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Campari warns of ‘temporary headwinds’ in half-year results
Campari Group delivered a solid performance in the first six months of 2024 with organic growth of 3.8% in net sales, accelerating in the second quarter to 6.9% — but warned of future ‘headwinds’.
Growth was driven by continued strength in aperitifs led by Campari and Aperol, especially in the Americas and Germany, while the rest of EMEA was impacted by very poor weather, as well as double digit growth in Espolòn and Grand Marnier in the US.
Net sales were €1.523.4m for the half year, which was up 3.8% organically. Group net profit was at €219.7 million, up 1.3%.
Sales in the Americas, which is 45% of total group sales, were up by 6.8%. The core US market was up by 3.5% with acceleration in the second quarter (7.2%). Growth was driven by Espolòn as well as growth in Aperol and Grand Marnier.
The EMEA region grew by 3.3% but Italy was down 5.2% with pressure on high-margin aperitifs from “very poor weather”. France was also impacted by poor weather as was the UK, which also suffered from a “challenging trading environment” delivering -7.2%.
But other markets in the region, including Spain, Greece and the Netherlands saw 13.4% growth.
Sales in Asia Pacific declined by 10.7% with improving trends in the second quarter. Australia was down by 11.2%, due to challenging macro and competitive environment, but with recovery in underlying trends in the second quarter.
China returned to growth in the second quarter.
Espolòn was up by 22.2% with growth driven by the core US market with growth also accelerating in seeding markets from a small base.
Grand Marnier also had double digit growth of 13.3% led by the US market and the Jamaican rum portfolio grew by 1.9% supported by positive underlying trends in premium rums.
Advertising and promotion expenses were €231.6 million (15.2% of net sales), up 2.7%.
Operating adjustments were negative at €24.4 million, mainly attributable to the costs related to the US$1.2bn Courvoisier deal.
Pre-tax profit-adjusted was €333.3 million, up 2.2% and pre-tax profit was €310.7 million, which was flat compared to the previous year.
Matteo Fantacchiotti, chief executive officer at Campari Group, said there was “palpable excitement” in the organisation around its acquisition of Courvoisier.
He said: “We recorded a solid performance in the first half of the year with acceleration in the second quarter, yet again outperforming the industry. In the remainder of the year, we expect to continue to outperform the industry leveraging our strong brands playing in growing categories in an environment currently showing softer market dynamics and increased price competition in core markets, while the macro remains volatile.
“On a full year basis, our ability to expand gross margin is expected to be impacted by some temporary headwinds (such as poor weather affecting high-margin aperitifs and agave supply contract renewals) guiding both unfavorable sales mix and shifting some of the related expected COGS benefits into next year. However, for the medium-term, we remain confident in the continued growth momentum and our ability to deliver profitable growth with consistent operating margin expansion.”
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