Pernod Ricard has reported good third-quarter results to March 2011, with consolidated sales (ex. tax and duties) for the nine months reaching E.5.902m ($8.891m), an increase of 11% compared to the same period in the previous year. Within this, duty free was said to have remained buoyant, experiencing double-digit growth.
Consolidated sales for the third quarter amounted to E.1.620m ($2.413m), an increase of 5% compared to the third quarter 2009/10, resulting from 5% organic growth, a positive 3% foreign exchange effect and a negative 2% group structure effect. Pernod Ricard said the performance was due to continued sustained growth of its strategic brands, with organic growth up 15% in emerging markets and sales stable in mature markets.
STRATEGIC BRANDS GREW +11% IN VALUE
In the first nine months of the 2010/11 financial year the 14 strategic spirit and Champagne brands – Top 14 (59% of sales) – grew by 7% in volume and 11% in value, due to a price/mix effect that remained very favourable. Twelve out of these 14 brands reported growth, including five posting double-digit growth: Royal Salute (+26%), Martell (+25%), Jameson (+22%), Perrier-Jouët (+21%) and The Glenlivet (+15%).
The company said: “Such a performance testifies to Jameson and Martell’s continued success in the US and Asia, respectively, and also to the rebound of our Scotch whisky and Champagne brands.”
In its review of the performance by region, the company said: “Asia/Rest of the World remained the most dynamic region, with sales growth of +23% to E.2.156m ($3.211m), being organic growth of +15%. The share of this region in total group sales increased to 37% over the first 9 months of 2010/11, compared to 33% during the same period of the previous year. The leading growth driver remained Martell, followed by Indian whiskies, Scotch whiskies and ABSOLUT.
“China and India continued to post outstanding growth. Likewise, other emerging markets such as Vietnam, Africa and Turkey are expanding rapidly. Duty free remained buoyant and experienced double-digit growth. Sales grew in South Korea over the first 9 months, but decreased in the third quarter in a market that reported a modest decline. The situation is difficult in Thailand, Australia, and more recently in Japan.
“In the Americas, sales growth accelerated in the third quarter and totalled E.1.564m ($2.329m) over the first nine months, an increase of 14% (organic growth of +6%) which was due to a dynamic Top 14 (+9%). Jameson, ABSOLUT and Chivas Regal, as well as Ballantine’s and Havana Club were the main drivers of this strong growth.
“In the US, the market is gradually recovering (Nielsen and NABCA 9 months 2010/11 +2% and +3%) with a more marked recovery for premium brands and improving on-trade consumption. Against this backdrop, Pernod Ricard is benefiting from the premium positioning of its portfolio.
“Sales grew moderately in Canada, with strong growth of ABSOLUT, Jameson, Havana Club and Graffigna. Mexico reported strong growth due to the very good performance of whiskies. Double-digit growth was achieved in Central and South America, with a strong increase in sales in most markets (Brazil, Argentina, Andean countries, Cuba, Central America) but a sharp decline in Venezuela.
WESTERN EUROPE ‘DIFFICULT’
“In Europe (excluding France), sales for the first nine months were stable on an organic basis at E.1.633m ($2.432m), but declined 3% on a reported basis following the disposal of certain assets in Spain and Scandinavia. This stability was a marked improvement compared to the 6% decline during the same period of the previous year.
“The situation remained difficult overall in Western Europe (in particular in Spain), but growth was confirmed in Central and Eastern Europe, more specifically due to Russia and Ukraine. In France, organic growth remained sound at +4%, bringing sales to E.549m ($818m), due to the strong performance of the Top 14 brands (+6%), driven by Ricard, ABSOLUT, Chivas Regal, Mumm, Perrier-Jouët, Jameson, Ballantine’s and Havana Club.
“Ricard in particular benefited from the launch of the new bottle and grew 2.5% in the off-trade during the first nine months, in a market that declined 2.1%.”
Commenting, Pierre Pringuet, Pernod Ricard Ceo stated: “The 3rd quarter 2010/11 confirmed the improved business trends since the start of the financial year and strengthens our confidence in our ability to meet our targets: organic growth in profit from recurring operations of close to +7% for the full 2010/11 financial year and Net Debt/EBITDA ratio close to four at the 30 June 2012 year-end”.