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Emerging Markets and Top Brands Drive Pernod Ricard

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Emerging Markets and Top Brands Drive Pernod Ricard

Emerging Markets and Top Brands Drive Pernod Ricard
September 05
15:19 2011

Achieving growth across all its regions, Pernod Ricard has reported an 8% rise in full year sales to Eur7.64 billion, including organic growth of 7%, as the French spirits and wine group staged a recovery in its mature markets, which grew by1.5%, and saw a return to very strong growth in its emerging markets – up 17%.

 

Pernod Ricard’s markets in Europe excluding France improved markedly, with stable sales over the full financial year, compared to a decline of 5% in 2009/10. This resulted from a robust recovery in Eastern and Central Europe (up 9%) and a moderate decline in Western Europe (down 2%), which was primarily due to weakness in Greece and Spain. In France, sales grew by 4% due to the commercial performance of the group’s top 14 brands.

 

The Asia/Rest of the World region displayed growth of 19% and remained the driving force for group growth, primarily due to Asia (particularly China, India, Vietnam, Taiwan and Duty Free markets).

 

Americas reported growth of 8% (organic growth of +5%). In the US, sales increased +2%, which included renewed growth by Absolut and the continued success of Jameson.

 

Pierre Pringuet, chief executive of Pernod Ricard.

Pernod Ricard’s top 14 brands, which now account for 58% of group sales, grew by 6% in volume and reached an all-time record high during the financial year, as did seven of its brands – Absolut, Chivas, Jameson, Havana Club, Martell, Royal Salute and The Glenlivet. The top 14 brands rose by 10% in value, and five of them reported double-digit growth – Royal Salute (27%), Martell (22%), Jameson (20%), Perrier Jouet (17%) and The Glenlivet (14%). Only Kahlua slipped back modestly.

 

Profit from recurring operations advanced 8% to Eur1.9 billion, which is double the growth rate in 2009/10 and higher than the 6% growth target announced at the beginning of the financial year. Operating margin was 25.0%, a rise of 28 bps compared to the previous year (on a like-for-like basis), despite the strong rise in the advertising and promotion expenditure to sales ratio.

 

Emerging countries are becoming increasingly powerful growth drivers for Pernod Ricard. Their share in the group’s profit from recurring operations was 38% in the 2010/11 financial year, compared to 33% in 2009/10.

 

Pernod Ricard’s group share of net profit reached Eur1.05 billion, a 10% increase compared to the 2009/10 financial year, and exceeded the Eur1 billion mark for the first time.

 

During the year, Pernod Ricard also managed to reduce net debt by Eur1.55 billion to Eur9.04 billion, due to strong cash generation and favourable currency translation factors. The net debt to EBITDA ratio decreased significantly to 4.4 at 30th June 2011, compared to 4.9 at 30th June 2010. Pernod Ricard has confirmed its target for a net debt to EBITDA ratio close to 4 at 30th June 2012.

 

According to Pierre Pringuet, chief executive of Pernod Ricard: “Our remarkable performance over the 2010/11 financial year demonstrated the relevance of our strategy and of our decentralised model. For 2011/12 the beginning of the financial year confirms the resilience of our markets. We will continue to grow, by capitalising on the strength of our portfolio of brands, the quality of our distribution network and the powerful leverage of emerging markets.”

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