Following an extremely strong start of the year, declining results in a small quarter
Results reflect the initial impact of COVID-19 on top of a tough comparison base,
with Italy impacted the most starting from March
A very challenging environment with some resilient pockets of growth
Q1 2020-HIGHLIGHTS
- Declining results in a small quarter, following an extremely strong start of the year, reflecting the initial impact of COVID-19 on top of a tough comparison base. Italy hit the most, and, to a lesser extent, the rest of Europe and GTR.
- Reported sales of €360.2 million. Organic decline of -5.3%. On a reported basis, total change of -2.7% after positive exchange rate and perimeter effects.
- EBIT adjusted1 of €47.9 million. Organic decline of -35.3%, largely due to a tough comparison base (+15.4%, +100 bps margin accretion in Q1 2019) coupled with a lower absorption of fixed costs, magnified in a small quarter.
- Group pre-tax profit adjusted2 of €34.7 million, down -45.7%. Group pre-tax profit at €30.6 million, down -51.6%.
- Net financial debt of €887.1 million as of March 31st, 2020, up €109.7 million vs. €777.4 million as of December 31st, 2019, mainly due to the acquisition of the French distributor Baron Philippe de Rothschild France Distribution S.A.S. and the share buyback.
- Strong financial position: the available liquidity, combined with credit lines and the new debt facility3 amount to more than €1.9 billion.
Milan, May 5th, 2020-The Board of Directors of Davide Campari-Milano S.p.A. (Reuters CPRI.MI-Bloomberg CPR IM) approved the additional financial information at March 31st, 2020.
Q1 RESULTS AND 2020 GUIDANCE
After an extremely strong start in January and February, the first quarter results reflect the initial COVID-19 impact which mostly hit the Italian market starting from March. The results were also impacted by a tough comparison base in a small seasonality period. The Pandemic is currently generating high level of uncertainties given its geographic expansion, the extent of the restrictions on the on-premise channel and the different reopening measures expected to be taken by the various governments, affecting consumer behaviours. Regarding the short-term, the overall impact on the Group’s business performance for the current year remains uncertain and difficult to be assessed at this stage. Looking forward, with most of its key markets being affected by COVID-19, the Group expects its performance to be more impacted in the second quarter and the beginning of the third, the peak season for the high margin and on-premise skewed aperitif business. With the gradual lifting of the restrictive measures across markets, the negative impact is expected to lessen throughout the remainder of year based on the current visibility.
Bob Kunze-Concewitz, Chief Executive Officer: ‘In this period of high uncertainty and difficulty, our key priority remains to ensure the safety of our Camparistas and business partners. Inevitably our business is facing short-term headwinds. As a highly agile organization, we are taking rapid actions to mitigate costs and preserve liquidity whilst remaining focused on our long term strategic agenda. To this extent, we are accelerating programs in digital transformation and e-commerce to further strengthen our digital capabilities across the entire organization. We are continuing to execute our m&a strategy focused on long-term brand building. Last, but quite importantly, our financial profile remains very solid. 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 normalises. As a committed and long-term brand builder, we will remain focused and highly engaged in the on-premise opportunity with our distinctive brand portfolio, firmly convinced that the out of home social experience and conviviality will remain essential to consumers’ lifestyles.’
1 Before operating adjustments of €(5.6) million in Q1 2020 and €(0.8) million in Q1 2019.
2 Before total operating and financial adjustments of €(4.2) million in Q1 2020 (vs. €(0.8) million adjustments in Q1 2019).
3 Refer to the press release published on 14th April 2020, for further details.