Pernod hails return to growth

Pernod Ricard has predicted organic profit increase of “between +1% and +3%” for 2014/15 as the drinks group announced a return to growth in its first quarter results.

Pierre Pringuet (second from right) with his team of directors

Organic sales for the first three months of its year rose by 2%, boosted by a “gradual improvement” in Asia and a continued healthy performance in the Americas. The picture was more mixed in Europe where sales slipped by -1%.

The news marks an improvement in fortunes for Pernod, whose end of year results for 2013/14 showed a double-digit decline in profits. The positive outlook echoes more upbeat sales reports by both Diageo and Rémy Cointreau earlier this month.

Within Pernod’s brand portfolio, there was a return to growth for its “Top 14” collection, which includes Ballantines whisky, Absolut vodka, Martell Cognac and Mumm Champagne. The group’s 18 Key Local Brands division also did well, with its 7% growth driven by a buoyant performance from the Indian whisky category.

It was a less positive picture for the Priority Premium Wines collection of brands, which saw sales decline by -3%, despite ongoing growth from Campo Viejo and Brancott Estate.

Commenting on this start to its financial year, CEO Pierre Pringuet said: “Pernod Ricard’s return to growth in the first quarter illustrates the group’s resilience in a difficult context. We are confident in the strength of our portfolio and distribution network.”

He also stressed the value of Pernod’s Allegro project, launched earlier this year, which aims to generate €150 million of savings for the company.

Predicting a “gradual improvement in sales” for the full year, deputy CEO and COO Alexandre Ricard confirmed a plan “to increase investment behind our priority brands and innovations.”