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Asia boosts Pernod Ricard full-year sales

French drinks group Pernod Ricard has reported “very strong” organic growth for its full-year 2019 financial results, driven mainly by Asia.

Pernod Ricard’s FY19 results were boosted by strong growth in Asia

Sales for the year ending 30 June 2019 reached €9.182 billion (US$10.17bn), with “very strong” organic growth of 6% and ongoing development of “must-win” markets.

In China, sales were up 21% compared to the previous year, boosted by the “continued strong dynamism” of the group’s Cognac brand, Martell.

India also experienced double-digit growth of 20% thanks to the continued expansion of Seagram’s Indian whiskies and the company’s strategic international brands.

China and India aided the “strong acceleration” in Asia and the rest of the world, where sales climbed 12%, also helped by Turkey and “strong growth” in Japan.

Travel retail was also a highlight for Pernod Ricard, with sales up 6% thanks to strong growth in all regions.

Looking to the Americas (up 2%), Pernod Ricard expressed strong growth in Latin America but noted sales were “dampened” by US wholesaler inventory optimisation.

In Europe, where sales rose 1%, Eastern Europe was partly offset by Western Europe, which experienced a “difficult” French market and “commercial disputes”.

From a brand perspective, Pernod Ricard reported “strong growth across all key spirits categories” as it continued to leverage its premium portfolio.

Its strategic international brands grew 7%, most notably due to Jameson Irish whiskey, and acceleration on Martell and Scotch whisky. However, this was “dampened” by the impact of US wholesaler inventory management.

Strategic local brands reported double-digit growth of 12%, with “continued strong momentum, particularly for Lillet, Altos, Monkey 47, ultra-premium Irish whiskeys and Smooth Ambler”.

The group also noted that innovation contributed to around 25% of Pernod Ricard’s top line growth, driven largely by Martell Blue Swift, Chivas XV, Beefeater Pink, Lillet apéritif and Monkey 47 gin.

Alexandre Ricard, chairman and chief executive officer, said: “FY19 was an excellent year, demonstrating clear business acceleration, while investing for long-term value creation. Our PRO [profit from recurring operations] growth, at 8.7%, is our highest since FY12.

“For FY20, we will continue implementing our FY19-21 ‘transform and accelerate’ plan, with increasing support for our priority brands, markers, strategic investments and Sustainability and Responsibility 2030 Roadmap.

“In a particularly uncertain environment, our guidance for FY20 is organic growth in PRO of between 5% and 7%.”

In its final quarter, organic sales for Pernod Ricard grew 5% to reach €1.994bn (US$2.21bn).

The firm has also unveiled a share buyback scheme for up to €1bn (US$1.11bn), which will be brought into effect across full-year 2020 and 2021. The implementation of the buyback programme will be dependent on market conditions.

In additional news, Pernod Ricard has also revealed plans to acquire Castle Brands for US$223m and has pledged a US$150m investment into building China’s first malt whisky distillery.

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