Italian drinks group Campari’s sales fell 5.3% at the start of the financial year, as the coronavirus outbreak took its toll on the demand for aperitifs.
The group, which makes Campari and Aperol, sold €360.2 million worth of drinks in the first three months of 2020, down from €370 million last year. It said that the closure of bars and restaurants around the world drastically hurt the growth of Aperol, which had until recently been one of Campari’s key growth drivers.
Demand for Aperol was practically flat in the first quarter compared with last year.
Gross profit was €209.0 million, down by 6.6% in value on a reported basis, and by 9.2% organically. This, it said, was driven by an “unfavorable
sales mix by market and brand, in particular by the negative performance of the high-margin aperitifs business in Italy due to COVID-19.”
Bob Kunze-Concewitz, Chief Executive Officer, said executives are taking “rapid actions to mitigate costs and preserve liquidity whilst remaining focused on our long term strategic agenda.”
This includes bringing forward programs designed to refine Campari’s e-commerce capabilities “to further strengthen our digital capabilities across the entire organization.”
Kunze-Concewitz added that, due to Campari’s healthy cash flow, the company will not hold off on acquisitions this year.
The group strengthened its balance sheet last month by arranging a medium-term loan for up to €750 million with a consortium of banks.
“Our financial profile remains very solid,” he said.
“Looking at the long-term, we remain confident of the positive consumption trends and growth opportunities of our business. We will
continue to leverage the strength and resilience of our brands and business, ensuring we are strongly positioned and ready to accelerate our growth as soon as the consumer demand normalizes.”
The group is now set to become the first Italian company to own a Champagne brand. Campari used its preliminary results announcement to confirm its plans to buy 80% of Champagne Lallier for €21.8 million.
Lallier was founded in 1906 in the village of Aÿ in Champagne, and currently has 15 hectares of vineyards in the region. The business sold 1m bottles of Champagne in 2019, including close to 700,000 bottles of Lallier. Francis Tribaut will continue in his role as managing director of Champagne Lallier following the acquisition.
The sale should be completed by the third quarter of this year, according to Campari.
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