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How did Pernod Ricard perform in H1 fiscal-2020? - results data

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  • Half-year sales rise 2.7% to EUR5.47bn (US$5.96bn)
  • Rate of growth lower than Diageo's for six months to end of December
  • Coronavirus impact set to be felt in second half

Pernod Ricard has sounded a note of caution in its latest half-year results, with the coronavirus expected to hit sales in the group's fiscal-2020.

In results for the six months to the end of December, released today, Pernod reported a 2.7% year-on-year increase in group sales. The announcement comes six months after the company saw fiscal-2019 sales climb by 6% and almost two weeks after rival Diageo posted a 4% top-line rise in the same six-month period.

Despite this, the first half improved towards the end of the period, after Pernod saw its Q1 sales inch up by 1.3%.

Pernod Ricard Fiscal-2020 - Sales versus 2019 - Reported

Source: Company results

On a regional basis, the Americas maintained a consistent mid-single-digit rate of growth throughout the half, although the US saw Jameson's performance level off versus strong comparables in the prior-half-year. The brand will focus on "new [consumption] occasions" in H2 in the country.

China did well, delivering an 11% rise thanks in part to the earlier Chinese New Year. However, Pernod noted that the coronavirus outbreak in the country is set to hit hard in the second half, with the country's entire on-premise channel having had to close this month as authorities try to reduce the spread. For the full fiscal year, the group said it expects China and Asia's Global Travel Retail channel to drag on total sales by 2%. Pernod said it is offering its Chinese employees the opportunity to work from home and providing staff in the country with additional holidays.

In India, sales growth slowed to 5% compared to 24% in the first half of fiscal-2019 thanks to the country's "weaker macroeconomic environment".

Pernod Ricard First-Half Fiscal-2020 - Sales by Region - Reported

Source: Company results

Blended Scotch brand Chivas Regal had a torrid first half as sales fell by 2% year-on-year on the back of the troubles in China. Back in August, Chivas boasted a 6% rise in fiscal-2019. Also of concern for Pernod is Martell, which posted a marked deceleration of growth - +4% in the half-year compared to +18% in the 12 months to the end of June.

Elsewhere in the portfolio, The Glenlivet and Royal Salute were both up by double digits, as was Beefeater, although the gin brand had to sell more volumes to grow its sales.

Irish whiskey powerhouse Jameson enjoyed a healthy half-year, delivering a 9% sales increase. The brand benefited from "good pricing" in its core US market, while Asia-Pacific offered "very promising development", particularly in India and China.

Pernod Ricard First-Half Fiscal-2020 - Strategic International Brands

Sales +/-Volumes +/-Price/Mix +/-
Absolut-1%+1%-2%
Chivas Regal-2%-3%+1%
Ballantine's+5%+3%+1%
Ricard-5%-5%---
Jameson+9%+9%---
Havana Club+6%---+6%
Malibu+13%+9%+4%
Beefeater+12%+13%-1%
Martell+4%-3%+8%
The Glenlivet+15%+8%+6%
Royal Salute+17%+12%+5%
Mumm-3%-6%+3%
Perrier-Jouet+1%-12%+13%
Total Strategic Intl Brands+4%+2%+2%

Source: Company results

CEO Alex Ricard

"H1 fiscal-2020 demonstrated solid growth and resilience of our business model. Our three-year plan 'Transform & Accelerate' is driving success, as evidenced by the diversification of the sources of growth in terms of geographic footprint and categories, continued strong pricing and ultimately the improvement in operating leverage.

"Looking to H2 FY20, the environment remains particularly uncertain from a geopolitical standpoint, with the additional pressure related to the COVID-19 outbreak. While we cannot currently predict the duration and extent of the impact, we remain confident in our strategy.

"We ... will continue to closely monitor our environment. We will stay the strategic course and maintain priority investments in order to continue maximising longterm value creation."

To read Pernod Ricard's official half-year results statement, click here.

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