Campari-Milano 2024 Outlook

Campari-Milano remains optimistic about the coming year despite facing what it considers normalizing macroeconomic conditions and ongoing negative foreign-exchange trends.

Strong Financial Performance

The Italian drinks group reported adjusted earnings before interest and taxes of 618.7 million euros in 2023, surpassing the prior year's earnings of EUR569.9 million. This result also exceeded analysts' expectations of EUR597 million. The adjusted operating margin remained steady at 21.2%.

Impressive Sales Growth

Sales for Campari increased by 10.5% organically to EUR2.92 billion in 2023, slightly below analysts' projections but still demonstrating substantial growth momentum for the company.

CEO's Perspective

Chief Executive Bob Kunze-Concewitz commented on the impressive performance, noting that the company achieved best-in-class organic growth fueled by strong momentum in aperitifs, tequila, and bourbon. Despite macroeconomic challenges and post-pandemic consumption normalization, Campari achieved industry outperformance.

Market Response

Following the release of Campari's full-year results, shares of the company rose by 4.9% to EUR10.02. Other drinks makers such as Remy Cointreau, Pernod Ricard, and Diageo also experienced increases in their stock prices after Campari's positive financial report, showcasing a positive trend in the industry.

Strategic Focus on China

Campari highlighted a particularly strong performance in China and revealed plans to establish a new route-to-market in the country through a targeted regional distribution model. The company is confident in its ability to leverage its portfolio of brands to successfully grow its Chinese business.

Campari-Milano's resilience in the face of economic challenges, paired with its strategic initiatives, positions the company for continued success in 2024 and beyond.

Campari Group's Expansion Plans

Acquisition of Beam Holding France

The Campari Group is set to acquire Beam Holding France, the owner of Courvoisier cognac, a move that was first announced in December and is anticipated to close this year. According to Deputy CEO Matteo Fantacchiotti, the addition of Courvoisier will not only significantly boost the company's presence in the U.S. market but also open doors for strategic growth in the Asia-Pacific region.

Anti-Dumping Investigation Impact

Despite the ongoing anti-dumping investigation launched by the Chinese government in January on brandy imported from the European Union, Campari did not mention any potential negative impacts on its operations. This investigation had raised concerns regarding the performance of drinks makers, but Campari remains optimistic about its future prospects.

Growth Prospects and Financial Outlook

In the medium-term, Campari foresees sustained brand momentum and industry outperformance. The company expects to see operating margin expansion driven by factors such as sales mix, pricing strategies, easing input cost inflation, and operational efficiencies. Furthermore, Campari plans to reinvest in brand building and commercial capabilities to drive organic growth.

Headquarters Relocation

Campari is gearing up to relocate its headquarters, with an initial investment of EUR110 million earmarked for this year's renovations. The move is scheduled for completion in 2027 after the necessary refurbishments are carried out.

Dividend Proposal

As part of its financial plans, the Campari Group will propose a dividend of EUR0.065 per share for the year, marking an 8.3% increase compared to the previous year.