Pernod Ricard announces sales rise of 6% to US$10,434m in full year results

FRANCE – Pernod Ricard, a French company that produces distilled beverages, has announced a sales rise of 6% in its 2018 full year results, from 3.6% in 2017 to US$10,434 million.

According to the company, the sales were very strong, with broad-based growth coming from a wide spectrum of markets.

The company reported that America had a continued dynamism of 6%, with USA now growing broadly in line with market and acceleration in Mexico and Brazil.

Asia and the rest of world had an acceleration of 9%, thanks to return to strong growth in China and India.

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Europe had a modest growth of 2%, with good momentum in Eastern Europe, Germany and UK but difficulties in France and Spain.
The Strategic International Brands’ acceleration was at 7% vs. 4% in FY17, 11 out of 13 in growth, 6 improving vs. FY17.

The company added that there was a very strong performance of Martell (+14%) and Jameson (+14%), improving trends for overall Scotch portfolio (+3% vs. stable in FY17) and return to growth of Chivas (+5%).

Q4 Sales were US$2237 million with 5% in organic growth (-2% reported), broadly consistent with underlying trends in the first 9 months of the year.

FY18 PRO was US$2727 million, with organic growth of 6.3% and -1.5% reported. The PRO margin was up 14bps organically but down -34bps on a reported basis due to adverse FX (-US$209m.)

Organic PRO growth was in line with the revised annual guidance of 6%, driven by gross margin of 6%, a 5bps margin improvement vs. FY17 on an organic basis.

The operational excellence savings limiting impact of cost of goods’ increased (in particular Agave cost and GST in India).

A dividend of €2.36 is proposed for the Annual General Meeting of 21 November 2018, up 17% from FY17, corresponding to an increase in pay-out ratio to 41%, reflecting the Group’s policy of gradually increasing cash distribution from approximately one-third of Group Net Profit from Recurring Operations to 50% by FY20.

As part of this communication, Alexandre Ricard, Chairman and Chief Executive Officer, declared, “FY18 was a very strong year. Consistent strategic implementation has enabled us to deliver a significant improvement in business performance while investing for the future.

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Our Sales have accelerated and diversified, and our margins improved. In FY19, in a still uncertain geopolitical and monetary environment, we will continue consistently implementing our strategy.

Our guidance for FY19 is organic growth in Profit from Recurring Operations between +5% and +7%.”

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