(Alliance News) - Campari NV on Tuesday reported that it ended 2023 with net sales of EUR2.91 billion, up 8.2% from EUR2.69 billion as of Dec. 31, 2022, while net income was EUR332.5 million from EUR331.5 million.

The proposed annual dividend is EUR0.065 per share, up 8.3% on 2022 when it was EUR0.060 per share.

Gross margin in the period stood at EUR1.70 billion, up 7.0% to EUR1.58 billion in 2022.

Contribution margin for 2023 was EUR1.20 billion from EUR1.10 billion in 2022 and up 8.7 percent.

Ebitda stood at EUR650.4 million from EUR602.0 million as of December 31, 2022.

Ebit was EUR540.2 million from EUR511.5 million, marking an increase of 5.6 percent.

Net financial debt was EUR1.85 million as of Dec. 31, up EUR298.2 million from EUR1.55 billion as of Dec. 31, 2022, reflecting negative free cash flow mainly due to cash absorption from the temporary increase in production inventory, extraordinary capital expenditures and dividend payment.

The multiple of net financial debt to adjusted EBITDA was 2.5 times as of Dec. 31 compared to 2.4 times as of Dec. 31, 2022.

On the sales side, those in the Americas grew organically by 7.7 percent, while those in Southern Europe, the Middle East, and Africa rose 6.8 percent. Asia-Pacific sales rose 21 percent, doing better than Eastern and Central Europe up about 19 percent.

Looking ahead, "For 2024 Campari Group remains confident in the continued outperformance of the sector in a normalizing macroeconomic environment. We expect agave trends and moderating inflation to be reflected in the income statement starting in the second half of the year, partly offset by additional fixed production costs from the increase in production capacity, the drag from the effect of the creation of safety stocks produced in 2023 at high production cost, as well as the negative currency effect of the Mexican Peso," as the company explained in a note.

"Sustained investments in brands, which also reflect the phasing of advertising and promotion expenses from 2023, are expected to continue, as are investments in commercial infrastructure. Negative currency effects are expected to continue although in a mitigated form compared to the previous year, while the scope will begin to reflect the addition of Couvoisier. In terms of technical effects, the first quarter will also reflect a very unfavorable basis of comparison due to effects related to the timing of price increases in the previous year. Finally, Campari Group remains very committed to the integration of the announced acquisition of Couvoisier, once finalized."

Bob Kunze-Concewitz, Chief Executive Officer of Campari, commented, "In 2023, we posted another year of top-notch organic sales growth, driven by very positive momentum across brands, particularly aperitifs, tequila and bourbon, and outperformance relative to the industry despite macroeconomic challenges and the expected normalization of consumption after exceptional growth in the post-pandemic period. We achieved double-digit organic growth for the third year in a row across all operating profitability indicators, supported by price increases across the entire portfolio, which more than offset inflation on material costs and sustained reinvestment in brands as well as in strengthening the corporate infrastructure for the next phase of growth."

Campari is in the green by 7.0 percent to EUR10.22 per share.

By Claudia Cavaliere, Alliance News reporter

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