Gruppo Campari hails double-digit Q1 growth

Italian drinks firm Gruppo Campari saw “continuous outperformance” of priority brands and key markets in the first quarter of 2017, when total sales increased 15%.

Gruppo Campari has reported a “good start to 2017”

Total group sales reached €376.6 million (US$409.8m) for the period ending 31 March 2017, up 15% on the same period the previous year. Results were also driven by the recent acquisition of Grand Marnier, which contributed €32.5m (US$35.3m) to net sales

Geographically, the Americas posted 30.9% growth, with the US – Gruppo Campari’s largest market – accounting for 30.1% of total group sales, driven by Wild Turkey Bourbon, Aperol and Campari.

The results were “partially offset” by sales of vodka brand Skyy, which continues to be affected by a “very competitive environment” as well as weakness in the flavoured category.

Sales in North, Central and Eastern Europe and Asia Pacific increased by 12.1% and 9.8% respectively, and Global Travel Retail net sales were up by 18.2%, driven by Aperol, Glen Grant, Appleton and Wild Turkey.

“We had a good start to 2017, delivering results in line with expectations in a low seasonality quarter,” said Bob Kunze-Concewitz, chief executive officer. “We achieved sustained overall growth in both organic and reported terms, across all performance indicators, thanks to a continuous improvement of our sales mix by brand and region.”

“Looking at the current year, our outlook remains fairly balanced and unchanged. Macro and political environments remain uncertain in most developed markets whilst challenges in emerging market economies will persist. However, we remain confident in delivering a positive performance for the full year on both the top and bottom line.”

Aperol “continued to outperform” in Q1 2017, up 17.7% driven by “sustained growth” in the brand’s core markets of Italy, Germany, Austria and double-digit growth in the US.

Campari “continued its positive momentum”, driven by “very good” performance in the US, Germany, France, Austria, Brazil and Jamaica, only partially offset by shipment weakness in Italy and Argentina.

While Skyy vodka registered a negative performance in its core US market, the brand delivered “very good results” in South Africa, Brazil, Canada, Australia and China.

Wild Turkey saw “strong results” in its core US market, driven by the restocking of product after route-to-market changes with Gruppo Campari’s distribution network, and Japan.

Appleton Estate, J.Wray and Wray & Nephew Overproof rums witnessed “outstanding performances” across Jamaica, the US and the UK.

Kunze-Concewitz added: “The continuous outperformance of the high-margin premium portfolio in key developed markets, which leverages our strengthened distribution networks and brand building investments, will continue generating a favourable sales mix and consequent gross margin expansion and help compensate some input costs inflation.

“The evolution in operating margins during the year will reflect the expected phasing relating to brand building and route-to-market investments in the first part of the year, as well as the comparison base in the previous year.

“Moreover, business will benefit from the full year consolidation of Grand Marnier, positively leveraging the enhanced distribution capabilities in the US and the brand strategy deployment, as well as the disposals of various non-core, low-margin businesses.”

Gruppo Campari saw its full-year sales grow 4.2% in 2016, bolstered by strong performances from its core portfolio of global and regional priority brands.

In February this year, the group agreed to acquire Bulldog Gin for US$58.4 million after distributing the brand for a number of years.