Campari CEO signs off with profit increase, bright outlook

By Elisa Anzolin

MILAN (Reuters) -Demand for aperitifs, tequila and bourbon helped Italian spirits group Campari to deliver higher operating profit last year as it prepares for a change of CEO and to digest its largest ever acquisition.

Shares in the group rose as much as 7% on Tuesday, with traders saying the profit beat expectations and taking reassurance from the company's outlook for 2024.

Despite economic slowdowns putting the brakes on worldwide demand for spirits after a post-pandemic boom, the Italian group said it was optimistic about this year.

"I remain confident in the strong business momentum across key brands and markets," said Matteo Fantacchiotti, who was appointed deputy CEO last year and will succeed current Chief Executive Bob Kunze-Concewitz who steps down in April after almost 17 years at the helm.

The group agreed in December to buy historic French cognac house Courvoisier for $1.2 billion marking a big push into brandy and hopes to finalise the deal by the third quarter.

Kunze-Concewitz said more M&A could follow that deal. "We have the appetite and also the capacity," he told Reuters.

The group's brands include the Aperol aperitif, Espolon tequila and Wild Turkey whisky.

It sees the price trend for agave, which is used to make tequila, and a slowdown in inflation having a positive impact on the business in the second half of the year, partially offset by incremental fixed production costs.

Campari's operating profit reached 619 million euros ($671 million) last year, boosted by price increases, which helped to cushion the impact of input cost inflation and investments and a negative currency effect.

Campari's shares were up 5% at 1450 GMT.

Net sales rose organically by 10.6% in the fourth quarter, mainly thanks to the good performances in the United States and Northern and Central Europe. Total sales for the year reached 2.9 billion euros, broadly in line with analyst expectations, according to a consensus by LSEG.

Campari, which plans to relocate to a new headquarters in the centre of Milan in 2027, is proposing a full year dividend of 0.065 euros per share, an increase of more than 8% on the previous year.

($1 = 0.9222 euros)

(Reporting by Elisa AnzolinAdditional reporting and writing by Keith Weir; Editing by Susan Fenton)