FRANCE: Pernod Ricard raises guidance after strong H1
- Profits to be stronger than expected
- Net sales up by 13%, including 6% currency gain
- China Cognac sales drive gowth
Pernod Ricard fuelled by emerging markets in H1
Pernod Ricard's CEO, Pierre Pringuet, said today (17 February) that the drinks giant expects like-for-like operating profits to increase by 7% for the current year, versus a previously-forecast rise of close to 6%.
Pernod's confidence follows strong results in the six months to the end of December. Net sales jumped by 13% on the same period of last year to EUR4.28bn (US$5.8bn), while net profits rose by 10% to EUR666m.
Excluding currency gains, sales rose by 7% for the half-year. Emerging markets drove growth and China's thirst for premium Cognac helped the group's Martell brand to increase sales by a third, while India and Russia also performed well. There was, too, improvement in several mature markets, with a return to sales growth in the US and a 5% net sales increase in France.
The group also highlighted progress in cutting debt, which has been a key focus over the last two years. Its net debt to EBITDA ratio fell by 0.4 to 4.5 times during the six-month period. Net debt stood at EUR9.72bn at the end of the half-year.
Despite the increases in sales and profits, Pernod's share price fell by 4% in early trading on the Paris stock exchange after its like-for-like earnings before interest and tax narrowly missed most analysts' estimates.
However, analyst group Evolution Securities said Pernod's prospects remain strong. "These results clearly demonstrate strong trading momentum and operational leverage," it said in a note. "Moreover, the high level of debt reduction should also begin to lay to rest leverage concerns."
For the full results statement, click here.
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