Pernod Ricard Sa · EURONEXT:RI
Pernod Ricard Sa — Pernod Ricard S A — H1 FY25 Earnings Presentation
55 slides from Pernod Ricard Sa's earnings presentation, Feb 6, 2025
Slide 1: H1 FY25 Sales and Results and medium-term update
H1 FY25 Sales and Results and medium-term update 6th February, 2025 Growth data specified in this presentation refers to organic growth, unless otherwise stated. Data may be subject to rounding. This presentation can be downloaded from www.pernod-ricard.com
Slide 2: Disclaimer
Disclaimer Financial data related to H1 FY25 figures published in this presentation is preliminary. This presentation may contain forward-looking statements based on estimates and forecasts reflecting management's current views and reasonable assumptions. Relating as they do to future events and cir
Slide 3: Executive Summary: navigating cyclical headwinds (1/2)
P. 3 Determined to navigate current cyclical headwinds with resilience and agility (1/2) H1 performance in-line with our expectations, with a sequential improvement in Q2 over Q1, marking four consecutive quarters of volume growth. Strong H1 Organic Operating Margin expansion with a +65bps increase
Slide 4: Executive Summary: navigating cyclical headwinds (2/2)
P. 4 Determined to navigate current cyclical headwinds with resilience and agility (2/2) Conditional on the degree of challenges posed by the global tariff environment, FY26 is expected to be a transition year with improving trends in Organic Net Sales. Amidst extraordinary trade tensions, we are fo
Slide 5: H1 FY25 Sales and Results
H1 FY25 Uo? Sales and Results i,
Slide 6: Organic Operating Margin expansion despite sales decline
P. 6 H1 Organic Operating Margin expansion, despite Sales decline, amidst ongoing challenges in the US and China H1 volumes in growth +2% with Q2 +4% sequential improvement, resilient underlying consumer demand Organic Net Sales -4% (Reported Net Sales -6%) Organic PRO1 -2% (Reported PRO1 -7%) H1 Or
Slide 7: Financial performance with strong cost discipline
P. 7 Financial performance demonstrating very strong discipline on costs and focus on cash generation NET SALES Organic -4% EPS -11% €6,176m €5.06 Reported -6% Organic -2% FREE PRO CASH-FLOW +46% €1,985m Reported -7% €440m Organic +65bps NET DEBT / PRO Margin EBITDA +0.2X 32.1% Reported -39bps 3.5X
Slide 8: Balanced geographic breadth mitigates US and China declines
P. 8 Broad-based and balanced geographic breadth helps mitigate the impact of declines in the US & China EUROPE ASIA GROUP AMERICAS REST OF WORLD -2% ORGANIC NET SALES GROWTH -4% ORGANIC NET SALES GROWTH -5% ORGANIC NET SALES GROWTH -4% ORGANIC NET SALES GROWTH WEIGHT IN SALES 28%1 WEIGHT IN SALES 2
Slide 9: Volume recovery continues following post COVID normalisation
P. 9 Volume recovery continues, following post COVID normalisation H1 FY25 volume +2%, Strategic International Brands flat (impacted by US and China), Strategic Local Brands +4% and Specialty Brands +1% Volume growth per semester Pre-Covid Post COVID Rebound Normalisation Recovery EXECUTIVE SUMMARY
Slide 10: Leading and gaining shares in most markets, except US
P. 10 Leading and gaining shares in the majority of our markets, except US Leader in the International Premium Plus Spirits sector, excluding the US Gaining in Germany Gaining in France Gaining in Poland Gaining in Gaining in Spain Off-Trade/Losing On-Trade Canada Gaining in UK On-Trade/Losing Off-T
Slide 11: FY25 H1 Sales
P. 11 FY25 H1 Sales
Slide 12: Top Markets
P. 12 Top Markets • H1 US Spirits market growth c.+1% inc. RTD USA • PR Sell-Out c.-6% Weight in Net Sales1 18% • OND sees improving sell-out performance on key brands, notably Jameson Organic Net Sales -7% • Expect to see improvement in sell-out through H2 • Strong, broad-based growth reflecting un
Slide 13: Regions
P. 13 Regions • Resilient sales in Europe excluding Russia. Growth and share gains in Poland, France and Ireland Europe • Spain in slight decline, growing share in Off Trade Weight in Net Sales2 29% • Germany in sharper decline with consumer spending pressures, growing share Organic Net Sales -2% •
Slide 14: H1 FY25 Financial Update
P. 14 H1 FY25 Financial Update FINANCIALS ｜ 4
Slide 15: Activating levers to protect Operating Margin
P. 15 Activating levers to protect Operating Margin despite top line decline while maintaining strong brand building investments Boosted by agile A&P allocation and phasing Reported -39bps Organic +65bps Organic PRO1 32.1% 32.5% + 115 bps -103 bps -2.2% -30 bps €2,144m -20 bps €1,985m Reported PRO -
Slide 16: Continuous improvement initiatives contributed c.€900m efficiencies
P. 16 Continuous improvement initiatives have contributed c.€900m efficiencies between FY23 to FY25 c.€600m Operational3 efficiencies, c.€300m structure efficiencies FY24/FY251 with a c.9% reduction in headcount since FY234 Cumulative2 FY23 to FY251 Optimising closures, removing giftboxes Design
Slide 17: EPS down 11% on softer PRO and higher financial expenses
P. 17 EPS down 11% on softer PRO and higher financial expenses Reported € millions H1 FY24 H1 FY25 ∆ Profit from Recurring Operations 2,144 1,985 -7% Financial Expenses from Recurring Operations (200) (240) Income tax on Recurring Operations (475) (438) Minority interests and other (30) (34) Group s
Slide 18: H1 FY25 Cash Flow and Debt
P. 18 H1 FY25 Cash Flow and Debt
Slide 19: Improved FCF with working capital improvements offsetting PRO decline
P. 19 Improved FCF with working capital improvements offsetting decline in PRO € millions H1 FY24 H1 FY25 Reported ∆ %∆ Profit from Recurring Operations 2,144 1,985 -159 -7% Amortisation, depreciation, provision movements and other 220 202 Self-financing capacity from recurring operations 2,364 2,17
Slide 20: Deploying capital with discipline
P. 20 Deploying capital with discipline Increase in ratio of Net Debt/ EBITDA driven in part by timing of dividend payment Net Debt / EBITDA 3.3x 3.5x ratio €12,050m -124 Net Debt / EBITDA -1,194 €10,951m +3.5x1 440 -124 -97 30 Jun ’24 Free M&A IFRS Dividends FX 31 Dec ’24 Cash Lease Translation lia
Slide 21: Medium-term update
Medium-t erm update
Slide 22: Exceptional turbulence of recent years: Covid super-cycle and normalization
P. 22 Exceptional turbulence of the recent years with unprecedented Covid super- cycle and normalization exacerbated by external headwinds International Spirits Growth in Value (€) YoY 18 16 14 12 10 8 6 4 2 0 -2 2007 2012 2013 2014 2015 2016 2017 2019 2021 2022 2023 2024 2002 2003 2004 2005 2006 20
Slide 23: Well balanced geographic footprint
P. 23 Pernod Ricard’s geographic footprint is well balanced across regions and between mature and emerging markets Balanced Geographic Footprint FY24 Net Sales split by region and market EMEA 34% Asia 34% Western E. Europe Europe USA America China 19 s 29% 10% % Rest of Asia Africa & India ME 12% Ce
Slide 24: Portfolio concentrated in premium international spirits
P. 24 Pernod Ricard’s portfolio is concentrated in premium international spirits and is diversified among the different spirits categories Complete and diversified portfolio FY24 Net Sales split by categories exc. Wines North American Vol 4.8m cs Whiskey 5yr CAGR +6% Tequila & RTDs Vol 500k cs Mezca
Slide 25: US market shows improving trends and gradual recovery
P. 25 Soft US market shows improving trends and evidence of gradual recovery TBA market continuing to normalize though PR USA volume trend closing gap with market Initiatives to accelerate recovery Spirits remain resilient, RTD sustaining growth over time Innovative campaigns, partnerships & Spirits
Slide 26: India exemplifies premiumisation and emerging market tailwinds
P. 26 India exemplifies Pernod Ricard’s leverage of powerful tailwinds of premiumisation and the increasing penetration of International Spirits in emerging markets Pernod Ricard holds a clear leading position with over 40% revenue share in high Pernod Ricard is the #1 player in the Indian market va
Slide 27: China opportunity remains strong despite headwinds
P. 27 Despite current cyclical short-term headwinds, China opportunity remains strong, and Pernod Ricard is the best positioned international premium spirits’ player Current situation requires agility with implementation of PR is the clear #1 in premium imported spirits with leading and growing shar
Slide 28: Leading positions in mature and emerging markets
P. 28 Beyond our top domestic markets, worldwide we enjoy leading market positions in mature and emerging markets, with many reporting strong performances • +10% sales CAGR • Net Sales +12% vs FY19 • +7% sales CAGR W Europe +4% • Consolidating #1 • #1 with c. 9% share of • +10% sales CAGR DD • PR gr
Slide 29: Additional €1bn efficiencies FY26 to FY29
P. 29 Continuous improvement driving an additional €1bn efficiencies FY26 to FY29 in support of Operating Margin expansion and cash generation A strong record delivering Organic . . . through efficiency initiatives . . . delivering c.€900m1 efficiencies Operating Margin expansion of c.50bps p.a. . a
Slide 30: Focus on strong, sustainable cash generation
P. 30 Focus on strong, sustainable cash generation from profitable growth Cycle of accelerated investments in Capex and strategic inventories to be completed by FY25 c. €1.5bn Free Cash Flow average FY21- Capex and maturing inventories investments have peaked in Historical cash conversion (ROCF1/PRO
Slide 31: Active portfolio management and disposals
P. 31 Active portfolio management with disposal of Wines and non-strategic local brands, focusing on attractive premium international spirit brands Margin accretive disposals Becherovka and Clan Campbell Wines Minttu and other Nordic Brands • Disposal of local European spirits • Disposal of Australi
Slide 32: Strong balance sheet and clear financial policy priorities
P. 32 Maintaining strong balance sheet and clear financial policy priorities to drive sustainable shareholders returns Financial policy aims to balance the deployment of capital for profitable growth and returning capital to shareholders While maintaining investment grade rating: 1. Investment in fu
Slide 33: FY25 Outlook and medium-term update
P. 33 FY25 Outlook and medium-term update Ongoing challenging macroeconomic environment and intense geopolitical uncertainties continue to impact the Spirits market, particularly the worsening context in China and Travel Retail Asia, notably impacting Martell. This leads us to revisit our outlook fo
Slide 34: FY25 H1 Appendix
FY25 H1 Appendix
Slide 35: Definitions and reconciliation of non-IFRS measures
P. 35 Definitions and reconciliation of non-IFRS measures to IFRS measures Pernod Ricard’s management process is based on the following non-IFRS measures which are chosen for planning and reporting. The Group’s management believes these measures provide valuable additional information for users of t
Slide 36: Upcoming Communication
P. 36 Upcoming Communication Date (subject to change) Event 13th February 2025 Publication of H1 FY25 Audited Accounts 17th April 2025 Q3 FY25 Sales call 15th May 2025 US Market Webcast 28th August 2025 FY25 Sales and Results Call APPENDIX ｜ 8
Slide 37: US alcohol consumption remains stable with reduced frequency
P. 37 Overall US alcohol consumption remains stable over the years, though with reduced frequency, and amidst economic driven moderation Overall alcohol consumption frequency Monthly Alcohol Drinker Incidence1 (%) (occasions/per month) vs greater intensity (servings/occasion)2 53% 53% 12,2 Frequency
Slide 38: Increasing US consumer preference for spirits
P. 38 Increasing US consumer preference for spirits, growing its share of total servings within TBA US Monthly penetration is growing on spirits/spirits- Same trend amongst US GEN Z, with penetration based RTDs, while declining on other categories increasing for spirits . . . 63% 74% 60% 71% 2013 20
Slide 39: Emerging Markets
P. 39 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 Myanmar Chile Bosnia Congo Namibia Colombia Bulgaria Egypt Nepal Costa Rica Croatia Ethiopia Nig
Slide 40: Strategic International Brands' organic Net Sales growth
P. 40 Strategic International Brands’ organic Net Sales growth Volumes H1 FY25 Organic Net Sales of which Volumes of which Price/mix growth H1 FY25 (in 9Lcs millions) Absolut 6.7 (2)% (0)% (2)% Jameson 6.1 (0)% +3% (3)% Ballantine's 5.2 +8% +11% (3)% Chivas Regal 2.7 +3% +2% +1% Ricard 2.3 (5)% (4)%
Slide 41: Sales Analysis by Period and Region
P. 41 Sales Analysis by Period and Region Net Sales Q1 FY24 Q1 FY25 Change Organic growth Group Structure Forex Impact (€ millions) Americas 857 28% 787 28% (70) (8)% (47) (5)% +34 +4% (58) (7)% Asia / Rest of World 1,330 44% 1,181 42% (149) (11)% (108) (8)% +5 +0% (46) (3)% Europe 855 28% 816 29% (
Slide 42: Summary Consolidated Income Statement
P. 42 Summary Consolidated Income Statement (€ millions) H1 FY24 H1 FY25 Change Net sales 6 590 6 176 (6)% Gross Margin 4 081 3 773 (8)% Advertising and promotions spend (980) (857) (13)% Contribution after A&P spend 3 101 2 916 (6)% Structure costs (958) (931) (3)% Profit from Recurring Operations
Slide 43: Profit from Recurring Operations by Region (1/2)
P. 43 Profit from Recurring Operations by Region (1/2) World (€ millions) H1 FY24 H1 FY25 Change Organic Growth Group Structure Forex impact Net Sales 6,590 100.0% 6,176 100.0% (414) (6)% (267) (4)% +29 +0% (177) (3)% Gross margin 4,081 61.9% 3,773 61.1% (309) (8)% (178) (4)% +12 +0% (143) (3)% Adve
Slide 44: Profit from Recurring Operations by Region (2/2)
P. 44 Profit from Recurring Operations by Region (2/2) Asia / Rest of the World (€ millions) H1 FY24 H1 FY25 Change Organic Growth Group Structure Forex impact Net Sales 2,850 100.0% 2,619 100.0% (231) (8)% (156) (5)% +5 +0% (80) (3)% Gross margin 1,699 59.6% 1,523 58.1% (176) (10)% (98) (6)% +5 +0%
Slide 45: Foreign Exchange Impact
P. 45 Foreign Exchange Impact Average rates evolution On Profit Forex impact from H1 FY25 On Net Sales Recurring (€ millions) H1 FY24 H1 FY25 % Operations US Dollar USD 1,08 1,08 (0,0)% (1) (0) Chinese Yuan CNY 7,83 7,77 +0,8% +4 +3 Indian Rupee INR 89,78 91,07 (1,4)% (11) (4) British Pound GBP 0,86
Slide 46: Sensitivity of profit and debt to EUR/USD exchange rate
P. 46 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 result (1) Pre-tax profit from recurring operations +14 Impact on the balance sheet (€ millions
Slide 47: Balance Sheet: Assets
P. 47 Balance Sheet: Assets Assets 30/06/2024 31/12/2024 (€ millions) (Net book value) Non-current assets Intangible assets and goodwill 19,039 19,330 Tangible assets and other assets 4,972 5,335 Deferred tax assets 1,713 1,684 Total non-current assets 25,725 26,349 Current assets Inventories 8,255
Slide 48: Balance Sheet: Liabilities and Shareholders' Equity
P. 48 Balance Sheet: Liabilities and Shareholder’s Equity Liabilities and shareholders’ equity 30/06/2024 31/12/2024 (€ millions) Group Shareholders’ equity 15,749 16,543 Non-controlling interests 1,048 1,089 of which profit attributable to non-controlling interests 38 24 Total Shareholders’ equity
Slide 49: Analysis of Working Capital Requirement
P. 49 Analysis of Working Capital Requirement June December June December H1 FY24 WC H1 FY25 WC (€ millions) 2023 2023 2024 2024 change* change* Aged work in progress 6 267 6 513 6 616 6 951 278 230 Advances to suppliers for wine and ageing spirits 12 19 20 19 7 2 Payables on wine and ageing spirits
Slide 50: Net Debt
P. 50 Net Debt 30/06/2024 31/12/2024 (€ millions) Current Non-current Total Current Non-current Total Bonds 1,778 10,907 12,685 1,110 11,014 12,124 Commercial paper 196 - 196 1,043 - 1,043 Other loans and long-term debts 156 133 288 145 135 280 Other financial liabilities 352 133 485 1,188 135 1,323
Slide 51: Change in Net Debt
P. 51 Change in Net Debt (€ millions) 31/12/2023 31/12/2024 Operating profit 2,286 1,897 Depreciation and amortisation 217 211 Net change in impairment of goodwill, PPE and intangible assets 14 0 Net change in provisions (42) (30) Changes in fair value on commercial derivatives and biological assets
Slide 52: Net Debt Maturity profile as of 31st December 2024
P. 52 Net Debt Maturity profile as of 31st December 2024 €bn APPENDIX ｜ 8
Slide 53: Bond Details
P. 53 Bond Details Currency Par value Coupon Issue date Maturity date € 600 m 1.500% 5/17/2016 5/18/2026 € 1,000 m o/w : € 500 m 0.500% 10/24/2027 10/24/2019 € 500 m 0.875% 10/24/2031 € 2,000 m o/w : € 1,000 m 1.125% 4/7/2025 4/6/2020 € 1,000 m 1.750% 4/8/2030 € 500 m 0.125% 10/4/2021 10/4/2029 € 75
Slide 54: Net debt / EBITDA evolution
P. 54 Net debt / EBITDA evolution Closing rate Average rate(1) EUR/USD rate Jun FY24 -> Dec FY25 1.07 -> 1.04 1.08 -> 1.08 Ratio at 30/06/2024 3.1 3.1 EBITDA & cash generation excl. Group structure effect and forex impacts 0.3 0.3 Group structure and forex impacts 0.2 0.2 Ratio at 31/12/2024 3.6 3.5
Slide 55: Net Diluted EPS
P. 55 Net Diluted EPS (x 1,000) H1 FY24 H1 FY25 Number of shares in issue at end of period 255,632 252,269 Weighted average number of shares in issue (pro rata temporis) 255,632 253,243 Weighted average number of treasury shares (pro rata temporis) -2,839 -1,771 Dilutive impact of stock options and