Obligation Campari Davide 2.75% ( XS1300465926 ) en EUR

Campari Davide

100 % ▼

Italie

XS1300465926 ( en EUR )

2.75% par an ( paiement annuel )

30/09/2020 - Obligation échue

Prospectus brochure de l'obligation Davide Campari XS1300465926 en EUR 2.75%, échue

100 000 EUR

600 000 000 EUR

Davide Campari était un entrepreneur italien qui a fondé la société Campari, célèbre pour sa liqueur amère apéritive.

L'Obligation émise par Campari Davide ( Italie ) , en EUR, avec le code ISIN XS1300465926, paye un coupon de 2.75% par an.
Le paiement des coupons est annuel et la maturité de l'Obligation est le 30/09/2020

DAVIDE CAMPARI-MILANO S.p.A.
(incorporated with limited liability under the laws of the Republic of Italy)
600,000,000
2.75 per cent. Notes due 30 September 2020
The issue price of the 600,000,000 2.75 per cent. Notes due 30 September 2020 (the Notes) of Davide Campari-Milano
S.p.A. (the Issuer) is 99.715 per cent. of their principal amount.
Unless previously redeemed or purchased and cancelled, the Notes will be redeemed at their principal amount on 30
September 2020. The Notes are subject to redemption in whole at their principal amount at the option of the Issuer at any
time in the event of certain changes affecting taxation in the Republic of Italy. See "Terms and Conditions of the Notes 
Redemption and Purchase".
The Notes will bear interest from 30 September 2015 at the rate of 2.75 per cent. per annum payable annually in arrear on 30
September each year commencing on 30 September 2016. Payments on the Notes will be made in Euros without deduction
for or on account of taxes imposed or levied by the Republic of Italy to the extent described under "Terms and Conditions
of the Notes Taxation".
Application has been made to the Luxembourg Commission de Surveillance du Secteur Financier (the CSSF), which is the
Luxembourg competent authority for the purpose of Directive 2003/71/EC as amended (which includes the amendments
made by Directive 2010/73/EU) (the Prospectus Directive) and for the purposes of the Luxembourg Act dated 10 July 2005
on prospectuses for securities, as amended (the Prospectus Act 2005) to approve this document as a Prospectus. By
approving this Prospectus, the CSSF assumes no responsibility for the economic and financial soundness of the transactions
contemplated by this Prospectus or the quality or solvency of the Issuer in accordance with Article 7(7) of the Prospectus
Act 2005. Application has also been made for the Notes to be admitted to listing on the official list and trading on the
Luxembourg Stock Exchange's Regulated Market (defined by Directive 2004/39/EC) in accordance with the Prospectus
Directive. This Prospectus (together with any documents incorporated by reference herein) is available on the Luxembourg
Stock Exchange website (www.bourse.lu). This Prospectus constitutes a prospectus for the purposes of article 5.3 of the
Prospectus Directive and for the purposes of the Prospectus Act 2005. The Notes have not been, and will not be, registered
under the United States Securities Act of 1933 (the Securities Act) and are subject to United States tax law requirements.
The Notes are being offered outside the United States by the Joint Lead Managers (as defined in Subscription and Sale) in
accordance with Regulation S under the Securities Act (Regulation S), and may not be offered, sold or delivered within the
United States or to, or for the account or benefit of, U.S. persons except pursuant to an exemption from, or in a transaction
not subject to, the registration requirements of the Securities Act.
The Notes will be in bearer form and in the denomination of 100,000 and integral multiples of 1,000 in excess thereof up
to and including 199,000. The Notes will initially be in the form of a temporary global note (the Temporary Global Note),
without interest coupons, which will be deposited on or around 30 September 2015 (the Closing Date) with a common safe-
keeper for Euroclear Bank S.A./N.V. (Euroclear) and Clearstream Banking S.A., Luxembourg (Clearstream,
Luxembourg). The Temporary Global Note will be exchangeable, in whole or in part, for interests in a permanent global
note (the Permanent Global Note), without interest coupons, not earlier than 40 days after the Closing Date upon
certification as to non-U.S. beneficial ownership. Interest payments in respect of the Notes cannot be collected without such
certification of non-U.S. beneficial ownership. The Permanent Global Note will be exchangeable in certain limited
circumstances in whole, but not in part, for Notes in definitive form in the denomination of 100,000 and integral multiples
of 1,000 in excess thereof up to and including 199,000 and with interest coupons attached. See "Overview of Provisions
Relating to the Notes in Global Form".
An investment in the Notes involves certain risks. Prospective investors should have regard to the factors described
under the heading "Risk Factors" on page 6.

Joint Lead Managers

BofA Merrill Lynch
BNP PARIBAS
Deutsche Bank

Société Générale Corporate & Investment
UniCredit Bank
Banking

29 September 2015
2

CONTENTS

Page

Important Notices .................................................................................................................................... 4
Risk Factors ............................................................................................................................................ 6
Information Incorporated by Reference ................................................................................................ 17
Terms and Conditions of the Notes ....................................................................................................... 18
Overview of Provisions Relating to the Notes in Global Form ............................................................ 31
Description of the Issuer ....................................................................................................................... 34
Overview Financial Information of the Issuer ...................................................................................... 70
Taxation ................................................................................................................................................ 79
Subscription and Sale ............................................................................................................................ 87
General Information .............................................................................................................................. 89

3

IMPORTANT NOTICES
The Issuer accepts responsibility for the information contained in this Prospectus and declares that, to the best of
its knowledge, having taken all reasonable care to ensure that such is the case, the information contained in this
Prospectus is in accordance with the facts and contains no omission likely to affect its import.
The Issuer has confirmed to BNP Paribas, Deutsche Bank AG, London Branch, Merrill Lynch International,
Société Générale and UniCredit Bank AG (together, the Joint Lead Managers) that this Prospectus contains all
information regarding the Issuer and the Notes which is (in the context of the issue, offering and sale of the
Notes) material; such information is true and accurate in all material respects and is not misleading in any
material respect; any opinions, predictions or intentions expressed in this Prospectus on the part of the Issuer are
honestly held or made and are not misleading in any material respect; this Prospectus does not omit to state any
material fact necessary to make all information contained herein not misleading in any material respect; and all
reasonable enquiries have been made to ascertain and to verify the foregoing.
This Prospectus is to be read in conjunction with all documents which are deemed to be incorporated herein by
reference (see "Information Incorporated by Reference"). This Prospectus should be read and construed on the
basis that such documents are incorporated in and form part of the Prospectus.
The Issuer has not authorised the making or provision of any representation or information regarding the Issuer
or the Notes other than as contained in this Prospectus or as approved for such purpose by the Issuer. Any such
representation or information should not be relied upon as having been authorised by the Issuer or the Joint Lead
Managers.
Neither the delivery of this Prospectus nor the offering, sale or delivery of any Note shall in any circumstances
create any implication that the information contained herein concerning the Issuer is correct at any time
subsequent to the date hereof or that any other information supplied in connection with the offering of the Notes
is correct as of any time subsequent to the date indicated in the document containing the same, or that there has
been no adverse change, or any event reasonably likely to involve any adverse change, in the condition
(financial or otherwise) of the Issuer since the date of this Prospectus.
Neither this Prospectus nor any other information supplied in connection with the offering of the Notes (a) is
intended to provide the basis of any credit or other evaluation or (b) should be considered as a recommendation
by the Issuer or any of the Joint Lead Managers that any recipient of this Prospectus or any other information
supplied in connection with the offering of the Notes should purchase any Notes. Each investor contemplating
purchasing any Notes should make its own independent investigation of the financial condition and affairs, and
its own appraisal of the creditworthiness, of the Issuer. Neither this Prospectus nor any other information
supplied in connection with the offering of the Notes constitutes an offer or invitation by or on behalf of the
Issuer or any of the Joint Lead Managers to any person to subscribe for or to purchase any Notes.
The distribution of this Prospectus and the offering, sale and delivery of Notes in certain jurisdictions may be
restricted by law. Neither the Issuer nor the Joint Lead Managers represent that this Prospectus may be lawfully
distributed, or that the Notes may be lawfully offered, in compliance with any applicable registration or other
requirements in any such jurisdiction, or pursuant to an exemption available thereunder, or assume any
responsibility for facilitating any such distribution or offering. In particular, no action has been taken by the
Issuer or the Joint Lead Managers which is intended to permit a public offering of the Notes or the distribution
of this Prospectus in any jurisdiction where action for that purpose is required. Accordingly, no Notes may be
offered or sold, directly or indirectly, and neither this Prospectus nor any advertisement or other offering
material may be distributed or published in any jurisdiction, except under circumstances that will result in
compliance with any applicable laws and regulations. Persons into whose possession this Prospectus comes are
required by the Issuer and the Joint Lead Managers to inform themselves about and to observe any such
restrictions. For a description of certain restrictions on offers, sales and deliveries of Notes and on distribution of
this Prospectus and other offering material relating to the Notes, see "Subscription and Sale".
4

In particular, the Notes have not been and will not be registered under the Securities Act and are subject to
United States tax law requirements. Subject to certain exceptions, Notes may not be offered, sold or delivered
within the United States or to U.S. persons.
In this Prospectus, unless otherwise specified, references to a Member State are references to a Member State
of the European Economic Area, references to U.S.$, USD, U.S. dollars or dollars are to United States dollars,
references to £, GBP or sterling are to pounds sterling, references to J.$ or JMD are to Jamaican dollars,
references to R.$ or BRL are to Brazilian real and references to , EUR or Euro are to the single currency
introduced at the start of the third stage of the European Economic and Monetary Union pursuant to the Treaty
on the Functioning of the European Union, as amended. References to billions are to thousands of millions.
Certain figures included in this Prospectus have been subject to rounding adjustments; accordingly, figures
shown for the same category presented in different tables may vary slightly and figures shown as totals in
certain tables, including percentages, may not be an arithmetic aggregation of the figures which precede them.
In connection with the issue of the Notes, UniCredit Bank AG (the Stabilising Manager) (or persons
acting on behalf of the Stabilising Manager) may over allot Notes or effect transactions with a view to
supporting the price of the Notes at a level higher than that which might otherwise prevail. However,
there is no assurance that the Stabilising Manager (or persons acting on behalf of a Stabilising Manager)
will undertake stabilisation action. Any stabilisation action may begin on or after the date on which
adequate public disclosure of the terms of the offer of the Notes is made and, if begun, may be ended at
any time, but it must end no later than the earlier of 30 days after the issue date of the Notes and 60 days
after the date of the allotment of the Notes. Any stabilisation action or over-allotment must be conducted
by the Stabilising Manager (or persons acting on behalf of the Stabilising Manager) in accordance with
all applicable laws and rules.
5

RISK FACTORS
The Issuer believes that the following factors may affect its ability to fulfil its obligations under the Notes. Most
of these factors are contingencies which may or may not occur and the Issuer is not in a position to express a
view on the likelihood of any such contingency occurring. In addition, factors which are material for the
purpose of assessing the market risks associated with the Notes are also described below.
The Issuer believes that the factors described below represent the principal risks inherent in investing in the
Notes, but the inability of the Issuer to pay interest, principal or other amounts on or in connection with the
Notes may occur for other reasons which may not be considered significant risks by the Issuer based on
information currently available to it or which it may not currently be able to anticipate.
Prospective investors should also read the detailed information set out elsewhere in this Prospectus and reach
their own views prior to making any investment decision.
Words and expressions defined in "Terms and Conditions of the Notes" or elsewhere in this Prospectus have
the same meaning in this section. References to a "Condition" is to such numbered condition in the Terms and
Conditions of the Notes. Prospective investors should read the entire Prospectus.
Risks relating to the Issuer
Adverse macroeconomic and business conditions may significantly and negatively affect the Campari
Group's revenues, profitability and results of operations.
Global economic conditions and conditions specific to developed markets, including Italy, other major European
countries, the United States and Australia as well as emerging markets in which the Campari Group does
business could substantially affect its sales and profitability. Global economic activity went through a sharp
economic downturn from 2007 until the beginning of 2014. During this period, global credit and capital markets
experienced unprecedented volatility and disruption and business credit and liquidity have tightened in much of
the world. Consumer credit also contracted in a number of major markets, including Italy, and global
unemployment rates increased significantly. Since 2014, global economic activity has started to recover, albeit
with only moderate and varied intensity across the different regions. Economic activity has gained some
strength in selected developed markets, including the United States but has weakened in the emerging
economies. Cyclical misalignment has led to a growing divergence of monetary policies in the advanced
countries, with the stance becoming even more expansionary in the euro area while being gradually normalised
in the United States. Recovering disposable income and improved consumer confidence, supported by measures
introduced by national governments in some developed markets, has led to moderate growth in consumption.
Such developments have had, to a certain extent and with different strength across the markets, an impact also
on alcohol consumption. However, tighter credit conditions imposed on the corporate sector by banks,
particularly in some emerging markets, have started to cause major liquidity problems, especially for smaller
companies, and this has led to some of the Campari Group's customers reducing their orders and stock levels.
The recovery remains uncertain and burdened by continuing geopolitical tension in the short and medium term,
owing to persistent weakness in the euro area and to economic and political uncertainties in some emerging
markets, particularly Russia. In response to the unfavourable economic situation globally and in the euro area,
exacerbated by uncertainty over the political and financial situation in Greece, volatility in global financial
markets has increased again in the recent past. It is difficult to determine the breadth and duration of the
economic and financial market problems and their potential effects on consumers of the Group's products and
its suppliers, customers and business in general. For example, distributors may reduce inventory levels,
consumers may choose to buy fewer spirits or to "trade-down" by buying fewer premium products in preference
for lower categories of spirits or wines and a lower volume of travellers, especially air travellers, may reduce
retail travel sales, and competitors may reduce prices. Continuation or further worsening of these difficult
financial and macroeconomic conditions could materially adversely affect the Campari Group's sales,
profitability and results of operations.
6

The Campari Group's industry is competitive, prone to consolidation and subject to consumer preferences; if
the Group is unable to compete for a share of the market in a cost-effective way, the Group's results of
operations and financial condition could be adversely affected.
The Campari Group competes mainly in the spirits and wines businesses, which are characterised by intense
competition and the potential for rapid change in consumer preferences. The Campari Group competes with
companies around the world, including large, well-established and successful companies, many of which have
significant financial, marketing, sales and development resources. The Campari Group also competes against
strongly entrenched local brands in many of the Group's markets. The Group's competitors may succeed in
developing products that are more popular with consumers or less expensive than any which the Group currently
markets or may develop. In addition, the consolidation of participants in these businesses may increase
competitive pressures as larger suppliers are able to offer a broader product line. Consolidation in the beverage
industry may also reduce the number of distribution outlets available to the Group, or lead to higher distribution
costs. The Campari Group competes with other brands for shelf space in retail stores and marketing focus by
independent wholesalers. Independent wholesalers and retailers offer other products, sometimes including their
own brands, that compete directly with the Campari Group's products. If independent wholesalers and retailers
give higher priority to other brands, purchase less of or devote inadequate promotional support to the Campari
Group's brands, it could materially and adversely affect the Group's sales and reduce the Group's
competitiveness. For example, due to intense competition in Europe, the Campari Group may not be able to
increase prices of its brands in line with rising production, selling and promotional costs. Moreover, delays or
unanticipated increases in the costs of developing new products or in gaining market acceptance for new
products could further adversely affect the Campari Group's competitive position and results of operations.
Risks relating to the Campari Group's dependence on consumer preference and propensity to spend.
The Campari Group depends on its ability to satisfy consumer preferences and tastes and to adapt its sales and
marketing strategies to anticipate market trends and developments in forms of media and marketing tools.
Consumer preferences and tastes can change in unpredictable ways due to a variety of factors, such as changes
in demographics, consumer health and wellness, concerns about obesity or alcohol consumption, product
attributes and ingredients, changes in travel, vacation or leisure activity patterns, weather, negative publicity
resulting from regulatory action or litigation against the Campari Group or comparable companies or a downturn
in economic conditions.
Consumers also may begin to prefer the products of competitors or may generally reduce their demand for
products in the spirits and wine categories. Failure by the Campari Group to anticipate or respond adequately
either to changes in consumer preferences and tastes or to developments in new forms of media and marketing
could adversely impact its business, results of operations and financial condition.
If the social acceptability of the Campari Group's products declines or governments adopt policies against
alcoholic beverages, its business could be materially adversely affected.
The Campari Group's ability to market and sell its alcoholic beverage products depends heavily on both
society's attitudes toward drinking and governmental policies that flow from those attitudes. In recent years,
increased social and political attention has been directed at the alcoholic beverage industry. The recent attention
has focused largely on public health concerns related to alcohol abuse, including drinking and driving, underage
drinking, and health consequences from the misuse of alcoholic beverages. Alcohol critics in Europe, the United
States and elsewhere increasingly seek governmental measures to make alcoholic beverages more expensive,
less available, and more difficult to advertise and promote. If the social acceptability of alcoholic beverages
were to decline significantly, sales of the Campari Group's products could materially decrease. The Campari
Group's sales would also suffer if governments ban or restrict advertising or promotional activities, limit hours
or places of sale, or take other actions designed to discourage alcohol consumption.
Tax increase and changes in other fiscal regulations could adversely affect demand for the Campari Group's
products.
Distilled spirits and wines are subject to import duties or excise taxes in many countries where the Group
operates. Many jurisdictions are considering excise tax increases. An increase in import duties or excise taxes
7

could adversely affect profit margins or sales revenue by reducing overall consumption or encouraging
consumers to switch to lower-taxed categories of alcoholic beverages. As at 30 June 2015, a tax dispute relating
to a local production tax and a dispute relating to a tax inspection report in connection with payment of a local
tax on the consumption of goods and services were pending with the Brazilian tax authorities, as further
described in "Description of the Issuer Legal Proceedings" below. The outcome of these, and any future, tax
disputes and investigations may adversely affect the Group's financial position.
The Campari Group depends on sales of key products, and any reduction in such sales could have a material
adverse impact on its results of operations, financial condition, business and/or prospects.
A significant proportion of the Campari Group's sales are focused on certain key brands, such as Aperol,
Campari, SKYY Vodka, Wild Turkey, Appleton Estate and J. Wray&Nephew, Campari Soda, Cinzano and,
Crodino. Accordingly, any factor adversely affecting the sale of these key products individually or collectively
could have a material adverse effect on the Campari Group's results of operations. Production and sale of each
of the key products could be rendered uneconomical by regulatory or competitive changes. The sale of the key
products could also be adversely affected by other factors, including supply, production or distribution
interruptions, marketing or pricing actions by one or more of the Campari Group's competitors, changes in
consumer preferences or other factors. Any reduction in sales of key products could lead to an increase in stock
levels and/or could render production uneconomical, which could have a material adverse impact on the results
of operations, financial condition, business and/or prospects of the Campari Group.
The Campari Group depends upon its trademarks and proprietary rights, and its competitive position may be
adversely affected if it fails to protect the Group's intellectual property rights or is subject to claims that the
Group is infringing upon the rights of others.
The Campari Group's success depends, in large part, on its ability to protect its current and future products and
to defend its intellectual property rights. The Campari Group has registered numerous trademarks covering its
products, and has filed, and expects to continue to file, trademark applications seeking to protect newly-
developed products. The Campari Group cannot be sure that registration of trademarks will be obtained with
respect to any of the Group's pending trademark applications or that any existing or future trademarks registered
to or licensed by the Campari Group will not be challenged, invalidated or circumvented by competitors.
The Campari Group also relies on trade secrets, proprietary know-how not protected by patents and continuing
technological innovation that it seeks to protect, in part by confidentiality agreements with licensees, suppliers,
employees and consultants. The Campari Group cannot be sure that its trade secrets and proprietary know-how
will not be compromised as a result of breaches of intellectual property rights or agreements or otherwise
become known or be independently developed by the Group's competitors or, if patents are not issued with
respect to products arising from research, that the Group will be able to protect such products.
The Campari Group may be required to defend against charges of infringement of trademarks, patents or
proprietary rights of third parties. Such defences could require the Group to incur substantial expense and to
divert significant effort of its technical and management personnel, and could result in the Group's loss of rights
to develop or make certain products or require the Group to pay monetary damages or royalties to license
proprietary rights from third parties. Furthermore, if the level of potentially infringing activities by others were
to increase substantially, the Group might have to increase the resources it dedicates to the protection of its
intellectual property rights. An adverse outcome of any dispute with respect to trademarks, patents or other
proprietary rights or any required increase in the resources dedicated by the Group to the protection of
trademarks, patents or other proprietary rights may adversely affect the Group's competitive position and results
of operations, including by reducing the Group's future sales or causing it to incur additional costs in defending
its rights.
Possible future acquisitions, and integration of the Group's recent acquisitions, may involve considerable
costs and may place a significant strain on the Campari Group's management, financial and other resources,
which could make it difficult for the Group to execute its growth strategy.
The Campari Group expects that the ongoing consolidation within the spirits business will continue. The
Campari Group will continue to evaluate potential acquisitions. The pursuit of these opportunities, and, if such
8

pursuit is successful, the subsequent integration of the businesses acquired, places significant demands on the
time and attention of the Campari Group's senior management and may involve considerable financial and other
costs (for example, in the identification and investigation of potential acquisitions, the negotiation of agreements
and the challenges associated with integration, particularly where the accounting and management systems
differ materially from those used elsewhere in the Group). In addition, the Campari Group may from time to
time incur additional indebtedness to finance acquisitions. The Campari Group may therefore be exposed to
risks in relation to acquisitions which may have an adverse effect on the Campari Group's financial condition
and results of operations.
The Campari Group's growth prospects will suffer if the Group is unable to implement its acquisition strategy
and/or realise the full intended benefits of synergies if, for example, the Group encounters unexpected
difficulties when integrating the businesses acquired. Employees and customers of acquired businesses may
sever their relationships with those businesses during or after completion of the transaction. In addition, if the
Campari Group makes an acquisition in a market outside of those in which the Group currently has a presence,
the Group will have to address an unfamiliar regulatory and competitive environment and may not be able to do
so successfully.
If the Campari Group is not able to attract and retain qualified personnel, this may adversely affect its
business.
The Campari Group's success depends in part on the efforts and abilities of its senior management team and key
employees. The loss or retirement of senior management or other key personnel, or an inability to identify,
attract and retain qualified personnel in the future, may make it difficult for the Group to manage its business
and could adversely affect its operations and financial results.
The Issuer is a holding company.
The production and distribution of the Campari portfolio in Italy is carried out directly by the Issuer. The
remaining operations of the Group are carried out through its subsidiaries and to such extent, the Issuer depends
on the earnings and cash flows of, and the distribution of funds from, these subsidiaries to meet its debt
obligations, including its obligations with respect to the Notes. Generally, creditors of a subsidiary, including
trade creditors, secured creditors and creditors holding indebtedness and guarantees issued by the subsidiary,
and preferred shareholders, if any, of the subsidiary, will be entitled to the assets of that subsidiary before any of
those assets can be distributed to shareholders upon liquidation or winding up. As a result, the Issuer's
obligations in respect of the Notes will, to the extent described above, effectively be subordinated to the prior
payment of all the debts and other liabilities of the Issuer's direct and indirect subsidiaries, including the rights
of trade creditors and preferred shareholders (if any), as well as contingent liabilities, all of which could be
substantial.
Disruptions or termination of the Campari Group's arrangements with the Group's third party
manufacturers or distributors could reduce the Group's sales and operating income.
The production and distribution of the Campari portfolio is carried out, to a large extent, directly by the Campari
Group. However, the Campari Group relies upon third parties to produce and distribute a number of its brands in
a number of markets under licensing arrangements. Outside of the Campari Group's eighteen direct markets,
including six in the Americas (the United States, Jamaica, Brazil, Canada, Argentina and Mexico), ten in Europe
(Italy, Germany, Russia, Switzerland, Austria, Belgium, Luxembourg, the United Kingdom, Spain and Ukraine)
and two in Asia Pacific (Australia and China), the Group generally depends upon third parties to distribute its
products. The use of third parties for these critical functions entails risks, including the risk of termination.
Furthermore, the Group has less control over the quality of products manufactured by third parties. Moreover, in
certain cases, there are no suitable replacements for the Campari Group's third party manufacturers. A
disruption or termination of the Campari Group's present arrangements with these third parties without suitable
alternative arrangements in place could have a material adverse effect on the Group's business, prospects,
results of operations and/or financial condition.
9

An increase in the cost of raw materials or energy could affect profitability.
The components that the Campari Group uses to produce its beverage products are largely commodities that are
subject to price volatility caused by changes in global supply and demand, inflation, weather conditions,
agricultural uncertainty or governmental controls. Commodity price changes may result in unexpected increases
in the cost of raw materials, glass bottles and other packaging materials for the Campari Group's products.
In addition, energy cost increases result in higher transportation, freight and other operating costs.
An increase in the cost of raw materials or energy could therefore affect the Campari Group's profitability.
The Campari Group could have insufficient or surplus product by inaccurately forecasting production or
other circumstances affecting its inventory.
The Campari Group has a substantial inventory of aged product categories, such as Bourbon whisky, Scotch
whisky, Canadian whisky, rum and tequila which mature over lengthy periods. While the maturing inventory is
stored at numerous locations throughout the world, the loss as a result of contamination, fire or other natural
disaster or destruction resulting from negligence or the acts of third parties or otherwise of all or a portion of the
inventory of any one of those aged product categories may not be replaceable and, consequently, may lead to a
substantial decrease in supply of those products. Additionally, the judgmental nature of determining how much
of the Group's aged products to lay down in any given year for future consumption involves an inherent risk of
forecasting error. This could either lead to an inability to supply future demand leading to a loss of sales and
market share or lead to future surplus inventory and decrease of profit margin.
The Campari Group's operations are conducted in many countries and, as a result, fluctuations between the
euro and other major currencies may affect financial results.
While the Campari Group reports its financial results in euros, the Group's portfolio of brands generates sales
and costs of sales throughout the world in a variety of currencies. In 2014, around 55.7 per cent. of the Group's
consolidated net sales came from outside the European Union. Accordingly, fluctuations between exchange
rates (in particular, between the euro and the U.S. dollar, Jamaican dollar, Russian rouble, Australian dollar,
Brazilian real or Argentinian peso) may affect the Group's financial results. The exchange rates between some
of the foreign currencies in which the Group operates and the euro have fluctuated significantly in recent years
and may continue to do so in the future. The Group seeks to manage its foreign currency exposures with
hedging contracts, but may incur losses under those hedges or may not be able to protect itself from the medium
or long term effects of exchange rate fluctuations as hedging activities cannot be expected to eliminate all
exchange rate risks. Any such exchange rate fluctuations may have a negative impact on the Group's reported
financial results.
Risks relating to international trade and operations in emerging markets.
In line with its international growth strategy, the Group currently operates in numerous markets, and plans to
expand in certain emerging countries, especially in Eastern Europe, Latin America and Asia. Operating in
emerging markets makes the Group vulnerable to various risks inherent in international business, including
exposure to an often unstable local political and economic environment, exchange rate fluctuations (and related
hedging issues), export and import quotas, and limits or curbs on investment, advertising or repatriation of
dividends.
The Campari Group's operations are subject to environmental regulations, which could expose it to
significant compliance costs and litigation relating to environmental issues
The Campari Group's operations are subject to environmental regulations by national, state and local agencies,
including, in certain cases, regulations that impose liability without regard to fault. These regulations can result
in costs or liability, including fines and/or environmental remediation obligations, which might adversely affect
the Campari Group's operations. The environmental regulatory climate in the markets in which the Campari
Group operates is becoming stricter, with a greater emphasis on enforcement.
While the Campari Group has implemented dedicated procedures relating to safety and qualitative controls in
the area of environmental pollution and the disposal of solid and liquid waste and has budgeted for future capital
10