Pernod Ricard: Steering Through a Transition With Agility, Discipline and Strategic Conviction

FY26 Organic Sales -3.9% (-14.2% reported)

FY26 Organic PRO -5.2% (-17.9% reported)

PARIS--(BUSINESS WIRE)--Regulatory News:

Pernod Ricard (Paris:RI):

Press Release – Paris, 27^th August 2026

Disciplined execution defending margin, delivering efficiencies and strengthening cash generation

• FY26 Organic Net Sales -3.9%, excluding the US and China +0.5%. FY26 was characterized by a contrasted environment, with continued softness in the US amplified by inventory adjustments and with weak demand in China, mitigated by improving trends and growth across ROW, though impacted by Middle East conflict in Q4
• Improving momentum in H2 with organic sales growth improving from -5.9% in H1 to -1.3% in H2
• Strong defence of the Organic Operating Margin with acceleration of the €1bn Operational Efficiencies program, delivering half of the target in FY26 and with full delivery now expected by FY28
• Structure Costs down -8.0% (-4% in FY25), with the implementation of Fit for Future operating model and disciplined cost management
• Free Cash Flow +6% with strengthened cash generation and strongly improving cash conversion by +17pts to 91%, through disciplined investments and working capital management
• Optimising strategic investments for future growth, maintaining balance sheet discipline to support our deleveraging trajectory and sustainable shareholder returns
• Proposed dividend of €4.70 per share, stable versus FY25, with an option for shareholders to receive final dividend of €2.35 either in cash or shares

SALES

FY26 Net Sales totalled €9,404m, an organic decline of -3.9% (-14.2% reported), with a negative FX impact mainly due to the US Dollar, Indian Rupee and Turkish Lira, and a negative perimeter impact mainly from brand disposals.

By region:

• Americas -10%,
  • USA -14%, Sustained improvement in sell-out gap to market, with accelerating responses to changing consumer demand
    • Spirits market slowdown with economic moderation and subdued consumer confidence. Narrowing gap-to-market through accelerating responses
    • Sell-out c.-7% over the full year, with sales impacted by some inventory adjustments
    • Jameson & Kahlúa outperforming their competitive set, while Skrewball and Malibu sell-out improving, helped by strong success of small formats and Malibu Pink innovation
    • Rapid adaptation to evolving market conditions, focusing on consumer recruitment & activation, Revenue Growth Management, innovation, RTD, small formats, on-premise activation and cultural partnerships
    • Route to Market reorganisation implemented and adapted to subsequent industry changes, with residual impacts on trade inventory
  • Canada in solid growth, notably on Jameson, Absolut & RTDs in a soft market, gaining share
  • Brazil in modest growth, recovering in H2 from the methanol crisis, with good performances on Beefeater and Absolut, though slight share loss
  • Mexico in sharp decline, with share loss amidst difficult market conditions

• Asia-RoW flat,
  • India +7% (+9% excluding Imperial Blue), strong momentum reflecting underlying consumer demand and premiumisation trends, gaining share
    • Accelerating performance underpinned by dynamic consumer demand
    • Market share gain, further benefitting from the Imperial Blue disposal
    • Good growth on local brands notably Royal Stag, the world’s #1 whisky by volume¹ with c.32m cases and Blenders Pride and launch of “Xclamat!on”
    • DD growth on Strategic International Brands led by Jameson’s exceptional performance, the #1 imported premium Spirit brand in India, and good growth on Ballantine’s and Chivas Regal
    • Disposal of Imperial Blue business is immediately accretive to margins and growth
    • Excise policy changes in Maharashtra state negatively impacting sales from July FY26
    • India-UK trade agreement implemented July 2026
  • China -19%, Challenging macro-economic environment, continuing weak consumer sentiment and regulatory measures impacting demand
    • Sharp decline with prestige categories under pressure, notably in sales of Martell
    • Premium brands are growing, supported by rise in casual dining occasions and increasing penetration of Premium Spirits among the growing middle class
    • Market share decline in Cognac, impacted by channel exposure
    • Cautiously optimistic trade sentiment ahead of Mid-Autumn Festival (MAF)
  • Japan in strong growth, gaining share driven with strong growth of Perrier-Jouët. South Korea returned to growth after significant reset. Taiwan market sales decline continues, market conditions continuing to be soft
  • Africa and Middle East in strong growth, driven by Türkiye, Nigeria and South Africa, while Middle East region is in sharp decline with impact in Q4
  • Australia in modest growth with contrasted brand performance, growing on Jameson, RTDs and Champagne. Gaining share

• Europe -3%,
  • France in decline while maintaining market leadership, with Perrier-Jouet and Bumbu in strong growth
  • Spain and Germany in decline, amidst continued soft market conditions
  • UK in modest decline, with growth on Jameson, Absolut and Champagnes, amidst improving market
  • Eastern Europe in continued growth, notably on Jameson, Ballantine’s & Absolut. Poland in modest decline following excise tax increase, though gaining share

• Global Travel Retail -3%, Resolution of the Cognac suspension in China, strong brand activations across Asia and dynamic traveller numbers in Europe and Americas
  • International passenger traffic continues to grow, now c.10% ahead of pre-covid
  • Strong recovery of sales in China Duty-Free, with strong Martell sell-out growth during Chinese New Year (CNY), but Asia region also negatively impacted by weakness in South Korea
  • Europe benefitting from US tourists and Americas benefitting from dynamic growth in cruises
  • Strong innovation execution with successful launch of Travel Retail exclusive ranges of The Glenlivet and Aberlour
  • Market share gain
  • Q4 sales impacted by Middle East conflict, expected also to weigh on sales in Q1 FY27

By brand:

• Strategic International Brands -4% excluding the US and China +1%
  • Jameson low-single-digits decline globally, though in high-single-digits growth excluding the US, with double-digit growth in India, Nigeria and China and good growth in several European and travel retail markets
  • Martell sharp decline globally, excluding China in low-single-digits growth driven by triple-digit growth in South Africa, double-digit growth in Nigeria and strong growth in Asia Travel Retail
  • Absolut in low-single-digits decline globally, excluding the US in low-single-digits growth, with double-digit growth in Türkiye and India, and good growth in Brazil and Canada
  • Scotch portfolio resilient, with Ballantine’s in low-single-digits growth and Chivas Regal broadly stable; both delivered strong growth in Türkiye and India

• Strategic Local Brands -2%,
  • Strong momentum on Indian Whiskies, led by Blenders Pride and Royal Stag
  • Olmeca in good growth, led by Africa and Europe
  • Kahlúa in decline in the US
• Specialty Brands -8%,
  • Bumbu in strong, broad-based growth
  • Código in good growth, notably in Asia and France
  • Skrewball decline in the US, though growing in Rest of World
  • Lillet in decline, driven by Germany
• RTDs +12%, strong growth across Canada, Australia and Western Europe

____________________________

^1According to IWSR CY25

RESULTS

FY26 Profit from Recurring Operations totalled €2,423m, an organic decline of -5.2% and a reported decline of -17.9%.

• Gross Margin was impacted by negative price/mix in a soft pricing environment, adverse market mix, tariffs and COGS inflation, while benefiting from the accelerated implementation of Operational Efficiencies.
• A&P at 15% of Net Sales, at the lower end of the c.16% range, supported by enhanced A&P effectiveness
• Strict cost discipline and the Fit for Future reorganisation led to an organic reduction in Structure Costs of -8.0%
• Reported Profit from Recurring Operations impacted by negative perimeter effect of -€114m, and adverse FX of -€268m largely on US Dollar, Turkish Lira, Indian Rupee
• Operating Margin at 25.8%, down -35bps organically, was impacted by adverse FX, while perimeter impact was accretive to margins

Group share of Net Profit from Recurring Operations was €1,476m, down -19%. Optimised finance costs led to a decrease in Recurring Financial Expenses, with an average cost of debt of 3.4%, while Income Tax on Recurring Operations declined in line with the reduction in Profit from Recurring Operations.

Group Share of Net Profit was €1,203m, down -26%, with higher non-recurring costs, primarily due to restructuring charges. Earnings Per Share in decline of -19% to €5.85.

FREE CASH FLOW AND DEBT

Free Cash Flow at €1,197m, +6% vs FY25, driven by materially improved cash conversion of 91%, up +17pts. Operating Working Capital benefited from lower trade receivables and finished goods inventories, partly offset by lower payables. Optimisation of strategic inventories investment and Capex at €616m, significantly reduced from recent peak levels.

Net debt decreased by -€65m versus 30 June 2025 to €10,662m, supported by improved Free Cash Flow and a positive contribution from M&A. The Net Debt/EBITDA ratio at average rate increased to 3.7x, mainly reflecting the decline in Profit from Recurring Operations.

A dividend of €4.70 per share is proposed, stable versus FY25, subject to shareholder approval at the Annual General Meeting on 20 November 2026. Shareholders will be offered the option to receive the FY26 final dividend of €2.35 either in cash or shares.

FINANCIAL POLICY

Our financial policy balances the deployment of capital for profitable growth and the return of capital to shareholders.

While maintaining investment grade rating:

1. Investment in future organic growth, in particular through Strategic Inventories and Capital Expenditure
2. Continued active portfolio management, including value creating M&A
3. Progressive dividend policy aiming for a dividend distribution at c.50% of Net Profit from Recurring Operations
4. Share buyback, when above priorities are fulfilled

FY27 OUTLOOK

We are expecting organic Net Sales broadly stable for the full year, in a contrasted and uncertain environment, with:

• Declines in the US and China, impacted by inventory adjustments as from Q1, and with underlying trends expected to improve in China, and
• Continued positive momentum in Rest of World, with ongoing strong growth notably in India.

A&P/Net Sales investment will be maintained at c.16%.

We will strongly defend Organic Operating Margin supported by strict cost control and accelerating the implementation of our Operational Efficiency initiatives whilst investing in digital transformation.

We expect strategic investments at c.€700m, strong operating working capital management, with cash conversion expected to continue at c.90%.

MEDIUM TERM FY27-29

Noting the current softness in the US market, we are projecting Organic Net Sales growth, aiming to be, on average, close to the lower end of the +3% to +6% range over FY27 to FY29.

We expect Organic Operating Margin expansion, supported by accelerated operational efficiencies of €1bn from FY26 to FY28, while maintaining consistent investments behind our brands with c.16% A&P/Net Sales.

We expect strengthened cash generation, aiming for c.90% cash conversion to fund our financial policy priorities, with strategic investments normalizing to no more than c. €700m.

We are targeting Net Debt / EBITDA ratio below 3x by FY29.

We are adapting our strategy to capture growth opportunities, and our operating model to meet changing circumstances including through our ongoing digital transformation to unlock further efficiencies.

We are confident in the continued engagement of our teams and we remain focused to deliver sustainable value growth over time.

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.

Audit procedures have been carried out on the financial statements. The Statutory Auditors’ report will be issued after examination of the management report and completion of procedures required for the filing of the Universal registration document.

A detailed presentation of our FY26 Sales & Results can be downloaded from our website: www.pernod-ricard.com

Definitions and reconciliation of non-IFRS measures to 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

• Organic growth is calculated after excluding the impacts of exchange rate movements, acquisitions and disposals, changes in applicable accounting principles and hyperinflation.
• Exchange rates impact is calculated by translating the current year results at the prior year’s exchange rates and adding the year-on-year variance in the reported transaction impact between the current year and the previous year.
• 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 calculations of the current year only from the anniversary date of the acquisition.
• The impact of hyperinflation on Profit from Recurring Operations in Türkiye and Argentina is excluded from organic growth calculations by capping local unit price/cost increases to a maximum of +26% per year, equivalent to +100% over three years.
• Where a business, brand, brand distribution right or agency agreement was disposed of or terminated in the prior year, the Group excludes the results for that business from the prior year in the organic movement calculations. 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 users to compare the Group’s performance on a like-for-like basis, focusing on areas that local management is most directly able to influence.

Profit from recurring operations

​Profit from recurring operations corresponds to the operating profit excluding other non-recurring operating income and expenses.

Cash Conversion

Cash conversion is calculated by dividing the Recurring Operating Cash Flow by the Profit from recurring operations. The Recurring Operating Cash Flow is calculated as the Self-financing capacity from Recurring Operations + Change in Recurring Operating Working Capital needs, Change in Strategic inventories and Cash Capex.

Net Debt / EBITDA

Net debt corresponds to gross financial debt, including IFRS 16 lease liabilities, less cash and cash equivalents. EBITDA corresponds to Profit from recurring operations excluding depreciation, and amortisation on fixed assets.

The Net Debt / EBITDA ratio is calculated using EBITDA on a last‑twelve‑months basis and using Net Debt translated at last‑twelve‑months average exchange rates.

Strategic Investments

Strategic (ageing) Inventories plus Capex

About Pernod Ricard

Pernod Ricard is a worldwide leader in the spirits and champagne industry, blending traditional craftsmanship, state-of-the-art brand-building, and global distribution technologies. Our prestigious portfolio of premium to luxury brands includes 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, Malibu liqueur and Mumm and Perrier-Jouët champagnes. Our mission is to ensure the long-term development of our brands with full respect for people and the environment, while empowering our employees around the world to be ambassadors of our purposeful, inclusive and responsible culture of authentic conviviality. Pernod Ricard’s consolidated sales amounted to €9,404 million in FY26.

Pernod Ricard is listed on Euronext (Ticker: RI; ISIN Code: FR0000120693) and is part of the CAC 40 index.

 

Appendices

Financial Tables can be consulted on www.pernod-ricard.com

Upcoming Communications

Date (subject to change)	Event
15^th October 2026	Q1 FY27 Sales
20^th November 2026	Shareholders’ Annual General Meeting
18^th February 2027	H1 FY27 Sales and Results