Pernod Ricard Sa · EURONEXT:RI
Pernod Ricard Sa — Pernod Ricard S A — FY2021 Earnings Presentation
49 slides from Pernod Ricard Sa's earnings presentation, Sep 1, 2021
Slide 1: FY21 Full-Year Sales and Results
FY21 FULL-YEAR SALES AND RESULTS 1 September 2021 All growth data specified in this presentation refers to organic growth (constant FX and Group structure), unless otherwise stated. Data may be subject to rounding. This presentation can be downloaded from our website: www.pernod-ricard.com
Slide 2: Contents
3 Executive Summary 7 Winning Strategy 12 Sales Contents 20 Profit 24 Cash Flow and Debt 28 Conclusion and Outlook 30 Appendices 2
Slide 3: Executive Summary
EXECUTIVE SUMMARY
Slide 4: Excellent rebound with Sales and PRO above FY19 levels
Executive Excellent rebound with Sales and PRO above Summary FY19 levels2 and strong growth momentum Very strong diversified FY21 growth • Driven by domestic Must-wins: USA (+16%) and China (+44%) reaching record Sales above $2bn and €1bn +10% • Significant premiumisation, thanks to Strategic Intern
Slide 5: Excellent performance
Excellent performance Executive Summary FY21 (€m) FY reported ∆ FY organic ∆ Sales Mature markets 8,824 5,045 +4.5% +9.7% +4% +18.3% Emerging markets 3,779 +17% PRO Profit from Recurring Operations (PRO) 2,423 +7.2% +18.3% PRO / Sales 27.5% +70bps +213bps • Excellent operating leverage +181bps, driv
Slide 6: Acceleration of 2030 Sustainability and Responsibility roadmap
Executive Acceleration of 2030 Sustainability and Summary Responsibility roadmap New collaborative agreement with International Union for Conservation of Nature for ‘Agriculture & Land Health’ initiative (IUCN) Valuing Circular New global Diversity & Inclusion roadmap “Live without labels”, to PEOPL
Slide 7: Winning Strategy
WINNING STRATEGY
Slide 8: Significant achievements of Transform & Accelerate during FY19-21
Winning Significant achievements of Transform & Accelerate Strategy during FY19-21 Milestones in key markets and portfolio Profound digital transformation management underway US Sales >$2bn and China >€1bn Transformation across all functions GTR, China and India leadership reinforced 6 key Sales and
Slide 9: Fundamental consumer insights driving Transform & Accelerate
Fundamental consumer insights driving Transform Winning Strategy & Accelerate now more compelling than ever Changing consumer values & expectations from brands and corporations New World Order with completely new geopolitical context The real emergence of Middle and Affluent Classes, representing ov
Slide 10: Continuing our transformational journey: The Conviviality Platform
Winning Continuing our transformational journey: Strategy The Conviviality Platform Creating direct interactions between consumers, customers, partners, brands, employees… Leveraging data to offer right product at right time to right consumer, for every occasion, in every market Activating mor
Slide 11: Strategy to maximise long-term value creation
Winning Strategy to maximise long-term value creation Strategy Medium-term ambition (in normalised context): Embed dynamic growth and deliver operating leverage • +4 to +7% topline growth, leveraging key competitive advantages and consistent investment behind key priorities • Focus on pricing and bu
Slide 12: Sales
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Slide 13: Organic Sales growth by Region
Sales Organic Sales growth by Region analysis Sales rebounded above FY19 levels1 with growth across all Regions +10% Americas 30% -6% +2% Excellent broad-based growth with USA, Canada and South America offsetting declines in Travel Organic Sales +14% Retail +12% Very strong growth mainly Asia-RoW dr
Slide 14: Must-win markets
USA: +16% China: +44% Must-win Record Sales > $2bn Record Sales >€1bn markets Very strong double-digit Sell-out 1 for The Glenlivet, Outstanding rebound driven by solid consumer Malibu, Kahlua, Super Premium whiskeys (Aberlour, sentiment Redbreast and US whiskeys), Martell and Tequilas Martell rei
Slide 15: Other key markets
Other key markets Europe1: +4% Americas1 incl. USA: +14% France: +1%, with rebound in H2 thanks to On- Canada: driven mainly by The Glenlivet, Jacob’s trade reopening. Share gains2 on Ricard, Mumm, Creek, Malibu and Kahlua. Dynamic innovation Ballantine’s and Absolut Brazil: excellent growth, thanks
Slide 16: Organic Sales growth by Category
Sales Organic Sales growth by Category analysis Strong premiumisation and innovation % of Sales FY19 FY20 FY21 +10% Strategic +7% Very strong rebound, primarily driven by Martell International 63% -10% in China and Jameson in Brands USA +11% Organic Sales +12% Driven by recovery of Strategic Local 1
Slide 17: Dynamic growth of Strategic International Brands
Sales Dynamic growth of Strategic International Brands analysis Martell: +24% Jameson: +15% Outstanding rebound driven by China growing Strong growth in USA supported by dynamic +46% with strong brand mix at-home consumption and On-trade re-opening Strong underlying Sell-out growth in USA High-singl
Slide 18: Acceleration of Specialty Brands
Sales Acceleration of Specialty Brands analysis +28% Very dynamic Specialty Whiskey portfolio, with Aberlour growing +32% driven by France and USA. Redbreast in strong double-digit growth in all key markets Specialty Brands Continued very strong growth of Lillet at +36%, mainly driven by Germany Str
Slide 19: Other key brands
Other key brands Sales analysis Malibu: +24%, broad-based growth, primarily driven by USA thanks to Off-Trade exposure Beefeater: impacted by On-trade exposure in Spain but growing high teens in H2 with good development in Brazil and Eastern Europe. Good growth of flavours, in particular Blood Orang
Slide 20: Profit
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Slide 21: Very strong organic operating margin expansion +213bps
Very strong organic operating margin Profit expansion +213bps € millions FY20 FY21 FY reported ∆ FY organic ∆ +18.3% 1 Sales 8,448 8,824 +4.5% +9.7% Gross margin after logistics costs (GM) 5,086 5,293 +4% +11% GM / Sales 60.2% 60.0% +64bps Organic PRO Advertising & prom. expenditure (A&P) (1,327) (1
Slide 22: EPS +13%, thanks to increased profit and lower cost of debt
EPS +13%, thanks to increased profit and Profit lower cost of debt € millions FY20 FY21 FY reported ∆ +13% Profit from Recurring Operations 2,260 2,423 +7.2% Financial income (expense) from recurring (328) (262) operations Income tax on recurring operations (468) (526) EPS Minority interests and oth
Slide 23: Strong increase in Group share of Net profit
Profit Strong increase in Group share of Net profit € millions FY20 FY21 Reported ∆ Profit from Recurring Operations 2,260 2,423 +7.2% Non-recurring operating income and expenses (1,283) (62) Operating profit 978 2,361 +142% Financial income (expense) (366) (371) Corporate income tax (258) (667) Non
Slide 24: Cash Flow & Debt
CASH FLOW & DEBT
Slide 25: €1,745m Recurring Free Cash Flow at historical high
FCF & Debt Outstanding Recurring FCF at historical high € millions FY20 FY21 Reported ∆ %∆ Profit from Recurring Operations 2,260 2,423 +162 +7.2% €1,745m Amortisation, depreciation, provision movements and other 362 383 +21 Self-financing capacity from recurring operations 2,623 2,806 +183 +7% Decr
Slide 26: Significant decrease of leverage from very strong Free Cash Flow
FCF Significant decrease of leverage from very & Debt strong Free Cash Flow 2.6x1 Leverage Net Debt / EBITDA € millions 3.2x (972) 2.6x 8,424 Net Debt / EBITDA ratio at +95 7,452 30 June 2021 (1 628) (265) +704 +122 30 June 2020 FCF M&A and Dividends Others (mainly Translation 30 June 2021 other fin
Slide 27: Significant return to stakeholders
FCF Significant return to stakeholders & Debt Proposed dividend of €3.12 per share: +17% vs. FY20, back to historical high of FY19 €3.12 € / share FY16 FY17 FY18 FY19 FY20 FY211 Proposed Dividend 1.88 2.02 2.36 3.12 2.66 3.12 dividend per Share buy-back programme to resume share • As published on 29
Slide 28: Conclusion & Outlook
Pernod Ricard Créaleurs de comivialité
Slide 29: Conclusion & Outlook
Excellent rebound with Sales and PRO above FY19 levels Conclusion (at constant FX) and strong growth momentum & Outlook For FY22, Pernod Ricard expects: • Good Sales momentum, supported by On-trade recovery, resilient Off-trade, dynamic e-commerce and travel improving very gradually, despite ongoing
Slide 30: Appendices
Appendices FY21 Sales & Results 30 1 September 2021
Slide 31: Definitions and reconciliation of non-IFRS measures to IFRS measures
Appendices Organic growth • Organic growth is calculated after excluding the impacts of Definitions and exchange rate movements and acquisitions and disposals. reconciliation of non-IFRS • Exchange rates impact is calculated by translating the current year results at the prior year’s exchange rates.
Slide 32: Upcoming communications
Upcoming communications Date1 Event 21 October 2021 9am CET Q1 FY22 Sales 10 November 2021 2pm CET Annual General Meeting 22 November 2021 3pm CET EMEA LATAM conference Call 10 February 2022 9am CET H1 FY22 Sales and Results 1. Dates are indicative and liable to change FY21 Sales & Results 32 1 Sept
Slide 33: Emerging Markets
Emerging Markets Asia-Rest of World Americas Europe Algeria Malaysia Argentina Albania Angola Mongolia Bolivia Armenia Cambodia Morocco Brazil Azerbaijan Cameroon Mozambique Caribbean Belarus China Namibia Chile Bosnia Congo Nigeria Colombia Bulgaria Egypt Persian Gulf Costa Rica Croatia Ethiopia Ph
Slide 34: Strategic International Brands' organic Sales growth
Strategic International Brands’ organic Sales growth Volumes FY21 Organic Sales growth Volumes Price/mix FY21 (in 9Lcs millions) Absolut 10.5 5% 2% 3% Chivas Regal 3.6 3% -1% 4% Ballantine's 7.6 1% 6% -5% Ricard 4.2 -1% 1% -3% Jameson 8.6 15% 14% 1% Havana Club 4.3 -4% 3% -7% Malibu 4.8 24% 22% 2% B
Slide 35: Sales Analysis by Period and Region
Sales Analysis by Period and Region Net Sales FY20 FY21 Change Organic Growth Group Structure Forex impact (€ millions) Americas 2,449 29.0% 2,627 29.8% 178 7% 336 14% 85 3% (244) -10% Asia / Rest of World 3,467 41.0% 3,640 41.2% 173 5% 372 11% 1 0% (201) -6% Europe 2,532 30.0% 2,557 29.0% 26 1% 101
Slide 36: Summary Consolidated Income Statement
Summary Consolidated Income Statement (€ millions) FY20 FY21 Change Net sales 8,448 8,824 4% Gross Margin after logistics costs 5,086 5,293 4% Advertising and promotion expenses (1,327) (1,393) 5% Contribution after A&P expenditure 3,759 3,900 4% Structure costs (1,499) (1,477) -1% Profit from recur
Slide 37: Profit from Recurring Operations by Region (1/2)
Profit from Recurring Operations by Region (1/2) World (€ millions) FY20 FY21 Change Organic Growth Group Structure Forex impact Net sales (Excl. T&D) 8,448 100.0% 8,824 100.0% 376 4% 810 10% 75 1% (508) -6% Gross margin after logistics costs 5,086 60.2% 5,293 60.0% 206 4% 550 11% 33 1% (376) -7% Ad
Slide 38: Profit from Recurring Operations by Region (2/2)
Profit from Recurring Operations by Region (2/2) Asia / Rest of the World (€ millions) FY20 FY21 Change Organic Growth Group Structure Forex impact Net sales (Excl. T&D) 3,467 100.0% 3,640 100.0% 173 5% 372 11% 1 0% (201) -6% Gross margin after logistics costs 1,969 56.8% 2,060 56.6% 91 5% 219 11% (
Slide 39: Foreign Exchange Impact
Foreign Exchange Impact Average rates evolution On Profit from Forex impact FY21 On Net Sales Recurring (€ millions) Operations FY20 FY21 % US dollar USD 1.11 1.19 7.9% (180) (89) Russian rouble RUB 73.95 89.10 20.5% (41) (33) Turkish Lira TRL 6.76 9.22 36.5% (33) (31) Indian rupee INR 80.13 87.94 9
Slide 40: Sensitivity of profit and debt to EUR/USD exchange rate
Sensitivity of profit and debt to EUR/USD exchange rate Estimated impact of a 1% appreciation of the USD Impact on the income statement(1) (€ millions) Profit from recurring operations + 11 Financial expenses (2) Pre-tax profit from recurring operations + 10 Impact on the balance sheet (€ millions)
Slide 41: Balance Sheet: Assets
Balance Sheet: Assets Assets 30/06/2020 30/06/2021 (€ millions) (Net book value) Non-current assets Intangible assets and goodwill 16,576 16,230 Tangible assets and other assets 3,699 3,963 Deferred tax assets 1,678 1,623 Total non-current assets 21,953 21,816 Current assets Inventories 6,167 6,555
Slide 42: Balance Sheet: Liabilities and Shareholder's Equity
Balance Sheet: Liabilities and Shareholder’s Equity Liabilities and shareholders’ equity 30/06/2020 30/06/2021 (€ millions) Group Shareholders’ equity 13,968 14,829 Non-controlling interests 243 246 of which profit attributable to non-controlling interests 21 13 Total Shareholders’ equity 14,211 15,
Slide 43: Analysis of Working Capital Requirement
Analysis of Working Capital Requirement June June June FY20WC FY21WC (€ millions) 2019 2020 2021 change* change* Aged work in progress 4,788 5,084 5,373 294 206 Advances to suppliers for wine and ageing spirits 12 19 9 7 (10) Payables on wine and ageing spirits (105) (108) (93) (5) 22 Net aged work
Slide 44: Net Debt
Net Debt 30/06/2020 30/06/2021 (€ millions) Current Non-current Total Current Non-current Total Bonds 723 8,599 9,322 70 8,787 8,857 Commercial paper 299 - 299 7 - 7 Other loans and long-term debts 81 192 273 115 108 222 Other financial liabilities 380 192 572 122 108 229 Gross Financial debt 1,103
Slide 45: Change in Net Debt
Change in Net Debt (€ millions) 30/06/2020 30/06/2021 Operating profit 978 2,361 Depreciation and amortisation 350 367 Net change in impairment of goodwill, PPE and intangible assets 1,007 78 Net change in provisions 97 (80) Changes in fair value on commercial derivatives and biological assets (3) 1
Slide 46: Debt Maturity at 30 June 2021
Debt Maturity at 30 June 2021 € bn 1.4 0.9 1.7 1.1 1.0 1.0 1.0 0.4 0.7 0.8 0.7 0.5 0.4 0.2 - - - - 0.0 - -0.1 20/21 21/22 22/23 23/24 24/25 25/26 26/27 27/28 28/29 29/30 30/31 31/32 … 41/42 … 50/51 -0.6 Cash Other debts Commercial paper Bonds Syndicated credit -2.1 -1.1 Strong liquidity position at
Slide 47: Bond Details
Bond Details Currency Par value Coupon Issue date Maturity date € 500 m 1.875% 28/09/2015 28/09/2023 € 1,500 m o/w: € 500 m 0.000% 24/10/2023 € 500 m 0.500% 24/10/2019 24/10/2027 € 500 m 0.875% 24/10/2031 € 650 m 2.125% 29/09/2014 27/09/2024 EUR € 1,500 m o/w: € 750 m 1.125% 01/04/2020 07/04/2025 €
Slide 48: Net debt / EBITDA evolution
Net debt / EBITDA evolution Closing rate Average rate(1) EUR/USD rate Jun FY20 -> Jun FY21 1.12 -> 1.19 1.11 -> 1.19 Ratio at 30/06/2020 3.2 3.2 EBITDA & cash generation excl. Group structure (0.9) (0.9) effect and forex impacts Group structure and forex impacts 0.3 0.3 Ratio at 30/06/2021 2.6 2.6 (
Slide 49: Diluted EPS
Diluted EPS (x 1,000) FY20 FY21 Number of shares in issue at end of period 265,422 261,877 Weighted average number of shares in issue (pro rata temporis) 265,422 262,143 Weighted average number of treasury shares (pro rata temporis) (2,564) (1,347) Dilutive impact of stock options and performance sh