Late yesterday, Pernod Ricard confirmed that it has opened discussions with Sazerac with a view to selling its Paddy Irish whiskey brand. Here’s a look at Paddy and its position in the Irish whiskey category and Pernod’s portfolio.
- Paddy is the world’s fourth largest Irish whiskey brand, behind Cuervo’s Bushmills in third, William Grant & Sons’ Tullamore Dew and market leader Jameson, which is also owned by Pernod
- The Paddy stable of expressions sells in the region of 200,000 nine-litre cases per year. Jameson sells 4.8m cases
- According to The IWSR, Paddy’s compound annual growth rate in the ten years between 2004 and 2014 was -2.7%. Jameson’s was 10.8% in the same period
- Both Paddy and Jameson operate in the premium price bracket. In the UK, the pair carry a retail price of around GBP20 (US$29.30) per 70cl bottle
- Paddy’s main market is France, which accounts for 40% of volumes. Ireland is next, with 25% of volumes, followed by the US (15%) and Bulgaria (6%)
- As well as Paddy, Pernod’s Irish Distillers unit owns and produces the Jameson, Powers, Midleton, Redbreast, Green Spot and Yellow Spot Irish whiskey brands. While the Jameson stable is made from a blend of pot still and fine grain whiskeys, the rest of Irish Distillers’ portfolio comprises single pot still whiskies. Paddy is also a blend
- In a note to clients today, analysts at Bernstein estimated at sales value of between EUR65m (US$75m) and EUR90m for Paddy. In fiscal-2015, the brand was estimated to bring in around EUR21m in net sales. “Assuming the same margins as the group,” the note says, “the brand possibly contributed approx. EUR5.5m in EBIT. Assuming 5% depreciation, this brings us to approx. EUR6.5m EBITDA. If we apply a 10-14x multiple to the business based on recent transactions, we get to an EV in the range of EUR65m to EUR90m.”
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