Campari full year sales rise 5.2% to €1.82 billion

Campari has reported strong growth in its full year 2017 results, with sales rising by 5.2% to €1.82 billion, with positive growth across all key markets, driven by the US and brands including Wild Turkey and Cabo Wabo Tequila.

Overall, net sales amounted to €1.82 billion, while group net profit amounted to €356.4 million, up 114% on the previous year.

The group’s global priority brands, which include Aperol, SKYY, Campari, Wild Turkey, Grand Marnier and the Jamaican rums, reported an organic increase of 7.7%, while its regional priority brands, driven by Espolòn, Bulldog and GlenGrant, achieved organic growth of +13.0%.

REGIONAL GROWTH

The Americas accounted for 43% of sales at €794m, which also represented the biggest region of growth for the brand – jumping 9.3% compared with the same period last year.

Sales in this market were driven by the Wild Turkey portfolio, Espolòn and Cabo Wabo Tequilas, the Jamaican rum and Grand Marnier, as well as the continued double-digit growth in Aperol and Campari.

Nevertheless, these positive gains were tempered by the negative performance of SKYY vodka, the group stated, which it said had suffered due to “strong competitive pressure, reduced innovation in infusions and difficult trading in third quarter as hurricanes affected two key states for the brand.”

Sales in Europe increase by 5% to €361m, representing 20% of sales. While Germany saw a decline in sales of 2.6%, impacted by “adverse weather conditions in the summer”, this was offset by the continued growth of Aperol (+11.5%), Frangelico, Bulldog, SKYY and Wild Turkey bourbon.

The Asia Pacific and the SEMEA (Southern Europe, Middle East and Africa) markets reported a slight increase of 0.8% and 0.7% respectively, accounting for 7% and 30% of total sales.

Bob Kunze-Concewitz, chief executive officer, said: “We achieved a strong performance across the key indicators in full year 2017, consistently delivering on strategy thanks to our focus and disciplined execution. In particular, over the past three years we delivered positive margin momentum, expanding our gross margin by nearly +600 bps on sales, on a cumulative basis, the combined result of the healthy organic expansion of +270 bps driven by sales mix and accretive m&a initiatives.

“This achievement enabled us to fuel accelerated investments in brand building and distribution enhancing initiatives for future growth and, at the same time, expand our EBIT margin ahead of sales growth by +190 bps in the last three years on a cumulative basis, of which +80 bps in organic terms.”

Announcing its full year results, the group said it would be proposing a full year dividend increase of +11.1% to €0.05 per share,

LOOKING AHEAD

One of the producer’s biggest strategies looking ahead will be the relocation of its Campari America headquarters from San Francisco to New York later this year.

“This move will put Campari America, Campari Group’s number-one sales generating area, closer to the Group’s worldwide headquarters in Milan, the production facilities in Kentucky, the Group’s operations in Jamaica, Mexico and Canada, as well as to the Group’s key distributor partners in the US,” the group explained.

It is also working to restructure its manufacturing facilities in Brazil this summer, in order to achieve “higher operational efficiency in this market” and to ensure the “long-term sustainability of the group’s operations in Brazil”.

Looking ahead, Kunze-Concewitz added: “We remain confident in achieving a positive performance across the key indicators into 2018, driven by the continued outperformance of the high-margin global and regional priorities in the key developed markets.

“Importantly, in line with our ongoing focus on the company’s core business, we have launched a series of projects aimed at improving the efficiency of our operations in some key markets, among which the relocation of our US head office from San Francisco to New York City, and the optimization of manufacturing operations in Brazil.”