On Tuesday, Campari Group will announce its results from the first three months of 2020. This time last year, the company posted a near-10% sales jump from the first quarter of 2019, with the top-line growth rate slowing as the 12 months progressed – The group’s full-year sales were up 5.9%. Here’s a look at the news that is likely to have shaped Campari’s performance in the three months to the end of March.
- Just before the first quarter kicked off, the company saw out 2019 with the announcement of an acquisition, this time in France. In late-December, Campari moved to bring its distribution footprint in the country in-house through the purchase of Baron Philippe de Rothschild France Distribution. The transaction, valued at around EUR60m (then US$66.7m), was completed at the end of February
- A look at the group’s balance sheet in January led one analyst to suggest that Campari could be lining up some sizeable M&A activity in 2020. With access to around EUR4bn, and a history of making big buys every three or four years, Campari remains one to watch in the months ahead, according to Ed Mundy at Jefferies
- Mundy’s position gained further traction a month later, when the group proposed the move of its registered office to the Netherlands. The switch, which won’t affect the company’s presence in its homeland of Italy, would allow for the adoption of “a flexible share capital structure, which will enable us to pursue further growth through external opportunities”, said CEO Bob Kunze-Concewitz. The proposal gained shareholder approval in late-March
- Over in Asia, where things were getting complicated by COVID-19, Campari made another office move, this time with its HQ in the continent heading to Singapore from Sydney. At a cost of around EUR3m, the move in the direction of China would mean the group will “be able to move faster and much more effectively in all of those core markets,” said Kunze-Concewitz
- Another consolidatory step was taken at the start of March, this time in the US. Palm Bay International was thanked for its time with three Cinzano vermouth expressions and a raft of wine brands in the country, as they shifted into Campari America’s ranks
- Seeing out the quarter was a trading update at the end of March, in which CEO Kunze-Concewitz made the bold prediction that the coronavirus impact will only hit the short-term. While admitting that full-year guidance was an unreliable exercise given the circumstances, the group chief argued that “the medium- to long-term consumption dynamics will not be affected”
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