Diageo and Pernod Ricard first half results show resilience

16 February, 2009
French drinks giant Pernod Ricard has confirmed that it expects to achieve double-digit net profit growth and meet full-year guidance

French drinks giant Pernod Ricard has confirmed that it expects to achieve double-digit net profit growth and meet full-year guidance.

In the same week, Diageo announced a cut in full-year guidance. CEO Paul Walsh said the company expected organic profit growth to be 4-6%, not 7-9% as predicted.

Diageo reported an 18% rise in sales and net profit for the fist half of the year but weakened markets caused the company to cut full-year guidance.

Pernod Ricard reported a 13% rise in net sales, to €4.2bn for the six months ending 31 December.

Pernod said the acquisition of Vin & Spirit, which included Absolut vodka, helped to boost the first half.

Pernod’s best performing brands included Hanava Club rum and Jameson whiskey, while sales declines were reported for Perrier Jouet Champagne and Jacob’s Creek wine.

Pernod said it anticipates the wine and spirits sector will show ‘excellent resilience’.

Diageo CEO Paul Walsh said Diageo's performance in this first half demonstrated resilience gained from the brand range across categories, price points and geography.

He said: “The global economic slowdown has affected business in the period and in November and December this impact was more pronounced.

“In this difficult market environment Diageo has delivered 3% organic net sales growth, 6% organic operating profit growth and 9% underlying eps growth and we have maintained our financial strength.  We have delivered value in the half from the brands we have added, Ketel One, Rosenblum Cellars and Zacapa. In addition we have benefited from exchange rate movements given the scale of our business in the United States and Europe and a reduction in our tax rate.”





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Dominic Roskrow

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