Pernod Ricard: First Quarter Sales 2010/11: € 1,879 million (+14%)

Date : 10/21/2010 @ 6:30AM
Source : Business Wire

Pernod Ricard: First Quarter Sales 2010/11: € 1,879 million (+14%)

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)

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