US and Spain boost Pernod Ricard’s growth

Acceleration in the USA and Spain helped boost Pernod Ricard’s annual sales by 2%, it announced this morning, with Jameson and Ballantine’s offsetting flat growth across some of its top 14 spirits brands.

Pernod Ricard CEO Alexandre Ricard (Photo: Pernod Ricard)

Sales in the year to 30 June 2016 grew 2% to €8,682m, the French spirits company announced this morning, as it toasted a “solid and encouraging year”.

The company credited accelerated growth of 4% in the USA with the new structure announced in July, as sales rose €2,446m. Sales were also up 5% in Brazil despite an economic recession, with growth in Canada as well – but travel retail in the Americas fell -9%.

Growth was more modest in Asia, where a strong performance in India (+12%), Africa, the Middle East, Japan and Australia helped offset a -9% decline in China, with double-digit decline Scotch proving whisky “less resilient” than Cognac.

Net sales in Europe, which makes up around a third of the group’s total sales, fell 1% to €2,709m, although this was negatively impacted by unfavourable exchange rate.

Strong Scotch and gin sales boosted Spain’s growth by 8%, and the company reported good growth in the UK, led by a strong performance by wine brands Campo Viejo and Brancott Estate, as well as Absolute, Jameson, Chivas and Mumm.

Overall, premium wines across the group rose 5%, on volumes up 6%, driven by Campo Viejo, and Brancott Estate. However although Jacob’s Creek returned to growth overall, this was largely on the back of a strong performance in the Australian market, which offset continued decline in the UK.

Growth on its 14 spirits and champagne brands, which make up 63% of total sales, were flat overall in volume and value terms – “stable”, the company reported – but Jameson saw a solid performance, up 16% in organic sales, on volumes up 12%, with champagne brand Perrier-Jouet up 9%, on volumes up 7%, and Ballantines growing 3%. However this contrasted sharlply with Absolut and Chivas Regal, which both fell 4% by value, with volumes down 2% and 5% respectively.

Local brands also did well, rising 6%, it noted.

Chairman and CEO Alexandre Ricard noted that good progress had been made to implement efficiencies, which included reorganising its US structure and teams to grow market share and accelerate momentum, and spinning off its global travel retail section, and the company was in line to deliver its medium term strategy to grow topline growth of 4-5% and improve margins.

As a result, guidance for the next financial year was set between 2 and 4%, he said.