Sales virtually stable and slight increase in PRO in HY102/13/2014
Sales virtually stable and slight increase in PRO1 in HY1 (excluding forex impact and Group structure)
New guidance for FY 2013/14: Organic growth in PRO between +1% and +3%
Net sales for the first semester of 2013/14 totalled € 4,570 million. Excluding forex impact and Group structure sales were virtually stable, reflecting an improvement in the second quarter (+2%) over the first (-1%). Due to a highly unfavourable forex impact, reported net sales growth was -7%.
Sales were mainly impacted by one market, China (-18%):
- Asia-RoW excluding China +2%
- very good performance in Europe (+4%)
- return to growth in Americas (+3%) following a strong second quarter
Top 14 was virtually stable despite a mix effect of -4% (decline of Martell in China). Volumes were stable and pricing remained positive. The second quarter showed a return to growth. Key local brands performed well (+4%) despite the decline (primarily technical) of Imperial.
Operating margin improved (+34bps), thanks to strict control of resources, leading to organic growth in Profit from Recurring Operations of +2% at € 1,359 million.
As announced, the highly unfavourable forex impact (€ -112 million on PRO at end December) affected the reported growth in Profit from Recurring Operations (-7%).
Financial expenses on recurring operations were reduced by -19% thanks to a significant reduction in the cost of debt to 4.6% (vs. 5.4% in HY1 2012/13).
Net profit from recurring operations declined -3%. Excluding forex impact, it grew +6%.
At end December, debt was reduced € -102 million to € 8.6 billion.
This announcement provided Pierre Pringuet, Chief Executive Officer of Pernod Ricard, with the opportunity to state: “We remain confident in the medium and long-term potential of China but we anticipate difficulties to persist for the full financial year. We want to prioritize the Group’s future sales growth through a sound commercial policy and an appropriate level of investment. As a result, we are issuing new guidance for FY 2013/14: organic growth in profit from recurring operations between +1% and +3%.”
Pierre Pringuet also announces the launch of Allegro, a project aimed at delivering further operational efficiency: “We want to improve organisational efficiency in order to generate future growth, seize new opportunities (particularly innovation and digital) and increase the speed of execution. We will continue to rely on our decentralised model, based on the direct relationship between Brand Companies and Market Companies.”
From a financial standpoint, this project will generate € 150 million of annual savings over three years. They will be partly reinvested to support brand development.
1Profit from recurring operations
About Pernod RicardPernod Ricard is the world’s co-leader in wines and spirits with consolidated sales of € 7,945 million in 2013/14. 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 (formerly Montana), Campo Viejo and Graffigna 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 the NYSE Euronext exchange (Ticker: RI; ISIN code: FR0000120693) and is a member of the CAC 40 index.
Contacts Pernod Ricard
Jean TOUBOUL / 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
Alison DONOHOE / Investor Relations
Tel: +33 (0)1 41 00 42 14
Carina ALFONSO MARTIN / Press Relations Manager
Tel: +33 (0)1 41 00 43 42