Third Quarter 2016/17 Sales

Strong year-to-date Sales: +4% organic growth (reported: +3%) 
Q3: +3% organic growth
Underlying trends in line with those of H1
FY17 guidance[1] confirmed:
Organic growth in PRO[2] between +2% and +4%

Year-to-date Sales

Sales for the first 9 months of FY17 totalled ' 7,047 million, with organic growth of +4%.  Growth was driven by:

• Strong growth across Americas: +7%
  
  • USA: +5% with Jameson, Martell and Altos in double-digit growth, Absolut in decline (but strong launch of Absolut Lime) and the positive impact of efficiency initiatives.  Shipments ahead of depletions.
  • Travel Retail Americas: return to growth
  • Latin America: strong overall growth in the region but decline in Brazil

• Modest growth in Asia-RoW: +1%
  
  • India: +1%, with temporary growth deceleration due to certain regulatory changes.  Q2 and Q3 impacted by demonetisation and highway ban to impact Sales mainly in Q4 FY17 and H1 FY18. Pernod Ricard confirming leadership in premium local and international whisky.
  • China improving and now stable.  Martell back to good volume and value growth.
  • Korea: continued strong decline
  • Travel Retail Asia: back to growth
  • Africa Middle East: growth deceleration due to macroeconomic and geopolitical context
     
• Strong Sales in Europe: +4%, with good growth in mature markets and dynamic recovery in Eastern Europe
  
  • France: slight growth excluding technical impact[3]
  • Spain: +4%, consolidating leadership in a faster-growing market
  • UK: dynamic growth boosted by advance shipments linked to price increases
  • Russia: strong growth with market share gains
  • Travel Retail Europe: decline in difficult environment
     
• Diversification of sources of growth:
  
  • Strategic international Brands: +4%, with 11 of 13 brands in growth
  • Innovation representing ¼ of topline growth
     
• Mix positive (vs. negative in FY 16) but pricing still subdued

The Strategic International Brands (+4%) were a key driver of overall Sales growth improvement, with strong momentum on Jameson, good growth on Ballantine's and improvement on Absolut and Martell.
The Strategic Local Brands were flat due to the temporary slowdown on Indian whiskies.
Strategic Wines grew dynamically at +7%, driven by Campo Viejo.
Reported growth was +3% due to a slightly unfavourable FX impact over the period.

Q3 Sales

Sales for the third quarter of FY17 were slightly softer, as expected, mainly due to CNY phasing¹, and totalled ' 1,987 million, including organic growth of +3% and reported growth of +7%.  This comprised:

• Good growth in Americas: +8%, with Latin America improving and USA in growth despite difficult basis of comparison
• Asia-RoW in decline at -2%, due to CNY phasing[4] and final impact of demonetisation in India, as planned
• Continued good performance in Europe: +7%, with Western Europe solid and Eastern Europe dynamic.
   

As part of this communication, Alexandre Ricard, Chairman and Chief Executive Officer, stated,  

'We have strong year-to-date Sales growth at +4%.  In an uncertain environment, our strategy is consistent and driving results, in particular in terms of diversifying the sources of growth.

We confirm our FY17 guidance[5] of organic growth in Profit from Recurring Operations of between +2% and +4%[6].'

Note: 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 Sales for the third quarter of 2016/17 can be downloaded here: https://www.pernod-ricard.com/en/media/article/third-quarter-201617-sales-20-april-2017/

Definitions and additional information related to the use of non-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.