Pernod Ricard Sa · EURONEXT:RI
Pernod Ricard Sa — Shareholder Meeting (November 2021)
144 slides from Pernod Ricard Sa's shareholder meeting presentation, November 2021
Slide 1: Shareholders Meeting 2021
Shareholders Meeting 2021 Pernod Ricard
Slide 2: Opening
OPENING Pernod Ricard
Slide 3: Alexandre Ricard, Chairman & CEO
Alexandre RICARD CHAIRMAN & CHIEF EXECUTIVE OFFICER Pernod Ricard
Slide 4: Shareholders' Meeting Bureau
E SHAREHOLDERS’ MEETING BUREAU CHAIRMAN TELLERS SECRETARY ALEXANDRE RICARD PAUL-CHARLES RICARD, PRISCILLA MATERS ANNE-MARIE POLIQUIN ALSO ATTTENDING: EVP FINANCE, IT & OPERATIONS LEAD INDEPENDENT DIRECTOR HELENE de TISSOT PATRICIA BARBIZET STATUTORY AUDITORS KPMG ERIC ROPERT DELOITTE MARC DE VILLART
Slide 5: Provisional Quorum
PROVISIONAL QUORUM Pernod Ricard
Slide 6: Provisional Quorum
E PROVISIONAL QUORUM LEGAL DOCUMENTS AVAILABLE THE DOCUMENTS REQUIRED BY THE APPLICABLE LAWS AND REGULATIONS, WHICH ARE ON THE SHAREHOLDERS’ BUREAU HAVE BEEN SENT AND MADE AVAILABLE TO THE SHAREHOLDERS WITHIN THE LEGAL DELAYS
Slide 7: Management Report
MANAGEMENT REPORT Pernod Ricard
Slide 8: We are emerging strong from the crisis
WE ARE EMERGING SE FROM THE CRISIS
Slide 9: Sales growth at constant FX, organic growth
*At constant Fx **Organic growth
Slide 10: Sales growth FY20 by region
AMERICAS™ +14% E “Sales growth FY20 **Including Travel Retail EUROPE™* +4% ASIA REST OF Wels China +11% 444% India +9% —— = GLOBAL TRAVEL RETAIL 40%
Slide 11: Continued focus on premiumisation
a dT WITH A CONTINUED FOCUS ON PREMIUMISATION bel = wos, " a
Slide 12: Progress on all S&R priorities
a dT WE HAVE MADE PROGRESS ON ALL OUR S&R PRIORITIES Valuing Circular PEOPLE MAKING ‘= | a) ee als Nurturing TERROIR
Slide 13: Our S&R progress
E OUR S&R PROGRESS Nurturing TERROIR Valuing PEOPLE carbon emissions (Scopes 182) ® 10 regenerative agriculture Complete risk mapping for 86% of 29% women in Top Gender pay gap programmes including 2 in our own our natural ingredients“) Management “ reduced to 1.8%) vinyards ( vs. 19% in 2016 Respon
Slide 14: We strengthened our portfolio
WE STRENGTHENED OUR
Slide 15: Investment in US-based Sovereign Brands
brine)| (BELA Investment in US-based Sovereign Brands i 3 _|
Slide 16: Brand innovations: No/Low, Ready to drink
| _———— BEEFEATER No/Low Ready to drink Ready to drink International France
Slide 17: Creating conditions for strong value creation
: | CREATING CONDITIONS FOR STRONG VALUE CREATION FOR OUR SHAREHOLDERS... SHARE PRICE EVOLUTION AND TSR*
Slide 18: A global presence
The commitment of our 18,500 employees = 13 countries of direct ~ commercial presence a2 +160. countries in which our ~ brands our distributed | ag 4 A global presence The industry’s most comprehensive portfolio
Slide 19: Strengthening our agility
E ALL WHILE STRENGTHENING OUR AGILITY - Better)moreldynamic resource allocation in relation to the various local requirements imposed by the reality of the pandemic ° A market-by-market approach to concentrate our resources and invest in growing brands - The implementation of more /agilelstructures,
Slide 20: And tomorrow
AND TOMORROW
Slide 21: Accelerate our transformation
MORE THAN EVER, WE WILL CONTINUE TO ACCELERATERQUISTRANSFORMATION TO ACHIEVE OUR VISION OF “CREATEURS DE CONVIVIALITE”
Slide 22: Integrating trends accelerated by the pandemic
BY INTEGRATING PREVIOUSLY IDENTIFIED RENDS ACCELERATED BY THE PANDEMIC
Slide 23: More connected
MORE CONNECTED 61% 65% +216% of global consumers have changed say that the way a brand estimated increase in consumer their shopping habits, making more responds to the pandemic spending on social networks environmentally friendly, will have a significant impact by 2025 (3) sustainable or ethical pu
Slide 24: Expansion of the middle and affluent classes
E ANTICIPATING THE EXPANSION OF THE MIDDLE AND AFFLUENT CLASSES a 2021 2030 more than half the world population People considered part of the middle or affluent classes _|
Slide 25: Adopting new ways of working
E ADOPTING NEW WAYS OF WORKING a3 i [mma | A change in the way offices are The expansion of remote working used, becoming places for meetings and exchanges
Slide 26: Integrating the digital revolution
E INTEGRATING THE DIGITAL REVOLUTION © i 3,000 17,500 Active monthly MS Active monthly e-commerce growth Teams users at MS Teams users at in Pernod Ricard Pernod Ricard
Slide 27: Understanding new global challenges
UNDERSTANDING NEW GLOBAL CHALLENGES Rising political tensions, currency volatility, environmental issues and uneven post-Covid growth recovery
Slide 28: Key priorities for the Pernod Ricard of tomorrow
WE HAVE THEREFORE IDENTIFIED 5 KEY PRIORITIES TO BUILD THE PERNOD RICARD OF TOMORROW
Slide 29: Priority 1
1. *International Union for Conservation of Nature
Slide 30: Investing to develop our talents
2. INVESTING TO DEVELOP OUR TALENTS aS V9 Model A unique Leadership Model Conviviality at work A culture of collaboration and performance Welcome to the Coursera x Pernod Ricard Online Courses Portfolio se Pernod Ricard university Pernod Ricard University to support talent development
Slide 31: Creating conditions for dynamic resource allocation
E 3. GREATING CONDITIONS FOR DYNAMIC RESOURCE ALLOCATION Dynamic resource management across the entire value chain Control our structure costs while maintaining our industrial investments and strategic stocks Develop increasingly effective financial information and modelling systems to better antici
Slide 32: Dynamic resource allocation and centres of excellence
- Managelourresoureeslaccording to each growth opportunity . Innovate to continue to dynamically manage our portfolio Boollourskills|through the creation of Centres of Excellence, from IT to HR to innovation and consumer research
Slide 33: Becoming a conviviality platform
a dT 5. BECOMING A CONVIVIALITY PLATFORM TO ACCELERATE OUR TRANSFORMATION * Create direct and transparent exchanges between our consumers, our customers, our partners, our brands and our employees ° Harness the power of data, Artificial Intelligence and new technologies to offer each consumer: - the
Slide 34: Medium-term ambition of Transform & Accelerate
a dT MEDIUM-TERM AMBITION OF OUR STRATEGIC ROADMAP TRANSFORM & ACCELERATE * +4 to +7% topline growth, leveraging key competitive advantages and consistent investment behind key priorities * Focus on pricing and building new operational excellence initiatives * Significant A&P investment, maintained
Slide 35: Financial policy priorities
E | REMINDER OF OUR FINANCIAL POLICY PRIORITIES WHILE RETAINING INVESTMENT GRADE RATINGS, IN THE FOLLOWING ORDER: 1. Investment in future organic growth, in particular through strategic inventories and capex 2. Continued active portfolio management, including value-creating M&A 3. Dividend distribut
Slide 36: Confidence in achieving our vision
BEEN MORE RELEVANT aa — _, BEEN MORE READY TO FACE THE FUTURE, | BEEN MORE CONFIDENT ABOUT i ACHIEVING OUR VISION OF” “CREATEURS DE CONVIVIALITE” il =
Slide 37: Financial Statements
FINANCIAL STATEMENTS
Slide 38: Hélène de Tissot
Héléene de TISSOT DIRECTOR FINANCE, IT & OPERATIONS Pernod Ricard
Slide 39: Executive summary
EXECUTIVE SUMMARY VERY STRONG REBOUND EXCELLENT FINANCIAL PERFORMANCE Very strong diversified FY21 growth notably with USA and China reaching record sales above $2bn and €1bn ° Significant Premiumisation thanks to growth of Strategic International Brands and Specialty Brands - Significant operating
Slide 40: Key figures
KEY FIGURES — € millions FYI /\— REPORTED ———/\- ORGANIC ———— SALES 8,824 +4.5% +9.7% Profit from Recurring Operations (PRO) 2,423 +7.2% +18.3% PRO/Sales 27.5% +70 bps +213 bps NET PROFIT FROM RECURRING OPERATIONS! +12% Net Profit! 1,305 +297% Free Cash Flow 1,628 +96% 1 Group share
Slide 41: Organic sales growth by region
+14% +11% +10% +4% FY20 FY21 -6% -6% -10% -14% • • • • 1 At constant FX
Slide 42: Sales growth by brand category
STRATEGIC STRATEGIC SPECIALTY STRATEGIC INTERNATIONAL LOCAL BRANDS WINES BRANDS BRANDS +28% +11% +7% +7% FY20 Stable FY21 -4% -10% -9% • • • • INNOVATION: +22% PRICE/MIX ON STRATEGIC BRANDS: +4%
Slide 43: Profit from recurring operations
FY20 FY21 REPORTED ORGANIC SALES1 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% +64 bps Advertising & Promotional expenditure (A&P) (1,327) (1,393) +5% +9% A&P / Sales 15.7% 15.8% +12 bps Structure2 (1,499) (1,477) -1% +1% Structure / Sal
Slide 44: Summary income statement
E SUMMARY INCOME STATEMENT COMMENTS * Gross margin +64 bps: stable pricing and better fixed cost absorption * Ratio A&P / Sales at c. 16% with reinvestment in markets and categories returning to growth * Structure costs: reflecting strict discipline
Slide 45: Group share of net profit
a dT GROUP SHARE OF NET PROFIT — € millions FY20 FY21 /REPORTED— PROFIT FROM RECURRING OPERATIONS (PRO) 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-controlling
Slide 46: Net debt evolution
(972) 8,424 (1,628) +95 (265) 7,452 +704 +122 30 June 2020 FCF M&A AND DIVIDENDS OTHERS FX 30 June 2021 OTHERS (MAINLY LEASE LIABILITIES)
Slide 47: Financial Statements Pernod Ricard SA
FINANCIAL STATEMENTS PERNOD RICARD SA Pernod Ricard
Slide 48: Parent company income summary
FY20 FY21 Operating Profit (61) (88) Financial income (expense) 1 140 726 Non-recurring items (65) (111) Income tax 163 131 NET PROFIT 1 178 657 •
Slide 49: Dividend
E FINANCIAL STATEMENTS FY17 FY18 FY19 FY20 FY21! Dividend 2.02 2.36 3.12 2.66 3.12 * Proposed dividend per share : +17% vs FY20, back to the historical high of FY19 * The remaining c. €0.5bn share buyback programme resuming in FY22 * A-second employee ownership programme will take place in FY222 1.
Slide 50: First Quarter FY22
FIRST QUARTER FY22 Pernod Ricard
Slide 51: First quarter FY22
E FIRST QUARTER VERY DYNAMIC Q1 AT +20%, ON LOW COMPARISON BASIS, WITH STRONG DEMAND IN MOST MARKETS — Q1 FY22 SALES : €2,718M — ORGANIC SALES GROWTH +20% (+22% REPORTED) Very dynamic start in all regions, with robust demand and strong shipments ahead of festive season Off-trade remaining resilient
Slide 52: Outlook
OUTLOOK Pernod Ricard
Slide 53: Alexandre Ricard, Chairman & CEO
Alexandre RICARD CHAIRMAN & CHIEF EXECUTIVE OFFICER Pernod Ricard
Slide 54: Outlook
OUTLOOK FOR FY22, PERNOD RICARD EXPECTS: Good sales growth to continue, albeit moderating vs. Q1 Significant investment in A&P and Structure costs to support future growth Continued implementation of Transform & Accelerate Strategy, including Digital Transformation C.€0.5bn share buyback programme,
Slide 55: Governance
GOVERNANCE Pernod Ricard
Slide 56: Patricia Barbizet, Lead Independent Director
Patricia BARBIZET LEAD INDEPENDENT DIRECTOR Pernod Ricard
Slide 57: Board of Directors & Committees
BOARD OF DIRECTORS & COMMIT TEES Pernod Ricard
Slide 58: Board of Directors & Committees
BOARD OF DIRECTORS & COMMITTEES ALEXANDRE RICARD PATRICIA BARBIZET CHAIRMAN AND CHIEF LEAD INDEPENDENT @) Q EXECUTIVE OFFICER @) DIRECTOR EQ VIRGINIE FAUVEL ANNE LANGE PHILIPPE PETITCOLIN TAN GALLIENNE KORY SORENSON INDEPENDENT INDEPENDENT INDEPENDENT INDEPENDENT INDEPENDENT DIRECTOR @ DIRECTOR e DI
Slide 59: Board composition
BOARD OF DIRECTORS AND COMMITTEES — COMPOSITION AT THE END OF THE FINANCIAL YEAR: 13 MEMBERS — (Including 2 Directors representing the employees) INDEPENDENCE INTERNATIONALISATION FEMALE RATE® RATE RATIOM © Excluding Directors representing employees e Pernod Ricard
Slide 60: Board main activities in FY21
BOARD OF DIRECTORS AND COMMITTEES THE BOARD OF DIRECT: MAIN ACTIVITIES IN FY21 ATTENDANCE RATE Monitoring the impact of COVID-19 crisis, by holding regular discussions with the Top Management Drawing up the annual and half-year financial statements Review of the budget Prepare the Annual Shareholder
Slide 61: Lead Independent Director report
E CORPORATE GOVERNANCE LEAD INDEPENDENT DIRECTOR REPORT FY21 ACTIVITY REPORT During the financial year, the Lead Independent Director has notably: * Met with our main investors to discuss the Company’s Governance * Chaired the executive session held during the Board meeting of 1st September 2020 * C
Slide 62: Dedicated committees
E BOARD OF DIRECTORS AND COMMITTEES THE BOARD OF DIRECTORS 5 DEDICATED COMMITTEES « Audit Committee * Nominations & Governance Committee * Compensation Committee ° Strategic Committee *« CSR Committee
Slide 63: The Audit Committee
E BOARD OF DIRECTORS AND COMMITTEES THE AUDIT COMMITTEE
Slide 64: The Audit Committee
BOARD OF DIRECTORS AND COMMITTEES |THE AUDIT COMMITTEE THE AUDIT COMMITTEE INDEPENDENCE RATE ATTENDANCE RATE MAIN ACTIVITIES Review of the Group’s draft annual and half-year financial statements (Parent Company and consolidated) * Monitor the Group’s cash flow and debt * Risk management and update o
Slide 65: Nominations and Governance Committee
E BOARD OF DIRECTORS & COMMITTEES THE NOMINATIONS AND GOVERNANCE COMMITTEE
Slide 66: Nominations and Governance Committee
E BOARD OF DIRECTORS & COMMITTEES INDEPENDENCE RATE ATTENDANCE RATE THE NOMINATIONS AND GOVERNANCE COMMITTEE MAIN ACTIVITIES Recommendations on the Group’s governance Review of the Board members’ independence Review of the Group’s Talent Management policy and presentation of the succession plan for
Slide 67: The Compensation Committee
E BOARD OF DIRECTORS & COMMITTEES THE COMPENSATION COMMITTEE
Slide 68: The Compensation Committee
BOARD OF DIRECTORS & COMMITTEES INDEPENDANCE ATTENDENCE _ MAIN ACTIVITIES RATE RATE Study the rules of governance and market practices concerning the compensation of Executive Directors 96,43% ° Review of Pernod Ricard’s long-term incentive policy with a view to the introduction of a CSR criteria Su
Slide 69: The Strategic Committee
a dT BOARD OF DIRECTORS & COMMITTEES THE STRATEGIC COMMITTEE
Slide 70: The Strategic Committee
BOARD OF DIRECTORS & COMMITTEES INDEPENDANCE ATTENDENCE RATE RATE MAIN ACTIVITIES Review of the key strategic issues of the Group, in particular its digital transformation Review of the evolution of consumption patterns in its markets, particularly in light of the consequences of Covid-19 Monitoring
Slide 71: Creation of the CSR Committee
E BOARD OF DIRECTORS & COMMITTEES * S&R is at the heart of the Group's concerns, as its products are sourced from terroirs * Our S&R roadmap, Good Times from a Good Place, is integrated into all Group activities * This roadmap is a strong leverage for the Group's performance and transformation, enco
Slide 72: The CSR Committee
E BOARD OF DIRECTORS & COMMITTEES THE CSR COMMITTEE
Slide 73: The CSR Committee
BOARD OF DIRECTORS & COMMITTEES INDEPENDANCE ATTENDENCE RATE RATE —__ MAIN ACTIVITIES Review of the S&R strategy and progress on the achievement of objectives for each pillar Introduction of CSR criteria to the LTIPs Reflecting on the application of the Group’s CSR commitments in relation to its var
Slide 74: Executive Director's Compensation Policy
a dT EXECUTIVE DIRECTOR'S COMPENSATION POLICY Pernod Ricard i _|
Slide 75: Kory Sorenson, Compensation Committee Chair
Kory SORENSON INDEPENDENT DIRECTOR & CHAIRWOMAN OF THE COMPENSATION COMMITTEE
Slide 76: Two resolutions submitted to vote
E EXECUTIVE DIRECTOR’ COMPENSATION POLICY TWO RESOLUTIONS SUBMITTED TO VOTE Approval of the components Approval of the of the compensation due or compensation policy items granted for FY21 to applicable to Mr Alexandre Mr Alexandre Ricard Ricard (Resolution n°8) (Resolution n°10)
Slide 77: Executive Director's compensation for FY21
E EXECUTIVE DIRECTOR’ COMPENSATION POLICY Fixed Compensation €1,100,000 unchanged since July 2018 NEVE aeosuciienm | 1,980,000 - 180% of fixed compensation (target 110% and max 180%) Stock-options 23,374 stock options with external performance condition (3 years) Elem a-lacelaurclaecmectces | 3,726
Slide 78: Compensation policy principles
E i EXECUTIVE DIRECTOR’ COMPENSATION POLICY COMPENSATION PRINCIPLES Fixed Compensation Variable Compensation Stock-options and Performance-based shares Deferred commitments Supplementary pension scheme Multi-year variable compensation / exceptional compensation Other benefits €1,250,000 as from 1st
Slide 79: Auditors' Reports
AUDITORS’ REPORTS
Slide 80: Marc de Villartay, Deloitte
Marc DE VILLARTAY DELOITTE 4 od Ric:
Slide 81: Reports on the financial statements
a REPORTS ON THE CONSOLIDATED FINANCIAL STATEMENTS | AND ON THE ANNUAL FINANCIAL STATEMENTS PAGES 240-243 AND 267-269 OF THE UNIVERSAL REGISTRATION DOCUMENT * Objective : obtain reasonable assurance that the financial statements do not contain any material _ misstatements, that they are in accordanc
Slide 82: Special report on regulated agreements
SPECIAL REPORT ON REGULATED AGREEMENTS ° No new regulated agreements to be submitted to the approval of the Shareholders’ Meeting ° Regulated agreement previously approved by the Shareholders’ Meeting that remained in force during the financial year: > Credit de €2,500,000,000 « Multicurrency Revolv
Slide 83: Special reports for the Extraordinary Shareholders' Meeting
I SPECIAL REPORTS REGARDING THE EXTRAORDINARY — SHAREHOLDERS’ MEETING ° We have issued the six following reports: > Report on the share capital decrease by cancellation of shares purchased up to a maximum of 10% of its share capital by 24-month period (14th resolution) > Report on the issue of ordin
Slide 84: Special reports: observations
I SPECIAL REPORTS REGARDING THE EXTRAORDINARY — SHAREHOLDERS’ MEETING ° No observation, it being specified that: > The proposed transactions to which they relate comply with the provisions set out by law > All necessary disclosures to enable you to assess the proposed cancellation of the preferentia
Slide 85: Presentation of the Resolutions
PRESENTATION OF THE RESOLUTIONS Pernod Ricard i _|
Slide 86: Anne-Marie Poliquin, Group General Counsel
Anne-Marie POLIQUIN GROUP GENERAL COUNSEL AND COMPLIANCE OFFICER a ws de comivialité
Slide 87: Parent company financial statements: first resolution
E PARENT COMPANY FINANCIAL STATEMENTS ORDINARY p— FIRST RESOLUTION APPROVAL OF THE PARENT COMPANY FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2021 * The purpose of this resolution is to approve the financial statement for the financial year ended 30 June 2021, which show a net profit o
Slide 88: •
•
Slide 89: • •
• •
Slide 90: •
•
Slide 91: •
•
Slide 92: •
•
Slide 93: •
•
Slide 94: • • •
• • •
Slide 95: •
•
Slide 96: •
•
Slide 97: •
•
Slide 98: •
•
Slide 99: • > > >
• > > >
Slide 100: •
•
Slide 101: • > >
• > >
Slide 102: • > >
• > >
Slide 103: • > >
• > >
Slide 104: •
•
Slide 105: • > >
• > >
Slide 106: • > >
• > >
Slide 107: • > >
• > >
Slide 108: • > >
• > >
Slide 109: • > > > >
• > > > >
Slide 110: • > >
• > >
Slide 111: • > >
• > >
Slide 112: • > >
• > >
Slide 113: •
•
Slide 114: •
•
Slide 115: Slide 115
Slide 116: Slide 116
Slide 117: Slide 117
Slide 118: Slide 118
Slide 119: Slide 119
Slide 120: Slide 120
Slide 121: Slide 121
Slide 122: Slide 122
Slide 123: Slide 123
Slide 124: Slide 124
Slide 125: Slide 125
Slide 126: Slide 126
Slide 127: Slide 127
Slide 128: Slide 128
Slide 129: Slide 129
Slide 130: Slide 130
Slide 131: Slide 131
Slide 132: Slide 132
Slide 133: Slide 133
Slide 134: Slide 134
Slide 135: Slide 135
Slide 136: Slide 136
Slide 137: Slide 137
Slide 138: Slide 138
Slide 139: Slide 139
Slide 140: Slide 140
Slide 141: Slide 141
Slide 142: Slide 142
Slide 143: Slide 143
Slide 144: Slide 144