Paris (February 10). Pernod Ricard said sales for the first half of fiscal-year 2022 reached €5.6bn, a rise of 17% (20% reported) on an organic basis with all main regions delivering double-digit growth. Q2 sales were €3.24bn, with +14% organic growth, which represented a slowing versus Q1 sales (+20%), cycling higher comparison basis in some markets.
Half-year profits from reoccurring growth were around 2bn, an organic growth of +22%, with a strong operating margin improvement of +147 basis points, driven by strong pricing across all regions more than compensating for inflation in Costs of Goods (COGs), notably from logistics and commodities.
Pernod Ricard chairman and CEO Alex Ricard said: “The execution of our transform & accelerate strategy is delivering excellent and broad-based performance in the first half, with brand share gains in most countries and with all our must-win markets showing very strong growth.”
Sales by region
Growth in the Americas region was up 14% with very dynamic growth in the region, notably USA, Brazil and travel retail.
In the US, up 9%, strong on-trade recovery and resilient off-trade driving good sell-out growth. Growth was driven by Jameson, Martell and super-premium whiskeys (Redbreast and US whiskeys). There was a very strong rebound of Jameson in on-trade. That will be accompanied by the launch of Jameson Orange in H2. There was the continued development of Agave portfolio, in particular Del Maguey.
Asia/Rest of World climbed by 16% with excellent growth driven by China, India and Turkey. Sales in China rose 14% with solid Martell sell-out despite localised on-trade disruptions in H1. There was an acceleration of The Glenlivet and strong growth of Royal Salute and Ballantine’s with continued strong development of Absolut.
Sales in India rose by 19% with broad-based growth across the portfolio, with strong underlying demand, favoured by a low basis of comparison. Pernod Ricard’s premiumisation strategy resulted in a strong mix within Seagram’s Indian whiskies and its international strategic brands were in strong growth, notably Jameson, Chivas Regal and Ballantine’s.
European growth was up 21% with growth across the region, with a rebound in Spain, France, travel retail and continued dynamism in Eastern Europe.
Global travel retail showed signs of a fightback with a steady recovery of international passenger traffic outside of Asia despite a slight slowdown in December. There was a return to growth in all regions on a very favourable comparison basis but activity was still below pre-covid levels.
Key strategic brands make big gains
Pernod Ricard’s key strategic brands climbed by +19%. It was a broad-based rebound with all brands growing, notably Jameson, Martell, Ballantine’s, Absolut and Chivas Regal, all double-digit.
Strategic Local Brands rose 14% driven by a recovery of Seagram’s Indian whiskies.
Speciality brands were up 21% with continued very dynamic momentum of American whiskeys, Malfy, Monkey 47, Redbreast, Lillet and the agave portfolio.
Strategic wines fell 6% with a soft first half, due, in particular, to New Zealand’s lower harvest.
The company used M&A in the first half to increase its exposure to fast-growing market segments with the acquisition of The Whisky Exchange, a leading online spirits retailer, and a minority stake in U.S. based Sovereign Brands, creators of Luc Belaire (a French sparkling wine), Bumbu (a range of rum products from the Caribbean) and other brands.
Full-year outlook
Ricard said: “Despite the ongoing volatile environment, we expect for FY22 strong sales growth across regions, with the continued on-trade rebound, off-trade resilience and a gradual travel retail recovery. We will increase investments to fuel growth momentum.”
