Robert Kunze-Concewitz – CEO Paolo Marchesini – CFO

Ian Shackleton – Nomura International Carl Walton – Bank of America – Merrill Lynch Luca Orsini – One Investments Paola Carboni – Equita Sim SpA Nigel Kennedy – Barclays

Thank you very much. Good afternoon and thank you for joining us on this call.

If you follow me to Slide #3, I’ll kick off with the key highlights. Overall, as you can see, the key indicators are in line with our expectations and this despite some rather horrendous weather in Q3 in most of our core European markets.

Looking at the sales report, the total sales were up by 0.8% on a nine months basis, and that includes an organic growth rate which is pretty good of 3.1%, a negative forex impact of 5.1% and a positive perimeter impact of 2.8%. Looking at the key drivers of our organic growth from a brand perspective, overall positive development of our top six international franchises which are up by 1.6%, and these were mostly driven by our long aperitifs – Campari, Aperol, as well as the SKYY franchise.

We’ve had improving trends in the third quarter across SKYY, Wild Turkey, the Rum portfolio as well as Cinzano and continue to have very good results behind our high-potential brands which are seeding, which are up by 7.3% in the third quarter as well as by our key local brands, particularly the Italian ones. If we look at it from a geography standpoint, it’s important to note that all regions are showing positive performance in the nine months, and despite this very adverse weather conditions in Europe in Q3.

Italy is up 4.2% in nine months, excellent performance in a weak market. And we need to also take into consideration that we have a very tough comp base in Q3 ‘13.

The rest of Europe was up 0.8% with different performances which we’ll analyze later on. The Americas were up 3.1% thanks to a very strong recovery in the U.S.

which we expected in Q3 as well as continuing positive developments in Argentina in most export markets. The rest of the world was up 5.7%, and this is driven by new developing markets particularly in Africa as well as Global Travel Retail.

Now, if we look at the key operating and financial results, we see the contribution after A&P was down by 0.2% overall but had a positive organic change of 2.5%. EBIT pre one-off’s of EUR193.7 million, down by 2.5% overall but slightly positive on an organic basis of plus 0.2%.

EBITDA pre one-off’s of EUR222.7 million, down overall by 2.8% but with a slight organic weakness of negative 0.5%. We’re taking the opportunity today to announce the series of negative one-off’s totaling EUR33.4 million, and these are mainly relating to provisions for restructuring initiatives in connection with both the recently acquired Gruppo Averna as well as our still wine business and the Jamaican non-core business.

We’ll go through these in detail later on during the presentation. Importantly, we also have a goodwill write-down resulting from the still wine business restructuring but it’s important to highlight that this is a non-cash item.

So incorporating this negative one-off, group pre-tax profits on nine months come out at EUR116.9 million which are one down by EUR21.8 million. Next in that, if we look at the trends across key brands and geographies, we see that the underlying business is performing well and is in line with expectations.

We’ve been able to weather very adverse climactic conditions in Europe in Q3. And clearly, we’ve also had to cycle a very tough comparison based on our largest market, Italy.

And we’ve also generated the expected recovery in the U.S. where depletions and shipments are starting to align better.

The trend in operating margins continues to be affected by the overlapping costs due to the phasing issues in the U.S. plants as well as new route-to-market initiatives.

And last but not least, the pre-tax profit was heavily penalized by the one-off costs. If we look at the sales results highlights nine months on Slide #5, we see overall growth of 0.8% and the key indicators we discussed earlier.

In terms of looking at on a region basis, as I said earlier on, strong recovery in the U.S., up 8.6% in Q3; Argentina continuing to grow 40.1%. Nice trends in Italy where we’re outperforming the market as well as the rest of our core markets.

Whilst on forex, we have a slight improving trend and still remains a heavy burden, down 5.1%. And the perimeter effect is due to the recent acquisitions, notably the Gruppo Averna as well the Forty Creek brand and business in Canada.

Looking at Q3, the trends are pretty much the same as on the first nine months basis. Clearly, the big difference is the bad weather impacting our long aperitifs business.

In most European markets, we actually had two different Europes – those below Paris and the business north of Paris, and that had quite an impact on aperitif consumption. And at the same time, the U.S.

business is starting to normalize on a shipment standpoint and that is in line with expectations. Forex in Q3, standalone Q3 improved to a negative effect of 2.4% thanks to the strengthening of the U.S.

dollar. I will skip the chart on the write-down by region and brand because it’s pretty self-explanatory.

Now, if we move on to Slide #9 and start with our region analysis with the Americas, we see that the largest chunk of our business, roughly 40%, or 39.4% to be more precise. The overall performance is a negative 6.2% but this was very heavily affected on a nine-months basis by forex which had a negative impact of 9.3%.

We actually have a positive organic growth of 3.1%. On the forex where the U.S.

dollar improved, clearly was a strong weakness across the currencies in all the other markets, and especially reversal in trends in the likes of Argentina and Brazil. If we move on to Slide #10 and we look at the U.S., our second largest market on a standalone basis, 20%.

The overall organic performance is up 0.4%. We need to bear in mind that actually, on a nine-months basis, our organic depletions are up by 4.5%, so there’s still opportunity to catch up.

But we’ve had the strong expected recovery in Q3 where we grew by 8.6%, and that started realigning – I’ll underline the word started – realigning the shipments of SKYY and Wild Turkey to the positive depletion trends. Looking at some of our other rising stars, we had a very good performance in Aperol where, essentially, we took Aperol into our network last year and we’ve actually quintupled the brand since, so it’s turning into a nice promise and we’re continuing to do very strongly on Carolans as well as Espolon.

Jamaica, which accounts for 7% of our sales, on a nine months basis, impacted by Q1 results, we’re still down 6.1%. But our Q3 was positive at 2.1%.

I mean, if we look at it on an organic basis, we have two very nice quarters, positive in a row. Brazil, 4.9% of our sales, overall organic growth of 7.9%.

Again, here, we’re outperforming the market and what’s paying off is our value strategy, so our premium brands, Campari and SKYY, continue to lead the growth as well as our imported premium spirits. And, again, here particularly the Aperol brand shines.

Argentina continued very strong performance, mostly driven by Campari as well as by SKYY; and again, here, almost doubling of the Aperol brand. Last but not least, Canada is starting to respond to the new marketing campaigns, particularly on the SKYY brand as well as on the significant Appleton Estate brand there.

So whereas we’re down on a year-to-date basis, we have a positive performance in Q3. Moving on to Italy, Slide #11, overall up 7.8%, with a very healthy balance between organic growth as well as perimeter.

Organic, we were up 4.2%, this within a context of a market where if you look at the Neilsen [ph] data is actually negative and low single digits. And the perimeter was up 3.7%, mainly attributable to the recent acquisition of Gruppo Averna.

We’re looking at it from a brand perspective on the nine months, we have positive growth of the whole aperitifs business. However, the long aperitifs were impacted in the key summer period.

But we’re starting – we’re continuing to see nice resilience on our short aperitifs, Crodino as well as Campari Soda. The point worth underlining here, too, is that these results were also obtained within the context of a very, very tough comp base in 2013 as we’ve grown by almost 25% in Q3 of 2013.

Moving on to the rest of Europe, so that’s excluding Italy, Slide #13, overall up 3%. Here, the organic growth was impacted by the very bad weather in most of our markets.

Forex, down 2.2%, that’s mostly due to the Russian ruble. As you know, this currency is coming under a lot of pressure.

Whereas on the perimeter, particularly due to Averna but as well as to the full impact of the William Grant portfolio in Germany with a positive 4.5% performance. Looking at Germany, there’s an overall organic decline of 5.2%.

These are soft results. We’re disappointed but that’s mostly driven by the horrendous weather we had.

The good news is that if we look at our on-premise sales on Campari and Aperol, actually, on a year-to-date basis, they’re up by 25%. So that’s a testimony to the solid fundamentals which over time will kick in in the overall results.

Russia, overall flattish, which is an excellent performance if you consider both the comp base of plus 34% last year as well as what is happening in that area of the world. We’re continuing to be very vigilant on the credit side and we’re also seeing some big consumer shifts between categories with vermouth being penalized significantly at the expense of sparkling wines.

The good news is that we’re by far a number one player in sparkling wines in Russia so we’re able to end up more positive overall. Looking at the other European markets, roughly 10% of our sales up 8.3%; again, here, because we’re coming from a lower basis with very strong double-digit growth rates behind Aperol, so we’re continuing to benefit from that trend.

Closing the regions with Slide 15 on the rest of the world and Global Travel Retail, we see that overall we’re up a healthy 7.3%; again, a good balance between organic, plus 5.7% as well as perimeter, 8.2%; whereas we are impacted negatively by forex, down 6.6%, where the main culprit here is the Australian dollar which has a negative effect of 8.9%. Now, if you look at the Australian market, we’re up 0.8% and this despite very weak consumer confidence.

If you look at our reference market, it’s actually down in the low single digits, so we’re outperforming the market here. And on the other markets, which are becoming over time more and more important – Nigeria, South Africa as well as Global Travel Retail, roughly 6% of group sales are growing close to 10%, so we’re continuing to see very good progress there.

Moving on to the details by brand, Slide 17, on Campari, it’s fair to say that we’re benefitting globally from the return of classic cocktails. That’s an important trend which we’re seeing at this day and age [ph] mostly in developed markets, in the large capitals and key cities of the world.

But at the same time, we’re also doing a pretty good job at recruiting new consumers into the franchise via the Campari Orange cocktail in the likes of Brazil, Argentina and Nigeria as well as doing tastings in GTR. So we feel quite good.

Overall, the franchise is up – or the brand is up 7.2% on a nine months basis and then was impacted by the weather in Q3. Moving on to Aperol, again, here, very solid fundamentals, although this brand was more impacted by the weather in Q3 where we were down by 6.2% and this is what impacted the European results mostly.

Clearly, these results were also mitigated by very strong double-digit growth in other markets, particularly in U.S. as well as South America and Northern Europe.

If we move on to SKYY, SKYY has turned positive, up 1.5% on a nine months basis, close to 10% on the standalone Q3 basis. While the strong recovery in the core U.S.

market, you will recall that we’ve re-launched the brand in July behind the upgraded and premium packaging as well as the new campaign, so we’d relatively destock the market in the first half of the year and now we’re starting to realign our shipments with the positive depletion trends of the franchise. And we’re continuing to grow double-digit in all other key markets.

Moving on to the following page, Slide #18, and the Wild Turkey Franchise, we have an improving performance here, although we’re still down by 3.1% on a nine-months basis and flat on Q3. We have a very nice performance between the core Wild Turkey Bourbon as well as on based RTD.

Also in Australia, what is really penalizing us is the double-digit decline of American Honey and American Honey based RTD in Australia. But this is, yes, a consumer habit trend which has been driven by the resurgence of cider-based drinks there.

Having said that, though we’re outperforming the key bourbon market and bourbon RTD. Our Rum portfolio is trending quite nicely.

We’re up 5.4% on Q3 basis, still slightly down 1.5% on a nine-month basis. Essentially, what’s still driving down the numbers is the weak Q1, but we feel quite good where the business is.

Jamaica and Canada, the two largest markets have turned positive. The U.S.

continues to perform quite nicely. We’ve finalized all new marketing plans and the key building blocks and we’ll be driving these in our different markets on a soft basis in the next six to nine months.

Soft basis because clearly, we want to finish some existing old packaging material and then we’ll transition to the new look on a market-by-market basis. Cinzano is a little bit of a mixed bag.

On a nine-month basis, we’re down by close to 6%, we’re flattish on a quarter and year. Essentially, what’s impacting is sparkling wines, mostly positively because we’re doing very well in Russia in sparkling wines.

But we’re suffering a lot of price competition in Germany. And vermouth, as I mentioned earlier, it continues to decline in Russia.

Moving on to our liqueurs and specialties, Frangelico, Carolans, nice performance, accelerating in Q3 up to 10%. We feel pretty good about this business.

We re-launched it, as you know, last year and now those fundamentals are starting to kick in. And we continue to have strong fundamentals on the tequilas, which were up 23% in Q3 and double-digit also on a year-to-date basis.

But, as you can expect, due to the size of the market, this is mostly driven by the U.S. Moving on to scotch whiskey, positive double-digit performance.

Key drivers are France and South Africa but also, I must say that the bad weather in Europe this summer actually penalized our aperitifs but helped our scotch business weather as consumers moved from aperitifs to brown spirits due to the cold. Slide #20, our other sparkling wines growing double-digits.

Mondoro, Riccadonna, our, as you know, very premium brands. So we feel quite good about that.

And then if remaining – closing on wines, still wine basis had a tough Q3 due to weather conditions. To close up the roundup from brands, as I said earlier, we’re feeling quite good about our single serve aperitifs.

Actually, Campari Soda both double-digit growth, both on a nine-months basis as well as on standalone Q3 basis. So potentially, we could have a nice surprise here.

Crodino, in line with expectations, still double-digit on nine months but we expect this to normalize in the last quarter. And then last but not the least, Brazilian brands positive on a nine-months basis, weakish on the three – on Q3.

Here we have different performances. The largest part of the business today is actually doing quite nicely.

Whereas on the add mix whiskeys, we continue to suffer from international competition. This is the roundup on sales.

I’ll pass on to Paolo and I will catch up at the end with our new initiative updates.

Thank you, Bob. If you follow me to Slide 24, we have the analysis on gross profit for the first nine months of the year.

As you can see, gross profit came in at EUR565 million, overall down by 0.3% over prior year. But as you can see to the right, showing an organic growth of 2.3%.

Of course, forex has a negative impact on the gross profit accounting to 4.6%. And the negative impact was partly offset by the contribution of perimeter which this year is a positive 2%.

In terms of marginality, gross profit declined by 60 basis points on sales from 53.9% to 53.3%. And looking at the existing business, the dilution accounted to 40 basis point in the nine months of this year.

The 40-basis point dilution of gross margin in existing business was primarily driven by unfavorable sales mix, both in terms of the brand and in terms of the geography. More in particular, in terms of geography, we had in the first nine months quite a robust growth of lower margin market, namely Latin America.

Some softness in Germany, which in the nine months was negative by 5% in organic business and some pricing pressure in the high margin Australian business. On the other hand, this three negative effect were partly compensated by quite a robust performance of high margin brands in Italy, as well as the overall aperitif portfolio performance in other European markets.

Worthwhile noting also the temporary overlapping production cost in Kentucky which are negatively impacting our 2014 gross profit. If you follow me to the following page, 25, we have the dynamics of contribution after A&P.

A&P came in at 16.4% of net sale in the nine months, down 0.6% year-on-year. And that is due to plant phasing of the A&P investments in our peak season which is the fourth quarter of the year.

The lower weight [ph] of the A&P on sales drove the margin on a 20-basis point at organic level. The contribution after A&P came in at EUR392 million, down 0.2%.

But still, in existing business we’re positive and the group is driving a 2.5% organic growth with a dilution of 20 basis points. If we move on to the following page, 26, as we can see, the analysis of EBIT and EBITDA at pre one-off’s.

First cost line, SG&A, came in at EUR198 million and increased in value by 2.1% with an overall increase as a percentage of net sales of 20 basis points. Now in the existing business, the organic increase of the SG&A accounted for 4.9%.

But it’s worthwhile noting an acceleration in the third quarter of this year of the organic acceleration of the SG&A which was driven by the startup of the new distribution initiatives, both in the U.S. – in the U.K.

and in Canada; which are due to consolidated operation at the beginning of next year. On the other hand, forex had a negative impact on the SG&A line by 5.5%, a perimeter increase of 2.8%.

The EBIT pre one-off was EUR194 million, down overall 2.5%, with an overall dilution of 60 basis points on sales of which just 50 [ph] is attributable to the existing business. Looking at the existing business, the EBIT pre one-off still was positive with a 0.2% organic growth.

On the other hand, the forex which were negative, accounted for 4.2%, in perimeter just 1.5%. Worthwhile noting that with respect to the recent acquisitions of Forty Creek and Averna, we’re on track with the planned return on capital invested in the first nine months and contributed 2.3% to the EBIT line or in terms of a value of EUR4.6 million.

The EBITDA before one-off came in at EUR223 million, down 2.8% in overall, and down 0.5% in existing business. If you move on to the following page, Page 27, we have the negative one-off’s line which is quite robust in the nine months at EUR33.4 million, of which EUR11.7 million attributable to provisions relating to restructuring projects and then Bob later will add color on those projects.

But we’re talking of integration of Averna and Braulio brands into the Gruppo Campari’s organization first and foremost. Secondly, the restructuring of our still wine business in Italy.

And thirdly, the restructuring on non-core activities in Jamaica. And worthwhile noting that the aggregate positive effect of those three initiatives is testing [ph] to generate a positive impact next year on our EBIT which is worth 1% of our EBIT line before one-off.

And basically, will generate the payback of approximately three years. We then have a EUR16 million relating one-off – negative one-off’s relating to goodwill write-down resulting from the still wine business restructuring and this is a non-cash item.

And on top of that, we are EUR5.6 million of other negative one-off’s, most of them linked to legal and consultancy fees in connection to recent acquisitions. Clearly on the back of the significant amount of negative one-off’s, the EBITDA came in at EUR160 million and was down 17.3% versus prior year.

If you follow me to Page 28, net financing cost came in at EUR42.9 million in nine months, down EUR1.1 million. Clearly, the average net debt position increased year-on-year from EUR910 million to EUR955 million on the back of the two recent acquisitions.

But on the other hand, the average coupon is now at 5.9%, on one hand reflecting the negative carry but on the other hand also benefiting from the interest rate reduction. Pretax Profit came in at EUR177 million in nine months, down by 21% but the input mainly driven by cash and cash negative one-off’s.

Operating working capital analysis, Page 30. Here we have good news.

Operating working capital came in at EUR595 million. Of course there is an overall increase of EUR67 million but just EUR11 million coming from existing business.

The remainder coming from perimeter and forex. And more in particular looking at existing business, if we cancel out the perimeter effect and we compared – and post with that – post on a like-for-like basis, the operating working capital in 12 months came down from 38.4% to 37.4% with 100 basis point containment of operating working capital on that 12-month space.

If you follow me to Page 31, analysis of net debt. Net debt came in at EUR1,035 million.

It was, of course, overall up EUR182 million from December of last year. But on the other hand, we had significant cash flow outlays due to two acquisitions and the dividend payment totaling EUR283 million, plus we also have unfavorable FX effect which accounted for EUR11 million.

As you can see, the short term cash, September came down by EUR266 million also partly due to the acquisition and dividend payment but also due to the repayment of our – of the first branch of our 2009 product placement as well as the re-class [ph] into short term debt of EUR86 million tranche of the 2003 product placement which is due to be paid 2015. Looking at the leverage debt ratio, the net debt to EBITDA on a pro forma basis is shy of 3 times – is 2.9 times as of September.

I think, Bob, this is it on on the numbers. I will turn it back to you for the restructuring project analysis.

Thank you, Paolo. If you follow me on Slide #34 where we highlight the three key restructuring projects we have, the first one is the full integration of the Averna and Braulio brands into our own organization.

Now, with the exception of the production of the infusions themselves, we will move all of the activities and all of the operations from back as well as front office into our own organizations as of the 1st of January 2015. So this is a pretty efficient process on the back of just six months of the acquisition.

We’ve also agreed the buyback of the distribution rights in the key German and Austrian markets. So we’ll be taking over that business on the 1st of January in those markets as well, which means that if we sum up Italy, Germany and Austria, we’ll have incorporated 90% of the acquired business into our own organization.

The remainder 10% is – discussions are in progress but we’ll do this in such a manner that it is moved and also updating from a financial standpoint for us. Moving on to the still wine business; here, also, based on the development of the business in emerging markets such as China, we’ve decided to restructure.

First of all, we’re focusing on our own high profitability brands. So we’re exiting the lower profitability third party business.

So both that, as well as the focus on more developed markets means that we simplified the structure and we’ll go for a reorganization which will impact. In terms of the non-core Jamaican activities, overall as you can imagine, we’re taking a pretty hard look at non-core activities.

In the case of Jamaica, also thanks to the investments we’ve made in a new IT system, we were able to do a very in-depth analysis of the profitability of the different businesses. And we’ve decided to strengthen our focus on the core higher profitability spirits and wine portfolio which means that we’ll be exiting the merchandising business – the agency brand business in the first quarter of 2015.

Now, if we sum them all up together, the three restructuring projects amount to EUR11.7 million which is a provision which we’ve created. We’re expecting a positive effect already in 2015.

And on a combined basis, as Paolo highlighted, they are due to generate an excess of 1% of group EBIT pre one-off’s. And if you look at it from a payback standpoint, they’re approximately three-year payback.

At the same time, we’ve also decided to – it’s no surprise because we already had some existing organizations and it’s in line with the group strategy to take control of route-to-market in key markets where we also have critical mass. So in the case of Canada, on the back of the acquisition of the Forty Creek business which has already a very strong sales organization in the core State of Ontario, we’ve decided to consolidate the distribution of the whole Gruppo Campari portfolio within the Forty Creek organization.

And this would take place as of January 1st. From an organization standpoint, as you know, that the largest business in Canada is in Ontario and there we already have a pretty strong organization.

What we’ll have to do is invest in additional capabilities in the rest of the Canadian territory. But this is all investments which we are mostly finalizing as we speak.

Moving on to the U.K., we have a similar story with the acquisition of the Lascelle De Mercado business. We inherited a small but qualitatively very successful, especially in the premium on-premise organization.

And in these past few years with our current partners, we’ve been able to – the Matthew Clark organization, we’ve been able to grow our business substantially. Campari, Aperol and Wild Turkey have grown very nicely and we thank them for the big effort they’ve put into that.

But we feel that we’ve come to a point that would make sense for us to combine all of our brands under one portfolio. And again, here, we are adding and finalizing this as we speak as well.

Additional sales and back office capabilities for our new U.K. organization and we’ll start trading our whole portfolio as of the 1st of March.

Moving on to key marketing initiatives, I’m not going to go through them one by one. But what you can see is that we’re extremely active on our aperitifs business and are continuing to win a lot of accolades and that’s paying off with some very nice organic growth rates, both on the Campari as well as the Aperol brand in key markets.

We’re continuing to innovate on the dark spirits area and we’re kicking off also a re-launch process for Appleton Estate in the key North American markets with new campaigns in both the U.S. as well as Canada.

And this will be followed up very shortly with the new packaging and then during the rest of next year with some other key innovations. Moving on to close the presentation; looking at the outlook for the remainder of this year, we feel pretty good about how the underlying business is performing.

So despite the persistent volatility in some of our key markets as well as, as we all know, a pretty unfavorable macro scenario, we believe that the key combination of our brands and markets will continue to perform quite nicely and will drive the group’s local market-by-market basis. In particular, we have very good momentum on the aperitifs portfolio and we expect this continue.

We expect this actually in the mid to – accelerate. But looking at the quarter per se, we expect it to positively impact the business in the last quarter.

Having said that, though, on the other hand, the full recovery of the gross margin dilution which we registered in the first nine months of this year, our ability to recover that on a full year basis will clearly depend upon the evolution of the sales mix, both in terms of geography as well as brands. And Q4 being such an important quarter for us, we’ll have to see how that goes and see whether the very strong momentum of the aperitifs business will be lessened or not by the relative outperformance of lower margin markets such as Latin America as well as Russia.

And we probably will see a persisting price competition in Australia and in Germany. Moreover, though, we are investing currently in the startup of the recent route-to-market initiatives, so the distribution platforms and building capability in Canada and the U.K.

So we’re expecting a temporary spike in organic growth of structure costs in the remainder of the year but then we’ll reap those benefits next year. In terms of mid and long-term outlook, clearly looking forward.

We expect the positive evolution of our business to continue. We will benefit from the good momentum behind our key brand market combinations.

And on top of that, we’ll be benefiting from more benign input costs environment as well as finally the positive reversal in 2015 of the temporary and overlapping production costs which affected this year. Last but not the least, the paybacks of the announced restructuring projects are also expected to increase focus on our core business.

And those, together with the new investments in route-to-market capabilities, should benefit our whole portfolio. So this is it form a presentation standpoint and we’re all ears and brains waiting for your questions.

Yes, hi, Bob and Paolo. I was hoping to get a bit more granularity about how you saw two key markets going forward.

First, the U.S., how you see the holiday season trending I think from a price point of view. And secondly, Russia, I think you talked about stability.

I just wondered how you saw about going forward in the next few quarters.

Let me start with the last one. In terms of Russia, I think the overall, yes, there has been a slowdown in consumption but we see imports trending better than local brands.

What is moving our dials is more this migration from vermouth into sparkling wine. Having said that, we’re continuing to take market share in our core businesses, so we feel good about the underlying consumption where we’re paying particular attention and we’re continuing to have stop and go.

It’s due to credit availability in the local distributor and wholesale segment. And contrary to some of our international peers, we don’t want to extend credit further in terms of time to our customers.

So we’re being very disciplined there. Now looking at the U.S.

overall, I mean, we’re seeing from a consumption standpoint, actually, a gradual but nice recovery and acceleration. The key trends are still the same with brown spirits growing faster than white spirits.

The on-premise channel is nice and healthy. With regards to pricing, it’s clearly vodka remains an area of tension.

We’re seeing some pretty aggressive moves from our key competitors around Labor Day. Having said that, we feel pretty good about what we’ve done to our vodka franchise from a marketing standpoint.

And consumers are responding both to the campaign as well as the new packaging. The one thing we’re highlighting though is that our infusions business is suffering from the slowdown of the whole flavored vodka market.

But we’re able to recover by an acceleration in the core vodka business.

Excuse me, Mr. Bob, just a quick follow-up.

Could you give us some guidance for FY 2015 on the restructuring move you’re making? I’m just wondering if those are negative impacts, you’re obviously not going to have the non-core businesses in Jamaica, you’re not going to have some of the wine.

Does that really take much away in terms of ‘15 from a profit point of view?

Hi, Ian. No, the number we’ve given, the positive impact at EBIT level of 1% – in excess of 1%, basically factor in the two things.

On one end, the downside portfolio, both in Jamaica and on distilled wines. And this is basically taking roughly EUR20 million haircut on the perimeter next year on the top line with some contributions after A&P tied to that.

But on the other hand, due to the synergies at the EBIT level, we have still a positive impact in excess of 1% of our EBIT pre one-off. The three project, per se, if we aggregated also them, in reality, the EUR7 million will generate higher savings than just the input of 1%.

But part of those savings were already anticipated to the equity capital market and were part of the project of driving the acquisition multiple of them [ph] down from nine times price to EBITDA to seven times. So that’s already in your numbers.

So we are going to have this 1% which this last three-year payback connect of numbers that we have already anticipated in the market.

That’s really great, Paolo. Thank you.

Thanks, everyone. Just a couple of questions for me.

I just wanted to run through the – I’m sorry, the guidance FY ‘14, some of the line items. So firstly the – of the gross margin you said obviously there’s a potential negative headwind here.

We had negative 60 bps in the first nine months. So is there any way you’re able to kind of quantify where you think things could potentially turn out for the full year ‘14 based on current trends?

And then on top of that, we have flagged that for FY ‘15, you do get a positive impact from some of the fading issues that we’ve seen in FY ‘14. But this kind of underlying sales headwind – sales mix headwind, is it right to think that some of that would probably lead into FY ‘14 as you’ll continue to get outperformance from some of the low margin markets and price competition in Australia and Germany, et cetera?

The second question was on the A&P spending. So that was of the question led to the first half and the previous guidance was that we’d see around, I think, 70 basis points increase in A&P half of FY ‘14, so that’s about 17.1% I think for the full year.

Have you got an update on where you think 2014 may come out now? And then finally, a separate question just on Jamaica.

The split of sort of core versus non-core, can you remind us what the kind of underlying growth of the core spirits and wine business is for Jamaica kind of underlying and how we should think of it going forward? Many thanks.

Okay, I’ll take the gross margin and the A&P. With respect to the gross margin, I mean the – and we put focus on existing business.

In the first nine months, we have a dilution of 40 basis points. So in order to hit our objective of achieving a flat gross margin, we need to deliver some accretion.

Now, there are some risks and opportunities. Here there is, as Bob has highlighted, on the sales mix a development on one end.

We have lower margin market which are growing faster like primarily [ph] last time in the first nine months and potentially also Russian onto 12 months is everything goes well in the third quarter. And then the pricing – the persisting price competition in Australia and to a certain extent also in Germany where that price environment is having a negative impact on volumes because we do not sacrifice on prices.

Then of course there are opportunities still on the mix front and the opportunities are primarily seen on the aperitif portfolio which is quite in good health everywhere probably, excluding Germany. On the other hand, there is an element of risk and we wanted to flag it now as we speak.

And then there are some opportunities as we have indicated which have been more down the road in 2015 and those are, I would say first and foremost, if [indiscernible] good cost environment for next year, we do not see much inflation, quite on the contrary on raw materials. On the other hand, we would have the reversal of the negative effects which negatively impacted the gross margin in the U.S.

on production although the overlapping cost of the brand was the cost of our contract manufacturers. And then of course as we’ve just pointed out, there are some feedbacks coming from the restructuring that we’ve just announced.

So this is only on the gross margin. On the A&P front, yes, we want to step up the A&P and at the level of historical levels at 17.1%, 20 bps give and take.

I mean that’s – we’re just average two [ph] of A&P into Q4 where we see the biggest opportunity and we’re moving funds into that quarter.

If we look at our Jamaican business, I mean the core wine and spirits business has an underlying momentum of about 5% growth. Whereas the merchandising business which we’re getting out of has been relatively flat.

So clearly we’re focusing on the growing part of the pie but most importantly on the profitable parts of the pie.

Got it, thanks. Can I just clarify on A&P?

So the guidance is unchanged and normally would have spending – we definitely have more spending in 2Q and 3Q, the key summer periods. So it’s simply a matter of saving for this year, all of that spending is going into the fourth quarter and we’re still expecting 17.1% roughly?

Absolutely.

Okay. Thanks very much.

I just wanted to ask about the A&P budget but you just have answered. So I think it’s fine for me.

All right.

Yes, hi. Good afternoon, everybody.

I would like to have, if possible, some more hint about the kind of organic growth we are now projecting for SG&A for this year in the life of the projects you have just started in terms of strengthening of distribution platforms. And also if possible, some indication on that same line for next year.

Thank you very much.

With respect to the organic growth, increase – we’re expecting the first quarter of the year that organic growth will basically follow the organic growth of the third quarter of the year which is a high single-digit number. Once we’ve done that, we’ll probably in new route-to-market invested the – let me put it this way.

The add-on in investment on 2015, according to the full year effect of investments that we’ve done this year, will just represent probably 60% of the 2014 investments. So we would still expect looking at the phasing of SG&A next year a negative comp in Q1 and Q2 because we have on one end the ramp up of our sales organization in three [ph] markets and then the benefit of the restructuring project in Q3 and Q4.

It’s more the phasing.

Okay, thank you very much.

The question is on mix which has been one of the reason of the disappointing gross margin. The question I have is, when do you think that the mix will revert and what are going to be the driver for that apart from the EUR20 million sales that you will lose from your restructuring plan?

We’re just looking at the mix of, let’s call it the core business, since the other business is under restructuring.

I think conceptually the key point here and then Paolo can deal with this in more detail – conceptually, the key point is the big focus we’re putting on our spirits, especially the top five brands which are also starting to benefit from our route-to-market initiatives, as well as all of the years of seeding we’ve been doing on the likes of the upper half [ph] of this world. So that’s where we’re starting to start feel good about.

You are already putting those efforts this year and despite that, that isn’t much realized.

Yes.

What is changing?

Well, clearly our ongoing position is that we’re going to have a decent summer next year. If you look at the underlying trend of the core aperitifs as well as the other top three brands, they are all pretty good and responding to our marketing initiatives.

What really dampened and impacted performance was the horrendous summer we had this year.

Okay. Is the weather impacting you in – since now it’s very bad again in most of the Northern Hemisphere?

Yes. The key seasonality for the aperitifs is really in Q3, so we’ve moved that on.

So it has less of an impact now.

Okay. So no blaming on the weather on Q4?

No.

Good. Thanks, Bob.

Sure.

Yes, just a follow-up, sorry. One is on the input cost environment you have just commented, if you can share with us the possible impact – positive impact in terms of 2015 gross margin you are possibly expecting from that.

And secondly, I would like to have your comment about recent rumors of possible disposal of the Sella&Mosca, the spirits [ph] business. Thank you very much.

Paolo, let me take the second one. I mean as you can now – as you know, we don’t comment on rumors and at the same, there are also certain regulations we need to follow which put us in a position where we cannot comment as well.

Having said that, I was very clear at the beginning saying that we’re taking a pretty tough look at non-core businesses and will move the usual Campari way of doing things which take the intrinsic economic value of assets into consideration.

Okay. Thanks.

Yes, looking at the input cost environment for next year, lucky enough it’s a positive because oil prices is quite down and that’s a positive impact in glass, on GNS [ph]. It help the turbine to produce most of our products.

So it’s positive. On the other end, we would like to quantify the opportunity when we announced the full year results once we’ve also looked at the pricing front.

So you also take into consideration the two things – pricing and input cost. And the two things go together.

So we normally tend to take as much price as we need from society [ph] cost pressure. So you have also volume impact as to – with respect to the price increase.

We’re not yet there to decide whether next year we would go for volume or value play.

Okay. Sorry.

And the last question on gross margin. Can you quantify a little bit the amount I suppose in terms of the points [ph] as you do sometimes coming from the overlapping cost for the U.S.

plant, so the kind of reversal we should expect the next year?

The reversal of the negative effect of Kentucky cost in 2015?

Yes.

We mentioned it was 40 basis points on sales.

Okay. Thanks.

Thank you very much.

Hi there, yes. I just wanted to confirm one thing and then ask you a question on Argentina.

Just on the A&P again, I think I heard you say that the expectation was for 17.1% for the full year which effectively implies another 300 basis point increase in the fourth quarter. I just wanted to make sure I’ve got my maths right there and perhaps get some ideas for the geographies for that.

And then secondly on the SG&A, if I recall correctly, you previously said that that was likely to be flat relative to sales. And today obviously we’ve talked about sort of incremental cost.

I wonder whether you’d give us a sort of a shift [ph] guidance now for 2014 knowing what you know for the fourth quarter. And then finally in Argentina, obviously the sales growth is very high, but I presume a large chunk of that is price.

I’d be interested in what the volume growth has been in Argentina. Thank you.

Let me take the last and the first question. With regard to Argentina, what we’re seeing is not only price development where actually on price we’re running slightly behind inflation, which is a local peculiarity.

Most of the growth is coming from volume. And the most important thing is that key very high margin brands such as Campari, SKYY, Aperol are growing in very high sustained double-digit growth rates there.

If you look at what’s happening in Argentina right now, is that there is a slowdown overall in consumption and that is impacting our lower value brands, more the Cinzano and the Old Smuggler Whisky, et cetera; whereas the premium brands are continuing to perform very, very well. Moving on to the A&P, we’re confirming flattish A&P in line with our guidance is about 17.1% which is give and take a few basis points.

So there are no changes there. And clearly, we’re putting it behind our top five businesses, so you can imagine where that will be going.

Yes, with respect to the SG&A, more than guiding the markets for SG&A on sales, what we said is in Q4 on the back of the recent initiatives vis-à-vis the investments on new route-to-market, we would see an increase of an organic increase of SG&A which would probably be in line with what we saw in Q3 which is a high single-digit growth rates. It clearly depends on the recruiting process and the structuring.

We do not have the crystal ball. But the base case for the time being is this one.

Okay, many thanks.

All right. Thank you very much.

Thanks for joining us. And I’m sure we’ll keep in touch.

Bye-bye.