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Pernod’s profits slip as new CEO steps in

Alexandre Ricard has officially taken over as chairman and CEO of Pernod Ricard, just as the French producer of The Glenlivet and Jameson whiskies reported a -5% slip in net profits.

Alexandre Ricard, Pernod Ricard’s new CEO, said the French drinks group’s H1 results are “solid” despite a 5% profits slip

Ricard’s move into the role sees the return of the drinks company to the direction of a member of the founding family, almost three years after former CEO Patrick Ricard, Alexandre’s uncle, died suddenly in 2012.

His official appointment was announced today as Pernod Ricard revealed its H1 results for the 2014/15 financial year, which showed organic sales growth of just 1% to €4.62bn.

Pernod attributed the stagnant growth to a “slowdown” in Eastern Europe, which is affected by a technical impact in Poland as well as economic frustrations in Russia.

Meanwhile the group reported a “gradual improvement of underlying trends” in China, which resulted in a stable result for the Asia/ rest of world region as a whole.

On the other hand, the Americas delivered organic growth of 2%.

Alexandre Ricard, CEO of Pernod Ricard, said the H1 results are “solid” and still improving despite a “challenging” environment.

“Heartened by this encouraging first semester, we confirm our full-year guidance of growth in profit from recurring operations between +1% and +3%.

“I am confident in the strength of our portfolio of premium brands and of our global network that support our three strategic growth pillars: premiumisation, expansion and innovation.”

Brands performance

Pernod Ricard’s brands portfolio was driven by “continued strong performance” of Jameson Irish whiskey (sales up 10%), The Glenlivet (14%) and Ballantine’s (5%) Scotch whiskies, as well as the group’s Indian whiskies.

Flagship Cognac brand Martell showed some improvement with volumes up 2%, although a shifted focus towards cheaper expressions in China put value sales down 9%.

Absolut suffered similar price challenges in the US as other international super-premium vodka brands, which despite seeing growth outside the country, drive a 1% overall global decline.

Local brands, which include Indian whiskies Passport, and 100 Pipers, grew 11% by volume in the period.

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