Very strong performance

• ^{Sales: +11%(1)}
• ^{Profit from recurring operations: +17%(1)}
• ^{Group share of net profit: +20%}

Upgraded guidance for full-year 2011/12

• Organic growth in profit from recurring operations close to 8%
• Net debt(2) / EBITDA(2) close to 3.9 at 30 June 2012

• ^{Strong sales dynamism (+11%(1)), driven by the Top 14 (+14%(1)) and emerging markets (+18%(1))}
• ^{Improvement in margin rates (gross margin: 62.1%, +124bps) while maintaining a strong advertising and promotional support to our brands, particularly to the benefit of innovation}
• ^{Accelerated growth of profits: +17%(1)}
• ^{Further significant deleveraging and key progress on the road to refinancing}

• Sales: € 4,614 million (+8%, organic growth +11%), driven by the Top 14 (+14%(1)) and emerging markets (+18%(1))
• Advertising & promotion expenditure: up 8%(1), representing a stable A&P to sales ratio
• Profit from recurring operations: € 1,379 million (+14%, organic growth +17%)  

• • Group share of net profit from recurring operations: € 843 million (+16%)
  • Group share of net profit: € 800 million (+20%)
  • Continued strong deleveraging: Net Debt/EBITDA ratio(2) of 3.9 at 31 December 2011 vs. 4.4 at 30 June 2011

• • dynamic sales, driven by the Top 14 and emerging markets
  • improved margin rates while maintaining strong advertising and promotion support behind its brands
  • acceleration of organic growth in profit from recurring operations of +17% with growth(1) in every region of the Group
  • key steps in debt reduction and refinancing

• organic growth of +11%, with continued dynamic growth in emerging markets, up +18%(1), and solid growth in mature markets (+6%(1)). This growth was boosted somewhat by stock building by the trade in France (“French pre-buying”) prior to an excise tax increase on spirits (effective as of 1 January 2012). Adjusting for “French pre-buying, growth in mature markets was solid at +3%(1). At the Group level, organic growth in net sales, excluding “French prebuying” would have been +8%.

• • an unfavourable foreign exchange effect of € 99 million for a -2% negative effect over the half year, primarily from the depreciation of the US dollar and certain emerging market currencies (Indian rupee, Mexican peso...),
  • a negative group structure effect of -1%, primarily due to the disposal of certain activities in New Zealand in half-year 2010/11.

  Consolidated sales for the 2nd quarter 2011/12 increased +9% to € 2,627 million, resulting from +11% organic growth, a negative -1% foreign exchange effect and a negative -1% Group structure effect.

•  Asia/Rest of the World, with growth of +15% (organic growth of +18%), remained the driving force for Group growth, primarily due to Asia (particularly China, India, Vietnam, Taiwan, Duty Free markets) and Africa/Middle East. Martell, Scotch whiskies in the Top 14 and Indian whiskies once again led growth. Seeding categories such as wine, champagne and vodka are gaining in significance.
• Americas reported growth of +1% (organic growth of +6%). Net sales in the US (+5%(1)) showed favourable price-mix. Jameson in the US (+37%(1)) remains the leading growth driver, but other brands also posted solid growth (The Glenlivet, Malibu...). Absolut was stable in the US. Sales also grew in most other markets of the region, except Mexico (implementation of a new business model). Brazil’s sales grew +14%(1), driven by the Top 14 (+34%(1)), particularly due to the success of Absolut, Chivas and Ballantine’s. Canada logged accelerated growth (+5%(1)) with double-digit growth from Kahlua and Malibu.

• • In Europe excluding France, the half year was satisfying, with net sales +2%(1) compared to stability(1) over the full financial year 2010/11. The trends were divergent, with accelerated growth in Eastern and Central Europe (+15%(1)) and a moderate decline in Western Europe (-2%(1)) due primarily to Spain (-5%(1), no market recovery as of yet), UK (-6%(1), due to wine) and Italy (-11%(1) , tight control of stocks by the trade). Other markets in Western Europe were resilient (Germany +2%(1), Duty Free).
  • In France, sales grew an exceptional +25%(1) due to trade pre-buying (3-4 months of stocks) prior to the excise duty increase on spirits (+14% on average). The impact on net sales is estimated at € 98 million. Excluding the estimated “pre-buying” impact, net sales grew +1%(1), The Top 14 brands (+26%(1)), in particular Ricard, Ballantine’s, and Jameson, benefitted from the trade “pre-buying.”

   

• • The priority premium wine brands grew +3%(1). The high value strategy and country diversification of these brands generated a +10%(1) increase in their contribution after advertising and promotion during the half year, a marked acceleration over the +6%(1) published for the full-year 2010/11.
  • The 18 key local spirits brands contributed 19% of the Group’s organic net sales growth. The brands increased +12% in value(1), driven by local whiskies in India (+26%(1)). Several other brands logged double-digit growth(1), including Clan Cambell (+32%(1)) and Pastis 51 (+33%(1)), which benefitted from trade pre-buying in France. Excluding the trade pre-buying impact, organic growth in net sales of the 18 key local spirits brands was +8%(1).
  • Premium brands(3) represented 74% of Group sales in the half-year 2011/12, compared to 71% for the half-year 2010/11.

Pernod Ricard had an excellent half-year 2011/12, with:

• continuity of main business trends of full-year 2010/11: strong growth in emerging markets, premiumisation...
• significant operating margin improvement

• further deleveraging and decisive progress to refinance the July 2013 maturity
• some favourable technical effects (“French pre-buying,” earlier Chinese New Year) that will reverse in the second half-year 2011/12

• continued strong dynamism for emerging markets: Asia, Eastern Europe, Latin America, Africa
• gradual improvement in the US

• ongoing softness in Western Europe, with continued recession in Southern Europe
• depressed consumption expected in France due to retail price increases as early as January 2012