FY20 GUIDANCE UPDATED TO REFLECT BUSINESS ACTIVITY

FY20 GUIDANCE UPDATED¹ TO REFLECT BUSINESS ACTIVITY:
PROFIT FROM RECURRING OPERATIONS ORGANIC DECLINE OF C. -15%

On 24 March 2020, Pernod Ricard shared its assumptions regarding the COVID-19 pandemic, leading to guidance of organic decline in Profit from Recurring Operations for FY20 of c. -20%, resulting from the following assumptions:

• China: very limited business in February and March; slow recovery from April
• Travel Retail: 80% business decline for the period from February to end June
• Other markets:
  • Off-trade, representing c. ¾ of Sales: c.10% Sales reduction from mid-March to end June
  • On-trade, representing c. ¼ of Sales: no Sales from mid-March to end June, as outlets are shut or not reordering.

On balance, these assumptions have proven to be directionally correct, in particular as regards China and Travel Retail.  There have however been some notable differences, mainly with India being subject to a full six-week lockdown of all sales and production, but more resilience in the Off-trade, especially in the USA and Western Europe.

As a result, and thanks to strong cost mitigation, Pernod Ricard now expects an organic decline in Profit from Recurring Operations for FY20² of c. -15%.

¹ Guidance given to market on 24 March 2020 of organic decline in Profit from Recurring Operations of c. -20% and confirmed on 23 April 2020 at the 9M Sales release.
² FY20 Results to be announced on 2 September 2020.

All growth data specified in this press release refers to organic growth (at constant FX and Group structure), unless otherwise stated.  Data may be subject to rounding.

Definitions and reconciliation of non-IFRS measures to IFRS measures
Pernod Ricard's management process is based on the following non-IFRS measures which are chosen for planning and reporting. The Group's management believes these measures provide valuable additional information for users of the financial statements in understanding the Group's performance. These non-IFRS measures should be considered as complementary to the comparable IFRS measures and reported movements therein.
Organic growth
Organic growth is calculated after excluding the impacts of exchange rate movements and acquisitions and disposals. 
Exchange rates impact is calculated by translating the current year results at the prior year's exchange rates.
For acquisitions in the current year, the post-acquisition results are excluded from the organic movement calculations. For acquisitions in the prior year, post-acquisition results are included in the prior year but are included in the organic movement calculation from the anniversary of the acquisition date in the current year.
Where a business, brand, brand distribution right or agency agreement was disposed of, or terminated, in the prior year, the Group, in the organic movement calculations, excludes the results for that business from the prior year. For disposals or terminations in the current year, the Group excludes the results for that business from the prior year from the date of the disposal or termination.
This measure enables to focus on the performance of the business which is common to both years and which represents those measures that local managers are most directly able to influence.
Profit from recurring operations
Profit from recurring operations corresponds to the operating profit excluding other non-current operating income and expenses.