Aperol Maker Campari puts margin target on ice on costs
Campari Italian Beverage Group said rising input costs would delay expected profitability gains, sending shares down more than 6%.
Bitters maker Aperol and Campari, which forecast a gross margin improvement of around 70 basis points this year, warned that the increase would not materialize due to rising costs.
Campari now expects its operating margin to remain stable on a like-for-like basis this year compared to 2021.
Cost pressure to intensify
“Temporary input cost pressure is expected to further intensify in the current year, postponing gross margin growth and ultimately leading to a broadly flat organic EBIT margin in 2022,” said CEO Bob Kunze-Concewitz in a statement.
Shares in Campari were down 6.6% at 11:05 GMT.
The Milan-based group said the new outlook included the possibility of beverage price hikes to mitigate rising costs.
Campari recorded a nearly 26% increase in like-for-like sales in 2021, helped by an increase in online purchases of spirits and consumption of cocktails at home.
Read more: Campari to raise prices to offset soaring costs
In the Americas, which accounted for 42.7% of total group sales, organic sales increased by 23.0% in 2021, compared to 19.9% in 2019.
The Espolòn, Grand Marnier and Aperol brands recorded strong double-digit growth, while Campari recorded strong single-digit growth.
In Northern, Central and Eastern Europe, which accounted for 20.2% of total sales, the company recorded organic growth of 18.6%.
Germany recorded 10.7% year-on-year growth, driven by Aperol, Aperol Spritz ready-to-drink and Campari. Sales in the United Kingdom increased by 39.1%, while Russia recorded growth of 25.0%.
Sales in Southern Europe, the Middle East and Africa, which account for 29.4% of total sales, increased by 36.7%, with Italy registering a jump of 36.4%, mainly due to the “Convenience of contrast” continues in the on-site and increased frequency of consumption on other channels.
Aperitif brands – Aperol, Campari and Campari Soda – saw strong double-digit growth in the region compared to 2020 and 2019, while Crodino saw low double-digit growth.
Reuters News, additional reporting from ESM- your source for the latest beverage news. Click subscribe to register ESM: European Supermarket Magazine.