Pernod Ricard financial results

Pernod records +7.8% sales growth for H1 FY19

07 February, 2019

Pernod Ricard has announced ‘very good’ financial results for the first half of FY19 with organic sales up 7.8%.

Sales for H1 FY19 totalled €5,185m, with Q2 sales accounting for €2,798m and H2 growth is expected to ‘moderate’ due to “Martell sustainable growth management, wholesaler inventory optimisation in US and a commercial dispute in France and Germany”, according to Pernod’s release.

BREAKDOWN BY AREA

Americas: +4%, with US growing broadly in line with market 

Asia-Rest of World: +16%, thanks to China and India and Africa Middle-East

Europe: ‘stable’, with greater momentum in Eastern Europe than in Western Europe

Strategic international brands: +10%, driven by Martell, Jameson, scotch, gin and champagne

Strategic local brands: +11%, thanks to Seagram’s Indian whiskies

Strategic Wines: -8%, due to implementation of value strategy and high comparison basis on
Campo Viejo.

TRANSFORM & ACCELERATE 3-YEAR PLAN 

“Transform & Accelerate” started in FY19 with the objective of embedding dynamic growth and improving operational leverage, in line with the objective of maximising long term value creation. 

FY19-21 ambitions: 

+4 - 7% topline growth

Deliver additional savings of €100m by FY21

A&P investment, maintained at 16% of Sales

Discipline on structure costs with growth below topline growth rates

Operating leverage of 50-60 bps, provided topline is in +4 - 7% bracket

Increased dividend distribution to 50% of net profit from recurring operations by FY20

COMMENT

Alexandre Ricard, chairman and CEO, said: “H1 FY19, the first semester of our new Transform & Accelerate three-year plan, was very strong. 

“While enhanced by phasing, it confirms the acceleration of our growth, resulting from our long-term investment strategy.

For full year FY19, in an environment that remains uncertain, we aim to continue dynamic and diversified growth across our regions and brands.

“By the end of June 2019, we will have completed our operational excellence plan announced in 2016, delivering €200m of P&L savings one year ahead of plan.

“We are increasing our guidance for FY19 organic growth in Profit from Recurring Operations to between +6% and +8% while improving operating leverage by c. 50bps. We will continue to roll out our strategic plan, focused on investing for sustainable and profitable long-term growth.”

Keywords: pernod ricard




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