November 7, 2017 / 4:53 PM / a year ago

UPDATE 1-Campari gives pause to asset sales, positive on Aperol

(Adds CEO comments, details)

By Francesca Landini and Maria Pia Quaglia

MILAN, Nov 7 (Reuters) - Italy’s Campari could take a pause in its campaign to sell non-core assets, CEO Bob Kunze-Concewitz said on Tuesday after the beverage group reported a healthy growth in nine-month organic sales.

The group, which was founded in 1860 in Milan, has put on the block low-margin businesses to focus on its priority brands, which include aperitif Aperol and eponymous drink Campari.

It has raised more than 300 million euros in 12 months from recent asset sales.

In the meantime, the group has also been engaged in an intense acquisition campaign under which it has bought French liqueur Grand Marnier and high-quality gin Bulldog.

“We have exited from the still wine business, the carbonated drinks and we have also divested real estate assets ... a pause in our asset sales would not be wrong,” Kunze-Concewitz told Reuters in comments after the release of financial results.

At the same time the CEO said the group would continue to review acquisition options while applying a “disciplined approach” when considering possible targets.

The group reported a 6.2 percent rise in organic 9-month sales to 1.276 billion euros. This was in line with an analyst consensus compiled by Reuters.

Adjusted operating profit (EBIT) came in at 257.3 million euros, with operating margin, a measure of the group’s profitability, at 20.2 percent in the period.

Sales of Aperol, the group’s largest brand in the portfolio, were up nearly 20 percent between January and September.

The group said its high-margin priority brands would continue to outperform in the final part of this year, thanks to strong sales for Aperol and the relaunch of Grand Marnier.

“Aperol will continue to be the star of the show,” Kunze-Concewitz said, adding the brand would grow at a “nice double digit” rate in 2018.

Grand Marnier benefited from the group’s decision to reduce the discounting campaigns put in place by the previous owner and was also positively impacted by a positive shipment effect, the top executive told Reuters, adding the brand would grow “mid-single digit” in the medium term.

“Skyy vodka is the only brand under pressure,” the CEO said, adding however the group was determined to hold on to it. ($1 = 0.8647 euros) (Editing by David Evans)

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