French drinks giant Pernod Ricard noted an enhanced travel retail showing as the company unveiled a “strong” first-half performance for the half-year ended 31 December 2016.
Sales for the period totalled €5,061 million, a +4% increase in organic terms while reported sales rose +2% due to an unfavourable FX impact.
The positive results were driven by improvement in travel retail, China and Russia; plus continued strong growth in the USA and for Jameson worldwide, and through innovation. Absolut, Martell and Chivas all performed positively.
Revamped organisations in the USA, global travel retail and China are “getting up to speed”, the group noted.
Travel retail sales in the Americas surged +14%, the channel’s growth driven by Martell’s expanded distribution and visibility across US airports.
Travel Retail Asia posted a “modest” sales decline, albeit an improvement over the H1 16 decrease, mainly due to delayed finalisation of negotiations with an unnamed key customer. The Scotch category in travel retail still faces a “tough market and competitive environment”, Pernod Ricard said.
In Europe, travel retail remained in decline “in a context that remains difficult”, the group noted tersely.
Travel retail Asia was to the fore for Ballantine’s Scotch whisky, which posted +6% growth year-on-year in the six months.
Innovation contributed +1% to overall group growth, driven by Jameson Caskmates, Lillet and Olmeca Altos
Q2 17 sales were €2,813 million, +4% and +3% in organic and reported growth terms respectively.
Chairman and Chief Executive Officer Alexandre Ricard said: “Our half-year results are strong, delivering a continued performance improvement. Our strategy remains consistent and is driving results.
“For full year FY17, in an uncertain environment, we plan to continue improving our business performance year-on-year vs. FY16. We will continue to support priority markets, brands and innovations while focusing on operational excellence. We expect to deliver organic growth in profit from recurring operations in line with the guidance of +2% to +4%.”
