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Pernod Ricard’s sales boosted by China

Pernod Ricard’s 2017/18 nine-month sales climbed 6.3% to €7.05 billion (US$8.72bn) driven by double-digit growth in China, India and Asia travel retail.

Alexandre Ricard, CEO of French drinks group Pernod Ricard

For the year-to-date, the Americas region witnessed 6% growth, with the US posting a 3% increase driven by “strong momentum” from Jameson Irish whiskey, Martell Cognac and Tequila brands Avion and Altos. However, flagship vodka brand Absolut remained in decline.

Canada reported a “modest” decline, while Brazil returned to growth, boosted by strategic international brands and Scotch whisky Passport.

The Asia-Rest of World region witnessed a double-digit growth of 10%, led by China, India, travel retail and Africa Middle East. In China, Martell saw “strong growth”, while Chivas “responded positively” to a relaunch plan.

Sales in Europe climbed 2% thanks to “good momentum” in Eastern Europe and stability in Western Europe, with Germany and UK performing well. France, Spain, and Germany struggled, posting declines of 4%, 4%, and 6% respectively.

During the first nine months of its 2018 fiscal year, Pernod Ricard’s strategic international brands posted a 7% increase collectively, boosted by Martell, Jameson and the return to growth of Chivas.

Strategic local brands had a “dynamic performance” in the same period, up 7%, driven largely by Seagram’s whiskies and the “strong” double-digit performance of Olmeca Altos Tequila.

However, the company noted that the fourth quarter was “negatively impacted” by lower Martell sales and Easter phasing.

Third quarter results

Meanwhile, the company’s third quarter organic sales increased by 9.3%, with “continued dynamism” in the Americas boosted by the US and Latin America.

Asia-Rest of World increased by 18% during Q3, attributed to favourable Chinese New Year phasing in China and demonetisation in India in FY17.

Europe fell by 1% due to “continued difficulties” in Spain and France along with unfavourable shipment phasing in Russia.

Alexandre Ricard, chairman and CEO, stated: “We have very strong year-to-date sales growth at 6.3%. Our strategy is consistent and driving results, in particular in terms of diversifying the sources of growth.

“We confirm our FY18 guidance given to the market on 9 February 2018 at the top-end of the range, with organic growth in profit from recurring operations of c. 6%.”

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