Gruppo Campari posted a 5.2% increase in its net sales in 2017 to €1.82 billion, thanks to the strong performance of its Americas division and boosted sales of Wild Turkey whiskey and Espolòn tequila.
Net profit surged by 114.3% to €356.4 million in a year in which the company bought Bisquit Cognac for €52.5 million and offloaded its Carolans and Irish Mist brands for $165 million.
In its Americas division – which makes up 43.7% of its total business – net sales rose by 9.3%. In the US, Aperol and Campari posted double-digit growth. Positive results were mitigated by the negative performance of Skyy vodka, which experienced difficult trading in the third quarter as hurricanes affected two key states for the brand.
Sales in the company’s North, Central and Eastern Europe business rose by 5%, with gin brand Bulldog – which Campari acquired early last year for $58.4 million – helping its UK market post a 13.8% increase in sales.
However, Germany registered a 2.6% decline for the year, impacted by adverse weather conditions in the summer as well as the poor performance of Cinzano sparkling wines.
Gruppo Campari CEO Bob Kunze-Concewitz said: “We achieved a strong performance across the key indicators in full year 2017, consistently delivering on strategy thanks to our focus and disciplined execution. In particular, over the past three years we delivered positive margin momentum, expanding our gross margin by nearly +600 bps on sales, on a cumulative basis, the combined result of the healthy organic expansion of +270 bps driven by sales mix and accretive M&A initiatives.
Gruppo Campari CEO Bob Kunze-Concewitz
“This achievement enabled us to fuel accelerated investments in brand building and distribution enhancing initiatives for future growth and, at the same time, expand our EBIT margin ahead of sales growth by +190 bps in the last three years on a cumulative basis, of which +80 bps in organic terms.
“Looking ahead into 2018, our outlook remains fairly balanced in a still uncertain macroeconomic scenario for some emerging markets. We remain confident in achieving a positive performance across the key indicators into 2018, driven by the continued outperformance of the high-margin global and regional priorities in the key developed markets.
“Importantly, in line with our ongoing focus on the company’s core business, we have launched a series of projects aimed at improving the efficiency of our operations in some key markets.”
Campari has also announced that it will relocate the headquarters of its US subsidiary Campari America from San Francisco to New York City in the fall of 2018. Located in midtown Manhattan, the new offices will house the US business operations and the North America regional executives and support teams.
This move will put Campari America, Campari Group’s number-one sales generating area, closer to the group’s worldwide headquarters in Milan, the production facilities in Kentucky, the group’s operations in Jamaica, Mexico and Canada, as well as to the group’s key distributor partners in the US.
The company has also decided to restructure its local operations in Brazil via the closing of one facility during July 2018, in order to achieve higher operational efficiency in this market.
It said the operational improvement will ensure the long-term sustainability of the group’s business in Brazil.
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