Pernod Ricard: First Quarter Sales 2010/11: € 1,879 million (+14%)
October 21 2010 - 1:30AM
Business Wire
Regulatory News:
Press release - Paris, 21 October 2010
Pernod Ricard’s (Paris:RI) consolidated net sales
(excluding tax and duties) totalled € 1,879 million for the
1st quarter 2010/11 (from 1 July to 30
September 2010), compared to € 1,646 million in the 1st quarter
2009/10, an increase of +14% which was due to:
- an organic growth of +10%,
driven by the 14 strategic brands (+17%(2)) and the new
economies(3) (+20%(2)). This performance was enhanced by a number
of technical items, favourable as a whole.
- a 7% positive foreign exchange
effect,
- a 2% negative group structure effect,
primarily relating to the disposal of Nordic and Spanish
assets.
Premium brands(4)
represented 73% of sales in the 1st quarter 2010/11,
compared to 70% in the 1st quarter 2009/10.
- The 14 strategic spirits and
champagne brands (Top 14) (60% of Group sales) recorded a 10%
volume growth as well as an organic sales growth of 17%, which
testifies to a very favourable mix/price effect. Against this
background:
- Nine out of fourteen brands enjoyed
double-digit organic sales growth: Martell (+45%(2)), Royal Salute
(+37%(2)), Perrier-Jouët (+36%(2)), Jameson (+27%(2)), Ballantine’s
(+16%(2)), Chivas Regal (+14%(2)), The Glenlivet (+14%(2)), Mumm
(13%(2)) and Havana Club (+11%(2)).
- ABSOLUT (+7%(2)) continued the recovery
initiated in the second half of 2009/10: marked improvement in the
US and very strong growth in Germany, Brazil, Canada, France, the
UK and Eastern Europe.
- Chivas Regal (+14%(2)): double-digit
growth in Asia, Latin America and Duty Free. The brand achieved
modest growth in Europe, despite a significant fall in volume in
Greece, offset by a buoyant Russia.
- The 4 Priority Premium Wine
brands (5% of Group sales) posted organic volume and sales
growth of 5%.
- After two years of decline, Jacob’s
Creek’s sales growth (+4%(2)) was driven by the US, Canada and
China, which offset the UK and Australian decline (high value
strategy maintained).
- Sales of Graffigna, Campo Viejo and
Brancott Estate grew by +22%(2), +11%(2) and +1%(2),
respectively.
- The 18 key local spirits brands
(16% of Group sales) grew both in volume (+3%) and value (+2%(2)).
The continuing very strong growth of Indian whiskies (Royal Stag,
Blender’s Pride) and the recovery of Imperial in South Korea and
Ramazzotti in Germany offset the difficulties of Wyborowa in
Poland, 100 Pipers in Thailand and Something Special in
Venezuela.
Review by geographic
region
The trend clearly improved in most regions. Asia / Rest of World
continued to drive Group growth.
- Asia / Rest of World: very buoyant
1st quarter. Sales: € 715 million (organic growth:
+25%)
- Asia: except for Thailand (tense
political climate), all markets experienced strong growth.
- Growth(2) rates were in excess of 30%
in China, India, Vietnam, Japan, Taiwan, Indonesia, the Persian
Gulf and Duty Free markets.
- The very strong growth in China was
enhanced by a wholesalers’ restocking on Martell, following
consumer depletions that exceeded shipments in the 4th quarter
2009/10.
- South Korea confirmed its recovery and
reported double-digit growth.
- The interruption of Chivas Regal
shipments to Kirin in the 1st quarter 2009/10 made the comparison
basis favourable in Japan.
- Pacific: sales decreased in Australia,
due to the decline in the bulk wine business among other
factors.
- Africa & the Middle-East: strong
organic growth (+27% (2)), especially in Turkey and the Middle
East.
- Americas: encouraging start of the
year. Sales: € 482 million (organic growth: +3%)
- In the US, sales were stable but the
Top 14 grew by +2%(2).
- Pernod Ricard USA slightly outperformed
the market in the 1st quarter, in line with the 2nd half of
2009/10, as confirmed by Nielsen data: volume +3% for Pernod Ricard
USA vs +2% for the market.
- ABSOLUT improved in the 1st quarter,
bolstered by marketing initiatives and downward pricing adjustment
(Nielsen + 9% vs vodka market +6%).
- Canada, Mexico and Duty Free reported
growth, due in particular to Top 14 brands and Wisers in
Canada.
- Central and South America: the modest
increase was due to strong growth in Argentina, Chile and Brazil,
which outweighed a marked decline in sales in Venezuela (-22%(2),
limitation on imports due to restricted access to US dollar).
- Europe: stabilization in the West,
rebound in the East. Sales: € 517 million (organic growth: +2%)
- Europe’s performance improved (+2%(2)
vs -5%(2) in 2009/10), including very contrasting situations
depending on countries and categories. Favourable technical effects
also affected results.
- Eastern and Central Europe:
double-digit growth was primarily due to Ukraine and above all
Russia (performance partly bolstered by sales ahead of price
increases), but the situation remained difficult in Poland, the
Czech Republic and Romania.
- Western Europe: sales were stable
overall.
- Germany: the strong growth (+22%(2))
was partly explained by favourable comparatives,
- Italy: business recovered after several
difficult years,
- Spain, Ireland and the UK: the decline
proved less significant in the 1st quarter (about -3%(2)) than in
the previous financial year,
- Greece: the very sharp decline
(-39%(2)) that began in the 4th quarter 2009/10 was a consequence
of the local crisis in consumer spending.
- France: strong resilience confirmed.
Sales: € 164 million (organic growth: +5%)
France proved resilient to the crisis. Sales were driven by the
strong performance of the Top 14 (+7%), more particularly due to
the Ricard, Ballantine’s, Havana Club and ABSOLUT brands, as well
as the recovery of champagne brands Mumm and Perrier-Jouët. Malibu
retreated but Clan Campbell achieved strong growth.
To conclude:
- The trends noted in the 1st quarter
2010/11 are encouraging for the full financial year:
- strong sales growth (enhanced by
favourable technical effects overall)
- very positive price / mix effect: Top
14 premium brands driving growth, supported by increased marketing
investments
- strong continued dynamism of new
economies
- an US market in gradual recovery and
where Pernod Ricard’s performance improved
- an European market that remained
difficult but is improving nonetheless
Pierre Pringuet, Chief Executive Officer of Pernod Ricard,
stated, as he commented on the sales:
“The very good performance of the 1st quarter, which was driven
by the Top 14 and supported by our marketing investment, confirms
our confidence in the current financial year. Against this
background, we have set ourselves the target of achieving organic
growth in Profit from Recurring Operations for the current
financial year close to +6%.
We also target a Net Debt(1) / EBITDA ratio at a level close to
4 for the 30 June 2012 year-end.”
Financial calendar for the 2011 calendar year
The financial communication calendar was simplified to include
in particular advance communication of the full-year guidance from
the presentation of sales for the first quarter of the financial
year.
The new calendar for 2010 and 2011 is as follows:
- 21 October 2010: 2010/11 first quarter
sales and 2010/11 full-year guidance
- 10 November 2010: Annual General
Meeting for the 2009/10 financial year
- 17 February 2011: 2010/11 half-year
sales and results
- 5 May 2011: 2010/11 third quarter
sales
- 1 September 2011: 2010/11 full-year
sales and results
- 20 October 2011: 2011/12 first quarter
sales and 2011/12 full-year guidance
- 15 November 2011: Annual General
Meeting for the 2010/11 financial year
(1) Net debt translated at average rates for the financial
year
(2) Organic growth
(3) Annual GNP per capita < USD 10,000
(4)Retail prices in the US >= USD 17 for spirits and > USD
5 for wine
Please visit the Finance section of our website
www.pernod-ricard.com to download the slideshow
presentation
Shareholders’ agenda: Annual General Meeting – Wednesday
10 November 2010
About Pernod Ricard
Pernod Ricard is the world’s co-leader in wines and spirits with
consolidated sales of € 7,081 million in 2009/10. 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 about 18,000 people and
operates through a decentralised organisation, with 6 “Brand
Companies” and 70 “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 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.
Please visit our website for more information:
www.pernod-ricard.com
APPENDICES 1ST QUARTER
2010/11
Analysis of sales by region
Net Sales
(€ millions)
Q1 2009/10 Q1 2010/11 Change Organic
Growth Group Structure Forex impact
France 157
10% 164 9% 7 5% 7 5% (0) 0% 0
0% Europe excl. France 520 32% 517 28% (2) 0% 10 2% (26) -5%
14 3% Americas 456 28% 482 26% 26 6% 13 3% (1) 0% 15 3% Asia / Rest
of the World 514 31% 715 38% 201 39% 125
25% (11) -2% 88 17%
World 1,646
100% 1,879 100% 232
14% 155 10% (39)
-2% 116 7%
Volume and organic growth of strategic brands
Q1 2010/11 Volume
organic growth Net Sales organic growth
Absolut 9% 7% Chivas Regal 14% 14% Ballantine's 11% 16%
Ricard -1% 3% Jameson 26% 27% Malibu 7% 2% Beefeater 4% 5% Kahlua
-4% -6% Havana Club 13% 11% Martell 31% 45% The Glenlivet 15% 14%
Royal Salute 39% 37% Mumm 12% 13% Perrier Jouët 25% 36%
Top
14 10% 17% Jacob's Creek 5%
4% Brancott Estate 6% 1% Campo Viejo 4% 11% Graffigna 19% 22%
Priority Premium Wines 5% 5%
Foreign Exchange effect
Forex impact Q1 2010/11
(€ millions)
Average rates evolution On Net Sales
2009/10 2010/11 %
US
Dollar USD 1.43 1.29 -9.8% 38 Russian Ruble
RUB 44.78 39.53 -11.7% 5 Mexican Peso MXN 18.97 16.52 -12.9% 7
Chinese Yuan CNY 9.77 8.74 -10.6% 21 Ukrainian hryvnia UAH 11.73
10.22 -12.9% 1 Indian Rupee INR 69.20 59.98 -13.3% 13 Polish Zloty
PLN 4.20 4.01 -4.4% 1 Australian Dollar AUD 1.72 1.43 -16.7% 8
Korean Won KRW 1.77 1.53 -13.9% 11 Thai baht THB 48.58 40.82 -16.0%
4 New Zealand Dollar NZD 2.12 1.80 -15.3% 4 Canadian Dollar CAD
1.57 1.34 -14.5% 9 Brazilian real BRL 2.67 2.26 -15.3% 4 South
African Rand ZAR 11.16 9.46 -15.3% 3 Swedish Krona SEK 10.41 9.38
-9.9% 2 Pound sterling GBP 0.87 0.83 -4.4% 4 Other currencies
(18)
Total
116
Group structure effect
Group structure Q1 2010/11
(€ millions)
On Net Sales Total Group Structure
(39)