FRANCE: Slower Q4 but FY sales still up at Pernod Ricard

By | 24 July 2008

A weak dollar saw Pernod Ricard sales slip by 3% in its fourth quarter, the French wine and spirits giant has said in its full-year results.

Double-digit growth from big spirits brands such as Martell, Jameson and Havana Club, however, lifted Pernod's full-year sales by 2.3% to EUR6.59bn (US$10.34bn) for the 12 months to 30 June, helping to offset the fourth quarter decline, the group said today (24 July).

The fourth quarter slip may increase speculation about the vulnerability of drinks firms to slowing western economies. Pernod said its Kahlúa, Beefeater and Chivas brands suffered from a weaker economy in the US, but remained confident about the year ahead.

Chairman Patrick Ricard predicted "a continuation of improving margins and strong organic growth of our operating profit from ordinary activities for the current fiscal year".

The group, which also announced today that it has completed the takeover of Sweden's Vine & Sprit, said its focus on premium spirits had continued to pay dividends in both mature and emerging markets. Pernod subsequently raised its operating profit guidance for the year ahead to 13%.

China and India were the top two contributors to Pernod's organic growth, increasing sales by 29% and 39% respectively over the past 12 months. In Europe, a 38% sales rise in Russia and a sharp recovery from Germany in the fourth quarter helped to lift regional sales by 4%. Sales in France also rose by 4%, despite another tough 12 months for the Ricard brand and the introduction of a smoking ban in French bars and cafes.

Sectors: Spirits, Wine

Companies: Pernod, Ricard, Martell, Jameson, Havana Club

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