Sales and Profits Decline at Pernod Ricard
Pernod Ricard has reported a 7% decline in full year sales to €7.945 billion, due to adverse foreign exchange factors and a 23% drop in sales in the Chinese market, with group profit from recurring operations falling 8%. However, as a result of strict control of resources, the operating margin rate increased 52 bps in organic terms – the strongest increase in four years. Consequently, profit from recurring operations recorded organic growth of +2% to €2.056 billion.
Sales of the French drinks group’s Top 14 brands declined 2% as a result of a slight reduction in volumes and unfavourable mix, including the decline of Martell in China. Despite a more challenging business environment, pricing remained solid at +2%. Pernod Ricard’s Key Local Brands increased sales by 4%, supported by positive pricing.
Sales in Europe showed a marked improvement, rising by 2%, but growth slowed in the Americas to 2%. The Asia-Rest of the World region, excluding China, increased sales by 4%.
Pierre Pringuet, chief executive of Pernod Ricard, says: “Despite an environment that was more difficult than anticipated, we have delivered the guidance announced in February, proof of everyone’s commitment, which I would like to commend. We are seriously committed to the Allegro project: this operational efficiency project must enable us to maximise our future growth while generating a hard figure of €150 million of savings.”
Alexandre Ricard, deputy chief executive and chief operating officer, remarks: “In this context which will remain challenging, we anticipate a gradual improvement in our sales growth, and we will increase the investment behind our brands and priority innovations in order to sustain long-term growth.”
