Get 40% Off
These stocks are up over 10% post earnings. Did you spot the buying opportunity? Our AI did.Read how

UPDATE 3-Campari says all set to continue good momentum

Published 08/06/2009, 09:08 AM
Updated 08/06/2009, 09:09 AM

* H1 net profit up 0.5 percent, sales up 2.5 percent

* Co maintains focus on cost containment

* CEO sees no meaningful M&A for at least 18 mths

* Shares up 1.5 percent, hit year's high

(Recasts with CEO interview comments)

By Marie-Louise Gumuchian

MILAN, Aug 6 (Reuters) - Drinks group Campari is well placed to continue the positive momentum that saw consumption of its brands outpace the market in key regions in the first half, when its net profit beat analyst estimates.

"We have all the cards in order to continue with positive consumption momentum," Bob Kunze-Concewitz, chief executive of the company best known for its bitter red aperitif, said in an interview.

"Our brands are very well positioned both from a category standpoint as well as a pricing standpoint to continue growing."

Davide Campari-Milano SpA, which made its biggest acquisition ever in April when it bought the Wild Turkey bourbon brand, does not see "anything meaningful" happening in terms of acquisitions for at least 18 months, Kunze-Concewitz said.

Campari, which has a portfolio of spirits, wines and soft drinks brands, said underlying consumption of its brands in the first half was "positive", outperforming the overall market trend in key regions.

In a slide presentation it said the U.S. spirits market grew 1.5 percent in the first half, while consumption of its spirits rose 11.7 percent. In Italy, the overall spirits market fell 3.8 percent while Campari spirits slipped 1.2 percent and its aperitifs saw demand rise 5.7 percent.

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

It said destocking pressure eased in key developed markets.

Campari's first-half net profit increased 0.5 percent to 60.1 million euros on sales up 2.5 percent to 441.8 million euros, thanks to improved conditions in the second quarter, integration of acquisitions and cost containment.

GOOD MONTH

JP Morgan said in a note the first half was better than expected, above a consensus forecast for sales of 436 million euros and for net profit of 59.8 million.

Shares were up 1.9 percent to 6.01 euros at 1236 GMT, paring gains after hitting a year high.

Campari is sticking to a medium-to-long term target of 5 percent organic growth, Kunze-Concewitz said, adding July was a "good month."

"With regard to this year where trading conditions aren't normal, we're reserving judgment for the time being," he said.

Campari said it would remain vigilant and would focus on cost containment, working capital and cash generation.

Campari bought the Wild Turkey bourbon whiskey brand from Pernod Ricard for $575 million this year to boost its U.S. presence.

"We're a conservative company and we've clearly declared that before making any sizeable acquisition we would be looking at reducing our debt levels," Kunze-Concewitz said.

"We continue maintaining a watchful eye (on the M&A scene) but I don't see anything meaningful happening at least for another 18 months on our side."

Pernod Ricard said it expected full-year operating profit to be at the lower end of its 3.5 percent growth target range on the back of flat comparable sales. (Editing by David Holmes) ($1=.6948 Euro)

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.