• Q1 pre-tax profits fall again, by 47.4% to EUR20.7m (US$28.5m)
  • Net sales in three months to end of March decrease by 8.4% to EUR288.7m
  • Operating profits plunge by 27.6% to EUR37.3m
  • Year-to-date holding up, thanks to late Easter
Campari saw its good start to Q1 taper off in March

Campari saw its good start to Q1 taper off in March

Gruppo Campari has reported falling sales and profits in its first quarter, as a healthy start to the period slowed markedly in March.

The company said earlier today (13 May) that pre-tax profits in the three months to the end of March fell by 47.4% year-on-year to EUR20.7m (US$28.5m). The fall came on an 8.4% dip in sales in the period to EUR288.7m, with operating profits also struggling, down by 27.6% to  EUR37.3m. 

The performance compares to a 25% fall in profits in Q1 2013.

Campari saw its sales in the Americas slip by 16.5%, thanks predominantly to a "very unfavourable" currency effect. The devaluation of several currencies in the region, including the US dollar, hampered performance.

Italy, however, recovered in Q1 for Campari, with sales rising by 4.9%. The country accounted for 27.3% of group sales, compared to 23.8% a year earlier.

Europe - excluding Italy - held firm in the quarter, delivering a 1% lift in sales, Campari said. Performance in the region was hampered, however, by a 24% fall in sales in Russia, which was impacted by "the impact of a less dynamic market and tightened credit control on sell-in". The other European markets posted "very satisfying results", Campari added.

The Rest of the World and Global Travel Retail struggled, with the group's sales falling by 19.3%. While China, South Africa and Nigeria were flagged for performing well, Australia, Japan and New Zealand were the main drags.

"Following two consistently solid monthly performances, weaker shipments in March impacted full quarterly results," said CEO Bob Kunze-Concewitz. "The end of the quarter was affected by a slowdown in Russia due to a less dynamic market and tightened credit control, shipment phasing in the US, and the late Easter, which resulted in shifting key promotional programmes, and thus shipments, into the second quarter in most European markets."

Kunze-Concewitz noted, however, that the first quarter is "not reflective of the underlying business momentum, which is improving across most markets".

"Net sales year-to-date to the end of April 2014, thanks to the normalisation due to the full inclusion of the Easter effect, were back to positive territory in terms of organic growth," he added.

The company's share price fell back this morning following the release of the Q1 numbers. At 1205 CEST, they were trading 5.2% down at EUR5.89.

To read the company's official statement, click here.

For an in-depth look at Campari's performance by region and brand, click here.

For coverage of the company's conference call, click here.

Expert analysis

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

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