Davide Campari-Milano (CPR) Q2 2024 earnings summary

Executive summary

• Net sales for H1 2024 reached €1,523.4 million, up 4.5% year-over-year, driven by organic growth of 3.8% and strong Americas performance, especially in Aperol and Espolòn, despite volatile macro and challenging industry context.

• EBIT-adjusted rose 2.1% organically to €360 million (23.6% margin), with margin diluted by negative sales mix from poor EMEA weather and fast Espolòn growth.

• Adjusted group net profit increased 2.2% to €239 million; reported net profit up 1.3% to €219.7 million.

• Outperformed the market, especially in aperitifs and tequila, with Aperol Spritz becoming the most popular cocktail in the US and Germany.

• Courvoisier acquisition completed for €1.2 billion, strengthening the premium spirits portfolio and US/Asia presence.

Financial highlights

• Organic net sales grew 3.8% year-over-year to €1,523 million, with Q2 up 6.9%.

• EBIT-adjusted: €360 million (+2.1% organic), margin 23.6% (down 40bps year-over-year).

• Adjusted group net profit at €239M (+2.2%); reported net profit at €219.7M (+1.3%).

• Recurring free cash flow (excl. extraordinary CapEx) at €130.8M, up €222.4M vs prior year.

• Net debt at €2,553M (net debt/EBITDA at 3.5x), reflecting Courvoisier acquisition and CapEx.

Outlook and guidance

• Medium-term outlook remains positive, with confidence in continued brand momentum and operating margin expansion.

• Gross margin expansion for 2024 unlikely due to mix and inventory effects; flat or limited gross margin targeted for full year.

• 2025 expected to benefit from lower agave costs, improved mix, and glass contract renegotiations.

• H2 performance dependent on favorable weather and market recovery, especially in the US.

• Industry outperformance expected to continue, leveraging strong brands despite softer market dynamics and increased price competition.