Campari announces 2012 First Quarter results
- Sales: € 279.3 million (+4.0%, organic growth +2.8%)
- Contribution after A&P: € 117.0 million (+7.1%, organic growth +4.6%, 41.9% of sales)
- EBITDA before one-offs: € 71.4 million (+2.9%, organic growth +2.6%, 25.6% of sales)
- EBIT before one-offs: € 63.8 million (+3.4%, organic growth +3.2%, 22.8% of sales)
- Group pre-tax profit: € 52.8 million (+4.6%)
- Net financial debt: € 589.5 million (€ 636.6 million as of 31 December 2011)
Milan, May 15, 2012 - The Board of Directors of Davide Campari-Milano S.p.A. (Reuters CPRI.MI - Bloomberg CPR IM) approved the consolidated results for the quarter ending 31 March 2012.
Gruppo Campari achieved positive results, showing positive organic growth in sales and operating profit performance.
Bob Kunze-Concewitz, Chief Executive Officer: ‘First quarter 2012 results were in line with expectations, resulting in positive organic growth in sales and operating profit performance, despite a tough comparison base and the anticipated one-off’s. We achieved positive growth across all the key spirit brands as well as key markets with the exception of Brazil and Russia. Importantly, the business confirmed its resiliency in Italy and Germany, gained momentum in the US and continued to perform very strongly in markets where distributions was recently insourced, including Australia, Argentina and Mexico. With Russia progressing as planned and first quarter 2012 results in line with expectations, we remain cautiously optimistic for the full year.’.
In the first quarter of 2012 Group sales totalled € 279.3 million showing a reported growth of +4.0%, and organic growth of +2.8%. The exchange rates effect was positive by +1.6%. Perimeter effect was negative by -0.4%, entirely driven by changes in distribution agreements.
Gross profit increased to € 161.7 million, up +3.6%, or 57.9% of sales, mainly thanks to a favourable sales mix.
Advertising and promotion spending (A&P) was down by -4.6% to € 44.8 million, or 16.0% of sales (17.5% of sales in the first quarter of 2011).
Contribution after A&P (gross margin after A&P) was up by +7.1% to € 117.0 million (+4.6% organic growth), or 41.9% of sales.
Structure costs, i.e. selling, general and administrative costs, increased by +11.9%, or 19.1% of sales (17.7% in the first quarter of 2011), reflecting investments in new route-to-market and strengthened central functions.
EBITDA before one-offs was up by +2.9% to € 71.4 million (+2.6% organic growth), or 25.6% of sales.
EBITDA reached € 70.1 million, an increase of +2.2%.
EBIT before one-offs rose by +3.4% to € 63.8 million (+3.2% organic growth), or 22.8% of sales.
EBIT reached € 62.4 million, an increase of +2.7%.
Net financing costs stood at € 9.5 million, down from € 10.3 million in the first quarter of 2011, due to theGroup's lower average debt level.
Group pre-tax profit reached € 52.8 million, up by +4.6%.
As of 31 March 2012, net financial debt stood at € 589.5 million (€ 636.6 million as of 31 December 2011), thanks to healthy cash flow generation of € 47.0 million in the first quarter of 2012.
CONSOLIDATED SALES OF FIRST QUARTER 2012
Looking at sales by region in the first quarter of 2012, the Americas (30.5% of total Group sales) posted overall growth of +1.7%, with an organic increase of +2.1%, a perimeter effect of -2.6%, and an exchange rate effect of +2.2%. In the Americas, sales in the US market (20.6% of total Group sales), registered an organic increase of +5.4%, driven by the Wild Turkey and SKYY franchises, by Campari, Carolans and Espolón, a perimeter effect of -3.8% (due to the termination of Cutty Sark agency) and an exchange rate effect of +4.3%. Sales in Brazil (4.2% of total Group sales) registered a negative organic performance of -31.9%, as a result of the pre-buying in the last quarter of 2011, ahead of the January 2012 price increase, as well as the slowdown in consumption in the overall beverage sector. The exchange rate effect was -1.1%. Sales in the other Americas (5.7% of total Group sales) showed an organic growth of +36.9%, mainly thanks to a strong performance in Argentina (driven by Campari, Old Smuggler and the local brands), Canada (driven by SKYY Vodka and Carolans) and Mexico (driven by SKYY ready-to-drink’s). Perimeter and exchange rate effects were respectively -1.4% and -2.6%.
The Italian market (36.4% of total Group sales) recorded a total growth of +0.5%, attributable to a positive organic growth of +0.3% and a positive perimeter effect of +0.2%. The organic growth was driven by a positive performance of Aperol, Aperol spritz home edition and Campari as well as Crodino and the Lemonsoda, more than offsetting weaker performances of CampariSoda and GlenGrant.
Sales in the rest of Europe (22.3% of total Group sales) increased by +1.4%, driven by a negative organic performance of -1.0%, a positive perimeter effect of +1.6% and a positive exchange rate effect of +0.8%. Germany grew by +1.9% on an organic basis despite the anticipated commercial dispute, whilst Russia recorded a negative sales performance of -23.0%, in the context of a tough comparison base in connection with the key brands’ transition into the new Campari Russia organisation. Switzerland and Austria continued to perform strongly.
Sales in the rest of the world (including Global Travel Retail), which accounted for 10.8% of total Group sales, grew by +36.6% overall, with a positive organic change of +27.2%, thanks to strong performances in all key markets (Australia, Japan, China, South Africa and GTR) and a positive exchange rate effect of +9.4%.
Looking at sales by business segment, spirits (77.9% of total sales) grew +5.3%, the combined result of positive organic growth of +4.4%, a negative perimeter effect of -1.1% and a positive exchange rate effect of +2.0%. Aperol registered a positive organic growth of +7.4%, delivering a strong performance across all markets with the exception of Germany, impacted by the commercial dispute with a key client. Moreover, the Aperol Spritz single serve home edition (not included in the Aperol brand performance above), a new single serve product introduced in Italy and Austria at the beginning of 2011 and exclusively distributed in the off premise channel, showed a strong performance of +32.4%. Campari brand sales increased by +0.9% at constant exchange rates (+1.4% at actual exchange rates), mainly driven by the core Italian market compensating for a temporary weakness in Brazil and Germany, plus a good progression in Argentina and the US. SKYY sales grew by +8.9% at constant exchange rates (+12.9% at actual exchange rates), driven by the positive performance in the US and strong momentum in main international markets (particularly Brazil and South Africa). The Wild Turkey franchise sales grew by +24.0% overall at constant exchange rates (+32.7% at actual exchange rates), driven by the positive performance of all the brands in all main markets. Notably, Wild Turkey bourbon grew by +8.4% with positive results in the US, Australia and Japan; Wild Turkey ready to- drink achieved a strong growth of +41.2%, driven by Australia and New Zealand; American Honey also continued to perform very positively growing by +49.0%, thanks to the US and Australia. Frangelico, Carolans and Irish Mist registered a good organic performance of +4.1%. Organic performance was also positive for GlenGrant, up by +1.3% (+2.3% at actual exchange rates) and the tequilas, up by +11.7% (+16.3% at actual exchange rates), driven by the good performance of Espolón. The Brazilian brands were down by -37.5% at constant exchange rates (-38.4% at actual exchange rates) in a small quarter, as a result of the pre-buying which occurred in the last quarter of 2011 (ahead of the January 2012 price increase), as well as general slowdown in consumption in the overall beverage sector. Campari Soda recorded a negative organic performance of -6.3%, as a consequence of continued weakness in the Italian day bars channel.
Wines, which accounted for 11.6% of total sales, decreased by -5.5%, due to the combination of an organic performance of -8.1%, a perimeter effect of +1.8% and an exchange rate effect of +0.8%.
Cinzano vermouths declined by -24.0% at constant exchange rates (-24.0% at actual exchange rates) driven largely by Russia where the business is affected by the brand’s transition into the new Group organisation. Cinzano sparkling wines sales increased by +3.2% at constant exchange rates (+3.8% at actual exchange rates), thanks to a good performance in the key German market, more than compensating softer performance in Italy and the Russian transition. The other sparkling wines declined organically by -8.0%:Riccadonna and Odessa performed positively, whilst Mondoro’s performance was affected by the brand’s transition in Russia. Still wines (including Sella&Mosca, Enrico Serafino and Teruzzi&Puthod) grew organically by +2.0%, driven by positive results in the international markets compensating for the weakness in the Italian on premise channel. The overall change in still wines of +12.5% was mainly due to the positive perimeter effect generated by new agency brands.
Soft drinks (9.6% of total sales) grew by +3.9%, driven by organic performance of +3.8%, thanks to good performances of Crodino (+1.2%) and Lemonsoda range in Italy, and an exchange rate effect of +0.1%.
The Executive responsible for preparing Davide Campari-Milano S.p.A.’s financial reports, Paolo Marchesini, certifies - pursuant to article 154 bis, paragraph 2 of the Legislative Decree 58/1998 - that the accounting disclosures in this statement correspond to the accounting documents, ledgers and entries.
ANALYST CONFERENCE CALL
At 1:00 pm (CET) today, Tuesday, May 15, 2012, Campari’s management will hold a conference call to present the Group’s first quarter 2012 results. To participate, please dial one of the following numbers:
- from Italy: 02 8058 811
- from abroad: +44 1212 818003
The presentation slides can be downloaded before the conference call from the main investor relations page on Gruppo Campari’s website, at
A recording of the conference call will be available from Tuesday, May 15 until Tuesday, May 22, 2012.
To listen to it, please call the following numbers:
- from Italy: 02 72495
- from abroad: +44 1212 818005
(access code: 737#).