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Pernod Ricard predicts sales growth in FY21

After posting its half-year results, which saw organic sales fall by -3.9% but some improvement in the second quarter, Pernod Ricard chairman Alexandre Ricard predicts growth in FY21.

Chairman Alexandre Ricard believes that Pernod Ricard will emerge from the Covid crisis stronger

In its half-year fiscal results, Pernod Ricard’s organic sales dropped -3.9% to hit €4.99bn in the six months to 31 December 2020. Meanwhile net profit fell by -6% to €984 million, down from €1.05bn in FY20.

However, in a statement, the French drinks firm revealed that there had been signs of improvement in the second quarter, and its results had been boosted by growth in e-commerce sales and the performance of its speciality brands, which include Lillet, Malfy, Aberlour, Avion, Redbreast and its American whiskeys (Jefferson’s, TX, Rabbit Hole and Smooth Ambler).

Performance in markets including the US (sales up 5%), China (up 13%), UK (up 14%), Germany (up 14%), Korea (up 10%) and Canada (up 8%) also displayed the company’s “continued resilience” in spite of continued on-trade disruption. Despite posting an overall decline of 6%, “must-win” market India also posted 2% sales growth in the second quarter as Covid restrictions were eased.

Pernod Ricard’s direct-to-consumer platform Drinks & Co achieved 63% online sales growth, with sales in the UK up 138%, the US by 84%, France by 56% and China by 46%.

However travel retail continued to experience “significant decline”, and this had a big impact on Pernod Ricard’s overall sales. Sales excluding the travel retail sector grew 1% during the six-month period.

Pernod Ricard said that passenger numbers were still in “severe decline” during H1, resulting in a sales decline of 57% despite the resumption of some domestic travel and an increased spend per traveller.

Chairman and CEO, Alexandre Ricard, said: “The first half confirms the long-term sustainability and underlying strength of our business. Despite an uncertain and volatile environment, with disruption in the on-trade and a prolonged downturn in travel retail, we anticipate organic sales growth for full-year FY21, thanks in particular to our dynamic performance in domestic must-win markets USA, China and India.”

“We will continue to implement our strategy, in particular accelerating our digital transformation, while dynamically managing resources. Thanks to our solid fundamentals, our teams and our brand portfolio, I am confident that Pernod Ricard will emerge from this crisis stronger.”

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