PARIS -- 07/24/08 --
2007/08 full-year sales: EUR 6,589 million
- Outstanding growth over the financial year: +8.7%*
- Premium spirits** (+14%*) and emerging markets*** (+22%*) are the main
growth drivers
- Acquisition of Vin & Sprit
- Further upward revision of guidance for growth in profit for the year
2007/08
Press release - Paris, 24 July 2008 - Pernod Ricard sales increased by 2.3%
to EUR 6,589 million (excluding tax and duties) for the 2007/08 financial
year ended 30 June 2008. This performance was the result of an outstanding
8.7% organic growth, a strong foreign exchange impact (-4.6%) primarily due
to the depreciation of the US dollar and a -1.6% Group structure impact.
Growth* of the 15 strategic brands was very strong: +11% in value and +5%
in volume, perfectly illustrating the premiumisation strategy of the Group,
enhanced by the quality of its portfolio of brands and by the power of its
distribution network, in particular in emerging countries. Ten of these
brands reported double-digit growth* rates: Martell (+24%), Jameson (+21%),
Mumm (+18%), Havana Club (+17%), The Glenlivet (+14%), Perrier Jouët
(+14%), Stolichnaya (+12%), Chivas (+11%), Ballantine's (+11%) and Malibu
(+10%).
Over the full financial year, the spirits business grew in value by +9%*.
The wine business grew by +6%*, compared to +1%* in the previous financial
year, thereby confirming its recovery and significant development
potential.
Overall, HY2 growth* (+7%) remained strong following a very good HY1
(+10%), against a background of further appreciation of the Euro against
most other currencies.
Fourth quarter consolidated sales totalled EUR 1,498 million, down 3%,
being +7% organic growth (foreign exchange impact -8%, Group structure
impact -2%). This strong organic growth, achieved in spite of the Sichuan
earthquake, the impact of which reduced quarter growth by about 1%,
testifies to the continuing strong dynamism in emerging markets and the
good performance of western markets.
The year 2007/08 was also marked by the acquisition of the Vin & Sprit
Group, owner of the ABSOLUT brand. The transaction closed on 23 July 2008.
ABSOLUT (world leader in premium vodkas) records excellent performances,
illustrated by its accelerated growth in the first half of 2008 (+12%
compared to +9% in the calendar year 2007) and a volume of 11.3 million 9-
litre cases sold over the 12 months period ending 30 June 2008 (+600,000 9-
litre cases compared to calendar year 2007). This demonstrates the
tremendous commercial and financial prospects linked to the integration of
this brand within the Group's portfolio. Pernod Ricard is moreover
confident in achieving the top end of the range of cost synergies announced
(EUR 125 to 150 million). The resulting cash generation, together with a
programme of asset disposals valued at about EUR 1 billion over the coming
12 to 18 months, will allow for a rapid reduction of the Group's
indebtedness.
* Organic growth
** Brands >< >= Chivas 12 yo or Martell VS
*** GNP / Inhabitant < 10,000 USD
All geographic regions contributed to full-year growth
¨ Asia / Rest of World: EUR 2,007 million (+7%, being organic growth of
+13%)
China (+29%*) and India (+39%*) represented 2/3 growth in the region and
remained the number one and number two contributors to the Group's organic
growth, respectively.
Duty Free, Taiwan, Malaysia, Indonesia, Vietnam, the Persian Gulf and
Singapore are also developing rapidly and Thailand experienced a recovery
in HY2.
Australia and New Zealand reported limited full-year growth, with a
recovery in HY2 following the slowdown caused by the strong price increases
of HY1.
Africa and the Middle East grew very sharply, due in particular to Jameson,
Chivas and Ballantine's.
In the fourth quarter, Asia continued to feature double-digit growth (+15%)
in spite of the earthquake in Sichuan.
¨ Americas: EUR 1,700 million (-5%, being organic growth of +8%)
North America (+5.0%*: spirits +4.4%*, wines +9.6%*)
- In the US, there was a shift of consumption from the on-trade to the off-
trade, with dynamic brands that continued their vigorous growth: Jameson,
The Glenlivet, Malibu and Wild Turkey for spirits and Montana, Perrier
Jouët, Mumm Napa and Campo Viejo for wines, but at the same time brands
with weaker franchises, which suffered from the economic downturn: Kahlúa,
Beefeater and Chivas.
- The year was excellent in Canada, while in Mexico international brands
showed satisfactory growth but brandies declined.
Central and South America (+20.4%*)
Chivas Regal (Venezuela and Central America), Ballantine's (Brazil, Central
America, Duty Free) and Havana Club (Chile, Cuba) remained the main growth
drivers for strategic brands. A slowdown was observed in Venezuela in HY2,
due to a generalised downturn in consumption in this country.
¨ Europe: EUR 2,171 million (+4%, being organic growth of +7%)
Eastern Europe and Central Europe continued their spectacular development,
mostly thanks to Russia, Poland, Kazakhstan, Ukraine and Romania. Russia
(+38%*) was the number three contributing country to overall Group organic
growth.
All major Western European markets (Spain, UK, Ireland, Germany, and
Greece) with the exception of Italy, experienced growth over the full
financial year, with a more contrasted growth observed in HY2.
A sharp recovery was noted in the 4th quarter in Germany after a highly
unfavourable comparison basis in the 3rd quarter, due to the price
increases of April 2007. Conversely, Spain and the UK had a tougher fourth
quarter.
¨ France: EUR 711 million (+4%, being organic growth of +5%)
Over the full financial year, our whisky brands Chivas, Ballantine's,
Jameson, The Glenlivet and Clan Campbell reported very good performances in
buoyant markets. Mumm and Perrier Jouët also grew rapidly (market share
gains, price increases, favourable mix effects) but fourth quarter volumes
were adversely affected by low inventory availability. The Ricard brand
showed a slight decrease in a declining market, confronted with the smoking
ban and bad weather.
* Organic growth
Conclusion and outlookThe vigour of sales and the highly favourable effects
of improved pricing and portfolio premiumisation lead us to anticipate
strong growth in our operating profit margin and enable us once again to
revise upwards our guidance for growth in operating profit from ordinary
activities to about +13%, on a like-for-like basis*, for the 2007/08
financial year. According to Patrick Ricard, Chairman and CEO of Pernod
Ricard: "the year 2007/08 demonstrates our significant growth potential in
all emerging markets and the sound basis of our business in western
markets. The quality of our portfolio of brands and the power of our
distribution network, enable us to start the 2008/09 year with confidence,
and to expect very strong growth in emerging markets and moderate growth in
western markets. This development, together with the significant
opportunities offered to the Group by the Vin & Sprit acquisition, enables
us to anticipate a continuation of improving margins and strong organic
growth of our operating profit from ordinary activities for the current
fiscal year."
* Foreign exchange and Group structure
About Pernod Ricard
Created by the merger between Pernod and Ricard (1975), the Group has
undergone sustained development, based on both organic growth and
acquisitions. The purchase of part of Seagram (2001), the acquisitions of
Allied Domecq (2005) and of Vin & Sprit (2008) have made Pernod Ricard the
world's co-leader in wines and spirits with sales of EUR 6,589 million in
2007/08.
Pernod Ricard holds one of the most prestigious brand portfolios in the
sector: ABSOLUT Vodka, Ricard pastis, Ballantine's, Chivas Regal and The
Glenlivet whiskies, Jameson's Irish Whiskey, Martell cognac, Havana Club
rum, Beefeater gin, Kahlúa and Malibu liqueurs, Mumm and Perrier Jouët
champagnes, as well as Jacob's Creek and Montana wines.
The Group favours a decentralised organisation, with Brand Owners and
Distribution Companies established in each key market, and employs a
workforce of more than 17,600 in 70 countries.
In addition, Pernod Ricard is strongly committed to a sustainable
development policy and encourages responsible consumption of its products.
(Ticker: RI ; ISIN code: FR0000120693)
For more information about Pernod Ricard, please visit our website:
www.pernod-ricard.com
Shareholders' agenda: 2007/08 Annual Results- Thursday 18 September 2008
2008/09 1st quarter sales - Thursday 30 October 2008**
Combined General Meeting - Wednesday 5 November 2008
** Due to the first consolidation of Vin & Sprit within Pernod Ricard
Group, the publication of sales figures for the first quarter 2008/09 has
been postponed from Thursday 23 October to Thursday 30 October 2008.
Contacts Pernod Ricard
Francisco de la VEGA/ Communication VP Tel: +33 (0)1 41 00 40 96
Denis FIEVET/ Financial Communication - Investor Relations VP Tel: +33 (0)1
41 00 41 71
Florence TARON/ Press Relations Manager Tel: +33 (0)1 41 00 40 88
"This press release does not constitute an offer to sell or a solicitation
of an offer to buy Pernod Ricard shares. If you wish to obtain more
comprehensive information about the Group, please refer to the public
documents registered in France with the Autorité des Marchés Financiers,
which are also available in French and English versions from our website:
www.pernod-ricard.com."
This information is provided by HUGIN
