Gruppo Campari Q1 results dampened by currency effects

By Erin Smith

Published: 10 May, 2016

Gruppo Campari results released yesterday show net sales remained flat at €327.4m for the first quarter of 2016, with organic growth offset by a negative exchange rate effects.

Gruppo Campari results released yesterday show net sales remained flat at €327.4m for the first quarter of 2016, with organic growth offset by negative exchange rate effects.

There results were for the first quarter through 31 March 2016.

Organic sales grew for the first quarter by 7.2%. The organic growth was driven primarily from Europe and the Americas.

The Americas reported organic growth of 6.9% with the US performing strongly and helping to offset the negative performance in Brazil which is facing both a political and economic crisis. Brazil's organic sales dropped 27.2% during the first quarter "as a result of a contraction in consumption, general difficulties in the market and the effect of easy sales in the last quarter of 2015 ahead of a rise in excise duties," according to the financial statement. The US is Gruppo Campari's second largest market.

Northern, Central and Eastern Europe recorded a 13.3% jump in organic growth, which was driven mainly by growth from Germany.

The negative exchange rates impacts overall offset most of the gains made in organic growth. The report said: "The negative exchange rate impact of 3.8% is due to the deprecation of many of the Group's currencies, except for the US dollar which rose by 2.2%. This appreciation was more than offset by the euro's rise against the Group's other functional currencies".

Specifically the Mexican Peso, the Brazilian Real, the Argentine Peso and the Russian Rouble were the worst performing currencies for Gruppo Campari. The Argentine Peso's average exchange rate declined 38.5% compared to 2015. The Brazilian Real also saw a massive decline of 25.3% for the same time period. The Mexican Peso dropped 15.5%, while the Russian Rouble declined 13.9%.

While the group does not expect that the emerging markets currencies will improve, it does think key brands in core markets will be able to offset any of the challenges it faces and will be deliver growth for the year.

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