Pernod Ricard’s Q2 results were lifted by continued sales growth in Asia, with the company registering an overall 3% increase in net sales for the period.
Pernod Ricard – which owns a diverse range of spirits such as Absolut, Martell and Chivas Regal – recorded net sales of €2.79 billion for the quarter, up from the €2.71 billion figure recorded in the same period last year.
Net sales in Asia/Rest of the World increased 7.4% to €1.18 billion, partially driven by a boost in the build-up to Chinese New Year and continued growth in India.
Sales in the Americas also increased 3.1% to €753 million, which the company partially attributed to consistent long-term investment, though net sales in Europe did fall 2% to €863 million, as growth in Eastern Europe was offset by weaker performance in Western Europe.
Pernod Ricard did not report its operating profit or net income for the second quarter of the year, but over the first half of the year, the company reported operating profit of €1.65 billion, a 10.7% year-on-year rise, though the company’s net profit did fall to €1.03 billion in the same period, a fall of 11.2% when compared to the same period last year.
The company’s organic sales grew 10% over the half-year period, with the Martell (23%), Royal Salute (15%) and Perrier-Jouët (12%) all performing particularly strongly.
However, despite the strong performance its Strategic International Brands portfolio, the company’s Strategic Wines unit recorded an organic sales decline of 8%, following the implementation of value strategy and a comparative sales decrease for its Campo Viejo wine, which performed well above expectations in H1 2018.
Pernod Ricard also warned that H2 growth is expected to moderate due to sustainable growth management of the Martell brand, wholesaler inventory optimisation in the US and a commercial dispute in France and Germany.
The company also announced a cost-saving plan, aiming to save an additional €100 million by 2021 and the company said it aims to achieve 4% to 7% annual organic sales growth over the same period.
Alexandre Ricard, Pernod Ricard’s chairman and CEO, said: “H1 FY19, the first semester of our new Transform & Accelerate 3-year plan, was very strong.
“While enhanced by phasing, it confirms the acceleration of our growth, resulting from our long-term investment strategy. For full year FY19, in an environment that remains uncertain, we aim to continue dynamic and diversified growth across our regions and brands.
“By the end of June 2019, we will have completed our operational excellence plan announced in 2016, delivering €200m of P&L savings one year ahead of plan.
“We are increasing our guidance for FY19 organic growth in Profit from Recurring Operations to between +6% and +8%. We will continue to roll out our strategic plan, focused on investing for sustainable and profitable long-term growth.”
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