French liquor giant Pernod Ricard has had an excellent year, especially in China, and wants to build on that through a major acquisition and a new distillery.
Hangover in Western Europe
Turnover of the group's broken financial year 2018/2019 had an organic 6 % growth, especially as its Martell cognac had an incredible growth in China. Operational profit went up 8.7 % (excluding exchange rate fluctuations): better than last year's 6.3 % and even better than the 8 % analysts were expecting. Net profit went down though, from 1.58 billion euros to 1.46 billion.
CEO Alexandre Ricard was satisfied to see Chinese turnover grow (+ 21 %), while local Indian whiskys saw a 20 % hike. The group's American turnover went up 4.5 %, despite a sales drop for Jameson whiskey and Absolut vodka. Western Europe was not so fruitful for the group, with a 1 % turnover drop as the result of a trade conflict in Germany and new, adverse legislation in France itself.
In an attempt to keep growing, Pernod Ricard has made an acquisition offer of 223 million dollars (just over 200 million euros) on Castle Brands, the American owner of bourbon brand Jefferson's. Moreover, the company is to invest 135 million euros in a new single malt distillery in China, to satisfy growing demand from the Chinese middle clases for a local quality whisky.