Pernod Ricard reports half-year growth despite European slowdown

Pernod Ricard has reported a rise in profits and sales for the first six months of its financial year “despite a less buoyant economic environment than in 2011/12”.

Sales for the six months, ending 31 December, totalled 4,907 million euros (£4,217m), which represents 6% growth for the group. The net profit was 847 million euros (£727m), which is also a 6% increase.

The group reported a similar pattern to Diageo with strong sales in China, the US and Eastern Europe helping to override disappointing figures from Western Europe.

Pierre Pringuet, CEO and vice-president of Pernod Ricard, said: “The good performance achieved this semester confirms the soundness of our business model: a comprehensive portfolio of first-class international and local brands, a premiumisation strategy enhanced by a strong innovation policy, and global exposure allowing us to capture all growth relays.

“We are confident in continuing our growth mid-term, and we confirm our guidance of organic growth in profit from recurring operations close to +6% for the full financial year 2012/13.”

The group saw strong growth in its emerging markets with 13% growth in Asia, 17% in India and 18% in China and there was a “solid” 9% growth in the US.

The group said the environment was “still challenging in Southern Europe, particularly Spain” where sales fell by -9%, also “the underlying sales trend was a decline of -3%” in France.

Overall sales in Western Europe fell by -4%, but Eastern Europe grew by 12%, led by Jameson, ArArAt, Chivas and Ballantine’s.

The group confirmed that it still expects to see “organic growth in profit from recurring operations close to 6% for the full 2012/13 financial year.”

Pringuet told Bloomberg: “We highlighted that the overall environment is not as buoyant as last year, so we keep a certain degree of caution. The good point, to me, is that technically for China there’s no longer speculation about a slowdown. It’s recovering.”