CAMPARI GROUP EDITED BY EMANUELE DONI, MARCO FERRARI, ALBERTO POLETTO, LETIZIA ALBANESE

CAMPARI GROUP EDITED BY EMANUELE DONI, MARCO FERRARI, ALBERTO POLETTO, LETIZIA ALBANESE

HISTORY Beginning - Foundation It was 1860 when Gaspare Campari, a specialist in bitters and cordials, invented the well known bright red, mid-proof aperitif that still today bears his name. The business started in downtown Milan at the historical Caffè Campari where the Galleria Vittorio Emanuele II is found today. Rival bar owners were allowed to stock his aperitif as long as it was advertised as being genuine Campari and not a substitute. Industrialization - Organic growth In 1904 after years of slow business development, Davide Campari, Gaspare s son, decided to industrialize the production by opening a plant in Sesto San Giovanni, which operated for more than a century. In the 20 s Davide, Gaspare s son, changed the company s policy by strategically reducing the scope to key beverages that shaped the identity of the firm: the Bitter Campari aperitif and the Cordial Campari liquor. In 1932 Campari Soda was launched in the market. Its main feature was the new striking bottle design developed by one of the most popular futurist artist at the time. The internationalization of the company, still led by Davide Campari, took place in 1923 with the establishment of Campari France and characterized the firm mainly in the second part of the century as the business expanded to more than 80 countries in the early-60s. End of the Campari s dynasty In 1976 the widow of the last Campari s heir, countess Angiola Maria Barbizzoli, transferred the ownership of the business to Domenico Garavoglia and Erinno Rossi, two managers. In 1982 Garavoglia became president and main shareholder of the Davide Campari-Milano, which went public in 1946.

A salient moment in the recent history of the company was in 1994, when Luca Garavoglia succeeded his father, who died prematurely. In that period the alcoholic beverages market went through a profound evolution which radically changed its structure. An intense wave of mergers and acquisitions helped the creation of global holding groups with well diversified portfolios, continually reorganized in such a way to strategically re-position brands in the market to achieve economies of scale and production-distribution synergies. Luca Garavoglia had two options: either following the industry trend or becoming a niche producer. The company could also be sold at excellent prices as it was highly profitable and had a positive trend. However without a process of growth it would have passively transitioned into being a static firm rather than dynamic and keen to development it has always been. External growth Garavoglia opted for the first alternative as he chose a route of international growth by way of acquisition. Since the first deal the entire corporate history was destined to radically change. The operation took place in 1994 and it involved the Gruppo Koninklijke BolsWessanen (KBW) who in turn took part of the Campari s equity by purchasing all the shares of the Rossi s family (near 40%). The acquisition was very big size wise as it doubled the firm s dimension. KBW was a Dutch company at the head of a multinational holding group, which operated in the foodbeverages sector and was characterized by dispersed ownership. The corporate integration had been a cumbersome process, involving some plants shut downs, making synergies more efficient and unification of sales channels. Nevertheless the expansion strategy for the Campari s external lines continued. In 1996 Campari acquired the Italian distribution rights (extended then to the Brazilian market) for the leading brands in the scotch whiskey segment like Glenfiddich and Grant s, on top of the production license for Germany s most popular bitter Jägermeister. Following alliances, joint ventures and acquisitions, Campari s sales grown a lot and reached 980 billion liras in 2000. Although the business was not the single-product company it once was but rather a multinational company with prestigious global brands, the seventy percent of the turnover of the was generated by four/five own products and the remainder by fixed term contracts with third parties without any renewal obligation. In 2001, after Gruppo KBW extern its intention to dismiss its shares of Campari, Garavoglia decided to

quote the company at the Mercato Telematico di Borsa Italiana in order to boost the growth process. During the fall of 2001 he acquired 50% of Skyy Spirits equity ( he already owned a minority of 8.9% since 1998) becoming the major shareholder, with the absolute majority. Although it has been the main resource-draining process, external growth has been an achievable target in virtue of a profitable and constant organic growth, which generated excellent results. Between 1994 and 2004 the management implemented a competitive strategy at the corporate level in order to create a strong portfolio including highly competitive brands with strong identities, capable of international expansion. Brands acquired from third parties had been put through a careful yet intense marketing process. Moreover the expansion of the portfolio (internally generated or through acquisitions) has been channeled through the existing organization thus giving rise to economies of scale, to more bargaining power in markets in which historical brands were already sold and to a relevant degree of penetration in emerging markets. The group s portfolio is particularly rich and articulated on three sectors, namely spirit, wine and soft drinks, which build up the broader beverage sector, In turn part of the consumer goods. Management s ability to maintain focus on market dynamics has allowed the company to reach significant level of growth both external, based on M&As and partnerships, and organic, by being able to adapt company s structure to reach deep into the territory and an overall efficient diversification. In the new millennium the process of external growth has continued and noteworthy is the Wild Turkey deal, which helped the company consolidate the Bourbon s market globally, in particular in the United States and the most recent acquisition of Fratelli Averna S.p.a., thus consolidating the leadership in the spirit sector in Italy. In the recent history the firm s management decided to go back to the origins by transferring the Campari Group to the historical production site in Sesto San Giovanni.

CORPORATE GOVERNANCE OWNERSHIP STRUCTURE Shareholding structure pre IPO (2001) ALICROS SRL (Garovaglia) WESSANEN EUROPA B.V. GIOCH S.A. Shareholding structure post IPO (2001-2015) ALICROS SRL (Garovaglia) FLOATING CAPITAL - Other Shareholders Campari has enjoyed great success since joining the Italian Stock Exchange in 2001. With great satisfaction we celebrate this milestone event and the true protagonists of our success: brands, people and a winning growth strategy. Over the years we have built a very solid business, thanks to the long-term vision of the shareholders and the management team who listed the company in 2001. We look forward to many more decades of consistent growth building upon a stronger brand portfolio, organization and route to market Bob-Kunze Concewitz, Chief Executive Officer in 2011 Campari is one of the flagship company of our market and it is definitely one of the best examples of how a company can achieve its aims and realize plans of development going public. As Borsa Italiana we are delighted to have been with the company step by step in this important path. Raffaele Jerusalmi, Chief Executive Officer of Borsa Italiana in 2011

Structure of the share capital (2015) Campari s shares have been listed on the Italian stock market (FTSE MIB index) since July 06th 2001. The IPO involved the sale of 142,296,000 shares. The amount of subscribed and paid-up share capital is 58.080.000,00 euro. The major shareholder remains the Garavoglia s family through Alicros S.p.A., holding the 51% of outstanding shares and the remaining 49% is floating capital held by other investors. Andrew Brown, who is the second biggest investor in the company, holds the 10.84% of shares through Cedar Rock Capital. Morgan Stanley Investment Management Ltd and Independent Franchise Partners LLP respectively own the remaining 2.04% and 2.02%. The governance of the company has not undergone massive changes since 2001, the year of the IPO and the major shareholder has remained the Garavoglia family No securities conferring special rights have been issued. There are no restrictions on voting rights. Campari decided to go public mainly to acquire resources to finance acquisitions. The stock market also imposes higher standards in terms of transparency and has a wider array of tools to incentivize and reward the management. Lastly, the IPO allowed two minority shareholders to liquidate their shares. Delegated bodies - Managing Directors The Board of Directors awarded executive managerial mandates to Robert Kunze-Concewitz, who currently is the Chief Executive Officer, Paolo Marchesini, the Chief Financial Officer, and Stefano Saccardi. The Board imposed financial limits and nature of these mandates. Noteworthy is also the position of Luca Garavoglia, who is the Chairman of the group and also has executive powers.

MAIN COMPETITORS Concentrated and highly aggressive international groups represent the top competitors of Campari. Below are the most relevant ones: Pernod Ricard Pernod Ricard is one of the world's leading companies in the wines and spirits market. Since its creation, the group has adopted a decentralized management structure. Pernod Ricard's manufacturing base comprises 101 production sites in 23 countries worldwide. Pernod Ricard focuses on a single business line of wines and spirits. However, it is organized into three operating segments, categorized on geographical basis: Europe, the Americas, and Asia/rest of the world. United Spirits United Spirits, formerly known as McDowell & Company, is the flagship company of the UB Group. The company manufactures and distributes a range of alcoholic beverages including whisky, vodka, rum, brandy, scotch, and wine. The company offers over 140 brands of spirits and wine, and exports these products to over 35 countries. In the wine segment, it offers Buvay-Ladubay sparkling wine, and Four Seasons still wine. Its spirits brands include Black Dog, Antiquity, and Bagpiper whisky, Pinky, Romanoff, and Vladivar vodka, McDonalds VSOP brandy, and Celebration rum. Diageo Diageo is a global manufacturer and distributor of premium spirits, beer and wine products. The company's operations include producing, distilling, brewing, bottling, packaging, distributing, developing and marketing branded alcoholic beverages. The company's premium brands include Johnnie Walker, Crown Royal, J&B, Buchanan's, Windsor and Bushmills whiskies, Smirnoff, Ciroc and Ketel One vodkas, Captain Morgan, Baileys, Don Julio, Guinness, and Tanqueray. Diageo sells its products in more than 180 markets worldwide. The company's operations are divided into five business segments, defined based on geographical presence: North America, Western Europe, Africa, Eastern Europe and Turkey, Asia-Pacific, and Latin America and Caribbean.

Bacardi Bacardi Limited is the largest privately held, family-owned spirits company in the world. Bacardi Limited refers to the Bacardi group of companies, including Bacardi International Limited. The company sells over 200 million bottles per year. The company s headquarter is located in Hamilton, Bermuda. The board of directors is composed of 16-member and it isled by the original founder's great-great grandson, Facundo L. Bacardí All rights reserved