- Strong organic growth* over the financial year: +9.1%
- Continuing premiumisation of the 15 strategic brands: organic growth* of +9% in volume and +13% in value
- Slight upwards revision of guidance of growth in net profit from ordinary activities (Group Share), on a constant foreign exchange basis
Press release - Paris, 26 July 2007 -
Pernod Ricard realised sales of 6,443 million euros (excluding tax and duties) for the 2006/2007 financial year ended 30 June 2007, a year-on-year increase of 6.2%. This performance comprised a strong 9.1% organic growth*, a -2.8% negative foreign exchange effect, primarily due to the loss in value of the US dollar, and a +0.2% group structure effect.
The 15 strategic brands registered vigorous organic growth*: +9% in volume and +13% in value, in line with the Group's premiumisation strategy. All of these 15 strategic brands progressed and the following eight posted double-digit volume growth: Stolichnaya (+18%), Martell (+17%), Montana (+17%), Havana Club (+15%), The Glenlivet (+15%), Perrier Jouet (+15%), Ballantine's (+11%) and Jameson (+11%).
Over the full financial year, the spirits business and the wine business increased by +11.0%* and +1.3%*, respectively. Spirits continued to grow strongly in the 2nd half-year with a 9.4%* sales increase while wine stepped up its growth to +4.5%*.
Overall, the strong 8.6% HY2 growth* confirmed the 9.7% performance achieved in HY1, which included a favourable comparison effect related to the reduction in inventory that followed the Allied Domecq acquisition.
Consolidated sales for the 4th quarter increased by 3.2% to 1,544 million euros, a +5.5% organic growth, (-2.0% foreign exchange effect, -0.2% group structure effect), thereby reflecting continuing strong growth following a particularly buoyant 3rd quarter (organic growth: +12.2%). The level of selling and advertising expenditure in the 2nd half-year was high due to the launch of new advertising campaigns.
All geographic regions contributed to annual growth
Asia / Rest of World: 1,884 million euros (+9.7%, that is organic growth* of +11.4%)
Over the full year, Martell and Ballantine's were the two main contributors to growth in Asia.
China witnessed outstanding growth by Martell and growth by the whole whisky portfolio in excess of 10% (Chivas Regal, Ballantine's and Royal Salute).
India continued its spectacular growth, for local brands (Royal Stag, Imperial Blue and Blenders Pride) as much as for imported whisky brands.
Thailand still remained a difficult market.
Australia and New Zealand are growing strongly, driven by Jacob's Creek and Montana as well as by international spirits brands, but were adversely affected by the decline of value wine sales (consumer price below US$ 3).
Except for Thailand, Asia continued to experience vigorous double-digit growth in the 4th quarter (+10%).
Americas: 1,786 million euros (+5.4%, that is organic growth** of +11.6%)
North America (organic growth*: +9.6%**)
- Growth remained very strong in the US, particularly in the 4th quarter. Jameson, The Glenlivet, Stolichnaya, Wild Turkey and Seagram's Gin continued to expand. Chivas Regal registered modest growth. Wine brands such as Jacob's Creek, Campo Viejo, Montana, Perrier Jouët and Mumm Napa enjoyed very strong growth, especially from the 2nd half-year.
- Mexico confirmed the excellent growth by imported brands and the improved situation of local brandies Don Pedro and Presidente.
Central and South America (organic growth*: +20.3%)
Chivas Regal (Venezuela and Central America), Ballantine's (Brazil, Chile) and Havana Club (Chile, Cuba) are the major growth drivers for strategic brands. Local brands such as Montilla (Brazil), Something Special (Venezuela) and Passport (Brazil) continued their strong development.
Europe: 2,091 million euros (+4.5%, that is organic growth** of +6.6%)
Over the full year, the business environment remained favourable in most European countries: Germany, Russia, Greece, Ireland and Poland. Italy and the UK stabilised.
Spirits such as Ballantine's (Germany, Eastern Europe), Beefeater (UK, Russia), Chivas Regal (Germany, Russia), Havana Club (Germany, Greece), Stolichnaya (UK, Greece) are some of the numerous highly dynamic brand/country combinations.
Montana wine and Perrier Jouet champagne registered strong growth, while Mumm remained stable and Jacob's Creek remained adversely affected by continuing strong competition in the UK.
A slowdown was experienced in the 4th quarter due to high 3rd quarter sales in anticipation of price increases in the UK, Germany and Spain. Overall, Europe showed renewed vigour with strong and consistent growth in the 1st and 2nd half-years (between 6% and 7%).
France: 682 million euros (+4.2%, that is organic growth* of +3.6%)
Over the full fiscal year, Ricard sales increased by 4% in volume and 6% in value. IRI/ Infoscan Census 12-month panels confirmed this trend for Ricard at +3.7%. Pastis 51 also contributed to growth. All key brands performed well. The Ballantine's, Chivas Regal and Clan Campbell whiskies, the Havana Club and Wyborowa white spirits, as well as the Mumm and Perrier Jouët champagne all registered growth.
Conclusion and outlook
In Patrick Ricard's opinion, Chairman and CEO of the Group: "2006/2007 was a further year of very strong growth for Pernod Ricard which witnessed progress by all strategic brands. The great success of our premium brands and our rapid growth in emerging countries were the two principal drivers of this performance and should ensure continued vigorous growth for the year in progress".
The vigour of the business environment throughout the 2nd half-year and the favourable evolution of profit margins enabled a significant increase in selling and advertising expenditure over the 2nd half of the financial year and leads to the expectation of growth in net profit from ordinary activities (Group Share) to be slightly in excess of initial guidance of 20%, on a constant foreign exchange basis.
* Organic growth measured excluding July for Allied Domecq brands
** Organic growth excluding bulk spirits sales