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2007/08 interim net sales: € 3 713 million


Outstanding 1st half-year organic growth: +10.1%, driven by emerging markets (1) (+25%) and premium spirits (2) (+17%) Continuing strong organic growth in Q2: +9.1% Higher full-year profit growth guidance

2007/08 interim net sales: € 3 713 million

Pernod Ricard consolidated net sales (excluding duties and taxes) for the 2007/08 1st half-year (1st July to 31 December 2007) increased by 5.9% to € 3 713 million, compared to € 3,507 million in the 2006/07 1st half-year.  This growth resulted from the following:
● outstanding 10.1% organic growth,
● a 2.5% negative foreign exchange impact, primarily due to the loss in value of the US dollar,
● a 1.5% negative group structure impact (disposal of Rich & Rare and end of co-packing for Fortune Brands).

The 15 strategic brands were the main drivers of this growth. They grew +7% in volume and +13% in value (3), which demonstrates the very positive impact of price increases and mix effects.

● Spirit sales grew +11%(3), due in particular to the strength of premium spirits(2): +17%(3).
Most strategic brands recorded double-digit growth(3) in value: Martell (+27%), Jameson (+23%), The Glenlivet (+18%), Chivas Regal (+16%), Havana Club (+16%), Malibu (+13%), Ballantine’s (+12%), Stolichnaya (+11%). Many other spirit brands reported strong growth, in particular Royal Salute in Asia, Ararat and Olmeca in Eastern Europe, Wyborowa in Poland and Royal Stag in India.

● The wine business recorded organic growth of +6% in value.
Sales of the three priority brands among our still wines, Jacob’s Creek, Montana and Campo Viejo together increased +9%, demonstrating the return to strong and profitable growth of this business due to premiumisation, price increases and innovation. For champagnes, the price increase policy has also  been successful as reflected in the growth(3) in value of Mumm (+17%) and Perrier Jouët (+7%).

2nd quarter 2007/08 consolidated net sales increased +5.2% to € 2,157 million, with organic growth at +9.1% (including foreign exchange and group structure effects of -2.9% and -0.9%, respectively).  Spirit business organic growth totalled +9.5% and that of the wine business +7.6%.

All geographic regions reported strong growth.  Emerging markets(1) further enhanced their expansion: these countries accounted for almost 30% of 1st half-year net sales and increased +25%, contributing nearly 2/3 of total Group growth(3).

• Asia / Rest of World: € 1,085 million (+10.7%, with organic growth at +13%)
Martell, Chivas Regal and Ballantine’s contributed 2/3 of organic growth for the Asia/Rest of World region. China grew +31%(3) due to Martell and Ballantine’s. India (+ 49%(3)) and Duty Free also recorded double-digit growth rates, as did Taiwan, Malaysia, Indonesia and Vietnam.

• Americas: € 970 million (-1.4%, with organic growth at +10%)
  • North America
In North America (US, Canada, Mexico), organic growth was +5%.
- US growth was similar between 1st quarter and 2nd quarter. Strategic brands such as Jameson, The Glenlivet, Malibu, Stolichnaya and Wild Turkey for spirits and Montana, Campo Viejo, Perrier Jouët and Mumm Napa for wines continued their vigorous growth. However, the Kahlúa, Chivas Regal and Beefeater brands had a more difficult 1st half-year.
- In Mexico, international brands grew strongly but Mexican brandies declined.
- Canada had a very good 1st half-year, in particular for the 15 strategic brands.
  • Central and South America
Central and South America reported very strong organic growth (+29%). Chivas Regal (Venezuela, Brazil), Ballantine’s (Brazil, Paraguay), Havana Club (Cuba, Chile) and Something Special (Venezuela) are developing rapidly.

• Europe (excluding France): € 1,262 million (+7.4%, with organic growth at +9%)
The Europe region had an excellent 1st half-year, underlined by a very good 2nd quarter, due to:
- the spectacular development of Central and Eastern Europe, which generated more than 60% of European growth. Russia (Chivas Regal, Jameson, Ballantine’s), Poland (Ballantine’s, Wyborowa), Ukraine and Romania were the main contributors to this growth.
- the solid growth in most major Western European markets (Spain, UK, Ireland, Greece). Italy is the main market in decline.

• France: € 396 million (+8%)
France had a very good 1st half-year including an outstanding 2nd quarter. All major whisky brands reported growth: Chivas Regal, Ballantine’s, Jameson, Aberlour, The Glenlivet and Clan Campbell.  Mumm champagne also recorded very strong growth but 2nd half-year growth will be adversely affected by product availability.  Ricard registered a marked recovery in Q2 and gained market share.

Conclusion and outlook
Patrick Ricard, Chairman and CEO of the Group stated “I could describe this 1st half-year as historic, given the outstanding sales dynamism; this reflects the relevance of the Pernod Ricard model, the performance of our premium brands(2) and our very strong geographic presence in emerging markets.  These results and the very positive sales outlook for the 2nd half-year enable me to be confident for the full financial year and to revise our growth guidance upwards.  We now aim for 2007/08 growth in Operating Profit from Ordinary Activities, on a like-for-like basis(4), of about +12%, compared to around +10% previously.”

(1) GNP/capita < USD 10,000
(2) Brands with a price positioning higher or equal to that of Chivas Regal 12 year old or Martell VS
(3) Organic growth
(4) Foreign exchange and group structure

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