Pernod Ricard Sa · EURONEXT:RI
Pernod Ricard Sa — Pernod Ricard S A — H1 FY22 Earnings Presentation
46 slides from Pernod Ricard Sa's earnings presentation, Feb 10, 2022
Slide 1: FY22 Half-Year Sales and Results
FY22 HALF-YEAR SALES AND RESULTS 10 February 2022 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 8 Sales 18 Profit Contents 22 Cash Flow and Debt 25 Conclusion and Outlook 27 Appendices 2
Slide 3: Executive Summary
EXECUTIVE SUMMARY
Slide 4: Record breaking Sales and PRO at c. €6bn and c. €2bn
Executive Summary Record breaking Sales and PRO1 at c. €6bn and c. €2bn +25% Very strong Net Sales performance with robust demand in most markets Reported PRO1 • Diversified growth across regions and categories with On-trade rebound and Off-trade resilience Organic PRO +22% • All Must-Win markets gr
Slide 5: Excellent performance with Sales and PRO well above pre-Covid levels
Executive Summary Excellent performance with Sales and PRO well above pre-Covid levels1 H1 reported ∆ organic ∆ vs. FY22 vs. LY vs. LY pre-Covid1 Sales 5,959 +20% +16.8% +13% Mature markets 3,184 +13% +8% +32% Emerging markets Profit from Recurring Operations (PRO) 2,775 1,998 +25% +21% +22.1% +21%
Slide 6: Creating value for all our stakeholders
Executive Creating value for all our stakeholders Summary Leader in the beverage industry LEAD participant status Valuing people Strong employee engagement Taking Care of Each Other They tell us they have: Developing together the future of Clarity of the Pernod Ricard Strategy work to meet our emplo
Slide 7: Agility to gain exposure to fast growing categories and scale acquired brands
Executive Agility to gain exposure to fast growing categories and scale Summary acquired brands Leveraging unique partnerships with industry pioneers Acquisition of The Whisky Exchange, a leading online spirits retailer, reinforcing positioning in fast growing e-commerce Minority stake in U.S. based
Slide 8: Sales
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Slide 9: Transform and Accelerate strategy delivering double-digit growth across all Regions
Sales Transform and Accelerate strategy delivering double-digit growth analysis across all Regions H1 FY20 H1 FY21 H1 FY22 vs. pre-covid¹ +20% +2% Very dynamic growth in the +20% Americas 27% +2% region, notably USA, Brazil Reported Sales and Travel Retail +14% +3% Asia-RoW Excellent growth driven b
Slide 10: All Must-Win markets in very dynamic growth
All Must-Win markets in very dynamic growth USA: +9% / +17%1 China: +14% / +28%1 Strong On-trade recovery and resilient Off-trade driving good sell- Good growth, with good MAF2 out growth Solid Martell sell-out despite localised On-trade disruptions in H1 Growth driven by Jameson, Martell and Super
Slide 11: Excellent growth momentum and market share gains in most markets
Excellent growth momentum and market share gains in most markets Europe1: +21% Americas1 incl. USA: +14% France: rebound driven by On-trade recovery with Champagne Canada: modest decline on a high comparison. Market share gain momentum and strong growth of Ballantine’s and Absolut on Absolut, Jameso
Slide 12: Excellent growth of Strategic International Brands and Specialty portfolio
Sales Excellent growth of Strategic International Brands and Specialty portfolio analysis driving strong price/mix % of Sales H1 FY20 H1 FY21 H1 FY22 vs. pre-covid2 +20% Strategic International Brands 65% -6% +4% Broad-based rebound with all brands growing, notably Jameson, Martell, Ballantine’s, Ab
Slide 13: All brands benefiting from resilient Off-trade and recovery of On-trade
Sales All brands benefiting from resilient Off-trade and recovery of On-trade in analysis all markets Martell: +11% / +8%1 Absolut: +23% / +9%1 Continued growth momentum in China driven mainly by Noblige Excellent international development, +35% outside of USA and Cordon Bleu Broad-based rebound wit
Slide 14: Strong media investments behind our brands
Sales analysis Strong media investments behind our brands Chivas released the two limited-edition bottles Balmain x New media campaign in USA ’Soar Beyond Chivas XV collection, developed in partnership with Olivier the Expected’, with Janelle Monae Rousteing Perrier-Jouët introduced ‘Fill Your World
Slide 15: Innovation in strong growth +43%
Sales analysis Innovation in strong growth +43% Launch of Jameson Orange Continued development of Ballantine’s and The Glenlivet 15yo with broad Beefeater Light in Spain based growth Very strong development of Absolut Martell Blue Swift in very strong growth in Outstanding development of Chivas Wate
Slide 16: Specialty Brands maintaining very strong momentum across regions
Sales Specialty Brands maintaining very strong momentum across analysis regions +21% Aberlour: +9%, developing strongly notably in China, Eastern Europe and France Redbreast in strong double-digit growth driven by USA and Ireland Specialty Brands Lillet in high single-digit growth, on high compariso
Slide 17: Other Strategic International Brands growing
Sales analysis Other Strategic International Brands growing Malibu: +9%, driven by Western Europe, USA and South Korea Beefeater: +31%, rebounding strongly mainly due to On-trade recovery in Spain and outstanding growth in Brazil. Continued double-digit growth of Beefeater Pink Havana Club: +12%, mo
Slide 18: Profit
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Slide 19: Dynamic Sales with A&P spend phasing resulting in strong operating margin expansion
Dynamic Sales with A&P spend phasing resulting in strong Profit operating margin expansion +147bps € millions H1 FY21 H1 FY22 reported ∆ organic ∆ Sales 4,985 5,959 +20% +17% +25% Gross margin after logistics costs (GM) 3,021 3,640 +20% +18% GM / Sales 60.6% 61.1% +39bps Advertising & prom. expendit
Slide 20: Excellent PRO growth driving significant EPS increase
Profit Excellent PRO growth driving significant EPS increase € millions H1 FY21 H1 FY22 reported ∆ +33% Profit from Recurring Operations Financial income (expense) from recurring operations 1,595 (151) 1,998 (102) +25% Income tax on recurring operations (337) (436) EPS Minority interests and other (
Slide 21: Excellent Group Share of Net Profit
Net Profit Excellent Group Share of Net Profit +44% € millions H1 FY21 H1 FY22 Reported ∆ Profit from Recurring Operations 1,595 1,998 +25% Non-recurring operating income and expenses (61) (2) Operating profit 1,534 1,995 +30% Group share of Financial income (expense) (254) (135) Net Profit Corporat
Slide 22: Cash Flow & Debt
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Slide 23: Very strong H1 cash generation
FCF Very strong H1 cash generation & Debt € millions H1 FY21 H1 FY22 Reported ∆ %∆ Profit from Recurring Operations 1,595 1,998 +403 +25% €1.4bn Amortisation, depreciation, provision movements and other 191 201 +10 Self-financing capacity from recurring operations 1,786 2,198 +413 +23% Decrease (inc
Slide 24: Dynamic financial policy supported by consistent strong cash delivery
FCF Dynamic financial policy supported by consistent strong cash & Debt delivery Net Debt / EBITDA 2.4x1 ratio 2.6x 2.4x¹ € millions +471 7,923 +74 Net Debt / EBITDA 7,452 +168 +820 ratio at 31 Dec 2021 (1 320) +729 30 June 2021 FCF M&A, Share Dividends Others (mainly FX 31 Dec 2021 buy-back and lea
Slide 25: Conclusion & Outlook
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Slide 26: Conclusion & Outlook
Continued execution of Transform & Accelerate strategy delivering excellent H1 Sales and PRO1 growth Conclusion & In an ongoing volatile environment with potential disruptions related to Covid-19, Pernod Ricard expects for FY22: Outlook • Continued On-trade rebound, Off-trade resilience and Travel R
Slide 27: Appendices
Appendices H1 FY22 Sales & Results 27 10 February 2022
Slide 28: Definitions and reconciliation of non-IFRS measures to IFRS measures
Appendices Organic growth • Organic growth is calculated after excluding the impacts of exchange rate movements and acquisitions and disposals. Definitions and reconciliation of • Exchange rates impact is calculated by translating the current year results at non-IFRS measures to IFRS measures the pr
Slide 29: Upcoming communications
FCF & Debt Upcoming communications Date1 Event 28 April 2022 Q3 FY22 Sales conference call 10 May 2022 North America conference call 8 June 2022 Capital Market Day in Paris 24 June 2022 Asia conference call 1. Dates are indicative and liable to change H1 FY22 Sales & Results 29 10 February 2022
Slide 30: 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 31: Strategic International Brands' organic Sales growth
Strategic International Brands’ organic Sales growth Volumes Organic Net Sales H1 FY22 growth of which Volume of which Price/mix (in 9Lcs millions) H1 FY22 Absolut 6.9 +23% +22% +1% Chivas Regal 2.6 +23% +25% (2)% Ballantine's 5.3 +29% +25% +4% Ricard 2.4 +2% +5% (3)% Jameson 5.8 +22% +22% +0% Havan
Slide 32: Sales Analysis by Period and Region
Sales Analysis by Period and Region Net Sales H1 FY21 H1 FY22 Change Organic Growth Group Structure Forex impact (€ millions) Europe 1,456 29.2% 1,797 30.2% +341 +23% +300 +21% +19 +1% +22 +2% Americas 1,402 28.1% 1,638 27.5% +235 +17% +196 +14% +17 +1% +22 +2% Asia / Rest of World 2,127 42.7% 2,524
Slide 33: Summary Consolidated Income Statement
Summary Consolidated Income Statement (€ millions) H1 FY21 H1 FY22 Change Net sales 4,985 5,959 20% Gross Margin after logistics costs 3,021 3,640 20% Adverti s i ng a nd promotion expens es (706) (840) 19% Contribution after A&P expenditure 2,315 2,801 21% Structure cos ts (721) (803) 11% Profit fr
Slide 34: Profit from Recurring Operations by Region (1/2)
Profit from Recurring Operations by Region (1/2) World (€ millions) H1 FY21 H1 FY22 Change Organic Growth Group Structure Forex impact Net sales 4,985 100.0% 5,959 100.0% +974 +20% +834 +17% +36 +1% +104 +2% Gross margin 3,021 60.6% 3,640 61.1% +619 +20% +532 +18% +17 +1% +69 +2% Advertising & promo
Slide 35: Profit from Recurring Operations by Region (2/2)
Profit from Recurring Operations by Region (2/2) Asia / Rest of the World (€ millions) H1 FY21 H1 FY22 Change Organic Growth Group Structure Forex impact Net sales 2,127 100.0% 2,524 100.0% +397 +19% +338 +16% +0 +0% +60 +3% Gross margin 1,232 57.9% 1,458 57.8% +226 +18% +198 +16% +0 +0% +29 +2% Adv
Slide 36: Foreign Exchange Impact
Foreign Exchange Impact Forex impact H1 FY22 Average rates evolution On Profit from (€ millions) On Net Sales Recurring H1 FY21 H1 FY22 % Operations US dollar USD 1.18 1.16 (1.7)% +23 +17 Chinese yuan CNY 7.99 7.47 (6.6)% +56 +33 Indian rupee INR 87.48 86.52 (1.1)% +7 +2 Russian rouble RUB 88.61 84.
Slide 37: 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 +15 Financial expenses (1) Pre-tax profit from recurring operations +14 Impact on the balance sheet (€ millions) I
Slide 38: Balance Sheet: Assets
Balance Sheet: Assets Assets 30/06/2021 31/12/2021 (€ millions) (Net book value) Non-current assets Intangi bl e a s s ets a nd goodwi l l 16,230 16,857 Ta ngi bl e a s s ets a nd other a s s ets 3,963 4,146 Deferred tax a s s ets 1,623 1,687 Total non-current assets 21,816 22,690 Current assets Inv
Slide 39: Balance Sheet: Liabilities and Shareholder's Equity
Balance Sheet: Liabilities and Shareholder’s Equity Liabilities and shareholders’ equity 30/06/2021 31/12/2021 (€ millions) Group Shareholders’ equity 14,829 15,757 Non-control l i ng i nteres ts 246 265 of which profit attributable to non-controlling interests 13 21 Total Shareholders’ equity 15,07
Slide 40: Analysis of Working Capital Requirement
Analysis of Working Capital Requirement June December June December H1 FY21 WC H1 FY22 WC (€ millions) 2020 2020 2021 2021 change* change* Aged work i n progres s 5,084 5,135 5,373 5,446 67 21 Adva nces to s uppl i ers for wi ne a nd a gei ng s pi ri ts 19 10 9 14 (8) 5 Pa ya bl es on wi ne a nd a g
Slide 41: Net Debt
Net Debt 30/06/2021 31/12/2021 (€ millions) Current Non-current Total Current Non-current Total Bonds 70 8,787 8,857 785 8,236 9,021 Syndicated loan - - - - - - Commercial paper 7 - 7 170 - 170 Other loans and long-term debts 115 108 222 163 94 258 Other financial liabilities 122 108 229 333 94 428
Slide 42: Change in Net Debt
Change in Net Debt (€ millions) 31/12/2020 31/12/2021 Opera ti ng profi t 1,534 1,995 Depreci a tion a nd a morti s a tion 179 189 Net cha nge i n i mpa i rment of goodwi l l , PPE a nd i ntangi bl e a s s ets 6 Net cha nge i n provi s i ons (31) (22) Retrea tment of contri butions to pens i on pl a
Slide 43: Debt Maturity at 31 December 2021
2.0 Debt Maturity at 31 December 2021 € bn - 1.5 - 1.0 1.7 - 1.5 - - 1.1 0.5 - 1.0 - 0.8 0.8 0.7 0.2 0.5 0.5 0.4 0.2 0.0 0.0 0.0 - 0.0 - 0.0 - 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 Cash Other debts Champagne credit -0.5 Commercial paper Bonds Syndicated cr
Slide 44: Bond Details
Bond Details Currency Par value Coupon Issue date Maturity date € 1,500 m o/w: € 500 m 0.000% 24/10/2019 24/10/2023 € 500 m 0.500% 24/10/2027 € 500 m 0.875% 24/10/2031 € 650 m 2.125% 29/09/2014 27/09/2024 € 1,500 m o/w: EUR € 750 m 1.125% 01/04/2020 07/04/2025 € 750 m 1.750% 08/04/2030 € 500 m o/w:
Slide 45: Net debt / EBITDA evolution
Net debt / EBITDA evolution Closing rate Average rate(1) EUR/USD rate 30/06/2021 -> 31/12/2021 1.19 -> 1.13 1.19 -> 1.18 Ratio at 30/06/2021 2.6 2.6 EBITDA & cash generation excl. Group structure effect and forex impacts -0.4 -0.4 Group structure and forex impacts 0.2 0.1 Ratio at 31/12/2021 2.4 2.4
Slide 46: Diluted EPS
Diluted EPS (x 1,000) HY FY21 HY FY22 Number of shares in issue at end of period 261,877 261,877 Weighted average number of shares in issue (pro rata temporis) 262,315 261,877 Weighted average number of treasury shares (pro rata temporis) (1,654) (1,656) Dilutive impact of stock options and performa