Campari sales up, net profit down

Gruppo Campari has posted up sales of €1,524 million, +13.7%, (organic growth +1.7%) while the group net profit was down -4.4% to €149.8m for the for the full year ending December 31, 2013.

The company reports +1.7% sales organic growth in FY 2013 (+6.4% in the fourth quarter, 2013), thanks to solid performance across the Americas and Russia, offsetting softness in Germany and Australia. Satisfactory results in Italy.

The group net profit decline was after negative one-off’s of €10.3m. Net debt stands at €852.8m at 2013 year end after non-recurring cash outflows totaling €86.2m in FY 2013, thanks to healthy cash flow generation, says Campari.

CEO Bob Kunze-Concewitz said: “In 2013 overall results were in line with expectations, thanks to the positive progression and acceleration of organic growth throughout the year. The business was challenged by unfavourable foreign exchange impact, continued macroeconomic challenges and volatile sales mix evolution. Due to a wide range of non-recurring business initiatives, including restructurings, plants start-up’s and the integration of significant new business, now completed, 2013 should be considered a year of transition.

“Going forward, the business context is expected to remain challenging with continued tough macroeconomic conditions in key markets and a worsening forex outlook. Moreover, we expect the estimated gross margin accretion to phase in more gradually than planned throughout the year, due to an unfavourable geographic mix (strong growth in markets with lower profitability), not completely offset by the improving brand mix, and to help offset a step up of A& P (advertising and promotions) investments behind key brand franchises. In this context, we expect the underlying business to continue building its momentum following a strong second half in 2013 and a good start to the year in 2014,” he said.

“Looking forward, with the transition year of 2013 behind us, we believe that the Group is better positioned for long-term growth driven by sustained brand building in major product-market combinations as well as the strengthened penetration and brand resonance of our Top Six Brand franchises across new geographies,’ said Kunze-Concewitz.