French spirits group Pernod Ricard saw its consolidated sales reach €4.6 billion in 2001, an increase of 4% compared to the last financial year.

The Group's operating profit was €451m , an increase of 7% and the company said it would reach its earnings target a year ahead of schedule with its Seagram acquisition on board.

Group net profit was up 84%, from €195m to €358m thanks to strong exceptional items. Excluding those exceptional items relating to the refocusing of the Group, net profit was €258m, an increase of 32% compared to 2000.

The core spirits and wine division drove the results with "significant growth in all regions worldwide". Turnover reached €1.92 billion in 2001, an increase of 9.5%, of which 8.2% was internal growth. Operating profit for spirits and wine was €344m, an increase of 14% (15.5% internal growth), whilst the operating margin reached 17.9%, a substantial growth for the third consecutive year.

Pernod said due to the delay of the acquisition, the Seagram deal did not have a significant impact on the year's accounts.  The operational integration process came broadly into effect at closing.

"Volumes experienced a slight slow-down during the second half of 2001 due to the delay in the closing of the deal, but remained in line with expectations built into the acquisition model. Forecasts for 2002 were based on conservative volume estimates (running down of inventory overhang, necessary re-energising of marketing)," the company said in a statement.

"Pernod Ricard forecasts a twofold increase in operating profit for Spirits and Wine, which will allow the Group to reach in 2002 the objectives set for 2003: earnings per share up 50% compared to 1999 (excluding exceptional items, goodwill amortisation, and being fully diluted)," it continued.


Stuart Price, beverage analyst with WestLB Panmure described the as "solid".  As mentioned He said: "The performance of the core 'Spirits and Wine' division is very encouraging with good organic growth and impressive margin improvement. Integration worries should be eased by this statement as the integration of the Seagram assets seems to be on track and the outlook looks positive."

However he also said that there were continuing concerns about the disposal of the non core divisions which "seem to have been on the market for some time". He said that non-core (without Seagram consolidated) non-core still represents 58% of sales and 24% of profits.