Good afternoon. This is the Chorus Call conference operator. Welcome, thank you for joining the Campari Group 2018 first half results. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Mr. Bob Kunze-Concewitz, Chief Executive Officer of the Campari Group. Please go ahead, sir.
Thank you very much. Good afternoon, welcome to our half year call. If you have the presentation in front of you, I would ask you to kindly move on to page number four. I kick off, without further ado, with the highlights. As you can see, we generated the expected acceleration in top-line growth in Q2, which led to a pretty solid organic growth over the first half and helped normalize trends across profit indicators. Focusing on net sales, we have had solid organic growth, up 5.4%, thanks to the acceleration I was talking about in Q2, where we are up 8% on an organic basis, helping us recover the phasing issues we had in Q1. We have had a continuous improvement in sales mix, thanks to the consistent outperformance of our key high-margin brands and getting the high-margin core developed markets. Looking at it by brands, we have the usual suspects.
Global priorities continuing to outperform, up 8.7% in the first half with an accelerated growth in Q2, up double digits, 12.5%, driven by Aperol, Campari, as well as our brown spirits. Our regional priorities were up by mid-single digits, 4.7% in H1, improving in Q2, which was double digits, up 10.6%, driven by Espolòn. On the other hand, the local priorities were down 4.2%. This is mostly due to a double-digit decline in the lower-margin Brazilian brands. Looking at it by geography, we have solid growth of high-margin developed markets, driven principally by the U.S., Western Europe, and Australia, while softness in emerging markets continued due to essentially macro volatility and some tough comparison basis. The reported change overall of -4.7% reflects the negative perimeter effect of 3.7%. More importantly, the negative ForEx effect of 6.4%.
Looking at EBIT and adjusted EBIT, we have an organic growth of 9.5%. This is clearly ahead of organic sales growth, leading to an 80 basis points margin accretion, driven by the strong organic gross margin expansion of 110 basis points. Again, clearly, this is driven by the positive sale mix by brand and market. This was partially offset by some phasing of A&P, which is creating a dilution of 40 basis points. On a reported basis, we have a change of -1.7%. That takes into account the negative effect of the disposals, -5.8%, as well as ForEx of -5.4%. Almost recovered everything by organic growth. The EBIT overall growth was 13.7% after positive operating adjustments of EUR 19.6 million, driven by the gain on the business disposal, the soft drinks, essentially, net of provisions for restructuring costs.
Group net profit adjusted rose to EUR 104.4 million, up 11.6%, and group net profit rose to EUR 147.2 million, up 35.5%. Our net financial debt stood at EUR 946.8 million at the end of the period, down by EUR 34.7 million, thanks to a pretty positive free cash flow generation, as well as the proceeds of the Lemonsoda business disposal, net of the Bisquit Cognac acquisition, the dividend payment, and the purchase of own shares. This leaves us a net debt to EBITDA ratio down to 1.9 times. If we move on to chart on the page number five, I'm not going to go into details because we're going to review both the regions as well as the brands.
Just to say that all of our regions performed positively, which is quite good, and if we look at the different clusters of brand groups, with the exception of local priorities, again, we've had a pretty good progression. Page number seven, net sales results for first half. We'll just underline the impact of ForEx and perimeter, which more than compensated the organic top line growth of 5.4%. Chart number eight, just to underline the fact that with the weakness in some emerging markets, particularly Russia and Brazil and Argentina, the emerging markets share of the pie was reduced to 17%, so we're at 83 to 17 skew. More importantly, though, let's delve into the results of the Americas, which had a pretty good performance overall, organically up 4.6%. A pretty negative impact of ForEx here, down 11.7%, and its perimeter mostly driven by Carolans in the U.S., down 3.1%.
Talking about the U.S., very nice growth of 5.9%, and the strong first half performance was driven by an acceleration in Q2, where we're up 8.2%. The performance in this first half was driven by a continued outperformance of Espolòn, Aperol, and Campari, and all these three brands grew at quite strong double-digit rates, as well as sustained growth of Wild Turkey and the Jamaican rum portfolio. Grand Marnier registered some growth, but here shipments were more robust than underlying trends, and this is due to a favorable comparable base in Q2 of 2017, we had a pretty low shipment base. And this helped, on the other hand, offset the decline in SKYY, where we have the reverse phenomenon, where shipments are still performing behind sellout trends. Moving on to Jamaica.
Very solid growth, up 14.8%, with strong double-digit growth of our largest franchises, Campari, Wray & Nephew Overproof, and Appleton Estate. The only, let's say, negative note here is Brazil, down 27.2%, where both political instability and macro weakness continue to impact the market as well as large parts of our portfolio. We must also underline the fact that we have a tough comp base here. We were up 29% in the first half of 2017. Nonetheless, if we look at the main drivers of this performance, the decline was mostly driven by local brands, followed by Campari and SKYY. And on the other hand, partly mitigated by very strong double-digit growth of Aperol. Argentina was down 5.8%. This negative performance was largely driven by our own tight and company credit policy. So we'll see Argentina improving in the second half of the year.
The decline in Campari, as well as the local and agency brands here, was positively mitigated by very nice trends behind SKYY, Cinzano, Cynar, and again, Aperol. The rest of the region increased by 10.3% with a very strong performance in Mexico, up 16.1%, thanks to SKYY Ready to Drink, SKYY, Aperol, and Espolòn. While Canada was overall broadly flat due to some shipment phase. Moving on to Southern Europe, Middle East, and Africa, we are up 4% on an organic basis, pretty flat on a ForEx basis, but down 6.9% on a perimeter. Obviously, the disposal of the Italian soft drinks has an impact here.
Italy is performing very nicely, up 3.1% on a half-year basis, with a continued very positive trend driven by Aperol, up 7.1%, Campari double digits, 12.1%, and nice growth behind Cynar and Braulio, which helped offset some softness in Crodino, Campari Soda, and the Cinzano portfolio. If we look at the rest of the region, we are up 7.6%. Very solid growth in France, where Aperol, Riccadonna, Glen Grant, and Campari are outperforming by far the market. Spain, where again, Aperol and Campari are the drivers. Nigeria, Campari and SKYY. South Africa, on the other hand, declined in H1 despite the strong growth in Q2, and this is due to the unfavorable comparison base which we had in the first half of 2017, which was clearly influenced by the start of the new distribution organization and stocks related to it.
To close off this area, global travel retail grew at a pretty solid 15.3%. Again, thanks to Aperol, Wild Turkey, Bulldog, Campari, Frangelico, as well as Ouzo 12. Moving on to chart number 11, North, Central, Eastern Europe. A very nice 6.7% organic growth. Some minimum ForEx here, down 2.5%, and a little bit also on the perimeter due to the soft drinks tails in some of the Central European markets. Germany had a very robust first half, with very strong growth in the second quarter, where we were up by 14.9%, which led to an overall growth of 7.4% over the first six months. We clearly recovered the weak start of the year. This performance was driven by a very strong performance of Aperol, up 26.1%, as well as Cinzano, Bulldog, Campari, and Ouzo 12.
The U.K. continues its very strong growth, up 17%, and sustained positive performance driven by Aperol, the Jamaican rums, Campari, Bulldog, and Cynar. Russia, as I mentioned earlier, is down 25.2%. This is clearly influenced, on the one hand, by a very unfavorable comp base last year, where Russia was up by close to under 12% in the first half of the year, as well as the impact of the price increase negotiations which dragged on in the first quarter and impacted our trading with our largest customer. Nonetheless, we are returning to regular growth, things should improve here in the second half of the year. If we look at the rest of the region, again, up very solidly, almost 17%, 16.8% to be precise, with very nice performances across the regions in terms of markets, the main hero here is Aperol.
To close off our regions, Asia Pacific, a very, very robust 14.6% growth, helped to a certain extent by an easy comp from last year, where we were badly impacted by weather in the first few months of the year. Australia up 10.7%. A very nice growth in the second quarter, 12.1%, where the comp was actually not that easy. We're consistently outperforming the local spirits market in all relevant categories. We also have very nice double-digit growth in Wild Turkey RTD, the bourbon portfolio, and then the usual suspects, Aperol, Campari, SKYY, Frangelico, and Glen Grant also round up the positive performance. The rest of the area is up double digits, 24.1%, with a nice positive performance in Japan driven by Wild Turkey, SKYY Ready to Drink, SKYY, Carmignano, and Cinzano.
We had double-digit growth in New Zealand, thanks to the Coruba Rum, which is a local brand, and Wild Turkey bourbon. China was broadly flat. Moving on to chart number 14. The only thing I'd like to underline is that now global priorities account for 57% of our total sales. That means it's an increase of 200 basis points versus Q1, and 300 basis points versus the same period a year ago. Commenting on a brand by brand basis, you see that Aperol now is by far our largest brand. It's representing 17% of our sales, growing at almost 25% on an organic basis, 24.7%. What is very encouraging is the continued and sustained very positive performance in the core markets, Italy, Germany, Austria, and Switzerland.
On the other hand, having established solid foundations in the rest of the world, we're starting to see the brand build very nice momentum across a very wide range of markets. We are particularly pleased about the U.S., which is now the brand's third largest market in value, and continuing to see out performances in France, Brazil, Russia, the U.K., Australia, Spain, and GTR. I could name a lot of other markets. Moving on to Campari, which continues to give us a lot of satisfaction. A very nice sustained growth rate, up high single digits, 8%, with a very favorable mix in terms of markets. Clearly, the double-digit growth in the U.S. is very welcome. Now the U.S. is the brand's second-largest market in value.
We're seeing double-digit growth in the core market of Italy, almost after 160 years, and very positive performances in a series of markets across continents, North America, Africa, Europe, and so on and so forth. The only blotch on Campari's performance is two large volume markets, Brazil and Argentina, where the brand declined. It's really kudos, I think, to how strongly the brand is performing in the rest of the geographies, as it's able to compensate for those declines in South America. Moving on to SKYY. SKYY is down overall organically 11.1%. Here, clearly the issue remains the U.S. market. However, I would like to underline the fact that our shipments are actually more negative than our depletions, who are also more negative than our consumption indicators. Particularly if we look at NABCA, it looks like we're stabilizing the brand, and it's slightly positive.
Where shipments are performing the sellout trend, we'll see things, I think, on a yearly basis, probably running closer to the underlying mid-single digit decline. In international markets, we have a mixed performance. On the one hand, we have some markets performing very solidly, Argentina, Japan, Mexico, and Jamaica. We have some phasing issues for particular reasons in South Africa, Brazil, Canada, and China. We'd expect these to even out in the rest of the year. We expect international to be nice and positive. Moving on to Grand Marnier on page 15. You see Grand Marnier up 13.2%. Clearly here, we have the reverse effect to SKYY. We had quite a low comp base in terms of shipments in Q2 of last year in the U.S. That comparable clearly helps boost the organic growth.
We'd expect the brand more or less to end up on a mid-single digit throughout the year. What's encouraging though is that key European and Asian markets are starting to register nice growth, which means that after having done the cleanup of last year, the brand is starting to react. Moving on to the Bourbon portfolio. Overall up 6.8%. We've had quite a positive first half for the Wild Turkey brand, up 9.9%, with very nice performances across its core markets as well as its potential markets, particularly Canada, travel retail, Japan, Germany, and Italy. Russell's Reserve, which is a very high margin brand, is registering nice double-digit gains in its core U.S. market and Canada and Australia. If we had more volumes, we'd be able to extend this further, but it is what it is.
American Honey was broadly flat with a slight decline in the core U.S. market. Again, here underlined that it's more on a shipment basis, whereas the brand is growing at a mid-single digit if we look at depletions. Moving on to our Rum portfolio, up 4.2%, a strong second quarter, up 13.9%. Wray & Nephew Overproof growing very nicely, high single digits, 9.7%. This vibe is expanding beyond Jamaica to the U.S. and the U.K. Appleton Estate was slightly negative. We have very nice performances in the U.S. and Jamaica and in seeding markets, but these were offset by declines in Canada and Mexico, which were impacted by shipment phasing. Moving on to Tequilas on page 16. Espolòn, which now accounts for 3% of our total sales, and this is a home-baked brand, we're pretty happy about that.
It is growing at a very sustained rate, up 34.3%, doing even better in its core market, the U.S., and very nice trends in many international markets. Bulldog slowed down to 6.4%. We have some temporary softness in Spain and Belgium, where we weren't able to respond to local craft brands as we're waiting for the new advertising campaign to kick in in the last quarter of this year. We have continued solid growth in the rest of our markets, particularly U.K., Germany, Brazil, Italy, as well as global travel retail. Glen Grant, flattish, down 0.8%, despite a very strong Q2, 21.5%, where the trends reflect the fact that we're contingenting volumes. We've put many markets on allocations as we're aging the profile of the aging liquids and moving also to sell higher value aged products.
We'll see the brand improving in the second half, but the contingentation will continue impacting a little bit longer. Forty Creek, slightly down 1.6%, nice and positive in Canada, up mid-single digit. On the other hand, we've some declines in the U.S., but we're starting to fix things in the U.S. as well. The Amari portfolio, slightly down 1.6%, most brands performing very nicely. The main culprit here is Averna, where we took a very big price increase in Germany, and that is impacting sales in the brand's second largest market. But we would expect things to normalize also and improve in the second half of the year. Cinzano, overall down 5.8%, despite an improvement in Q2. We have Vermouth, which is in positive territory, as all of its core markets are doing well, Argentina, Germany, Russia and Italy.
On the other hand, sparkling wines are down 11.4%, mostly due to phasing in core market of Russia, linked to the price increase negotiations. If we look at the other sparkling wines, Mondoro is down by 9.5%, and this is linked to the Russian price increase issue, although it's normalizing. On the other hand, Riccadonna, as the brand is tied very closely to the fate of Aperol in France mostly, but also in Peru and Chile, is moving very positively. To round it up with our local priorities, Campari Soda, slightly down 1.9%. We'd expect it to be flattish on a full year basis. Crodino was impacted by pipeline on innovation last year, down by 1.5%. On the other hand, we're very pleased with the performance of our RTDs in Australia, we're vastly outperforming the market.
The one blotch, and this is something which will improve, but will remain negative on a full year basis, is the local brands and priority brands in Brazil, Dreher and Sagatiba, which were down 33% in the first half of this year. Ouzo was impacted by some shipment phasing in Greece. Having said that, the brand is performing exactly in line with expectations, so it will have a nice and positive full year growth. Last but not least, Cabo, where you see a weak performance which doesn't reflect depletions or consumption. We're down 8.6%, and this is due to a very tough comp base on shipments basis, where we were up by 25% in the first half of last year. This is the quick overview of performance by brand, and now we'll dwell into
Thank you, Bob. If you follow me to page 20, we have the analysis of net sales and EBIT by region. As we can see, the Americas still remain the group largest region with 42.8% of group's net sales and 41% of group's EBIT. Notwithstanding the decline in South America, and most notably the negative impact of FX on the regional performance. Worthwhile mentioning the outperformance of the high margin North Central and Eastern European region, which capitalized on the very strong performance of Aperol, which was in the first half up 26%, leading to a 28.6% EBIT contribution to the overall group profits. Moving on to page 21, we have the analysis of Americas. As you can see, on a reported basis, the net sales declined by 10.2%, and EBIT declined by 9.4%, totally driven by perimeter, the disposal of Carolans and FX.
Whilst looking at geographic performance, net sales were up 4.6%, and EBIT was up 9.6%, leading to 90 basis points EBIT margin expansion in existing business. With regards to top line, the 4.6% net sales increase was driven by positive growth across the North American region, which more than offset the weakness in South America markets. Gross profit benefited from very positive sales mix, driving 110 basis points accretion, and particularly in the high margin North American market, the expansion of gross profit helped compensate the adverse Agave price impact, which, by the way, is to become more impactful in coming quarters in Q3 and Q4. Of the EUR 12 million negative hit coming from Agave in the first half, we've already recognized EUR 4 million, so still EUR 8 million negative hit in the second half of this year. With regards to A&P, a slight increase to support the brand building investments.
A&P was up 5.3% in value with 10 basis points dilution. On the other hand, SG&A in the region grew in line with the top line in existing business, so there's no impact on margins. The EBIT margin overall came in at 19.7% from 19.6% of last year, with 20 basis points accretion, where the organic accretion of 90 basis points more than offset the combined dilutive impact of perimeter and FX, which accounted for 70 basis points. If you move on to the EMEA region, page 22. Overall, on a reported basis, we had a decline of top line of 3% and flattish EBIT, actually -0.3%, again, driven by perimeter. As you can see in existing business, net sales grew by 4% and EBIT by 4.7%, leading to a minor organic change in EBIT margin of 10 basis points.
Top line clearly benefited from the good performance of the high margin Italian market. With regards to gross profit, EMEA had an improvement in marginality of 90 basis points, thanks to the solid performance of the high margin aperitif portfolio across the region. The investment in A&P grew faster than the top line, at 7% increase year-on-year in value terms due to phasing of brand building investments, particularly behind the aperitif portfolio, as well as to support a number of initiatives in the GTR channel. SG&A grew in value by 5.5% in existing businesses, thus leading to 40 basis points dilution due to the strengthening of on-premise capabilities in selected markets, as well as investments in the global travel retail chain channel. With regards to FX and perimeter. FX, almost entirely attributable to the disposal of low margin businesses, Lemonsoda and the termination of agency brands, the Brown-Forman portfolio.
They had, overall, a negative impact in value terms, but a positive impact on margins of 40 basis points. EBIT margin for the EMEA region was up to 18.6% on sales from 18.1%, 50 basis points driven by the accretive effect of the organic growth, coupled with the positive perimeter and FX impact that I have referred to before. Moving on to the Northern and Central Eastern European market. On a reported basis, the region was up 3% on net sales line and 5.4% on the EBIT line. In existing business, actually, performance was even more robust, with top line up 6.7% and EBIT up 9.1%.
Again, also in this region, we have an organic expansion of the EBIT margin of 70 basis points, totally driven by gross margin expansion, up in existing business 210 basis points, driven by the strong sales mix improvement, thanks to the positive performance of the high margin aperitif portfolio. Part of the 210 basis points gross margin expansion has been reinvested in A&P to support the high margin global priorities, and that drove 140 basis points dilution from the A&P line on sales. SG&A grew in value by 7.2% in existing business, thus leading to 10 basis points dilution on the EBIT margin line. Overall, the EBIT margin was up to 29.8% from 29.1% of last year, with 70 basis points entirely attributable to the accretive effect of the organic growth. Moving on to APAC, page 24.
We had very solid results with a reported increase in net sales of 4.6% and reported increase in EBIT of 58%. Looking at the organic performance, that was even stronger, with top line growing 14.6% and bottom line growing 83.6%. Thus, driving 350 basis points EBIT margin expansion in existing business, of which 90 basis points came from gross margin expansion. Again, here is particularly the very robust performance of the Australian market, coupled with investments in A&P, which in value term were up 11%, but at a moderate pace vis-à-vis top line, with 40 basis points EBIT margin expansion and a very moderate increase in SG&A, up 4.2% in value terms, with 220 basis points EBIT margin expansion. On a reported basis, EBIT margin was up to 8.7% from 5.8%, showing 300 basis points EBIT margin expansion on sales.
We move on to the consolidated results, skip slide 26 and look at slide 27. Gross profit on a reported basis came in at EUR 471.9 million, down 1.1% in value, but up to 60.6% on sales or 220 basis points accretion. Of which, 110 basis points gross margin expansion is coming from organic gross profit growth, which in value was up 7.5%. The organic growth of gross profit in existing business was ahead of the top line, thanks to the favorable sales mix by brand, as we saw before, and markets, where high margin global and regional priorities performed quite nicely in core developed markets where margins are higher. Thus, we managed to offset the dilutive effect of the adverse agave price, which became progressively more impactful in Q2.
The first quarter, we had 250 basis points gross profit expansion, and the second quarter, neutral on margins. A&P came in at EUR 134.9 million, up 0.4% in value to 17.3% on sales, with 90 basis points dilution. Looking at the existing business, the organic growth of A&P was 7.9% in value, with 40 basis points dilution, primarily driven by the phasing of our marketing initiatives, with a stronger skew in first half this year to support the development of brands such as Campari, Aperol, and Grand Marnier. The SG&A came in at EUR 176.5 million on a reported basis, down 1.6% in values to 22.7% on sales, down 70 basis points on sales. Looking at the organic trend of SG&A, we had a moderate increase in the first half in value, 5.3%, slightly lower than the top-line growth, and therefore neutral on margin.
EBITDA adjusted came in at EUR 160.5 million on a reported basis, down 1.7% in value to 20.6% on sales, showing 50 basis points margin accretion. Looking at the organic performance, the bottom line performance was quite robust in the first half, with an increase in value of EBITDA adjusted of 9.4%, delivering 80 basis points margin accretion. Page 28, more in particularly, we have a breakdown of the EBITDA adjusted performance by organic perimeter and FX impact. As we can see, in existing business, as I said before, the organic growth of EBIT was in value 9.5%, with 80 basis points organic accretion, totally driven by gross margin expansion of 110 basis points on a year-to-date basis, more than offsetting the step up in A&P spend of 40 basis points.
Perimeter had a negative impact on the EBIT of 5.8%, or EUR 9.5 million, driving 40 basis points dilution to [a sale or disposal on] non-core businesses. The FX had a negative impact in value of 5.4%, or EUR 8.9 million, with 40 basis points accretion. If we move on to the following page 29, we have the analysis of the financial charges. The net financial charges came in at EUR 14.8 million, down versus last year by EUR 8.2 million, thanks to the positive effect of the liability management transactions that were successfully completed at the back end of last year. Average cost of net debt came in at 3%, in line with H1 last year. Then we had a small positive financial adjustment of EUR 1.6 million related to some minor financial asset disposal.
If we move on to page 30, the analysis of tax rate, thanks to the, as already highlighted, the reduction of the U.S. corporate tax rate, the recurring effective tax rate came down from 32.1% last year to 27.9% this year. On a recurring cash tax rate basis, the rate is now 22.3%, from 23.5% of last year. Also the good deferred non-cash taxes are now down to EUR 8 million versus EUR 12 million of last year. We have to highlight some good news on the patent box. This year, in the first half, we're recognizing EUR 14.8 million, thanks to a better than expected patent box benefit, both on prior years and the current year. We have a positive effect on prior years of EUR 4 million, and the guidance of EUR 19 million has to be lifted up to EUR 21 million on a recurring basis.
We couple the prior year benefit of four, plus the 21, we will end up with a positive impact this year of EUR 25 million from patent box. Whilst, as you see on the last bullet, 2019 will be the last year for patent box, and we will bank EUR 21 million. Moving on to the analysis of non-recurring adjustments, page 31. Basically, no news versus guidance that was given at the back end of last year. Versus in the first half, we're recognizing total operating adjustments of EUR 19.6 million, small financial adjustments of EUR 1.6 million, and the effects of the patent box as well as the fiscal effects on the operating and financial adjustments totaling EUR 21.6 million. The total bottom line impact of those adjustments in the first half of this year of a positive EUR 42.8 million.
Moving on to page 33, we have the analysis of cash flows. Free cash flow came in at EUR 110.9 million on a reported basis, up EUR 40.1 million versus last year. On a recurring free cash flow basis, group generated around EUR 38.5 million, up EUR 47.1 million. Key drivers, listed below, we have a slight decrease in EBITDA, EUR 3.9 million. Other charges mainly related to provision and other non-cash items with a non-recurring positive impact of just EUR 2.6 million. Taxes paid of EUR 24.2 million on a reported basis, of which EUR 12.4 attributable to recurring cash flows with notably, in comparison to last year, first half recurring taxes paid of EUR 32 million implies a shift of tax payments in the second half of this year of about EUR 20 million.
Change in operating working capital, EUR 21.1 million, as we will see in the following slide. The other big item is the CapEx line, where on a recurring basis we've spent EUR 17.3 million and EUR 18.8 million on a reported basis. Moving on to page 34, operating working capital as a percentage of net sales, it came in at 37.2% versus 33.3% of December last year. If we excluded the EUR 42.4 million perimeter impact on operating working capital, the ratio of operating working capital on net sales would be 34.7%. Actually, the organic increase in operating working capital accounted for EUR 21.1 million and ForEx had an impact of a negative EUR 9 million on working capital. Moving on to page 35, we have the analysis of the net financial debt, which, as Bob said, decreased by EUR 34.7 million.
Net debt stood at EUR 946.8 million. Thanks to the positive free cash flow generation of EUR 110.9 million that we've analyzed before. The proceeds from the sale of the Lemonsoda that you can see in the footnote, EUR 80 million. The cash outlay for the acquisition of Bisquit accounting for EUR 52 million, the dividend payment for EUR 57 million, and purchase of own shares of about EUR 20 million. On the back of that, the net debt to EBITDA pro forma ratio declined to 1.9 times from two times at the back end of last year. Page 36, in closing, the debt maturity profile, quite a very solid position with long-term gross debt, which exceeds the net debt. We have EUR 1.3 billion of bonds and loans.
We currently have EUR 558 million of excess cash, which is more than enough to repay the first tranche of term loan expiring in 2019 for a total consideration of about, including other financing, about EUR 250 million. I think this is it on numbers. Bob, I hand you over the floor.
Thank you, Paolo. Before closing up with the conclusion and opening up to your questions, just a few words on our marketing activities, where we're firing on all cylinders. You'll see that on Aperol, our events and our ability to scale up events and making them more engaging is improving significantly. You might have seen some in London in the late spring, early summer. On the other hand, we even had an event as large as with 70,000 people in Naples with a concert. These things are really terrific for engaging with our consumers and getting liquid to lip and conquering them. On Campari, also very successful Negroni Week. I think this is probably one of the biggest drivers behind the consistent growth of the brand, where through the Negroni, we're recruiting a lot of new consumers.
It's an event which started with about 100 bars five years ago. This year, again, full visibility events, activation in 10,000 bars across 69 countries. This thing has a lot of legs and clearly sends a message to everyone, including to some of our peers, that there's no Negroni without Campari. What I'd like to attract your attention to is to the new campaign, which we launched on SKYY in June of this year. It's a new integrated marketing campaign, which we call Proudly American, and it celebrates the spirit of today's bold and optimistic Americans. The campaign juxtaposes famous phrases from American history, such as Home of the Brave, was very powerful, as you can see from the top up and to the right, and vivid imagery featuring people who really do shine brightly in the face of adversity.
We celebrate diversity, and I'm proud to inspire today's articulation of being American. This is quite an important campaign, I think, which will be very distinctive and make the mark for the brand. On the other hand, also very positive is we launched a new Infusion Watermelon. It actually did so well, it went out of stock, this hasn't happened for quite a while. That leaves us a little bit more optimistic for the performance of the Infusions line this year. Lastly, to close out, you can see that we're really focusing on driving value with more premium line extensions across our portfolio, as well as in our innovation. We just launched, very successfully, although on a small base, a Italian gin, O'ndina, based on basil.
It had a very good start in Italy and the U.K., and we'll roll out in Spain in the second half of the year. This is a brand we'll nurture probably in the next 10 years to come. Last but not least, conclusion and outlook. I think you've seen that we've had a pretty solid organic growth in the first half of this year, reflecting the very nice acceleration top line in Q2, which helped recover, as expected, the Q1 phasing issues, as well as helped normalize the trends across profit indicators. Our sales mix continues to be quite favorable, thanks to the consistent outperformance of our high-margin brands in core high-margin developed markets. On a reported basis, the first half shows positive underlying trends, which unfortunately were impacted by the expected negative ForEx and perimeter effects.
Nonetheless, looking at the remainder of the year, our outlook remains broadly balanced in terms of risks as well as opportunities. Looking at organic sales growth, we expect it to continue to be driven by the outperformance of our high-margin global and regional priorities in our core developed markets. The one exception will be SKYY, where we will continue to destock the brand in its core market, the U.S. Geographically, we expect the core developed markets to continue driving the growth, whilst lower margin emerging markets will continue to suffer from the overall environments. We will have improvements in the second half, but overall, we expect them to be weaker than last year. Looking at organic trend and gross margin, we expect gross margin organic expansion to continue to be driven by a favorable sales mix, which will help overcome the significant adverse agave price impact.
In particular, the gradual increase of the average purchase price of agave, as Paolo mentioned during the financial review, is expected to accelerate in the remainder of the year, generating clearly in the second half a greater dilutive effect than in the first half. Looking at adjusted EBIT, the potential upside from a less adverse ForEx impact, especially U.S. dollar versus EUR, will be reinvested in accelerated brand-building initiatives behind our key global brands, particularly Aperol, as well into some selective strengthening of on-premise capabilities, as well as the creation of central capabilities for brand houses development. With regard to the key underlying business indicators, we remain quite confident in delivering a positive performance in the full year 2018. This is it, and we look forward to your questions.
Thank you, sir. Excuse me, this is the Chorus Call conference operator. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. To remove yourself from the question queue, please press star and two. Please pick up the receiver when asking questions. The first question comes from Mr. Edward Mundy of Jefferies. Please go ahead, sir.
Afternoon, Bob. Afternoon, Paolo. Three questions, please. The first is on Aperol. No signs of slowdown at all. If anything, it is accelerating. How do you think about the opportunity for Aperol to be produced locally? Is that something you are thinking about? And what would the margin implication of that be? Second question for you, Paolo, on margins. I think at Q1, you were guiding for gross margin expansion about 60 basis points for the year. I was wondering whether you could provide an update on your margin expectations through the P&L gross margin, A&P, SG&A, and EBIT for the year. Then finally, just one on Campari Cask Tales. Are you able to talk a little bit more about the product and the thinking behind it?
Is it something that is scalable and something that could help premiumize the Campari brand, or is it something predominantly being used for brand building at this stage?
Okay. I'll take the first and the third question first, yes. With regards to the questions on Aperol is performing perfectly in line with our expectations. The three stages model and having the markets in different parts of that model clearly leads us to believe that we've got plenty of room to grow the brand. I assume the question is probably indirectly asked on what happens if potentially customs duties in the U.S. Technically, it's not that difficult to produce Aperol outside of Italy. We could do that relatively quickly. On the other hand, we would do it reluctantly because we think that made in Italy is quite important. On the margin side, yeah, there could be a small improvement, but it's not what's going to change the destiny of the brand.
We think that the fact that Aperol is the number one cocktail in Italy, and that it is produced in Italy is clearly part of the core proposition. On Campari Cask Tales, at the moment, we're still viewing it as a brand-building tool. Can it be scaled up? Technically, it can. It's a very young initiative, and I think we'll make the call next year. We'll see how it is, but it's definitely a great brand-building tool, and it's really helping premiumize the brand.
Yeah. On the margin front, basically, let's try and recap where we are on the guidance. I need to break down the guidance into the three factors: organic, perimeter, and ForEx. First and foremost, let's start from last year restated following the IFRS reclass. 2017, on a restated basis, delivered 57.7% gross margin on sales. A&P on sales came in at 16%, and SG&A on sales came in at 20.1%, with EBIT adjusted margin on sales of 21.7%. This is last year. Basically, the point we made last time we had the call was that the business fundamentally is delivering, on a sustainable basis, 120 basis point gross margin expansion. That is partly impacted by the increase in the agave price that is costing us EUR 12 million, or roughly 60 basis points.
In existing business, we were seeing a 60 basis point gross margin expansion, and clearly 60 basis point EBIT adjusted expansion with no major swings in A&P and SG&A. Then we will discuss at a later stage, the ForEx. We have the positive impact, or let's put it this way, less negative impact of the U.S. dollar. That is freeing up some resources that we will reinvest in A&P and SG&A. If we wanted to quantify the impact at this stage of the year, we can say roughly 40 basis point, evenly split between A&P and SG&A, so 20 basis point drift between the two. We have perimeter.
As we all know, there is no change to guidance with disposed businesses that were low in gross margin on sales, and it is driving about 130 basis point gross margin expansion on a reported basis. On the other end, these businesses were low A&P intensive, and so this is leading to 60 basis point dilution. Clearly, there is an impact of SG&A on sales as, the supporting functions and the sales organization and the marketing teams were not reduced following the disposal of these businesses. This is leading to about 70 basis point SG&A drift. It's perimeter on EBIT level, was guided as neutral and remains neutral. With regards to ForEx, this is the good news. Here we have a double effect. The guidance we gave was based on a ForEx of 1.25 on a EUR-dollar basis.
We're running our numbers based on a simulation of 1.19. We have some positive impact that is partly offset by further deterioration of emerging market currencies. There is a positive element in the effects in terms of marginality. The transactional impact that is caused by the devaluation of the dollar versus the EUR that we've quantified in 30 basis points in EBIT terms, 30 basis points on sales, is now no longer there because it's fully absorbed by the further deterioration of the emerging market currencies that are hitting low margin markets. Of the 40 basis points dilution of EBIT margin driven by stepped up investments in A&P and SG&A, we will recover 30 basis from currencies. The point is, in value terms, we don't see any change.
We'll probably slightly change the impact of the three factors, organic and ForEx, vis-a-vis prior guidance.
Paolo, thank you.
You're welcome.
The next question is from Andrea Pistacchi of Deutsche Bank. Please go ahead.
Hi, Bob. Hi, Paolo. I also have two or three questions, please. Firstly, just to clarify and a little more granularity, please, on the margin. In particular, on the gross margin, you were saying earlier there's been quite a swing from Q1, where gross margin was up 250 basis points, and Q2, where you said it was neutral. You said that agave cost pressures have intensified. I think you said €4 million for H1. If I assume that the EUR 4 million was all in Q2, that would be, I think, about 100 basis points of gross margin. There is still quite a swing between Q1 and Q2. Looking at the shape of your top line, strong growth of Aperol U.S., weak performance in Brazil and Russia, it would appear that mix benefits are still very strong.
I was trying to understand really what is the delta in gross margin performance between Q1 and Q2. On the SG&A, just to clarify your comment on SG&A and A&P and the impact on EBIT. Did you say that, because at Q1 you were saying that SG&A and A&P would be organically approximately flat year on year. Are you now saying, if I understood, that they will probably be up about 40 basis points, but this will be offset by the FX benefit? Finally, if you could possibly quantify what you'd expect, in EUR terms, the FX impact on EBIT to be for the full year, assuming, as you said, the EUR/USD at 1.19. Thank you.
Okay. With regards to the gross margin, there is the agave effect that is causing that EUR 4 million and EUR 8 million to come in H2. I suspect that also in terms of sales mix, we had a negative impact from local priorities, Crodino and Campari Soda, which in the quarter were softer than last year. Thus, further denting the gross margin in the second half. The performance of these brands is also driven by promotional activity. As you phase into the different quarters, the promo activities, you may have swings on brands that are quite profitable and can make the difference. With regards to the SG&A and A&P on sales, yeah, that's correct, Andrea. We are currently envisaging a 20 basis point step up in existing business on A&P, and 20 basis points step up on the SG&A line.
In terms of A&P on sales, if you bundle the 20 basis point organic that I've just referred to, plus the 60 basis points that are coming from perimeter, we are basically targeting A&P on sales of about 16.8%. That's the target, and then we have the 20 basis points on the SG&A line. With regards to the FX, the opportunity that we're currently seeing is about EUR 6 million, EUR 7 million. The prior guidance was EUR 24 million, so it could be EUR 18 million, EUR 19 million, a negative hit to the bottom line.
Perfect. Thank you.
The next question is from Simon Hales of Citigroup. Please go ahead, sir.
Thank you. Just a couple of questions, please, for Bob. I wonder if you could talk a little bit about the performance of Grand Marnier, the underlying perhaps depletion trends you're seeing, the performance a little bit by geography. Also, where are you with regards to the HQ move in the U.S.? Has that actually happened now? Have you managed to move all the people and key personnel across that you wanted to with that, or are we still in the throes of getting through that process?
Okay. With Grand Marnier, if you look at it on a global basis, the underlying right now trend is somewhere between low to mid-single digit. The U.S. is currently running at overall closer to mid-single digit, it's the largest part of the pie. This takes into consideration, obviously, all the discontinuations and all of those things, which are flushing out of the system. What's important is that we're starting to see the brand react positively in markets which are outside of the U.S. There, the actions we took, particularly on ending discounts, et cetera, were a lot harsher last year than anything we've done elsewhere. So it's good to see the brand reacting. With regard to the headquarter move, I'm very pleased to say that it is complete in a sense that all the people are now in New York.
They haven't moved into the final offices, where the refurbishment will probably take till about end of October. They're in temporary offices. All of the positions are filled. We've had some excellent local recruits, so we're in a very good position. Obviously, this was a major move, could have created a lot of disruption. I think kudos to our U.S. management team for handling such a large move in such a smooth way.
Thank you. Can I just ask, just going back to, Paolo, your comments around sort of A&P spend and the slightly greater level of investment that we are now seeing for this year compared to perhaps what you were guiding to at the Q1. How do we think about the phasing of that through the second half in terms of Q3 versus Q4, in terms of the big programs that you have potentially got coming down the pipeline?
The current schedule is heavier on Q3 than Q4 versus last year.
Okay. Thank you.
The next question is from Javier Gonzalez of Berenberg. Please go ahead, sir.
Yeah. Good morning. Good afternoon, sorry. A couple of questions. Firstly, I wonder if you would be able to share with us what the average gross margin of the regional priorities is, also another number I'm after is the growth rate in the U.S. business, excluding SKYY. If you could give us your views as to what you think it's running at. Lastly, very simple question for you, Bob, probably, but I would be very interested to hear from you what you think is the biggest challenger to the Aperol brand or biggest competitor. Thank you.
Mm-hmm. Well, I'll start with the last one. I don't think the success of the Aperol Spritz is convincing many of our peers to somehow turn some of their existing brands into spritz brands. Most of them really don't have the credibility for that. There is some me-too activity, again, that has short-term impacts, but then they wash through the system because they're not able to duplicate our quality. I think if you really think about it, our source of business is beer, so clearly beer is a competitor. To a large extent, also the phenomenon of gin and tonics. That was the last question. Sorry, I forgot the first one.
Yeah, the first one is, if you could share with us what the average gross margin of the regional priority brands is.
No, unfortunately, we don't disclose that. Clearly the spirits brands have a much higher gross margin than the sparkling wines and the vermouth. Some of our regional spirits brands have gross margins very similar to the global priority brands.
Okay, the question on the U.S. business, the growth rate excluding SKYY?
I'd have to get back to you on that, we can go through them individually. If you look at it, the bourbons are growing high single digit, mid to high single digit on the rums. Tequila is growing at a very strong double digit. The aperitifs as well. Aperol is almost doubling. Campari is growing in the 15% ranges. Net in net, quite a robust growth.
If I come one very last question. You've mentioned in the past the different stages at which you might be when you launch Aperol into new markets, I wonder, the efforts you make in more mature markets to de-seasonalize the brand, I just wonder whether you could give us some color in terms of how successful you've been at that, maybe in terms of flattening out or, let's say, making the sales throughout the year more consistent.
Yeah, if you look at some of the original markets such as the two oldest ones, Italy and Austria, our seasonality would be close to that of beer. We've been pretty successful going into skiing resorts, running events, and activations in key cities in the fall as well as in the early spring. That's working quite well. Germany, we're starting to get there, as well as Switzerland. The other markets are more at the beginning. The most important thing is that we see that the growth models which we apply in Italy, which is really our laboratory, then end up working out in all the other markets. It's just a question of time.
Great. Thank you.
The next question is from Chris Pitcher of Redburn. Please go ahead.
Thank you. Good afternoon, everyone. A few questions. Just to follow up on the Grand Marnier shipment phasing. Looking at the first half, would the first half be a more normal seasonal sales profile, such that we should expect a modest negative in Grand Marnier in the second half as you sort of rebalance to get to that mid-single for the full year? Secondly, on the SKYY destocking, could you give us a bit more color behind that? A brand that is in decline, you would expect to see a natural destocking by wholesalers to sort of keep ahead of the declines, or is there something more fundamental behind that? Thirdly, I appreciate it's small, but you mentioned China was flat. Could you update on how the new relationship with Camus is going in China and whether that caused any disruption?
Other players in China are reporting, obviously, better growth currently. Thanks.
Yeah. Bear in mind, the China numbers which you see are our shipments to Camus, they don't reflect the underlying depletions in the market, which are positive. You'll have swings and phasing effects from when they order product from us and when we ship it to them. I wouldn't read anything into that. Now, if you look at your first question on Grand Marnier, I think mathematically you're correct. The brand is running more at a mid-single digit, so it will balance out throughout the second half of the year. With regards to SKYY, it's actually us deciding to keep a certain number of days of stock on hand at our distribution partners, particularly the largest one representing about 80% of our sales. There's nothing more than that. It's just the right way of doing business.
We'll adjust when we see the brand stabilizing, which it looks like it's starting to do, particularly, as I said earlier, in the NAFTA markets, where it has turned slightly positive on consumption terms.
It's very much your decision.
Yeah
On your mathematics, it should normalize by the end of the year.
Yeah.
Okay. Thanks very much.
Sure.
The next question is from Marion Boucheron of Raymond James. Please go ahead, madam.
Hi, good morning. Just going back to the gross margin. Hello?
Yes, we're here listening.
Yeah, sorry. Just going back to the gross margin, in the full year, I was wondering how you see the impact from scope and ForEx impacting H2. H1 was fairly positive. How would you see it trend lining over H2? Second question, there was a lot of markets rebounded in Q2 quite sharply. How do you see these markets evolving throughout the year, and also if you could give us some color on more of the emerging markets like Brazil or Russia.
Let me take the first question. As I said earlier, the market which will be hardest hit on a full year basis is Brazil. We're down significantly on the local brands in the first half of this year. They will start improving in the second half, but overall, we would expect Brazil to be down in the high single digits on a full year basis. On the other hand, remaining in the geography, we'd expect Argentina to swing around, and to actually grow in the high single digits on a full year basis. A lot of what happened in Argentina is us being very tight on credit offered to customers, whereas the rotations of our brands is pretty healthy given the market context.
Moving into Russia, we've had that bump, let's call it that way, on our trajectory in Q1 where the discussions with our largest customer on price increases led us nowhere. We didn't ship anything to them in Q1. We started resuming shipments in Q2. As you know, the seasonality of our largest products are very much in Q4 around Christmas, New Year's with the sparkling wines. We expect to recover to a certain extent. The most positive thing is to see how our mix is changing in Russia, particularly driven by aperitifs with, again, very strong performance by Aperol Campari as well, and tequila. We feel good about the Russian business.
Yeah. With regards, if I got you correctly, to gross margin trend for the second half of the year, it will be overall a positive gross margin expansion also in the second half, although not clearly as strong as the first half, which delivered 110 basis point organic expansion of gross margin. This is clearly impacted by the agave, which is costing us EUR 8 million. You need to run the math, but it could be as high as probably 90 basis points, something like that in the second half.
Okay, on the perimeter and FX impact, you expect it to be lower than what it was in H1, lower than the 100 basis points margin expansion it triggers on gross margin.
Right. FX in the second half is still negative, but is not as negative as in the first half. Perimeter, the impact is evenly split between H1 and H2. No major differences. More or less.
FX is.
More or less is the same, yeah.
Thank you.
The next question is from Emma Letheren of RBC. Please go ahead, ma'am.
Hi. Just one question from me. Wondering if you could quantify the gross margin impact from improving sales mix in the first half, just so I can get an idea of how significant other factors such as promotional activity were.
The gross margin, 110 basis points expansion is entirely driven by sales mix improvement, partly offset by the other. Other input costs are fairly neutral on increase of other input costs, fairly neutral on gross profit, as we managed to increase net sales prices in line with our plans. As said, Tequila is EUR 4 million, it is probably in the first half, 50 basis points.
Okay, thank you.
The next question is from Paola Carboni of Equita. Please go ahead, madam.
Hello?
Yes. Hi, Paola. We're here.
Good afternoon, everybody. A few questions from me, just to score something you said also. In particular, can you comment again about your new indication for SG&A? I got that the previous guidance of 3% in organic terms is now going to -20 basis points, if I understood correctly. You mentioned the EUR 6 million-EUR 7 million opportunity. I got confused. Sorry about that, if you can repeat. Forex, if you can share with us what the absolute impact would be with your assumption of 1.19 for the U.S. dollar. This was already asked, but probably the answer was missed. I was interested in your outlook for Campari Soda and Crodino, considering that they might be a driver for profitability.
sorry, if you have any indication about how long it might take for SKYY to stabilize, both in terms of sell-out in the U.S. and of sell-in. How much further months of de-stocking are you envisaging? Thank you very much.
I'll take the last one, Paola. I think the way we've planned it's a gradual de-stocking throughout the year, that will finish at the end of this calendar year.
Paola, my comments on organic change in margin guidance is, we're basically saying that we've guided towards 60 basis points EBIT margin expansion in existing business, driven by gross margin expansion of 60 basis points.
Now we're saying, we will lift in existing business A&P on sales by 20 basis points and SG&A on sales by 20 basis points, totaling 40 basis points. This is an investment that is offset by some positive news on the FX, that we've quantified in about EUR 6 million, EUR 7 million from USD, partly offset by deterioration of other currencies. Say it is just EUR 5. From EUR 24 million negative hit on the ForEx at the EBIT level, we're now probably expecting to have a negative impact in EBIT line from ForEx of about EUR 18 million, EUR 19 million. That's the comment. On the underlying assumption is assuming that we will manage to hit an average USD/EUR FX of 1.19 versus 1.25, which was the underlying assumption for prior guidance.
Okay, perfect. Very clear now.
The next question is from Nico von Stackelberg of Liberum. Please go ahead, sir.
Hi, guys. You're well aware of the moderation trends going on in the spirits industry. For example, Diageo Seedlip, Pernod Ricard came out with Ceder's. In fact, Diageo are further extending this. They have Gordon's as a ready-to-drink, as a low ABV, and also Ketel One Botanical, which is also a lower ABV spirit. What are you doing in the space? What's the plan? Just curious how you guys are seeing that. Thanks.
Our view on regular ABV brands is to not to play around with ABV. We think that playing around with ABV on existing brands is really very dangerous in the mid to long term for the brands. We're not going to do any of that. We're not also all that keen on doing ready-to-drinks and all of those things. We have them in a few selected markets where it's market practice, but that's where we're keeping things. If you're looking at the non-alcoholic opportunity, frankly, we have a gem in our hands with the Crodino range. We started in the past two years to start testing it in various central European markets. It's doing very well. We will build upon that.
Okay. That's good to hear because I've been wondering about Crodino. Are you guys considering bringing Crodino to, for example, the U.S. or maybe just to further develop its exposure here in the U.K.? Also as sort of adding onto that, you also have built some gems pretty much out of nowhere with Koko Kanu and, I struggle to pronounce it, but O'ndina. Just wondering if those could be expanded further into other markets, maybe for FY 2019. Thanks.
Yeah. Our overall philosophy is to establish solid foundations for our brands and develop growth models in selected markets. After a few years, then we expand them into other markets. We take a mid to long-term view to this. There's no need to rush things. We're not chasing quarterly numbers. We're doing brand building. Yes, eventually all of those brands will spread on a global basis, but we'll take our time.
Okay. Good to hear. Thanks.
As a reminder, if you wish to register for a question, please press star and one on your touchtone telephone. Please go ahead, sir.
One last question from Edward Mundy.
We have a final question from Edward Mundy of Jefferies. Please go ahead.
Yeah, we could have a Campari conference call without asking the M&A question. Bob, Paolo, I was wondering whether you could possibly provide any granularity or any color at all on how the pipeline's looking and sort of appetites and readiness for M&A.
The appetite and readiness is there, but you know we have stringent criteria. It doesn't mean that just because something pops up on the market that we're going to go after it. I would say the pipeline is maybe a little bit softer than usual, but there are always very interesting leads we're working upon. You never know.
Great. Thank you.
We have a follow-up question also from Paola Carboni at Equita. Please go ahead, madam.
Yes, sorry, just a follow-up question. I don't know if there is already an answer on that. I would appreciate if do you have any indication on how your portfolio breaks down in terms of Let's say premiumization, we can say. Clearly we have a breakdown by global priorities, by brand, and so on and so forth. Considering that you are pushing more and more premiumization strategy, and going toward, let's say part of your portfolio is going towards a kind of luxury offering, we can say, especially for aged spirits. I don't know if you have already any kind of indication of how actually your offering is changing in this respect, in terms of price brackets, for example. Thank you very much.
Well, thanks. It's a good question, Paola, but it's not something which we're actively tracking because the definition of what is premium, ultra premium is very much related to individual markets. If you mix up all the numbers, you'll end up with an omelet. This is something we do on a market by market basis, and clearly the focus is much more in the U.S. and our core European markets at this stage.
Okay, thanks.
We have a follow-up question from Andrea Pistacchi of Deutsche Bank. Please go ahead, sir.
Yes, thanks. I've got two more quick questions, please. First one on Aperol. In the U.S., you've been recently taking it into new cities in the U.S. If you have any sort of early feedback on how that is going, whether in some places it's working better than elsewhere. The second one for Paolo on CapEx. I think the number was particularly low in this H1. I don't know if this was a bit of a one-off, and whether for the year, it should be a higher number.
Yeah. Andrea, with regards to Aperol in the U.S., we're in the thick of it at this moment. Everything is going in line with planned, so we feel good about it. I'd rather wait until the end of the year, at least the end of Q3 to pass judgment on how things have worked. It's very encouraging. I don't know if you caught it, but the likes of The New York Times have called Aperol the drink of the summer 2018. Obviously, quite a few people are picking up those wonderful glowing orange wine glasses. Yeah.
Yeah. With regards to CapEx, guidance is basically unchanged. We were shooting for EUR 72 million overall CapEx, including EUR 16 million of extraordinary CapEx and EUR 57 million of maintenance CapEx. The left to go is quite big. We have about EUR 54 million to go for the rest of the year, of which EUR 14 in maintenance and EUR 9 in extraordinary.
Perfect. Thank you very much.
The next question is from Mitch Collett of Goldman Sachs. Please go ahead.
Hello. I just wanted to get a bit more color, perhaps on top line growth for the full year. There's a few puts and takes, I guess, in the first half and between the first and second quarter. What do you see as a better guide to the full year growth rate for your top line? Would it be the second quarter or the first half? One unrelated follow-up. You had an EUR 11 million increase in aging liquid during the first half, which is a bit of a step up on the run rate from last year. Can you give us some color on which brands you are increasing your investment in aging stock? Thanks.
Yeah, overall, I wouldn't get too hung up by quarters Q1, Q2. I would look at the half year results and especially on the APATs and the key global brands see it as more indicative with the exception of SKYY and Grand Marnier, which will even out during the year because they're very inverse trends between depletions and shipments.
Okay, and the reversion for those two broadly nets each other out. Is that right?
Yeah.
Okay. On aging stock?
Well, on stock, I think, are you talking on an organic basis or overall? Overall, clearly with the inclusion of the aged liquids which came with the Bisquit acquisition.
Okay. Understood. Thank you.
The next question is a follow-up from Mr. Nico von Stackelberg of Liberum. Please go ahead, sir.
No, actually, Mitch asked my question. Thanks.
Okay, sorry. The next question is from Chris Pitcher of Redburn. Please go ahead, sir.
Yeah, I think Mitch's question answered the one I was going for. Just to confirm, I was trying to get the shipment movement on SKYY and Grand Marnier in the half, and they almost exactly match each other about EUR 8 million. Is that the right way to think about it? One positive and one negative. They're looking forward to Q1 next year.
Yeah.
They even out that. Just to confirm that.
Yes.
Thanks.
All right, any final questions, please press star and one on your touch-tone telephone. It looks like that's it. There are no more questions registered, sir.
Well, thank you very much for joining us. We're a few hours away from vacation, so we wish you.
Thanks, Bob.
Paolo says second. We wish you a great summer, and enjoy all those wonderful orange and red glasses. Thank you. Bye-bye.
Bye-bye.
Ladies and gentlemen, thank you for joining. The conference is now over, and you may disconnect your telephones.