Despite the mixed economic conditions, which affected some of its brands, the French wine and spirits group Pernod Ricard said yesterday that its first half sales reached €1,496m representing organic growth of 8%. However after a negative currency impact of €157m, the company saw a consolidation effect of 2%, below expectations.
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However, the company said that in France the difficult market conditions of the first quarter continued, though the last two months have seen a slight improvement.
In Europe (excluding France), the 8% organic growth achieved was derived from “excellent results in major markets (Italy, Spain, the UK, Germany, Greece), as well as Eastern Europe and Russia. Conversely, difficult market conditions continued in the Republic of Ireland as a result of the severe increase in excise duty in that market at the end of 2002,” the company said.
In the Americas, Pernod’s results were seriously affected by exchange rates against the dollar and the South American currencies . It still achieved organic growth of nearly 7%, thanks primarily to a good performance in the US.
In the Asia-Pacific region organic growth reached
20%, thanks notably to good results in major markets (China, Thailand, India, Australia). This growth was achieved in spite of the difficulties encountered in duty-free outlets (SARS) as well as in Japan and Korea (market conditions), the company said.
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By GlobalDataAmong the group’s major brands, Chivas Regal was up 4%, and was doing well in China and in southern Europe (Spain, Greece, Portugal). However the results were marred by the effects of SARS in the Asian duty-free market and from the continuing economic crisis in South America.
Cognac brand Martell was up 9% thanks to a recovery in Asia and the UK. However, in the US, sales remained on a downward trend, where the planned re-launch will not take place until the second half of the year.
Pernod said that volume sales of Ricard, Pastis 51 and Clan Campbell reflected the poor conditions encountered in the French market for alcoholic drinks during the first half of the year. However it added: “The upturn of their sales during the summer, as well as the gains in market-share observed through market research, bode well for an improvement in second half.”
“These very satisfactory results make it possible, despite the difficult global economic environment, to look forward to a strong improvement, at constant exchange rates, in operating profit of our Wine and Spirits business for the first half of 2003,” the company concluded.
