illycaffè S.p.A. profitability at record level and net profit significantly growing in 2018

EBITDA Adjusted: €75,3 million, 15.6% of revenue, +10,7% compared with 2017
Net Profit: €18,1 milioni, +39,1% compared with 2017
Consolidated Revenues: €483 milioni, +3,5% compared with 2017 (+5,1% at constant exchange rates)

Trieste, April 29^th 2019 – illycaffè's annual shareholder meeting has approved today the 2018 financial statement.

Profitability at record levels, net profit gowing nearly 40% on the year, consolidated revenues at €483 million, up 3.5% on the year (up 5.1% at constant exchange rates). This is, in a nutshell, the brillant result reached by the Company in 2018.

EBITDA adjusted reached €75.3 million in 2018, growing 10.7% compared with 2017.

Net profit was €18,1 million, growing 39.1% compared with 2017, including extraordinary items (related to the Patent Box regulation). Normalized net profit, comparable with 2017, is €16.7 million, growing 8.4% compared with 2017. Revenues grew over twice compared with the growth recorded in 2017 and rose 5% in volumes.

“This is the result of increased efficiency and decisive actions on our core business, the portioned market and the restaurant/hotel (Ho.Re.Ca) sector – says Massimiliano Pogliani, illycaffè's Chief Executive Officer. Last year we were able to feed our growth by focusing our strategy on three pillars: broadening our global leadership as quality product provider in the premium hospitality sector; continuing to develop our mono-brand retail channel globally; increasing our market share in the portioned system sector. On this last point, we signed an important agreement with JAB holding to produce and distribute globally illy-branded aluminum capsules through the JDE platform. This new product will hit the stores in the following weeks, increasing our market share in Italy and abroad and further establishing our positioning in the higher range of the market.”

Foreign markets continue to have a growing role: sales outside Italy weighed for 65% of total revenues, more than the previous year. North-American market was one of the fastest-growing globally, with revenue increasing 8.4% on the previous year in terms of volumes. In China, sales grew 12.2% on the year in terms of volumes.

In Italy, the ecommerce segment posted a significant increase compared with the previous year, rising 78,9%.

The mono-brand retail sector has continued to grow as illy stores now total 259 points of sale: 179 illy Caffè of which 17 directly-operated and 80 illy Shops of which 6 directly-operated. In 2018, 37 points of sale were opened: 32 illy Caffè, of which 1 directly-operated (in Vienna) and 5 illy Shops.

The return on invested capital (ROIC) stood at 12.7%, benefitting of the positive impact of

patent box regulation. Excluding such extraordinary item it grows 8.5% compared with 2017,with investments focusing on strategic areas leading to a increased productivity.

Similarly to 2017, investments in 2018 focused on marketing and communication and on optimizing production operations to meet growing demand. Investment in marketing and communication increased significantly, pushing the international ad campaign “LIVE HAPPilly”, with Andrea Bocelli as brand ambassador. At production level, investments led to increased capacity in the Iperespresso capsule department, in the roasting department and in the traditional products department have increased.

2018 results confirmed the Company's satisfactory sales performance and the strength of the brand. Over the year illycaffé has continued to implement the long term strategic plan, which will see a combined growth of revenue and profitability over the coming years.

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illycaffè is an Italian family business, founded in Trieste in 1933 and committed to offering the greatest coffee to the world. illy is the world's most global coffee brand, producing the unique illy 100% Arabica blend made of 9 of the world ‘s best selections of Arabica; each day more than 7 million cups are served in over 140 countries in the finest cafés, restaurants, hotels and in offices and homes. illy has become the standard forerunner of espresso, and thanks to three critical innovations, is considered the leader in the science and technology of coffee. With the bestowing of the first “Ernesto Illy Award for quality espresso coffee” in 1991 in Brazil, illy also pioneered direct sourcing, sharing know-how and paying a premium price for the best quality, based on partnerships underwritten by the principles of sustainable development. The company also founded the University of Coffee with the aim of fostering and spreading its culture, providing comprehensive academic and hands-on training for coffee growers, baristas and coffee lovers in order to cover every aspect of the product. Everything ‘made in illy’ is enhanced by beauty & art, which represent founding values of the brand, starting from its logo – designed by an artist, James Rosenquist – and including the renowned illy Art Collection, comprised of over 100 cups designed by international artists. In 2018 the company was employing 1,294 people, and posted consolidated revenues of €483 million. There are approximately 259 stores and mono-brand illy shops in 43 countries.

For Further Information

www.illy.com

illycaffè Giovanna Gregori – Christine Pascolo, Tel. 040/389.0111