s, C&C brands and Midori), and organic growth.

CONSOLIDATED RESULTS FOR THE FIRST HALF OF 2006

In the first quarter of 2006, Group sales totalled € 417.8 million, an increase of 14.8% (+12.2% at constant exchange rates).

The overall change in consolidated sales resulted from organic growth of 2.5% and a positive exchange rate effect of 2.6%. External growth, which came in at 9.8%, was driven by recent acquisitions (Glen Grant Scotch whisky and Teruzzi & Puthod wines) and third-party brands covered by new distribution agreements (C&C’s spirits portfolio on the US and Brazilian markets, Jack Daniel’s and other Brown-Forman brands on the Italian market and Midori liqueur
and Martin Miller’s gin on the US market).

Trading profit increased by 7.3% to € 115.3 million (+5.2% at constant exchange rates), or 27.6% of sales. Organic growth accounted for 2.0%, external growth for 3.2% and positive exchange rate effects for 2.1%.

EBITDA before one-off’s increased by 6.6% (+4.8% at constant exchange rates) to € 95.3 million, or 22.8% of sales.

EBITDA rose by 3.5% (+1.7% at constant exchange rates) to € 95.2 million, or 22.8% of sales.

EBIT before one-off’s went up by 6.2% (+4.4% at constant exchange rates) to € 86.0 million, or 20.6% of sales.

EBIT increased by 2.8% (+1.0% at constant exchange rates) to € 85.9 million, or 20.6% 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 € 80.4 million, an increase of 2.3% (+0.4% at constant exchange rates).

Net profit attributable to the Group was € 55.5 million, a rise of 4.0% (+2.0% at constant exchange rates).

Shareholders’ equity was € 725.1 million at 30 June 2006.

At 30 June 2006, net debt stood at € 479.5 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 € 128.9 million. The acquisition was financed by bank debt.

CONSOLIDATED SALES IN THE FIRST HALF OF 2006

The spirits segment, which accounts for 70.2% of sales, recorded growth of 20.6%, the combined result of organic growth of 3.7%, a positive exchange rate effect of 3.7% and external growth of 13.3%. External growth was driven by the newly acquired Glen Grant, Old Smuggler and Braemar Scotch whiskies and by new distribution agreements, notably for C&C’s spirits portfolio on the US and Brazilian markets, Jack Daniel’s whisky on the Italian market and Midori liqueur on the US market. Campari brand sales dipped by 6.7% at constant exchange rates (-4.6% at actual exchange rates), because of a slowdown in sales in the second quarter, as stocks were reduced in view of the introduction of new packaging. Sales of SKYY Vodka rose by 12.9% at constant exchange rates (+17.9% at actual exchange rates), thanks to a positive performance on both the US (+12.3% at constant exchange rates) and international markets (+17.9%). Regarding the other main brands, the spirits segment benefited from strong performances from Aperol (+23.2%), Ouzo 12 (+13.8%) and Brazilian brands (+10.4% at constant exchange rates), while Campari Soda and Cynar put in negative first-half performances (-1.7% and -12.9% respectively at constant exchange rates). Of the brands under licence, Scotch whiskies (+12.6% at constant exchange rates), 1800 tequila (+9.2% at constant exchange rates) and Jägermeister (+5.3% at constant exchange rates) performed well.

The wines segment, which contributed 11.4% of sales, registered growth of 3.9%, due to the combination of negative organic growth of 0.8%, a positive exchange rate effect of 0.8% and external growth of 3.9%, generated by the newly-acquired Teruzzi & Puthod. The segment’s positive performance was driven by Cinzano sparkling wines (15.7%) and Sella & Mosca wines (+3.5%), while Cinzano vermouth registered a decline of 9.1% at constant exchange rates. As for the Group’s other brands, Mondoro registered sales growth, but Riccadonna suffered a decline in sales.

Sales of soft drinks, which came in at 17.2% of sales and were generated almost entirely on the Italian market, show a positive performance by Crodino (+3.3%) and the third-party brand Lipton Ice Tea (+1.4%). Sales of the carbonated soft drinks dropped by 3.4%.

Looking now at results by region, first-half sales on the Italian market, which account for 46.5% of sales, recorded an increase of 4.6%. Italian sales were boosted by external growth of 4.8%, deriving mainly from Glen Grant and the distribution of Jack Daniel’s and the other Brown-Forman brands (since May 2005); organic sales growth was negative at 0.2%. Sales in Europe (16.6% of consolidated sales) grew by 7.9%, entirely due to external growth (+9.1%) mainly generated by the new brands Glen Grant and Teruzzi & Puthod. In the Americas, which account for 32.9% of total sales, the US market registered organic growth of 10.5%, external growth
of 28.0% and a positive exchange rate effect of 5.1%. In Brazil, sales registered organic growth of 3.7% at constant exchange rates and a positive exchange rate effect of 23.4%. External growth was a negative 0.9%. Sales in the rest of the world (including duty free sales), which account for 4.0% of total sales, grew by 14.0% in total, driven by organic growth
of 9.4%.

CONFERENCE CALL

Please note that at 17.00 (CET) today, Monday 11 September 2006, Campari’s management will hold a conference call to present the Group’s first-half 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.camparigroup.com/investors.

A recording of the conference call will be available from 21.00 on Monday 11 September until 21.00 on Monday 18 September. To hear it, please call +44 1296 618 700 (access code: 631317).

The Campari Group is a major player in the global beverage sector, trading in over 190 nations around the world with a leading position in the Italian and Brazilian markets and a strong presence in the US, Germany and Switzerland. The Group has an extensive portfolio that spans three business segments: spirits, wines and soft drinks. In the spirits segment stand out internationally
renowned brands, such as Campari, SKYY Vodka and Cynar together with leading local brands, such as Aperol, CampariSoda, Glen Grant, Ouzo 12 and Zedda Piras and the Brazilian brands Dreher, Old Eight, Drury’s. In the wine segment together with Cinzano, known world-wide, are Liebfraumilch, Mondoro, Riccadonna, Sella & Mosca and Teruzzi & Puthod all respected wines in their category. In the soft drinks segment are Crodino, Lemonsoda and its respective line extension dominating the Italian market. The Group has over 1,500 employees. The shares of the parent company, Davide
Campari-Milano, are listed on the Italian Stock Exchange.

FOR FURTHER INFORMATION:

Download the full press release (PDF - 45 KB)

The document is in PDF format. To view PDFs you need the Adobe Acrobat Reader. This program is available free of charge from the Adobe website.