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Pernod hails growth and succession plan

Pernod Ricard announced its strongest growth in four years as the French group paved the way for Alexandre Ricard to head the company, following the sudden death of chairman Patrick Ricard two weeks ago.

Groomed for succession: Alexandre Ricard

For the moment Danièle Ricard steps into the role of chairman and CEO Pierre Pringuet remains in his post but becomes vice-chairman of the board, which announced the appointment of Alexandre Ricard as deputy CEO and COO.

Confirming speculation that Alexandre would take over a key leadership role within the Pernod Ricard, a statement from the group said: “These appointments reflect the board of directors’ intention to see Alexandre Ricard succeed Danièle Ricard and Pierre Pringuet in their duties as chairman and chief executive officer at the end of January 2015, at which time Pierre Pringuet will have reached the statuatory age limit for a chief executive officer.”

This reshuffle accompanied the release of strong end of year results from Pernod, which reported 8% organic sales growth.

As with Diageo, who announced sales growth of 6% last week, it was emerging markets which underpinned Pernod’s performance, delivering growth of 17%, compared to a 2% uplift from mature markets.

With growth of 15%, Asia, Africa and the Middle East continue to be “the growth driver of the group,” as China, India, Vietnam, Taiwan and Travel Retail performed particularly well.

In the US, growth more than doubled compared to last year, reaching 5%, thanks largely to the success of Irish whiskey brand Jameson. Overall the Americas posted growth of 6%, with sales in Brazil leaping by 13%.

The picture was more modest in Europe, which recorded sales growth of 2% as a polarised picture emerged between east and west. Declines in the UK, Spain, Greece and Italy saw Western European sales shrink by -1%, compared to 16% growth in Eastern Europe.

Within Pernod’s portfolio, its top 14 brands combined achieved record sales of 47.2 million nine litre cases to account for 60% of the group’s total. Particularly strong performances came from Martell Cognac, which grew by 10% and Pernod’s whiskies, Jameson, Chivas, The Glenlivet and Royal Salute.

As for wine, Champagne Perrier-Jouët saw volume sales grow by 10%, while Pernod’s priority premium wine portfolio, which includes Jacob’s Creek, Brancott Estate, Campo Viejo and Graffigna, achieved a 2% sales increase, driven largely by Rioja brand Campo Viejo.

Summing up these results as Pernod’s “best growth rate since the 2008 crisis,” Pringuet attributed this success to “a clear and consistent strategy: substantial investments in our brands, innovation, premiumisation and geographic expansion.”

Looking to the future – Pernod is due to reveal its earning targets for the current year on 25 October – Pringuet concluded: “Despite the economic uncertainty, we are confident of the group’s ability to deliver solid growth this year as well.”

Finally, speaking at a press conference at 11am this morning, Pringuet confirmed that Martell had broken the one million case mark for annual sales in China.

Indeed, he recorded that the last Pernod event Patrick Ricard had attended before his death on 17 August was a party at the Musée Rodin in Paris to celebrate this milestone with Chinese staff, who were flown over especially for the evening.

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