Campari Group: too early to predict covid-19 impact

27th March, 2020 by Nicola Carruthers

Aperol maker Campari Group said it is too early to provide “reliable estimates” on how the coronavirus pandemic has affected the Italian firm’s current financial year, but expects the second quarter to be “more heavily impacted”.

Aperol, often the star performer in Campari Group’s sales, could drop in Q2 amid the pandemic

In an update on the Italian company’s business outlook and the impact of the coronavirus pandemic, Campari Group said the global spread of the disease has caused a “high level of uncertainty”.

The Wild Turkey producer said the outlook it published last month as part of its full-year 2019 results “did not reflect the impact of covid-19 and hence cannot be confirmed”.

The firm said: “Due to the continuous evolution of the pandemic’s spread in terms of geographical extension and intensity, as well as the high uncertainty regarding its duration, the group believes it is premature at this time to provide reliable estimates on covid-19’s impact on the group’s financial results for the current year.”

Regarding the coronavirus outbreak and how it will impact the business, Campari Group expects it will mainly concern consumption trends in the off-premise channel, “strongly impacted by the restrictions in the group’s key markets, including Italy, to which the key apéritifs segment is particularly exposed”.

Campari Group said the impact on the off-premise channel is predicted to be “more limited” in comparison to the on-premise channel.

The global travel retail market, which has a “limited weight” on the group’s total sales, is “certainly impacted” due to restrictions on international travel, Campari said.

Peak season for apéritifs

Campari Group forecasts the Q1 impact to be predominantly in the Italian market over the last month. The region has been hit the hardest by the coronavirus outbreak.

The second quarter, described as the peak season for apéritifs, is predicted to be more heavily hit, but “still to an uncertain extent”.

The group’s performance in the second half of year “may depend on the speed with which the virus is definitively vanquished globally”.

Campari Group said: “While confirming its strong commitment to take all necessary actions to contain the effects and protect its business results, the group reserves the right to provide further updates as soon as the conditions allow it to make a reliable estimate about the impact.”

Bob Kunze-Concewitz, CEO of Campari Group, said the firm’s priority is maintaining the “safety of the Camparistas and the continuity of [its] business”.

“We believe that, despite the negative short-term impacts that we will face, thanks to our agility and ability to adapt to changes, the current situation would be considered temporary and that the medium-long term consumption dynamics will not be affected,” he said.

“Looking forward, we will continue to leverage the strength and resilience of our business and brands, ensuring we are strongly positioned and ready to embrace new challenges and accelerate our growth as soon as the consumer demand returns to normal post-covid-19.”

Earlier this month, Aperol producer Campari Group donated €1 million (US$1.1m) to a public healthcare institution in Milan to fund the intensive care operational unit used to hospitalise patients who test positive for covid-19. The company has also donated alcohol to a number of organisations for the production of hand sanitiser.

The coronavirus pandemic has also hit French firm Pernod Ricard, which recently forecast a 20% decline in operating profit for its 2020 financial year.

Meanwhile, the outbreak is expected to drag Diageo’s full-year 2020 profits down by up to £200m (US$260m).

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