Pernod hit by unfavourable foreign exchange rates

Pernod Ricard’s net sales for the first nine months of the 2013/14 financial year totalled €6,186 million – down 7% on the same period last year. The company says the results are in line with the first half-year and sales were stable excluding foreign exchange and group structure effects.

Top line results for the first nine months are: organic growth in profit from recurring operations between 1% and 3%. The 7% decline was attributed to the unfavourable foreign exchange effect.

In Asia/Rest of World (-3%), sales were impacted primarily by China where the decline was exacerbated by destocking in the third quarter as anticipated. Excluding China, sales growth was 5% over the nine months compared to 2% in the half-year.

Pernod says of particular note was the good performance in India and travel retail. The situation remained difficult in Korea and Thailand.

In the Americas (+4%), organic growth improved slightly compared with the half-year due in particular to the good performance in Brazil. Good growth in the US (+4%) continued to be driven by excellent price/mix but slowed down slightly compared with the half-year, says the report.

In Europe (+2%), western Europe was stable while eastern Europe posted growth of 9%. The third quarter was impacted by unfavourable technical effects (later Easter, excise duty increases, price increases, phasing of promotions, etc).

Pernod Ricard CEO Pierre Pringuet said: “In an environment that remains challenging, our performance over the nine months was in line with the half-year and with our annual guidance. I am pleased with the acquisition of Kenwood (see below) and with the strengthening of our partnerships with our two largest US distributors, which reinforce the group’s portfolio and execution capability in the US.”