ITALY: European drag in Q3 sees Gruppo Campari growth slow in YTD
- Nine-month net profits come in flat, up by 0.8% to EUR175.7M (US$223.4m)
- Net sales in nine months to end of September increase by 4.8% to EUR931.6m
- Operating profits rise by 2.6% to EUR211.6m
Gruppo Campari released its YTD results this morning
A "sudden change" in trading conditions in Italy, coupled with industry-wide issues in Spain and France, saw Europe pull on Gruppo Campari's performance in the first nine months of 2012.
The company, which took the final step toward gaining full control of Jamaica's Lascelles deMercado last week, said earlier today (12 November) that net profits for the first nine months of the year were flat, inching up by 0.8% to EUR175.7m (US$223.4m). Sales in the period rose by 4.8% to EUR931.6m, while operating profits increased by 2.6% to EUR211.6m.
The year-to-date performance marked a slowdown on the first six months of this year, when net profits were up by 3.5%, and sales and operating profits each rose by 5%.
While the Americas and the US both delivered sales increases in the nine-month period of 10%, Campari described Italy as producing a "disappointing" third quarter. The country, which accounted for 30.4% of total group sales, saw its sales slip by 1.3%. The company said that Italy had been "particularly hit by sudden change in trading conditions and consumption trends in September".
The rest of Europe saw salse slip by 0.7%, with Germany dropping by 9.6% on tough comps, and Spain and France hit by the economic crisis and an excise duty increase, respectively.
"Looking at the highly seasonal Q4 and the beginning of next year, we expect trading conditions in Italy to remain volatile," warned Campari CEO Bob Kunze-Concewitz. "On the positive side, we expect continued positive momentum in North America and Asia Pacific, improving performance in Brazil and Germany and a return to normal trading conditions in Russia.
"Despite the tough economic environment in Western Europe, we remain committed to brand building and exploiting opportunities in the key brand market combinations and will heighten our focus on cost optimisation opportunities. For the medium term, we expect our strong ‘long’ aperitifs franchise to overcome short term adverse economic conditions in Italy and Europe and to maintain our positive momentum across categories in the rest of the world."
To read the company's official announcement, click here.
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