alexandre ricard pernod ricard covid-19

Pernod Ricard predicts -20% profit for FY20

24 March, 2020

Pernod Ricard has released a revised outlook for the 2020 financial year in light of the effects that COVID-19 is having on the drinks industry.

The COVID-19 pandemic is having widespread repercussions on the business. While the extent and duration are still uncertain, the group has updated its current assumptions and resulting financial impacts.

REVISED IMPACT

  • China: very limited business in February and March; slow recovery from April

  • Travel retail: 80% business decline for the period from February to end June

  • Off-trade 10% sales reduction from mid-March to end June

  • On-trade no sales from mid-March to end June

The combined impact leads to an organic decline in profit from recurring operations of -20% for FY20.

On 23 March 2020, the group repaid a bond of €850m plus interest three months ahead of schedule thanks to the exercise of the early redemption option. The next significant bond redemption is in April 2021 when US$1bn is due.

The Group has €3.4bn of credit lines secured with banks, of which €0.3bn are currently drawn. These include a €2.5bn syndicated credit facility, maturing in 2024, which is currently undrawn.

Alexandre Ricard, chairman and CEO, said: “Our business model and strategy are resilient. Our three-year plan Transform & Accelerate has been very successful, as demonstrated by the FY19 and H1 FY20 results, and will continue to positively impact the business as we move through the COVID-19 crisis.

“The environment has very significantly deteriorated due to the COVID-19 outbreak. We are encouraged to see that, thanks to the implementation of strong measures, China appears to be starting to make a gradual recovery. 

“Our priority is to ensure the health and safety of our employees and business partners. With the revised assumptions linked to COVID-19, we are providing guidance of an organic decline in profit from recurring operations for full-year FY20 of -20%. 

“We are staying the strategic course while implementing a comprehensive action plan to mitigate costs. Thanks to our solid fundamentals, rooted in employee engagement and the quality of our portfolio, I am confident in Pernod Ricard’s ability to bounce back and its growth potential.”





Digital Edition

Drinks International digital edition is available ahead of the printed magazine. Don’t miss out, make sure you subscribe today to access the digital edition and all archived editions of Drinks International as part of your subscription.

Comment

La'Mel Clarke

Service isn’t servitude: the skill of hosting

La’Mel Clarke, front of house at London’s Seed Library, looks at the forgotten art of hosting and why it deserves the same respect as bartending.

Instagram

Facebook