Davide Campari-Milano (CPR) Q2 2024 earnings summary

Executive summary

• Organic net sales grew 3.8% year-over-year to €1,523 million, with Q2 accelerating to 6.9%, led by Global Priority brands in the Americas and resilient EMEA despite poor weather, outperforming the industry.

• EBIT-adjusted rose 2.1% organically to €360 million, margin at 23.6%, 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.

• Americas outperformed, offsetting EMEA margin pressure from adverse weather; APAC declined due to competition and route-to-market changes.

• Aperol Spritz became the most popular cocktail in the US and Germany, supporting brand momentum.

Financial highlights

• Net sales reached €1,523 million (+3.8% organic, +4.5% reported); Q2 acceleration to 6.9%.

• EBIT-adjusted at €360 million (+2.1% organic, +0.1% reported), margin 23.6%, diluted by mix and weather.

• EBITDA-adjusted €418.8 million (+3.5% organic, +1.9% reported), margin 27.5%.

• Recurring free cash flow at €130.8 million, a €222.4 million improvement year-over-year.

• Net debt to EBITDA-adjusted at 3.5x; net financial debt at €2,553.2 million, up €699.7 million due to Courvoisier acquisition and capex.

Outlook and guidance

• Medium-term outlook remains positive with continued brand momentum and industry outperformance, despite margin headwinds from mix, inventory, and delayed agave contract benefits.

• Gross margin expansion unlikely in 2024 due to mix and inventory headwinds; expect flat gross margin for the year if Q3 weather is favorable.

• 2025 expected to benefit from lower agave costs, improved sales mix, and glass contract renegotiations, supporting gross margin accretion.

• High single-digit organic revenue growth still seen as achievable in a soft market; H2 performance depends on market and weather trends.