Italian drinks firm Gruppo Campari has announced that its total sales for the first half of 2017 have increased from those in the same period 12 months ago.
Total sales for the company reached €844.7 million, an increase of 13.5% from last year’s total of €743.9 million, with organic sales growth standing at 6.8%, which the company says is driven by the strong organic growth of high-margin global priorities including Campari, Skyy Vodka and Wild Turkey which increased by 9.2% and regional priorities including Cynar, Averna and Glen Grant Scotch which saw an increase of 11.5%.
The company also benefited from a positive exchange rate effect of 1.8% as many currencies including the US dollar, Russian rouble and the Australian dollar increased in valuation compared to the year before.
Gruppo Campari saw its largest market, the US, account for 27.6% of its total sales with overall growth of 26.1%, which is up 2.8% from the same period last year.
Campari chief executive officer Bob Kunze-Concewitz said: “We delivered very good results in the first half of 2017, delivering sustained growth, both in organic and reported terms, across all performance indicators. The solid organic growth was achieved after an acceleration in the second quarter of both sales and profitability. The sustained gross margin expansion, which benefitted from the continuous improvement of our sales mix by brand and region and also from a gradual recovery in the sugar business, helped contain the adverse phasing of A&P investments, skewed into the first half of this year.
“This effect, combined with investments in enhanced distribution capabilities, lead to the expected margin dilution in operating margin in the first half. Looking into the second half of the year, our outlook remains fairly balanced and unchanged. Macroeconomic environments in some emerging markets remain uncertain whilst the political uncertainty persisting in some regions might continue fuelling the volatility of major currencies against the euro.
“Moreover, we believe that the progressive strengthening of the euro against the US dollar may have a more adverse impact in the second half of the year. Nevertheless, we remain confident in achieving a positive performance across key indicators for the year, driven by the outperformance of the high-margin global and regional priorities. We expect the gross margin to continue benefitting from the favourable sales mix despite being penalised by inflationary effects on material costs in emerging markets as well as rising prices in some raw materials such as agave.”
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