The results reflect the initial impact of Covid-19 on top of a tough comparison base, with Italy impacted the most.
Sales in the Americas5 (50.6% of total Group sales) were slightly down organically by –0.9%. Growth in the Group’s largest market, the US (+1.1%) thanks to Espolòn, Aperol, Campari and Skyy, despite the tough comparison base as well as the initial negative effect of COVID-19 driven by the lockdown of the on-premise (accounting for ca. 30% of the market net sales in FY 2019).
This was more than offset by the performance of Jamaica, which registered a decline of -7.3% driven by the decline in the rum portfolio mostly due to on-premise closures and reduced touristic flows, amplified by a tough comparison. Canada grew by +9.3% thanks to Forty Creek and Appleton Estate. In South America, Brazil suffered from a tough comparison base, registering a decline of –13.2%.
Global Priority Brand Performance
Global Priorities (58% of total Group sales) registered an organic decline (-4.0%), with Aperol and Campari flattish (-0.2% and +0.3% respectively) as the decline in core Italy driven by on-premise closure in March due to COVID-19 entirely offset growth in most of the other markets:
Aperol and Campari organic growth in the quarter, excluding Italy, would have been respectively +22.1% and +9.3%. Declines also on Grand Marnier (-10.8%), with the US market affected by a tough comparison base as well as declines in consumption in the on-premise channel impacted by COVID-19. Skyy declined by -4.7%, despite overall positive results in the core US market driven by consumers shifting to the off-premise because of the on-premise closures in March.
Wild Turkey‘s shipments declined (-12.7%), with the core U.S. market affected by the destocking ahead of the new packaging (now postponed), nonetheless sell-out trends remain very positive for the brand. Growth in the Jamaican rum portfolio (+3.7%) was driven by the core US, the UK and Canada.
Regional, Local Priorities
Regional Priorities (17% of total Group sales) declined organically by -7.9%, with the positive performance from Espolòn (+10.0%), driven by the core US market, more than offset by declines in Riccadonna, Cinzano, Bulldog and GlenGrant. Mondoro and Forty Creek had positive results, driven by their respective core markets of Russia and Canada.
– Local Priorities (11% of total Group sales) registered a negative organic performance of -7.2%. Wild Turkey RTD, Cabo Wabo and Ouzo 12 all registered positive growth, which was unable to offset declines in the single-serve aperitifs, Campari Soda (-19.9%) and Crodino (-15.5%), due to their strong exposure to the Italian on-premise channel, largely hit by COVID-19.
Short-Term Headwinds
‘In this period of high uncertainty and difficulty, our key priority remains to ensure the safety of our Camparistas and business partners. Inevitably our business is facing short-term headwinds,” said Bob Kunze-Concewitz, CEO. “As a highly agile organization, we are taking rapid actions to mitigate costs and preserve liquidity whilst remaining focused on our long-term strategic agenda. To this extent, we are accelerating programs in digital transformation and e-commerce to further strengthen our digital capabilities across the entire organization.
“We are continuing to execute our M&A strategy focused on long-term brand building. Last, but quite importantly, our financial profile remains very solid.
“Looking at the long-term, we remain confident of the positive consumption trends and growth opportunities of our business. We will continue to leverage the strength and resilience of our brands and business, ensuring we are strongly positioned and ready to accelerate our growth as soon as the consumer demand normalizes. As a committed and long-term brand builder, we will remain focused and highly engaged in the on-premise opportunity with our distinctive brand portfolio, firmly convinced that the out of home social experience and conviviality will remain essential to consumers’ lifestyles.’