Drinks giant Pernod Ricard turned in a strong HY1 performance, underlined by improvements in global travel retail.

 

Organic sales rose +4% to reach €5,061m ($5,047m), with reported sales at +2% due to an unfavourable FX impact.

 

Following organisational changes,  global travel retail is ‘getting up to speed’,  contributing to improvements versus FY2016 in China and Russia and in Absolut, Martell and Chivas.

 

AMERICAS TRAVEL RETAIL +14%

Strong performances from the Americas (+7%) and travel retail (+14%) was underpinned by Martell’s expanding distribution and visibility in US airports.

 

Sales in Asia RoW grew by 3%, but travel retail Asia sales notched a “modest” decline, the results state.

 

Europe sales were +2%, but travel retail sales remain depressed due to current macroeconomic pressures.

 

The group’s reported share of net profit was €914m ($976m), rising +3% vs. H1 16, with the reported share of net profit from recurring operations at €957m ($976m), rising +5% vs. the same period.

 

 

Net debt grew by €237m ($253) to €8,953m ($9,569m) due mainly to an adverse translation adjustment on US dollar-denominated debt.

 

REACTION: CALLS FOR A BULK  IRISH WHISKEY SEGMENT

Commenting on the results, Andre Levy, Chairman of marketing and sales company Protégé International, commented: “The growth enjoyed by Pernod Ricard with regard to Irish Whiskey is not at all surprising when we look at the existing market structure.

 

“This structure favours large dominant players, and jeopardises the future of smaller brands that are expected to grow the category globally outside of Jameson.”

 

Levy says the creation of a wholesale bulk Irish whiskey market could “democratise” the environment and “realise the future global growth potential of the sector”, in a similar manner to the operating structure embraced by Scotch whisky.