Olly Wehring

Analysis - Gruppo Campari set to struggle in Q1

By | 26 March 2013

Campari will see its home market drag on Q1 performance

Campari will see its home market drag on Q1 performance

Troublesome trading conditions in Italy and Germany will give Campari a tough start to 2013, an analyst has warned.

Earlier this month, Milan-based Campari posted a slight dip in full-year profits for 2012, with both its home market and nearby Germany dragging on performance. While a “worse-than-expected market environment” in Italy in the final quarter hindered sales, Germany was hit by a “commercial dispute with a key client” over Campari's Aperol brand.

In a note to clients today (26 March), Kepler Capital Markets said that the two markets will continue to prove difficult this year.

“In Italy,” Kepler said, “we expect that -8% underlying trend to continue/deteriorate further in H1, as austerity measures and the political conundrum continue to weigh on consumer confidence.

“In Germany, we fear the ‘me-too’ products - priced at a 50% discount to Apérol price - that popped up during Apérol’s delisting in 2012 might force Campari to step up marketing spend.”

Kepler forecast that full-year net profits for Campari in 2013 will come in at around EUR179m (US$232.1m), a year-on-year increase of 6.7%. This contrasts, however, with the firm's sector peers, who are expected to deliver a 14% lift in net profits on average this year.

“When reporting 2012 earnings,” Kepler continued, “Campari flagged that, in Q1, Italy would be hit by a EUR20m to EUR25m shift in revenues from Q1 into Q2-Q3 (delayed pre-load for the summer). This means sales in Italy could drop by 25% year-on-year in Q1, translating into a 3% like-for-like sales decline at group level."

Campari is set to release its Q1 results on 13 May.

Expert analysis

Davide Campari - Milano S.p.A. : Consumer Packaged Goods - Company Profile, SWOT & Financial Report

Canadean's "Davide Campari - Milano S.p.A. : Consumer Packaged Goods - Company Profile, SWOT & Financial Report" contains in depth information and data about the company and its operations. The profile contains a company overview, key facts, major products and services, swot analysis, business description, company history, financial analysis, mergers & acquisitions, key employees, company locations and subsidiaries, employee biographies as well as competitive benchmarking data.

Sectors: Company results, Soft drinks, Spirits, Wine

Companies: Campari

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