Pernod Ricard SA · EURONEXT:RI
Pernod Ricard SA — Q1 2011/12 Earnings Presentation
44 slides from Pernod Ricard SA's earnings presentation, Oct 20, 2011
Slide 1: 2011/12 Q1 Sales and Guidance
2011/12 Q1 Sales and Guidance Excellent 1st quarter 2011/12, with organic sales growth of 11%, to € 1,987 million Guidance: Organic growth in 2011/12 profit from recurring operations close to 6% Net Debt* / EBITDA* ratio close to 4 at 30 June 2012 20 October 2011 This presentation can be downloaded
Slide 2: Presentation structure
Presentation structure • Overall analysis • Growth by region • Portfolio review / Marketing initiatives • Conclusion and outlook 2
Slide 3: 2011/12 1st quarter environment and highlights
2011/12 1st quarter environment and highlights Q1 2011/12 has not been impacted from the financial crisis that started this summer High foreign exchange volatility since the start of the financial year: reappreciation of the USD and weakening of currencies of certain emerging countries (INR, RUB, et
Slide 4: Sales trend in 1st quarter 2011/12
Sales trend in 1st quarter 2011/12 Sales: € 1,987 million (+6%), which was organic growth of +11% (vs +10%* in Q1 2010/11) driven by the Top 14: volume +6%, sales +14%* Strong dynamism in emerging markets** (+20%*) Good recovery in mature markets (+5%*) In summary, a very good start to the financial
Slide 5: Main technical items of the 1st quarter 2011/12
Main technical items of the 1st quarter 2011/12 − Change of distributors in Israel and Chile + US: mechanical replenishment of wholesaler stocks following excellent depletions in June 2011 + Favorable basis of comparison: weak sales in Venezuela in Q1 2010/11 5
Slide 6: Change in 2011/12 Q1 sales
Change in 2011/12 Q1 sales (77) (10) 196 1,987 1,879 -4% -1% +11% +6% Q1 10/11 Organic growth Forex Group Q1 11/12 Sales effect structure Sales +11% organic growth driven by the Top 14 (+14%) € 77 million negative forex effect, primarily due to the decline in the average EUR/USD rate (1.41 in Q1 201
Slide 7: Presentation structure
Presentation structure • Overall analysis • Growth by region • Portfolio review / Marketing initiatives • Conclusion and outlook 7
Slide 8: Sales growth and analysis by geographic region
Sales growth and analysis by geographic region FY 2010/11 Q1 2011/12 Asia-RoW +15% +16% Americas +5% +14% Europe (excluding France) 0% +3% France +4% -1% World +7% +11% Q1 10/11 Q1 11/12 9% France 8% 37% Europe 40% 28% 26% Americas Asia and RoW 26% 26% Continued strong dynamism in Asia – RoW, good g
Slide 9: Asia – Rest of world: Analysis by category
Asia – Rest of world Analysis by category Q1 Q1 (€ millions) Organic ∆ 2010/11 2011/12 ∆ Sales 715 794 +11% +16% Martell, Scotch and Indian whiskies still very buoyant Growth driven by Martell (+27%*) and Top 14 Scotch whiskies (+16%*) with a very favourable price/mix effect Indian whiskies: Royal S
Slide 10: Asia – Rest of world: Analysis by country
Asia – Rest of world Analysis by country China: very strong growth (+25%*) driven by Martell, Scotch whiskies and Jacob’s Creek India: very strong increase of +29%* thanks to local whiskies. Top 14 +20%* Other emerging markets expanding rapidly: Vietnam (+76%*), Indonesia (+73%*) Taiwan (+30%*): ver
Slide 11: Americas: Analysis by category
Americas Analysis by category Q1 Q1 Organic (€ millions) ∆ 2010/11 2011/12 ∆ Sales 482 508 +5% +14% Very strong growth in Q1 Top 14 (+16%* vs. +7%* in FY 2010/11): main growth generator, particularly with Jameson, Malibu and The Glenlivet in the US, Absolut in Brazil, as well as Chivas in Duty Free
Slide 12: Americas: Analysis by country: US
Americas Analysis by country: US Overall market trend remaining positive during Q1 (Nielsen 3 months at end September 2011 +2% and NABCA 2 months at end August +2%) Pernod Ricard: • Organic sales growth +15% and Top 14 +16%. Mechanical replenishment of wholesaler stocks following excellent depletion
Slide 13: Americas: Analysis by country: other countries
Americas Analysis by country: other countries Brazil: strong growth (+17%*) driven by the Top 14 (+30%*), particularly Absolut, Chivas and Passport Mexico: sales decline in Q1, but strong consumer depletions for Chivas (Nielsen +12%) and Absolut (Nielsen +20%) Canada: sales increase, with contrastin
Slide 14: Europe (excluding France): Analysis by category
Europe (excluding France) Analysis by category Q1 Q1 (€ millions) Organic ∆ 2010/11 2011/12 ∆ Sales 517 524 +1% +3% Good performance Sales +3%* vs stability* over the 2010/11 full financial year Top 14: growth (+6%*) driven by Jameson, Chivas, Beefeater and The Glenlivet. Decline of Ballantine’s in
Slide 15: Europe (excluding France): Analysis by country
Europe (excluding France) Analysis by country Western Europe: +0.4%*, an improvement vs. FY 2010/11 (-2%*) • Difficult environment in Spain (-5%*) and Italy • Technical recovery in Greece (+15%*) from a favourable basis • Good performance in Germany (+3%*), driven by Absolut, Chivas, The Glenlivet a
Slide 16: France
France Q1 Q1 (€ millions) Organic ∆ 2010/11 2011/12 ∆ Sales 164 162 -1% -1% Moderate decline in Q1 Reduction primarily due to unfavourable summer weather for aniseed and to a trade dispute Decline of the Ricard brand (-7%*), partly offset by the strong performance of Chivas (+7%*), Absolut (+7%*) an
Slide 17: Emerging markets
Emerging markets Q1 10/11 sales Q1 11/12 sales Emerging 37% markets* 39% Mature markets 63% 61% Very strong organic sales growth of emerging markets * in Q1 2011/12 (+20%) Share of emerging markets * in Group sales rose from 37% to 39% Emerging markets* represented more than 2/3 of the Group’s organ
Slide 18: Presentation structure
Presentation structure • Overall analysis • Growth by region • Portfolio review / Marketing initiatives • Conclusion and outlook 18
Slide 19: Organic sales growth by category
Organic sales growth by category Share of FY Q1 2011/12 Q1 sales 2010/11 2011/12 Top 14 Spirits & Champagne 62% +10% +14% Priority Premium Wines 5% 0% +8% 18 key local spirits brands 16% +3% +7% Other 17% +1% +4% Total 100% +7% +11% Highly favourable growth mix Very good Q1 for all categories of the
Slide 20: Portfolio review: Top 14 Spirits & Champagne
Portfolio review Top 14 Spirits & Champagne Volume: +6% Sales: +14%* % of Group sales: 62% *Organic growth 20
Slide 21: Continued strong growth of the Top 14
Top 14 Spirits & Champagne Continued strong growth of the Top 14 with very favourable price/mix (+8%*) Organic Volume sales Price/mix growth growth 12 brands of the Top 14 grew Absolut 4% 4% 0% both in volume and sales Chivas Regal 15% 18% 3% Ballantine's -2% 3% 5% Ricard -7% -5% 2% 8 out of 14 bran
Slide 22: Top 14 Spirits & Champagne: Iconic brands
Top 14 Spirits & Champagne Iconic brands Stable volume in the US. Outside US +6% (+8% excluding the impact of distributor change in Israel) +18% growth* in emerging markets Volume = +4% Main growth* drivers: Duty Free, Brazil, South Korea, Russia, Sales = +4%* Africa and Germany Strong double-digit
Slide 23: Top 14 Spirits & Champagne: Premium brands
Top 14 Spirits & Champagne Premium brands Volume decline, primarily due to France and Spain Sales growth* driven by Asia, Americas and Eastern Europe Volume = -2% Superior qualities (Ballantine’s 15 years old and older) grew +15%* Sales = +3%* (vs. -4%* for Ballantine’s Finest) Significant decline i
Slide 24: Top 14 Spirits & Champagne: Premium brands
Top 14 Spirits & Champagne Premium brands Excellent Q1, bolstered by numerous innovations Acceleration in the US (+35%*). Development of Malibu Cocktails Volume = +18% and strong launch of Malibu Black Sales = +17%* Launch of Malibu Cocktails and Malibu Fresh in France Exceptional performance, drive
Slide 25: Top 14 Spirits & Champagne: Prestige brands
Top 14 Spirits & Champagne Prestige brands Outstanding growth (+25%*) with a continued very favourable Volume = +10% price/mix effect Sales = +25%* Favourable trend for the quality mix (XO +32%*, Noblige +25%*) Strong development in its key market (US +50%*), as well as in Volume = +35% Duty Free an
Slide 26: Priority Premium Wines
Priority Premium Wines Very good Q1, illustrating the efficiency of the high value strategy Volume: +3% Sales: +8%* % of Group sales: 5% Volume -3% sales +2%* Volume +17% sales +17% * Volume +17% sales +20%* Volume +11% sales +49%* NB : Brancott Estate includes Stoneleigh in Q1 2010/11 and Q1 2011/1
Slide 27: 18 key local spirits brands
18 key local spirits brands Continued growth driven by Indian whiskies Volume: +12% Sales: +7%* % of Group sales: 16% Very strong development of Indian whiskies (+29%*), strategic business for the Group, which now accounts for 6% of sales Overall performance adversely affected by the decline of Wybo
Slide 28: Key marketing initiatives & innovations
Key marketing initiatives & innovations Product innovation Limited editions Consumer promotions Sponsorships Digital initiatives New advertising campaigns 28
Slide 29: Product innovations
Product innovations MALIBU New Malibu Cans introduced in the UK, Malibu Fresh, Malibu Black JACOB’S CREEK Cool Harvest Range introduced in Australia MUMM ROYAL SALUTE Launch in France of Mumm Brut Sélection, third of the Royal Salute Tribute to Honour was launched to US luxury media in New York in A
Slide 30: Limited editions
Limited editions CHIVAS REGAL ABSOLUT ABSOLUT New Chivas Regal 12 gift ABSOLUT Crystal Pinstripe Absolut Illusion Edition tin by New York illustrator ultra limited edition Dan Funderburgh MUMM The G.H.MUMM Ritual Box BEEFEATER London Market Limited Edition 30
Slide 31: Consumer promotions On-Trade
Consumer promotions On-Trade MALIBU MARTELL Station Invasion Music Tour in US and Italy The Martell Trunk tour featured at Fouquet’s, Paris HAVANA CLUB BEEFEATER Havana Club ‘Mint Revolution‘ Contemporary Tea Salons, Argentina and Colombia 31
Slide 32: Sponsorships
Sponsorships JAMESON ROYAL SALUTE PERRIER-JOUËT Jameson First Shot Film Competition Polo Foundation Team sponsorship during the visit of the Official champagne of the wedding with Kevin Spacey Duke and Duchess of Cambridge to the USA of Prince Albert de Monaco and Miss Charlene Wittstock BRANCOTT ES
Slide 33: Digital initiatives
Digital initiatives ABSOLUT BALLANTINE’S Absolut Blank app – Ballantine’s Human Application Interface – new characters participate in the launched BEEFEATER & PLYMOUTH GIN global creative New Gin & Tales website movement. MUMM New international website MARTELL THE GLENLIVET New mobile 30,000 fans ha
Slide 34: New advertising campaigns
New advertising campaigns CHIVAS REGAL Chivas Regal 25 ‘Legend Reborn’ campaign with TIME and FORTUNE magazines BALLANTINE’S CAMPO VIEJO Ballantine’s Finest Transformation print New UK press campaign ‘Live Uncorked’ campaign launched in August. HAVANA CLUB BEEFEATER Havana Club 7 spectacular Poster
Slide 35: Presentation structure
Presentation structure • Overall analysis • Growth by region • Portfolio review / Marketing initiatives • Conclusion and outlook 35
Slide 36: Conclusion on the 1st quarter 2011/12
Conclusion on the 1st quarter 2011/12 Very good start to the year Continuation of major 2010/11 trends: • Strong growth in emerging* markets • Moderate growth in mature markets • Growth driven by the Top 14 with a continued very favourable price/mix effect “Investment Grade” ratings by both Moody’s
Slide 37: Outlook and guidance for the full 2011/12 financial year
Outlook and guidance for the full 2011/12 financial year The start of the financial year confirms the solidity of our markets Our outlook assumes the following macro-economic scenario: Strong growth in emerging* markets Slow growth in mature markets 2011/12 guidance: Organic growth in profit from re
Slide 38: Next communications
Next communications Next communications from Pernod Ricard Holding: • 2010/11 Annual General Meeting: Tuesday 15 November 2011 • Americas conference call: Thursday 15 December 2011, with Philippe Dréano • 2011/12 HY1 sales and results: Thursday 16 February 2012 • Asia conference call: Tuesday 20 Mar
Slide 39: Pernod Ricard
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Slide 40: Appendices
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Slide 41: Organic growth of strategic brands
Organic growth of strategic brands Net Sales Volume growth Price/mix organic growth Absolut 4% 4% 0% Chivas Regal 15% 18% 3% Ballantine's -2% 3% 5% Ricard -7% -5% 2% Jameson 23% 29% 7% Malibu 18% 17% -1% Beefeater 8% 8% -1% Kahlua 3% 4% 2% Havana Club 1% -2% -3% Martell 10% 25% 16% The Glenlivet 35%
Slide 42: Sales analysis by region
Sales analysis by region Net Sales Q1 2010/11 Q1 2011/12 Change Organic Growth Group Structure Forex impact (€ millions) France 164 8.7% 162 8.1% (2) -1% (2) -1% (0) 0% 0 0% Europe excl. France 517 27.5% 524 26.4% 7 1% 17 3% (4) -1% (6) -1% Americas 482 25.7% 508 25.6% 26 5% 66 14% 1 0% (41) -8% Asi
Slide 43: Foreign exchange effect
Foreign exchange effect Forex impact Q1 2011/12 Average rates evolution On Net (€ millions) Sales 2010/11 2011/12 % US dollar USD 1.29 1.41 9.4% (40) Indian rupee INR 59.98 64.67 7.8% (9) Chinese yuan CNY 8.74 9.07 3.7% (9) Hong Kong dollar HKD 10.03 11.01 9.7% (1) Pound sterling GBP 0.83 0.88 5.4%
Slide 44: Group structure effect
Group structure effect Group structure Q1 2011/12 On Net Sales (€ millions) Total Group Structure (10) 44