US buoys Campari sales despite turbulent Eurozone

The strength of the US spirits market and new sales platforms in emerging markets has helped Gruppo Campari achieve strong sales growth in 2012, despite turbulent conditions in the Eurozone.

Sales of Skyy in the US and new markets have boosted overall sales for Gruppo Campari

The Milan-based drinks group reported overall net sales of €1.34bn in the 2012 calendar year, an increase of 5.2% on the previous year.

A 3.5% increase in advertising spend, coupled with the €317.9m acquisition of Lascelles deMercado, which completed on 10 December 2012, put the group’s net profit at €156m, 6.9% down from the previous year.

Sales in the Americas – Campari’s largest region – posted an overall growth of 8.8%, driven by strong momentum from Wild Turkey Bourbon, Skyy Vodka – and its Infusions range – Carolans Irish cream liqueur, Tequila brands Espolon and Cabo Wabo, and Campari. However Brazil [eroted a negative performance of -7.9%, impacted by a negative trend in local brands.

Despite a 2.9% fall in sales in Italy, Gruppo Campari believes its Campari and Aperol brands delivered a strong performance (-0.8% and -1.1% respectively), after record sales in 2011, claiming the results prove the “resiliency of the long aperitifs business which outperformed all other categories”.

Sales in the rest of Europe (up 5.3%) were buoyed by a good performance from Russia (up 61%), despite negative sales of -9.1% in Germany.

Bob Kunze-Concewitz, CEO of Gruppo Campari, said the 2012 results were “overall satisfactory”, considering the group’s aim to improve its brand and market mix.

“Regarding the existing business in 2012, adverse market conditions in the Group’s traditional markets, particularly Italy, Brazil, Germany, affected our aperitifs and still wine portfolio but were compensated by strong growth in newly established sales platforms in Australia, Argentina and Russia in combination with the continued strong performance of the overall US business. Moreover, we benefitted from healthy cash flow generation thanks to good working capital management.

Kunze-Concewitz added that he expected the year ahead to be as challenging as 2012, although net sales of the Lascelles deMercado portfolio – which includes Appleton Estate and Coruba rum – will have a significantly positive effect.

“Looking forward, we expect 2013 to be another challenging year due to heightened macroeconomic difficulties in Eurozone markets. However, continued positive momentum in the US and the Pacific, coupled with improvements in Latin America, stronger growth in Eastern Europe, particularly in Russia, as well as a strong innovation pipeline and heightened brand building in our core categories will help compensate European weakness.

“Moreover, we expect to further strengthen our brand portfolio and route to market in the Americas and the Pacific thanks to our transformational acquisition of Lascelles deMercado. Net in net, looking forward we are well equipped to tackle the awaiting challenges.”