Release Date: May 08, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Davide Campari-Milano NV (DVDCF, Financial) recorded significant double-digit growth in more than 10 less developed markets globally, showcasing the potential for geographic expansion.
- The company is on track with its cost containment program, expecting benefits to start in the second half of the year.
- Aperol and Espolon showed strong performance in the US, with growth rates of 12% and 14% respectively.
- The company is maintaining a disciplined approach to pricing, which is crucial in the current uncertain market environment.
- Davide Campari-Milano NV (DVDCF) has completed staffing for its House of Brands structure, which is expected to enhance operational efficiency and brand management.
Negative Points
- The company reported a negative 4.2% organic net sales growth in Q1, impacted by Easter timing and logistic delays.
- EBITDA adjusted in value declined by 17.2% organically, with a margin dilution of 310 basis points.
- The macroeconomic volatility and logistic delays have affected ordering patterns, particularly in the US.
- The company faces potential negative impacts from tariffs, estimated at around €25 million on EBIT for 2025.
- The weakening of the US dollar may pose additional negative impacts for the remainder of the year.
Q & A Highlights
Q: Can you explain the situation with shipments to the US and the impact of logistics delays?
A: Simon Hunt, CEO: The logistics challenges were due to several factors, including delays in shipments from France and issues with key ingredients and glass availability. We have largely caught up in April, and we expect to recover fully in Q2. The environment remains uncertain, but we are managing our stock levels carefully.
Q: How do you feel about the European market environment as we enter the peak season for aperitifs?
A: Simon Hunt, CEO: Despite a slow start due to calendar effects, April showed strong performance. There is cautious optimism as consumer trends improve, and we have significant plans for the peak season to ensure strong execution.
Q: Can you update us on the margin outlook and any changes in the drivers since two months ago?
A: Paolo Marchesini, CFO: The margin guidance remains unchanged. We expect positive COGS evolution and minimal pricing contribution. The focus is on cost containment and managing the phasing of AMP and SG&A expenses, with improvements anticipated in the second half of the year.
Q: How is the pricing environment in the US for tequila and whiskey, and are you holding the line on pricing?
A: Simon Hunt, CEO: The environment is competitive, especially in the tequila category. We are maintaining pricing discipline, particularly in the blanco category, to manage tariff impacts. In whiskey, we focus on long-term pricing strategy to protect brand equity.
Q: What are the main priorities for execution in the short term, and what capabilities are needed for long-term strategy?
A: Simon Hunt, CEO: Execution priorities include efficiency in operations, strong commercial execution, and effective marketing. For long-term strategy, we are assessing capabilities needed, focusing on leveraging existing investments in production capacity and IT infrastructure.
Q: Can you clarify the impact of tariffs and the level of mitigation feasible?
A: Simon Hunt, CEO: We assume a 20% tariff on European brands and 10% on Jamaican products. The impact for 2025 is not annualized, and we are exploring mitigation strategies, including pricing adjustments and market share strategies, depending on competitor actions.
Q: How sustainable is the strong growth in Asia, particularly after the summer months in Australia?
A: Simon Hunt, CEO: The growth in Asia is supported by strategic changes in route to market and strong execution in smaller markets. We expect continued positive performance, driven by on-premise focus and brand building efforts.
Q: What is the outlook for the remainder of the year, given the uncertain trading environment?
A: Simon Hunt, CEO: We maintain our full-year guidance, balancing risks and opportunities. The focus is on execution and pricing discipline, with a cautious approach due to the challenging environment.
Q: Can you provide insights into the SG&A savings and their regional impact?
A: Simon Hunt, CEO: SG&A savings are not region-specific but focus on organizational efficiency across all levels. We aim to balance resources globally, with no significant regional shifts anticipated.
Q: How do you view the potential for Espolon RTD in the US market?
A: Simon Hunt, CEO: While Espolon RTD has seen success in Australia, the US RTD market is crowded. We are evaluating the opportunity carefully to ensure any entry is strategic and successful.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
