00:00Well, Campari has stopped estimates in the fourth quarter with one analyst highlighting impressive top line growth at the Italian
00:06Spirits Group.
00:07Now we're now joined by Simon Hunt, chief executive officer of Campari Group, in one of his first interviews for
00:12TV since taking the helm in January last year.
00:15So, Simon, thank you so much for joining us. When you look at the results, they're pretty good.
00:19How fragile, actually, is consumer sentiment right now? Everything that we've seen because of tariffs, geopolitics, and now this new
00:26war in the Middle East.
00:29Yeah, I think what we're really seeing is some strength in our business where consumers, where they are feeling a
00:34bit of pressure economically.
00:35They're looking for value. They're looking for brands that really resonate with them.
00:39And as a result, to come through 2025 with outperforming the industry, strong top line growth.
00:45We've got a good margin enhancement and good profit growth. I'm delighted with the performance.
00:51Overall, there's a decline in alcohol consumption.
00:54So, does it make you innovate in terms of products, in being alcohol-lite, or even non-alcoholic drinks?
01:01I think it's important to remember in the alcohol industry is that moderation is not a new theme.
01:06This has been running for 100 years.
01:08And the less but better story has been very consistent for many of the companies.
01:12In our case, I think what we've seen is we've seen a shift in consumer trends where people are going
01:17a little bit earlier in the day.
01:18They are also looking for lower ABV, more refreshment. They want aspirational drinks that are also accessible.
01:24And look, with an Italian background, you know, that's exactly the space we play in.
01:28And so we've got a portfolio of brands that meets that emerging trend in a really efficient way.
01:33And the team's done a great job of activating that last year, despite the tricky environment.
01:39I know, Simon, that you're really trying to focus on the U.S., where you're also hoping to get market
01:44share for Aperol Spritz as a valid substitute to beer.
01:48How's that going?
01:50Yeah, at this stage, our focus has been in the strategic on-premise bars and restaurants, which is really where
01:55brands are built.
01:56And I'm delighted we delivered a plus 15 percent growth rate on Aperol in that environment.
02:01And then we took it into retail in the control states, trending up at plus 10, and then also into
02:07many of the open states as well.
02:09So we've got a good start in 2025.
02:11What I announced last night is that we've also hired 21 brand activators to get out, knock on doors, get
02:17into bars, and really activate Aperol in the 11 states that we're focused on.
02:22So we think it's a big, big opportunity for us to go after.
02:25We're increasing the investment.
02:26We're putting more feet on the street.
02:27Those people are hired and literally started this week.
02:31I mean, the U.S. accounts for about 30 percent of your sales.
02:34But I think sales were flat in 2025.
02:37What are you expecting 2026 to look like?
02:40Yeah, I think it's important that even though sales were flat at a total portfolio, we had several brands.
02:45The brands were really focusing on actually growing.
02:48So we saw Aperol growing.
02:50We saw Esplan Tequila growing, even in a tougher market.
02:53And so as I announced at the Capital Markets Day, we've really looked at our portfolio and said we want
02:58to make fewer, bigger bets.
02:59And that's exactly what we're doing, putting all of our effort behind fewer brands and really driving it.
03:04So when you look at the total portfolio, it was flat.
03:06But if you look at the individual brands we're focusing on, we saw some very good growth.
03:12How's your program of brand disposals going?
03:15I know you sold off, for example, Cinsano and Averna.
03:18Some of the sparkling wines business also went.
03:20What's next?
03:22Yeah, I mean, I think we've looked at the portfolio.
03:24When I first came in, we had 72 brands within the portfolio.
03:27And not all of them have the same opportunity to grow as a brand like Aperol or Esplan Tequila or
03:33Wild Turkey.
03:33And so we had to make the tough decision about really focusing the team behind the biggest bets.
03:38And as part of that process, we identified some brands that we just didn't think were playing quite the strategic
03:43role they were playing in the past.
03:44And as a result, we found some great homes for them, some great Italian companies that will love the brands
03:49and continue the great heritage.
03:51We're continuing conversations.
03:52I do want to be clear.
03:53We don't have to sell anything.
03:55The robustness of our business certainly, I think, shows that.
03:58But where we see the right balance between the value we can achieve for it and the focus we can
04:04then put behind those bigger, fewer bets, that's really the balance we're working through.
04:09Simon, I mean, you've been in the drinks business for quite some time.
04:12Have tastes changed?
04:14I know we ask this to a lot of the big food companies because of GLP-1 and things like
04:21Zempic.
04:22Do we consume differently?
04:24I know you talked a little bit about it at the beginning, but do people want less sweet drinks?
04:30Yeah, to be honest, one of the things that's exciting about this industry is the consumer trends are always evolving.
04:36And one of the things that we're doing at Campari is we're leading that.
04:39Our leadership within the spritz category plays across a range of different flavor profiles, from Sati Rosa to Aperol to
04:46Campari to Chenna.
04:48So we have a whole range of flavors to go after.
04:51And what we're learning with this is consumers like to experiment.
04:54Whereas before, when I first started the industry, people would stay in one category.
04:57Now we're seeing a lot more experimentation.
04:59But the biggest thing is that looking for that sociability, that opportunity to get together with their friends in an
05:05informal environment.
05:06And that's currently what we do better than anyone else.
05:09I mean, I spend most of my days now talking about the price of oil and the fact that it
05:13could still jump 10%, 15%.
05:15We really don't know what happens in the Middle East.
05:17Does that increase your cost significantly if you were to stay at that level?
05:21And can you pass on some of those price increases?
05:25Yeah, I think, look, a lot of the commentators I've seen this morning have been talking about what if and
05:30how does this play out.
05:31I think we need to be a bit balanced.
05:32We're six days in.
05:34So, yes, we've got to think around scenarios.
05:36For us, 90% of our business is Europe and the Americas.
05:39And we have local production in many of those places.
05:41We have to make our cognac in cognac.
05:43We make our aperitifs in Italy.
05:45So, we're quite locally driven in terms of that.
05:47So, I think any kind of effect would really be on the input costs and on freight.
05:53On input, glass is a big user of energy.
05:55We'll have to see what happens.
05:56But as your previous commentator said, gas prices aren't anything near where they were back when the Ukraine situation kicked
06:02off.
06:03And then the second part is then on freight, particularly road freight.
06:06But at this stage, we're working through that.
06:08Our hope is that actually there's a peaceful resolution pretty soon.
06:13You boosted your dividend significantly.
06:15You said you're also optimistic.
06:17Your words, I think, on deleveraging going forward.
06:20Should we expect an increase in dividend in 2026?
06:24Yeah, I think we reviewed our leverage position.
06:27And the fact that we managed to get to two and a half times a year early, it really shows
06:31the cash generation of the business.
06:32It's a very cash generative business.
06:34And so, really pleased with our tight management of that to get us down to that.
06:39What we want to do is continue to delever.
06:41It then gives us the opportunity to either increase the dividend, either take the pause off our M&A side,
06:46or look at other opportunities of backing parts of the business that maybe need some more investment.
06:52You've also said you're pausing Bolt on M&A.
06:55Why is that?
06:56And actually, if there was the opportunity of a lifetime, would you get back in?
07:01Yeah, I think it depends on what the opportunity of a lifetime is, to be totally honest with you.
07:04I mean, one of the big challenges we have as a team.
07:07Well, then whenever I do that, the prices go up about 20 percent.
07:11So I've got to be a bit careful with that.
07:12But I think, look, at the moment, what we're looking at is the opportunities we have within Campari are really
07:17compelling.
07:18We have a massive geographic expansion opportunity.
07:21We can break into new occasions with Aperol on tap and Aperol ready to drink, Campari spritz.
07:26So we've got a lot to focus on at the moment.
07:28And I think at the moment we're not seeing anything outside that is that compelling.
07:32Now, I'm not saying never.
07:33And maybe there are some brands out there that will come around and we'll say maybe there is the one
07:36of a lifetime.
07:37Then we can have a look at it.
07:38But the most important thing is by getting our leverage down, we have the optionality.
07:42We can then make the decision to either do that or we can look at our dividend stream and see
07:46how we can further enhance total shareholder returns.
07:50You've been in the top job at Campari for about 14 months.
07:52What surprised you the most since you joined?
07:57I'd say probably two things.
07:59The first was the sheer scale of the opportunity.
08:02I'd worked with Campari.
08:04I'd admired the company from the outside.
08:06But we have so much opportunity that, apparently, other companies don't have.
08:10So to post the great results that we put through 2025, in my view, we're just getting started with what
08:15we can do, even in a tricky environment.
08:18So that would be the first thing.
08:19The second thing is, as you rightly said, I've been in this industry.
08:22I've worked in five different companies.
08:23The Camparista culture, our 5,000 Camparistas around the world, are some of the most passionate, determined, competitive team members
08:32I've ever worked with.
08:33And I think that was really showing through a tough year last year with some of the best execution I've
08:37ever seen.
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