Davide Campari-Milano (CPR) Q1 2025 earnings summary

Executive summary

• Q1 2025 saw organic net sales decline by 4.2% to €665.6 million, mainly due to Easter timing, logistics delays, and macroeconomic volatility, but April showed a strong bounce back in impacted markets; perimeter growth from acquisitions offset some declines.

• Sell-out outperformed in most geographies, with double-digit growth in over 10 less developed markets and strong brand resilience, especially in April.

• Strategic focus remains on long-term brand building, cost containment, portfolio streamlining, and geographic expansion, with no acquisitions planned and ongoing CapEx for production expansion.

• The new operating model based on four Houses of Brands was implemented to drive efficiency and focus on core brands.

• Prudent approach maintained amid tariff threats and economic uncertainty, with focus on deleverage and brand expansion.

Financial highlights

• Net sales grew 0.3% year-over-year to €665.6 million, with organic sales down 4.2%, perimeter impact +4.3%, and FX +0.2%.

• Adjusted EBITDA was €173.7 million (26.1% margin), down 4.1% year-over-year; adjusted EBIT was €136.1 million (20.4% margin), down 10.2% reported and 17.2% organically.

• Group profit before tax-adjusted was €114 million, down 22.5% year-over-year.

• Net financial debt at €2,460 million, leverage ratio at 3.4x net debt/EBITDA-adjusted, up from 3.2x at year-end 2024.

• Gross margin was flat at 58.8% of net sales, supported by favorable COGS but offset by negative mix.

Outlook and guidance

• Full-year 2025 guidance confirmed, but visibility remains low due to macroeconomic uncertainty and potential tariff impacts.

• Negative EBIT impact from tariffs estimated at €25 million for 2025 (not annualized), with mitigation actions under review and not included in guidance.

• Medium/long-term outlook targets mid- to high-single-digit organic net sales growth and EBIT margin accretion by 2027.

• Cost containment program on track, with benefits expected from H2; SG&A to be reduced by 50bps in 2024 and 200bps by 2027.

• A&P as a percentage of net sales expected at 17%-17.5% for the full year.