Pernod Ricard has started its financial year 2018-2019 well, but the world's second biggest producer of spirits warns that the second half of the year will not be as outspoken.
Strong turnover growth
The organic turnover of the producer of Ricard (pastis), Absolut Vodka, Jameson (whisky) and Martell (cognac) grew by 10.4 % to 2.387 billion euro, far more than the analysts' consensus of +7.3 %. That performance is entirely due to Asia (+23 %) or more precisely China, where the group was able to profit from the annual Moon Feast (which occurred in quarter one this year). India is another market where the French spirits manufacturer made a strong push, even after getting hit by the stricter alcohol laws last year.
America (+2 %) and especially Europe (+1 %) are more of a letdown: in the United States, underlying growth remains strong and the lower performance is mostly due to delivery problems, but in Europe (particulary Spain and home market France) the weaker performance is starting to look like it is structural in nature. The United Kingdom and Germany are bringing in lower numbers, but are partially compensated by the strong Russian growth.
For the second quarter, Pernod Ricard foresees few problems: the group is expecting strong performance because the Chinese New Year comes slightly earlier this year and the Chinese are already collecting their supplies. The company expects growth normalisation in the second half of the year however, with the aim for an organic growth of 5 to 7 % for the year as a whole.