Campari, the Italian company which is the sixth largest player in the global spirits market, has reported strong growth in sales and profits for 2002, driven by its international business which, for the first time, accounted for a greater share of total revenues than the domestic arm.
Consolidated sales for the year reached €661 million, up 34 per cent on the previous year, while EBITDA increased 40 per cent to €160 million. Net profits were up 37 per cent to €87 million.
Commenting on the results, Campari's CEO, Marco Perelli-Cippo, said: "The group is successfully continuing its expansion in global markets, with results increasing significantly. In 2003, we expect a further growth, despite the unfavourable global economic environment."
The good performance during the year was attributed to the important acquisitions completed early in the year: Skyy Spirits in the US and Zedda Piras and Sella & Mosca in Italy. These companies accounted for 32.4 per cent of growth, with existing operations accounting for a further 5.1 per cent.
Revenues from the spirits segment, representing 64.6 per cent of total sales, were €426.6 million, up 50.3 per cent. An essential contribution to this result came from Skyy Vodka which showed double-digit growth both on the US market and on international markets. Organic growth of the spirits segment was 7.3 per cent, helped by a good performance from CampariSoda (+3.3 per cent), Ouzo 12 (+4.5 per cent) and Jägermeister (+4.3 per cent). Organic growth was also boosted by the launch of the RTD product, Campari Mixx.
The performance of the Campari brand itself was positive at 2.6 per cent (although sales dropped 1.5 per cent when exchange rates are taken into account). Sales rose in Italy and Brazil, but Germany continued to disappoint. Local Brazilian brands Dreher, Old Eight and Drury's lifted sales in both volume and value terms, but the exchange rate impact meant that reported sales were 12.4 per cent lower from Brazil.
The group's wine operations grew by 31.3 per cent, due mainly to the acquisition of Sella & Mosca. The group's existing portfolio grew by 5.1 per cent, however, with Cinzano sparkling wines showing particularly strong growth (+15.5 per cent). Cinzano vermouth sales dropped by 0.8 per cent, but this was nonetheless an improvement on previous years.
The soft drinks segment declined by 0.1 per cent during the year, despite a positive performance from Crodino, which grew by 4.3 per cent. The decline came mainly from the group's carbonated soft drinks (due to poor summer weather), but these are marginal in terms of profitability.
For the first year in the group's history, sales on international markets overtook those on the Italian market, demonstrating the group's successful strategy of boosting foreign sales.
The Italian market (which accounts for 47.1 per cent of sales) grew by 18 per cent, thanks to the contribution by Zedda Piras and Sella & Mosca (+11.1 per cent), and to significant organic growth (+6.9 per cent), resulting from the good performance of Campari, CampariSoda, Crodino, Cinzano sparkling wines and to the launch of Campari Mixx.
The Americas accounted for 30.3 per cent of total sales, with growth wholly generated by the US market, as an effect of the consolidation of Skyy Spirits. In particular, the United States, accounting for 20.9 per cent of total sales, became the second most important market for the group. The Brazilian business, amounting to 8.4 per cent of consolidated sales, recorded a 14.3 per cent rise in local currency which, due to the exchange rate effect, translates into a 15 per cent drop in reported currency.
"As for 2003, we expect the positive trend in consolidated sales to be driven, with respect to external growth, by contributions from the sales of Tequila 1800 in the United States, for which the distribution agreement was stipulated in 2002, and with respect to the existing portfolio, by the widened distribution of Campari Mixx in the German and Austrian markets," said Perelli-Cippo. The company has just signed an agreement with Belgian brewer Interbrew to develop sales of Campari Mixx in Germany.