Pernod Ricard’s 2016/17 nine-month sales climbed 3% to €7 billion (US$7.6bn) as the Americas region strengthened, but flagship vodka brand Absolut remained in decline.
Alexandre Ricard says his strategy is “consistent” and “driving results”
Organic growth across the Americas stood at 7%, with the USA posting 5% gains driven by double-digit surges for Jameson Irish whiskey, Martell Cognac and Altos Tequila.
Despite Absolut’s overall weakness, the group did report a “strong launch” for flavour extension Absolut Lime.
Latin America sales were “strong overall”, excepting Brazil which remained in decline.
Sales in Europe climbed 4% on the “dynamic recovery” in Eastern Europe, with Russia, Spain and the UK also making gains.
The Asia-Rest of World region managed a 1% uplift, with operations pegged back due to demonetisation and the highway sales ban in India, a “strong decline” in Korea, and a deceleration due to macroeconomic and geopolitical challenges in Africa and the Middle East.
Conversely China continued to improve and was declared “now stable”, with Martell back to good volume and value growth.
Travel retail reported a mixed performance, with the Americas and Asia-RoW returning to growth, but Europe posting declines in a “difficult environment”.
For the year to date, Pernod Ricard’s strategic international brands collectively enjoyed a 4% sales increase, with 11 of the 13 in growth. Innovation accounted for one quarter of all top-line growth.
The overall price/mix returned to positive territory, but pricing remained “subdued”, the company noted.
‘Softer’ third quarter
Despite posting solid year-to-date figures, the third quarter was “slightly softer”, largely due to the early timing of the Chinese New Year, the company said.
Reported growth of 7% saw Q3 sales hit €1.99bn (US$2.13bn), up from €1.86bn (US$1.99) in the same quarter in fiscal 2015/16.
Stand-out brands included Jameson and Ballantine’s with improvements noted for Absolut and Martell.
Strategic local brands fell flat due to the temporary slowdown on Indian whiskies.
Overall, the Americas region saw sales climb 8% on an improving Latin America and US, and Europe grew 7% with Western Europe “solid” and Eastern Europe “dynamic”.
Asia-RoW declined -2% with the “planned” impact of demonetisation in India and the timing of the Chinese New Year.
“In an uncertain environment, our strategy is consistent and driving results, in particular in terms of diversifying the sources of growth commented chairman and CEO Alexandre Ricard.
“We confirm our FY17 guidance of organic growth in profit from recurring operations of between 2% and 4%.”