PERNOD RICARD : Full Year 2013/14 Sales & Results

+2% organic growth in pro (in line with objectives outlined in February)
Organic increase in operating margin
Reduction in net debt

Press Release, Paris - 28 August 2014

Download the press release with appendices

Sales for the 2013/14 financial year totalled € 7,945 million, broadly stable excluding Group structure and foreign exchange effects. The reported decline in sales was 7% due to a highly unfavourable foreign exchange effect.

Sales were adversely affected by one market, China (-23%):

• Asia-RoW -4%; outside China +5%
• marked improvement in Europe (+2%)
• slowdown of growth in the Americas (+2%) due to the US and Travel Retail

The Top 14 declined 2% as a result of a slight reduction in volumes and unfavourable mix (decline of Martell in China). However, despite a more challenging business environment, pricing remained solid at +2%. The good performance of Key Local Brands (+4%) should be noted, supported by positive pricing. Mix was negative.

As a result of strict control of resources, the operating margin rate increased +52 bps in organic terms, the strongest increase in four years. As a result, profit from recurring operations recorded organic growth of +2% to € 2,056 million.

The foreign exchange impact was highly unfavourable (€-199 million on PRO, as announced). It had a significant impact on the reported change in profit from recurring operations (-8%).

The net financial expense from recurring operations improved by € 98 million due to a very significant reduction in the cost of debt to 4.6% (compared with 5.3% for the 2012/13 financial year).

Group share of net profit from recurring operations decreased by 3%. This decline was lower than the reported decrease in PRO, due to the sharp reduction in financial expenses and the stabilisation of the income tax rate. In organic terms, it grew +9%.

At the end of June, net debt had reduced by € 374 million to € 8.4 billion.  

As part of this communication, Pierre Pringuet, Chief Executive Officer of Pernod Ricard, stated: "Despite an environment that was more difficult than anticipated, we have delivered the guidance announced in February, proof of everyone's commitment, which I would like to commend. We are seriously committed to the Allegro project: this operational efficiency project must enable us to maximise our future growth while generating a hard figure of €150 million of savings."

Alexandre Ricard, Deputy CEO ＆ Chief Operating Officer, added: "In this context which will remain challenging, we anticipate a gradual improvement in our sales growth, and we will increase the investment behind our brands and priority innovations in order to sustain long-term growth."

Audit procedures on the consolidated financial statements have been carried out. The Statutory Auditors' report will be issued following their review of the management report.
A detailed presentation of sales and results for the 2013/14 financial year is available on our website: www.pernod-ricard.com
In line with its standard practice, Pernod Ricard will communicate earnings guidance for the current financial year as part of its Q1 2014/15 sales communication on 23 October 2014.

Note: All growth data specified in this press release refers to organic growth, unless otherwise stated. France is now included in the Europe operating segment.