Pernod Ricard, the word’s number two wines & spirits company, today reported full-year results, with sales hitting €8,987 million. The figure was down by -0.3% year-on-year but organic sales rose by +6%.
Travel retail showed good growth across all regions, noted the group, “thanks in part to new organisation, leading to value market share gains”. The company hailed the performance of the channel in the Americas and in Asia in particular. Travel retail sales grew +9% in the Americas, driven by the group’s Strategic International Brands, in particular Chivas.
Travel retail sales climbed by +8% in Asia, led by Martell’s strong performance along with other strategic brands. In Europe, travel retail returned to growth, led by Ballantine’s, Jameson and Chivas.
Group-wide, sales across all channels were buoyed by Asia-Rest of the World (+9%, with strong China/India growth) and the Americas (+6%). Europe grew more modestly at +2%, with good momentum in Eastern Europe, Germany and UK but difficulties in France and Spain.
The company’s Strategic International Brands’ accelerated sales growth by +7% compared to +4% in FY17. This included surging sales of Martell (+14%) and Jameson (+14%). It also included improving trends for the Scotch portfolio (+3% vs. stable in FY17) and the return to growth of Chivas (+5%). Absolut sales climbed by +2%, thanks to growth outside the USA (+6%) although USA is still in decline. Pernod also highlighted a “significant improvement” in sales of Seagram’s Indian whiskies (+13%).
Q4 sales were €1,927 million with +5% in organic growth (-2% reported), broadly consistent with underlying trends in the first nine months of the year.
Full-year profit from recurring operations (PRO) was €2,358 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 an adverse foreign exchange impact (-€180m.)
Group share of net profit was €1,577 million, +13% reported, thanks in particular to a reduction in financial expenses.
Pernod Ricard Chairman and Chief Executive Officer Alexandre Ricard said: “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. 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%.”
