Campari Records Sales Of €398m for First Quarter Of 2021; To Fund Tannico's French E-Shop Purchase; Looking At Asia And US For Acquisitions
Campari has recorded sales of €398 million for the first quarter of 2021.
Campari CEO Bob Kunze-Concewitz said that he expects the Italian beverage group's best-selling drink Aperol to return to double-digit growth this year after a flat performance in 2020.
Campari exceeded like-for-like sales expectations during the first quarter, helped by the growing consumption of spirits in the US and northern Europe.
However, the sale of Aperol was little changed between January and March, while whiskey and tequila brands rose strongly.
Kunze-Concewitz said that Aperol's first-quarter sales were lacklustre because of a tough comparison with the same period last year, when US beverage suppliers boosted orders ahead of a planned price rise for Aperol by Campari effective from April of 2020.
In an interview with Reuters, he said that the weakness in Aperol shipments to the US in the first quarter was only temporary.
"We expected Aperol sales to grow double digits in the full-year 2021 compared with 2020," Kunze-Concewitz said, adding that both Italy and the US will post a good performance for the orange-coloured aperitif as the two countries eased restrictions linked to the COVID-19 pandemic.
Campari bought Aperol at the end of 2003 and popularised it, first in Europe and then overseas, by promoting the Spritz cocktail. The aperitif now accounts for approximately one-fifth of the group's total sales.
"We are working to open a brand house for the drink in Venice in September," Kunze-Concewitz said.
Campari’s €398 million sales figure for the first quarter was up 17.9% year-on-year on an organic basis, stripping out currency swings and acquisitions or asset disposals, against analyst expectations of 6% to 7% .
Adjusted operating profit jumped 43% to €68.5 million.
"Revenge conviviality will boost demand for cocktails as consumers are gradually allowed to return to bars and restaurants in Italy and in other European countries," Kunze-Concewitz said.
He said that conditions are ripe for a good second quarter performance for the beverage group.
Funding Tannico's French E-Shop Purchase
In other Campari news, the beverage group has said that it will fund partner Tannico's purchase of French wine e-shop Ventealapropriete.com (VAP) as the Italian group taps into rising online alcohol sales.
Demand from housebound consumers during COVID-19 lockdowns has fuelled growth at e-retailers such as Tannico, the revenue of which rose by 82% rise last year, and VAP, which sells premium domestic and international wines, as well as high-end spirits in France.
But Campari expects the trend to last even as vaccine rollouts mean bars across Europe once again fill with people.
"With this funding, Campari Group confirms its commitment to the strategic e-commerce channel, set to continue to grow strongly thanks to the positive trend in the home consumption of spirits cocktails," it said in a statement.
Campari said that it is ready to underwrite up to 100% of a €32 million capital increase by Tannico to fund the purchase of 68.5% of VAP. Campari bought 49% of Tannico, which operates in 20 markets worldwide, last year.
Tannico's acquisition of VAP, which was founded in 2008 and recorded revenue of €34.5 million last year, is expected to close by the end of July.
Looking at Asia And The US For Acquisitions
Additionally, Kunze-Concewitz has been quoted as saying that the beverage group is focused on both Asia and the US as it presses on with its acquisition strategy and is targeting premium brands.
"Yes...Campari has built a structure capable of managing revenues that are higher than our current ones," Kunze-Concewitz reportedly told Italian daily newspaper La Stampa when asked whether the group will continue with M&A deals.
The group, which already owns brands Aperol, Skyy vodka and Grand Marnier, wants to continue to expand in the high-end segment, Kunze-Concewitz reportedly added.
"It is the first time that Asia is mentioned as a possible target market for acquisitions," Equita analyst Paola Carboni said in a note.
Scouting for acquisitions in Asia would be "consistent with the group's last few quarters' increasing commercial and distribution focus on this region," she added.
At present, Asia, excluding Australia, accounts for only 1.5% of Campari's sales, the Milan-based broker said.