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.”
