• Q1 pre-tax profits slump by 25.4% to EUR39.4m (US$51.2m)
  • Net sales in three months to end of March increase by 12.9% to EUR279.3m
  • Operating profits also struggle, down by 17.6% to EUR51.5m
  • CEO acknowledges "poor" performance in Q1
Gruppo Campari had expected Italy to struggle in the first quarter of 2013

Gruppo Campari had expected Italy to struggle in the first quarter of 2013

Gruppo Campari has seen its domestic market drag on Q1 performance, as Italy struggled in the quarter "as anticipated".

The Milan-based company said earlier today  (13 May) that pre-tax profits in the three months to the end of March came in 25.4% down year-on-year, totalling EUR39.4m (US$51.2m). Sales in the quarter were strong, however, rising by 12.9% to hit EUR279.3m. Operating profits also fell markedly, by 17.6% to EUR51.5m.

In organic terms, net sales were down by 9%, the company noted.

Sales in Italy, which accounts for almost a quarter of Campari's performance, came in 26.2% down on the corresponding period a year earlier, thanks to the “expected” destocking effect in the country in Q1. In late-October last year, a law was introduced that placed restrictions on payment time limits from customers to food and drink producers.

The Americas, meanwhile, saw sales climb in organic terms by 10.8%, driven by a 7.6% lift in the US. Reported sales in the region leapt by 66.7%, thanks to Campari's acquisition of Lascelles deMercado late last year.

“As anticipated, the results in the first, and traditionally low season, quarter of 2013 were poor,” said company CEO Bob Kunze-Concewitz. “Results were strong in the Americas, showing continued positive momentum in the US market and improvements in Latin America, and Eastern Europe (particularly Russia), offsetting continued weakness in Germany, exacerbated by very poor weather conditions, and softness in Australia.

“The integration and development activities of the Lascelles deMercado business are progressing in line with plan, and were marked by the transition of the international business into the group network.”

Looking to the full-year, Campari warned that the “evolution in consumption trends and the potential persistence of poor weather conditions in Italy and in Eurozone markets” could see the company struggle to pull back Q1's numbers over the rest of 2013.

Following the release of the Q1 numbers, Campari's share price fell, and were trading down 3.1% at EUR5.97 at 1405 CEST.

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

For a full round-up of just-drinks' coverage of Campari's Q1 performance, click here.