Jameson drives Pernod’s ‘strong’ H1 results

Pernod Ricard has reported a “strong performance” in the first half of its 2017 fiscal year led by Jameson Irish whiskey, which saw sales surge by 20%.

Jameson enjoyed a “continued very strong performance” in H1

In the six months to 31 December 2016, the French drinks group saw organic sales climb 4% to €5,061 million (US$5.4m), while reported sales growth was up 2%.

Alexandre Ricard, chairman and chief executive officer, said: “Our half-year results are strong, delivering a continued performance improvement. Our strategy remains consistent and is driving results.”

Across the firm’s top 14 key brands, Jameson, Martell Cognac and Ballantine’s Scotch whisky led “growth acceleration” of 6% on an organic basis in H1, bolstered by a return to growth for vodka brand Absolut.

Jameson enjoyed a “continued very strong performance” driven by its success in the US market, where it is now the largest brand in Pernod’s portfolio – representing just over a quarter of total sales. The brand also reported strong growth in Africa Middle East and Europe.

Martell Cognac grew 7%, credited to “strong growth” in China and “fast development” in the US and travel retail Americas.

Though Absolut continued to decline in the “competitive” US market, the brand achieved a 1% sales increase due to a “very good” performance across Europe and LATAM.

The firm’s Scotch stable saw mixed results: Ballantines and Royal Salute posted gains, while The Glenlivet fell flat and Chivas dropped by 1%.

Innovation contributed 1% to overall growth, driven by Jameson Caskmates, Lillet and Olmeca Altos.

Regional growth

Improvement was driven mainly by the US, with the Americas demonstrating an accelerated growth of 7% compared to 4% the previous year, led by Jameson and Martell. The group hailed a significant improvement in travel retail Americas, with sales up 14%.

Europe saw an improvement in H1 with a 3% sales increase driven by recovery in Russia, with strong growth driven by the group’s international brands.

Pernod also cited continued good performance in the UK and Spain.

“Clear improvements” were seen in China, which benefited from an 4% sales uplift due to an early Chinese New Year, driven by Martell – however Scotch whiskies are “still suffering”.

Growth in Asia and the rest of the world decelerated to 3%. with sales affected by a temporary slowdown on Indian whiskies, attributed to the demonetisation of certain banknotes in the country in November 2016.

“For full-year 2017, in an uncertain environment, we plan to continue improving our business performance year-on-year versus FY16,” said Ricard.

“We will continue to support priority markets, brands and innovations while focusing on operational excellence. We expect to deliver organic growth in profit from recurring operations (PRO) in line with the guidance of 2-4%.”

Ricard said the brand portfolio is continuing to be “actively managed”, with the acquisition of a majority stake in Smooth Ambler and the disposal of Domecq brandies and wines.