The Italian drinks group Davide Campari-Milano saw its net profits fall 7.9% in 2003 to €79.8m, as the company suffered from what it called a "substantial impact of exchange rate movements".

"It should be stressed that…if these results were considered before exchange rates impact, they would show double-digit growth versus the previous year," the company said in a statement.

Deputy chief executive officer Enzo Visone said: "2003 was another year of more than satisfactory results for the Campari Group: we fully met our targets for both organic growth (despite the negative exchange rate movements) and external expansion, which continued in 2003 with the acquisitions of Barbero 1891 and Riccadonna. These results lay the foundations for further growth in 2004, despite the unfavourable economic outlook, especially with respect to Europe."

The company said that it would propose a dividend of €0.88 per share (unchanged from last year), for a total dividend of €24.7m.

Group sales in 2003 were €714.1m, up 8.1% (+14.5% at constant exchange rates). Organic growth was 9.6%, while exchange rate movements had a negative effect of 6.4%, mainly because of the fall in value of the US dollar and the Brazilian real.

Profit before taxes and minority interests was €138.1m, up 11.9% (+19.2% at constant exchange rates). The result was boosted by net non-operating income of €23.1m, which includes the capital gain generated by the sale of the head office building in Milan, Via Filippo Turati, in July 2003.

In the company's spirits segment, which accounted for 65.5% of total sales, sales grew by 9.6% (+18.7% at constant exchange rates). Organic growth was 11.5%, thanks to a positive performance from all of the group's main brands.

Sales of Campari rose by 3.4% at constant exchange rates (-1.1% at actual exchange rates).
Geographically, sales performance was positive in Italy (+10.8%), Brazil and Germany, where the upturn in sales seen in the first half of the year continued and led to much higher than expected overall growth for 2003.
Sales of wines, which accounted for 13.9% of total sales, grew by 2.5% at constant exchange rates (+5.5% at actual exchange rates). Organic growth was up 4.3%, following a good performance from Cinzano sparkling wines (+5.3% at constant exchange rates) and a more modest contribution from Cinzano vermouth (+0.8% at constant exchange rates).

Soft drink sales, which contributed 19.6% to the total and are realised almost exclusively on the Italian market, grew by 10.2%, also thanks to last year's particularly hot summer.

As for 2004, the group maintained a "cautious view of the future, in the light of an unfavourable macroeconomic scenario, with particular reference to Europe".

The company said that, as regards the US, "the market continues to be affected by an increasing competition in the premium vodka segment. Regarding Brazil, the business performance is highly correlated with the performance of the local economy. Meanwhile, the Italian business is expected to benefit from the contribution of Aperol and the other brands of Barbero 1891 acquired in December 2003."