FY22 Full-year Sales and Results

Results

FY22 PRO1 grew +19%, to €3,024m (+25% reported) delivering organic operating margin expansion of +52bps:

• Gross margin expanded +12bps as price, mix and fixed cost absorption offset COGS increases
• A&P ratio at c. 16% of Sales, with dynamic allocation between brands, markets and activities
• Structure costs: purposeful increase, notably recruitments to support our digital
• transformation
• Positive FX impact on PRO of c. +€160m thanks mostly to USD and CNY appreciation versus EUR.

Recurring effective tax rate at 23.2%.
Group share of Net PRO was €2,124m, +32% reported vs. FY21.
Group share of Net Profit was €1,996m, +53% reported, a very strong increase thanks to Profit from Recurring Operations growth, reduced financial expenses and positive FX impact.

Cash flow and debt

FY22 recorded a record high cash generation with Recurring Free Cash Flow at €1,926m.
The cost of debt averaged 2.3% vs. 2.8% in FY21, thanks to successful bond debt refinancing.
Net debt increased by €1,205m vs. 30 June 2021 to €8,657m mainly explained by M&A cash-out and share buyback of c. €750m executed during the year. Net Debt/EBITDA ratio at average FX rates² stood at 2.4x at 30 June 2022.

Return to shareholders is accelerating with:

• A proposed dividend of €4.12, an increase of +32% vs. FY21

Starting our new fiscal year with very healthy trade inventory levels across regions, in a context remaining volatile, we expect for FY23:

• Dynamic, broad based Net Sales growth, on a normalizing comparison basis, with a good start to Q1;
• Intense focus on revenue growth management and operational efficiencies in a high inflationary environment;
• A&P ratio at c. 16% of Net Sales, with improved ROI;
• Continuing investments in structure, notably supporting the rapid deployment of the Conviviality Platform;
• Increased Capex at c. 7% of Net Sales and Strategic Inventories to fuel future growth;
• €500m to €750m share buyback, following our financial policy priorities;
• Significant positive currency effect expected for FY23³.

_{¹ Profit from Recurring Operations
² Based on average EUR/USD rate: 1.13
³ Assuming USD/EUR at 1.00 (spot rate as at 22nd Aug)}

Alexandre Ricard, Chairman and Chief Executive Officer, stated,
“Three words summarize Pernod Ricard’s excellent performance in FY22: record, balanced and
sustainable.
FY22 was a record year in many respects. Our Sales broke the symbolic milestone of €10 billion with our fastest growth rate in over 30 years, delivering a record €3 billion profit from recurring operations at a record operating margin of 28.3%.
FY22’s performance was also very well balanced. Growth was driven by all regions, categories, price points and channels, with a comparable contribution from both mature and emerging markets.
Most importantly, our performance was sustainable thanks to the real progress we’ve made on delivering our strategic roadmap “Good Times from a Good Place”.
There has definitely been a newfound appreciation for conviviality since the Covid outbreak and I would like to take this opportunity to praise our teams whose commitment has never wavered, and who continue to play a key role in facilitating convivial experiences with our brands around the world.
While we are faced with a challenging and volatile environment, I am confident that our unique competitive advantages and the rapid deployment of our digital transformation will enable us to deliver our FY23 to FY25 medium-term financial framework.”

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.

A detailed presentation of FY22 Sales and Results can be downloaded from our website: www.pernod-ricard.com

Audit procedures have been carried out on the financial statements. The Statutory Auditors’ report will be issued after examination of the management report and completion of procedures required for the filing of the Universal registration document.”

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, acquisitions and disposals and changes in applicable accounting principles.
• 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.