Campari half-year results boosted by global priorities, positive exchange rate

Gruppo Campari, the Italian spirits group hailed its first-half results as sales grew 13.5% to €844.7m, helped by strong growth of high-margin global priorities and regional priority brands.

The maker of SKYY vodka and Wild Turkey bourbon said that it also benefitted from a positive exchange rate effect of 1.8% as many currencies it trades in increased in valuation. The company adds that the consolidation of the Grand Marnier acquisition in July 2016 helped boost sales as well as the termination of some distribution agreements and sale of non-core businesses.

The group said it sold the Grand Marnier Paris headquarters building in July for €35.3 million.

Group net profit for the first-half surged 61.7% to €108.6m.

By region, the Americas which are the group’s largest market with 44.5% of group sales posted a 26.1% growth, led by the U.S. The firm notes that its strong performance in the U.S. was driven by its Wild Turkey bourbon portfolio, Aperol and Campari, while Espolon continues its strong double-digit growth momentum. However, the company said that SKYY vodka continues to struggle in the U.S. due to strong competition and weakness in flavoured vodka category.

Elsewhere in the Americas, sales were positive in Jamaica, buoyed by good results in the rum portfolio and a strong performance by Campari. Brazil saw a 29% organic growth, though favoured by an easy comparison base of -26.5% in the same period in the previous year. While the country is still in the grips of a recession, the group’s Brazilian brands as well as SKYY vodka, Aperol, and Campari performed positively. Sales in Mexico grew double-digit, thanks to SKYY ready-to-drink, the Jamaican rums, Aperol and Campari.

Southern Europe, Middle East and Africa (SEMA), the second biggest market for the spirits maker with 30.6% of group sales grew 2.8% organic and 3.8% in the second quarter. There was a positive performance in the Italian market with Aperol and Campari. The region’s other markets such as Spain and South Africa performed equally well, helping offset declines in Nigeria, which is still being impacted by macroeconomic factors.

Sales in North, Central and Eastern Europe, which accounts for 18.6% of group sales, climbed 12.6%, driven by exchange rate effect and a perimeter effect. While Russia registered a positive growth, the group says it remains cautious of the competitive environment and the local macro environment.

In Asia Pacific, the group saw an 11% growth helped by a positive exchange rate effect of 5.7% and a perimeter effect of 2.6%. China and Japan both recorded positive growths, with Japan benefitting from a recovery against the previous year’s delays. Japan recorded saw strong sales of Wild Turkey bourbon, Campari, SKYY vodka, Aperol and Cinzano Sparkling.

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