Pernod Ricard outperforms Diageo with solid half-year profit growth

By Mathew Lyons

Published: 11 February, 2016

Global drinks giant Pernod Ricard has reported solid growth in the first half of its financial year 2015/16, with organic sales up 3% to £3.9 billion.

Reported sales growth was 7%, thanks to favourable fluctuations in the currency markets.

Pernod's principal global rival, Diageo, last week reported organic growth of 1.8% in its half-year report.

Growth in Asia and the Rest of the World, which accounts for 41% of the group's global sales was 5%, with sales of Martell up 4% in China.

Sales in the key Indian market were up 14%, driven by Pernod's Indian whiskies which grew 15%, with strong growth for Imperial Blue, Royal Stag and Blender's Pride brands.

Pernod is now shipping over 40 million cases of whisky in India annually.

In the Americas, Pernod grew sales by 4%, with notable growth in the US of 3%.

Diageo posted a 2% contraction in its six-month North American sales figures.

Jameson posted 24% growth in the US, with The Glenlivet also up 9%.

Alexandre Ricard, chief executive officer and chairman of the board

Pernod nudged up 1% in its mature European markets, with growth in Spain and the UK counteracted by contractions in France and Russia of 7% and 6% respectively.

Among Pernod's 14 leading global brands, which account for 64% of its overall sales, Jameson posted 11% organic growth by value, Perrier-Jouët 10%, Martell and Glenlivet both 7%, Royal Salute 6% and Beefeater 5%.

In contrast, Ricard contracted 8%, Kahlua 5% and Absolut 3%.

Sales of Pernod's disputed Havana Club brand, which is once again a source of controversy in the US, were up 3% on the back of growing tourist revenues as US relations with Cuba normalise.

Sales of Pernod's Priority Premium Wines portfolio were up 8% by volume and 6% by value, with double digit growth for Jacob's Creek in the UK, Australia, Sweden and Canada, and a strong performance from Brancott Estate and Campo Viejo across the US, UK and a range of other territories.

Alexandre Ricard, chairman and chief executive of Pernod Ricard, said: "Our half year results are solid, delivering a continued improvement in sales. Our strategy has remained consistent and is driving results, in particular in terms of innovation.

"We will continue to support priority markets, brands and innovations while focusing on operational excellence."

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