Global brands boost Gruppo Campari sales

Wild Turkey Bourbon and Appleton Estate rum maker Gruppo Campari has reported “solid” sales in the first nine months of 2016, but profits were knocked by its acquisition of Grand Marnier.

Gruppo Campari’s takeover of Grand Marnier has knocked the group’s YTD profit

The Italian drinks group’s sales grew 3.1% to €1.18 billion (US$1.3bn), however pre-tax profits fell 26.3% to €131.5 million (US$145m). Campari said the decline was “entirely driven” by Grand Marnier transaction costs, restructuring projects and debt refinancing.

Campari reached an agreement to acquire Grand Marnier and its parent company, Société des Produits Marndier Lapostolle – valued at €682.9m – in March this year.

The group immediately acquired 17.19% of the group, plus a further 2.6% from controlling family shareholders, and plans to fully acquire SPML by 2021.

Grand Marnier’s first time consolidation contributed € 43.8m to Campari’s net sales.

The group was hit by a -3.7% foreign exchange impact, but its global and regional brands “outperformed” in key markets such as North America and Western Europe.

The US usurped Italy to become the group’s largest market in the first nine months of this year, accounting for 25.3% of total net sales that were driven by Wild Turkey, Aperol and Campari. However, Brazil registered an overall decline of 11.8% due to “persistent macroeconomic weakness”. Sales in Gruppo Campari’s domestic Italian market remained flat at +0.1%.

In terms of brands, Aperol continued its global growth, reporting a 19.3% sales increase, Skyy Vodka achieved organic growth of 1.4% and Wild Turkey registered gains of 6.6% Meanwhile, Gruppo Campari’s Jamaican rums, including Appleton Estate, J.Wray and Wray & Nephew Overproof, showed a positive organic growth of 5.1%.

‘Our nine months 2016 results reflected the consistent execution of our growth strategy,” said Bob Kunze-Concewitz, CEO of Gruppo Campari. “Looking at the remainder the year, the current outlook remains broadly unchanged. Although not further deteriorating, the macroeconomic environment, particularly the emerging markets, and key currencies are expected to remain volatile.

“At the same time, we remain confident to deliver a positive and profitable performance, driven by the high-margin ‘Global Priorities’, particularly the aperitifs, American whiskies and Jamaican rums, thanks to sustained brand building investments.”

Earlier this year, Kunze-Concewitz told The Spirits Business that Gruppo Campari’s acquisition activity is set to ramp up in 2017.