Q3 ORGANIC NET SALES STABLE AND REPORTED
-2%
YTD ORGANIC NET SALES -2% AND REPORTED
-6%
Regulatory News:
Pernod Ricard (Paris:RI):
Press Release – Paris, 25 April 2024
This robust performance illustrates the strength of our
diversified portfolio of premium international spirits and our
broad-based geographic footprint covering mature and emerging
markets.
This strength largely mitigates the impact of slower performance
in China, due to a difficult macroeconomic environment and in the
US, as trade inventory levels are adjusted.
Dynamic results achieved notably in the Must Win Markets of
India and Global Travel Retail and in Japan, Germany and Turkey,
and improving momentum in Q3 in Spain, Brazil and South Africa.
FY24 Q3 Net Sales €2,347m, stable, (+2% excluding Russia)
and -2% reported
FY24 9M Net Sales €8,937m, an organic decline of -2% (-1%
excluding Russia) and -6% reported, with unfavourable Foreign
Exchange impact of -€699m1, of which roughly half is offset by
favourable Group Structure of +€354m2
Volumes grew by +1% in Q3, with growth resuming
following four consecutive quarters of decline, with FY24 9M
volumes decline -4%
9M Price/mix effect +2%, as the strong, though
moderating, price effect at +6% is partially offset by negative
market mix
By regions, including Must Win Markets (Q3/YTD)
- Americas: -7%/-7%:
- USA -11%/-8%, accelerating brand activation, notably on
Jameson and newly acquired brands
- YTD Organic Net Sales performance -8%, with depletions value
c.-7% and underlying Sell-Out at c.-3% as the US Spirits market
growth remains broadly unchanged and with trade inventories
continuing to be adjusted in Q3
- Jameson Original gains share within its competitive set,
following largest ever PR USA investment over the Saint Patrick’s
Day period
- Good Sell-Out performance on Kahlua, Código and
Jefferson’s
- Canada: broadly stable YTD, with strong growth in Q3 on
Jameson, Kahlua & Bumbu
- Brazil: strong rebound in Q3 against favourable comps
and improving consumer demand, with growth on Ballantine’s, Absolut
and Beefeater
- Mexico: soft decline YTD with notably weaker tourism
impacting On-Trade
- Europe -6%/-5%, excluding Russia a very resilient
+4%/+1%: cycling a strong H1 FY23, with growth notably driven
by Germany and Eastern Europe
- France: modest decline YTD, with Q3 in growth driven by
strong performance of Ricard and Bumbu
- Spain: broadly stable YTD with solid growth in Q3 on
favourable comps after H1 lapped On-trade recovery and revenge
conviviality last year, with good growth YTD on Ballantine’s,
Jameson and Chivas Regal
- Germany: strong double-digit growth YTD driven by
Absolut, Jameson and Ballantine’s with favourable comps vs Q3
LY
- UK: soft performance with good growth YTD on Jameson,
Kahlua and Malibu
- Poland: strong growth YTD thanks to Ballantine’s and
Jameson
- Asia-RoW +8%/+2%: Dynamic and accelerating regional
performance across Asia and Africa, with the exception of
China:
- India +8%/+5%, strong, broad-based and accelerating
performance
- Strong consumer demand for spirits
- Sales accelerating and premiumisation continuing
- Strong YTD growth of Strategic International Brands with
Jameson, Absolut and The Glenlivet
- Strong growth of Seagram’s whisky brands led by Royal Stag and
Blenders Pride
- China -12%/-9% in a challenging macroeconomic
environment
- Sales decline with continuing soft consumer sentiment leading
to a weak CNY
- Solid performance of Martell Noblige
- Strong growth on premium International brands Jameson, Absolut,
Olmeca and Beefeater
- Japan: double-digit growth YTD driven by Perrier-Jouët,
Chivas Regal and The Glenlivet , with a favourable phasing effect
in Q3
- Korea: soft YTD, with better Q3 led by good performance
on Jameson and Ballantine’s
- Other Asia: strong YTD growth of Taiwan Market
- Africa and Middle East: strong double-digit growth in Q3
and YTD driven by Turkey with outstanding growth on Chivas
Regal, Ballantine’s and Olmeca; South Africa with Jameson
and RTDs and Nigeria maintaining very strong growth with
Martell and Jameson
- Global Travel Retail +38%/+9%: Improving Sell-Out momentum
amplified by phasing and favourable comps in Q3
- Good growth across the portfolio notably on Jameson, Martell
and Scotch brands
- Gradual recovery of Chinese travelers continuing
- Favourable phasing in Q3 as expected, particularly impacting on
TR Asia
By brands:
- Strategic International Brands: +1%/-3%, Inventory
adjustments in the US and softer performance in China weigh on the
overall YTD performance of Strategic International Brands. Key
highlights by Market and Brand include Martell in Nigeria; Jameson
in India, Germany and Korea; Absolut in Germany, China, India and
Turkey; Chivas Regal in Turkey, Japan and Western Europe;
Ballantine’s in Turkey, Germany and Poland; The Glenlivet in India,
Taiwan Market and Japan; and Royal Salute in Taiwan Market
- Strategic Local Brands: +5%/+4%, with good
momentum of the Seagram’s whiskies portfolio in India, with Kahlua
in the US and UK; with Olmeca across all regions
- Specialty Brands: -7%/-6%, impacted by the US inventory
adjustments. Net Sales highlights include Bumbu, the recently
launched Deacon Scotch Whisky and Altos Tequila
- Strategic Wines: -9%/-10%, mainly driven by declines in
USA and UK
Outlook
Building on very strong FY23 and robust 9M FY24 performances,
Pernod Ricard remains confident in its medium-term financial
framework of +4% to +7% top line growth, aiming for the upper end
of the range, with Organic Operating Leverage of +50/+60 bps.
In a challenging environment, Pernod Ricard expects for
FY24:
- Dynamic Q4 Net Sales, improving versus 9M, leading to broadly
stable full year Organic Net Sales
- Continued focus on Revenue Growth Management and operational
efficiencies
- A&P ratio at c. 16% of Net Sales and very strict control of
Structure Costs
- Organic Operating Margin expansion, with Organic Profit from
Recurring Operations growing by c.+1%
- Negative FX impact partially offset by perimeter effect
- Investments in strategic inventories at a similar level to
FY23, and increase in Capex to c.€800m
- Free Cash Flow reflecting lower reported PRO and increase in
strategic investments
- c.€300m share buyback for the year, with c.€150m completed in
H1
Dividend
An interim dividend of €2.35 per share will be detached
on 17th July 2024 and paid on 19th July 2024. The final
dividend will be subject to the AGM decision on 8th November
2024
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.
Organic Growth for named markets excludes Travel Retail.
This press release is also available from our website:
www.pernod-ricard.com
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 and
hyperinflation.
- 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.
- The impact of hyperinflation on Net Sales
and PRO in Turkey is excluded from P&L organic growth
calculations by capping unit local price/cost increases to a
maximum of +26% per year, equivalent to +100% over 3 years.
- 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.
About Pernod Ricard
Pernod Ricard is a worldwide leader in the spirits and wine
industry, blending traditional craftsmanship, state-of-the-art
brand-building, and global distribution technologies. Our
prestigious portfolio of premium to luxury brands includes 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, Malibu liqueur and Mumm and
Perrier-Jouët champagnes. Our mission is to ensure the long-term
development of our brands with full respect for people and the
environment, while empowering our employees around the world to be
ambassadors of our purposeful, inclusive and responsible culture of
authentic conviviality. Pernod Ricard’s consolidated sales amounted
to € 12,137 millions in fiscal year FY23.
Pernod Ricard is listed on Euronext (Ticker: RI; ISIN
Code:FR0000120693) and is part of the CAC 40 and Eurostoxx 50
indices.
Appendices
Financial Tables can be consulted on
www.pernod-ricard.com
Upcoming Communications3
Date
Event
May 16th 15.00 CET
S&R Webcast
August 29th 09.00 CET
Full Year Results
1 Mainly depreciation against Euro for Argentinean Peso, Turkish
Lira, US Dollar, Chinese Yuan and Indian Rupee
2 Mainly hyperinflation in Turkey & Argentina and
acquisitions of Sovereign Brands, Skrewball, ACE Beverage Group and
Código
3 Subject to change
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240424260046/en/
Florence Tresarrieu / Global SVP Investor Relations and Treasury
+33 (0) 1 70 93 17 03 Edward Mayle / Investor Relations Director
+33 (0) 6 76 85 00 45 Ines Lo Franco / Investor Relations Manager
+33 (0) 6 49 10 33 54 Emmanuel Vouin / Head of External Engagement
+33 (0) 1 70 93 16 34