Pernod Ricard: 9-month 2013/2014 Sales

Performance for the first 9 months in line with H1

Confirmation of FY 2013/14 guidance:
Organic growth in Profit from Recurring Operations
between +1% and +3%

PARIS--()--Regulatory News:

Press release - Paris, 24 April 2014

Pernod Ricard (Paris:RI)

Sales for the first nine months of the 2013/14 financial year totalled € 6,186 million. In line with the first half-year, sales were stable excluding foreign exchange and Group structure effects. The reported decline was -7% due to a highly unfavourable foreign exchange effect.

In Asia/Rest of World (-3%), sales were impacted primarily by China where the decline was exacerbated by destocking in the third quarter as anticipated. Excluding China, sales growth was +5% over the nine months compared to +2% in the half-year. Of particular note was the very good performance in India and Travel Retail. The situation remained difficult in Korea and Thailand.

In the Americas (+4%), organic growth improved slightly compared with the half-year due in particular to the good performance in Brazil. Good growth in the US (+4%) continued to be driven by excellent price/mix but slowed down slightly compared with the half-year.

In Europe (+2%), Western Europe was stable whilst Eastern Europe posted growth of +9%. The third quarter was largely impacted by unfavourable technical effects (later Easter, excise duty increases, price increases, phasing of promotions, etc.).

The portfolio dynamics were similar to that of the half-year:

  • Top 14 was virtually stable (-1%), with the return to growth of Scotch whiskies in the third quarter
  • Priority Premium Wines were stable
  • Key Local Brands (+5%) posted strong growth

Emerging markets (-1%), excluding China, remained dynamic (+7%). Mature markets (+1%) followed the same trend as in the half-year.

Several highlights of the third quarter can be noted:

  • The Group’s operational efficiency programme, the Allegro project, is being gradually implemented, in line with the set objectives of simplification, prioritisation and mutualisation
  • New distribution agreements were negotiated in April 2014 with Pernod Ricard USA’s largest distributors (Southern Wine & Spirits and Republic National Distributing Co.)
  • Pernod Ricard made a tactical acquisition of a premium California wine (Kenwood) to achieve critical size in wine in the US, a key market for the development of this category
  • In March 2014 the Group successfully issued a 6-year bond of € 850 million at highly favourable terms. The 2% coupon was the lowest ever achieved for this maturity by a BBB- rated company

Pierre Pringuet, Chief Executive Officer of Pernod Ricard, took this opportunity to comment: “In an environment that remains challenging, our performance over the nine months was in line with the half-year and with our annual guidance. I am pleased with the acquisition of Kenwood and with the strengthening of our partnerships with our two largest US distributors, which reinforce the Group’s portfolio and execution capability in the US.”

A detailed presentation of sales for the first nine months of 2013/14 can be downloaded from our website: www.pernod-ricard.com

Note: All growth data specified in this press release refers to organic growth, unless otherwise stated.

About Pernod Ricard

Pernod Ricard is the world’s co-leader in wines and spirits with consolidated sales of € 8,575 million in 2012/13. Created in 1975 by the merger of Ricard and Pernod, the Group has undergone sustained development, based on both organic growth and acquisitions: Seagram (2001), Allied Domecq (2005) and Vin & Sprit (2008). Pernod Ricard holds one of the most prestigious brand portfolios in the sector: Absolut Vodka, Ricard pastis, Ballantine’s, Chivas Regal, Royal Salute and The Glenlivet Scotch whiskies, Jameson Irish whiskey, Martell cognac, Havana Club rum, Beefeater gin, Kahlúa and Malibu liqueurs, Mumm and Perrier-Jouët champagnes, as well Jacob’s Creek, Brancott Estate, Campo Viejo and Graffigna wines. Pernod Ricard employs a workforce of nearly 19,000 people and operates through a decentralised organisation, with 6 “Brand Companies” and 80 “Market Companies” established in each key market. Pernod Ricard is strongly committed to a sustainable development policy and encourages responsible consumption. Pernod Ricard’s strategy and ambition are based on 3 key values that guide its expansion: entrepreneurial spirit, mutual trust and a strong sense of ethics.

Pernod Ricard is listed on the NYSE Euronext exchange (Ticker: RI; ISIN code: FR0000120693) and is a member of the CAC 40 index.

Appendices

Sales analysis by region

Net Sales
(€ millions)

    HY1 2012/13     HY1 2013/14     Change     Organic Growth     Group Structure     Forex impact
Europe 1,619   33.0% 1,612   35.3% (7)   0% 59   4% (33)   -2% (33)   -2%
Americas 1,282 26.1% 1,209 26.5% (73) -6% 41 3% (2) 0% (112) -9%
Asia / Rest of World 2,005   40.9% 1,749   38.3% (256)   -13% (82)   -4% (12)   -1% (162)   -8%
World 4,907   100.0% 4,570   100.0% (336)   -7% 18   0% (48)   -1% (306)   -6%
 

Net Sales
(€ millions)

Q3 2012/13 Q3 2013/14 Change Organic Growth Group Structure Forex impact
Europe 561 32.2% 523 32.4% (39) -7% (19) -3% (8) -1% (12) -2%
Americas 425 24.4% 403 25.0% (22) -5% 23 5% (1) 0% (44) -10%
Asia / Rest of World 756   43.4% 690   42.7% (67)   -9% (10)   -1% (1)   0% (56)   -7%
World 1,743   100.0% 1,616   100.0% (127)   -7% (6)   0% (10)   -1% (112)   -6%
 

Net Sales
(€ millions)

YTD March
2012/13

YTD March
2013/14

Change Organic Growth Group Structure Forex impact
Europe 2,180 32.8% 2,135 34.5% (46) -2% 41 2% (41) -2% (45) -2%
Americas 1,708 25.7% 1,613 26.1% (95) -6% 63 4% (3) 0% (156) -9%
Asia / Rest of World 2,762   41.5% 2,439   39.4% (323)   -12% (92)   -3% (13)   0% (218)   -8%
World 6,650   100.0% 6,186   100.0% (464)   -7% 12   0% (57)   -1% (419)   -6%
 

Sales analysis by region (former operating segments)

Net Sales
(€ millions)

    HY1 2012/13     HY1 2013/14     Change     Organic Growth     Group Structure     Forex impact
France 374   7.6% 397   8.7% 23   6% 24   6% (1)   0% 0   0%
Europe excl. France 1,245 25.4% 1,215 26.6% (30) -2% 35 3% (32) -3% (33) -3%
Americas 1,282 26.1% 1,209 26.5% (73) -6% 41 3% (2) 0% (112) -9%
Asia / Rest of World 2,005   40.9% 1,749   38.3% (256)   -13% (82)   -4% (12)   -1% (162)   -8%
World 4,907   100.0% 4,570   100.0% (336)   -7% 18   0% (48)   -1% (306)   -6%
 

Net Sales
(€ millions)

Q3 2012/13 Q3 2013/14 Change Organic Growth Group Structure Forex impact
France 144 8.3% 133 8.3% (11) -8% (10) -7% (1) -1% 0 0%
Europe excl. France 417 23.9% 389 24.1% (28) -7% (9) -2% (7) -2% (12) -3%
Americas 425 24.4% 403 25.0% (22) -5% 23 5% (1) 0% (44) -10%
Asia / Rest of World 756   43.4% 690   42.7% (67)   -9% (10)   -1% (1)   0% (56)   -7%
World 1,743   100.0% 1,616   100.0% (127)   -7% (6)   0% (10)   -1% (112)   -6%
 

Net Sales
(€ millions)

YTD March
2012/13

YTD March
2013/14

Change Organic Growth Group Structure Forex impact
France 518 7.8% 530 8.6% 12 2% 14 3% (2) 0% 0 0%
Europe excl. France 1,662 25.0% 1,604 25.9% (58) -3% 26 2% (39) -2% (45) -3%
Americas 1,708 25.7% 1,613 26.1% (95) -6% 63 4% (3) 0% (156) -9%
Asia / Rest of World 2,762   41.5% 2,439   39.4% (323)   -12% (92)   -3% (13)   0% (218)   -8%
World 6,650   100.0% 6,186   100.0% (464)   -7% 12   0% (57)   -1% (419)   -6%
 

France is now included in the Europe operating segment

Top 14 brands organic sales growth – 9 months

Top 14       Net Sales       Volumes       Price/mix
Absolut 0% -3% 3%
Chivas Regal -2% -6% 4%
Ballantine's -4% 1% -5%
Ricard 5% 4% 1%
Jameson 13% 10% 3%
Havana Club 3% 1% 2%
Malibu -3% -4% 1%
Beefeater 1% 2% 0%
Kahlua -1% -1% 0%
Martell -9% -7% -2%
The Glenlivet 9% 1% 9%
Royal Salute -9% -9% 0%
Mumm -1% -2% 1%
Perrier-Jouët 17% 8% 9%
Top 14 -1% 0% -1%
 

Foreign exchange impact (sales)

Forex impact YTD March 2013/14
(€ millions)

      Average rates evolution(1)      

On Net
Sales

2012/13   2013/14   %
Indian rupee   INR 70.27   83.82   19.3% (80)
US dollar USD 1.29 1.35 4.8% (67)
Australian dollar AUD 1.24 1.48 19.3% (30)
Argentinian peso ARS 6.20 8.69 40.2% (28)
Russian rouble RUB 40.15 45.28 12.8% (26)
Japanese yen JPY 108.48 136.16 25.5% (24)
Venezuelan bolivar VEF 10.93 17.55 60.5% (22)
Bresilian real BRL 2.61 3.12 19.5% (21)
Other currencies               (121)
Total               (419)
 

(1) Average rates vs. EUR

Foreign exchange impact for the financial year 2013/14 (profit from recurring operations)

Over the full 2013/14 financial year, the forex impact on profit from recurring operations is estimated at approximately € (200) million, based on exchange rates at 15 April 2014, particularly EUR/USD = 1.36

Group structure effect

Group structure YTD March 2013/14
(€ millions)

      On Net Sales
Scandinavian activities (23)
Spanish activities (18)
Australian activities (5)
Other (11)
Total Group Structure (57)
 

Emerging markets

Asia-Rest of World       Americas       Europe
Algeria   Malaysia       Argentina       Albania
Angola Morocco Bolivia Armenia
Cambodia Mozambique Brazil Azerbaijan
Cameroon Namibia Caribbean Belarus
China Nigeria Chile Bosnia
Congo Persian Gulf Colombia Bulgaria
Egypt Philippines Costa Rica Croatia
Ethiopia Senegal Cuba Georgia
Gabon South Africa Dominican Republic Hungary
Ghana Sri Lanka Ecuador Kazakhstan
India Syria Guatemala Kosovo
Indonesia Tanzania Honduras Latvia
Iraq Thailand Mexico Lithuania
Ivory Coast Tunisia Panama Macedonia
Jordan Turkey Paraguay Moldova
Kenya Uganda Peru Montenegro
Laos Vietnam Puerto Rico Poland
Lebanon Zambia Uruguay Romania
Madagascar Venezuela Russia
Serbia
Ukraine

Contacts

Contacts Pernod Ricard
Jean TOUBOUL, +33 (0)1 41 00 41 71
Financial Communication – Investor Relations VP
Sylvie MACHENAUD, +33 (0)1 41 00 42 74
Director External Communications
Alison DONOHOE, +33 (0)1 41 00 42 14
Investor Relations
Carina ALFONSO MARTIN, +33 (0)1 41 00 43 42
Press Relations Manager

Sharing

Contacts

Contacts Pernod Ricard
Jean TOUBOUL, +33 (0)1 41 00 41 71
Financial Communication – Investor Relations VP
Sylvie MACHENAUD, +33 (0)1 41 00 42 74
Director External Communications
Alison DONOHOE, +33 (0)1 41 00 42 14
Investor Relations
Carina ALFONSO MARTIN, +33 (0)1 41 00 43 42
Press Relations Manager