PARIS--(BUSINESS WIRE)--Regulatory News:
Pernod Ricard (Paris:RI):
Press release - Paris, 20 April 2017
STRONG YEAR-TO-DATE SALES: +4% ORGANIC GROWTH (REPORTED: +3%)
Q3: +3% ORGANIC GROWTH
UNDERLYING TRENDS IN LINE WITH THOSE OF H1
FY17 GUIDANCE1 CONFIRMED:
ORGANIC GROWTH IN PRO2 BETWEEN +2% AND +4%
Sales for the first 9 months of FY17 totalled € 7,047 million, with organic growth of +4%. Growth was driven by:
Strong growth across Americas: +7%
- USA: +5% with Jameson, Martell and Altos in double-digit growth, Absolut in decline (but strong launch of Absolut Lime) and the positive impact of efficiency initiatives. Shipments ahead of depletions.
- Travel Retail Americas: return to growth
- Latin America: strong overall growth in the region but decline in Brazil
Modest growth in Asia-RoW: +1%
- India: +1%, with temporary growth deceleration due to certain regulatory changes. Q2 and Q3 impacted by demonetisation and highway ban to impact Sales mainly in Q4 FY17 and H1 FY18. Pernod Ricard confirming leadership in premium local and international whisky.
- China improving and now stable. Martell back to good volume and value growth.
- Korea: continued strong decline
- Travel Retail Asia: back to growth
- Africa Middle East: growth deceleration due to macroeconomic and geopolitical context
Strong Sales in Europe: +4%, with good growth in mature markets
and dynamic recovery in Eastern Europe
- France: slight growth excluding technical impact3
- Spain: +4%, consolidating leadership in a faster-growing market
- UK: dynamic growth boosted by advance shipments linked to price increases
- Russia: strong growth with market share gains
- Travel Retail Europe: decline in difficult environment
Diversification of sources of growth:
- Strategic international Brands: +4%, with 11 of 13 brands in growth
- Innovation representing ¼ of topline growth
- Mix positive (vs. negative in FY 16) but pricing still subdued
1 Guidance communicated 1 September 2016
2 PRO = Profit from Recurring Operations
3 Shipments brought forward from July to June 2015 ahead of back-office mutualisation between Ricard and Pernod on 1 July 2015
The Strategic International Brands (+4%) were a key driver of overall Sales growth improvement, with strong momentum on Jameson, good growth on Ballantine’s and improvement on Absolut and Martell.
The Strategic Local Brands were flat due to the temporary slowdown on Indian whiskies.
Strategic Wines grew dynamically at +7%, driven by Campo Viejo.
Reported growth was +3% due to a slightly unfavourable FX impact over the period.
Sales for the third quarter of FY17 were slightly softer, as expected, mainly due to CNY phasing1, and totalled € 1,987 million, including organic growth of +3% and reported growth of +7%. This comprised:
- Good growth in Americas: +8%, with Latin America improving and USA in growth despite difficult basis of comparison
- Asia-RoW in decline at -2%, due to CNY phasing1 and final impact of demonetisation in India, as planned
- Continued good performance in Europe: +7%, with Western Europe solid and Eastern Europe dynamic.
As part of this communication, Alexandre Ricard, Chairman and Chief Executive Officer, stated,“We have strong year-to-date Sales growth at +4%. In an uncertain environment, our strategy is consistent and driving results, in particular in terms of diversifying the sources of growth.
We confirm our FY17 guidance2 of organic growth in Profit from Recurring Operations of between +2% and +4%3.”
Note: All growth data specified in this press release refers to organic growth (at constant FX and Group structure), unless otherwise stated. Data may be subject to rounding.
A detailed presentation of Sales for the third quarter of 2016/17 can be downloaded from our website: www.pernod-ricard.com
1 Chinese New Year (CNY): 28 January 2017 vs. 8 February 2016
2 Guidance communicated 1 September 2016
3 Over the full FY17, the FX impact on Profit from Recurring Operations is estimated at approximately +€ 80m, based on average FX rates for full FY17 projected on 31 March 2017, particularly a EUR/USD rate of 1.07
Definitions and additional information related to the use of non-IFRS measures
Pernod Ricard’s management process is based on the following non-IFRS measures which are chosen for planning and reporting. The Group’s management believes these measures provide valuable additional information for users of the financial statements in understanding the Group’s performance. These non-IFRS measures should be considered as complementary to the comparable IFRS measures and reported movements therein.
Organic growth is calculated after excluding the impacts of exchange rate movements and acquisitions and disposals.
Exchange rates impact is calculated by translating the current year results at the prior year’s exchange rates.
For acquisitions in the current year, the post-acquisition results are excluded from the organic movement calculations. For acquisitions in the prior year, post-acquisition results are included in the prior year but are included in the organic movement calculation from the anniversary of the acquisition date in the current year. Where a business, brand, brand distribution right or agency agreement was disposed of, or terminated, in the prior year, the Group, in the organic movement calculations, excludes the results for that business from the prior year. For disposals or terminations in the current year, the Group excludes the results for that business from the prior year from the date of the disposal or termination.
This measure enables to focus on the performance of the business which is common to both years and which represents those measures that local managers are most directly able to influence.
Profit from recurring operations
Profit from recurring operations corresponds to the operating profit excluding other non-current operating income and expenses.
About Pernod Ricard
Pernod Ricard is the world’s n°2 in wines and spirits with consolidated Sales of € 8,682 million in FY16. 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 and Malibu, Mumm and Perrier- Jouët champagnes, as well Jacob’s Creek, Brancott Estate, Campo Viejo and Kenwood wines. Pernod Ricard employs a workforce of 18,500 people and operates through a decentralised organisation, with 6 “Brand Companies” and 85 “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 Euronext (Ticker: RI; ISIN code: FR0000120693) and is part of the CAC 40 index.
House of Brands effective at 1 July 2016
Strategic International Brands
Strategic Local Brands
As of 1 July 2016:
(1) The above segmentation is used for Financial Communications. The same perimeter has been applied to FY16 for comparison purposes.
(2) Bulk Spirits are allocated by Region according to the Regions’ weight in the Group
YTD Sales by Region
|H1 2015/16||H1 2016/17||Change||Organic Growth||Group Structure||Forex impact|
|Asia / Rest of the World||2,019||40.7%||2,040||40.3%||22||1%||52||3%||(0)||0%||(30)||-1%|
|Q3 2015/16||Q3 2016/17||Change||Organic Growth||Group Structure||Forex impact|
|Asia / Rest of the World||822||44.3%||837||42.1%||15||2%||(15)||-2%||(0)||0%||30||4%|
|Change||Organic Growth||Group Structure||Forex impact|
|Asia / Rest of the World||2,841||41.7%||2,878||40.8%||37||1%||37||1%||(1)||0%||1||0%|
As of 1 July 2016, Bulk Spirits are allocated by Region according to the Regions’ weight in the Group
Foreign exchange impact on YTD FY17 Sales
Forex impact 9M 2016/17
|Average rates evolution||On Net Sales|