Pernod Ricard sales decrease 15% due to Covid-19 disruption

23 April, 2020

Pernod Ricard has revealed a 15% organic decline in sales for the three months to March 31.

The Covid-19 pandemic caused sluggish sales in China and travel retail during the third quarter of fiscal 2020. The Absolut, Glenlivet and Jameson supplier reported Q3 sales of €1.74 billion, down from €2 billion the previous year.

The distiller had enjoyed strong growth during the first half of fiscal 2020, but it has now experienced a 2.1% organic sales decrease for the nine months to March 31.

“Performance in H1 through the start of Q3 was solid, thanks to the implementation of our Transform & Accelerate strategic plan,” said chairman and chief executive Alexandre Ricard. “Since then, the Covid-19 pandemic has led to a significant deterioration of the environment across the globe.”

The distiller will pay out an interim dividend of €1.18 per share on July 10, but it has now halted its remaining €500 million share buy-back. A share buy-back of €523 million has been completed already in the current financial year.

Pernod Ricard’s has a cash position of €2.1 billion, and it pledged to maintain investment in future organic growth and value-creating acquisitions. “Our business model and strategy are resilient,” said Ricard.

He added that under current assumptions of the impact of Covid-19, the firm expects to report a decline in profit of around 20% for the 2020 financial year. “We are staying the strategic course while implementing a comprehensive action plan to mitigate costs and tightly manage cash,” he said. “Thanks to our solid fundamentals and strong liquidity position, I am confident in Pernod Ricard’s ability to bounce back from today’s challenges to achieve its growth potential.”

Sales in China are now down 11% year-on-year for the nine months to March 31, due to a severe Q3 decline. Travel retail sales have declined 13%, driven by a sharp decline from February onwards.

Sales in the US and Europe remain in year-on-year growth, although there was a slowdown in March. India is still up 1% year-on-year, but the nationwide lockdown imposed on 24 March has softened its Q3 performance.

It highlighted Lillet, Altos, Redbreast, Monkey 47, Aberlour and Del Maguey as brands showing strong dynamism.





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

Nick Strangeway

Bar food's blurred lines

Once upon a time pubs and bars were somewhere you went with the sole purpose of getting pissed and there wasn’t a knife and fork in sight, just a packet of dry roasted nuts.

Instagram

Facebook