Campari Group full-year profits fall 24%By Owen Bellwood
Italy’s Campari Group saw profits fall by almost a quarter in 2020 as the Covid-19 pandemic took its toll on sales.
During the 12 months to 31 December 2020, Aperol owner Campari Group reported sales of €1.77 billion (US$2.14bn), a 4.1% organic drop on 2019 levels. The group’s net profit for the period fell by 24.4% to €202.1 million (US$243.8m).
Campari said growth in the off-premise in Canada, Australia and Northern Europe ‘helped mitigate weakness in on-premise-led markets’ such as Italy. The Group’s estimated split by channel based on pre-Covid-19 net sales was 40% on-trade and 60% off-trade.
Sales were also hit by the closure of the global travel retail (GTR) channel.
Across its global markets, Campari reported a 1.8% drop in the Americas, which accounts for 43.7% of its total sales.
The US saw shipments rise 3.4%, but this was offset by declines in Jamaica, South America and Brazil due to on-premise closures and a drop in tourism.
Sales in Southern Europe, the Middle East and Africa declined 18.6% as a result of on-trade closures and a 68.9% decline in GTR. Reduced sales in Italy, Spain and South Africa also offset double-digit growth in France.
In North, Central and Eastern Europe, sales grew organically by 6.8%. Germany, the UK and Russia all registered resilient growth to rise by 8.6%, 7.4% and 10.7% respectively.
In the UK, e-commerce sales increased by 90% and now account for 10% of Campari’s sales in the market.
Sales in Asia Pacific grew 4.6% and were boosted by ‘strong growth overall’ in Australia. However, sales in China declined after a weak fourth quarter, and New Zealand and Japan were also hit by the impact of route-to-market transitions.
‘Strong business resilience’
Campari Group’s flagship Aperol apéritif brand was ‘flattish in 2020’, while the namesake Campari brand declined 4.5% due to the impact of on-trade-focused markets such as Italy and Jamaica.
Bourbon brand Wild Turkey grew mid-single digits, driven by Australia and the US. However, vodka brand Skyy declined by 16.2% as a result of ‘destocking ahead of a complete brand relaunch’.
The group’s Jamaican rum sales rose 5.2%, driven by the US and Canada, and Espolòn Tequila grew by 29.9%.
Bob Kunze-Concewitz, chief executive officer of Campari Group, said: “Our overall performance in 2020 showed strong business resilience and brand momentum in key off-premise brand-market combinations, as supported by double-digit sell-out trends.
“Looking at 2021, although our brands continue to be very healthy with strong consumer pull, our outlook remains cautious mainly due to the uncertain timing related to the on-going restrictions and the vaccine roll-out affecting the on-premise channel across all geographies and global travel retail.
“Meanwhile, we will continue to leverage the digital and on-line investments, along with a dynamic omni-channel approach, to rapidly adapt to the ‘new normal’ environment, particularly with regards to e-commerce.
“We expect the home consumption to remain sustained, particularly in the key off-premise markets, including the United States, where, with destocking activities completed, the shipments are expected to progressively align with consumption trends.
“In the long run, as the out-of-home social experience and conviviality will remain essential to consumers’ lifestyles, thanks to our strong brands’ health we remain confident of a favourable development of our business.”