Pernod Ricard has announced that 2011/12 saw it achieve its best growth since 2007/08, exceeding the financial targets that had been announced:
- accelerated sales growth to +8%
- growth in profit from recurring operations of +9% compared to a target of “close to +8%”
- significant improvement in operating margin rate (+75 bps)
- completion of debt refinancing and accelerated debt reduction with a net debt to EBITDA ratio of 3.8 at 30 June 2012 compared to a guidance of “close to 3.9”
- proposed dividend of €1.58 per share, an increase of +10%
Pierre Pringuet, Chief Executive Officer of the Group, commented:
“Throughout the 2011/12 financial year, the Group recognised its best growth rates since the 2008 crisis, be it for the top or bottom line. This is the result of a clear and constant strategy: substantial investments in our brands, innovation, premiumisation and geographic expansion. This performance also derives from a unique, decentralised organisation founded upon the motivation and the accountability of men and women that Patrick Ricard bestowed upon us.
“Despite the economic uncertainty, we are confident in the Group’s ability to deliver solid growth this year as well.”
Best growth since 2007/08
- Sales: € 8,215 million (+8%, reported growth of +7%)
- Top 14: +10%
- Emerging markets: +17% / Mature markets: +2%
- Profit from recurring operations: € 2,114 million (+9%, reported growth of +11%)
- Group share of net profit from recurring operations: € 1,201 million (+10%)
- Operating margin (PRO / sales): 25.7%, an increase of +75 bps
- Net Debt / EBITDA ratio(2): 3.8 at 30 June 2012 vs. 4.4 at 30 June 2011
Growth driven by emerging markets, confirmed growth in mature markets
Full-year sales totalled € 8,215 million, a sustained growth of +7%, resulting from:
- organic growth of +8%, due to continued very strong growth in emerging markets (+17%) and mature markets (+2%), which grew for the second consecutive year
- favourable foreign exchange effect of € 51 million, for a +1% positive effect over the full financial year
- group structure effect of -1%, primarily due to the disposal of certain Spanish and New Zealand activities in 2010/11 and certain Canadian activities in 2011/12.
Sales by region
Results driven by buoyant Asia/Rest of World, continued growth of premium brands in the Americas and a good overall performance in Europe, particularly Eastern Europe
- Asia/Rest of World, with growth of +15%, remains the growth driver of the Group, primarily due to China, India, Vietnam, Taiwan and Travel Retail. Growth was also very strong in Africa/Middle East.
- Americas reported growth of +6%. In the US, growth accelerated to +5% (vs. +2%in 2010/11), driven by Jameson. The improved performance of Absolut in the 2nd half of the year should also be noted. Brazil’s sales grew +13%, driven by the Top 14 (+26%), particularly due to the success of Absolut and Scotch whiskies. Due to the reorganisation of the subsidiary, Mexico posted a decline of -12%.
- Europe, excluding France, recorded sales growth of +2% with pronounced bipolarisation between East and West. In Eastern Europe, sales growth noticeably accelerated to +16% (compared to +9% in 2010/11), while sales in Western Europe declined -1%, a similar decrease as in the previous year (-2%). This decline is primarily attributable to Spain (-4%), Italy (-13%), Greece (-13%) and the UK (-4%).
- In France, sales declined -1% due to a decrease in spirits consumption following the excise duty hike of 1 January 2012 (+14% on average), which had a particularly adverse effect on the aniseed category. Despite this increase, certain brands posted a strong performance (Absolut +13%, Havana Club +13%).
Sales by brand
All-time record for the Top 14 (60% of Group), with significant price/mix, driven by Martell and whiskies
Top 14 volumes
Grew +3% to an all-time record (47.2 million 9L-cases), as did eight of its constituent brands: Absolut (+3%), Chivas (+7%), Jameson (+15%), Malibu (+6%), Beefeater (+6%), Martell (+10%), The Glenlivet (+15%), and Royal Salute (+20%).
Value
Significant +6% price/mix effect enabled the Top 14 to grow +10%. Six of these brands reported double-digit growth: Martell (+25%), Royal Salute (+23%), TheGlenlivet (+19%), Jameson (+18%), Perrier Jouët (+14%) and Chivas (+11%). Only Ricard declined -3% (the aniseed category in France was severely affected by the excise duty hike).
For the full results click here