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Aperol and Campari "driving over half the growth" at Campari Group - analysis

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While there has been a lot of excitement around Campari's fairly recent acquisitions - Grand Marnier, Bulldog gin and Bisquit Dubouché et Cie Cognac - it was the company's stalwart Italian brands that set pulses racing in analysts' notes following this week's 2017 results.

Aperol saw its sales leap by 20% in 2017

Aperol saw its sales leap by 20% in 2017

"Whilst there have been some strong brand performances (Espolon, Bulldog, Glen Grant), over half of 2017 group growth was attributable to Aperol and Campari," says Jefferies analyst Edward Mundy. "Both brands are the go-to products within their respective sub-sectors (spritz and bitters) and it is encouraging that the base of growth appears to be widening and becoming more defensive."

Societe Generale analyst Laurence Whyatt, meanwhile, flags Campari's "detailed breakdown" of the pair's performance in his client note. "The highlights were impressive 20% sales growth in its biggest brand, Aperol, which is also very high gross margin," writes Whyatt. "It is still growing strongly in its core markets of Italy, Germany, Austria and Switzerland, maintaining a high marketing budget to prevent the encroachment of look-alike competitors. In its biggest potential market – the US – Aperol grew sales 51%."

To brand Campari, and Whyatt highlights "solid 10% growth" with the brand also doing well in the US market. 

At Liberum, analysts commended the group for being an "attractive brand builder" with a portfolio of spirits bearing "strong brand identities". 

"The company's position is strong and underpinned by a diversified portfolio with significant penetration opportunities, a strong balance sheet, a talented management team and the long-term backing of the Garavoglia family," Liberum says. 

Turning to M&A, the analyst community ploughed the same furrow it started late last year, following Campari's purchase of Bisquit Dubouché et Cie, echoing its belief that there are more purchases to come.

"We believe the deal pipeline remains healthy and see firepower of EUR700m (to 3.5x net debt to EBITDA) which would enable an acquisition of similar size to Grand Marnier," adds Mundy.

Gruppo Campari will not stop at Bisquit Dubouché et Cie Cognac - Click here for a just-drinks analysis


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