Campari Group Q3 boosted by global brands

Italian drinks firm Campari Group has reported “very positive” results in the first nine months of 2018, bolstered by the “continued outperformance” of its global and regional priority brands.

Campari “continued its positive momentum” with an increase of 9.7%

The drinks group’s reported sales fell by -2.5% to €1.2 billion (US$1.36bn) due to the “exchange rate and perimeter effects”.

Organic sales grew by 6.2% driven by the strengthened Euro, the sale of non-core businesses (in particular Carolans Irish cream liqueur and Lemonsoda) and the termination of agency brands distribution, partially offset by the Bisquit Cognac acquisition. Gross profit increased by 1% in value to €731.8 million.

The Americas, which represents 43.4% of the total group’s sales in the quarter, posted an overall decrease of -7.2%. The group’s largest market, the US, grew by 4.3%, driven by the double-digit increase of Espolòn, Aperol and Campari, and the “positive trend” of Wild Turkey, the Jamaican rums and GlenGrant.

Sales in Southern Europe, Middle East and Africa fell by 2.9%, while sales in North, Central and Eastern Europe increased by 6.1%.

Sales in Asia Pacific increased by 7.6% and the region’s other markets grew by 24.2%, driven by the “positive performance” of Japan, China and New Zealand.

The group’s global priority brands’ sales grew organically by 10.3%. Aperol increased by 31% driven by its core markets – Italy, Germany and Austria – and “strong double-digit growth” of high potential markets including the US, Russia, the UK, France, Australia, Czech Republic, Spain and global travel retail.

Campari “continued its positive momentum” with an increase of 9.7% organically.

Skyy vodka’s sales fell by 8.1%, attributed to “weakness” in the US market due to the “persistent competitive environment” and the “weakness of the flavoured segment”.

Wild Turkey Bourbon grew by 13.7%, boosted by “solid growth” in the US, while Grand Marnier liqueur increased by 0.7%.

The Jamaican rum range, including Appleton Estate and Wray & Nephew Overproof, increased organically by 5.1%.

Espolòn Tequila was up by 31.5%, benefitting from “strong double-digit growth” in its core US market.

“In the first nine months of 2018 we achieved a very positive net sales organic growth, accelerating in the third quarter, driven by the continued outperformance of the key high margin global and regional priorities in the core developed markets,” said chief executive officer Bob Kunze-Concewitz.

“The favourable sales mix continued to drive the growth of profitability and margin expansion, and helped compensate the expected adverse forex effect as well as the impact from the divestments of non-core businesses.

“Looking at the remainder of the year, our outlook remains broadly unchanged and balanced in terms of risks and opportunities.

“We remain confident in achieving a positive performance across key underlying business indicators in the year.”