FRANCE: Absolut drives growth for Pernod Ricard FY

Pernod Ricard has posted a lift in full-year sales and profits driven by the acquisition of the owner of Absolut vodka, Vin & Sprit.

The France-based company said today that net profits for the year to the end of June came in 12.5% up on its previous fiscal year, reaching EUR945m (US$1.34bn). Net sales also increased, by 9.3% to EUR7.2bn, while operating profit leapt by 21.9% to EUR1.76bn.

On an organic basis, however, sales were flat for the year, dropping by 0.4%. The company blamed "significant" destocking by distributors and retailers.

Geographically, Pernod saw its European markets stagnate, with growth of just 1%. While Eastern Europe delivered a "good" performance in the first half of the year, the region experienced a "sharp trend reversal" in the latter half. In the Americas region, sales leapt by 51% primarily due to the integration of Absolut and the favourable exchange rate.

"The US proved a difficult market, penalised by distributor and retailer destocking and declining on-trade consumption," the company noted. Latin America and Canada, however, reported an "excellent" year.

Asia/Rest of World and France delivered growth of 17% and 19% respectively, with the positive foreign exchange impact on Scotch whisky costs helping drive sales in Pernod's home market.

Of Pernod's 14 strategic brands - not including Absolut - the Perrier Jouet Champagne brand suffered markedly in the year, with sales falling by double digits in both value and volume. While Martell Cognac posted a 12% rise in volumes but a 6% fall in value, the international brands were flat in volume for the year, and 4% down in value.

"Despite a particularly difficult environment, the group achieved a very satisfactory performance in the year just ended," said Pernod's CEO, Pierre Pringuet. "We start 2009/10 with confidence and determination: our priorities are clear, continue to reduce debt and strengthen investments behind our strategic brands."

Looking forward, Pernod said it anticipates an economic environment that will "remain difficult", with the wines and spirits industries expected to stagnate in the next 12 months.

For Pernod's full statement, click here.