Pernod Ricard SA · EURONEXT:RI
Pernod Ricard SA — Q1 FY2010/11 Earnings Presentation
42 slides from Pernod Ricard SA's earnings presentation, Oct 21, 2010
Slide 1: 2010/11 Q1 Sales and Guidance
2010/11 Q1 Sales and Guidance Very good 1st quarter 2010/11, including organic sales growth of +10% to € 1,879 million Guidance: Organic growth close to +6% in 2010/11 profit from recurring operations Net Debt / EBITDA ratio close to 4 at 30 June 2012 This presentation can be downloaded from our web
Slide 2: Presentation structure
Presentation structure • Overall analysis • Portfolio review • Growth by region • Conclusion and outlook 2
Slide 3: Changes to Financial Communication Calendar
Changes to Financial Communication Calendar Simplification of the Financial Communication calendar including earlier communication of full year guidance New calendar for 2010 and 2011: 21 October 2010: 2010/11 first quarter sales and 2010/11 full-year guidance 10 November 2010: Annual General Me
Slide 4: 2010/11 Key Figures
2010/11 Key Figures Sales: € 1,879 million (+14%), with organic growth of +10% (vs - 4%* in Q1 2009/10) driven by Top 14: volume +10%, sales +17%* New economies** achieved sales organic growth of +20% in Q1 2010/11, a strong acceleration compared to the trend prevailing at the end of the previous
Slide 5: 1st Quarter 2010/11 Environment
1st Quarter 2010/11 Environment High foreign exchange volatility (in particular rise of EUR against most other currencies) EUR/USD Significant decline in USD in exchange rate Q1 2010/11, but average 1.36 at 30/09/2010 EUR/USD rate of 1.29, which remained substantially more favourable than in Q1 20
Slide 6: Sales growth in 1st quarter 2010/11
Sales growth in 1st quarter 2010/11 Improvements in trends noted in Q4 2009/10 were strengthened: • Faster growth in emerging markets, driven in particular by very strong demand for Martell and Indian whiskies • Confirmation of recovery noted since HY2 2009/10 in Russia, South Korea and Duty Free
Slide 7: Main technical effects of Q1 2010/11
Main technical effects of Q1 2010/11 − Significant sales decline in Venezuela due to difficulties in access to USD (Chivas, Something Special) + Replenishment of our wholesalers’ inventories of Martell in China, following consumer off-take in excess of shipments in Q4 2009/10 + Favourable comparativ
Slide 8: Sales growth in 1st quarter 2010/11
Sales growth in 1st quarter 2010/11 116 (39) 1,879 155 1,646 -2% +7% +10% +14% Q1 09/10 Organic Forex Group Q1 10/11 sales growth effect structure sales +10% organic growth driven by Top 14 (+17%) Very positive forex effect, primarily due to the rise in value of the USD vs EUR (average EUR/USD r
Slide 9: Analysis of organic sales growth
Analysis of organic sales growth FY 2009/10 Q1 2010/11 Top 14 Spirits & Champagne +4% +17% Priority Premium Wines -2% +5% 18 key local spirits brands +4% +2% Other -3% -2% Total +2% +10% Very favourable growth mix Improved trend (Top 14, Wines) Premium brands* represented 73% of sales in Q1 2010/11
Slide 10: Presentation structure
Presentation structure • Overall analysis • Portfolio review • Growth by region • Conclusion and outlook 10
Slide 11: Portfolio review: Top 14 Spirits & Champagne
Portfolio review Top 14 Spirits & Champagne Volume: +10% Sales: +17%* % of Group sales: 60% *Organic growth 11
Slide 12: Top 14 Spirits & Champagne: Outstanding overall performance in Q1
Top 14 Spirits & Champagne Outstanding overall performance in Q1 Organic Organic volume sales Price/mix 9 brands out of 14 effect growth growth reported double- Absolut +9% +7% -2% digit organic Chivas +14% +14% +0% Ballantine’s +11% +16% +6% sales growth Jameson +26% +27% +1% The Glenlivet +15% +
Slide 13: Absolut: Volume +9% Sales +7%
Volume +9% Sales* +7% Good start to the year, in line with HY2 2009/10 Negative price / mix effect (-2%): impact of the downward pricing adjustment in the US Marked improvement in the US: Q1 2010/11 shipments and depletions +2%. Nielsen and NABCA +9% Very strong growth in France, Germany, the
Slide 14: Chivas: Volume +14% Sales +14%
Volume +14% Sales* +14% Excellent Q1, partly bolstered by technical effects Asia: double-digit growth. Continuing recovery in Duty Free markets and China and rapid development in Vietnam. Favourable technical effect in Japan (+ 30,000 9L cases ) Significant growth in Americas: • US: Q1 2010/11 d
Slide 15: Ballantine's: Volume +11% Sales +16%
Volume +11% Sales* +16% Very strong recovery of Ballantine’s, both in Europe and in Asia, including a very favourable price / mix effect Ballantine’s Finest (volume +9%): very strong growth in many markets (France, Switzerland, Poland, Latin America, Asia and Duty Free markets), which offset the d
Slide 16: Martell: Volume +31% Sales +45%
Volume +31% Sales* +45% Continuing outstanding growth by Martell Further strong improvement in mix / price for the fifth consecutive year (impact of strong growth in superior qualities and price increases of April 2010) Very strong growth in Asia: • China: strong consumer demand, market share ga
Slide 17: Jameson and Havana Club
& Volume +26% Sales* +27% US: continuing very strong increase in depletions (+22%) during Q1 2010/11 (Nielsen +22% and NABCA +25%). Improved trend in Europe (double-digit growth), due in particular to Eastern Europe (Russia, Ukraine), Portugal and recovery in Ireland. New variations on the “Ea
Slide 18: Royal Salute and The Glenlivet
& Volume +39% Sales* +37% Very strong development of Royal Salute in its key markets: China, Taiwan, Vietnam and Duty Free Asia (against favourable comparatives) Launch of “62 Gun Salute - The Pinnacle of Scotch Whisky”, in Taiwan and in South Korea Volume +15% Sales* +14% Glenlivet consolidat
Slide 19: Ricard and Beefeater
& Volume -1% Sales* +3% France: good performance (+3%) due to off-trade market share gains (Nielsen stable in a market at -3%) Double-digit decline on the Spanish border with France, stability in all other markets “R tricycles” advertising outside cafés located in trendy Parisian districts fro
Slide 20: Malibu and Kahlua
& Volume +7% Sales* +2% Strong development of the brand due to innovation: the launch of Malibu Cocktails in the US. Volume stable excluding cocktails Good trend for the brand in the US. Excluding cocktails, depletions +2%, Nielsen +2% and NABCA +6% Contrasting situation in Europe (sales virtu
Slide 21: Mumm and Perrier-Jouët
& Recovery of champagne brands Volume +12% Sales* +13% France: off-trade growth (Nielsen +1% in line with the market), including a slight increase in shelf price. Gradual recovery in on-trade Confirmed rebound in all key export markets, excluding the UK Launch of new "Blanc de Blancs" and "Bla
Slide 22: Priority Premium Wines
Priority Premium Wines Improved overall performance in Q1 2010/11 Volume: +5% Sales: +5%* % of Group sales: 5% *Organic growth 22
Slide 23: Jacob's Creek and Brancott Estate
& Volume +5% Sales* +4% The brand enjoyed renewed volume growth following two years of decline Growth in high potential markets: US, Canada and China. Significant shipments to the Netherlands (promotions carried out in Q1 in 2010/11 vs Q2 in 2009/10) Decline in the UK and Australia (high value
Slide 24: Campo Viejo and Graffigna
& Volume +4% Sales* +11% Strong growth in the US, Germany and the Netherlands Virtual stability in Spain Continuing decline in the UK (high value strategy) New tapas activation campaign in Ireland, Sweden and the UK Volume +19% Sales* +22% Strong growth in the US, Graffigna’s leading expor
Slide 25: 18 key local spirits brands
18 key local spirits brands Volume: +3% Sales: +2%* % of Group sales: 16% *Organic growth 25
Slide 26: 18 key local spirits brands: good overall performance
18 key local spirits brands Good overall performance of the 18 key local spirits brands: +3% in volume and +2%* in value (vs +2%* in Q1 2009/10) • Continuing very strong growth of local whisky brands in India: Royal Stag and Blender’s Pride • Return to growth for premium Scotch whisky Imperial in S
Slide 27: Presentation structure
Presentation structure • Overall analysis • Portfolio review • Growth by region • Conclusion and outlook 27
Slide 28: Analysis of sales by geographic region
Analysis of sales by geographic region FY 09/10 FY 10/11 10% France 9% 31% Europe 37% 28% Americas 31% Asia and 28% RoW 26% Organic sales growth FY 2009/10 Q1 2010/11 France - +5% Europe -5% +2% Americas +4% +3% Asia and RoW +9% +25% Total +2% +10% Trend clearly improved in most regions Asia – RoW c
Slide 29: Asia – Rest of World: very buoyant Q1
Asia – Rest of World: very buoyant Q1 Group (€ millions) Q1 09/10 Q1 10/11 Organic growth Forex effect structure Sales 514 715 +25% +17% -2% Asia: strong growth in all markets, Thailand being the sole exception • Organic growth rates in excess of 30% in China, India, Vietnam, Japan, Taiwan, Indone
Slide 30: Americas: encouraging start to the year
Americas: encouraging start to the year Group (€ millions) Q1 09/10 Q1 10/11 Organic growth Forex effect structure Sales 456 482 +3% +3% - US: • Stable sales (+2%* on Top 14) and depletions • A recovering market. PR USA slightly outperformed the market in Q1, in line with HY2 2009/10. Nielsen +3%
Slide 31: Europe: stabilisation in the West, recovery in the East
Europe: stabilisation in the West, recovery in the East Group (€ millions) Q1 09/10 Q1 10/11 Organic growth Forex effect structure Sales 520 517 +2% +3% -5% Improved performance in Europe (+2%* vs -5%* in 2009/10), including very contrasting situations depending on countries and categories. A numb
Slide 32: France: strong resilience confirmed
France: strong resilience confirmed Group (€ millions) Q1 09/10 Q1 10/11 Organic growth Forex effect structure Sales 157 164 +5% - - Sales driven by the strong performance of the Top 14 (+7%*) • Growth of Ricard, Ballantine’s, Havana Club and ABSOLUT • Recovery of champagne brands Mumm and Perrier
Slide 33: Growth in new economies
Growth in new economies Q1 09/10 sales Q1 10/11 sales New 33% economies* 37% Mature markets 67% 63% Organic sales growth of +20% in Q1 2010/11 Share of new economies* in Group sales jumped from 33% to 37% New economies* are again expected to significantly boost Group sales in 2010/11 * Annual GN
Slide 34: Presentation structure
Presentation structure • Overall analysis • Portfolio review • Growth by region • Conclusion and outlook 34
Slide 35: Conclusion
Conclusion The trends noted in Q1 2010/11 are encouraging for the full financial year: • Strong sales growth (enhanced by favourable technical effects overall) • Very positive price / mix effect: Top 14 premium brands driving growth, supported by increased marketing investments • Strong continued
Slide 36: Outlook
Outlook Our guidance is: 1) Organic growth close to +6% in profit from recurring operations for the full 2010/11 financial year 2) Net Debt* / EBITDA ratio close to 4 at the 30 June 2012 year-end * Net Debt translated at the average exchange rates for the year 36
Slide 37: Pernod Ricard
WM, me, (=, Pernod Ricard e — Créateurs de comvia/ité
Slide 38: Appendices
MZ = = Pernod Ricard Créatetirs de comivialité Appendices 6 Oa SO
Slide 39: Strategic Brands Organic Growth
Strategic Brands Organic Growth Volume organic Net Sales organic Q1 2010/11 growth growth Absolut 9% 7% Chivas Regal 14% 14% Ballantine's 11% 16% Ricard -1% 3% Jameson 26% 27% Malibu 7% 2% Beefeater 4% 5% Kahlua -4% -6% Havana Club 13% 11% Martell 31% 45% The Glenlivet 15% 14% Royal Salute 39% 37% M
Slide 40: Sales by Region
Sales by Region Net Sales Q1 2009/10 Q1 2010/11 Change Organic Growth Group Structure Forex impact (€ millions) France 157 10% 164 9% 7 5% 7 5% (0) 0% 0 0% Europe excl. France 520 32% 517 28% (2) 0% 10 2% (26) -5% 14 3% Americas 456 28% 482 26% 26 6% 13 3% (1) 0% 15 3% Asia / Rest of the World 514 3
Slide 41: Foreign Exchange Effect
Foreign Exchange Effect Forex impact Q1 2010/11 Average rates movement On Net (€ millions) Sales 2009/10 2010/11 % US Dollar USD 1.43 1.29 (9.8%) 38 Russian Ruble RUB 44.78 39.53 (11.7%) 5 Mexican Peso MXN 18.97 16.52 (12.9%) 7 Chinese Yuan CNY 9.77 8.74 (10.6%) 21 Ukrainian Hryvnia UAH 11.73 10.22
Slide 42: Group Structure Effect
Group Structure Effect Group structure Q1 2010/11 On Net Sales (€ millions) Total Group Structure (39) 42