Davide Campari-Milano N.V.

Good evening, this is the Corosco Conference Operator. Welcome and thank you for joining the Campari Group first half 2026 Financial Results Conference Call. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. Today's call will be hosted by Simon Hunt, Chief Executive Officer, and Francesco Mele, Chief Financial Officer. At this time, I would like to turn the conference over to Simon Hunt. Please go ahead.

Great, thanks very much. Good afternoon, everyone. A pleasure to be here with you again. I've got Francesco with me, and of course, we have our IR team that will be available after the call for any follow-up. So let's get going. With a summary of our first half results, Now, I think it's important to start by stating that we are doing exactly what we said we would do, and we are growing in the important start to the peak season. In fact, we are the only listed Spirits player now with five consecutive quarters of organic top-line growth. Now, overall in H1, we record a plus 2.7% organic top-line growth, with Q2 a plus 2.5%, despite a more difficult comparison base. At the same time, we continue to outperform and gain share across all of our key markets in sellout, especially on our priority brands. In fact, we are gaining share in 95% of our markets. Now, I know you've all heard this a few times, but I think it's worth to reiterate our strategy that we shared at our CMD back in November, because that is exactly what we are doing. So first, we talked about sharper portfolio choices with fewer bigger bets. We're doubling down on the key priority brands and the results on the sellout are clear with solid share gains across regions and especially in the strategic on-premise. Second, winning the first shared drink every day, everywhere, with new formats for new occasions. Following our recent new format launches on our aperitifs, we are seeing very strong initial results. with positive feedback from consumers and trade and encouraging velocity and distribution gains. Third, accelerating our geographic expansion. In the first half, we recorded broad-based growth with expansion into smaller seeding markets by increasing our exposure to these high-growth markets where we under-index. And also, with the rollout of priority brands into new markets like Sati Rosa in the U.S. right in time for the summer season. And the final two, leveraging our investments to work harder and driving efficiency across each line of the P&L, allowing us to invest more behind our brands. Now, as you can see on the page, we strengthened our gross margin profile by 130 bps accretion, mainly driven by positive mix due to the performance of aperitifs, as well as input cost benefit and lower tariff impact. and Francesco is going to go into that in a lot more detail later on. Our brand building investments continued at pace into the peak season and front loaded in the first half in absolute terms as we guided. In fact, we are deploying one of the most comprehensive coverages across music festivals and other events, both with our existing products as well as our new innovations this year. Our cost containment program continues to deliver and we are on track to achieve 70 BIPs organic SG&A benefit on top line as guided with an H1 delivery of 60 BIPs. As a result, we achieved 130 BIPs EBIT adjusted margin accretion. Although the underlying trends on the main contributors to EBIT have not changed, we are raising our margin expectation for the full year due to a more favorable than expected tariff impact. Again, more details on this later in the presentation. On the balance sheet side, we remain comfortable and at sustainable levels. We recorded 64% recurring free cash flow conversion before operating working capital changes, and total recurring conversion was impacted by seasonality. Our distillery expansion in Kentucky is progressing as planned and on track to be finalized by the end of the year. Our leverage is comfortable at 2.6 times, supported by business momentum, with some impact of seasonality in operating working capital. At the same time, we are continuing to streamline our portfolio with new disposals of the rum-agricole business, including Trois-Rivières, Maison Lamoni, as well as Biscay de Boucher and Cabo Wabo. As I'm sure you will have seen, we also recently successfully closed a new euro bond issuance of 600 million euros and a liability management transaction, which allow us to feel comfortable regarding the maturity profile of our funding base. So now let's delve into some of the details, starting with the top line. As you can see, the first half organic top line growth of plus 2.7% was broad based across all regions and most houses again. In terms of FX, the main impact is coming from the US dollar, while the perimeter impact is in line with what we previously told you and mainly driven by the disposal of Cinzano and one month impact of Averna. We'll go one by one, but first let's look at sellout, which as you know, is the critical indicator. So far in 26 years to date, we have recorded outperformance and share gains across all of our key markets. With our priority brands, we are growing everywhere, in most cases with mid-single to low double-digit growth. In the U.S., we are outperforming in all channels, especially in NAPCA and the strategic on-premise, where the share gains are even more evident. In Europe, again, we have an outperformance across the board. Total Europe sell-out data includes 12 countries, and you can see we are growing plus 2% compared to the sector decline of negative 1%. and in the on-premise, which you don't see on the page, the outperformance is even more pronounced. Now, as I said up front, we are gaining share in every one of our markets. And I think with all the noise in the category on CEO changes and significant restructures, merger speculation and consumer pressure, we at Campari are growing. And we are growing share because we have a clear, differentiated strategy and we are executing it without distractions. So now let's move on to Europe top line. Europe delivered plus the 1.9% organic growth in the first half, with growth across all markets except Germany. In fact, Europe growth is plus 2.9% excluding Germany, where the consumer pressure is most evident. This growth was driven by our creative portfolio strategy with contribution from all of our key brands. Innovations also started playing a more meaningful role as part of our convenience strategy. and all together we are implementing the biggest ever activation plan in Europe in terms of days of activation, menu placements and festivals. In Italy we saw continued growth for our aperitif portfolio led by strong executions on innovations, notably Aperol on tap and Campari Spritz ready to serve which hit shelves at the beginning of Q2. In addition, we are executing 4,700 activations during the peak season, especially into Q3, and we already have Aperol Tap in more than 1,000 outlets, including festivals, events, but also new outlets like pizza restaurants. Aperol's performance is further supported by the rollout of our L'Originale campaign, which is reinforcing our leadership in the entree with almost 500 outlets already proudly displaying the certification badge that they proudly serve Aperol. As I mentioned, Germany continues to see a challenging backdrop with subdued consumer confidence and wallet pressure impacting numerous consumer sectors. Despite this backdrop, Sati Rose's performance remains strong. and we've seen strong execution behind Codino and the early success of our innovation rollout, including Campari Spritz ready to serve and Apparel on tap. The environment going forward is expected to continue to be challenging, but we will continue to expand our presence and activate behind our key brands in preparation of the market recovery. In France, the Aperity portfolio is performing strongly with high single-digit growth partially offset by the local portfolio. Aperol continues to lead that performance, and Sati Rosa has also started to gain traction following its launch last year. The U.K. had a strong first half with plus 4.3% growth, once again led by double-digit growth in our aperitif portfolio with contribution from Aperol, Campari, Sati Rosa, and Credino. There's also strong early traction for the Aperol-to-go camp, with ongoing distribution gains and velocity at three times our original targets. At the BST Festival in Hyde Park over a two-week period, we sold 65,000 cans of Aperol Spritz in a format that we wouldn't be able to do previously. And Aperol on tap will also progressively be rolled out over the summer. In other European markets representing about 12% of overall sales, we saw broad-based growth of plus 5.5% across most countries, especially in Spain, Austria, Greece, and Benelux. Having just been to both Spain and Greece, I can tell you the potential for our portfolio there is really exciting. And the bulk of the growth is coming from Aperol, Sati Rosa, Credino, and sparkling wine to support the aperitif trend, as well as solid performance on Courvoisier. Now moving to North America, we recorded a plus 2.6% organic growth with all markets growing. The U.S. recorded a plus 1.5% organic growth driven by our priority brands, Aperol and Espelon, especially with strong on-trade performances. Aperol saw solid growth showing the early benefits of increased investments behind the brand. including an amplified presence at Coachella and the 21 new brand activators in the on-premise across the four states are really driving the business. In fact, the accounts that they are covering, we are seeing four times the velocity of the accounts that they are not covering. In July, we started a campaign with Hilary Duff to sponsor her concert tour, which is further amplifying visibility into the third quarter. Another important development in the U.S. is the June launch of Sate Rosa. Although it's very early days, we are seeing strong pickup, with most locations limiting consumers to a maximum of a one or two bottle purchase. And we're already seeing people come back for reorders. TikTok is leading the social media buzz on this brand, accounting for 41% of the coverage, which is an encouraging signal that the brand is resonating with legal purchase age trend-driven consumers. S1 also continues to form well with high single-digit growth, both in Blanco and Repo. Also here, we continue to activate behind the brand with the short King Week campaign featuring Ken Jeong and activations during the World Cup with a series of watching block parties. Commercially, we placed Esplanade in over 7,000 menus, double our original target, with similar success also in off-premise displays. And we'll talk more about the performance later in the day. Moving to Jamaica, we recorded plus 8.8% growth with benefit from the faster hurricane recovery, as well as pricing coming through in the market. For the rest of the region, all countries registered solid growth, including Mexico, which recovered the quarter one phasing impact that we mentioned previously. So now let's have a look at developing markets. As a reminder, we formed this region at the beginning of the year in order to become more agile and benefit from a repeatable playbook across some of our seeding markets. In the first half, we started to see some of the benefits of this increased focus with widespread organic growth of plus 9.1%. Brazil saw continued momentum of Aperol and local brands, partially offset Campari, phasing into the next quarter. Argentina benefited from the ongoing strength of Sky Cosmic, and since the launch of Sky Cosmic was in June last year, we do expect the growth rate to normalize in the second half. In the other countries, one of the key drivers of growth was Cuvoisier, led by Eastern Europe and South Africa. The new region has completed its strategy work and is now working on capital allocation in line with the group-wide strategy in a disciplined way to target the multiple opportunities we have in these markets. For APAC and GTR, we registered a flat trend in the first half. The biggest market in Australia grew plus 2.6% with double-digit growth in both APROL and Esplan to now contributing about a third of the total top line in Australia. and this was partially offset with a flattish trend on wild turkey, which still contributes more than 50% of Australia's top line. Here, we're continuing our focus in the on-premise and activating strongly. In GTR, we recorded a plus 6% growth. As you might remember in Q1, it was negative 13.5. It was off a high base admittedly, but it was also impacted by geopolitical events in certain geographies. In Q2, while an easier comparison base helped, We also focus strongly on the imperatives in Europe. And below you can see our launch in EasyJet and British Airways of the Aperol to go can, for example, while also activating across numerous airports. In the rest of the region, we recorded solid growth in China, India, and other partnership markets. But this was more than offset by South Korea, where the completion of our distribution company integration has led to a negative impact this year. Right, now let's change the optics from regions to houses, starting with aperitifs. Overall top line growth was an encouraging plus four in the first half. Aperol delivered a solid performance of plus 3.3, benefiting from the positive trend in the bottle, which was amplified by launch of innovations such as Aperol Entente. All regions contributed to the positive trend, and we'll talk more about the Aperol innovations on the next slide. Italy saw resilient performance while in Germany the brand was held back by the challenging consumer environment. Elsewhere, we saw good contribution from the US, UK, France, Brazil, and Australia. For Campari, we recorded plus 2.3% growth with solid performance in Europe and North America. And Campari also benefited from the launch of Campari Spritz Ready-to-Serve in Q2 in some European markets. It's early days, but so far the response from the trade and consumers has been very positive, particularly in Italy and Germany. The remainder of our Aperitus portfolio grew 8.8%, primarily driven by Sati Rosa, which continues its solid growth in its core German market and is also progressively benefiting from the rollout into other high potential countries. It's important to note that only a few years ago in 2023, only 4% of Sati Rosa top line was outside of Germany. This has now reached 48%, showing the solid reception that it's having in new markets. As I mentioned before, the U.S. launch is now underway and the initial trends are very positive. In the U.K., it has already become the number one innovation launch in spirits in Sainsbury's in just a short few months. One of the key pillars on our CMD was winning the first shared drink with new formats for new occasions and providing convenient options for our consumers. And here I want to walk you through what we've launched so far for Aperol. Of course, the bottle and the perfect serve remain a critical piece of our strategy. And the on-premise focus remains fundamental in order to reach new occasions and achieve incremental growth. We've accelerated the expansion of the ready-to-serve into new markets. Now we have 15 seeding markets, and the trends are all positive. And this allows consumers to achieve that perfect serve at home in a glass over ice. As you all know, we piloted APAROL on tap last year over the summer in select locations. This year we are rolling it out across the peak season in more and more high-velocity venues and events in select markets. The tap program allows us to use events not solely for visibility, but also for sales. In just three months, the tap volume in Italy has reached roughly 1.5% market share of premium beer. This is exactly the profit pool we want to penetrate further. Lastly, we also launched the long-awaited Aperol to go can in the UK, Belgium, Austria and GTR. The idea is simple, making Aperol accessible in occasions where we're not able to play in the past. Towards the end of the year, we're also planning to launch a glass-to-go alternative for some select markets like Brazil, which, similarly to TAP, can be an on-premise alternative to offset local constraints like the lack of Prosecco in Brazil. Now, all of these innovations give us incremental top line and higher or on-par gross profit per serve versus the 3-2-1. Now moving on to the House of Whiskey and Rum, we recorded a decline of 6%, mainly due to the impact of the whiskey category challenges in the U.S., South Korean impact that are already mentioned, and a temporary demand-led supply constraint on Russell's Reserve, as I've told you before. And going forward, supply will be strategically managed in the upcoming years to ensure that we have a more consistent aging liquid supply. Jamaican runs were resilient with a flattish top line, including solid underlying trends in Jamaica, offset by a high comparison base in the U.S. In the House of Agave, Espolon grew 8.2% in the first half, with balanced growth in both Blanco and Repo, supported by the launch of Extra Inega. Here, while we see the ongoing benefit from geographic expansion, the majority of the growth is being driven by the core U.S., where the brand continues to gain share. On the next page, you're going to see some additional details on Esplan. First, looking back at the performance of Esplan in the U.S. over the last 10 years on the top left chart, you can see what a trajectory it's had. There's been a lot of growth in tequila overall, but both in the initial period of growth between 2015 and 2022, as well as the most recent period, Esplan has outperformed strongly. The premium segment is currently the fastest growing part of the category as many consumers trade down from the larger super premium segment. And Esplan's quality led premium positioning benefits from both trading up and trading down. Esplan in 2015 was the fourth largest premium brand in the US. And now as of 2025, it is the number two. with a CAGR growth of plus 19% between 2022 and 2025. Now looking instead to the year-to-date sell-out data in 26 in the bottom left, we see this trend continuing. In the Nielsen Off-Prem, Esplan is one of only four growing top 10 brands. In fact, across the four largest tequila states, Esplan is outperforming by nine points on average, including key battlegrounds of California, Texas, Florida, and New York. In Nashville, we have gained plus 70 bps market share and are the only top 10 growing brand with a plus 12% growth. Similarly, in the on-premise, we are again the only double-digit scale brand in the category, and we plan to continue this trend with investments behind the brand, selected promotions, but keeping our pricing strategy which we believe the great liquid supports the strong value equation for the consumer. And lastly, looking at the right part of the page, you can see we also have ample incremental room for growth. Smaller pack formats are the main growing part of the tequila category today in the U.S. with plus 3% growth in smaller than 375 mil versus negative four for the overall category year to date. We launched our smallest format to date which is a 200 mil bottle only in June this year. It's already seen a strong pickup, and we expect more contribution going forward with potential additional innovations to come in this segment of the market. Varian innovation will also drive additional growth. The Extra Anejo launch in June at $70 per bottle, for example, cements the brand's accessible premium status with one of the most affordable and, frankly, delicious Extra Anejo offerings on the market. Finally, we can have a look at our House of Cognac and Champagne and then the local brands. The House of Cognac and Champagne recorded a plus 4.6% top line growth with solid performance in Courvoisier driven by developing markets and APAC. In the U.S., we held a stable trend despite the ongoing category pressure. The growth in Dr. Armani on the other hand was mainly due to an easy comp base with normalization expected in the balance of the year. Within our local brands, Sky remains an important part of our portfolio, and we're pleased to see the growth of plus 5.7% in the first half, primarily driven by Argentina, due to the popularity of Sky Cosmic. And that was more than offsetting the ongoing softness in the U.S., in line with other major players in the U.S. vodka category. I'll now hand the floor over to Francesco, who will walk you through the first half financials in more detail. Francesco.

Thank you, Simon, and good afternoon to you all. Let's start by looking at the EBIT margin trends. Overall, in H1, we recorded 130 bps organic EBIT adjust margin expansion, supported by the pull forward of gross margin benefit, while AMP and SG&A are progressing as planned. In gross margin, we recorded the solid organic accretion of 130 bps. supported by a combination of stronger mixed effects due to the solid performance of aperitif in early peak season, the saving of COGS productivity gains, which we were able to realize faster than originally expected and now in the base, the tail end of agave benefits that we have flagged previously, and lastly, limited tariff impact of $7 million. Here, the impact was lower than we originally expected for H1. Due to the fact that between February 20 until the end of the quarter, we paid only 10% tariffs in the U.S. instead of the originally expected 15%. As a result, we have updated our full year guidance accordingly. Based on the U.S. administration's most recent decision of just a few days ago, the 10% tariff was for the time being reconfirmed. We will obviously keep monitoring the development around tariffs. Our AMP to sales reached 17.4% in H1, leading to a dilutive impact of 50 bps organic, driven by brand building investment for peak season and to support our innovation pipeline as planned. On SG&A, our containment efforts are continuing, in line with our expectations, and we benefited from an accretive impact of 60 bps organic in H1. This means that we are on track to reach, by the end of 2026, the 70 BIPs guidance that we have provided. Some of you might have seen that Alien Arm Fossil has recently joined us at CHRO and brings with it significant large-scale transformation and automation capabilities. To close, EBIT Adjust was arrived at $358 million, reflecting a margin of 23.7% with plus 8.5% organic growth, excluding the net negative impact of $23 million from perimeter and effects. In terms of P&L, we recorded a positive evolution supported by business momentum. Group net profit adjust grew at 4.7%, mainly driven by the positive evolution of EBIT adjust, as well as favorable impact of financial expenses. EBIT operating adjustments were negative at $109 million, mainly driven by the write-down of assets marked for disposal of $82 million, as we recognize the diminished strategic value for this route to market enhancing past acquisitions. and we'll have that to adjust their asset value as we dispose of them. Simon will comment more on this new disposal later in the presentation. Negative $17 million related to other six assets, negative $10 million related to bread impairments, and finally positive $19 million coming from the Averna and Zedapira disposal capital gains. Adjusted financial expenses were $44 million, with decrease driven by lower average net debt at $2 billion versus $2.3 billion last year, with average cost of net debt stable at 4.3%. The positive $5 million adjustment you see in the table is related to the gain we book due to the bond liability management executed in the context of the $600 million bond issuance. For the full year, we are maintaining our guidance of around 100 million financial expenses, also due to the impact of the new bond issuance, which has further helped improving our maturity profile. The recurring tax rate was at 27.9%, minus 130 BPS versus H1 2025, due to favorable country mix. Recurring cash tax rate is at 25.8%. Lastly, I will cover the key balance sheet indicator on the next page. Operating working capital as a percentage of sales is at 52%, similar to the same period of last year, and seasonally higher mainly due to some build-up of finished goods inventory for peak season and select increased immaturing liquids. Compared to the end of the year, the increase in operating working capital is also due to the normalization in the net trade position, driven by concentration of capex and related cumulated payable at the end of last year. On capex, the maintenance capex remained temporarily contained at 3% of sale, slightly below the run rate of around 4%. Extraordinary CapEx on the other end is at 2% of sales, including the tail of the production capacity enhancement program, especially in Kentucky, with finalization expected in 2026, for a total of 100 million. On cash flow, the recurring free cash flow before operating working capital change conversion is at 64%, aligned with our historical five-year average of 68%. The overall recurring free cash flow on the other end remained more limited at 4% conversion, or 19 million, due to the impact of the operating working capital seasonality. This is expected to normalize into the second half of the year. On leverage, we remain comfortable at 2.6 times, marginally higher than year-end leverage ratio, due to some impact of the seasonality that I mentioned before. In fact, the increase of $110 million in net debt is primarily linked to this operating working capital increase, as well as some impact from the dividend payments, mitigated by the proceeds of the Averna disposal. And with that, I will hand back to Simon to talk about certain activities in 2026 and our outlook. Thank you.