Massimo Zanetti Beverage Group Reports Financial Results, Positive Growth Trend

Villorba (Treviso, Italy), 11 August 2016 - The Board of Directors of Massimo Zanetti Beverage Group S.p.A. approved the interim report at 30 June 2016.

The first half of 2016 confirmed the positive growth trend of MZB Group, in particular with a strong performance in terms of EBITDA, which has offset the increase in OPEX related to the strengthening of the Segafredo global brand and of the organisational structure. The single serve grew by 23%.

• Roasted coffee sales volumes growth +6.7% to 63,678 tons
• Consolidated turnover of Euro 442.7 million in line with the first semester of last year
• Consolidated gross profit up +7.8% to Euro 184.2 million
• Strong consolidated Adjusted EBITDA, up +13.3% to Euro 26.7 million
• Consolidated Operating Profit reached Euro 11.1 million
• Profit for the period totalling Euro 5.2 million
• Net financial indebtedness of Euro 161.6 million, down Euro 24.1 million compared to 31 December 2015
• Guidance confirmed

Volumes

During the first half of 2016, MZB Group sales volumes of roasted coffee increased by 6.7% on the same period of the last year, totalling 63,678 tons. The increase was recorded in all the MZB Group's distribution channels.

The Mass Market channel grew by 8.2% in the first half of 2016, reaching 26,194 tons, mainly due to continued growth in Northern Europe, led by Finland, Netherlands and Germany. The Mass Market channel accounted for 41.1% in terms of total volumes of the group.

The Food Service channel rose 2.7%, to 5,309 tons. The increase was recorded in all geographical areas. The Food Service accounted for 8.3% in terms of total volumes of the group.

The Private Label channel increased by 6.2%, to 32,175 tons. This performance was mainly attributable to the results achieved in the Americas, notably the USA, and in the Southern Europe. This channel accounted for 50.5% in terms of total volumes of the group.

The Single Serve category grew by 23% in the first half of 2016 versus the same period of last year, thanks to the performance of the Americas, with an increase of over 50%, headed by the Segafredo, Chock full o'Nuts and KAUAI brands. In the first half of the year, Hills Bros brand launched the first capsule 100% compostable thanks to the investment in Club Coffee. Southern Europe achieved a growth of 7% versus the same period of last year.

At the geographical level, the Americas confirmed the positive trend recorded in the first quarter of this year, with a total of 39,526 tons in the first half of 2016, thus recording an increase of 3.8% on the same period of last year. Growth was mainly driven by the private label, confirming first quarter positive trend. The single serve category achieved a significant increase, above 50%. The Americas accounted for 62% of total sales volumes of the group.

Volumes in Southern Europe totalled 12,948 tons in the first half of 2016, an increase of 4.2% involving all distribution channels. Strong mass market growth offset the decline recorded in the first quarter of the year, thus reversing the trend, thanks to new products and advertising campaign.

With reference to this region, last July 12, 2016, the Group acquired the portuguese Nutricafés. The closing is scheduled for mid-September 2016. The Southern Europe represents 20% of MZB Group’s total volumes.

Strong growth in Northern Europe which recorded an increase in volumes greater than 25% for a total of 10,183 tons in the first half of 2016 versus the same period of last year mainly driven by double-digit growth in the mass market channel. Kulta Katriina, in Finland, grew thanks to the relaunch of the brand with products, new packaging and TV advertising, while Netherlands, following the agreement with the distribution chain Albert Heijn, was up double-digit in the mass market. The private label continued to growth although from a smaller basis. Northern Europe stands to be the third largest contributor in terms of total volume with about 16% of the total.

Coffee volumes in the Asia, Oceania and Café division amounted to 1,022 tons in the first half of 2016, slightly down on the previous half-year (by 1.6 %). The trend improved compared to the first quarter. Boncafé confirmed its positive trend with an increase of 6%.

Consolidated revenue

The MZB Group's consolidated revenue for the first half of 2016 amounts to Euro 442.7 million with a slight decline of 1.7% compared to the same period of last year. The increase in volumes described above, has been impacted by the decrease in the average selling price of coffee roasted following the decrease of average purchase price of green coffee, and from a different channel mix of the product sold.

With respect to distribution channels, the Mass Market contribution to consolidated revenue accounted for 37%, Private Label for 36% while the Food Service and Other products accounted for 21% and 6%, respectively.

The Americas remain the main geographical area in terms of revenue, accounting for 50% of turnover with the USA confirming their position as the MZB Group's main market. Southern Europe is the Group's second geographical area, accounting for 23% with France the main market. Northern Europe accounts 19% headed by Finland and Asia, Pacific and Cafes* accounts 7%. Full report.