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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

• Revenue Contribution (Americas): 45% of global revenues

• Revenue Contribution (EMEA): 48% of global revenues

• Revenue Contribution (APAC): 7% of global revenues

• Aperol Revenue Growth (9 Months): 3%

• Espolon Revenue Growth (9 Months): 18%

• SKYY Revenue Decline (9 Months): 13%

• Interest Expenses: EUR 57.7 million

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

• Warning! GuruFocus has detected 6 Warning Signs with BSP:INTB3.

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 significant cost containment program aimed at achieving a 200 basis point reduction in SG&A as a percentage of net sales by 2027.

• 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 challenging conditions in Italy and Germany.

• The company is reorganizing its operating model to create four houses of brands, which is expected to enhance growth and efficiency by focusing on brand accountability and resource allocation.

Negative Points

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

• The company's EBIT margin declined by 4.2% organically over the first nine months, with a significant margin dilution of 140 basis points.

• The third quarter saw a 1.4% organic net sales growth, reflecting a soft market context and supply shortages due to a hurricane in Jamaica.

• The company experienced destocking issues in Italy and unexpected retailer destocking in the U.S., impacting shipment performance.

• The Courvoisier acquisition is generating a lower-than-expected EBIT contribution due to market cleanup and investment needs.

Q & A Highlights

Q: What were the main factors that derailed the quarter's performance compared to the optimistic outlook in July? A: Paolo Marchesini, Interim Co-CEO, highlighted several factors: the impact of a hurricane in Jamaica, poor weather conditions in September affecting aperitifs, and unexpected destocking in Italy. Additionally, consumer confidence was lower than anticipated, affecting consumption patterns.