FRANCE: Asia, Americas drive Pernod profits
Pernod saw underlying operating profit leap 72% to EUR1.25bn (US$1.6bn) for the year to 30 June. Revenues jumped 68% to EUR6.1bn, buoyed by contributions from brands formerly owned by Allied Domecq. Pernod said its "original" brands saw sales rise 4.3% on an organic basis.
Asia and the Americas account for 54% of Pernod's profits, a share boosted by the Allied acquisition, which doubled Pernod's size in the US.
Pernod insisted the global integration of the Allied business had been completed at a lower cost than expected. The company said that it also expects to see the benefit of around EUR270m in synergies in the next financial year - 12 months earlier than expected.
The former Allied portfolio, including Mumm Champagne and Kahlua liqueur, contributed around EUR2.4bn of sales during the year, Pernod said.
However, the company admitted that the performance of the ex-Allied brands had been hit by destocking in markets including Spain and Mexico. Pernod had also moved to end sales that had generated parallel imports in some markets, particularly Central America.
Pernod's core stable relied on the "great vitality" of its premium brands with The Glenlivet and Chivas Regal Scotch whiskies, Jameson Irish whiskey and Martell Cognac all enjoying double-digit growth.
Europe, however, proved a tough market for Pernod, who admitted having a "difficult year" on the continent. Sales inched up 0.8%, while in France, Pernod saw sales slide 1.1%.
Nevertheless, Pernod said it was looking ahead with "confidence" and forecast organic sales growth of 4-6% and "strong double-digit growth" in net profit.
"The quality of Pernod Ricard brand portfolio and the strength of its distribution network should enable the group to generate strong organic sales and profit growth during the financial year," Pernod said.
"In addition, the new strategic platforms (positioning, advertising, packaging) of acquired brands will be implemented from the end of 2006, which should enhance the vitality of Allied Domecq brands."
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