Skyy-rocketing results? Not quite

Bob Kunze-Concewitz, CEO of the Campari Group said that “in the first nine months of 2007 we achieved satisfactory results.”

Grupo Campari, one of the smaller players of the global spirits industry, reported that in the first nine months 2007, group sales totalled EUR 644.6 million, an increase of 2.8 percent.

The modest increase was due to the termination of the Lipton Ice Tea distribution contract on the Italian market, which could only partly be offset by Glen Grant and Old Smuggler (whose sales started on 15 March 2006), and the newly acquired X-Rated brands (whose sales started on 1 August 2007).

EBITDA for the nine months 2007 rose by 3.1 percent to EUR 143.4 million, or 22.2 percent of sales.

The group’s profit before tax was EUR 115.5 million, an increase of 1.5 percent.

Bob Kunze-Concewitz, Campari’s youthful CEO, called the January-to-September 2007 results “satisfactory”. Photo: D. Venturelli/C. Romaniello

As of 30 September 2007, Grupo Camapri’s debt stood at EUR 293.3 million, a decrease of EUR 86.2 million from 31 December 2006, following the dividend payment (EUR 29 million paid on 4 May 2007) and the acquisition of X-Rated (EUR 29 million).

The spirits segment (70.9% of total sales) recorded growth of 5.6 percent. The Campari brand posted growth of 2.3 percent in value terms while SKYY vodka sales rose by 14.5 percent, thanks to a very positive performance on both the US and international markets.

The wines segment, which contributed 14.3 percent of total sales, registered growth of 15.1 percent. The segment’s strong performance was driven by Cinzano vermouth (+18.8%) and by Cinzano sparkling wines (+20.2%).

Sales of soft drinks (12.9% of total sales), which are generated almost entirely on the Italian market, recorded an organic growth of 5.0 percent, driven by strong performance of Crodino (+7.8%), the Lemonsoda range (+5.1%) and other carbonated drinks. The overall change was negative by 20.9 percent due to a negative perimeter effect of 25.9 percent, attributable to the termination of Lipton Ice Tea sales.

Lipton Ice Tea is one of the most popular beverages in Italy. Since 2007 it has been distributed by Pepsico Beverages Italia.

Campari’s disappointing Euro share price reflects its continuing dependence on two markets: Italy and the United States. Source: Grupo Campari