ITALY: Campari registers good growth despite sales decline
Davide Campari-Milano has reported a healthy growth in its first quarter profits, despite a fall in revenues in the period, caused in part by currency fluctuations and the loss of the tequila 1800 distribution contract in US.
In the first quarter of 2008, group sales totalled €190.9 million, a decrease of 2.9% (-0.7% at constant exchange rates). The overall change in consolidated sales resulted from an organic growth of 1.3%, a negative exchange rate effect of 2.1% and a negative perimeter effect of 2.1%.
"The latter was due to the announced termination of tequila 1800 distribution contract in US, which was partially offset by Cabo Wabo, X-Rated (whose sales started on 1 August 2007), Bowmore and Flor de Cana," the company said.
EBITDA rose by 8.0% (+10.1% at constant exchange rates) to €50.2m, or 26.3% of sales. The group's profit before tax was €40.1m, with a progression of 6.8% (+8.6% at constant exchange rates).
The company's spirits segment (67.6% of total sales) recorded a decrease in sales of 7.2%, the combined result of an organic decrease of 1.6%, a negative exchange rate effect of 2.7% and a negative perimeter effect of 2.9%.
However, the Campari brand posted a growth of 1.4% at constant exchange rates (0.9% at actual exchange rates). But, SKYY sales declined by 2.3% at constant exchange rates (-13.2% at actual exchange rates), due to planned destocking in US market, ahead of SKYY Infusions and SKYY Vodka new pack launch, in April 2008.
CampariSoda finished the first quarter with a positive performance of 2.8%; Aperol confirmed the positive trend and recorded a growth of 11.6% at constant exchange rates. Glen Grant (-15.5% at constant exchange rates) registered a decrease, mainly due to the tough comparison quarter on quarter, the company said.
The wines segment, which contributed 13.9% of total sales, registered a growth of 3.3%, due to the combination of organic growth of 3.7% and a negative exchange rate effect of 0.4%. The segment's positive performance was driven by Cinzano vermouth (+9.7% at constant exchange rates) and by Cinzano sparkling wines (+9.3% at constant exchange rates). The still wines segment also benefited from positive performances from Sella & Mosca (+2.2%).
Sales of soft drinks (16.6% of total sales), which are generated almost entirely on the Italian market, recorded a strong organic growth of 12.8%, driven by Crodino (+14.1%), Lemonsoda range (+14.2%) and other carbonated drinks (+9.3%).
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