Pernod Ricard delivers strong full-year results with profit rising 43%

French spirits maker, Pernod Ricard said on Thursday that revenue for the full-year ending 30 June 2016 rose 1% to €8.7bn ($9.6bn), up from €8.6bn in the previous year.

The maker of Jameson Irish Whisky, Absolut Vodka and Chivas Regal Scotch Whisky, among others said that revenue growth was largely driven by 4% growth acceleration in the USA and a 1% lift in Spain.

In the USA, some of its key brands delivered strong results – Jameson 23%; Malibu 2%; The Glenlivet 9%; and Martell 25%. The company said it was also successful in implementing a good price mix.

Other markets in Latin America showed good performances, helping lift sales 4% – led by Brazil, which despite being in a recession, delivered 5% sales growth. Other top performers were Argentina, Uruguay, Chile, and Mexico, among others.

By region, Pernod Ricard said it recorded double-digit growth in Africa, in particular South Africa, where sales was driven by its Top 14 International brands. Chivas and Jameson performed phenomenally well in the region contributing to a 19% sales lift. However, the company was also weighed by macroeconomic and geopolitical difficulties in the second-half leading to deceleration.

REGION 2016 2015 Change
Europe €2.709bn €2.731bn -1%
Americas €2.5bn €2.38bn 4%
Asia/Rest of World €3.5bn €3.4bn 1%

Pernod Ricard said that sales in Western Europe remained stable. In France which is the spirit maker’s home front, sales fell 7% due to competition and a difficult pricing environment. Spain was the bright spot in Europe delivering 8% rise in sales, driven largely by Scotch and gin. The company said it was able to implement modest price increases. UK also delivered good results with the Top 14 brands, in particular Absolut, Jameson, Chivas and Mumm showing strong performances.

In Eastern Europe, the spirits maker saw overall revenue growth of 5%, led by Poland where sales rose 10%, buoyed by Chivas Regal, Ballantine’s and Passport whiskies and premium vodkas. Russia which has been particularly hit by currency volatility with the fall in oil price showed resilience delivering 2% sales growth.

In India, which is its second best market by sales, the company saw a 12% rise in revenue, driven by double-digit volume growth of both local and imported whiskies.

The spirits maker also saw double –digit growth in Japan, where its Top 14 brands, in particular Perrier-Jouet helped lift sales.

Australia also delivered good results for Pernod Ricard, driven by Jacob’s Creek, Champagnes Mumm and Perrier-Jouet.

However, in China, Pernod Ricard experienced difficulties, with sales declining 9%. South Korea was also less favourable with a shift towards lower ABV in that country. Travel Retail in Asia also declined due to domestic market weakness.

Net profit for 2015/2016 full-year rose 43% to €1.3bn ($1.5bn), up from €880m in the previous financial year.

Pernod Ricard said it was making further organizational changes to further drive growth. For instance, it was creating a dedicated salesforce team for premium brands in China and a new leadership and commercial team to turn around its business in South Korea. And in the USA, it was reorganizing its marketing team into brand units.

Leave a Reply

Your email address will not be published. Required fields are marked *