Pernod Ricard, the world’s second largest wines & spirits company, today reported a +4% rise in sales for the 2016/17 financial year to €9,010 million. Organic growth accelerated to +3.6%, coming closer to the group’s mid-term objective of +4-5%. Net profit rose by +13% to €1,393 million.
Sales growth was driven by the company’s Strategic International Brands, which grew sales by +4%. Of the 13 key brands, nine improved their performance, with Martell (+6%) and Absolut (+2%) among the notable brands to return to growth in the year. Martell benefited from a healthy performance in China as well as in travel retail, said Pernod Ricard.
By geography, sales growth was driven by the USA, China (back to growth), Eastern Europe and Global Travel Retail, noted the company.
In the Americas, sales grew by +7%, with a +5% rise in the USA and +11% in other regional markets. Travel retail marked its “return to growth, driven by Martell [and by] increasing distribution and visibility across region” said Pernod Ricard.
Asia/Rest of the World posed modest +1% growth in sales, but was notable for a rebound in China, with sales up +2% compared to a -9% decline a year ago. India grew by just +1%, largely due to regulatory changes.
Pernod Ricard noted: “Travel Retail Asia returned to positive trend after a decline in FY16 [but the] commercial environment remains challenging.”
Sales in Europe climbed by +3%, with travel retail declining in a market that remains “difficult” according to the company.
Pernod Ricard Chairman and Chief Executive Officer Alexandre Ricard said: “FY17 was a strong year, delivering Profit from Recurring Operations (+3.3%) in line with guidance together with an excellent cash performance. These results demonstrate that the strategic direction the Group adopted two years ago is delivering: growth is accelerating and diversifying through successful activation of our strategy.
“In FY18, we will continue to implement our roadmap, in particular focusing on digital, innovation and operational excellence. We are confident that we will continue improving our business performance. As a consequence, our guidance for FY18 is organic growth in Profit from Recurring Operations between +3% and +5%.”
The company said top line growth would reach +4-5% in the coming year, with the USA, China and Europe among the strong performers, and with Indian growth expected to accelerate.
