Gruppo Campari’s sales go flat in first quarter
Italian drinks firm Gruppo Campari posted flat results in the first quarter of 2016, with a small boost from an early Easter, though losses were driven by currency headwinds and losses from the firm's Jamaican sugar company.
The figures
The Wild Turkey, Skyy Vodka and Campari maker posted sales of €327.4m (£259.1m), unchanged from the first quarter of 2015, although organic sales growth came in at 7.2 per cent.
The group was hit by currency headwinds in markets such as Brazil and Argentina, although sales were better than expected when adjusted for currency volatility, which has hit many companies in the first quarter.
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Pre-tax profit reached just over €34m, a loss of 4.3 per cent, while pre-tax profit adjusted for one-offs with €40.2m.
In the Americas, which represent 41.2 per cent of the group's sales in the first quarter, growth fell by 6.3 per cent.
Why it's interesting
The firm has attributed key growth drivers in the first quarter to its high-margin global priority brands, particularly aperitifs, American whiskies and Jamaican rums and, on the other hand, by the positive performance of the group's "core strategic markets".
It has also said its outlook shared at the beginning of the year, including posting a positive, profitable performance, remains unchanged.
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Gruppo Campari announced it would launch a friendly takeover of French liqueur maker Grand Marnier in mid-March, and has said in the second half of 2016 its activities will reflect the effects "of the exclusive agreement for the worldwide distribution of the Grand Marnier spirits portfolio as well as the consolidation of the Society des Produits Marnier Lapostolles SA business".
What Gruppo Campari said
Chief executive Bob Kunze-Concewitz said:
[W]e achieved a positive organic growth in all regions, particularly in the high margin developed markets, such as North America and Western Europe. However, it should also be noted that the first quarter is traditionally a small quarter and that this year our performance was impacted by some one-off drivers, positive as well as negative.
On the positive side, these results benefitted overall from an earlier Easter than in 2015, as well as from some shipments phasing in the US, which will gradually reverse in the next quarters. On the negative side, the group’s net sales performance was affected by a decline in the non-core and low margin sugar business in Jamaica due to temporary events which are not expected to reverse in the remainder of the year.