Growth slows at Pernod Ricard

By Mathew Lyons

Published: 18 October, 2019

Sales growth at global drinks giant Pernod Ricard has slowed, with first-quarter turnover of €2.483bn revealing underlying growth of just 1.3%, in line with expectations.

In the same period last year, the company reported growth of 10.4%.

Predicted growth for the full year remains at between 5% and 7%.

Results for the three months to end September were particularly strong in the US and China, both of which saw organic sales rise 6%.

Growth in the US has been fuelled by the success of Jameson’s Black Barrel, while Malibu and Kahlua are both showing solid growth. Sales of Absolut in the US market continue to decline, despite the launch of the Absolut Juice range.

In China, both Absolut and Ballantine’s Finest are in double-digit growth, while challenging on-trade conditions have led to a decline in sales for Chivas. First-quarter sales in China last year saw organic growth of 27%.

Sales in Europe were up 3%, with growth in Eastern Europe particularly strong. In Russia, the company is reporting double-digit growth.

Western Europe has returned to growth, with France up 3% led by sales of Absolut. Turnover in the UK fell back 1% in part due to the group’s value strategy for Jacob’s Creek.

Growth in India was also up 3%.

Sales in the important global travel retail sector fell back 6%, however, a decline which Pernod attributes to a mix of promotional phasing in Europe and exceptional sales in the comparable quarter last year.

Alexandre Ricard, the group’s chairman and chief executive, said the “moderate” Q1 figures were due to “an environment that remains particularly uncertain”.

The group also launched the first phase of its €1bn share-buyback scheme, which announced in August.

It has committed to buying up to €150m of its own shares over the next two months, starting from today, 18 October.

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