ITALY: Destocking continues drag on Campari in H1

Davide Campari-Milano has reported flat net profits for the first half of this year, as destocking continued to take its toll on the company.

Campari said today (6 August) that group net profits for the six months to the end of June came in 0.5% up on the same period a year earlier, reaching EUR60.1m (US$86.5m). Sales increased, meanwhile, by 2.5% to EUR441.8m.

Operating profits for the half-year climbed by 4.7% to EUR96.8m.

While sales of the company's namesake spirits brand slipped by 6.6% in the period, Skyy vodka sales rose by only 0.5%,as the brand struggled against a year-earlier relaunch. Factoring in sales of Bourbon brand Wild Turkey, which Campari acquired from Pernod Ricard earlier this year, and spirits sales overall in the period rose by 4.9%.

The firm's wine division, which accounted for 13.5% of total sales, delivered a flat performance, down by 0.4%. Soft drinks, meanwhile, which made up 13.5% of sales, slipped by 2.7%.

"The reduction of destocking pressure in key developed markets gives us confidence that the latter's performance will mirror more closely the positive consumption trend of our key brands going forward," said Campari's CEO, Bob Kunze-Concewitz. "Nonetheless, we will remain vigilant, maintaining our focus on cost containment, working capital and cash generation throughout the year.

"Thanks to the successful integration of all newly acquired businesses, we will be able to more fully exploit their potential in the second half.".

For the official statement from Campari, click here.

For Campari's Q1 results, click here.

An update, with further comments following the company's webcast, can be found here.