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• Organic Net Sales Growth (9 Months): 2.1%

• Organic Net Sales Growth (Q3): 1.4%

• EBIT Organic Decline (9 Months): 4.2%

• EBIT Margin (9 Months): 21.9%, down 140 basis points

• Gross Margin Dilution (9 Months): 10 basis points

• Pretax Profit (Adjusted): EUR 446.3 million, down 5.6%

• Net Debt: EUR 2.6 billion

• Net Debt-to-EBITDA Ratio: 3.4x on a pro forma basis

• Revenue from Americas: 45% of global revenues

• Revenue from EMEA: 48% of global revenues

• Revenue from APAC: 7% of global revenues

• Aperol Revenue Growth (9 Months): 3%

• Espolon Revenue Growth (9 Months): 18%

• Campari Revenue Growth (9 Months): 8%

• SG&A Growth (9 Months): 7.6%

• A&P to Sales Ratio (9 Months): 16%

• Interest Expenses: EUR 57.7 million

• Extraordinary CapEx Plan: EUR 500 to 550 million for 2024 and 2025

Release Date: October 29, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Davide Campari-Milano NV (DVDCF) reported a 2.1% organic net sales growth for the first nine months of 2024, driven by global priority brands, particularly in the Americas and EMEA.

• The company is implementing a transformational reorganization by creating four 'houses of brands' to enhance growth and efficiency, focusing on aperitifs, cognac, champagne, tequila, whiskeys, and rum.

• Espolon tequila showed strong performance, with a 18% growth in the first nine months, outperforming the tequila category in key markets.

• Aperol continues to perform well, with strong growth in the U.S., Canada, and other markets, despite challenges in Italy and Germany due to cyclical factors.

• The company is targeting a 200 basis point reduction in SG&A as a percentage of net sales over the next three years, aiming to improve cost efficiency and profitability.

Negative Points

• Davide Campari-Milano NV (DVDCF) faced a challenging macroeconomic environment, with poor weather conditions and reduced consumer confidence impacting sales, particularly in the third quarter.

• The company's EBIT margin declined by 140 basis points to 21.9% due to lower absorption of fixed costs and a challenging sales mix.

• The U.S. market experienced destocking and muted consumption, affecting sales performance, particularly for SKYY vodka and Wild Turkey.

• The Jamaican rum portfolio was impacted by a hurricane, leading to supply shortages and affecting both local and international markets.

• The company anticipates continued macroeconomic headwinds and expects only low single-digit organic sales growth for the full year 2024.

Q & A Highlights

Q: What were the main factors that derailed the quarter's performance compared to the optimistic outlook in July? A: The quarter was impacted by several unexpected factors, including a hurricane in Jamaica, poor weather conditions in September affecting aperitifs, and a significant drop in consumer confidence. Additionally, destocking in Italy was unexpected, particularly at the retail level, which negatively impacted shipment performance. These factors are considered cyclical and nonrecurring, and the company remains confident in returning to its original growth trajectory.