Campari hails ‘solid’ H1 growth

Italian drinks firm Campari Group saw organic sales increase by 5.4% in the first half of 2018, with the US, western Europe and Australian markets “outperforming”.

Campari Group’s 2018 first half was boosted by Aperol, Campari, Wild Turkey and Grand Marnier

Sales reached €778.2 million (US$909.4m) and group net profit increased by +35.5% to €147.2m (US$172m). Uplift was driven by Aperol, Campari, Wild Turkey, Grand Marnier as well as Espolòn Tequila. All regions contributed to organic growth.

The company has a net financial debt of €946.8m as of 30 June 2018, due to the “positive free cash flow generation” and following the sale of the Lemonsoda business, net of the acquisition of Bisquit Cognac, the dividend payment and the purchase of own shares.

In terms of brands, Aperol grew organically by +8.7%, boosted by “continued sustained growth” in the brand’s core markets Italy, Germany, Austria and Switzerland.

Campari “continued its positive momentum”, increasing by +8% organically. The brand witnessed “double-digit growth” in the UK and its core Italian market.

Skyy vodka registered a double-digit decline of -11.1%, due to the “persistent competitive environment” of the US and the “weakness” of the flavoured segment.

Grand Marnier liqueur grew by +13.2%, while the Wild Turkey Bourbon portfolio grew by +9.9%, bolstered by its key US and Australian markets.

The Jamaican rum range – which includes Appleton Estate and Wray & Nephew Overproof – grew by +4.2%.

Regional priority brands increased by +4.7% organically, with Epsolòn Tequila up by +34.3%, boosted by double-digit growth in the US.

British gin brand Bulldog grew by +6.4%, and GlenGrant was “broadly flat” at -0.8%.

Performance by region

Looking across regions, the Americas posted organic growth of +4.6% with an overall change of -10.2%.

The US grew by +5.9% organically, driven by the “strong double-digit growth” of Espolòn, Aperol and Campari, and the “sustained growth” of Wild Turkey and the Jamaican rum portfolio.

Sales in southern Europe, Middle East and Africa grew organically by +4%, while the region’s ‘other markets’ showed a “solid growth” of +7.6%.

In north, central and eastern Europe, sales increased overall by +3% with an organic change of +6.7%. The UK grew by +17% and sales in Russia declined organically by -25.2%, impacted by price increase negotiations and the “persisting market volatility”.

Sales in Asia Pacific increased by +4.6%, with Australia up by +10.7% as the firm’s brands “consistently outperformed the spirits market in all key categories”.

‘Solid organic growth’

“In the first half 2018 we achieved a solid organic growth, reflecting an accelerated top-line growth in the second quarter, broadly recovering the first quarter phasing issues, as well as a normalisation of trends across profit indicators,” said Bob Kunze-Concewitz, chief executive officer.

“The favourable sales mix continued to benefit from the outperformance of the key high-margin combinations of global and regional brands, driving organic growth across profit indicators and margin expansion.

“Looking into the second half of the year, our outlook remains broadly balanced in terms of risks and opportunities. We remain confident in achieving a positive performance across key underlying business indicators, driven by the continued positive development of the key high-margin combinations by brand and market.”