Davide Campari-Milano SpA, the maker of Wild Turkey bourbon, slid the most in three years in Milan trading after reporting slower sales growth than some analysts had estimated because of weakness in Italy.
The shares fell 7.6 percent to 5.31 euros, the biggest drop since November 2008. That gives the company a market value of 3.1 billion euros ($4.2 billion). Revenue excluding the effects of acquisitions and currency shifts rose 7.3 percent in the third quarter, slowing from a 12 percent pace in the first half, the company said today in a statement. Melissa Earlam, an analyst at UBS AG in London, had estimated growth of 12.5 percent.
Sales in the company’s home market of Italy, which represents 32 percent of sales, rose 2.7 percent, weighing on total revenue growth. Campari, based in Milan, said sales improvements were driven by Aperol and its Campari brand in markets including Germany. The company said in August it bought Sagatiba, a Brazilian cachaca brand, as it pushes further into emerging markets, seeking faster sales growth as the European and U.S. economies stagnate.
Campari has “further heightened our disciplined approach to working capital management” in light of the macroeconomic risks, Chief Executive Officer Bob Kunze-Concewitz said in the statement. “For the remainder of the year, we expect our key brand and market combinations to continue performing positively.”
Mario Monti, former European Union competition commissioner, was asked to become Italy’s prime minister yesterday after the European debt crisis led to the unraveling of a coalition led by Silvio Berlusconi. Italy’s 10-year bond yield surged to more than 7 percent last week on concern about public finances.
Campari has withdrawn credit to one wholesaler customer in Italy, Kunze-Concewitz said today on a conference call, but hasn’t seen any “major” effects from the government reshuffle. The CEO said he feels “quite good” about the ability to raise funds for any future acquisitions.
The company will invest to strengthen its distribution, particularly in the “high-potential” Russian market, it said in the statement.
Nine-month net revenue was 889.2 million euros. Earnings before interest and taxes rose almost 13 percent to 206.2 million euros.
So-called organic sales in the U.S., the world’s biggest spirits market, rose 3 percent as consumers bought Skyy vodka infusions and Wild Turkey. Sales advanced 8.4 percent in Brazil on the same basis, helping push growth in the Americas, representing 34 percent of revenue, to 9.6 percent. Sales in Europe excluding Italy gained 17.2 percent as Russian, Austrian and German consumers bought more products.