Campari Group reports profit decline for 2020

Campari Group has reported that net adjusted profit decreased 24.4% year-on-year to €202.1 million in 2020 as a result of the Covid-19 pandemic.

Coronavirus lockdowns significantly curtailed sales of Aperol and Campari in certain markets during the summer, while travel retail sales also dried up.

Yet Campari Group achieved overall sales growth in off-trade focused markets including the United States, Canada, Australia and Northern Europe.

That helped it deliver resilient full-year financial results, with reported organic net sales down by just 4.1% for the year to €1,772,000,000. It would have been a 2.5% decline without destocking in the U.S.

EBIT was down 20.4% on an organic basis to €321.9 million, mainly due to unfavourable sales mix and lower absorption of fixed costs. Overall EVIT was down 40% after negative operating adjustments of €90.1 million.

Group net profit was €187.9 million, down 39.1% after a €14.2 million hit on total operating, financial and tax adjustments.

Net financial debt was €1,103,800,000 as of December 31, 2020, up €326.4 million year-on-year following acquisitions, a share buyback and a dividend payment.

Campari bought Champagne Lallier, acquired French distributor Baron Philippe de Rothschild France Distribution and snapped up a 49% stake in online wine and spirit retailer Tannico last year.

The firm proposed a full-year dividend of €0.055 per share, in line with previous year. 

“Our overall performance in 2020 showed strong business resilience and brand momentum in key off-premise brand-market combinations, as supported by double digit sell-out trends,” said chief executive Bob Kunze-Concewitz.

“During 2020, whilst we continued to execute our long-term strategy also via M&A, we increased our investments to drive new home consumption opportunities and we geared our organization towards more agile ways of working and new business priorities.

“Looking at 2021, although our brands continue to be very healthy with strong consumer pull, our outlook remains cautious mainly due to the uncertain timing related to the on-going restrictions and the vaccine roll-out affecting the on-premise channel across all geographies and global travel retail.

“Meanwhile, we will continue to leverage the digital and on-line investments, along with a dynamic omni-channel approach, to rapidly adapt to the ‘new normal’ environment, particularly with regards to e-commerce.

“We expect the home consumption to remain sustained, particularly in the key off-premise markets, including the United States, where, with destocking activities completed, the shipments are expected to progressively align with consumption trends.

“In the long run, as the out-of-home social experience and conviviality will remain essential to consumers’ lifestyles, thanks to our strong brands’ health we remain confident of a favourable development of our business.”

Campari and Grand Marnier suffered declining sales in 2020, while Aperol was broadly flat, but there was strong growth for Wild Turkey, Wray & Nephew and Appleton Estate.