2007/08 full-year sales: € 6,589 million07/24/2008
Outstanding growth over the financial year: +8.7%* Premium spirits** (+14%*) and emerging markets*** (+22%*) are the main growth drivers Acquisition of Vin & Sprit Further upward revision of guidance for growth in profit for the year 2007/08
Growth* of the 15 strategic brands was very strong: +11% in value and +5% in volume, perfectly illustrating the premiumisation strategy of the Group, enhanced by the quality of its portfolio of brands and by the power of its distribution network, in particular in emerging countries. Ten of these brands reported double-digit growth* rates: Martell (+24%), Jameson (+21%), Mumm (+18%), Havana Club (+17%), The Glenlivet (+14%), Perrier Jouët (+14%), Stolichnaya (+12%), Chivas (+11%), Ballantine’s (+11%) and Malibu (+10%).
Over the full financial year, the spirits business grew in value by +9%*. The wine business grew by +6%*, compared to +1%* in the previous financial year, thereby confirming its recovery and significant development potential.
Overall, HY2 growth* (+7%) remained strong following a very good HY1 (+10%), against a background of further appreciation of the Euro against most other currencies.
The year 2007/08 was also marked by the acquisition of the Vin & Sprit Group, owner of the ABSOLUT brand. The transaction closed on 23 July 2008. ABSOLUT (world leader in premium vodkas) records excellent performances, illustrated by its accelerated growth in the first half of 2008 (+12% compared to +9% in the calendar year 2007) and a volume of 11.3 million 9-litre cases sold over the 12 months period ending 30 June 2008 (+600,000 9-litre cases compared to calendar year 2007). This demonstrates the tremendous commercial and financial prospects linked to the integration of this brand within the Group’s portfolio. Pernod Ricard is moreover confident in achieving the top end of the range of cost synergies announced (€ 125 to 150 million). The resulting cash generation, together with a programme of asset disposals valued at about € 1 billion over the coming 12 to 18 months, will allow for a rapid reduction of the Group’s indebtedness.
* Organic growth
** Brands >= Chivas 12 yo or Martell VS
*** GNP / Inhabitant < 10,000 USD
All geographic regions contributed to full-year growth
• China (+29%*) and India (+39%*) represented 2/3 growth in the region and remained the number one and number two contributors to the Group’s organic growth, respectively.
• Duty Free, Taiwan, Malaysia, Indonesia, Vietnam, the Persian Gulf and Singapore are also developing rapidly and Thailand experienced a recovery in HY2.
• Australia and New Zealand reported limited full-year growth, with a recovery in HY2 following the slowdown caused by the strong price increases of HY1.
• Africa and the Middle East grew very sharply, due in particular to Jameson, Chivas and Ballantine’s.
In the fourth quarter, Asia continued to feature double-digit growth (+15%) in spite of the earthquake in Sichuan.
• Americas: € 1,700 million (-5%, being organic growth of +8%)
• North America (+5.0%*: spirits +4.4%*, wines +9.6%*)
- In the US, there was a shift of consumption from the on-trade to the off-trade, with dynamic brands that continued their vigorous growth: Jameson, The Glenlivet, Malibu and Wild Turkey for spirits and Montana, Perrier Jouët, Mumm Napa and Campo Viejo for wines, but at the same time brands with weaker franchises, which suffered from the economic downturn: Kahlúa, Beefeater and Chivas.
- The year was excellent in Canada, while in Mexico international brands showed satisfactory growth but brandies declined.
Chivas Regal (Venezuela and Central America), Ballantine’s (Brazil, Central America, Duty Free) and Havana Club (Chile, Cuba) remained the main growth drivers for strategic brands. A slowdown was observed in Venezuela in HY2, due to a generalised downturn in consumption in this country.
• Eastern Europe and Central Europe continued their spectacular development, mostly thanks to Russia, Poland, Kazakhstan, Ukraine and Romania. Russia (+38%*) was the number three contributing country to overall Group organic growth.
• All major Western European markets (Spain, UK, Ireland, Germany, and Greece) with the exception of Italy, experienced growth over the full financial year, with a more contrasted growth observed in HY2.
A sharp recovery was noted in the 4th quarter in Germany after a highly unfavourable comparison basis in the 3rd quarter, due to the price increases of April 2007. Conversely, Spain and the UK had a tougher fourth quarter.
• France: € 711 million (+4%, being organic growth of +5%)
Over the full financial year, our whisky brands Chivas, Ballantine’s, Jameson, The Glenlivet and Clan Campbell reported very good performances in buoyant markets. Mumm and Perrier Jouët also grew rapidly (market share gains, price increases, favourable mix effects) but fourth quarter volumes were adversely affected by low inventory availability. The Ricard brand showed a slight decrease in a declining market, confronted with the smoking ban and bad weather.
* Organic growth
Conclusion and outlook
According to Patrick Ricard, Chairman and CEO of Pernod Ricard: “the year 2007/08 demonstrates our significant growth potential in all emerging markets and the sound basis of our business in western markets.
* Foreign exchange and Group structure
About Pernod Ricard
Pernod Ricard is the world’s n°2 in wines and spirits with consolidated Sales of € 8,558 million in 2014/15. Created in 1975 by the merger of Ricard and Pernod, the Group has undergone sustained development, based on both organic growth and acquisitions: Seagram (2001), Allied Domecq (2005) and Vin&Sprit (2008). Pernod Ricard holds one of the most prestigious brand portfolios in the sector: Absolut Vodka, Ricard pastis, Ballantine’s, Chivas Regal, Royal Salute and The Glenlivet Scotch whiskies, Jameson Irish whiskey, Martell cognac, Havana Club rum, Beefeater gin, Kahlúa and Malibu liqueurs, Mumm and Perrier- Jouët champagnes, as well Jacob’s Creek, Brancott Estate, Campo Viejo, Graffigna and Kenwood wines. Pernod Ricard employs a workforce of approximately 18,000 people and operates through a decentralised organisation, with 6 “Brand Companies” and 80 “Market Companies” established in each key market. Pernod Ricard is strongly committed to a sustainable development policy and encourages responsible consumption. Pernod Ricard’s strategy and ambition are based on 3 key values that guide its expansion: entrepreneurial spirit, mutual trust and a strong sense of ethics. Pernod Ricard is listed on Euronext (Ticker: RI; ISIN code: FR0000120693) and is part of the CAC 40 index.
Contacts Pernod Ricard
Julia MASSIES / Financial Communication – Investor Relations VP
Tel: +33 (0)1 41 00 41 71
Sylvie MACHENAUD / Director External Communications
Tel: +33 (0)1 41 00 42 74
Emmanuel VOUIN / Press Relations Manager
Tel: +33 (0)1 41 00 44 04
Apolline CELEYRON / Press Relations Officer
Tel: +33 (0)1 41 00 40 97