Campari CEO claims ‘best-in-class’ growth

Bob Kunze-Concewitz is ending his 18-year reign as chief executive of Davide Campari-Milano on a high note.

For the year to the end of December, he delivered an 8.6% rise in adjusted operating profits to €618.7m, outshining analysts’ expectations and sending the shares up by 6%.

Demand for aperitifs, tequila and bourbon drove what he called “another year of best-in-class organic top line growth.”

“We achieved a third consecutive year of double-digit organic growth across all operating profit indicators,” he said.

Kunze-Concewitz, who steps down in April, said total net sales for the year were €2.9 billion.

They increased organically by 10.6% in the fourth quarter, mainly due to the good performances in the United States and Northern and Central Europe.

Sales of Aperol were 23% ahead in the year.

Buoyant

The group is increasing its dividend by 8.3% in line with its buoyant results for the year.

And while many rivals are predicting static or little growth in 2024 as economic slowdowns dampen worldwide demand for spirits after the 2022 post-pandemic boom, the Italian group said it was optimistic about this year.

“For 2024, Campari group remains confident on continued industry outperformance in a normalizing macro environment,” it said in a statement.

It predicts that it will benefit from a global slowdown in inflation and reducing price pressure for supplies of agave in the second half.

“I remain confident in the strong business momentum across key brands and markets,” said Matteo Fantacchiotti, who will succeed Kunze-Concewitz.

“We will continue our transformational growth journey, leveraging Campari Group’s key strategic pillars, combining organic and M&A growth, geographic and portfolio expansion, and balancing growth with returns”, Fantacchiotti said.

Momentum

In the medium-term, Campari expects continued healthy brand momentum as well as industry outperformance, it said.

“We expect consistent operating margin expansion driven by sales mix, pricing, input cost inflation easing and operational efficiencies, with continuous reinvestment into brand building and commercial capabilities to fuel organic top line growth,” the company said.

In addition, late this year the group will complete its €1.2 billion purchase of Cognac house Courvoisier from Beam Suntory, an acquisition that is designed to give it extra portfolio firepower in the crucial North American market.

Campari is a comparatively late entrant to the Chinese market for imported premium brands but recorded a positive performance there in the year and said that it intends to create a new route-to-market in the country through a targeted regional distribution model.

“With a strong portfolio of brands, the group is confident in successfully building the Chinese business using a strengthened distribution platform in accordance with the strategy for that market,” it said.