FRANCE: Pernod Ricard sees H1 profits slip as China woes remain

Pernod Ricard has reported a slide in first-half net profits and sales as on-going pressures in China continue. 

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The French group's net profits in the six months to the end of December fell by 2% to EUR839m (US$1.14bn), it said earlier today (13 February). Sales in the period slid by 7% to EUR4.57bn, while profits from recurring operations were down by 7% to EUR1.35bn.

Pernod said the decreases were mainly driven by its performance in China, where its sales dropped by 18% in the six-month period. Sales in Asia/Rest of the World fell by 4% organically. However, excluding China, the region posted an organic sales lift of 2%.

China also impacted Q1 sales, but Pernod CEO Pierre Pringuet said the company "remains confident in the medium- and long-term potential of China". However Pringuet added: "We anticipate difficulties to persist for the full financial year.”

For the full fiscal year to the end of June, Pringuet warned that the company expects organic growth in profits from recurring operations of between 1% and 3%.

Q2 net sales were also impacted, down 5%. However, a strong second quarter in the Americas saw sales in the region return to organic growth in H1 (+3%), Pernod said. Europe also performed well in the half, with organic sales up 4%.

Meanwhile, Pringuet announced the launch of a cost-saving programme, Allegro, that is expected to save Pernod EUR150m over the next three years.

“We want to improve organisational efficiency in order to generate future growth, seize new opportunities - particularly innovation and digital - and increase the speed of execution,” he said.

Pernod's share price had climbed by 2% as of 1100 CET today.

To read the company's official statement, click here.

To read an interview with Pernod's new head of digital, Antonia McCahon, click here.

Click here for an analysis of Pernod's H1 results, while a closer look at the company's performance in the six-month period can be found here.

For coverage of the company's media presentation, click here.

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