"Encouraging" growth at Pernod Ricard

By Jo Gilbert

Published: 01 September, 2016

French spirits maker Pernod Ricard has reported topline growth thanks to its presence in Spain and the US.

FY16 profit from recurring operations for the year ending June 30 grew by 2% to €2.28bn, up from €2.24bn the year before.

Organic sales grew by 2%, with reported sales up 1%.

Sales for the year grew to €8.68bn, mainly due to growing revenue streams in the US and Spain.

In the Americas, sales were up 4% compared to 2% in FY15, notably driven by USA (+4% in FY16 vs. stable in FY15).

Europe saw a 1% improvement driven by Spain, with encouraging growth in most markets.

However, trading conditions in China were less favourable, where revenue fell 9% year-on-year, attributed to the government's official crackdown on gift-giving and broader economic issues.

Alexandre Ricard, chairman and CEO, said: "FY16 was a solid and encouraging year, delivering profit from recurring operations in line with guidance while maintaining investment and implementing significant initiatives to deliver our medium- term strategy and objectives."

The world's number two spirits group behind Diageo was bolstered by strong performance with flagship brands Jameson, Ballantine's, Perrier-Jouët and Indian Whiskies, but experienced "difficulties" with Chivas and Absolut vodka.

Priority premium wines saw positive growth acceleration driven by Campo Viejo.

Group share of net profit was €1.24bn, up 43% compared to FY15 - a historical high for the company.

Going forward, the company is targeting growth in profit from recurring operations of between 2% and 4% in fiscal 2017.

"For full year FY17, in a contrasted environment, we expect to continue improving our business performance year-on-year vs. FY16, supporting priority markets, brands and innovations and focusing on operational excellence. As a consequence, our guidance for FY17 is organic growth in profit from recurring operations between +2% and +4%," Ricard said.

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