Pernod Ricard Sa · EURONEXT:RI
Pernod Ricard Sa — Investor Day (2018)
43 slides from Pernod Ricard Sa's investor day presentation, Jun 5, 2018
Slide 1: Pernod Ricard Asia: Reinforcing Leadership and Setting Up a New Phase of Growth
Pernod Ricard Asia REINFORCING LEADERSHIP AND SETTING UP A NEW PHASE OF GROWTH
Slide 2: Welcome
WELCOME Philippe Guettat Jean-Etienne Gourgues Chairman & CEO, Pernod Ricard Asia Managing Director, Pernod Ricard China Philippe Guettat has been Chairman and CEO of Jean-Etienne Gourgues has been the Managing Pernod Ricard Asia since July 2015. Director of Pernod Ricard China since July 2014. Phil
Slide 3: Vision and Strategy
VISION AND STRATEGY #1 A CLEAR VALUE LEADER IN IMPORTED SPIRITS OPERATIONAL EXCELLENCE PORTFOLIO MANAGEMENT Best in class operational efficiency Diversify sources of growth by brands and markets PREMIUMISATION & LUXURY TALENT DEVELOPMENT Seize pricing opportunities when relevant Recruit, develop and
Slide 4: 9M FY18: Return to Strong Growth Fuelled by China and India
9M FY18: RETURN TO STRONG GROWTH FUELLED BY CHINA AND INDIA PERNOD RICARD ASIA China Korea Strong growth of Martell; Declining Imperial but +11% Chivas responding positively trend improving thanks vs stable LY (6)% to Strategic Int’l Brands +19% to relaunch plan and growth vs (14)% LY Japan vs +2% L
Slide 5: Diversifying Sources of Growth by Brand and Market
DIVERSIFYING SOURCES OF GROWTH BY BRAND AND MARKET Martell strong growth Seagram’s Whiskies with volume momentum in India, across all price segments and markets enhanced by favorable basis of comparison +16% +13% #1 #1 Cognac in China Bottled in India and SEA premium Whiskies Chivas returning to gro
Slide 6: India Back to Strong Growth After Regulatory Headwinds in FY17
INDIA BACK TO STRONG GROWTH AFTER REGULATORY HEADWINDS IN FY17 After a particularly challenging FY17… … Pernod Ricard India is back to strong and diversified growth DEMONETIZATION 9M FY18 Sales +14% November 2016 vs +1% in FY17 … and expanding its value leadership HIGHWAY BAN April 2017 Volume Marke
Slide 7: India's Value Leadership Is Underpinned by a Robust Business Model
INDIA’S VALUE LEADERSHIP IS UNDERPINNED BY A ROBUST BUSINESS MODEL Unique Premium Brands Portfolio • Seagram’s whiskies leader in Premium+ Western Style Spirits • Strong #2 in Bottled in Origin Whiskies, fast growing Clear Commercial and marketing excellence leader in Best in class operational effic
Slide 8: Korea: Execution of Turnaround Plan on Track
KOREA: EXECUTION OF TURNAROUND PLAN ON TRACK ✓ Completed company ✓ Clarified consumer- ✓ Revamped sales ✓ Restored cohesion overhaul mid-2016 centric priorities organization and winning mindset YTD Mar (6)% vs (14)% LY Imperial #3 Strategic International brands #1 (9)%* In local whiskies +5% In vodk
Slide 9: Key Growth Accelerators
KEY GROWTH ACCELERATORS PREMIUMIZATION ROUTE TO NEW INNOVATION & LUXURY MARKET GEOGRAPHIES 9
Slide 10: Strong Consumer Trade-up in India Across Local and International Portfolio
PREMIUMIZATION STRONG CONSUMER TRADE-UP IN INDIA ACROSS LOCAL & LUXURY AND INTERNATIONAL PORTFOLIO Bottled in India Bottled in Origin 9M FY18 Sales Blender’s Pride Reserve Collection + 30% 9M FY18 Sales Price Index >120 Reserve vs. Blender’s Pride Collection + 24% Royal Stag Barrel Select + 36% Stra
Slide 11: Perrier-Jouët and Mumm as Key Engines for Growth in Japan
PREMIUMIZATION PERRIER-JOUËT AND MUMM AS KEY ENGINES FOR & LUXURY GROWTH IN JAPAN Strong activation reinforcing Perrier-Jouët’s equity Correcting value gap with Mumm Grand Cordon 9M FY18 Sales +12% 9M FY18 Sales +13% Price Index (Competitor = 100) 105 100 90 Perrier-Jouët Mumm FY17 Competitor Mumm F
Slide 12: Successful Launch of Martell Cordon Bleu Extra
PREMIUMIZATION SUCCESSFUL LAUNCH OF MARTELL CORDON BLEU EXTRA & LUXURY AS SOLID TRADE-UP PROPOSITION TO CORDON BLEU Cordon Bleu Extra concept: • The Extra-ordinary expression of Martell Cordon Bleu • The original Martell Cordon Bleu blend boosted in Very Old Borderies 135 100 CB CB Extra Price Index
Slide 13: Low ABV Innovation to Reset Growth in Korea
INNOVATION LOW ABV INNOVATION WITH OBJECTIVE TO RESET GROWTH IN KOREA Declining market shifting to low ABV Launch of a complete Low ABV portfolio Local Whisky market (CAGR -6%) Launch of 35 by Imperial 0% First Low Abv that targets “down to earth” buddies (2016) 100% 51% 49% '12 '13 '14 '15 '16 '17
Slide 14: Disrupting Thailand with Royal Stag at Value Sweet Spot
INNOVATION DISRUPTING THAILAND WITH ROYAL STAG AT VALUE SWEET SPOT Large market opportunity Focused activations that drive trial and repeat Local Admix Market 2011 to 2017 Volume pool of CAGR +4%27.5 c.30M 9lc Source: IWSR 2017, PR analysis Competitive Price Point Competitor 1 Competitor 2 Results @
Slide 15: Locally Relevant Innovation That Drives Market Success
INNOVATION LOCALLY RELEVANT INNOVATION THAT DRIVES MARKET SUCCESS Address popularity and growth Enter second largest western Win market share Premiumization of Chivas 18 on Japanese craft whisky style spirits category in India in Taiwan Malts category Fine blend of Scotch finished in rare Crafted wi
Slide 16: Vietnam: Redesigned Organization Driving Commercial Excellence
ROUTE TO VIETNAM: REDESIGNED ORGANIZATION DRIVING MARKET COMMERCIAL EXCELLENCE Prioritize distribution in 28 provinces (out of 83) Set up of 2-tier wholesaling system Champion Vinh Phuc Bac Giang 1 Hanoi ➢ Tailored trade Hai Duong Champion Thai Binh terms and Thanh Hoa Nam Dinh sales/services suppor
Slide 17: Cambodia: Start of Pernod Ricard Cambodge
ROUTE TO MARKET CAMBODIA: START OF PERNOD RICARD CAMBODGE A small but attractive market for the mid-term with stable regulations for alcohol Fair and stable duty and GDP Growth +6.9%* tax system • Priorities: • Capture and recruit emerging adult middle-class • Lead whisky category development Inflat
Slide 18: Establishing Presence in New Geographies: Myanmar
NEW GEOGRAPHIES ESTABLISHING PRESENCE IN NEW GEOGRAPHIES: MYANMAR Promising and fast-changing country Large premiumizing local whisky market Large & Young 13M 9lc WSS** market 3 leading local players GDP growth +5.9%* Population growing 5-10% y.o.y 54M incl. 62% below 35 yo 26% New Government Emergi
Slide 19: Recently Announced Partnership with Local Whisky Key Player
NEW RECENTLY ANNOUNCED PARTNERSHIP GEOGRAPHIES WITH LOCAL WHISKY KEY PLAYER Pernod Ricard to acquire a controlling stake in new joint venture • #3 brand in market • Existing Route To Market • Recognized local partners: Yoma Strategic and Win Brothers Target leadership in Myanmar’s whisky industry 19
Slide 20: Plenary Session - China
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Slide 21: A Very Clear Vision and Ambition for China
WE HAVE A VERY CLEAR AND COMPELLING VISION & AMBITION FOR CHINA Mission: Créateurs de Convivialité Vision: Build Pernod Ricard brands to become part of the everyday drinking repertoire of Middle and Affluent Classes Be recognized as a good corporate citizen creating positive influence on society
Slide 22: Pernod Ricard China Is Uniquely Positioned to Capture Growth
PERNOD RICARD CHINA IS UNIQUELY POSITIONED TO FULLY CAPTURE THE PRESENT AND FUTURE GROWTH OPPORTUNITIES IN CHINA 22
Slide 23: Martell Is Confirming Both Leadership and Share of Market
COGNAC MARTELL IS CONFIRMING BOTH LEADERSHIP AND SHARE OF MARKET Cognac by Quality Cognac by Brand +14% vs. +14% vs. 2,569 2016 2016 2,569 2,395 24 QSS +16% 2,395 157 Others +38% 23 2,257 2,257 503 XO +14% 136 2,092 2,088 20 2,092 2,088 114 363 Competitor 2 0% 600 19 18 440 350 90 86 363 422 399 327
Slide 24: Whisky Market Back to Growth
WHISKY MARKET BACK TO GROWTH DRIVEN BY ALMOST ALL SEGMENTS, STRONG REBOUND OF BALLANTINES AND CHIVAS IN 2017 Whisky by Quality Whisky by Brand vs. vs. 2016 2016 1,628 1,628 111 +17% +17% 155 1,358 1,369 Malt +26% 402 1,358 1,369 109 1,254 1,254 1,172 197 1,172 123 155 Ultra Premium & Prestige 32 369
Slide 25: White Spirits: Impressive Growth in New Moments of Conviviality
WHITE IMPRESSIVE GROWTH INDICATING ACCELERATED PENETRATION IN NEW MOMENTS OF SPIRITS CONVIVIALITY Total White Spirit by Product Focus on Vodka +32% vs. +26% vs. 2016 2016 1,129 442 334 Liqueurs +57% 354 354 353 351 884 876 858 826 208 223 76 Tequila +26% 210 212 302 Others +28% 70 Gin +34% 65 62 60
Slide 26: Imported Wine and Spirits, Premium Baijiu and Beer Enjoying Fastest Growth
MARKET IMPORTED WINE & IMPORTED SPIRITS, PREMIUM BAIJIU & PREMIUM BEER ARE LANDSCAPE ENJOYING FASTEST GROWTH Baijiu Beer Wine Imported Spirits -3% -1% 0% CAGR +10% +1% CAGR -3% CAGR -7% CAGR +1% 158 156 156 5.1 1,236 5,641 5,300 4.8 1,174 1,201 30 59 Premium 240 75 31 61 52 4,970 1.1 White Spirit 33
Slide 27: A Broader Repertoire with Growing Demand for Exploration and Variety
CONSUMER A BROADER REPERTOIRE WITH GROWING DEMAND FOR EXPLORATION AND LANDSCAPE VARIETY…. % of 18-60 years old having consumed alcohol in past 3 Months 2010 2012 2014 2016 39 41 32 35 21 22 17 18 16 18 18 17 8 10 11 7 Baijiu Beer Wine Imported Imported Spirit Baijiu Beer Wine Spirits % of 18-60 year
Slide 28: Imported Spirits Being Drunk More Frequently
CONSUMER LANDSCAPE … WITH IMPORTED SPIRITS BEING DRUNK MORE FREQUENTLY BY CONSUMERS… Consumption Frequency (among Past 3 Months category drinker) Premium Baijiu Baijiu Premium Beer Beer ImportedSpirits Imported Wines Spirits 20 42 36 Occasional drinkers 47 56 decreasing 53 Monthly drinkers 48 49 22
Slide 29: Strong Rebound of Per Capita Drinking Volume on Cognac and Whisky
CONSUMER … AND STRONG REBOUND OF PER CAPITA DRINKING VOLUME ON COGNAC LANDSCAPE AND WHISKY… Average number of glasses consumed amongst past month drinkers 2011 2013 2015 2017 Imported Imported Spirits 3.6 2.8 2.9 3.8 Spirits 2.0 1.9 1.7 2.2 Cognac Whisky 1.8 1.5 1.5 1.9 White 2.0 2.1 2.3 2.3 Spirits
Slide 30: Pernod Ricard China Transformed Itself to Adapt to the Chinese Market
PERNOD RICARD CHINA TRANSFORMED ITSELF TO ADAPT TO THE FAST-PACED CHANGING CHINESE MARKET 30
Slide 31: MAC Population Will Continue to Grow, Driven by Affluent+
CONSUMER MAC POPULATION WILL CONTINUE TO GROW, DRIVEN BY DEVELOPMENT CHANGES OF AFFLUENT+ 2015 2018 2021 2024 MAC CAGR MAC CAGR MAC CAGR Total MAC** 336 M + 9.1% 437 M + 6.3% 525 M + 5.2% 611 M Individual (Million) Affluent : >25kRMB 20 +22% 36 +17% 57 +12% 80 Upper middle: 13-25kRMB 124 +12% 176 +9
Slide 32: Rising Sophistication and Individuality Leading to New Drinking Occasions
CONSUMER RISING SOPHISTICATION & INDIVIDUALITY LEADING TO NEW DRINKING CHANGES OCCASIONS, EMPOWERED BY DIGITAL ENVIRONMENT RISE OF HEALTH & GROWING CONNECTED YOUNG WELLBEING SOPHISTICATION LIFE GENERATION Increasing awareness With continuous rising Under the boom of smart The young generation is and
Slide 33: 2 Business Units and 2 Routes to Market Created in July 2016
TRANSFORM PERNOD RICARD 2 BUSINESS UNITS AND 2 ROUTES TO MARKET WERE CREATED IN JULY 2016 CHINA PRESTIGE BU PREMIUM BU MUST STOCK MUST STOCK PRIORITY PRIORITY DISTRIBUTED DISTRIBUTED 1 outlet is only visited by 1 Sales Representative of Pernod Ricard China 33
Slide 34: 2 Business Units and 2 Routes to Market Created in July 2016
TRANSFORM PERNOD RICARD 2 BUSINESS UNITS AND 2 ROUTES TO MARKET WERE CREATED IN JULY 2016 CHINA PRESTIGE NIGHT E-Commerce & New Night Club, KTV Retail MEAL OCCASION Modern Off-Trade Traditional Off-Trade, New On-Trade Restaurant 30 priority cities 8 3 7 3 6 3 ROUTE TO MARKET: 2 levels of wholesaler
Slide 35: Pernod Ricard China Keeps Transforming Itself, Driving Strong Results
PERNOD RICARD CHINA KEEPS TRANSFORMING ITSELF, DRIVING STRONG RESULTS 35
Slide 36: Across Various Geographies and Strong Digital Acceleration
DIGITAL TRANSFORMATION … ACROSS VARIOUS GEOGRAPHIES AND STRONG DIGITAL ACCELERATION Connectors Content Partnerships Connected bottle and 2.8 billion views (for 12 episodes) Partnerships with key Chinese consumer interaction video and 6.9 billion online buzz tech & digital partners 36
Slide 37: Martell: Strong Performance Across 2 Moments of Conviviality
MARTELL STRONG PERFORMANCE ACROSS 2 MOMENTS OF CONVIVIALITY WITH TRANSFORMATION 2 CONSUMER TARGETS, NUMEROUS CHANNELS AND CONSUMER TOUCHPOINTS…. PREMIUM MEAL PARTY TO OCCASION IMPRESS DISCERNING INSPIRERS SOCIAL STATUS SEEKERS Mostly OFF Trade Purchase Mostly ON Trade Purchase Meal activation Weddin
Slide 38: Martell: Consumer Recruitment and Premiumisation
MARTELL TRANSFORMATION … DRIVEN BY SUCCESSFUL CONSUMER RECRUITMENT AND PREMIUMISATION… RECRUITMENT P R E M I U M I Z AT I O N PEOPLE/TARGET Younger consumers Baijiu consumers Existing consumers of Noblige & Cordon Bleu - Distinction - Cordon Bleu PRODUCTS/ - Noblige - Cordon Blue Extra PORTFOLIO - C
Slide 39: Martell: Geographies and Digital Acceleration Growth Relays
MARTELL TRANSFORMATION … ACROSS VARIOUS GEOGRAPHIES AND STRONG DIGITAL ACCELERATION GROWTH RELAYS Geographical expansion Digital transformation E commerce & instant buy Social & Community Youku Premium Meal Hub Ten Cent Party Channel & live stream 39
Slide 40: Chivas Rebound and Full Whisky Portfolio Approach
WHISKY CHIVAS REBOUND AND FULL WHISKY PORTFOLIO APPROACH DELIVERING TRANSFORMATION DOUBLE DIGIT GROWTH Diversify in Prestige Night Grow in new Moments of Conviviality Business Buddies/Besties Party To Impress Indulge Time Fun Night Out Trendy Experience Entertainment Together Retain and Up-trade Con
Slide 41: Delivering Double Digit Performance Across the Whole Portfolio
DELIVERING DOUBLE DIGIT PERFORMANCE ACROSS THE WHOLE RESULTS PORTFOLIO THIS FINANCIAL YEAR 9M FY18 Sales Growth +19% vs +2% FY17 Martell Chivas Regal International Premium brands +19% +19% +21% • Whole range achieving double-digit growth Rebound with first-year activation of new International premiu
Slide 42: Pernod Ricard Asia Is Uniquely Positioned to Capture Growth Opportunities
PERNOD RICARD ASIA IS UNIQUELY POSITIONED TO FULLY CAPTURE CONCLUSION PRESENT AND FUTURE GROWTH OPPORTUNITIES ACROSS THE REGION ✓ Acceleration and diversification of growth in FY18 • Strong regional performance fuelled by China and India • Diversifying sources of growth by brand, channel and market
Slide 43: Thank You
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