Milan (May 4, 2020): Campari Group has reported sales of €534.8m, up +34.4% on a reported basis (+29.4% on an organic basis) compared with the first quarter 2021 (+43.7% vs. the first quarter 2019). Earnings (EBITDA-adjusted) amounted to €134.7m, up +46.5% on an organic basis vs. the first quarter 2021 (+52.5% vs. the first quarter 2019).
CEO Bob Kunze-Concewitz said: ‘Overall we had a very solid start to the year with continuing underlying momentum and strong on-premise recovery in Europe. This positive performance was amplified also by phasing and easy comparison bases in a low seasonality quarter. Looking at the remainder of 2022, we remain confident about the continued strong business momentum across our key brands and markets. Meanwhile, the overall performance will reflect the effects of a gradual normalization of the shipments due to phasing, different comparison bases throughout the rest of the year and the conflict in Ukraine. Concomitantly, volatility and uncertainty remain due to the ongoing pandemic and geopolitical tensions.”
Campari confirmed its guidance of flat organic EBIT margin in 2022 as it leverages adequate price increases and positive mix to mitigate the expected intensification of the inflationary pressure on input costs.
Sales by region
Sales in the Americas were up organically by +14.9%. The Group’s largest market, the US, grew by +6.6% despite a tough comparison base, thanks to resilient home consumption and renewed strength in the on-premise. The performance was driven particularly by Espolòn, Wild Turkey, Aperol, Campari and Cabo Wabo. Canada grew by +9.4%.
Jamaica registered strong growth (+20.1%). Campari’s Jamaican rum portfolio was up 6.5% with Appleton doing very well overall, up 22.1% with premium rums doing well in key markets, and Appleton Estate outperforming its category.
Sales in Southern Europe, Middle East and Africa grew by +61.2%. The region’s largest market, Italy, was up +70.2%, mainly driven by strong recovery in the on-premise channel, magnified by phasing and an easy comparison base. The entire aperitif portfolio registered strong growth in the country: Aperol (+101.4%), Campari (+118.7%), Campari Soda (+24.8%) and Crodino (+75.6%). France grew +38.8%, mainly driven by Aperol, Riccadonna and Campari. S
The UK continues to perform strongly double digit, up 26.6%. Again, key drivers here were Aperol as well as Magnum Tonic which is quite important in that geography. The rest of North, Central and Eastern Europe grew by 29.4% with very nice performances across Austria, Switzerland and Belgium, largely due to the [indiscernible]. In Russia, on the other hand, starting from the last month of the quarter, the business has been reduced to minimum necessary because of the war.
GTR was up +50.2% thanks to the continued lifting of travel restrictions and traffic in the airports resumed. North, Central and Eastern Europe (17% of total Group sales) grew organically by +33.2%. Germany registered very strong growth of +41.5% in a low seasonality quarter, benefiting also from favourable weather conditions.
The performance was largely driven by growth in the aperitifs: Aperol, the newly introduced Aperol Spritz ready-to-enjoy, Campari, as well as Crodino, albeit off a small base.
Sales in Asia Pacific (grew organically by +18.4%. Australia grew +5.4% despite a tough comparison base (+22.6% in the first quarter of 2021) and ocean freight constraints. The performance was largely driven by Wild Turkey bourbon, Wild Turkey RTD, Espolòn and Campari. China was broadly flat due to snap lockdowns in relation to the zero-Covid policy
“You can see the very strong momentum across all regions and brand clusters. Obviously, the on-premise skewed European markets benefited the most from the reopening,” Kunze-Concewitz noted in a presentation to analysts.
Commenting on the decision to take price increases in response to inflationary pressures, Kunze-Concewitz said: “In Europe currently it varies from brand to brand. Obviously, we took higher pricing increases on the aged distilled spirits, and depending on the brand it’s mid-single digit in upwards. In the case of Campari, before the inflationary pressures came, we took a strategic decision to do a repositioning of the Campari price in Continental Europe, so depending on the market Campari’s prices increase between 10% and 20%. If we move on to the U.S., we’re probably more around mid-single digit in highly inflationary markets. Its very tailored to the market and the type of brand.”
In terms of global inventory levels, Kunze-Concewitz explained that they are currently very low. “We don’t have high inventories anywhere in the world when you’re looking at our distributors and the trade.”
He also believes there is an opportunity to expand its portfolio beyond new usage occasions. “Now clearly, the pandemic and the first lockdowns have been beneficial to us, because it really increased the penetration of our key cocktails at home. Now making a Negroni is no longer an insurmountable challenge. You have many great Negroni makers, the same of our sprits and so on or even the Grand Margarita. So that has really driven the penetration of our brands in-house.
“And at the same time, regional event conviviality, which is still continuing across all markets where the on-premise is open, is really giving us a second win. So, we see those two things continuing, particularly when it comes to our Campari Aperol, we’ve seen the Campari Sprtiz and the Aperol Sprtiz go also into the meal occasion, branch launch, informal dinner. So that’s in that we have more traction overall across the portfolio. We feel good about it. We’re not – given the volatility, both from an economic, political and so on, we don’t feel like calling out a different top line guidance. But clearly, as you can see from the three-year compound annual growth rates across brands and markets, our performance has accelerated.”
