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, expected to release benefits starting in H2 2025, which should improve operating leverage and margin profile.
- Aperol and Espolon showed strong performance in the US, with growth rates of 12% and 14% respectively, indicating robust brand health.
- The company reported a solid performance in APAC with 11% growth, driven by strong execution in Australia and positive trends in China and South Korea.
- Davide Campari-Milano NV (DVDCF) is maintaining a disciplined approach to pricing, which is crucial in a volatile market environment, ensuring long-term brand equity protection.
Negative Points
- The company experienced a negative 4.2% organic net sales growth in Q1 2025, primarily due to Easter timing impacts and logistic delays.
- Macroeconomic volatility and logistic challenges affected ordering patterns and shipments, particularly in the US, impacting overall performance.
- The EBITDA adjusted in value declined by 17.2% organically, with a margin dilution of 310 basis points, indicating pressure on profitability.
- The company faces potential negative impacts from tariffs, estimated at around €25 million on EBIT for 2025, which could affect financial performance.
- The weakening of the US dollar poses additional potential negative impacts for the remainder of the year, adding to the financial uncertainties.
Q & A Highlights
Q: Can you explain the situation of shipments to the US and the logistics delays you mentioned? Will shipments catch up in Q2?
A: The logistics challenges were due to several factors, including delays in shipments from France and issues with key ingredients and glass availability. We have seen a strong April, compensating for the weaker shipment pattern. We are holding stock levels and monitoring the situation closely. The trade remains cautious, but we are confident in our plans for the market.
Q: How do you feel about the environment in Europe, especially with the peak season for Aperitifs approaching?
A: Despite a slow start due to calendar effects, April was strong. We see positive trends in Italy and other markets, with consumers returning to the category. We have significant plans for the peak season and are optimistic about execution.
Q: Can you update us on the drivers of the margin outlook? Has anything changed in terms of the moving parts?
A: The margin guidance remains unchanged. We expect positive COGS evolution, with minimal pricing contribution this year. AMP will step up, funded by a 50 basis point reduction in SG&A as a percentage of revenues. The first half will see negative impacts, but recovery is expected in the second half.
Q: Can you discuss the pricing environment in the US, particularly for tequila and whiskey?
A: The environment is competitive, especially in the blanco tequila category. We are holding pricing to see how tariffs impact retail pricing. In Reposado, we are seeing growth and do not feel the need to compete on price. For US whiskey, we are maintaining pricing discipline to protect brand equity.
Q: What are the main priorities in the short term for execution, and what capabilities are needed for the business in the longer term?
A: The focus is on efficient operations, commercial execution, and marketing to create consumer desire. Strategically, we are assessing capabilities needed for future growth, with a strong position in production capacity and IT infrastructure already in place.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
