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Sales at Pernod Ricard slump post-Covid

Published:  02 September, 2020

Organic sales at Pernod Ricard fell 9.5% as a result of the Covid-19 crisis, the company has reported, with revenues for the year to 30 June reaching €8.5bn.

Sales for the fourth quarter slumped by 36.2% as the pandemic devastated both the on-trade and the global travel retail market.

However, overall figures for the first half year show solid growth, up 4.3%, against a high benchmark of 12.8% growth for H1 2019.

Profits from recurring operations fell back 13.7%, a better performance than predicted in the group’s July guidance, which foresaw a 15% contraction. The off-trade, particularly in the US and Europe, has proved more resiliant than anticpated.

The groups strategic international brands fell 10%, after posting growth of 4% for H1 led by Martell, Absolut and Ballantine’s.

The largest decline in sales was recorded in Asia-RoW with a 14% drop. Across both Europe and the Americas, sales fell 6%.

Scotch whisky sales fell 11% overall, although within that, key brand The Glenlivet posted 2% growth after H1 growth of 15%. Chivas, Ballantine and Royal Salute fell back 17%, 8% and 2% respectively.

Despite the challenging financial picture, Scotch gained value share in nine of its top 10 markets, including the US, France, Germany and Australia, thanks to its premium whiskies and single malts.

The gin category overall reported a drop of 6%, with Beefeater down 7% and Plymouth down 9%. Beefeater grew 11% in H1 and expanded its market share in over 20 markets, fuelled in part by the successful launch of its Blood Orange expression.

The group gained market share in the gin category in over 40 markets, including the UK, France, Mexico and Peru.

Alexandre Ricard, chairman and CEO of Pernod Ricard, said: “For FY21, Pernod Ricard expects continued uncertainty and volatility, in particular relating to sanitary conditions and their impact on social gatherings, as well as challenging economic conditions.

“We anticipate a prolonged downturn in travel retail but resilience of the off-trade in the US and Europe and sequential improvement in China, India and the on-trade globally.

“Thanks to our solid fundamentals, our teams and our brand portfolio, I am confident that Pernod Ricard will emerge from this crisis stronger.”

In the UK, the group’s market share hit 6.5%, its highest point, with off-trade MAT sales up 53% in the 12 weeks to end June driven by Beefeater, Absolut and Jameson’s.

David Haworth, MD of Pernod Ricard UK, said: “We are in the unique position of having a spirits portfolio and a wine portfolio. We can see with 53% growth for premium brands in the last twelve weeks [to end June], if that trend continues we’re going to have a pretty good H1 of the next fiscal year.”

The group has recently moved to strengthen its UK wine operation with the appointment of Lucy Bearman to the newly created position of wine portfolio director. Its brands include Campo Viejo, Brancott Estate and Jacob’s Creek.