Pernod Ricard has reported consolidated net sales (excluding taxes and duties) of €6,650 million for the first nine months of the 2012/13 financial year (from 1 July 2012 to 31 March 2013), representing a growth of +5% (+4% organic growth).
Duty free maintained double-digit growth, while emerging markets (China +11%, India +17% and Russia +19%) and the US, as well as the company’s Top 14 brands, stood out as the key drivers of performance.
“Pernod Ricard’s business demonstrated good resilience in, as announced at the beginning of the year, a less favourable economic environment,” said Pernod Ricard Chief Executive Officer Pierre Pringuet. “Our growth is still based on the same drivers: our policy of premiumisation and innovation, the strategic brands and strong presence in emerging markets and the US.”
For the third quarter of the 2012/13 financial year, reported growth was +2%, with organic growth of +6%.
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“Pernod Ricard’s business demonstrated good resilience in”¦a less favourable economic environment “ |
Pierre Pringuet Chief Executive Officer Pernod Ricard |
SALES ANALYSIS BY REGION
Asia/Rest of the World
This region reported sustained growth of +12% to €2,762 million (organic growth of +8%).
Martell posted organic sales growth of +18%, while Indian whiskies grew +20%. Scotch whiskies encountered continued weakness in Korea and Thailand and slowdown in China. Absolut, Champagne (double-digit growth) as well as Jacob’s Creek also performed strongly.
Performance of the region’s main markets:
• Duty Free: continued double-digit growth
• China: Continued dynamic growth of +11% despite a slowdown in the third quarter (stable Chinese New Year and significant shipments in the half-year). The company noted the on-going solid performance of Martell and new growth drivers (Jacob’s Creek, Absolut), contrasted with difficulties for Scotch whiskies.
• India: Indian whiskies grew +17%, with continued market share gains in the premium segment. Top 14 brands grew +18%, driven by Chivas, Absolut, The Glenlivet and Ballantine’s.
• South Korea: continued modest increase in sales, with strong growth of Absolut driven by the development of the modern on-trade. However, whiskey market still down due to the structural decline of the traditional on-trade.
• Thailand: structural decline of 100 Pipers. Double-digit growth of Absolut and wine.
• Japan: good performance driven by Perrier-Jouët, Café de Paris and Jameson.
• Australia: slight decline but Top 14 up +6% with good development of Mumm and Absolut.
• Africa/Middle East: strong +12% growth with good progression of the Top 14 brands.
Americas
In the Americas, solid growth was driven by the Premium brands. Net sales grew +7% to €1,708 million, representing +6% organic growth.
The Top 14 (+7%) is a key growth driver (notably Jameson, The Glenlivet, Chivas and Malibu).
Priority Premium Wines grew +3%, while the Key Local Brands (+8%) benefitted from double-digit growth of Passport and Something Special.
Performance of the region’s main markets:
• Duty Free: renewed growth (third quarter +11%); “very favourable” price/mix due to an ambitious policy of increasing prices (three price hikes in 18 months).
• United States: solid growth (+7%), primarily driven by the Top 14 (+8%). Absolut grew +1.6%, Jameson +23% (the main growth driver), Malibu +6%, Perrier-Jouët +7%, The Glenlivet +15%.
• Brazil: slowdown in market growth, but strategic brands continue their incline – Absolut +18%, Ballantine’s +7%, and Chivas +7%.
• Mexico: positive effects of the new business model (+6% vs. -12% in financial year 2011/12), with strong growth of the strategic brands (Top 14: +8%).
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Europe
Net sales in Europe (excluding France) hit €1,662 million: Eastern Europe sees continued sustained growth (+11%), while Western Europe declined -3%.
The Top 14 continues to grow (+2%) thanks to Jameson, Chivas, Havana Club, Beefeater and Absolut, and despite the decline of Ballantine’s (very challenging whisky market in Spain) and of Mumm.
Priority Premium Wines (+1%) are showing an improved trend, while the Key Local Brands (-1%) are virtually stable thanks to renewed growth in Q3 for Ramazzotti in Germany and to double-digit growth for ArArAt and Olmeca in Russia. The latter compensates for the ongoing decline of Ruavieja and Becherovka in the difficult markets of Spain and Czech Republic respectively.
Performance of the region’s main markets:
• Russia: principal market contributing to growth (+19%) driven by Jameson, ArArAt, Chivas, Olmeca and Ballantine’s.
• Ukraine (+4%): good development of the Top 14 driven by Jameson, Absolut and Ballantine’s but slowdown in Q3 (unfavourable macro-economic environment)
• Poland (+1%): renewed growth with improved trend for Wyborowa
• Kazakhstan (+30%): strong development in this “very promising” market
• Southern Europe: situation remains challenging but improving slightly with a better performance in Spain (-3%)
• Germany: continued double-digit growth of the Top 14 and renewed growth in Q3 for Ramazzotti
• Renewed growth in UK and Ireland
France
In France net sales were €518 million (-5% excluding pre-buying). There are continued market share gains according to Nielsen data: Pernod Ricard -1% in a market down -2%, Ricard -2% in an aniseed market -4%.
Nielsen data also indicated the excellent performance of several key brands such as Absolut (+14%), Havana Club (+18%) and Aberlour (+10%).
SALES ANALYSIS BY BRAND
Top 14 brands (+6%) continue to develop at a more rapid pace than the Group’s portfolio as a whole, with Premium brands representing 75% of sales for the nine months to 31 March 2013.
Good performances from both Martell and Jameson (both +16%), with the latter continuing to report double-digit growth in its principal markets (US, Russia, South Africa).
White spirits also performed well, with growth from Absolut (double-digit growth in Asia/Rest of World region), Havana Club, Malibu, and Beefeater (“remarkable” growth, particularly in Spain, the US and Russia).
Slower growth in Asia and challenges in the Spanish market resulted in a deceleration for Scotch whiskies. However, Chivas (+6%) recorded excellent price/mix and The Glenlivet (+21%) saw record growth.
There was a decline in Ricard due to reduced consumption in France (excise duty hike).
For Champagnes, there was a decline in Mumm offset by the growth of Perrier-Jouët thanks to greater international exposure.
The company posted good overall performance of the 18 key local brands (volumes +6% and net sales +6%). Continued dynamism was seen from Indian whiskies (+20%) – which outperformed the market in value – and from Passport (+23%), ArArAt (+17%) and Olmeca (+14%). At the same time there were declines of Pastis 51 and Clan Campbell as well as of 100 Pipers (-14%).
Premium Priority Wines (volumes stable and net sales +3%) continue their high-value strategy and geographic diversification with +3% price/mix, net sales +17% in Asia and renewed growth in Europe.
In conclusion, Pringuet said: “Confident in the strength of this model, we confirm our guidance of organic growth in profit from recurring operations of close to +6% for the full financial year 2012/13.”
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