just On Call - Gruppo Campari CEO quietly confident after strong Q1
Gruppo Campari's CEO toasts strong start to 2011
Campari's CEO has said that many of the group's biggest drinks brands are in good shape as the firm enters its key selling period.
But, Bob Kunze-Concewitz is refusing to get carried away with Campari's strong start to 2011, declaring himself "cautiously optimistic" after double-digit rises in both first-quarter sales and profits.
"The fundamentals of our brands are strong, but we've got two very important quarters coming up," he told just-drinks on a media call following the group's results announcement today (12 May). Campari's first quarter typically has the smallest financial impact on the group.
Still, Kunze-Concewitz said that Campari has built up "significant momentum". Among the group's drinks brands, Aperol sales and Wild Turkey franchise sales rose by 57% and 43% respectively at constant exchange rates over the three months to the end of March. Meanwhile, Skyy vodka sales rose by 8%.
There was strong growth for the group in Germany, Russia, the Americas and Australia, helping global net sales to increase by 15% on the same period of last year, to EUR268.4m (US$381.2m). Excluding currency gains, sales rose by 13%.
A 3% sales fall for the Italian group in its domestic market was the main weakness in Campari's performance. However, the group attributed much of this to the late timing of Easter this year. "In April, we've already recovered the ground lost in Q1," Kunze-Concewitz said.
For the quarter, Campari's EBITDA rose by 17% on the same period last year, although currency contributed to 5% of this growth. Pre-tax profits also increased strongly, by 16.6% to EUR50.5m. The firm underlined that the increases have been achieved in spite of higher advertising and promotion spend.
A significant amount of advertising spend is being reserved for the relaunch of Wild Turkey. Campari has changed the packaging of the brand and is planning a heavyweight marketing campaign in the US.
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