Campari starts year with double-digit growth

Italian spirits group Gruppo Campari reported 15% revenue growth in the first quarter of 2017 (Jan – Mar) to €376.6m ($409.8m). The group attributed its good performance to strong organic growth of its global priority and regional priority brands, a positive exchange rate effect and a perimeter effect, driven by the Grand Marnier acquisition in July 2016, which contributed €32.5m to group sales. The gains from the Grand Marnier sales partially offset declines from termination of some distribution agreements and sale of non-core businesses.

Group Pre-tax profit rose 56.7% to €53.6m in the period.

Looking at the group’s sales activities by region, the Americas region, which is the group’s largest market, contributing 46.8% of group sales saw a 30.9% increase in revenue to €176.4m, from €134.8m in the previous year.

The US accounted for 30.1% of the sales increase, driven by strong growth of Wild Turkey bourbon, Aperol, Campari and Espolon. However, the gains were partially offset by SKYY vodka’s sales decline, which is facing strong competition and low demand in the flavoured category.

Southern Europe, Middle East and Africa, which contributes 29% of group sales, saw declines of -1.6% to €109.2m due to a negative perimeter effect. However, there were some bright spots. Global Travel Retail revenue climbed 18.2%, mainly driven by Aperol, GlenGrant, Appleton and Wild Turkey. South Africa also performed strongly in the region as the group transitioned into its own route-to-market. The performance of the group in South Africa offset struggles it is experiencing in Nigeria due to prolonged macroeconomic headwinds.

Sales in North, Central and Eastern Europe, accounting for 17.4% of total group sales rose double-digit by 12.1% to €65.7m, helped by positive exchange rate effect.

In Asia, which accounted for 6.7% of group sales, revenue grew by 9.8% to €25.4m, up from €23.1m in 2016.

Bob Kunze-Concewitz, CEO Gruppo Campari said, “We had a good start to 2017, delivering results in line with expectations in a low seasonality quarter.”

“Looking at the current year, our outlook remains fairly balanced and unchanged,” he added.

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