Strong Year For Pernod Ricard
Global drinks group Pernod Ricard has reported a 4% increase in revenue to €9.01 billion and a 5% rise in profit from recurring operations (PRO) to €2.39 billion for its 2017 financial year. Organic sales growth accelerated to 3.6% during the year, moving closer to Pernod Ricard’s mid-term objective of 4% to 5%.
Alexandre Ricard.
The acceleration in sales was driven by the group’s Strategic International Brands which grew by 4% against a flat performance in 2016. Eleven out of the total of 13 brands were in growth with nine improving their performance, with in particular a return to growth for Martell cognac (+6%) and Absolut vodka(+2%). In terms of geography, the improvement in sales was driven by the USA, Eastern Europe, Global Travel Retail and a return to growth in China. Growth accelerated to 7% in the Americas, Asia-Rest of World was up 1% and Europe by 3%. Innovation drove a third of overall top line growth.
Pernod Ricard continued to actively manage its portfolio during its 2017 financial year by acquiring majority stakes in promising premium brands (Smooth Ambler, Del Maguey and Ungava) while disposing of non-core assets (Frïs, Domecq and Glenallachie distillery).
Organic PRO growth at 3.3% was solid and at the higher end of the annual guidance bracket of 2% to 4% despite unexpected regulatory changes in India. The reported operating margin was up 35 bps.
Alexandre Ricard, chairman and chief executive of Pernod Ricard, comments: “FY17 was a strong year, delivering Profit from Recurring Operations in line with guidance together with an excellent cash performance. These results demonstrate that the strategic direction the group adopted two years ago is delivering: growth is accelerating and diversifying through successful activation of our strategy.”
He continues: “In FY18, we will continue to implement our roadmap, in particular focusing on digital, innovation and operational excellence. We are confident that we will continue improving our business performance. As a consequence, our guidance for FY18 is organic growth in Profit from Recurring Operations between +3% and +5%.”
