By Manuela Mesco and Christopher Bjork
The mixed economic picture across Europe was reflected in
sharply different moods among some of the continent's top
executives.
In Italy, which posted a surprise contraction in the first
quarter, signs of decline caused by the continent's economic crisis
and its lingering repercussions are still evident. Italian cafes
and restaurants are still struggling and many are continuing to
close down as Italians forgo eating out. Matteo Lunelli, chairman
of Italian wine company Ferrari, said that the number of his
customers--mainly cafes and restaurants--who fail to pay for their
orders has increased in the past 18 months.
"It will take a long time before we see a real recovery," said
Andrea Illy, chairman and chief executive of coffee maker Illy
Caffe. "I'm really skeptical on how and if we can grow, and I hear
the same feelings among entrepreneurs and consumers in Italy. We
can have a growth opportunity in the short term...but then we need
some reforms, which I'm not seeing around right now."
Still, some senior executives are spotting signs of economic
recovery, even in Italy. Drinks group Davide Campari-Milano SpA's
Italian revenue grew for the third quarter in a row, climbing 5% in
the first quarter of the year compared with a year earlier. Part of
the reason is a more stable political situation in Italy and across
Europe, following years of uncertainty as governments struggled
with the economic crisis and lingering aftermath, said Bob
Kunze-Concewitz, Campari's chief executive.
"Politics offers positive messages," he said. "And this is
supporting Italian consumers' confidence. We see this
everywhere."
Many companies have also clawed out new markets after struggling
for years with flat or shrinking business in Europe. "We hit the
bottom" in Europe, said Mr. Illy. "So everyone is looking for
alternative growth opportunities." Mr. Illy said that his company,
which makes around 40% of its revenue in Italy, has boosted exports
outside Europe this year.
In Spain, which saw a modest pickup in growth in the first
quarter, television broadcasters are starting to see a pickup in
advertising--another sign of growing confidence across European
corporate boardrooms. Massimo Musolino, general manager of Mediaset
Espana Comunicación SA, said that after more than two years of
declines in the advertising market, the country's largest
broadcaster has seen a turnaround taking shape in the past two
quarters.
"We expect a recovery in private consumption in coming months,"
Mr. Musolino said on a conference call last week. "This doesn't
mean that Spain has reversed to precrisis levels, but it suggests
that the worst is over and we are now on the road to recovery," he
said.
Write to Manuela Mesco at manuela.mesco@wsj.com and Christopher
Bjork at christopher.bjork@wsj.com