Campari results strong despite disputes and weak economy

Gruppo Campari has reported a 5% net sales growth in the first half of the year, despite a raft of issues in Russia, Germany and Italy.

Gruppo Campari’s Aperol continued to lead growth across all markets

The group, whose brands include Aperol, Skyy Vodka and Wild Turkey Bourbon, saw sales increase to €618.3million and profits to €363.2million for the first half of the year ending 30 June 2012.

But while organic sales in the US increased by 9.6% with “positive momentum” across all key brands, those across Campari’s home country of Italy and the rest Europe were weaker.

Sales in Italy, Campari’s largest market, were impacted by “weakening consumer confidence”, and grew by just 1.4% thanks to strong growth from Aperol, Campari and Skyy’s newly introduced flavoured range.

The rest of Europe also saw sales dip, but by 2.1%. Campari attributes the fall to the impact of the economic crisis in Spain and France, a dispute with a retailer in Germany (which accounted for a 9.7% loss in sales itself), and the migration to a new sales platform in Russia.

Bob Kunze-Concewitz, CEO of Campari, said: “Trading in South America was (also) impacted, in particular, by a slowdown in consumption in Brazil. On the positive side, heightened brand building activities helped accelerate positive momentum across the portfolio in North America. Moreover, we continued to grow strongly in Asia Pacific, constantly taking market share.

“Looking forward into the second half of the year, which, traditionally, weighs considerably more on full year results, we remain cautiously optimistic. Whilst we do not expect any improvements in the tough overall trading environment in the most challenging markets, we expect to maintain a good balance between potential upsides and downsides.

“Positive momentum in North America and Asia Pacific with a return to normal trading conditions in Russia and slow but gradual resolution of the trade dispute in Germany should help compensate for a very challenging environment in Italy and South America.”