FDBusiness.com

Benefiting from an improvement in the global economic environment and favourable currency factors, Pernod Ricard has achieved strong sales and profit growth in the first half ended December 31st last. Net sales increased by 13% to Eur4.28b – up 7% organically – and group share of net profit from recurring operations rose by12% to Eur726m.

Pernod Ricard increased advertising and promotion spend by 11% organically to Eur765m; raising it from 17% to 17.9% of sales. The French and international drinks giant improved its operating margin (profit from recurring operations/sales) by 30bps to 28.3% and also significantly reduced debt by Eur864m during the period.

Pierre Pringuet, chief executive of Pernod Ricard:

The group’s 14 strategic spirits and champagne brands grew 8% in volume and 13% organically in value, reflecting a very favourable price/mix effect. These 14 strategic brands represented 59% of group sales in the first half of 2010/11, compared to 55% in the first half of the previous year: Indeed, eight of 14 brands posted double-digit organic sales growth: Martell (+32%), Royal Salute (+31%), Perrier-Jouët (+21%), Jameson (+18%), Ballantine’s (+13%), The Glenlivet (+12%), Chivas Regal (+11%) and Havana Club (+10%).

Pernod Ricards sales in Europe (excluding France) showed a marked improvement in the first half, growing 2% organically against a 5% decline in 2009/10. This came from strong growth in Central and Eastern Europe and moderate growth in Western Europe.

According to Pierre Pringuet, chief executive of Pernod Ricard: “This strong performance enables us to revise upwards our guidance for organic growth in profit from recurring operations to a level close to 7% over the full 2010/11 financial year. We will pursue our policy of sustained investments in our strategic brands and markets.”