Currency weaknesses take shine off Gruppo Campari’s first quarter 2016 revenue

Gruppo Campari, the Italian spirits maker, which operates in Nigeria through Brian Munro Limited, reported flat sales of €327.4m in the first quarter of 2016, although, excluding the effects of currency movements, organic growth would have been 7.2%

The company behind such brands as Campari, Aperol, Skyy Vodka, among others, said that sales were held back due to a weakening of several key currencies including the Mexican peso, Brazilian real, Argentine pesos and the Russian rouble. It added that losses at its non-core Jamaican sugar business contributed to the company’s woes.

The group’s pre-tax profit stood at slightly above €34m, a loss of 4.3%, while pre-tax profit adjusted for one-offs came in at €40.2m

Looking at sales by region, the Americas which contributed 41.2% of group sales in the first quarter saw sales decline 6.3%, blamed on exchange rate impact and termination of distribution agreements and sale of non-core businesses in Jamaica.

Sales in Southern Europe, Middle East and Africa, which brought in 33.9% of group sales for the quarter, saw an overall growth of 3.9%. The region was led by a 2.4% organic growth in the Italian market which contributed 26.1% of the group sales and 77.1% of the region sales. The region also benefited from an early Easter which magnified the overall positive consumption trend. There were also strong performances in France and South Africa, which partially help offset weaknesses in Nigeria (Campari), which has been undergoing a prolonged socio-economic headwinds, and the temporary slowdown of Global Retail Travel. The region’s other markets (6.7% of Group net sales and 37.7% of the region) registered an overall positive organic growth of 14.6%, mainly driven by the UK.

In North, Central and Eastern Europe, which contributes 17.9% to the group, sales grew 9.8%.

Sales in the Asia Pacific region declined 1.1% as China posted negative growth for the quarter due to a general economic slowdown.

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