Wine industry survey

Mediobanca Research Department

Milan, 7 April 2017

2 2

Leading wine-makers: Italian sales and exports (index 2011=100)

106.9 109.2

108.1

111.6

117.6

100.0

108.8

119.0 120.9

129.1

137.7

2011 2012 2013 2014 2015 2016P

Sales generated in Italy Exports

3 3

Leading wine-makers and manufacturing companies: net sales

(index 2011=100)

100.0

107.8

113.9 114.3

120.1

127.3

98.4 97.4

98.8

102.2

111.7

2011 2012 2013 2014 2015 2016P

Wine industry Manufacturing industry

4 4

Analysis by company and product type in pre-closing 2016P figures

(% chg. in sales 2016P/2015)

6.4 5.9

13.6

4.4

5.8

7.5

13.0

5.6

Limited companies Co-operatives Spumanti Other wines

Total sales Exports

5 5

Percentages of companies by class of change in turnover vs previous edition (2011-2017F) and changes in sales

23.8 21.4 24.5 25.9

36.4 30.1

46.9

17.1 25.0 15.4 18.7

7.8 31.6

25.9 48.6

39.1 33.6 14.4

34.8

22.9

17.3

-8.9 -6.1 -15.3

-25.8

-11.6 -9.1 -7.4

-1.0 -5.6

-7.8

-8.2

-6.6 -3.4

-0.6

-2.8

-3.4

-7.0

-2.8 -2.9

-2.5

9.5

7.8

5.7

0.3

5.1

6.0

2011 2012 2013 2014 2015 2016P 2017F

=< -10% from -5 to -9.99% from -0.01 to -4.99% >= +10% from 5 to 9.99% from 0 to 4.99% % change in sales

6 6

Exports by geographies in 2016P

(% share of turnover and chg. vs 2016P/2015)

52.1

34.2

4.0

1.3

8.4

7.1

6.3

7.9

13.1

1.9

EU countries North America Asia and Australia Central and South America Rest of the world

% division in 2016P % chg. 2016P/2015

7 7

Top 30 Italian wine-makers by turnover (2015-2016P)

Companies Registered office

Total sales Export Net profit

(loss)

as a % of

2015 sales

Net profit

(loss)

as a % of

2016 sales

No. of bottles

produced in 2016

Ownership

structure 2015 2016 % change

2016/2015

Rank

2015 Rank 2016

2016

€ m

as a % of

2016 sales

% change

2016/2015 € m

CANTINE RIUNITE & CIV (°) Campegine (Re) 546 566 3.6 1 1 377 66.5 2.5 1.3 2.0 200,629,998 Co-

operative

of which: GIV - GRUPPO ITALIANO VINI (°) Bardolino (Vr) 358 365 1.9 278 76.2 1.8 1.7 2.2 81,170,000

of which: CANTINE RIUNITE & CIV (*) Campegine (Re) 201 213 5.7 99 46.3 13.5 2.7 1.7 119,459,998

CAVIRO (°) Faenza (Ra) 300 304 1.1 2 2 92 30.5 7.8 2.9 0.4 50,957,345

(^)

Co-

operative

PALAZZO ANTINORI (°) Florence 209 218 4.5 3 3 140 64.0 0.2 21.5 21.0 25,000,000 Family-

owned

CASA VINICOLA ZONIN (°) Gambellara (Vi) 183 193 5.1 4 4 165 85.8 7.5 0.5 2.7 50,200,000 Family-

owned

MEZZACORONA (°) (*) (+) Mezzocorona (Tn) 175 163 n.a. 5 n.a. 97 59.1 n.a. 0.9 1.1 44,930,000 Co-

operative

Gruppo CAMPARI (wine division) (§) Milan 171 169 -1.2 6 7 n.a. n.a. n.a. n.a. n.a. n.a. Family-

owned

CAVIT CANTINA VITICOLTORI (°) (*) Ravina (Tn) 167 178 6.7 7 5 144 80.7 7.6 3.1 3.0 n.a. Co-

operative

FRATELLI MARTINI SECONDO LUIGI Cossano Belbo (Cn) 160 174 9,0 8 6 156 89.7 9.0 1.7 2.5 78,000,000 Family-

owned

CASA VINICOLA BOTTER CARLO & C. Fossalta di Piave (Ve) 154 165 6.6 9 8 160 96.9 9.6 9.2 8.8 77,626,000 Family-

owned

IWB - ITALIAN WINE BRANDS (°) (-) Milan 145 146 0.8 10 11 105 72.1 10.7 3.8 3.2 45,000,000 Mixed

ENOITALIA Calmasino di Bardolino (Vr) 134 148 9.7 11 10 110 74.3 4.3 2.6 n.a. 88,318,528 Family-

owned

Gruppo SANTA MARGHERITA (°) Fossalta di Portogruaro (Ve) 118 157 32.9 12 9 108 68.7 47.6 12.1 21.3 18,830,036 Family-

owned

GRUPPO CEVICO (°) (*) Lugo (Ra) 113 111 -1.7 13 13 31 27.9 -1.1 0.6 1.2 71,323,229 Co-

operative

CANTINA SOCIALE Co-operative DI SOAVE

(°) (*) Soave (Vr) 106 117 10.3 14 12 45 38.3 -1.2 1.6 1.7 35,000,000

Co-

operative

COLLIS VENETO WINE GROUP (°) (*) Monteforte D'Alpone (Vr) 104 106 2.2 15 15 32 30.2 40.0 1.0 1.5 23,000,000 Co-

operative

SCHENK ITALIA (°) Ora (Bz) 101 108 7.7 16 14 80 73.9 9.3 0.5 0.4 57,300,000 non-Italian-

owned

cont.

8 8

Top 30 Italian wine-makers by turnover (2015-2016P) cont.

Companies Registered office

Total sales Export Net profit

(loss) as

a % of 2015

sales

Net profit

(loss) as

a % of 2016

sales

No. of bottles

produced in 2016

Ownership

structure 2015 2016 % change

2016/2015

Rank

2015 Rank 2016

2016

€ m

as a % of

2016 sales

% change

2016/2015 € m

COMPAGNIA DE' FRESCOBALDI (°) Florence 97 101 4.7 17 16 63 62.3 1.9 21.7 22.5 11,267,721 Family-owned

MONDODELVINO (°) Forlì 95 100 5.3 18 18 84 84.1 8.8 0.3 3.2 60,458,366 Mixed

RUFFINO (°) (*) Pontassieve (Fi) 93 99 6.1 19 19 92 93.5 5.5 11.8 16.7 17,091,878 non-Italian-

owned

LUNELLI (°) Ravina (Tn) 84 95 13.4 20 20 25 26.5 6.8 7.6 n.a. n.a. Family-owned

LA VIS (°) (*) (=) Lavis (Tn) 83 76 -8.6 21 24 56 73.8 -10.0 -3.1 5.3 n.a. Co-operative

CONTRI SPUMANTI Cazzano Di Tramigna (Vr) 78 77 -0.9 22 23 30 38.8 -10.9 5.1 3.1 71,067,000 Mixed

LA MARCA VINI E SPUMANTI Oderzo (Tv) 75 101 33.9 23 17 80 79.3 39.4 0.0 0,0 35,000,000 Co-operative

VILLA SANDI Crocetta Del Montello (Tv) 73 88 20.7 24 21 40 45.1 5.4 3.2 8.0 32,200,000 Family-owned

Gruppo BANFI (°) Montalcino (Si) 70 67 -3.9 25 27 38 56.7 -5.7 2.8 5.2 13,818,000 non-Italian-

owned

QUARGENTAN Roncà (Vr) 68 n.a. n.a. 26 n.a. n.a. n.a. n.a. 0.3 n.a. n.a. Family-owned

MIONETTO Valdobbiadene (Tv) 65 72 11.3 27 26 41 57.2 26.7 4.7 4.4 n.a. non-Italian-

owned

VIVO CANTINE (°) (*) Salgareda (Tv) 65 81 25.4 28 22 38 47.3 39.8 0.7 0.6 26,787,250 Co-operative

F.LLI GANCIA & C. Canelli (At) 62 62 -0.9 29 29 30 48.8 13.6 -6.2 -4.9 20,055,439 non-Italian-

owned

MASI AGRICOLA (°) (') S. Ambrogio Di Valpolicella (Vr) 61 64 4.9 30 28 54 84.4 0.3 10.2 9.3 n.a. Family-owned

VS - VINICOLA SERENA Conegliano (Tv) 56 n.a. n.a. 31 n.a. n.a. n.a. n.a. 2.4 n.a. n.a. Family-owned

Gruppo TERRA MORETTI ($) Erbusco (Bs) 47 73 n.a. n.a. 25 n.a. n.a. n.a. 9.7 9,9 9.000.000 Family-owned

(°) Consolidated financial data.

(*) The financial year ends on 31 July for Cantine Riunite & Civ, Mezzacorona, Gruppo Cevico, Collis Veneto Wine Group and Cantine Brusa, on 31 May for Cavit, on 30 June for Cantina Sociale Cooperativa di Soave and La Vis, on 28 February for

Ruffino, on 31 August for Vivo Cantine.

(^) Excluding wine sold in cartons, boxes and barrels.

(+) 2016 data refer to 11 months of operation (financial years ended on 31 August 2015 and on 31 July 2016).

(§) Only part of the wine division's data are included in the aggregate. The Group produces and sells «Riccadonna», «Cinzano» (vermouth and spumanti), «Liebfraumilch» as well as spumanti under the «Mondoro» brand name.

(-) Set up on 27 November 2014 and listed on the stock market (AIM) since 29 January 2015, with a free float of approx. 60%. The group comprises the companies Giordano Vini and Provinco Italia.

(=) Under compulsory administration from 8 June 2015 al 16 April 2016.

(') Listed on the stock market (AIM) since 30 June 2015.

(§) Data taken from the aggregate sales of the group’s wine-making companies. Including the companies acquired from the Campari group at year-end 2016 would lead to combined turnover as at end-2015 of more than €60m, ranking the Moretti

group among the top thirty sector operators.

Source: financial statements and individual companies.

9 9

Indicators of economic performance, financial solidity and production efficiency in 2015

1.0

0.8 0.8 0.8 0.8

0.7 0.7 0.6 0.6 0.6 0.6 0.6 0.6

0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.4 0.4

0.4 0.4 0.3

0.2

0.0

z-score (°) Consolidated financial data.

10 10

2017 estimates: estimated changes

in total sales in exports

(as % of those interviewed)

>=+10%

17.3

from +5% to +9.99%

25.9

from 0% to +4.99%

46.9

from -0.01% to -4.99%

7.4 from -5% to -9.99%

0.0

=<-10%

2.5

>=+10%

24.0

from +5% to +9.99%

24.0

from 0% to +4.99%

44.3

from -0.01% to -4.99%

5.1

from -5% to -9.99%

1.3

=<-10%

1.3

11 11

Profitability of wine

(as %, 2011-2015)

5.0 4.8 5.7

6.4 6.7

3.4 3.4 2.7

5.9 6.6

27.0 26.1

29.2

32.1 33.3

2011 2012 2013 2014 2015

ROI ROE NOM/VA

12 12

Profitability of wine and beverages

(as %, 2011-2015)

5.0 4.8

5.7

6.4 6.7

10.5

8.5

9.4

8.7 8.8

3.4 3.4

2.7

5.9

6.6

8.0

8.9

9.5 9.5

10.0

2011 2012 2013 2014 2015

ROI (wine) ROI (beverages) ROE (wine) ROE (beverages)

13 13

ROE by region

(as %, 2015)

-0.8

0.7

4.1

5.3

7.0 7.8 7.9

9.9

Sicilia Friuli V.G. Piedmont Lombardy Emilia-Romagna Trentino-Alto Adige Tuscany Veneto

14 14

Shareholders' portfolios

(€m based on 2015 net equity)

Companies

875

Individuals

1,372

Co-operatives

859

Non-Italian

375

Financial investors

400

Others

76

Stock Market

66

Individuals:

approx. €3.1bn families

(directly or via companies):

approx. €2.2bn

15 15

Nine Italian companies with sales over €150m

(turnover 2015)

2,380

2,221

1,573

983

823

622 546

410 361 300 297 293 266 245 245 241 221 209 200 183 175 171 167 163 160 154 152

* Champagne

** Wine Division

16 16

Exports

(as % of 2015 sales; companies with sales of over €150m)

96.9

89.7 85.8

81.2 80.7

70.6 68.9 66.5 65.9 64.1 64.0 59.1

53.5

46.0 42.6 40.4

37.3

30.5 28.4

9.0 4.2 2.0

17 17

Industrial margins

(EBIT/sales, as %; excluding co-operatives for Italy)

17.5

16.6

17.8

19.4

21.0

7.5

6.7

7.8

9.3 9.5

2011 2012 2013 2014 2015

Non-Italian Italian

18 18

End-markets

non-Italian companies Italian companies

(as % of 2015 sales)

Asia and Australia

13.1%

North America

58.6%

Europe

16.4%

Central and South

America

4.3%

Rest of the world

7.6%

Asia and

Australia

3.9%

North America

34.2%

Europe

51.8%

Central and

South America

1.3%

Rest of the world

8.8%

19 19

Vineyards owned by large producers

(as % of total surface area, equal to 78,287 hectares)

China

25.6%

Argentina

2.9%

Australia

14.9%

Canada

1.4%

Chile

20.6%

Europe

10.1%

New Zealand

5.2%

South Africa

6.7%

United States

12.6%

20 20

Largest vineyards worldwide

(data in hectares)

Yantai Changyu Pioneer Wine

(CN)

20,055

Treasury Wine Estates (AU)

13,425

Viña Concha y Toro (CL)

10,804

E. & J. Gallo Winery (US)

9,308

Constellation Brands (USA)

8,781

Grupo Peñaflor (AR)

6,104

Pernod Ricard (FR)

5,611

21 21

Mediobanca index of listed wine companies

(total return to 14 March 2017, Jan. 2001=100)

696.1

288.1

194.9

283.7

1644.8

285.4

1534.3

622.5

369.6

466.4 445.2

153.6

247.0 200.2 221.0

Australia Chile China France North

America

Spain Other countries World (local

currency)

MB wines index National stock market

22 22

Stock market multiples

(at end-date for 2015 financial statements)

3.1 1.7 2.1

1.2 1.1 1.1 1.2

34.3

26.0

22.1

13.8

16.0

30.4

39.8

China Other countries North America Chile Spain France Australia

P/BV P/E

23

Mediobanca Research Department

Foro Buonaparte 10, Milan, Italy

www.mbres.it