Pernod Ricard H1: Travel retail +38%; tipped for ‘strong sales momentum’

By Luke Barras-hill |

Alexandre Ricard, Chairman and Chief Executive Officer, Pernod Ricard.

Pernod Ricard expects travel retail’s steady recovery to yield ‘strong diversified sales momentum across regions’ in full year 2022.

The assessment comes as the French drinks giant announced its H1 FY22 results today (10 February), serving up a strong cocktail of reported sales growth (+20% vs H1 2021; +17% organic) across all regions to total €5,959 million/$6,842 million.

Global travel retail sales jumped by 38% year-on-year [though the result remained 41% down on pre-Covid H1 FY20 – Ed].

In a results presentation, Pernod Ricard pointed towards the steady recovery in international traffic outside Asia.

Despite the slowdown in December all regions returned to growth on a ‘very favourable comparison basis’ aided by the resumption of activations for strategic brands such as Chivas and Jameson, though Pernod Ricard acknowledged that activity remains below pre-Covid levels.


Alexandre Ricard, Chairman and Chief Executive Officer, said: “Despite the ongoing volatile environment, we expect for FY22 strong sales growth across regions, with continued on-trade rebound, off-trade resilience and a gradual travel retail recovery. We will increase investments to fuel growth momentum.”

Profit from recurring operations increased by 25% yoy to €1,998 million, read the statement. Organic growth in profit from recurring operations was up 22%, with a strong organic operating margin improvement of +147bps.

The drinks group noted a favourable forex impact linked to the strengths of the US dollar and Chinese renminbi against the Euro. Source: Pernod Ricard H1 FY22 sales & results.

Recurring free cash flow increased by 39% to €1,383m and net debt was up by €471m to €7,923m.

The Americas (+14%), Asia-RoW (+16%) and Europe (+21%) demonstrated growth, particularly within Americas and European travel retail markets.

Pernod Ricard noted a strong price/mix performance with growth across its strategic international brands (+19%), chiefly double-digit hikes for James, Martell, Ballantine’s, Absolut and Chivas Regal; and strategic local brands (+14%), buoyed by the recovery of Seagram’s Indian whiskies.

Meanwhile, the group reported ‘continued very dynamic momentum’ for its American whiskeys, Malfy, Monkey 47, Redbreast, Lillet and agave products within its specialty brands (+21%).


On the other hand, strategic wines (-6%) experienced a soft first half due, in particular, to a lower harvest in New Zealand.

In full-year 2022 the group expects the on-trade rebound to continue, supported by resilience in the off-trade markets.

Dynamic topline growth is tipped to drive an expansion of its operating margin (albeit moderating versus H1) in a climate of increased investments and strong cash generation.

The Scotch portfolio enjoyed growth of +23% yoy, with spirited performances from Chivas Regal (+23%) and Royal Salute (41%) helped on by the rebound of travel retail. Source: Pernod Ricard H1 FY22 sales & results.

The firm continues to implement its ‘Transform & Accelerate’ strategy, which includes digitally transforming Pernod Ricard into a ‘Conviviality Platform’.

Alexandre Ricard paid tribute to the company’s global teams working within an environment that continues to be disrupted by the Covid pandemic.

He said the ‘Transform & Accelerate’ strategy has affected brand share gains in most countries, with all ‘must-win markets’ displaying strong growth.

“We remain focused on executing our strategy, progressing on our Sustainability and Responsibility journey and accelerating our digital transformation,” he added. “A successful mix of robust fundamentals, the dedication of our teams and our portfolio of brands, has yielded a very strong set of results and seen us through this crisis, emerging even stronger.”

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