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.”





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Nick Strangeway

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