Campari battles profit loss in Q3

Gruppo Campari has seen its sales improve due to “strong acceleration in organic performance” in its third quarter.

Gruppo Campari has announced a 13% increase in its year-to-date sales

Sales grew 13% to €1.05 billion during the first nine months of the year, but net profits have fallen by 14.9% to €149.5 million.

Announcing its half-year financial results for 2013 earlier this year, the Italian drinks group revealed a net profit loss of 26.1% for the first six months of the year to €57.6 million, in line with the 25% profit loss reported in its Q1 results in May.

For its Q3 results, the company saw an upward shift in its domestic Italian market thanks to an improvement in consumption trends.

However company bosses admitted that the company had suffered from an “unfavourable” foreign exchange effect and instability in certain markets.

“With a worsening foreign exchange outlook, continued macroeconomic challenges in some key markets and volatile sales mix evolution, the overall business context remains tough,” said Bob Kunze-Concewitz, CEO of Gruppo Campari.

Sales in the Americas, which account for 42.4% of the group’s total sales, showed the most marked improvement, increasing by 35.9%.

Double-digit growth for the Wild Turkey Bourbon portfolio enabled a 3.7% increase in organic sales for the US.

While Brazil witnessed a slowdown in its local brands, Argentina reported a “strong performance”, pushing organic sales by 12.3% in the other Americas.

Sales in Europe grew by 4.6% overall, driven by a new distribution agreement in Germany and a positive performance of Aperol in the UK and Belgium.

Organic sales in the rest of the world, which accounts for 10% of the group’s total slaes, dipped 3.2% due to a weak performance of Wild Turkey in Australia.

Overall, key spirits brands, accounting for 74.7% of Campari’s portfolio, grew 7.1%.

Campari anticipates that a strong final quarter will stabilise the business and also announced its plans to set up a distribution company in Spain.

Kunze-Concewitz added that the company has successfully completed planned restructurings, plant start-ups and planned business integration.

He continued: “Looking forward, on the back of this transitionary year we will start reaping the benefits accruing from the new set up and expect our long term growth to be driven by sustained brand building across key brand-market combinations, and the strengthening resonance of the brand portfolio in new geographies.”

The firm’s net financial debt currently stands at €910.7m.

Gruppo Campari also recently announced a global distribution deal with Bulldog Gin.