INTERNATIONAL. Pernod Ricard this week unveiled its results for the 2010/11 financial year ended 30 June 2011, with sales totalling €7,643 million (excluding tax and duties) – a sustained growth of +8% (organic growth +7%).
Consolidated sales for the fourth quarter 2010/11 declined by a moderate -1% (organic growth +6%) to €1,741 million.
Profit from recurring operations grew +6% to €1,909 million. This was driven by organic growth of +8% – ahead of the initial target of +6% for the year – with growth in every region of the group. Group share of net profit from recurring operations grew +9% to €1,092 million.
REGIONAL PERFORMANCE
All regions contributed to organic growth in profit from recurring operations, with emerging countries becoming increasingly powerful growth drivers for Pernod Ricard. Their share in the group’s profit from recurring operations was 38% in the 2010/11 financial year, compared with 33% in 2009/10.
With an increase of +19% (organic growth +15%), Asia/Rest of the World remained the driving force for group growth, primarily due to Asia (particularly China, India, Vietnam, Taiwan and Duty Free markets).
Growth was also very strong in Africa/Middle East and Turkey. Sales grew +3% during the financial year in Japan, with the impact of the tsunami having been less significant than anticipated (sales down -7% in the fourth quarter).
Americas reported growth of +8% (organic growth +5%). In the US, sales increased +2%, which included renewed growth by Absolut and the continued success of Jameson. Sales also grew in all other markets in the region, except in Venezuela. Brazil’s sales grew +12%, driven by the Top 14 brands (+41%), particularly due to the success of Absolut and Scotch whiskies.
In Europe excluding France, the trend improved markedly, with stable sales over the full financial year (compared to a decline of -5% in 2009/10).
This resulted from a robust recovery in Eastern and Central Europe (+9%) and a moderate decline in Western Europe (-2%) which was primarily related to two markets: Greece (-33%) and Spain (-5%). Nonetheless, sales in Western Europe clearly improved when compared with the previous financial year (-5%).
In France, sales grew +4% due to the commercial performance of the Top 14 brands, especially Ricard, Ballantine’s, Mumm, Chivas, Havana Club, Perrier-Jouët, Jameson and Absolut.
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BRAND PERFORMANCE
The Top 14 (58% of group sales) grew +6% in volume and reached an all-time record high during the financial year, as did seven of its brands: Absolut, Chivas, Jameson, Havana Club, Martell, Royal Salute and The Glenlivet.
The Top 14 brands grew +10% in value and five of them reported double-digit growth: Royal Salute (+27%), Martell (+22%), Jameson (+20%), Perrier Jouët (+17%) and The Glenlivet (+14%). Only Kahlua slipped back modestly -1% with the launch of the new “˜Delicioso’ advertising campaign during the financial year.
The priority premium wine brands grew +0.4%, with the confirmed growth of Campo Viejo and Graffigna offsetting the moderate decline of Jacob’s Creek and Brancott Estate. The “˜value’ strategy implemented for these brands generated a +6% increase in their contribution after advertising and promotion during the financial year.
The 18 key local spirits brands continued to grow and increased overall by +3% in value, driven by local whisky brands in India, which reported a +30% rise. The overall performance was adversely affected however by the decline of Seagram’s Gin in the US (-12%) and 100 Pipers in Thailand (-13%).
Premium brands represented 71% of group sales during the 2010/11 financial year, a two-percentage point increase compared with the previous year.
Pernod Ricard Group Chief Executive Officer Pierre Pringuet said: “Our remarkable performance over the 2010/11 financial year demonstrated the relevance of our strategy and of our decentralised model. For 2011/12 the beginning of the financial year confirms the resilience of our markets. We will continue to grow, by capitalising on the strength of our portfolio of brands, the quality of our distribution network and the powerful leverage of emerging markets.”
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