Campari withdraws 2020 sales predictions due to coronavirus

Davide Campari-Milano has withdrawn the guidance it issued in mid February about its performance for the present financial year.

The news was released at an extraordinary annual meeting of its shareholders today – the proceedings were conducted electronically to avoid personal contact amid the ravages of the Covid-19 pandemic, which has severely affected Italy.

The producer of the eponymous aperitif and a range of international spirits said that its mid-February prediction was made prior to the spread of the virus, and therefore “did not reflect the impact of COVID-19 and hence cannot be confirmed.”

“At the same time, due to the continuous evolution of the pandemic’s spread in terms of geographical extension and intensity, as well as the high uncertainty regarding its duration, the group believes it is premature at this time to provide reliable estimates on COVID-19’s impact on the group’s financial results for the current year.”

Bob Kunze-Concewitz, the chief executive, said: “At this particularly difficult time, our priority is to ensure the safety of the Camparistas and the continuity of our business. We believe that, despite the negative short-term impacts that we will face, thanks to our agility and ability to adapt to changes, the current situation would be considered temporary and that the medium-long term consumption dynamics will not be affected.

“Looking forward, we will continue to leverage the strength and resilience of our business and brands, ensuring we are strongly positioned and ready to embrace new challenges and accelerate our growth as soon as the consumer demand returns to normal post COVID-19.”

The company was at pains to underline the strength of its balance sheet and the financial resources available to it and confirmed that all its production facilities are operational and complying with health and emergency regulations.

At the meeting shareholders separately approved the group moving its registered office to Amsterdam, where Dutch corporate law will give it extra protection from potential takeovers. This, the group says, is part of its long-term strategy. It would also further cement control of the group by the Garavoglia family.

However, the switch cannot happen until after certain financial considerations have been met, which are subject to a further shareholders’ vote to be held by the end of June.

When the plan was launched, Campari’s shares stood above €9 and shareholders were to be offered €8.376 if they wished to sell out. That was subject to a cap of €150m in total.

But as global markets slumped Campari’s shares fell and today stand at €6.9, so sellers would lock in a significant gain.
So the resolution passed today limits the total number of shares that can be redeemed to three million, the cash value of which would be far below the €150m cap.

If the board are successful in dissuading sufficient potential sellers then the transfer to Amsterdam will take place after a confirming vote in June. If too many want to take the money, the deal will be off and no redemptions will be made. The move to Amsterdam will then be in abeyance.

The company confirmed, however, that its separate €350m share buyback scheme would continue as planned.

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