FRANCE: Pernod confirms guidance as H1 sales, profit rise
Pernod Ricard has said that it is on course to meet full-year profit guidance, after reporting a 13% rise in net sales and a 5% increase in net profit for its fiscal first half.
Shares in Pernod rose by 6% early today (13 February) after group CEO Pierre Pringuet said that the French drinks giant still expects double-digit growth in like-for-like net profit in its full-year, based on current exchange rates.
His comments came as Pernod reported a 13% rise in net sales, to EUR4.2bn (US$5.4bn), for the six months ended 31 December. Organic net sales rose by 5% for the period.
Net profit from recurring operations rose by 15%, while reported net profit inreased by 4% to EUR625m.
Pernod said it was boosted in its first half by the acquisition of Sweden's Vin & Sprit, including Absolut vodka, and strong rises for the Martell and Ballantine's brands in Asia, as well as growth in Eastern Europe.
Western Europe and the US, which have been hit hardest by the global economic downturn, proved more challenging. Group sales in the US fell by 2% for the half, largely due to a decline in orders from retailers, Pernod said. In Europe, the firm said Spain, UK and Italy were "difficult".
Top performing brands for the group were Martell, Jameson, The Glenlivet and Havana Club, which all posted double-digit net sales growth.
Several brands reported sales declines in the first half, including Perrier Jouet Champagne and Kahlua, down 8% and 7% respectively. Pernod also reported volume declines for seven of its 14 "strategic brands", including a 6% drop for Martell, a 14% fall for Perrier Jouet and a 5% slip for Jacob's Creek wine.
Going forward, Pernod said: "Although visibility is limited for the second half of the year, we anticipate that the wines & spirits sector will on the whole continue to show excellent resilience."
The group added that it expects a decline in organic net sales in the third quarter, however.
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