Campari’s bitter-sweet financial results

The Italian spirits giant reported a 2.4% organic increase in net sales in 2024, a performance tempered by challenging external conditions and shifting consumption trends. While profitability bore the brunt of ongoing investment commitments, Campari remains bullish on its long-term potential. Net sales reached €3.07 billion (£2.5bn) reflecting a 5.2% increase on a reported basis, with the acquisition of Courvoisier playing a notable role in boosting the top line. Yet, organic EBIT-adjusted slipped by 2.5% to €605 million, reflecting a 100 basis points margin dilution. The group’s net profit-adjusted declined 3.7% to €376 million, while the unadjusted figure saw a more sobering 39% drop to €202 million. This was partly due to a €213 million charge linked to a three-year cost containment programme. Chief executive Simon Hunt, only two months into his tenure, remained upbeat despite the headwinds: “As I close the second month in this role, I am pleased to announce that Campari Group delivered positive results and outperformance vs competition again in 2024.” His confidence hinges on a robust portfolio, ongoing investment in markets and infrastructure and an enviable global footprint.

Weathering the storm in key markets

The Americas (45% of group sales) saw 4% organic growth, with the US remaining flat but bolstered by a 12% surge in Espolòn Tequila and an 11% rise in Aperol. Jamaica, despite the summer’s hurricane-induced supply shortages, eked out a 1% gain. Meanwhile, Europe (48% of sales) grew by 3%, despite Italy’s 4% decline, which was offset by Germany’s 5% increase, driven by Aperol and the pink-hued Sarti Rosa. Elsewhere, Asia-Pacific shrank by 6%, with Australia down 6% and India and South Korea underperforming. By category, the House of Aperitifs (43% of total sales) remained Campari’s crown jewel, up 6% for the year, thanks to Aperol’s steady 5% growth. Meanwhile, the House of Whiskeys and Rum declined by 6%, with Wild Turkey under pressure in the US and Australia. The House of Agave rose 10%, led by Espolòn, while Cognac and Champagne notched a 2% gain, thanks to Lallier’s 27% jump.

The year ahead

The group is bracing for a ‘transition year’ in 2025, with low-single-digit declines in Q1 sales due to Easter timing before a stronger second half. Organic EBIT-adjusted margin is expected to remain flat, with advertising and promotion spend rising to the historic range of 17-17.5% of sales. There’s also the unwelcome spectre of 25% tariffs on European, Mexican, and Canadian imports to the US, which could bite into profits by as much as €100 million annually. Medium-term prospects, however, remain rosier. Campari anticipates a return to mid-to-high single-digit sales growth, banking on premiumisation, tequila expansion and efficiency gains. Sustainability is also high on the agenda, with a 46% reduction in direct carbon emissions since 2019, a 65% cut in water usage and a 96% renewable electricity mix.