The world's second largest premium drinks company said it has organic growth of +3%, thanks in particular to a positive US dollar impact.
Regionally, the report says, this was driven by:
- Strong growth in the Americas (+6% year-to-date) driven by a dynamic US (partly enhanced by shipment phasing);
- Modest growth in Asia/Rest of the World (+2% YTD) with continued strong growth in India and Africa but a decline in China;
- Resilient Sales in Europe (+1% YTD), driven mainly by Spain.
Pernod’s Top 14 brands, such as Chivas Regal, Martell and Absolut, grew +1% YTD driven notably by Jameson and innovation, while Key Local Brands, such as Seagrams and Olmeca, (+7% YTD) reported dynamic growth driven by Indian whiskies and Passport. Priority Premium Wines accelerated (+4% YTD) thanks to the UK and Australia.
Sales for the third quarter of FY16 totalled €1,855m, including organic growth of +1% and a negative exchange rate impact (-4%) due to emerging market currency weakness. The third quarter reported growth was -3%. Growth was in part favoured by shipment phasing in the US but negatively impacted by an earlier Chinese New Year, said the company.
Chairman and CEO Alexandre Ricard (pictured) said: “Our sales growth to date at +3% is solid in an environment that remains contrasted. Our strategy has remained consistent and is driving results: innovation is accelerating; operational excellence is driving efficiencies; our ongoing initiatives in the US are starting to deliver; we are working actively to develop the new phase of growth in China, where we remain confident in the medium-term potential despite the tough current context.
“We confirm our FY16 guidance of organic growth in Profit from Recurring Operations between +1% and +3%,” stated Ricard.
Thomas Buckley of Bloomberg News comments: “ Sales in Asia and the company’s rest-of-world division fell 5% while analysts expected 1% growth.
“Pernod Ricard is seeking to offset a slowdown in China, where it has forecast demand for spirits to fall further, as opposed to cognac makers Hennessy and Remy Cointreau, which reported signs of a rebound. The company is reinvigorating sales of its flagship Absolut vodka in the US and Europe through new packaging and releasing a more expensive high-end variant, Elyx. It is also investing in Africa, a continent Ricard has said could become as important as Asia, currently the distiller’s largest region for revenue,” said Buckley