PARIS, France – Net sales of Pernod-Ricard for the first semester of 2013/14 totalled € 4,570 million.
Excluding forex impact andGroup structure sales were virtually stable, reflecting an improvement in the second quarter (+2%)over the first (-1%). Due to a highly unfavourable forex impact, reported net sales growth was -7%.
Sales were mainly impacted by one market, China (-18%):
- Asia-RoW excluding China +2%
- very good performance in Europe (+4%)
- return to growth in Americas (+3%) following a strong second quarter
Top 14 was virtually stable despite a mix effect of -4% (decline of Martell in China). Volumes were stable and pricing remained positive.
The second quarter showed a return to growth. Key local brands performed well (+4%) despite the decline (primarily technical) of Imperial. Operating margin improved (+34bps), thanks to strict control of resources, leading to organic growth in Profit from Recurring Operations of +2% at € 1,359 million.
As announced, the highly unfavourable forex impact (€ -112 million on PRO at end December) affected the reported growth in Profit from Recurring Operations (-7%).
Financial expenses on recurring operations were reduced by -19% thanks to a significant reduction in the cost of debt to 4.6% (vs. 5.4% in HY1 2012/13). Net profit from recurring operations declined -3%.
Excluding forex impact, it grew +6%.At end December, debt was reduced € -102 million to € 8.6 billion.
This announcement provided Pierre Pringuet, Chief Executive Officer of Pernod Ricard, with theopportunity to state: “We remain confident in the medium and long-term potential of China but we anticipate difficulties to persist for the full financial year.
“We want to prioritize the Group’s future sales growth through a sound commercial policy and an appropriate level of investment. As a result, we are issuing new guidance for FY 2013/14: organic growth in profit from recurring operations between +1% and +3%.”
Pierre Pringuet also announces the launch of Allegro, a project aimed at delivering further operational efficiency: “We want to improve organisational efficiency in order to generate future growth, seize new opportunities (particularly innovation and digital) and increase the speed of execution.
“We will continue to rely on our decentralised model, based on the direct relationship between Brand Companies and Market Companies.”From a financial standpoint, this project will generate € 150 million of annual savings over three years. They will be partly reinvested to support brand development.
A detailed presentation of sales for the first semester of 2013/14 can be downloaded from the website: www.pernod-ricard.com.
Limited audit procedures have been carried out on the half-year financial statements. Half-year financial report related to this press release is being prepared and will be available on our website www.pernod-ricard.com.
Note: All growth data specified in this press release refers to organic growth, unless otherwise stated. France is now included in the Europe operating segment.
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 coffee liqueur 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.
