Troublesome quarter for Pernod Ricard

9 % drop in revenue

In the first trimester of its broken fiscal year, from July through September, the French giant managed a revenue
of 2.013 billion euro, dropping 9 %
in absolute figuers. Exchange rates had a significant effect, as
organically, the drop was limited to 1 %.

A year ago, the emerging markets managed to deliver a huge growth in this
quarter, with China going up 18 % and Russia 28 %. It is precisely these
regions that are now failing, organically dropping 6 %. Pernod Ricard alsofailed to reproduce its strong American sales from last year (+16 %) and instead remained level over there. Europe
is performing better with an organic growth of 3 %.

When taking the entire year into consideration, Pernod Ricard is estimating an internal growth of some 4 to 5 %,
lower than the 6 % in 2012-2013.

Big brands score less

Remarkable is that the 14 biggest brands, including Absolut Vodka, Chivas
and Ricard, dropped 1 % in volume and 5
% in turnover. That was hard to swallow as these brands combined signify 64
% of the total group turnover. Top of the line brands like Martell (-12 % in
turnover) and Ballantine’s (-11 %) suffered heavily, particularly in Asia.

Premium wines managed to hold onto
their volume and increased their turnover 1 % thanks to a slight increase
in price. Pernod Ricard also has several local brands in its portfolio, with
Pastis 51 as a well-known name among France lovers. This sector, representing
17 % of the group turnover, grew 11 %
(volume) and 8 % (turnover) in the last quarter.

Pernod Ricard is not the only
beverage producer struggling this past quarter. British
Diageo and French
Rémy-Cointreau recently published similar numbers.

(Translated by Gary Peeters)