Davide Campari Milano S p A : 2019 full year results investor presentation

February 18, 2020 at 06:45 pm

2019 Full Year

Results

Investor Presentation

18 February 2020

Table of contents

Results Summary

Sales Results

By region
By brand

Operating Results by Region

Consolidated P&L

Cash Flow & Net Financial Debt

New initiatives & Outlook

Annex

Results for the Full Year 2019 ended 31 December 2019

Results for full year ended 31 December 2019

Consistent solid performance across all key underlying indicators

		FY 2019 (1)			Change vs. FY 2018

Key figures	€ million % on sales		Reported	Organic		FX	Perimeter (2)

Net sales

of which: Global priorities Regional priorities

Gross profit

margin accretion (bps) (3)

1,842.5	100.0%	+7.6%	+5.9%	+2.1%	-0.4%
			+7.3%
			+4.3%
1,121.2	60.9%	+9.1%	+7.0%	+2.2%	-0.1%
		+80bps	+60bps	0bps	+20bps

EBIT adjusted (4)
408.0	22.1%	+7.7%		+6.7%	+1.7%	-0.7%

margin accretion (bps) (3)				0bps	+20bps	-10bps	-10bps
EBITDA adjusted (4)

479.8	26.0%	+10.9%		+9.6%	+1.7%	-0.4%
margin accretion (bps) (3)				+80bps	+90bps	-10bps	0bps
Group net profit adjusted (5)

	267.4		+7.3%
Adjusted basic EPS (€)	0.23

Recurring free cash flow	267.3
Net Debt at period end (1)	777.4

Dividend per share (€)	0.055

Application of IFRS 16-'Leases' (effective 1 January 2019)
Effect of termination of agency brands contracts, net of acquisitions
Basis points rounded to the nearest ten
EBIT and EBITDA before negative operating adjustments of €(21.7) million in FY 2019, mainly attributable to restructuring operations (positive operating adjustments of €1.9 million in FY 2018)
Group net profit before overall net positive adjustments of €41.0 million in FY 2019 (overall net positive adjustments of €47.0 million in FY 2018)

Results for the Full Year 2019 ended 31 December 2019

Key highlights

Sustained positive topline, fueling investments back into the business for future growth

> Net Sales	• Positive organic growth in FY 2019 (+5.9%), despite selective destocking in Japan and South Africa ahead of changes in route-to-market
	• Consistent outperformance of key high-margin brands in core developed markets
	- By brand: Global Priorities outperformed (+7.3% in FY 2019), mainly driven by Aperol and Campari. Regional Priorities up
	+4.3% thanks to Espolòn, while Local Priorities were up +1.8%, thanks to the single-serve aperitifs (Crodino and Campari Soda)
	and Wild Turkey read-to-drink
	- By geography: good performance in high-marginmarkets, driven mainly by the US, Italy and the rest of Europe. Recovery in
	South America and Russia, although in a highly volatile environment
	• Reported change of +7.6%, reflecting a negative perimeter effect of -0.4% or €(6.9) million, mainly due to agency brands
	discontinuation, and a positive FX effect of +2.1% or €36.1 million, driven by the strengthened US Dollar vs. Euro
> EBIT	• EBIT adjusted

Organic growth of +6.7%, slightly ahead of organic sales growth (+20 bps margin accretion), driven by organic gross margin expansion of +60 bps in FY 2019 thanks to the positive sales mix despite the agave headwinds and after reinvestments back into the business (A&P and SG&A -40bps dilutive)
In Q4, organic gross margin was slightly accretive (+10 bps), largely hindered by a tough comparable base vs Q4 2018 (+230 bps). Combined with the phasing effect of A&P, organic EBIT margin was dilutive by -90 bps

Net profit
Free cash flow
Net debt

- On a reported basis change of +7.7%, taking into account the negative perimeter of -0.7% or €(2.6) million and positive FX of
  +1.7% or €6.5 million
Group net profit adjusted to €267.4 million (1), up +7.3%
Group net profit reported to €308.4 million, up +4.1%
Free cash flow at €258.5 million, of which recurring free cash flow of €267.3 million
Net financial debt at €777.4 million (2) as of 31 December 2019 vs. €846.3 million as of 31 December 2018, down €68.9 million, driven by positive cash flow, net of acquisitions and real estate disposal as well as the incremental debt generated by the adoption of IFRS16-'Leases'
Net debt to EBITDA adjusted ratio at 1.6 times as of 31 December 2019 (down from 2.0 times (3) as of 31 December 2018)

Other resolutions

>	Dividend	• Increase in proposed full year dividend to €0.055 per share, up +10.0% vs. last year
>	Share buy-back	• Continuation of share buy-back program to be implemented up to an amount of €350 million in the next 12 months

(1) Group net profit before overall net positive adjustments of €41.0 million	4

Please refer to slide 49 for details on the net financial debt
Calculated based on the same criteria adopted for the ratio of 31 December 2019

Results for the Full Year 2019 ended 31 December 2019

Delivering on strategy

Positive margin expansion driven by outperformance of core high-margin brand and market combinations

Organic net sales growth

(FY 2014 - FY 2019)

Gross margin improvement FY 2014 - FY 2019 (1)		EBIT adjusted improvement by key driver (1)
	bps	bps		+140 bps organic
+450bps	+450	(150)		bps+90	+70bps
60.9%

53.3%			19.1%	(150) bps
			+450 bps	(160) bps
	(2)	(3)			(2)	(3)

> Cumulative 5-year:+750 bps, of which +450 bps organic	> Cumulative 5-year:+300 bps, of which +140 bps organic
> On annual basis: +150 bps overall, of which +90 bps organic	> On annual basis: +60 bps overall, of which +30 bps organic

22.1%

Strong gross margin expansion driven by sales mix improvement, fuelling consistent re-investments in brand building and business infrastructure for future growth

(1)	Basis points rounded to the nearest ten	5
(2)	Including effect of IAS 29 hyperinflation in Argentina (non-material)

IFRS15 implementation as of 1 January 2018. Under IFRS15 certain A&P expenses are reclassified in deduction of sales

Results for the Full Year 2019 ended 31 December 2019

Positive organic sales growth

Continued positive growth across all regions and brand clusters

By Region

By Brand

Americas: satisfactory growth across the region driven by the core US market, up +5.3%, Jamaica +17.6% and Latin America
SEMEA: Italy up +5.8% and good growth in the rest of the region, particularly France, helping compensate destocking ahead of route-to-market change in South Africa
NCEE: strong positive performance overall, mainly driven by the UK and Russia
Asia Pacific: flattish performance overall against a tough
comparison base (FY 2018: +12.9%), while Australia grew positively which helped to largely offset destocking in Japan ahead of route-to-market change

(1)

1. Including Rest of Portfolio, up +6.2% in FY 2019
Global Priorities: strong full year performance in Aperol and the Jamaican rums. Campari and Wild Turkey were positive overall, despite destocking ahead of route-to-market change in Japan.
Grand Marnier was broadly flattish. SKYY declined overall, albeit with improving trends in the main US market, affected by destocking in South Africa ahead of route-to-market change
Regional Priorities: very positive performance from Espolòn, Averna and Riccadonna
Local Priorities: positive growth driven largely by the single-serve aperitifs (Campari Soda and Crodino) and Wild Turkey RTD

Results for the Full Year 2019 ended 31 December 2019

Table of contents

Results Summary

Sales Results

By region
By brand

Operating Results by Region

Consolidated P&L

Cash Flow & Net Financial Debt

New initiatives & Outlook

Annex

Results for the Full Year 2019 ended 31 December 2019

Net sales results for Full Year 2019

Growth drivers

	Organic change (1)
% change	+5.9%	+2.1%	-0.4%

€million

1,711.7

+101.5

+36.1

(6.9)

1,842.5

Organic change of +5.9% (after excluding the positive price effect in Argentina of 70bps) (1) or €101.5 million (+3.6% or €18.4 million in Q4 2019), largely driven by the key brand-market combinations
Forex effect of +2.1% or €36.1 million, largely thanks to the strengthened US Dollar vs. Euro (+1.0% or €5.2 million in Q4 2019) which more than offset weakness in Latin American currencies
Perimeter impact of -0.4% or €(6.9) million, due to the tail-end effect of the termination of agency brands contracts, only in part offset by the consolidation of Rhumantilles, Ancho Reyes and Montelobos acquisitions (completed in Q4)

Starting from Q3 2018, following the inclusion of Argentina into the cluster of Hyperinflationary Economies, sales organic change in this country has been calculated to reflect only the volume change, therefore excluding the price effect and the revaluation component required by IAS 29 (both included in FX effect)

Results for the Full Year 2019 ended 31 December 2019

Net sales by regions & key markets in FY 2019

US remains the largest market with 26.9% of Group Net Sales

FY 2019 Group Net Sales €1,842.5 million

Organic growth +5.9%

Asia Pac: 7.0% of total

Organic growth: +0.8%

NCEE:	21.4% of total	Americas: 44.6% of total
	Organic growth: +8.8%
	Organic growth: +5.8%

SEMEA: 27.1% of total

Organic growth: +5.3%

Developed vs. emerging markets(1): 80% vs. 20%

(1) Key emerging markets include Jamaica, Russia, Brazil, Argentina, Mexico, South Africa, Peru and Nigeria

Results for the Full Year 2019 ended 31 December 2019

Americas: +5.8% organic

Americas44.6%

% change

+5.8%

+4.5%

-0.1%

						Regional net sales organic growth
€million	744.7	+43.5	+33.8	(0.6)	821.5			by quarter

							Q1	Q2	Q3	Q4
						2019	13.1%	7.3%	0.5%	4.3%
						2018	2.9%	6.0%	4.7%	2.1%

Organic growth by key market in FY 2019

>US	+5.3%	•	Overall positive growth in the US market, driven by double-digitgrowth in Aperol (+33.9%), Espolòn (+34.4%) and Russell's Reserve
			(+18.1%) and by the positive performance of Campari, Wild Turkey, Wray&Nephew Overproof and Grand Marnier. Cynar and
			Averna also registered positive growth off a small base. SKYY declined due to the competitive pressure in flavours, while core vodka is
			progressively aligning to more favourable consumption trends
> Jamaica	+17.6%	•	Continued strong performance and ongoing favourable trends in Jamaica with positive mix driven by core Wray&Nephew Overproof
			(+22.2%), Appleton Estate (+50.4%), Magnum Tonic Wine (+26.4%) and Campari (+8.8%)

> Canada	+2.6%
> Brazil	+3.3%
> Others	+1.0%

Overall positive performance thanks to the double-digit growth of Aperol, Espolòn and Campari, mitigating the slight decline of Appleton Estate and Forty Creek
Overall satisfactory growth, in a still highly volatile environment: a positive performance from Aperol and Campari was partly offset by weakness in the local Brazilian brands. Macroeconomic weakness, high unemployment rates and political instability continue to impact the Brazilian market
Mexico registered positive growth, largely thanks to SKYY ready-to-drink, Cinzano sparkling wine and Aperol while Argentina also registered a positive performance (+9.7%) against an easy comparable base (FY 2018: -32.4%)largely due to growth in SKYY, Cinzano sparkling wine, Campari and Aperol while macro conditions remain uncertain and challenging. Other markets in North America declined while other markets in South America grew thanks to Aperol and Riccadonna

Results for the Full Year 2019 ended 31 December 2019

(1)

SEMEA: +5.3% organic

									SEMEA
									27.1%
	% change		+5.3%	-0.1%	-1.3%
									Regional net sales organic growth
	€million	479.8	+25.4	(0.4)	(6.2)	498.7			by quarter

										Q1	Q2	Q3	Q4
								2019		6.4%	8.6%		8.9%	-1.8%
								2018		1.1%	6.3%		9.6%	2.8%
							(2)
Organic growth by key market in FY 2019
> Italy	+5.8%	•	Very solid full year performance, largely driven by the aperitifs portfolio: double-digit growth of Aperol (+12.8%), continued solid
			growth of Campari (+8.3%) and growth in local aperitifs such as Crodino and Campari Soda. Cynar, Espolòn and GlenGrant also
			contributed to a positive result
> Others	+3.9%	•	France grew positively by +14.2% thanks to double-digit growth of Aperol and Riccadonna while Spain declined overall (-1.4%)as
			positive growth in Aperol and Cinzano Vermouth was offset by weakness in Bulldog which was impacted by a very competitive gin

market. In the African markets, Nigeria grew positively thanks to a strong performance of Campari and American Honey while South Africa declined due to destocking ahead of route-to-market change

Global Travel Retail grew by +4.1% thanks to double-digit growth in Aperol, Campari and GlenGrant

Incl. Global Travel Retail
Perimeter effect largely driven by agency brand distribution termination in Italy combined with first-time consolidation of Rhumantilles in Q4 2019

Results for the Full Year 2019 ended 31 December 2019

NCEE: +8.8% organic

NCEE21.4%

% change

+8.8%

+1.0%

-0.0%

						Regional net sales organic growth
€million	358.9	+31.5	+3.6	(0.1)	393.8			by quarter

							Q1	Q2	Q3	Q4
						2019	11.6%	4.2%	10.4%	9.9%
						2018	-3.8%	14.4%	13.9%	-0.2%

Organic growth by key market in FY 2019

> Germany +3.3% • Positive performance in Germany largely driven by double-digit growth of Aperol (+18.2%) as the brand continues to leverage new consumption occasions beyond deseasonalisation, as well as positive trends in Ouzo 12, Averna, SKYY, Crodino, Frangelico and GlenGrant. This offset a temporary decline in Campari due to a very tough comparison base from 2018 (+13.9%) ahead of the price increase implemented at the beginning of the year as well as weakness in Cinzano sparkling wines

>UK	+39.6%
> Russia	+11.9%
> Others	+6.5%

Very positive growth showing an accelerated trend, driven by sustained growth of Aperol (+23.0%) and the Jamaican brands (+42.0%), largely Wray&Nephew Overproof and Magnum Tonic. Espolòn also registered positive growth, albeit off a small base, as the brand is seeded internationally
Overall positive performance against an easy comparison base (FY 2018 -11.4%) as the market shows signs of recovery, despite volatility, with positive trends in Aperol, the Cinzano portfolio and Mondoro
Good performance across the rest of the region, particularly Austria, Switzerland, Scandinavia and Eastern Europe, mainly driven by Aperol and Campari

Results for the Full Year 2019 ended 31 December 2019

Asia Pacific: +0.8% organic

Asia

Pacific7.0%

% change

+0.8%

-0.7%

0.0%

							Regional net sales organic growth
€million	128.3	+1.1	(0.9)	0.0	128.5			by quarter

							Q1	Q2	Q3	Q4
						2019	-3.1%	4.9%	0.7%	0.6%
						2018	17.8%	11.7%	19.2%	6.0%

Organic growth by key market in FY 2019

> Australia +2.0%

> Others

-1.8%

Very satisfactory performance, despite the tough comparison base (FY 2018 +10.5%) and the negative impact of bushfires towards the end of Q4. Positive growth in Wild Turkey ready-to-drink,Aperol, which continues its double-digittrend (+22.8%), SKYY and Espolòn
Overall decline driven by the Japanese market due to destocking ahead of route-to-market change while China (SKYY, Cinzano sparkling wine, Aperol) and New Zealand (Appleton Estate, Wild Turkey) grew positively off a small base

Results for the Full Year 2019 ended 31 December 2019

Net sales by key brand

FY 2019 Group Net Sales €1,842.5 million

Rest of Portfolio: 15%

Organic growth +5.9%

Agency brands & Co-packing 7%

Rest of own brands 8%

Local Priorities, 11%
Organic change: +1.8%	Global Priorities, 57%

	(+100bps vs FY 2018)
	Organic change: +7.3%

Regional Priorities,17%

Organic change: +4.3%

Results for the Full Year 2019 ended 31 December 2019

Aperol (18% of Group sales): +20.5%(1)

Global Priorities

Top 5 markets by value

Italy

Continued strong double-digit sales growth building on a very positive performance from previous years (5-year average +19.7%) thanks to sustained growth in the brand's core established and high potential markets, in line with the brand's growth model, as well as high growth from seeding markets
Aperol remains the Group's largest brand by value and continues to outperform in every market with improving geographic mix
Performance by market stage:
- Core Established
- - Strong result in Italy (+12.8%) as the brand continues to extend its usage occasions by taking ownership of food occasions. Aperol continues to grow by underlying double-digitafter 16 years of consistent execution of the brand strategy
  - Germany registered solid double-digit growth of +18.2% thanks to both the continued strengthening of the brand via deseasonalisation outside of the summer season as well as the initial move into extending usage occasions. Austria and Switzerland also achieved solid growth
- High Potential
- - Solid shipment result in the US market (+33.9%), lagging much stronger depletion and sellout trends, against last year's tough comparison base (FY 2018 +73.7% driven by first-time activations). The US remains the brand's
    3rd largest market by value. The brand begins to penetrate both the on and off premise occasion, largely on the East & West Coasts while initial activations in the mid-west took place this year. Canada also grew double digits, up +54.4%
  - Russia, now the brands 4th largest market, is also growing high double digits (+62.7%)
  - Continued double-digitgrowth in the UK, up +23.0%, as the brand remains one of the fastest growing brands in the UK for the fifth year in a row, while continued double-digitgrowth in France (+42.4%) and Spain (+18.1%) as well as sustained positive development in Global Travel Retail (+22.9%)
  - Australia continued double-digit growth, up +22.8%
- Seeding
- - High double-digit growth across Europe (particularly Scandinavian markets, Czech Republic, Poland), Americas (particularly Argentina, Brazil, Chile) while China also registered very high double-digit growth after first-timeactivations in Shanghai this summer

Germany
US
Russia
Austria

(1) Sales at constant FX. Q4 2019 sales organic growth: +15.9%

Results for the Full Year 2019 ended 31 December 2019

Celebrating 100 years in 2019

Global Priorities

US Festivals / Pop ups

Aperol activations continued to run in the US market throughout the summer and into November, with four key sponsorships: the highly anticipated Governor's Ball in NY, Lollapalooza festival in Chicago, Riptide Music Festival in Florida and Camp Flog Gnaw in LA

Aperol Spritz swings, signs and special Aperol gardens created the perfect Aperol Spritz ambiance, with customized Aperol bars where Aperol Spritz were served was central to the activations, with wearable merchandise was offered in exchange for social & instagrammable sharing - creating millions of impressions

Moreover, this autumn saw the pop-up of a dedicated Aperol Spritz bar, in the heart of NYC, in Bryant Park. At night the temporary ice-rink glowed orange with Aperol Spritz!

'Aperol Happy Together Live' - Venice

An important birthday deserves an unforgettable party. To celebrate the centenary of Aperol, a unique show joined different artists, set over a weekend, connected by the same passion for the music. Venice and Piazza S. Marco hosted the special edition of the Aperol Happy Together Live: a unique event that mixes different styles of music and different people to toast together.

'Aperol Big Spritz Social' - UK

During May & June in London, at the Shoreditch Electric Light Station and at Manchester's Oast House, Aperol invited Londoners and Mancunians (over 5,000 of them) to celebrate its centenary anniversary by immersing themselves in a world built for endless possibilities of Italian-stylespontaneity and sociability. A one of a kind celebration with food, dj-set,the UK's first ever revolving Aperol bar carousel, embedded 'bubble booths' hidden behind a giant Aperol Spritz as well as the unmissable flowing orange waterfall

Results for the Full Year 2019 ended 31 December 2019

Campari (10% of Group sales): +4.6%(1)

Global Priorities

Campari registered positive growth of +4.6% in the year, building on the positive international trends in the previous years, partly offset by the Japanese destocking ahead of route-to-marketchange (+6.0% organic growth before the destocking effect). Overall results in 2019 was also hindered by the soft performance in the brand's third largest market by value, Germany (-7.6%),after a price increase earlier this year coupled with a tough comparable base from Q4 2018 (+26.6%) ahead of the price repositioning
Performance by market
- SEMEA
- - Core market of Italy registered solid growth of +8.3% benefitting from very solid underlying trends of classic cocktails and Campari mixes such as the Campari Spritz or Campari & Tonic
  - Temporary weakness in France and Spain
- North, Central & Eastern Europe
- - Germany registered a decline of -7.6%, due to the aforementioned price increase while other markets in the region (Austria, Switzerland, Belgium) registered positive performances as the brand receives marketing support alongside specific mixology and cocktail events such as the Negroni week
- Americas
- - The US remains Campari's second largest market by value and grew positively by +9.6%, behind a double-digitdepletion trend, as the brand continues to benefit from the revival of Campari-based classic cocktails and speakeasy-style mixology, in particular the Negroni, Americano and Boulevardier
  - Argentina recovered against an easier comparison base from last year due to the tough macroeconomic situation and Brazil, despite continued market volatility, registered double-digitgrowth
  - Continued solid growth in Jamaica and Canada
- Asia Pacific
- - Australia continued to register positive growth while Japan declined due to destocking ahead of route-to- market change

(1) Sales at constant FX. Q4 2019 sales organic growth: +3.5%

Top 5 markets by value

Italy
US
Germany
Jamaica
Brazil

Results for the Full Year 2019 ended 31 December 2019

Cocktail focus: essential for mixology

Global Priorities

Camparino Reopening - the	Negroni week: 100 years of Negroni
birthplace of Campari

The iconic Camparino in Galleria - the birthplace of the Milanese aperitivo - reopened its doors to the city in winter 2019. Campari Group marked the relaunch with an exclusive event, unveiling its new look which has preserved and emphasized the historic heritage and Art Nouveau detailing of the bar, while at the same time creating a new identity for the present and future.

The relaunched venue serves an innovative range of drinks and food with a focus on quality, using gastronomic ingredients and cocktails from the traditional to more contemporary, original creations

Celebrating art - NY & Venice Film Festival

Campari extended its long-standing commitment to the world of art and cinema as the exclusive spirits partner of the 57th New York Film Festival (NYFF) as well as the main sponsor of the Venice Film Festival. In New York,

Campari was front and center with brand visibility, bar presence, featured cocktails and experiential activations, while in Venice, Campari hosted a number of activations including the Venetika, the floating cinema and Entering Red, the secret closing party which took place in one of the most prestigious locations in the City, spreading the brand style and essence everywhere, painting Venice with a distinctive tone of red, the Campari red

Negroni Week began by unveiling a plaque celebrating the creation of the Negroni in the presence of the Deputy Mayor of the city of Florence as well as Pier Lamberto and Paolo Andalò Negroni Bentivoglio, Count Camillo's grandsons and Luca Picchi, author of the book 'Negroni Cocktail. An Italian legend'. In this corner of the Viviani Della Robbia Palace in the Drogheria Casoni (Caffè Casoni) 100 years ago the Count Cammillo Negroni inspired the creation of one of the most famous cocktails in the world - the Negroni!

THERE'S NO NEGRONI WITHOUT CAMPARI

The participation of bars across the world has increased year on year, and in 2019 the number of bars participating in Negroni week grew by +23% (12,000 venues!) compared to the 2018 edition, with more than 12 thousand venues subscribed in 60+ countries!

Results for the Full Year 2019 ended 31 December 2019

SKYY (8% of Group sales): -3.8%(1)

Global Priorities

The SKYY franchise declined by -3.8% in FY 2019, largely driven by the core US following the destocking activity mainly aimed at streamlining the SKYY infusions, which lasted until the end of the third quarter with some tail end effect in Q4 2019
The international markets, which account for 27.0% of the brand's global sales value, were flattish, impacted by the destocking activities in South Africa, ahead of route-to-marketchange, which offset entirely the good growth in other markets
Performance by market
- US
- - The US market registered a mid-single digit decline as the brand was impacted by destocking activity during the year. Concomitantly, the brand continues to suffer from strong competitive pressure, particularly in flavours, with the infusions portfolio down -9.2%in FY 2019, dragging down the overall performance, while core vodka is progressively aligning to more favourable consumption trends. The 'Proudly American' campaign as well as sponsorship of World Pride events are helping to keep the brand premium and relevant among millennial consumers while the destocking activity has helped to close the gap to more favourable consumption trends year on year
- International markets
- - Development into the Americas continues: good growth in Argentina (5th largest market) and continued double-digit growth in Mexico offset some weakness in Brazil
  - Within SEMEA, growth in GTR was unable to offset declines in Italy and Spain while South Africa also declined temporarily due to destocking ahead of route-to-market change
  - In North, Central & Eastern Europe, double-digit growth in Germany was partly mitigated by weakness in the UK
  - In Asia Pacific, China (3rd largest market) and Australia registered positive growth

(1) Sales at constant FX. Q4 2019 sales organic growth: -6.6%

Top 5 markets by value

US
Germany
China
South Africa
Argentina

Results for the Full Year 2019 ended 31 December 2019

Building on traditions

Global Priorities

SKYY Vodka: celebrating diversity

SKYY USA WorldPride Sponsorship

In June 2019, SKYY Vodka continues its' efforts to champion a new era of social progress fueled by diversity within the LGBTQ+ community in the USA, by serving as the Official Vodka of WorldPride NYC and Los Angeles Pride Festivals. This year, in honor of the 50th Anniversary of the Stonewall riots, SKYY has partnered with the original Vogue performers, paying tribute to the people and history that shaped LGBTQ+ culture today. Activities included 9+ events, with over 4 million consumer engagements including a branded float on June 30th during the official WorldPride

Parade held in NYC

SKYY Cold Brew

For a limited time only during Summer 2019, SKYY Vodka is bringing the authentic taste of the USA's latest obsession, cold brew coffee, to cocktail bars and retail stores with the release of SKYY Infusions® Cold Brew Coffee. This flavor is infused with Arabica coffee beans. Perfect for brunches, summer parties or after work drinks, it is enjoyed on the rocks, in coffee-inspired cocktails, or as a twist on a classic, like the SKYY Martini

SKYY Limited Edition

Launched in Spring 2019, SKYY Vodka proudly brings its San Francisco roots to life through the new limited-editionSKYY Bottle Series. These three new bottles celebrate the culture and values that have made the brands hometown a global progressive icon. For a limited time only, the brand's famous blue vodka bottle features recognized San Francisco landmarks paired with bold statements such as 'We Build Bridges, Not Walls' or 'There is no straight path': that define the city's leadership in diversity through social progress, optimism and empowerment

Results for the Full Year 2019 ended 31 December 2019

Wild Turkey (8% of Group sales): +2.9%(1) (2)

Global Priorities	Top 5 markets by value

	>	US
> Organic growth of +2.9% after declines in the fourth quarter due to phasing in the core US market, with depletions	>	Australia
>	Japan
up double-digits
• Wild Turkey bourbon grew +0.4% affected by the destocking in Japan, while the Russell's Reserve premium	>	GTR
offering continued its solid growth, up +16.7% overall	>	Canada

- American Honey registered a positive performance overall, up +6.0% driven by the core US market as well as Nigeria, only partly offset by some temporary weakness in Australia
Performance by market
- US
- - Portfolio of premium extensions and offerings such as Wild Turkey Longbranch, Russell's Reserve and the Master's Keep series continued to grow double-digits combined. Overall positive performance of +1.4% affected by slow down of Wild Turkey 101 core business due to price repositioning
  - Overall the brand remains a top choice for high-end mixologists and connoisseurs, while also leveraging the brand's quality, heritage and craft credentials, alongside continued national marketing support from the Matthew McConaughey campaigns and other brand activations
- International markets
- - Positive momentum in the seeding European markets such as Germany, Italy and Austria
  - Japan declined by double digits, due to destocking ahead of route-to-market changes (accounting for -0.5% of the brand's overall organic performance). Australia was slightly down while New Zealand and China grew positively off a small base

(1) Sales at constant FX. Q4 2019 sales organic growth: -5.8%

Incl. Wild Turkey bourbon, Russell's Reserve, American Honey. Wild Turkey ready-to-drink and American Honey ready-to-drink are excluded

Results for the Full Year 2019 ended 31 December 2019

Premiumisation journey

Global Priorities

Wild Turkey: Talk Turkey	Wild Turkey: Cornerstone Rye

Wild Turkey, with Creative Director and brand storyteller, Matthew McConaughey, launched Talk Turkey, a new unscripted, digital interview series featuring conversations between McConaughey, and trailblazers from influential movements who are helping to define culture through acts of personal conviction. With themes of redemption, female empowerment, self-help,and reconnecting with the outdoors grounding each episode, this series propelled the authentic story of these inspiring individuals. The interview and documentary episodes ran weekly on IGTV, Twitter and Facebook

Wild Turkey launched Master's Keep Cornerstone Rye, the fourth release in the award-winning Master's Keep series. The result is a Rye Whiskey of extraordinary maturity - the triumphant culmination of more than 150 years of Kentucky artisanship and heritage. For this limited release, Eddie hand-pickedfrom among his oldest #4 alligator char barrels - each with Rye aged between nine and 11 years. From there, Eddie crafted a perfectly balanced, high- aged Rye Whiskey that exquisitely showcases Wild Turkey's signature bold and spicy flavors

Wild Turkey: 'With Thanks'

In November, in Los Angeles, Matthew McConaughey, Eddie Russell, a group of volunteers and charity partner Operation BBQ Relief, kicked off the season of giving and prepared and delivered 800 turkey dinners to first responders in charge of relief efforts around the wildfires in the Los Angeles. A group of 40 volunteers from the Wild Turkey community visited and delivered meals to more than 20 fire houses and an additional 800 meals were prepared for local homeless shelters in Los Angeles. Matthew McConaughey & Eddie Russell announced the efforts on Facebook live and personally visited the firehouses to deliver meals and thank the first responders

Results for the Full Year 2019 ended 31 December 2019

Grand Marnier (7% of Group sales): -0.9%(1)

Global Priorities

	Top 5 markets by value
	>	US
> Overall flattish performance (-0.9%)with positive reversal in Q4 (+8.1%) recovering the negative Q3	>	Canada
>	France
performance due to shipment phasing
> The core brand continues to receive support from the 'Live Grand' campaign, launched in 2018,	>	GTR
alongside a redefined drinking strategy, while the Grand Marnier Cuvées (Louis Alexandre and	>	Italy
Cuvée du Centenaire) are being progressively launched in the core US market, aiming to improve the
price mix over time

Performance by region
- Americas
- - The core US market grew by +2.2% while Canada was flattish against a significant price repositioning. Double-digit growth in Mexico, albeit off a small base
- SEMEA, North, Central & Eastern Europe and Asia Pacific

Overall soft performance mainly due to temporary weakness in Global Travel Retail and softness in some European markets

(1) Sales at constant FX. Q4 2019 sales organic growth: +8.1%

Results for the Full Year 2019 ended 31 December 2019

Grand Mixes & Grand Cuvées

Global Priorities

Grand Marnier: Cordon Rouge -

premiumising with 'Grand' cocktails

Grand Marnier's 'Live Grand' campaign, launched in 2018 in NY and Paris, invites consumers to celebrate life's more luxurious, out-of-theordinary experiences, to move from 'good to grand' by using Grand Marnier both in mixology, for high-end cocktails but also for easy mixers, supporting the rollout of the brand's strategy across North American and European geographies

Grand Marnier Cuvée du Centenaire

The new Cuvée du Centenaire was launched with a premium packaging inspired by the vibrant artistic movement of Art Nouveau. Originally created in 1927 in honour of the first Century of The House of Marnier Lapostolle, Cuvée du Centenaire celebrates an extraordinary era of audacity and eccentricity by combining for the first time orange bigaradia with XO cognacs. The cognacs used in this extraordinary Cuvée come from the finest growing areas of Cognac region: Grand and Petite Champagne

Grand Marnier: Louis Alexandre

In January 2019, the new Cuvée Louis Alexandre was launched in the US market, with VSOP liquid and brand new, more premium packaging. Created by

Patrick Raguenaud, Grand Marnier's master blender, Cuvée Louis Alexandre uses cognac taken from the most prestigious area in Cognac, then aged in oak barrels in Bourg-Charente.The Cuvée Louis Alexandre has carefully selected cognac, enriched with the essence of highly aromatic bitter orange

Results for the Full Year 2019 ended 31 December 2019

Jamaican rums (6% of Group sales): +7.5% (1) (2)

Global Priorities

Very positive growth for the Jamaican rum portfolio in the year (+7.5%) with continued outperformance of Wray&Nephew Overproof while Appleton Estate's full year performance was impacted by a temporary decline in the core North American markets in Q4 2019
Wray&Nephew Overproof registered +15.1% growth in FY 2019 (Q4: 17.7%) and continues to develop its reputation as a mixologist's favourite due to the depth of flavour, versatility and unmatched quality. The brand grew double-digit in the core market of Jamaica as well as the US, Canada and the UK
Appleton Estate declined by -1.7%overall. Negative performance in the core markets of US and Canada was partially mitigated by solid growth in Jamaica (+50.4%). The brand continues to premiumise its offerings while leveraging the liquid quality, brand heritage and craft credentials of Jamaican rum, supported by the brand house in the heart of Jamaica
Performance by region
- Americas
- - The Jamaican rum portfolio grew by mid-singledigits in the core US market driven by
    Wray&Nephew Overproof
  - Positive double-digit growth in Jamaica driven by both Appleton Estate and Wray&Nephew
    Overproof
- SEMEA, North, Central & Eastern Europe and Asia Pacific
- - The UK continues its double-digit growth, largely driven by Wray&Nephew Overproof, up +17.7% in the year, while Appleton Estate grew +2.5%
  - Positive progression in seeding markets such as New Zealand, France and Switzerland

Sales at constant FX. Q4 2019 organic sales growth: +10.2%
Incl. Appleton Estate and Wray & Nephew Overproof

Top 5 markets by value

Jamaica
US
Canada
UK
Mexico

Results for the Full Year 2019 ended 31 December 2019

New Brand Visual Identity

Global Priorities

Appleton Estate 2020

Appleton Estate, our premium rum brand, introduced a new Brand Visual Identity (BVI) to the global marketplace in October 2019. Our BVI celebrates our home of Jamaica through a rich pallet of blue hues, as well as an accent of copper which represents our pots stills and golden rum. Central to the BVI is our Jamaican Insignia, an artistic emblem comprised of five iconic symbols of Jamaica. These unique BVI elements further elevate Appleton Estate's visual impact as a premium brand that strives to exemplify Joyful Excellence

Appleton Estate: 23y/o Journey rum

In December 2019, The Joy Spence Appleton Estate Rum Experience introduced an exclusive limited edition 23 Year Old Journey Rum. Limited to only 300 750ml bottles, priced each at $250USD, this rum is first in a series of limited edition rums under the name 'Journey'. This name was chosen in gratitude to our guests who have made the journey to Jamaica's Nassau Valley to visit our Estate

Appleton Estate: Ultimate Spirits

Challenge

Appleton Estate Wins Big at 2019 Ultimate Spirits

Challenge held in April 2019. Awards:

Appleton Estate 21YO:98 Points, Extraordinary, Ultimate

Recommendation, Chairman's Trophy

Appleton Estate Rare Blend 12YO:94 Points, Excellent,

Highly Recommended, Finalist

Appleton Estate Signature Blend:92 Points, Excellent,

Highly Recommended, Finalist, Great Value

Appleton Estate Reserve Blend:92 Points, Highly

Recommended, Finalist, Great Value

Results for the Full Year 2019 ended 31 December 2019

Brand sales review

Regional Priorities

Regional priorities	Brand sales as %	Organic	Organic
	of Group's sales	change	change
	in FY 2019	in FY 2019	in Q4 2019

Tequila

Gin

+32.4%

+54.0%

-3.2%

-8.6%

Solid double-digit growth driven by core US market, with positive shipment recovery in Q4, as the brand is consistently outpacing category trends
Seeding markets such as Australia, Russia, Canada, Italy, South Africa and the UK continue to grow positively
Overall soft performance due to ongoing gin market pressure in core markets of Spain, the UK and Belgium. Improving consumption trend in core Germany
Strong growth in seeding markets such as South Africa and Brazil

Whiskies

Cognac

-6.7%

+0.4%

-4.2%

-14.5%

<1% +6.7% -34.6%

Overall negative results, amplified by destocking in the South African market ahead of route-to-market change, reflecting the
Group's long-term strategic refocus on higher-margin and longer-aged premium expressions
Soft performance in the core market of Canada against a tough comparison base (FY 2018 +12.4%, Q4 2018: +18.5%)
Overall positive first full year organic performance, with declines in Q4 driven by phase out of previous packaging ahead of 2020 relaunch

Results for the Full Year 2019 ended 31 December 2019

Brand sales review

Regional Priorities

Regional priorities	Brand sales as %	Organic	Organic
	of Group's sales	change	change
	in FY 2019	in FY 2019	in Q4 2019

and	liqueurs

bittersItalian	4%	-0.9%	-1.9%

&		3% (1)	-6.9%	-10.4%
wineSparkling vermouth	(1) Incl. Cinzano verrmouth and

	Cinzano sparkling wines
	3%	+8.5%	+5.7%

Soft performance by Frangelico as positive growth in Germany was offset by weakness in core US, Spain and
Australia
Averna registered a good overall performance as growth in Germany, the US and Austria offsets weakness in core Italy
Good performance in Cynar as solid growth in core Italy and seeding US offset declines in Brazil and Switzerland
Slight decline in Braulio due to a robust price increase in core Italy, while GTR registered solid double-digitgrowth
Vermouth declined (-8.2%)as positive growth in the core Russian, Argentinian and Spanish market was offset by strong declines in Germany and other European markets due to significant price repositioning
Sparkling wines registered a decline due to weakness in the core markets of Germany and Italy. Positive growth in core Russia and seeding markets such as China and Japan
Good performance in Mondoro (+2.9%) driven by the core market of Russia
Riccadonna registered positive results of +14.3% thanks to a double-digit growth in the core market of France, offsetting temporary weakness in Australia

Results for the Full Year 2019 ended 31 December 2019

Brand sales review

Local Priorities

Local priorities	Brand sales as %	Organic	Organic
			of Group's sales	change	change
			in FY 2019	in FY 2019	in Q4 2019
			3%	+1.6%	-10.3%

			3%	+2.4%	-7.1%

			2%	+5.0%	+7.7%
			1%	-5.1%	-21.6%
			1%	+3.0%	+6.8%
			1%	+3.7%	-2.5%

Overall good performance thanks to core Italy, with Q4 performance driven by the expected realignment of shipments
Positive result overall thanks to growth in core Italy as well as seeding central European markets
Negative Q4 impact driven by the expected realignment of shipments
Good performance in core Australia and New Zealand
Negative overall performance in core Brazilian market which remains highly volatile
Overall positive driven by Germany, the US and the UK
Positive growth driven by the core US, with depletions up high-single digit

Results for the Full Year 2019 ended 31 December 2019

Regional Priority initiatives

Espolòn - DEATH magazine

Bisquit & Dubouché

Espolòn Tequila launched DEATH, a limited-edition magazine celebrating the Day of the Dead through literary calaveras. Once Mexico's illustrated poems for satirical obituaries, literary calaveras are the holiday's signature witty poems, poking fun at loved ones in a game of creativity, irreverence, and mortality. DEATH celebrates the holiday with modern calaveras penned by rising literary stars and pop culture personalities, including Mexican American and Latin authors. Miguel, Grammy-winning R&B superstar, was in the cover with illustration done by Scott Campbell, world-renownedtattoo artist. The launch of DEATH kicked off at a pop-up"newsstand from the other side" from 10/31 to 11/1. Lucky attendees had the chance to be invited to "cross over" into a once-in-an-afterlifeimmersive celebration hidden deep within the space

The first production of the new bottle of Bisquit&Dubouché took place in November 2019. The offer reflects the new super premium positioning of the brand, leveraging on a complete new marketing mix - from the new brand name - Bisquit&Dubouché - that brings back in the logotype the co-founderAdrien Dubouché - to the new packaging design - a super premium squared bottle that underlines the brand rebel character and the wish to disrupt the traditional codes of cognac. The new Bisquit&Dubouché unveils a new liquid, with a smooth aromatic bouquet, a persistent taste with floral notes of rose, dried apricot and muscat grape. First markets to be served will be South Africa and Belgium, designed to relaunch the current business of VS and VSOP variant, immediately followed by USA, GTR and Switzerland by February 2020

Results for the Full Year 2019 ended 31 December 2019

Regional Priority initiatives

Cinzano Vermouth: Cinzano

Moments

2019 saw the kick-off of the Global Partnership between Cinzano Vermouth and Sofar Sounds, where three markets were successfully activated: the US, Spain and Argentina. Cinzano Moments by Sofar Sounds is confirming to be a valuable platform to share genuine moments in music engaging the younger target. All the events have been amplified through relevant local media partners and influencers, on top of the digital support created through local and global channels with a single minded approach. The events have been crucial for the launch of the new brand identity in a consistent and engaging way cross geos and channels

Bulldog Gin

Bulldog Gin invited consumers in Barcelona for the second #FULLSHINEPARTY in Spain (the first in Madrid held in April), inspiring consumers to shine from within. A few hundred guests including microsite-competition winners and digital influencers, toasted with Bulldog G&Ts with a black twist and enjoyed tailored activations such as UV Tattoos, interactive lights, in addition to the shining dance floor

Bulldog Gin closed out the year by ramping up its presence in the Greek market with an official launch party in central Athens for hundreds of media, trade and VIP guests. Highlights of the event included local celebrities, DJ Agent Greg and performance by dancer-choreographer Tasos Xiarcho

Results for the Full Year 2019 ended 31 December 2019

GlenGrant wins big: 2020 Whisky Bible

Jim Murray 2020 Whisky Bible

GlenGrant 18 Year Old, the rarest variant in the GlenGrant single malt range, has once again been named "Scotch Whisky of the Year", "Single Malt of the Year" and "Best Single Malt Scotch Aged 16-21years" by the esteemed Whisky writer and reviewer, taking home the top prize in the category for a stunning fourth year in a row. Additionally, The GlenGrant 10 Year Old wins in the "Best Single Malt Scotch Aged 10 Years and Under" category for a remarkable 7th time. There were also awards for the GlenGrant 15 year old whisky as well as the unaged 'Rothes Chronicles Cask Haven'. The complete list is below:

Scotch Whisky of the Year

GlenGrant Aged 18 Years Rare

Edition

Single Malt of the Year (Multiple

Casks)

GlenGrant Aged 18 Years Rare

Edition

Scotch No Age Statement

GlenGrant Rothes Chronicles Cask

Haven

10 Years & Under (Multiple Casks)

GlenGrant Aged 10 Years

11-15 Years (Multiple Casks)

GlenGrant Aged 15 Years Batch

Strength

16-21 Years (Multiple Casks)

GlenGrant Aged 18 Years Rare

Edition

Results for the Full Year 2019 ended 31 December 2019

Table of contents

Results Summary

Sales Results

By region
By brand

Operating Results by Region

Consolidated P&L

Cash Flow & Net Financial Debt

New initiatives & Outlook

Annex

Results for the Full Year 2019 ended 31 December 2019

Net sales & EBIT analysis by region

FY 2018

FY 2019

Net Sales

breakdown by

region

EBIT (1) breakdown

by region

The Americas remain the Group's largest region in terms of net sales and profitability (44.6% of Group's net sales and 42.0% of Group's
EBIT(1) in FY 2019. Decrease in SEMEA's weight on sales (-90bps) vs. FY 2018 driven by disposals of non-core businesses while increase in NCEE's weight on profitability (+220bps) driven by sustained growth of high-margin brands

(1) EBIT adjusted	34

Results for the Full Year 2019 ended 31 December 2019

EBIT (1) by region - Americas

	FY 2019		FY 2018		Reported change		Organic change	21.7%	+20 bps	20.9%

	€ million	% of sales		€ million	% of sales	%	%		-20 bps

Net sales	821.5	100.0%	744.7	100.0%	+10.3%	+5.8%		-70 bps	-10 bps

Gross profit	479.7	58.4%	434.8	58.4%	+10.3%	+5.4%
A&P	(157.3)	-19.1%	(136.4)	-18.3%	+15.3%	+9.6%		Organic change -70 bps (2)
SG&A	(151.0)	-18.4%	(137.0)	-18.4%	+10.2%	+4.7%

EBIT(1)	171.4	20.9%	161.5	21.7%	+6.1%	+2.5%

Organic change:
Gross Profit

A&P

SG&A

FX & Perimeter:

EBIT adjusted organic growth of +2.5% with -70 bps dilution. Key drivers:

Growth (+5.4% in value) slightly behind topline, leading to -20bps margin dilution: positive sales mix more than offset by the increasingly negative impact of agave as well as the dilutive effect of recovery in emerging markets, most notably Brazil and Argentina
A&P growth (+9.6% in value) ahead of topline, -70bps margin dilution, driven by increased brand building investments, particularly behind key global brands (Aperol, Campari and Grand Marnier) and Espolòn
SG&A increase behind topline (+4.7% in value and +20 bps margin accretion), as a consequence of the downsizing of local structures in South America

Positive FX effect largely driven by the strengthening USD vs Euro (-10 bps dilution)

> EBIT margin:

EBIT margin at 20.9% in FY 2019

(1)	EBIT adjusted	35
(2)	Bps rounded to the nearest ten

Results for the Full Year 2019 ended 31 December 2019

EBIT (1)	by region - SEMEA
							17.4%	+100 bps		17.7%
	FY 2019			FY 2018		Reported change	Organic change		-20 bps	-30 bps	-20 bps
	€ million % of sales		€ million	% of sales	%	%
Net sales	498.7	100.0%	479.8	100.0%	+3.9%	+5.3%
Gross profit	333.1	66.8%	312.8	65.2%	+6.5%	+6.9%	Organic change +50 bps (2)
A&P	(89.2)	-17.9%	(83.7)	-17.4%	+6.6%	+6.4%

SG&A	(155.8)	-31.2%	(145.6)	-30.3%	+7.0%	+6.4%
EBIT(1)	88.1	17.7%	83.6	17.4%	+5.5%	+8.4%

Organic change:

Gross Profit

A&P

EBIT adjusted organic growth of +8.4%, despite a lower contribution of the South African market due to destocking ahead of route-to-market change. EBIT adjusted +50 bps organic margin accretion, mainly driven by positive sales mix. Key drivers:

Strong gross margin expansion (+6.9% in value and +100 bps margin accretion) driven by solid performance of high-margin aperitif portfolio, in particular Aperol and Campari, across the region
A&P growth above topline (+6.4% in value and -20bps margin dilution) due to sustained investment activity behind global priority brands, in particular Aperol

SG&A	• SG&A increase (+6.4% in value) ahead of sales, leading to -30bps margin dilution, mainly driven by the
	strengthening of central structures

FX & Perimeter: Negative perimeter effect
EBIT margin: EBIT margin up to 17.7% in FY 2019

(1) EBIT adjusted	36

Bps rounded to the nearest ten

Results for the Full Year 2019 ended 31 December 2019

EBIT (1)	by region - NCEE
									32.1%	+150 bps	+20 bps	0 bps	+10 bps	33.7%
	FY 2019			FY 2018		Reported change		Organic change

	€ million % of sales		€ million	% of sales	%		%
Net sales	393.8	100.0%	358.9	100.0%	+9.7%		+8.8%

Gross profit	248.5	63.1%	220.7	61.5%	+12.6%		+11.4%		Organic change +160 bps (2)
A&P	(55.6)	-14.1%	(51.3)	-14.3%	+8.4%		+7.5%

SG&A	(60.0)	-15.2%	(54.4)	-15.2%	+10.3%		+9.0%
EBIT(1)	132.9	33.7%	115.1	32.1%	+15.5%		+14.3%

Organic change:
Gross Profit

EBIT adjusted organic growth of +14.3%, well ahead of sales growth, leading to +160bps margin accretion Key drivers:

Growth (+11.4% in value) ahead of sales (+150 bps margin accretion), driven by strong sales mix improvement by brand and by market, led by the positive performance of the high-margin aperitif portfolio (in particular Aperol) in core high-marginmarkets such as Germany, the UK, Switzerland and Austria

A&P	•	A&P growing (+7.5% in value) below topline, leading to +20 bps margin accretion
SG&A	•	SG&A increase (+9.0% in value) slightly ahead of sales, broadly neutral on margin

FX & Perimeter: Negligible FX and perimeter effect
EBIT margin: EBIT margin up to 33.7% in FY 2019

(1)	EBIT adjusted	37
(2)	Bps rounded to the nearest ten

Results for the Full Year 2019 ended 31 December 2019

EBIT (1)	by region - Asia Pacific
									14.5%	+70 bps	+10 bps
	FY 2019			FY 2018		Reported change		Organic change
	€ million % of sales		€ million	% of sales	%		%			12.1%
Net sales	128.5	100.0%	128.3	100.0%	+0.2%		+0.8%			-270 bps

Gross profit	60.0	46.6%	59.6	46.5%	+0.5%		+2.4%
			-50 bps
A&P	(17.8)	-13.9%	(17.9)	-14.0%	-0.4%		+0.1%		Organic change -190 bps (2)
SG&A	(26.5)	-20.6%	(23.1)	-18.0%	+15.1%		+16.2%

EBIT(1)	15.6	12.1%	18.7	14.5%	-16.5%		-12.5%

Organic change:
Gross Profit

A&P

SG&A

EBIT adjusted organic decline of -12.5%, leading to a dilution of -190 bps. Key drivers:

Growth (+2.4% in value) ahead of topline, leading to +70 bps margin accretion, driven by positive sales mix in Australian market which fully offset the lower contribution from the Japanese market following destocking ahead of route-to-market change which impacted high margin brands (Campari and Wild Turkey)
A&P flattish, +10 bps margin accretion
SG&A increase (+16.2% in value) above topline, generating -270bps margin dilution, driven by lower absorption of fixed costs given the contained topline growth combined with the enhancement of the region's commercial structures and provisions in connection with the regional headquarters move to Singapore

FX & Perimeter: Negative FX effect largely driven by weakness in the Australian Dollar vs. Euro and neglectable perimeter impact

> EBIT margin:

EBIT margin down to 12.1% in FY 2019

(1) EBIT adjusted

(2) Bps rounded to the nearest ten

Results for the Full Year 2019 ended 31 December 2019

Table of contents

Results Summary

Sales Results

By region
By brand

Operating Results by Region

Consolidated P&L

Cash Flow & Net Financial Debt

New initiatives & Outlook

Annex

Results for the Full Year 2019 ended 31 December 2019

FY 2019 consolidated P&L

							FY 2019
						Organic margin
					Reported	accretion/	Organic	Forex	Perimeter
	FY 2019	FY 2018	change	(dilution)	change	impact	effect
	€ million	% of sales	€ million	% of sales	%	(bps) (3)	%	%	%
Net Sales	1842.5	100.0%	1711.7	100.0%	7.6%		5.9%	2.1%	-0.4%
COGS (1)	(721.3)	-39.1%	(683.6)	-39.9%	5.5%		4.3%	2.0%	-0.8%
Gross Profit	1121.2	60.9%	1028.1	60.1%	9.1%	60	7.0%	2.2%	-0.1%
A&P	(319.9)	-17.4%	(289.2)	-16.9%	10.6%	-30	7.7%	2.8%	0.1%
Contribution after A&P	801.3	43.5%	738.9	43.2%	8.5%	30	6.7%	1.9%	-0.2%
SG&A (2)	(393.3)	-21.3%	(360.1)	-21.0%	9.2%	-20	6.8%	2.1%	0.3%
EBIT adjusted	408.0	22.1%	378.8	22.1%	7.7%	20	6.7%	1.7%	-0.7%
Operating adjustments	(21.7)	-1.2%	1.9	0.1%	-
Operating profit (EBIT)	386.3	21.0%	380.7	22.2%	1.5%
Net financial income (charges)	(33.0)	-1.8%	(33.8)	-2.0%	-2.4%
Adjustments to financial income (charges)	5.8	0.3%	1.8	0.1%	-
Proft (loss) related to companies valued at equity	0.1	0.0%	(0.2)	0.0%	-
Put option, earn out income (charges) and
hyperinflation effects	(4.7)	-0.3%	2.3	0.1%	-
Group pre-tax profit	354.6	19.2%	350.8	20.5%	1.1%
Group pre-tax profit adjusted	370.4	20.1%	347.1	20.3%	6.7%
Income Tax expense	(46.2)	-2.5%	(54.5)	-3.2%	-15.1%
Net Profit	308.4	16.7%	296.3	17.3%	4.1%
Non-controlling interests	0.0	0.0%	0.0	0.0%	-
Group net profit	308.4	16.7%	296.3	17.3%	4.1%

Group net profit adjusted	267.4	14.5%	249.3	14.6%	7.3%
Depreciation & Amortisation	(71.8)	-3.9%	(53.8)	-3.1%	33.4%	-70	30.1%	1.8%	1.5%
EBITDA adjusted	479.8	26.0%	432.6	25.3%	10.9%	90	9.6%	1.7%	-0.4%
EBITDA	458.1	24.9%	434.5	25.4%	5.4%

COGS = cost of materials, production and logistics expenses
SG&A = selling, general and administrative expenses
Bps rounded to the nearest ten

Results for the Full Year 2019 ended 31 December 2019

EBIT adjusted - summary effects

€ million	25.2	6.5	(2.6)

				-0.7%
% change	+6.7%	+1.7%
378.8		+7.7%	408.0

FY 2018

Organic

Forex

Perimeter

FY 2019

EBIT adjusted: on a reported basis up +7.7% in value, stable at 22.1% on net sales, in line with last year
- Organic growth of +6.7% in value, above topline growth, generating +20 bps margin accretion, thanks to solid organic gross margin accretion, net of investments in marketing and structure costs. The adoption of IFRS16-'Leases' accounting principle from 1 January 2019 generated a positive effect of €1.4 million
- Forex and perimeter combined effect of +1.0% in value, corresponding to -20bps margin dilution
EBITDA adjusted: on a reported basis up +10.9% in value, to 26.0% on net sales. The increase includes a positive effect generated by the adoption of IFRS 16-'Leases' of €15.0 million, driven by the incremental depreciation on the rights of use
- Organic growth of +9.6% in value, leading to +90 bps margin accretion
- Forex and perimeter combined effect of +1.3% in value, -10 bps margin dilution

(1) Bps rounded to the nearest ten	41

Results for the Full Year 2019 ended 31 December 2019

EBIT adjusted margin - key drivers

+60 bps-30 bps-20 bps-20bps

22.1%	+20 bps (2)	22.1%

	Organic

Gross profit: on a reported basis up +9.1% in value, to 60.9% on sales (+80 bps accretion):
- Organic growth of +7.0% in value, +60 bps margin expansion. Organic growth ahead of topline thanks to favourable sales mix by brand and market, despite the increasingly adverse agave purchase price, the lower contribution of some high-marginbrands in selected markets due to destocking ahead of route-to-marketchange (mainly Japan) and the dilutive effect of emerging market recovery
- Forex and perimeter combined effect of +2.1% in value, +20 bps margin expansion, driven by termination of low-margin agency brands. The overall impact from new acquisitions was limited
A&P: on a reported basis up +10.6% in value, to 17.4% on net sales (-50 bps dilution)
- Organic growth of +7.7% in value, above topline growth leading to -30bps margin dilution, reflecting higher marketing investments particularly behind global brands, such as Aperol, Campari and the Jamaican rum portfolio, as well as selected Regional Priority brands, such as Espolòn
- Forex and perimeter combined effect of +2.9% in value, -20bps margin dilution, driven by the termination of low A&P- intensity agency brands
SG&A: on a reported basis up +9.2% in value, to 21.3% on net sales (-30 bps dilution)
- Organic growth of +6.8% in value, above topline growth, leading to -20bps margin dilution, mainly due to the strengthening of on-premise commercial capabilities in selected markets
- Forex and perimeter combined effect of +2.5% in value, -10bps margin dilution, primarily driven by the deconsolidation of businesses carrying no structure costs

(1)	Rhumantilles from October 2019 and Ancho Reyes and Montelobos from 20 November 2019	42
(2)	Bps rounded to the nearest ten

Results for the Full Year 2019 ended 31 December 2019

Group pre-tax profit

Financial charges

Negative operating adjustments of €21.7 million, mainly attributable to restructuring projects (incl. outsourcing initiatives)
Net financial charges were €33.0 million in FY 2019, aligned vs. last year, reflecting the lower average indebtedness
(€865.8 million in FY 2019 vs €925.4 million in FY 2018) which compensated the effect of first time adoption of IFRS16- 'Leases' (€3.4 million additional interest charges)
Average cost of net debt at 4.1%(1) in FY2019, up from 3.3% in FY 2018, mainly attributable to the first time application of IFRS16-'Leases' and the significant negative carry effect
Group pre-tax profit was €354.6 million, up +1.1% in FY 2019
Group pre-tax profit adjusted (2) was €370.4 million, up +6.7% in FY 2019
1. Calculated based on net financial income (charges) over average financial debt
2. In FY 2019, net negative operating and financial adjustments of €(15.8) million, mainly attributable to restructuring projects. This compares with the net positive operating and financial adjustment of €3.7 million in FY 2018.

Results for the Full Year 2019 ended 31 December 2019

Group net profit adjusted

Tax rate and EPS

€ million	Actual	Actual	Reported
FY 2019	FY 2018	change

EBIT adjusted	408.0	378.8	7.7%
Recurring net financial charges	(33.0)	(33.8)	-
Put option costs and others	(4.6)	2.1	-
Pretax profit adjusted	370.4	347.1	6.7%
Total recurring taxes, of which:	(103.1)	(97.8)	-
- Recurring cash tax	(87.2)	(81.3)	-
- Goodwill deferred tax	(15.8)	(16.5)	-
Group net profit adjusted	267.4	249.3	7.3%
Recurring cash tax rate	-23.5%	-23.4%	-
Recurring effective tax rate	-27.8%	-28.2%	-
Total adjustments net, of which	41.0	47.0	-
- Operating adjustments	(21.7)	1.9	-
- Financial adjustments	5.8	1.8	-
- Patent box	25.4	26.0	-
- Fiscal effects on adjustments	5.4	12.6	-
- Other fiscal adjustments	26.0 (1)	4.8	-
Group net profit	308.4	296.3	4.1%
Reported tax rate	-13.0%	-15.5%	-
Basic earnings per share (€) adjusted (2)	0.23	0.22	-

1. Partial release of provisions related to uncertain tax risks for €47.8 million (IFRIC 23), net of increase in deferred tax liability on future dividend distribution for €(21.8) million (IAS12)
2. EPS calculation based on weighted average outstanding shares (net of own shares) of 1,144,315,926 shares in FY2019 (vs. 1,154,903,852 shares in FY2018)
Group net profit adjusted at €267.4 million, up +7.3%:
- Recurring effective tax rate at 27.8% in FY 2019, down from 28.2% in FY 2018
- Adjusting the recurring effective tax rate for the goodwill deferred taxes (broadly in line with last year), recurring cash tax rate at 23.5% in FY 2019, broadly in line with FY 2018
Reported tax rate of 13.0% reflecting total net adjustments amounted to €41.0 million in FY 2019, which included €25.4 million Patent Box benefit
Cumulated Patent Box benefit in 2014-2019 of €96.2 million
Recurring effective tax rate down by 480 basis points from 32.6% to 27.8% in 2016-2019

Results for the Full Year 2019 ended 31 December 2019

Table of contents

Results Summary

Sales Results

By region
By brand

Operating Results by Region

Consolidated P&L

Cash Flow & Net Financial Debt

New initiatives & Outlook

Annex

Results for the Full Year 2019 ended 31 December 2019

Free cash flow

	FY 2019	FY 2018	FY19 vs. FY18	FY19 vs. FY18

	Total	Recurring	Total	Recurring	Total		Recurring
	€ m	€ m	€ m	€ m	€ m	%	€ m	%
EBITDA adjusted	479.8	479.8	432.6	432.6	47.2	10.9%	47.2	10.9%
Taxes paid	(45.3)	(81.1)	(48.5)	(72.5)	3.2		(8.6)
Change in OWC (at constant FX and perimeter)	(29.6)	(29.6)	(25.5)	(25.5)	(4.1)		(4.1)
Financial income (expense), of which	(22.1)	(27.9)	(21.0)	(22.8)	(1.0)		(5.1)

Net interest paid	(27.9)	(27.9)	(22.8)	(22.8)	(5.1)		(5.1)
Financial adjustments	5.8	0.0	1.8	0.0	4.0		0.0

Capex (1)	(82.4)	(61.1)	(70.9)	(49.7)	(11.5)		(11.4)
Other non-cash items(2)	(41.9)	(12.8)	(31.0)	5.7	(10.9)		(18.5)
Free Cash Flow (FCF)	258.5	267.3	235.6	267.7	22.8	9.7%	(0.5)	-0.2%

Recurring capex refers to maintenance capex
Other non-cash items mainly attributable to provision for restructuring projects, incentive plans, net use of funds

Free cash flow at €258.5 million, up €22.8 million vs. FY 2018. Recurring free cash flow at €267.3 million, broadly unchanged vs. FY 2018. Key drivers:
- Increase of EBITDA adjusted of €47.2 million, partially due to the first time application of IFRS16-'Leases'
- Taxes paid of €45.3 million in FY 2019 after non-recurring tax benefits ('Patent Box') and fiscal effects on adjustments. Recurring taxes at €81.1 million in FY 2019
- OWC increase of €29.6 million in FY 2019 (vs. increase of €25.5 million in FY 2018) (1)
- Financial expenses of €22.1 million in FY 2019, of which recurring financial expenses of €27.9 million
- Capex of €82.4 million in FY 2019, of which recurring capex of €61.1 million
- Negative impact from other non-cash items of €(41.9) million in FY 2019, mainly due to provisions release for restructuring projects. Recurring at €(12.8) million in FY 2019
Recurring FCF/EBITDA adjusted ratio at 55.7% in FY 2019 (from 61.9% in FY 2018)

(1) Refer to annex 9 'Operating working capital' for details

Results for the Full Year 2019 ended 31 December 2019

Operating working capital(1)

€ million	29.6	10.5	18.8

636.0

694.8

	OWC at 31/12/2018	Organic	Forex	Perimeter	OWC at 31/12/2019
% on
sales	37.2%				37.7%

OWC increase of €58.8 million as of 31 December 2019 vs. 31 December 2018. Key drivers:
- Organic increase of €29.6 million, due to:
- - Increase in inventory of €23.7 million, of which ageing liquid increase of €19.1 million
  - Increase in payables of €13.3 million
  - Increase in receivables of €19.2 million
- Forex impact of €10.5 million
- Perimeter effect of €18.8 million, driven by the recent acquisitions of Rhumantilles, Ancho Reyes and Montelobos
OWC as % of net sales at 37.7% as of 31 December 2019, up from 37.2% as of 31 December 2018, mainly due to the disproportional effect of consolidating the two recent acquisitions as mentioned above (closed in Q4 2019). Excluding the effect of the acquisitions, the pro-formaOWC as % of net sales would be at 36.7%

(1) Refer to annex 9 'Operating working capital' for details

Results for the Full Year 2019 ended 31 December 2019

CAPEX

€ million	FY 2018		FY 2019	FY 2020
actual		actual	guidance


Maintenance capex (net of barrel disposal)		49.7	61.1	64
Extraordinary capex (incl.new offices, brand houses and other projects)		21.2	21.3	30
Total capex		70.9	82.4	94

Total capex investment was equal to €82.4 million, of which:
- €61.1 million maintenance capex
- €21.3 million extraordinary capex
For FY 2020, maintenance capex is expected at approximately €64 million and extraordinary capex at approximately €30 million reflecting investments on extra projects (incl. brand houses and other projects)

Results for the Full Year 2019 ended 31 December 2019

Strong FCF generation driving €68.9 million reduction in net financial debt

258.5

(90.4) (23.5)

	(57.3)	(47.3)
28.9

(846.3)	(777.4)

	(189.6)

Net debt at 31/12/2018	FCF	Net value from disposals	Dividend	(1)	IFRS 16 application	(2)	(3)
Purchase of own shares	Others	Net debt at 31/12/2019

- acquisitions
Net financial debt at €777.4 million as of 31 December 2019, down €68.9 million from €846.3 million as of 31 December
2018, driven by strong generation of cash flow, net of the acquisition of Rhumantilles and Ancho Reyes & Montelobos, the disposal of Villa Les Cèdres (4) and after the dividend payment, the net purchase of own shares and the effect of IFRS16-
'Leases' application
Net debt to EBITDA adjusted ratio at 1.6 times as of 31 December 2019 (down from 2.0 times (5) as of 31 December 2018)
1. Purchase of own shares net of sale of shares for stock option exercises
2. Including the effect of the first-time application of IFRS16-'Leases' of €(81.4) million (as of 1 January 2019) as well as the net effect generated during the year relating to lease contracts
3. Mainly related to FX and earn-out
4. Impacting the net financial debt as of 31 December 2019 by €141.9 million, of which €60.1 million related to tax to be paid in 2020 (to impact net financial debt of 2020)
5. Calculated based on the same criteria adopted for the ratio of 31 December 2019

Results for the Full Year 2019 ended 31 December 2019

Debt maturity(1)

Net debt of €777.4 million as of 31 December 2019
Long-termgross debt at €600 million(2)
- Overall long-term gross debt average coupon at 1.62%
- Fixed interest rate debt accounts for c. 58% of the overall long-term gross debt

(3)

Refer to annex 8 Financial debt details
€580.9 million Eurobond expiring in September 2020 reclassified as short-term debt
Includes Lease Debt arising from the adoption of IFRS16-'Leases'

Results for the Full Year 2019 ended 31 December 2019

Table of contents

Results Summary

Sales Results

By region
By brand

Operating Results by Region

Consolidated P&L

Cash Flow & Net Financial Debt

New initiatives & Outlook

Annex

Results for the Full Year 2019 ended 31 December 2019

Business developments in Asia in 2020

Singapore - New Asia Pacific Regional Headquarters

The Group will relocate its Asia Pacific Regional Headquarters from Sydney to Singapore in spring 2020
With a prime and centric location within the region, the move to Singapore will allow

the Group to better focus on the growth opportunities in the region and facilitate closer connections between the region and the other business units of the Group

China - Market exploration for Aperol

The Group will engage in exploratory initiatives aimed to localize the Aperol global playbook to China
This includes a series of micro battles for top potential channels in the on-premise to determine 'where to play' and 'how to win'

Japan - Joint venture setup

Campari will move from a third party market to a newly established equity partnership with a local premium spirits operator aimed at the development of marketing and sales activities of a premium spirits portfolio, including Campari brand, in the Japanese market. With an initial stake of 40% of the J/V, Campari Group has the right to purchase up to 100% of the J/V share capital starting from 2023
Currently generating c.1% of Campari Group's net sales, Japan is a key market for
Campari and Wild Turkey brands, while representing a key opportunity for a wider super premium offering

Results for the Full Year 2019 ended 31 December 2019

Distribution developments in France

In December 2019, the Group announced the signing for the acquisition of 100% of the French distributor Baron
Philippe de Rothschild France Distribution S.A.S. ('RFD'), which has been the exclusive distributor of Campari
Group's brand portfolio for the French market since 2009. It is also the exclusive distributor of a portfolio of premium and super-premium wine varieties in the French market, such as Mouton Rothschild and Mouton Cadet brands
The deal is expected to close during the first quarter of 2020, subject to customary antitrust approval
In 2018, RFD achieved reported sales of €145.1 million (under local GAAP), including the net sales of Campari Group own brands as well as third-party brands
Accounting for 2.2% of the Group's net sales in FY2019, France is a core and high potential market for the Group, mainly thanks to the aperitifs business and the newly acquired rhum agricole premium brands
By insourcing the distribution, the Group aims to enhance focus on its core brand portfolio in the French market

Campari Group's presence in France - own portfolio

Core 3rd party brands (1)

Seller's premium and super-premium portfolio of prestigious and renowned local and international wine varieties, such as Mouton Rothschild and Mouton Cadet brands, to be distributed by Campari Group upon the deal closing

Results for the Full Year 2019 ended 31 December 2019

Corporate actions and other resolutions

Dividend

Increase in proposed full year dividend to €0.055 per share, up +10.0% vs. last year, in line with Company's dividend policy

Share buy-back program

Continuation of share buy-back program to be implemented for an increased amount up to €350 million in twelve months
- The increase of the buyback serves the purpose of implementing the new Company's policy of having a portfolio of treasury shares sufficient to serve all outstanding stock options plans as opposed to the vested ones only, in order to hedge the risk of the price increase of the shares underlying the options and, as a result, contain the overall outlay of the incentive plans (1)

Transfer of the registered office of

Davide Campari-Milano S.p.A. to the Netherlands and enhancement of current increased voting mechanism

Evolution of dividend per share (€) for

the past 5 years

Evolution of share buy-back, net

in the past 5 years (€ million)

Transaction aimed at encouraging a capital structure more supportive of the Group's external growth strategy in the long run and rewarding a shareholder base with a long term investment horizon, in line with the Group's strategic guidance (2)

(1)	Additional details on the program will be communicated before the commencement of the purchases	54

(2)	Refer to related Company's announcement of 18 February 2020

Results for the Full Year 2019 ended 31 December 2019

Conclusion and Outlook

In FY 2019, the Group delivered sustained performance across sales and profit indicators despite selective destocking and negative agave price effect, thanks to continuous sales mix improvement driven by outperformance of key high-margin brands in core developed markets
Looking forward, for FY 2020, the outlook remains fairly balanced in terms of risks and opportunities:
- The positive underlying business momentum is expected to continue, driven by the combinations of key high- margin brands in core developed markets. The tail-endeffect of the destocking activities, linked to route-to- market changes, is expected to impact the first half of the year, on top of a tough comparison base
- Positive evolution of EBIT organic performance by value is expected. While the margin development is expected to reflect agave's increasingly elevated purchase price, the import tariff imposed by the US as well as investments in brand building and route-to-market initiatives for business long-termdevelopment
- Perimeter effect is to reflect the recent acquisitions as well as the agreement related to the acquisition of the French distributor (subject to Antitrust approval) while FX is to be impacted by volatile macro environment

The Group remains confident in delivering a positive performance across

all key business indicators in 2020

Results for the Full Year 2019 ended 31 December 2019

Table of contents

Results Summary

Sales Results

By region
By brand

Operating Results by Region

Consolidated P&L

Cash Flow & Net Financial Debt

New initiatives & Outlook

Annex

Results for the Full Year 2019 ended 31 December 2019

Annex - 1 Net sales by region and key market

Annex - 2 Net sales by brand cluster

Annex - 3 Q4 2019 consolidated income statement

Annex - 4 Reclassified balance sheet at 31 December 2019 - Invested capital and financing sources Annex - 5 Consolidated balance sheet at 31 December 2019 - Assets and liabilities

Annex - 6 FY 2019 reclassified cash flow

Annex - 7 FY 2019 consolidated cash flow statement

Annex - 8 Financial debt details

Annex - 9 Operating working capital

Annex - 10 Exchange rates effects

Results for the Full Year 2019 ended 31 December 2019

Net sales by region & key market

Annex - 1

	FY 2019	FY 2018	Change		of which:
	€ m	%	€ m	%	%	organic	perimeter	forex
Americas	821.5	44.6%	744.7	43.5%	10.3%	5.8%	-0.1%	4.5%
Southern Europe, Middle East & Africa	498.7	27.1%	479.8	28.0%	3.9%	5.3%	-1.3%	-0.1%
North, Central & Eastern Europe	393.8	21.4%	358.9	21.0%	9.7%	8.8%	0.0%	1.0%
Asia Pacific	128.5	7.0%	128.3	7.5%	0.2%	0.8%	0.0%	-0.7%
Total	1,842.5	100.0%	1,711.7	100.0%	7.6%	5.9%	-0.4%	2.1%

Region breakdown by key market

Q4 2019

organic

4.3% -1.8% 9.9% 0.6%

3.6%

Americas by market
	FY 2019	FY 2018	Change		of which:			Q4 2019
	€ m	%	€ m	%	%	organic	perimeter	forex	organic
USA	495.1	60.3%	445.6	59.8%	11.1%	5.3%	0.0%	5.8%	3.3%
Jamaica	108.0	13.1%	90.1	12.1%	19.8%	17.6%	-0.2%	2.4%	18.3%
Canada	58.0	7.1%	54.8	7.4%	5.7%	2.6%	0.0%	3.1%	0.8%
Brazil	52.0	6.3%	51.5	6.9%	0.8%	3.3%	0.0%	-2.4%	-2.4%
Mexico	41.8	5.1%	37.8	5.1%	10.6%	5.9%	-0.8%	5.6%	13.7%
Other countries	66.7	8.1%	64.8	8.7%	2.9%	-1.9%	-0.1%	4.9%	-5.4%
Americas	821.5	100.0%	744.7	100.0%	10.3%	5.8%	-0.1%	4.5%	4.3%

Results for the Full Year 2019 ended 31 December 2019

Net sales by region & key market

Annex - 1

Southern Europe, Middle East & Africa by market

	FY 2019	FY 2018	Change		of which:
	€ m	%	€ m	%	%	organic	perimeter	forex
Italy	367.0	73.6%	356.1	74.2%	3.1%	5.8%	-2.7%	0.0%
France	40.3	8.1%	33.7	7.0%	19.5%	14.2%	5.3%	0.0%
GTR	30.1	6.0%	29.6	6.2%	1.4%	4.1%	-2.6%	-0.1%
Other countries	61.3	12.3%	60.3	12.6%	1.7%	-2.0%	4.2%	-0.6%
Southern Europe, Middle East & Africa	498.7	100.0%	479.8	100.0%	3.9%	5.3%	-1.3%	-0.1%
North, Central & Eastern Europe by market
	FY 2019	FY 2018	Change		of which
	€ m	%	€ m	%	%	organic	perimeter	forex
Germany	172.6	43.8%	167.2	46.6%	3.3%	3.3%	0.0%	0.0%
Russia	55.9	14.2%	48.9	13.6%	14.4%	11.9%	0.0%	2.5%
United Kingdom	46.2	11.7%	32.8	9.2%	40.8%	39.6%	0.0%	1.2%
Other countries	119.0	30.2%	110.0	30.6%	8.2%	6.5%	-0.1%	1.8%
North, Central & Eastern Europe	393.8	100.0%	358.9	100.0%	9.7%	8.8%	0.0%	1.0%
Asia Pacific by market
	FY 2019	FY 2018	Change		of which
	€ m	%	€ m	%	%	organic	perimeter	forex
Australia	88.4	68.7%	88.3	68.8%	0.1%	2.0%	0.0%	-1.9%
Other countries	40.2	31.3%	40.1	31.2%	0.3%	-1.8%	0.0%	2.1%
Asia Pacific	128.5	100.0%	128.3	100.0%	0.2%	0.8%	0.0%	-0.7%

Q4 2019

organic

-0.7% 28.2% 18.6% -28.9%

-1.8%

Q4 2019

organic

-2.2% 12.3% 67.8% 9.7%

9.9%

Q4 2019

organic

-1.3% 5.5%

0.6%

Results for the Full Year 2019 ended 31 December 2019

Net sales by brand cluster

Annex - 2

Consolidated Net sales by brand

	FY 2019	FY 2018	Change		of which:
	€ m	%	€ m	%	%	organic	perimeter	forex
Global Priorities	1,048.5	56.9%	955.4	55.8%	9.7%	7.3%	0.0%	2.5%
Regional Priorities	309.2	16.8%	287.9	16.8%	7.4%	4.3%	1.1%	2.1%
Local Priorities	211.5	11.5%	208.1	12.2%	1.6%	1.8%	0.1%	-0.2%
Rest of portfolio	273.2	14.8%	260.4	15.2%	4.9%	6.2%	-3.9%	2.6%
Total	1,842.5	100.0%	1,711.7	100.0%	7.6%	5.9%	-0.4%	2.1%

Q4 2019 organic

4.7%

2.6% -6.5% 9.0%

3.6%

Results for the Full Year 2019 ended 31 December 2019

Q4 2019 Consolidated income statement

Annex - 3

	Q4 2019	Q4 2018	Reported
	change

	€ million	% of sales	€ million	% of sales	%

Net Sales	538.7	100.0%	511.1	100.0%	5.4%
COGS (1)	(226.1)	-42.0%	(214.9)	-42.0%	5.2%
Gross Profit	312.6	58.0%	296.2	58.0%	5.5%
A&P	(87.6)	-16.3%	(78.4)	-15.3%	11.8%
Contribution after A&P	225.0	41.8%	217.9	42.6%	3.3%
SG&A (2)	(105.0)	-19.5%	(98.2)	-19.2%	6.9%
EBIT adjusted	120.0	22.3%	119.6	23.4%	0.3%
Operating adjustments	(7.8)	-1.4%	(10.5)	-2.0%	-
Operating profit (EBIT)	112.2	20.8%	109.1	21.4%	2.8%

Organic	Forex	Perimeter
change	impact	effect
%	%	%

3.6%	1.0%	0.8%
3.3%	0.3%	1.6%
3.8%	1.5%	0.2%
9.8%	1.7%	0.3%
1.6%	1.4%	0.2%
4.2%	1.4%	1.3%
-0.5%	1.4%	-0.7%

Financial income (charges) Financial adjustments

Proft (loss) related to companies valued at equity

Put option, earn out income (charges) and hyperinflation effects

(7.6)	-1.4%	(11.4)	-2.2%	-33.4%
5.8	1.1%	0.2	0.0%	-
(0.0)	0.0%	(0.1)	0.0%	-
(1.0)	-0.2%	3.5	0.7%	-

Profit before taxes and	109.5	20.3%	101.4	19.8%	7.9%
non-controlling interests


Other Information
Depreciation&Amortisation	(19.5)	-3.6%	(13.1)	-2.6%	48.7%
EBITDA adjusted	139.5	25.9%	132.8	26.0%	5.1%
EBITDA	131.7	24.5%	122.3	23.9%	7.7%

41.6%1.1%6.1%

3.7%1.4%0.0%

COGS = cost of materials, production and logistics expenses
SG&A = selling, general and administrative expenses

Results for the Full Year 2019 ended 31 December 2019

Reclassified balance sheet

Annex - 4

Invested capital and resources

€ million	31 December 2019	31 December 2018	Change
Inventories and current biological assets	618.6	566.1	52.5
Trade receivables	316.9	285.9	31.0
Trade payables	(240.7)	(216.0)	(24.7)
Operating working capital	694.8	636.0	58.8
Tax credits	18.7	22.4	(3.7)
Other receivables and current assets	44.7	32.3	12.4
Assets held for sale	5.3	7.8	(2.5)
Other current assets	68.7	62.6	6.1
Payables for taxes	(75.1)	(13.9)	(61.1)
Other current liabilities	(141.5)	(153.3)	11.8
Liabilities held for sale	-	-	-
Other current liabilities	(216.5)	(167.2)	(49.3)
Defined benefit obligations	(33.4)	(31.6)	(1.8)
Deferred tax liabilities	(386.1)	(368.2)	(17.9)
Deferred tax assets	37.5	38.4	(0.9)
Other non-current assets	8.2	8.1	0.0
Other non-current liabilities	(67.6)	(131.6)	63.9
Other net non-current assets / liabilities	(441.4)	(484.8)	43.4
Net tangible fixed assets	581.9	578.2	3.6
Intangible assets, including goodwill & trademarks	2,481.1	2,383.9	97.2
Equity investments	0.5	0.4	0.1
Total fixed assets	3,063.5	2,962.5	101.0
Invested capital	3,169.0	3,009.1	159.9
Group shareholders' equity	2,389.7	2,162.8	226.9
Non-controlling interests	1.9	0.0	1.9
Net financial debt	777.4	846.3	(68.9)

Financing sources	3,169.0	3,009.1	159.9


% Net debt on equity	32.5%	39.1%

Results for the Full Year 2019 ended 31 December 2019

Consolidated balance sheet (1 of 2)

Assets

Annex - 5

	31 December 2019	31 December 2018	Change
	€ million	€ million

ASSETS
Non-current assets
Net tangible fixed assets	496.4	454.4	42.0
Right of use assets	80.5	-	80.5
Biological assets	3.9	1.0	2.9
Investment properties	1.1	122.8	(121.7)
Goodwill and brands	2,431.8	2,341.0	90.8
Intangible assets with a finite life	49.3	42.9	6.4
Investments in associates and joint ventures	0.5	0.4	0.1
Deferred tax assets	37.5	38.4	(0.9)
Other non-current asssets	22.8	23.9	(1.1)
Total non-current assets	3,123.8	3,024.9	98.9

Current assets
Inventories	617.7	565.3	52.5
Biological assets	0.9	0.8	0.0
Trade receivables	316.9	286.0	30.9
Short-term financial receivables	8.3	29.1	(20.8)
Cash and cash equivalents	704.4	613.9	90.5
Income tax receivables	18.7	22.4	(3.7)
Other receivables	44.7	32.3	12.4
Total current assets	1,711.6	1,549.8	161.8

Assets held for sale	5.3	7.8	(2.5)
Total assets	4,840.7	4,582.5	258.2

Results for the Full Year 2019 ended 31 December 2019

Consolidated balance sheet (2 of 2)

Liabilities

Annex - 5

	31 December 2019	31 December 2018	Change
	€ million	€ million

LIABILITIES AND SHAREHOLDERS' EQUITY
Shareholders' equity
- Share capital	58.1	58.1	-
- Reserves	2,331.6	2,104.7	226.9
Capital and reserves attributable to Parent Company	2,389.7	2,162.8	226.9
Non-controlling interests	1.9	-	1.9
Total shareholders' equity	2,391.6	2,162.8	228.8

Non-current liabilities
Bonds	349.4	778.7	(429.4)
Other non-current liabilities	476.4	463.7	12.7
Post-employment benefit obligations	33.4	31.6	1.8
Provisions for risks and charges	51.4	118.7	(67.2)
Deferred tax liabilities	386.1	368.2	17.9
Total non-current liabilities	1,296.7	1,760.9	(464.2)

Current liabilities
Payables to banks	31.0	4.5	26.5
Bonds	580.0	218.6	361.4
Other financial liabilities	84.3	52.5	31.8
Trade payables	240.7	216.0	24.7
Income tax payables	75.1	13.9	61.1
Other current liabilities	141.5	153.4	(11.9)
Total current liabilities	1,152.5	658.9	493.6

Liabilities held for sale	-	-	-
Total liabilities	2,449.1	2,419.7	29.4
Total liabilities and shareholders' equity	4,840.7	4,582.6	258.2

Results for the Full Year 2019 ended 31 December 2019

Reclassified cash flow statement

Annex - 6

	31 December	31 December	Change
	2019	2018

	€ million	€ million	€ million

EBITDA Adjusted	479.8	432.6	47.2
Provisions and other changes from operating activities	(41.9)	(31.1)	(10.9)
Taxes paid	(45.3)	(48.5)	3.2
Cash flow from operating activities before changes in w orking capital	392.5	353.0	39.5
Changes in net operating w orking capital	(29.6)	(25.5)	(4.1)
Cash flow from operating activities	363.0	327.5	35.5
Net interests paid	(27.9)	(22.8)	(5.1)
Adjustments to financial income (charges)	5.8	1.8	4.0
Capital expenditure	(82.4)	(70.9)	(11.5)
Free cash flow	258.5	235.6	22.9


(Acquisition) disposal of companies or business division	110.8	22.2	88.6
Dividend paid out by the Parent Company	(57.3)	(57.5)	0.2
Other changes (incl. net puchase of ow n shares)	(54.3)	(62.0)	7.6
Total cash flow used in other activities	(0.8)	(97.3)	96.4


Exchange rate differences and other changes	(13.9)	(4.0)	(9.9)
Change in net financial position due to operating activities	243.7	134.3	109.4


Put option and earn-out changes	(77.6)	1.0	(78.7)
IFRS 16-'Leases' application	(81.4)	-	(81.4)
Increase in investments for lease right of use	(15.8)	-	(15.8)
Net cash flow of the period = change in net financial position	68.9	135.3	(66.4)


Net financial position at the beginning of the period	(846.3)	(981.5)	135.3

Net financial position at the end of the period	(777.4)	(846.3)	68.9

Results for the Full Year 2019 ended 31 December 2019

Cash flow statement (1 of 2)

Annex - 7

€ million31 December 2019 31 December 2018Change

EBIT	386.3	380.7	5.7
Effects from applying hyperinflation accounting	4.5	3.0	1.5
Depreciation and amortisation	71.8	53.8	18.0
Gains and losses on sales of fixed assets	(2.5)	(3.0)	0.5
Gains on sales of business	-	(38.5)	38.5
Write-downs of tangible fixed assets, goodwill, trademark and busine	6.1	2.2	4.0
Accruals of provision	(15.7)	2.0	(17.7)
Use of provisions	(10.0)	5.3	(15.3)
Net change in Operating Working Capital	(29.6)	(25.5)	(4.1)
Income tax paid	(45.3)	(48.5)	3.2
Joint Venture profit	-	0.2	(0.2)
Other non-cash items	(2.7)	(3.9)	1.3
Cash flow generated from (used in) operating activities	363.0	327.5	35.4
Purchase of tangible and intangible fixed assets	(92.0)	(82.8)	(9.2)
Disposal of tangible assets	9.6	11.9	(2.3)
Acquisition and sale of companies or subsidiaries	(86.5)	15.7	(102.1)
Debt assumed with acquisition	6.0	6.5	(0.5)
Disposal of non strategic assets	200.0	-	200.0
Payment of put option and earn out	(69.2)	(42.9)	(26.3)
Interests received	9.0	7.1	1.9
Net change in securities	27.4	8.2	19.3
Dividends received	0.0	0.1	(0.1)
Other changes	(0.1)	(0.4)	0.3

Cash flow generated from (used in) investing activities	4.3	(76.6)	80.9

Results for the Full Year 2019 ended 31 December 2019

Cash flow statement (2 of 2)

Annex - 7

€ million	31 December 2019	31 December 2018	Change

Bond issued by Parent Company	149.3	-	149.3
Repayment of medium-/long-term financing	248.7	-	248.7
Repayment of private placements and bonds	(219.1)	-	(219.1)
Payment of lease liabilites	(13.0)	-	(13.0)
Repayment of other medium-/long-term financing	(300.0)	(0.5)	(299.5)
Net change in short-term financial payables and bank loans	19.8	(10.4)	30.1
Interests paid	(27.7)	(29.6)	1.9
Interest on leases	(3.4)	(0.3)	(3.1)
Change in other financial payables and receivables	(23.2)	(5.3)	(17.9)
Own shares purchase and sale	(47.3)	(55.5)	8.2
Dividend paid by Group	(57.3)	(57.5)	0.2
Cash flow generated (used in) financing activities	(273.2)	(159.2)	(114.0)

Other differences including exchange rate differences	(3.6)	7.7	(11.2)
Net increase (decrease) in cash and banks	90.5	99.5	(9.0)
Net cash position at the beginning of period	613.9	514.5	99.5
Net cash position at the end of period	704.4	613.9	90.5

Results for the Full Year 2019 ended 31 December 2019

Financial debt details

Annex - 8

Gross debt composition as of 31 December 2019

Issue date	Maturity	Type	Currency	Coupon	Outstanding Amount	Original tenor	As % of total
(€ million)

Sep 30, 2015 (1)	Sep-20	Unrated Eurobond	EUR	2.75%	581	5 years	49%
Apr 5, 2017	Apr-22	Unrated Eurobond	EUR	1.768%	50	5 years	4%
Apr 5, 2017	Apr-24	Unrated Eurobond	EUR	2.165%	150	7 years	13%
Apr 23, 2019	Apr-24	Unrated Eurobond	EUR	1.655%	150	5 years	13%
Jul 31, 2019	Jul-24	Term Loan	EUR	1.25% +3m euribor	250	5 years	21%
Total gross debt					1,181		100%
Of which: medium-long term				600

Net financial debt composition as of 31 December 2019

€ million	31 December 2019	31 December 2018	31 December 2019 vs.
31 December 2018

Short-term cash/(debt) (A)	71.5	404.1	(332.6)
- Cash and cash equivalents	704.4	613.9	90.5
- Short-term debt	(633.0)	(209.9)	(423.1)
Medium to long-term cash/(debt) (B)	(666.1)	(1,076.0)	409.9
Debt relating to operating activities (A+B)	(594.6)	(672.0)	77.3
Liabilities for put option and earn-out payments (2)	(182.8)	(174.3)	(8.5)
Net cash/(debt)	(777.4)	(846.3)	68.9

Reclassified as short-term debt
Including commitments for future minority purchases (including Grand Marnier) and payable for future earn-outs

Results for the Full Year 2019 ended 31 December 2019

Operating working capital

Annex - 9

	31 December 2019	31 December 2018		Reported	Organic	Forex	Perimeter
		change	change	impact	effect

	€ million	% sales	€ million	% sales		€million

Receivables	316.9	17.2%	285.9	16.7%	31.0	19.2	3.9	7.9
Inventories	618.6	33.6%	566.1	33.1%	52.5	23.7	7.5	21.3
- Maturing inventory	364.7	19.8%	340.1	19.9%	24.6	19.1	5.6	-
- Biological assets	0.9	0.0%	0.8	0.0%	0.0	0.0	0.0	-
- Other inventory	253.0	13.7%	225.2	13.2%	27.8	4.6	1.9	21.3
Payables	(240.7)	-13.1%	(216.0)	-12.6%	(24.7)	(13.3)	(0.9)	(10.5)

Operating Working Capital	694.8	37.7%	636.0	37.2%	58.8	29.6	10.5	18.8

Results for the Full Year 2019 ended 31 December 2019

Exchange rates effects

Annex - 10

	Average exchange rate	Period end exchange rate
	FY 2019	change vs FY	31 December 2019	change vs 31 December
		2018		2018
	: 1 Euro	%	: 1 Euro	%

US Dollar	1.120	5.5%	1.123	1.9%
Canadian Dollar	1.486	3.0%	1.460	6.9%
Jamaican Dollar	149.201	2.0%	148.887	-2.0%
Mexican Peso	21.558	5.4%	21.220	6.0%
Brazilian Real	4.413	-2.4%	4.516	-1.6%
Argentine Peso (1)	67.275	-35.8%	67.275	-35.8%
Russian Ruble	72.459	2.2%	69.956	14.0%
Australian Dollar	1.611	-1.9%	1.600	1.4%
Chinese Yuan	7.734	1.0%	7.821	0.7%
British Pound Sterling	0.877	0.9%	0.851	5.1%
Swiss Franc	1.113	3.8%	1.085	3.8%

Following the adoption of IAS 29 'Financial reporting Hyperinflationary economies' in Argentina, the average exchange rate of Argentine Peso for FY 2019 was adjusted to be equal to the rate as of 31 December 2019

Results for the Full Year 2019 ended 31 December 2019

Disclaimer

This document contains forward-looking statements that relate to future events and future operating, economic and financial results of Campari Group. By their nature, forward-looking statements involve risk and uncertainty because they depend on the occurrence of future events and circumstances. Actual results may differ materially from those reflected in forward-looking statements due to a variety of factors, most of which are outside of the Group's control.

It should be noted that the company's accounts and consolidated results are currently subject to auditing.

Results for the Full Year 2019 ended 31 December 2019

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Davide Campari - Milano S.p.A. published this content on 18 February 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 18 February 2020 18:43:07 UTC

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