Pernod Ricard on track for year of strong growth based on first nine months of fiscal 2008/09 – 15/04/09
Source: ©The Moodie Report
By Melody Ng
INTERNATIONAL. Pernod Ricard today reported a solid set of results for the first nine months of the 2008/09 fiscal year (1 July 2008 to 31 March 2009).
Consolidated net sales (excluding tax and duties) increased by +9% to €5,557 million. Organic net sales growth was +0.3% in a “more challenging environment”, driven downwards mainly by a slowdown in Eastern Europe, in duty free markets and in the ontrade in most mature markets, as well as a "significant" de-stocking from wholesalers and distributors.
There was also a +12% group structure effect, a result of the integration of Vin & Sprit.
The negative foreign exchange impact (-3%) is attributed mainly to the depreciation of the Pound Sterling, Korean Won, Australian Dollar and Indian Rupee against the Euro, and is partially compensated by the appreciation of the American Dollar and the Chinese Yuan.
Spirits and Wines activities achieved organic growth of +0.7% and -1.3% respectively.
The top 14 strategic brands (excluding Absolut) grew organically by +0.4% in value and -4% in volume due to a favourable mix/price effect. The best performing brands in value were: Martell (+13%), Jameson (+11%), The Glenlivet (+7%), Havana Club (+6%) and Mumm (+4%).
Absolut made “strong progress” in each key market outside the US with the following trends: Spain +6%, UK Off-trade +20%, Australia +8%, Brazil +16%, France +10%, Germany +41%, Italy +6%, Mexico +15%. In the US, the brand declined by -4% though on a high comparison basis.
In the 3rd quarter 2008/09, consolidated net sales were slightly down -2% to €1,345 million. This includes -12% organic growth, negative foreign exchange impact of -0.7% and group structure effect of +10%.
Conclusion and outlook
For fiscal year 2008/09, Pernod Ricard now aims for organic growth in profit from recurring operations of between +3% and +5% (versus between +5% and +8% previously announced
), reflecting a higher than initially anticipated level of de-stocking. The group confirms its target of an average cost of borrowing below 5%.
With this, Pernod Ricard confirms its guidance of double-digit growth in group share of net profit from recurring operations, which for the first time should exceed €1 billion over the full 2008/09 fiscal year.
The group's target to achieve free cash flow form recurring operations of close to €1 billion over the full 2008/09 fiscal year is also reiterated.
Commenting on these figures, Pernod Ricard Chief Executive Officer Pierre Pringuet declared: “In this difficult environment we aim for a record group share of net profit from recurring operations for the fiscal year 2008/09, which illustrates the group’s strength and its resilient business model.”
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