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Davide Campari-Milano N.V.

Earnings Release Feb 24, 2022

7328_iss_2022-02-23_1b8c796f-867a-4a96-a1e9-1f6fbe449d05.pdf

Earnings Release

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Strong performance with double-digit growth across key financial indicators vs. both 2020 and 2019, despite the fourth wave of the pandemic impacting consumption and logistics and the intensifying cost inflation

Very positive momentum across all regions and brand clusters

Increase in proposed full year dividend to €0.06 per share, up +9.1% vs. previous year

Continued good progress across the four pillars of the Group's Sustainability roadmap

Proposal for appointment of the Board of Directors of Davide Campari-Milano N.V. for the next three-year period

FY 2021-RESULTS HIGHLIGHTS

  • Reported net sales of €2,172.7 million, +25.6% organic growth vs. full year 2020 (+22.6% on a reported basis), and +20.5% organic growth vs. full year 2019. Sustained net sales organic growth in the fourth quarter, up +20.9%, despite the pandemic fourth wave impacting consumption and logistics. Strong growth of +12.0% vs. the fourth quarter of 2019.
  • EBIT-adjusted of €435.2 million, +42.3% organic change vs. full year 2020, +240 basis points accretion (+13.0%, -140 bps margin dilution vs. full year 2019). EBIT-adjusted organic growth of +2.1% in the fourth quarter, -230 bps dilution, reflecting mainly the enhanced A&P in the peak season and the intensified cost inflation.
  • Group net profit-adjusted of €307.9 million, up +52.4%. Group net profit of €284.8 million, up +51.6% after total operating, financial and tax adjustments of -€23.1 million.
  • Free cash flow of €332.3 million. Recurring free cash flow of €407.5 million (+55.7%) or 79.1% of EBITDA-adjusted, up from 65.4% in 2020, reflecting strong business performance and cash conversion.
  • Net financial debt of €830.9 million as of December 31st, 2021, down €272.8 million vs. December 31st, 2020 (€1,103.8 million). Net debt to EBITDA-adjusted ratio at 1.6x as of end of year 2021, improving from 2.8x as of 31 December 2020, thanks to the positive cash flow generation.
  • Proposed full year dividend of €0.06 per share, an increase of +9.1% vs. the previous year.
  • Solid return to shareholders with TSR of 38.4% in 2021 (annualized 5-year TSR of 23.4% and annualized 10-year TSR of 18.6%).

Milan, February 23rd, 2022-The Board of Directors of Davide Campari-Milano N.V. (the 'Company') (Reuters CPRI.MI-Bloomberg CPR IM) approved the Annual Report for the year ended December 31st, 2021 of Campari Group.

Bob Kunze-Concewitz, Chief Executive Officer: '2021 was a very successful year as we delivered strong business performance across key financial indicators. The solid results were achieved thanks to very healthy brand momentum benefiting from overall increased consumption and penetration versus pre-pandemic levels. Such positive trends continued in the fourth quarter despite the fourth-wave disruption at year-end.

Looking at 2022, we remain highly confident about the continued strong business momentum with accelerated consumer recruitment across our key brands, fully leveraging new consumption habits across both on-premise and off-premise channels. Regarding profitability, whilst we continue to leverage price increase opportunities to mitigate cost headwinds, the temporary input costs pressure is expected to further intensify during the current year, postponing the gross margin accretion (+70 bps previously expected) and ultimately leading to broadly unchanged organic EBIT margin in 2022. As a long-term focused organization, we remain committed to maintaining a sustained level of investments behind our brands and capabilities, in order to be best positioned to fully benefit from the gradual phase out of the pandemic induced challenges.'.

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SUMMARY FINANCIAL INFORMATION FOR THE FULL YEAR ENDED 31 DECEMBER 2021

FY 2021 FY 2020 Reported Organic Perimeter Forex
€ million € million Change change impact Impact
Net sales 2,172.7 1,772.0 22.6% 25.6% -1.9% -1.0%
EBIT-adjusted 435.2 321.9 35.2% 42.3% -2.6% -4.6%
% on sales 20.0% 18.2%
Group net profit-adjusted 307.9 202.1 52.4%
Group net profit 284.8 187.9 51.6%
EBITDA-adjusted 514.9 399.9 28.8% 34.7% -1.9% -4.0%
% on sales 23.7% 22.6%
Free cash flow, of which: 332.3 168.6 97.1%
Recurring free cash flow 407.5 261.7 55.7%
Net financial debt at the end of the period 830.9 1,103.8
Basic earnings per share adjusted (€) 0.27 0.18 53.3%
Proposed full year dividend per share (€) 0.06 0.055 9.1%

REVIEW OF CONSOLIDATED SALES FOR THE FULL YEAR 2021 RESULTS

Group sales totalled €2,172.7 million, up +22.6% on a reported basis or +25.6% in organic terms. Compared to the full year 2019, which represents the unaffected base with regards to the Covid-19 impact, the organic growth was +20.5%. The positive net sales organic growth continued in the fourth quarter, up +20.9%, despite the challenges of logistic constraints (+12.0% vs. the fourth quarter of 2019).

The perimeter effect was -1.9% due to agency brands termination. FX effect was -1.0% mainly driven by the devaluation of the US Dollar and emerging market currencies over the year.

Analysis of organic change by geography:

  • Sales in the Americas (42.7% of total Group sales) were up organically by +23.0% (+19.9% vs. full year 2019). The Group's largest market, the US, grew by +18.9% (+22.8% vs. full year 2019), with continued growth in the last quarter (+6.8% vs the fourth quarter 2020, +20.2% vs the fourth quarter 2019) benefitting from the on-premise reopening and sustained consumption in the off-premise. In particular, Espolòn, Grand Marnier and Aperol registered strong doubledigit growth, while Wild Turkey, with high-end expressions outperforming, and Campari grew by high single digit. Offpremise sell-out in the US reflected the very tough comparison base from last year, while the 2-year stack grew +28.2%, ahead of the overall spirits market1 . Canada grew by +10.9% and Jamaica registered strong growth (+28.0%). The rest of the region, including Brazil, Mexico and Argentina, grew by double digits with improved brand momentum and an easy comparison base.
  • Sales in Southern Europe, Middle East and Africa2 (29.4% of total Group sales) grew very positively by +36.7% (+15.5% vs. full year 2019). Italy was up by +36.4% mainly driven by the continued 'revenge conviviality' in the on-premise and increased consumption frequency across the channels. Core aperitifs Aperol, Campari and Campari Soda were up by high double digits vs. both 2020 and 2019, whilst Crodino grew low double digits. In the fourth quarter Italy grew +60.0%. France grew +22.1%, mainly driven by Aperol and Riccadonna. Spain grew strongly thanks to the reopening of the on-premise. South Africa was also positive. The GTR channel grew +70.2% after an acceleration in the fourth quarter thanks to the continued lifting of travel restrictions.

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1 Source: Nielsen data XAOC+Liquor+Plus Conv CYTD Wks-52 W/E 1/1/2022

2 Includes Global Travel Retail.

  • North, Central and Eastern Europe (20.2% of total Group sales) grew organically by +18.6% (+25.8% vs. full year 2019). Germany registered solid growth of +10.7% (+20.0% vs. the full year 2019), thanks to Aperol, the newly introduced Aperol Spritz ready-to-enjoy and Campari. The UK grew by +39.1%, Russia +25.0% and the other markets in the region were also positive, largely led by Aperol.
  • Sales in Asia Pacific (7.7% of total Group sales) grew organically by +22.9% (+27.9% vs. full year 2019). Australia was flat (+20.1% vs. full year 2019), with a decline in the fourth quarter mainly due to poor weather conditions and trans-ocean supply constraints. Other markets in the region showed a very positive result (+109.4%), particularly China and South Korea.

Analysis of organic change by brand:

  • Global Priorities (56.4% of total Group sales) registered an organic growth of +26.2% (+20.9% vs. full year 2019). Aperol grew strongly at +32.8%, thanks to renewed strength in consumer recruitment in the on-premise channel alongside sustained home consumption. Core markets such as Italy, the US, France, the UK, Russia, Switzerland, Belgium, and Austria grew by double digits, while newer markets such as China and Mexico grew even faster. In the fourth quarter it grew by +45.8%, mainly boosted by deseasonalisation activities. Campari also delivered strong growth of +30.1% thanks to all major markets. It benefitted from positive home mixology trends as well as positive on-premise momentum, driven by proprietary cocktails such as the Negroni, Boulevardier and Americano and the spread of Campari spritz in established markets. Campari grew by +23.4% vs full year 2019, largely driven by core Italy. Wild Turkey showed strong growth (+10.9%, +16.1% vs. full year 2019), mainly driven by the outperformance of premium expressions in the core US market. SKYY grew +8.2% driven by the international markets, particularly in South Africa, while the core US market was slightly negative. Grand Marnier (+43.2%, +21.2% vs. full year 2019) registered strong growth in the core US market thanks to the positive cocktail home consumption trends as well as the success of the Grand Margarita in both channels. The growth in the Jamaican rum portfolio (+22.7%, +27.8% vs. full year 2019) was driven by the favourable category trends in premium rum, particularly in the core US, Canada, Jamaica and the UK.
  • Regional Priorities (19.3% of total Group sales) showed a strong performance (+29.8%, +31.7% vs full year 2019), with solid growth of Espolòn (+37.5%, +77.6% vs. full year 2019), Bulldog, The GlenGrant, Cinzano, the Sparkling Wines (Mondoro and Riccadonna), the Bitters and Forty Creek. Other brands such as Bisquit&Dubouché grew, driven by South Africa and China, while Ancho Reyes and Montelobos both registered strong growth thanks to very positive category momentum, particularly in the US.
  • Local Priorities (12.3% of total Group sales) registered a positive performance (+24.6%, +20.7% vs. full year 2019), mainly driven by Campari Soda, thanks to its successful relaunch, and Aperol Spritz ready-to-enjoy. Regarding other brands Magnum Tonic grew by double-digits and X-Rated was up triple-digits.

REVIEW OF FULL YEAR 2021 RESULTS

Gross profit totalled €1,296.8 million, corresponding to 59.7% of net sales, up by +26.4% in value on a reported basis. It grew organically by +28.5%, generating +140 bps margin accretion thanks to a favourable sales mix driven by the outperformance of aperitifs, combined with the suspension of US import tariffs, and a stronger absorption of fixed production costs driven by higher production volumes and an easy comparison base. These positive effects more than offset the increased input and logistics costs as well as the dilutive effect of Espolòn due to the high cost of agave, with the latter lessening thanks to price increases introduced during the year.

Advertising and Promotion expenses (A&P) were €397.8 million, corresponding to 18.3% of net sales, up by +28.4% in value on a reported basis. They increased organically by +29.1%, faster than topline growth (+25.6%), hence dilutive on margin by -50 basis points. It grew +26.0% vs. FY 2019 (-80 basis points dilution), reflecting strong investments behind key brands, accelerating in the fourth quarter.

CAAP (Contribution after A&P) was €899.0 million, corresponding to 41.4% of net sales, up by +25.5% in value on a reported basis (up organically by +28.3%). Organic change was +14.2% vs. 2019.

Selling, general and administrative expenses (SG&A) totalled €463.8 million, corresponding to 21.3% of net sales, +17.7% in value on a reported basis. They grew organically by +16.8% in value, lower than topline, generating +160 bps margin accretion, reflecting investments to strengthen Group's capabilities and business infrastructure, as well as the expected structure costs phasing (mainly incentives and hiring catch up), impacting in particular the fourth quarter.

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EBIT-adjusted was €435.2 million, corresponding to 20.0% of net sales, up by +35.2% in value on a reported basis. It grew organically by +42.3%, generating an accretion of +240 basis points. The perimeter effect on EBIT-adjusted was -2.6% (or -€8.3 million), mainly due to the discontinuation of agency brands. The forex effect on EBIT-adjusted was -4.6% (or -€14.7 million), driven by the devaluation of the US Dollar as well as key emerging markets currencies against the Euro.

Operating adjustments were negative at -€34.3 million, mainly attributable to restructuring initiatives, write-off of minor brands and non-recurring last mile long-term incentive schemes3 , partly mitigated by the positive adjustment resulting from the closure of a tax dispute in Brazil and one-off refunds.

EBITDA-adjusted was €514.9 million, up by +28.8% in value on a reported basis (up organically +34.7%), corresponding to 23.7% of net sales.

EBIT (18.4% of net sales) and EBITDA (22.1% of net sales) were at €400.8 million and €480.6 million respectively.

Net financial expenses were €17.1 million in 2021. Excluding the exchange gain/(loss), the net financial charges were €25.0 million (vs. €34.8 million in 2020), driven by a lower average cost of net debt (2.5% in 2021 vs. 3.5% in 2020, thanks to the liability management activities carried out over the last years).

Profit before taxation-adjusted was €415.3 million, up +48.9% vs. 2020. Profit before taxation was €388.6, up +85.4%.

Taxation totalled €105.6 million, on a reported basis. Recurring income taxes were equal to €109.2 million excluding positive tax adjustments totalling €3.6 million.

Group net profit-adjusted reached €307.9 million, up +52.4% in value on a reported basis. Group net profit was €284.8 million, up +51.6% in value on a reported basis, after negative overall adjustment of -€23.1 million4 .

Free cash flow was €332.3 million (vs. €168.6 million in 2020). Recurring free cash flow amounted to €407.5 million (up 55.7% from €261.7 million in 2020). When measured as a percentage of EBITDA-adjusted, the ratio was 79.1% in 2021, up from 65.4% in 2020. This increase was driven by the solid business performance and efficient working capital management.

Net financial debt at €830.9 million as of 31 December 2021, down €272.8 million vs. 31 December 2020 (€1,103.8 million), thanks to the very positive free cash flow generated by the business.

Net debt to EBITDA-adjusted ratio at 1.6x as of 31 December 2021, improving from 2.8x as of 31 December 2020, driven by the solid business performance.

SUSTAINABILITY

In 2021, the Group continued to make solid progress across all four pillars of its sustainability roadmap.

Environment. In 2021 the Group achieved ahead of time the water usage (L/L) target initially set for 2025 and consequently renewed its commitment to water efficiency by introducing a new and more challenging target for 2025. In terms of gas emissions, the Group has made the key commitment to achieve net zero by 2050. The target of 100% renewable electricity for European production sites, which was set for 2025, was fully achieved in 2021 as well. Moreover, the Group completed its first sustainability-linked share buyback program with a reward mechanism to allocate an amount deriving from the outperformance5 to energy efficiency projects. The outperformance generated by the programme allows the Group to finance photovoltaic transformation projects in two production sites in Italy.

People. In 2021, the Group created and implemented a DEI (Diversity, Equity and Inclusion) index to evaluate performances and measure improvements at global and local level. As further evidence of its commitment to ethical communication, the Group joined the Unstereotype Alliance, a thought and action platform with the mission to eradicate harmful stereotypes in media and advertising content. To further enhance the Camparistas' sense of belonging, the Group launched its first Employee Stock Ownership Plan with a high participation rate of 51.6%.

Responsible practices. As part of the Group's Global Responsible Alcohol Strategy, the Group revised its Code on Commercial Communication with new specific guidelines for digital marketing communications and for Influencer Generated Contents. Moreover, the Group published and communicated a new Policy on Responsible Alcohol Consumption to all its Camparistas in 2021.

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3 Pursuant to the Remuneration Policy, a last mile incentive scheme with retention purpose to be potentially awarded to the current Chief Executive Officer has been approved by the competent Company's corporate bodies and therefore implemented as illustrated in the Remuneration Report.

4 Of which €(34.3) million negative operating adjustments, €4.7 million positive financial adjustments, €2.9 million positive adjustments related to the reassessments of previously held associates and joint ventures, and €3.6 million positive tax adjustments.

5 The outperformance is the difference between the purchase price and the average VWAP (Volume Weighted Average Price) during the execution period.

Community involvement. The Group continued to show strong commitment to education and culture with a strong focus on the world of art, design and cinema by extending local best practices to other markets. Moreover, the Group continued to contribute to the fight against the pandemic by supporting business partners, consumers and hospitals in its main markets.

OTHER RESOLUTIONS

Board of Directors. The Board of Directors proposed to the Shareholders' meeting to approve the appointment of the following executive and non-executive directors of Davide Campari-Milano N.V. for a three-year period expiring at the end of the Annual General Meeting to be held in 2025:

  • Luca Garavoglia, non-executive director and Chairman;
  • Robert Kunze-Concewitz, executive director and Chief Executive Officer;
  • Paolo Marchesini, executive director and Chief Financial Officer;
  • Fabio Di Fede, executive director and Group General Counsel and Business Development Officer;
  • Emmanuel Babeau, non-executive director;
  • Eugenio Barcellona, non-executive director;
  • Alessandra Garavoglia, non-executive director;
  • Margareth Henriquez, non-executive director;
  • Jean-Marie Laborde, non-executive director;
  • Christophe Navarre, non-executive director;
  • Lisa Vascellari Dal Fiol, non-executive director.

The curriculum vitae of the Board of Directors' Candidates are available at the corporate offices of the Company in Sesto San Giovanni (MI), Via Franco Sacchetti 20, and on the Company's website (https://www.camparigroup.com/en/page/group/governance).

Mid-Term Incentive Plan. The Board of Directors proposed to the Shareholders' meeting to approve a mid-term incentive plan based on Campari shares aimed at rewarding Camparistas for their active participation in the Group performance and fostering their retention. Eligible Camparistas will be awarded with a right to receive a number of Campari shares for free, subject to their uninterrupted employment during a three-year vesting period. Relevant details are available in the Information Document pursuant to article 114-bis of the Consolidated Law on Financial Intermediation to be published on the Campari Group's website.

Dividend, sustainability report and renumeration report. The Board of Directors proposed to the Shareholders' Meeting, a dividend of €0.06 per share for the year 2021, gross of withholding taxes, +9.1% increase versus last year. The dividend will be paid on April 21 st , 2022 (with an ex-date for coupon n. 2 of April 19 th , 2022 in accordance with the Italian Stock Exchange calendar, and a record date of April 20th , 2022). The Board of Directors resolved to convene the Annual General Meeting on April 12th , 2022 to approve the Annual Report including, inter alia, the financial statements for the year ended 31st December 2021, the non-financial disclosure, the corporate governance and the remuneration report.

Share buyback. The Board of Directors proposed to the Shareholders' meeting to authorise the purchase of own shares, mainly aimed at the replenishment of the portfolio of own shares to serve the current and future stock option plans for the Group's management, according to the limits and procedures provided by the applicable laws and regulations. The authorization is requested until June 30th, 2023.

Stock options. The Board of Directors proposed to the Shareholders' meeting to approve a stock option plan. The plan foresees the granting of stock option plans to directors of the Board and the Company's management, granting the relevant bodies the authorization to implement the plan by June 30th, 2023. Relevant details are available in the Information Document pursuant to article 114-bis of the Consolidated Law on Financial Intermediation to be published on the Campari Group's website.

* * *

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FILING OF DOCUMENTATION

The Annual Report as of 31st December 2021 (including, inter alia, the non-financial disclosure, the corporate governance report, the report of the non-executive directors, the statement and responsibilities in respect to the annual report, the remuneration report and the independent auditor's report) is available at the corporate offices of the Company in Sesto San Giovanni (MI), Via Franco Sacchetti 20, on the Company's website (https://www.camparigroup.com/en/page/investors), as well as the authorized storage of the Dutch Financial Markets Authority (AFM).

The following documentation

  • Notice of call, Agenda and Explanatory Notes;
  • Mid-Term Incentive Plan Information Document pursuant to article 114bis, paragraph 3, TUF;
  • Explanatory Report regarding the Stock Option Plan pursuant to articles 114bis and 125ter, TUF;
  • Curriculum vitae of the Board of Directors' Candidates

is available at the above corporate offices and on the Company's website (www.camparigroup.com/en/page/group/governance).

The Board of Directors is responsible for preparing the annual report, inclusive of the management report, the full year consolidated financial statements and the Company only financial statements at 31 December 2021, in accordance with the Dutch Financial Supervision Act and the applicable International Financial Reporting Standards (IFRS).

Disclaimer

This press release contains certain forward-looking statements relating to the Campari Group. All statements included in this press release concerning activities, events or developments that we expect, believe or anticipate will or may occur in the future are forward-looking statements. Forward-looking statements are based on current expectations and projections about future events and involve known and unknown risks, uncertainties and other factors, including, but not limited to, the following: volatility and deterioration of capital and financial markets, changes in general economic conditions, economic growth and other changes in business conditions, changes in government regulation and other economic, business and competitive factors affecting the businesses of Campari Group. Such factors include, but are not limited to: (i) changes in the laws, regulations or policies of the countries where Campari Group operates; (ii) the adoption, both at a global level and in the countries where Campari Group operates, of restrictive public policies that have an impact on the production, distribution, marketing, labelling, importation, price, sale or consumption of alcoholic products; (iii) long-term changes in consumers' preferences and tastes, social or cultural trends resulting in a reduction in the consumption of products of the Campari Group as well as in purchasing patterns and the ability of Campari Group to anticipate these changes in the marketplace; and (iv) increased production costs and volatility of raw materials' prices.

Therefore, Campari and its affiliates, directors, advisors, employees and representatives, expressly disclaim any liability whatsoever for such forward-looking statements.

These forward-looking statements speak only as of the date of this document and Campari does not undertake an obligation to update or revise any forward-looking statement, whether as a result of new information, future events and developments or otherwise, except as required by law. It should be noted that the draft company only financial statements and consolidated financial statement, as well as the data related to the Non-Financial Disclosure, are subject to auditing.

ANALYST CONFERENCE CALL

At 1:00 pm (CET) today, February 23rd, 2022, Campari's management will hold a conference call to present the Group's results for the Group's Full Year 2021 Results. To participate, please dial one of the following numbers:

  • from Italy: (+39) 02 802 0911
  • from abroad: (+44) 1212 818 004

The presentation slides can be downloaded before the conference call from the main investor relations page on Campari Group's website, at https://www.camparigroup.com/en/page/investors.

A recording of the conference call will be available from today until Wednesday March 2nd, calling the following number: • (+39) 02 8020987 (Access code: 700903#, PIN: 903#)

FOR FURTHER INFORMATION

Investor Relations

Chiara Garavini Tel. +39 02 6225330 Email: [email protected] Jing He Tel. +39 02 6225832 Email: [email protected] Thomas Fahey Tel. +44 (0)20 31009618 Email: [email protected]

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Corporate Communications

Enrico Bocedi Tel. +39 02 6225680 Email: [email protected]

https://www.camparigroup.com/en/page/investors http://www.camparigroup.com/en http://www.youtube.com/campariofficial https://twitter.com/campari

Visit Our Story

ABOUT CAMPARI GROUP

Campari Group is a major player in the global spirits industry, with a portfolio of over 50 premium and super premium brands, spreading across Global, Regional and Local priorities. Global Priorities, the Group's key focus, include Aperol, Campari, SKYY, Grand Marnier, Wild Turkey and Appleton Estate. The Group was founded in 1860 and today is the sixth-largest player worldwide in the premium spirits industry. It has a global distribution reach, trading in over 190 nations around the world with leading positions in Europe and the Americas. Campari Group's growth strategy aims to combine organic growth through strong brand building and external growth via selective acquisitions of brands and businesses.

Headquartered in Milan, Italy, Campari Group operates in 22 production sites worldwide and has its own distribution network in 22 countries. Campari Group employs approximately 4,000 people. The shares of the parent company Davide Campari-Milano N.V. (Reuters CPRI.MI - Bloomberg CPR IM) have been listed on the Italian Stock Exchange since 2001. For more information: http://www.camparigroup.com/en. Please enjoy our brands responsibly.

- Appendix to follow -

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CAMPARI GROUP

Consolidated net sales breakdown by brand priority for the full year 2021

1 January-31 December
2021
% Change of which:
€ m % Split Total organic perimeter forex
Global Priorities 1,226.1 56.4% 24.4% 26.2% 0.0% -1.8%
Regional Priorities 419.1 19.3% 29.2% 29.8% 0.5% -1.2%
Local Priorities 266.9 12.3% 24.7% 24.6% 0.0% 0.1%
Rest of portfolio 260.5 12.0% 5.0% 18.3% -14.4% 1.1%
Total 2,172.7 100.0% 22.6% 25.6% -1.9% -1.0%

Consolidated net sales by geographic area for the full year 2021

1 January-31 December
2021
% Change of which:
€ m % Split Total organic perimeter forex
Americas 927.9 42.7% 19.9% 23.0% 0.0% -3.1%
Southern Europe, Middle East & Africa 638.8 29.4% 37.8% 36.7% 1.0% 0.1%
North, Central & Eastern Europe 438.1 20.2% 8.5% 18.6% -9.7% -0.3%
Asia Pacific 167.8 7.7% 28.3% 22.9% 0.8% 4.6%
Total 2,172.7 100.0% 22.6% 25.6% -1.9% -1.0%

Consolidated EBIT-adjusted by geographic area for the full year 2021

1 January-31
December 2021
% Change of which:
€ m % Split Total organic perimeter forex
Americas 184.5 42.4% 32.1% 44.3% 0.0% -12.3%
Southern Europe, Middle East & Africa 71.2 16.4% 119.8% 129.1% -9.4% 0.1%
North, Central & Eastern Europe 162.5 37.3% 21.9% 26.0% -4.3% 0.2%
Asia Pacific 17.0 3.9% 3.1% -13.2% 3.4% 12.9%
Total 435.2 100.0% 35.2% 42.3% -2.6% -4.6%

CAMPARI GROUP

Consolidated income statement for the full year 2021

FY 2021 FY 2020
€ million % € million % Change
Net sales 2,172.7 100.0% 1,772.0 100.0% 22.6%
Cost of goods sold(1) (875.8) -40.3% (746.1) -42.1% 17.4%
Gross profit 1,296.8 59.7% 1,025.9 57.9% 26.4%
Advertising and promotional costs (397.8) -18.3% (309.8) -17.5% 28.4%
Contribution margin 899.0 41.4% 716.1 40.4% 25.5%
SG&A(2) (463.8) -21.3% (394.2) -22.2% 17.7%
Result from recurring activities
(EBIT-adjusted)
435.2 20.0% 321.9 18.2% 35.2%
Adjustments to operating income (expenses) (34.3) -1.6% (90.1) -5.1% -61.9%
Operating result (EBIT) 400.8 18.4% 231.8 13.1% 72.9%
Financial income (expenses) (17.1) -0.8% (38.9) -2.2% -55.9%
Adjustments to financial income (expenses) 4.7 0.2% 1.4 0.1% 235.7%
Put option, earn out income (charges) and
hyperinflation effects
0.2 0.0% 18.1 1.0% -99.0%
Profit (loss) related to associates and joint
ventures
(0.1) 0.0% (2.8) -0.2% -97.7%
Group profit before taxation 388.6 17.9% 209.6 11.8% 85.4%
Group profit before taxation-adjusted 415.3 19.1% 278.9 15.7% 48.9%
Taxation (105.6) -4.9% (22.7) -1.3% 364.4%
Net profit for the period 283.0 13.0% 186.9 10.5% 51.4%
Net profit for the period-adjusted 306.1 14.1% 201.1 11.3% 52.2%
Non-controlling interests (1.8) -0.1% (1.0) -0.1% 77.9%
Group net profit 284.8 13.1% 187.9 10.6% 51.6%
Group net profit-adjusted 307.9 14.2% 202.1 11.4% 52.4%
Depreciation and amortisation (79.7) -3.7% (78.0) -4.4% 2.2%
EBITDA-adjusted 514.9 23.7% 399.9 22.6% 28.8%
EBITDA 480.6 22.1% 309.8 17.5% 55.1%

(1) Includes cost of material, production and logistics costs. (2) Includes selling, general and administrative costs.

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Consolidated balance sheet as of 31 December 2021

31 December 2021 31 December 2020
€ million € million
ASSETS
Non-current assets
Property, plant and equipment 560.3 482.7
Right of use assets 71.8 71.5
Biological assets 13.4 8.9
Goodwill 1,416.3 1,354.1
Brands 974.9 956.6
Intangible assets with a finite life 54.0 44.3
Investments in associates and joint ventures 26.1 26.1
Deferred tax assets 55.3 44.5
Other non-current assets 5.3 5.7
Other non-current financial assets 5.7 7.1
Total non-current assets 3,183.0 3,001.5
Current assets
Inventories 742.0 656.7
Biological assets 3.7 1.6
Trade receivables 290.4 281.8
Other current financial assets 15.8 1.2
Cash and cash equivalents 791.3 548.1
Income tax receivables 17.7 17.4
Other current assets 49.2 45.0
Assets held for sale - 3.3
Total current assets 1,910.1 1,555.2
Total assets 5,093.1 4,556.7
LIABILITIES AND SHAREHOLDERS' EQUITY
Shareholders' equity
Issued capital and reserves attributable to owners of the parent 2,371.8 1,996.6
Non-controlling interests 3.0 1.8
Total shareholders' equity 2,374.8 1,998.4
Non-current liabilities
Bonds 845.5 894.7
Loans due to banks 355.2 320.0
Other non-current financial liabilities 120.9 169.3
Post-employment benefit obligations 30.1 33.4
Provisions for risks and charges 34.4 41.8
Deferred tax liabilities 366.0 338.0
Other non-current liabilities 21.5 7.3
Other non-current liabilities 1,773.6 1,804.6
Current liabilities
Bonds 50.0 -
Loans due to banks 198.1 244.3
Other current financial liabilities 73.9 31.9
Trade payables 394.6 321.2
Income tax payables 54.4 16.1
Other current liabilities 173.7 140.3
Total current liabilities 944.7 753.7
Total liabilities 2,718.3 2,558.3
Total liabilities and shareholders' equity 5,093.1 4,556.7

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Consolidated reclassified cash flow statement as of 31 December 2021

31 December 2021 31 December 2020
€ million € million
EBITDA 480.6 309.8
Effects due to IAS 29 application 4.5 2.4
Goodwill, trademark and sold business impairment 8.0 45.7
Accruals and other changes from operating activities 64.7 (9.3)
Income taxes paid (79.1) (119.7)
Cash flow from operating activities before changes in working capital 478.7 228.8
Changes in net operating working capital 5.0 43.4
Cash flow from operating activities 483.7 272.2
Net interests paid (15.6) (25.3)
Adjustments to financial income (charges) - 1.4
Capital expenditure (135.7) (79.8)
Free cash flow 332.3 168.6
(Acquisition) disposal of companies or business division (3.1) (120.6)
Dividend paid out by the Parent Company (61.6) (62.9)
Other changes (incl. net purchase of own shares) (6.5) (275.6)
Total cash flow used in other activities (71.2) (459.1)
Exchange rate differences and other changes 4.3 10.9
Change in net financial position due to operating activities 265.4 (279.6)
Put option and earn-out liability changes (3.5) (5.6)
Increase in investments for lease right of use (13.0) (7.8)
Net cash flow of the period=change in net financial position 248.9 (293.0)
Net financial position at the beginning of the period (1,103.8) (777.4)
Net financial position at the end of the period (830.9) (1,103.8)

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CAMPARI GROUP DAVIDE CAMPARI-MILANO N.V.

Parent company income statement

1 January-31 December 2021 1 January-31 December 2020
€ million € million
Net sales 777.2 602.5
Cost of goods sold (302.9) (228.0)
Gross margin 474.4 374.5
Advertising and promotional (74.6) (64.4)
Contribution after A&P 399.7 310.0
Selling, general and administrative expenses (144.8) (134.8)
Other operating income/ (expenses) (15.1) (114.2)
Operating result 239.8 61.0
Financial income (charges) (20.5) (35.4)
Dividends 14.9 62.2
Share of profit (loss) of associates (2.2) (0.7)
Profit before tax 231.9 87.2
Taxes (65.0) (3.9)
Net profit 166.9 83.3

Parent company balance sheet

31 December 2021 31 December 2020
€ million € million
Total non-current assets 2,923.7 2,603.0
Total current assets 519.4 379.7
Total assets 3,443.1 2,982.6
Total shareholders' equity 1,534.2 1,122.4
Total non-current liabilities 1,238.6 1,281.1
Total current liabilities 670.3 579.1
Total liabilities and shareholders' equity 3,443.1 2,982.6

Parent company cash flow

31 December 2021 31 December 2020
€ million € million
Cash flow generated from (used in) operating activities 221.1 155.5
Cash flow generated from (used in) investing activities (1.8) (20.6)
Cash flow generated from (used in) financing activities (110.4) (322.1)
Net change in cash and cash equivalents:
increase (decrease)
108.9 (187.3)
Cash and cash equivalents at the beginning of period 69.7 257.0
Cash and cash equivalents at end of period 178.6 69.7

Page 12 of 12

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