Pernod Ricard FY sales up 10%

Absolut owner Pernod Ricard saw organic sales rise by 10% in fiscal 2023, driven by double-digit growth for the firm’s core brands.

Reported net sales for the group rose by 13% to €12.13 billion (US$13.2bn) in the year ending 30 June 2023.

Organic profit from recurring operations rose by 11% for fiscal 2023.

It followed a positive performance in the first half of the financial year when Pernod’s sales soared by 19%.

Alexandre Ricard, chairman and CEO, said: “Pernod Ricard once again delivered a very strong full-year performance, achieving double-digit broad-based growth in sales and earnings despite a volatile environment.

“The relevance of our growth strategy, the desirability of our brands and the unwavering commitment and agility of our teams enabled us to gain share in most markets and strengthen pricing.”

The group’s ‘strategic international brands’ grew by 11%. Within that division sits Jameson Irish whiskey, Absolut Vodka, Beefeater gin and Martell Cognac, which each recorded 10% growth.

Jameson notably recorded ‘strong growth’ outside of the US, including South Africa (up 23%), India (up 51%) and global travel retail (up 27%). Mid-single-digit growth for the brand was recorded in the US.

Other strategic international brands to post sales increases were Havana Club rum (up 6%), Ricard (up 1%), rum liqueur Malibu (up 4%), and the Prestige portfolio (up 15%).

The firm’s Scotch portfolio rose by 17%, led by Royal Salute (up 32%), Chivas Regal (up 25%), Ballantine’s (up 13%) and The Glenlivet (up 9%).

The group’s local brands rose by 10%, driven by Seagram’s Indian whiskies and Olmeca Tequila.

‘Speciality brands’ climbed by 8%, with ‘continued development’ for Lillet, Aberlour Scotch whisky, Malfy Gin and the Spot Irish whiskey range.

Since its acquisition of Malfy in 2019, Pernod Ricard has tripled the Italian brand’s sales to 400,000 nine-litre cases as of 2023.

Sales by region

The Americas region rose by 2%, however sales in the US were stagnant after a ‘high comparison basis’ in the first quarter.

The region’s sales were driven by a ‘dynamic’ Latin America, including Mexico (up 12%), while Canada registered 3% growth.

The Asia and rest-of-the-world region climbed by 17%, with growth in Japan (up 21%), Korea (up 19%) and Africa (up 15%).

A ‘challenging microeconomic environment’ in China resulted in a decline in the first quarter, the firm said.

Sales in Europe were up by 8%, with double-digit growth in Spain and an 8% increase in Germany. The UK grew by 2%.

Global travel retail soared by 40%, bolstered by its Scotch portfolio, Martell, and Absolut.

Pernod Ricard said the recent financial year was its ‘most active’ 12 months of portfolio management in a decade.

The firm has invested more than €1bn (US$1.09bn) in expanding into ‘attractive’ categories in North America.

Pernod highlighted its purchases of majority stakes in Bumbu rum maker Sovereign Brands, Código 1530 Tequila, flavoured whiskey Skrewball (the ‘second fastest-growing spirits category in the US’), and Canadian ready-to-drink player Ace Beverages.

Outlook for fiscal 2024

The firm reiterated its goal of reaching the upper end of the 4% to 7% growth range in net sales for FY2023 to FY2025.

Pernod Ricard expects a ‘soft start’ in the first quarter of its next financial year due to high comparison rates.

Furthermore, for 2024, the company said it is increasing investments in capital expenditures in the range of €800m-€1bn and in its ‘strategic’ inventories to ‘support growth of [the] very dynamic aged spirits category’.

The firm is planning ‘elevated investments’ for the next two years.