Pernod Ricard SA · EURONEXT:RI
Pernod Ricard SA — Deutsche Bank conference 2012
34 slides from Pernod Ricard SA's conference presentation, Jun 20, 2012
Slide 1: A value-creative business model
PERNOD RICARD A value-creative business model Deutsche Bank conference – 20 June 2012
Slide 2: A value-creative business model
Deutsche Bank conference – 20th June 2012 A value-creative business model - TEXT Spirits within the consumers’ goods universe Major achievements… … based on a strong business model Striving for global leadership Pernod Ricard’s ambitions 2
Slide 3: Spirits carry higher margins
Spirits carry higher margins EBIT GDP margin1 EBIT margin growth 12,5% Pernod Ricard Spirits 2 Beverages (excl. Spirits) Food HPC Personal Goods GDP growth 30,0% 10,0% 25,0% 7,5% 20,0% 5,0% 2,5% 15,0% 0,0% 10,0% (2,5)% (5,0)% 5,0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Spirits c
Slide 4: IWSS market is value driven
IWSS(1) market is value driven… TOTAL SPIRITS 3,300 million cases Traditional Western Style 1,933 million cases 1,367 million cases 12% of volumes, but 37% of value CAGR 01/11 +2.7% 410 Local IWSS(1) 2010 398 969 million cases 398 million cases 393 386 385 367 IWSS(1) Volumes 352 With a strong Milli
Slide 5: … with a largely untapped potential
… with a largely untapped potential Example: China Pernod Ricard’s exposure to EM(1) Imported Spirits 1% CAGR ‘02 to ‘12 is balanced between 5m cases sales and profits Whisky: +28% Cognac: +20% Net Sales - 9 months FY11/12 White Sp. & others: +18% BaiJiu: 99% Baijiu: +3% 40% 60% Example: Russia “Loc
Slide 6: Spirits growth is driven by premium brands
Spirits growth is driven by premium brands Subprime crisis % CAGR 00-10 Super Premium+: +4.8% Asia crisis Gulf War Premium: +2.4% Standard: +2.1 % Volumes rebased to 100 in 1985 6
Slide 7: Portfolio is favorably oriented toward premium brands
Pernod Ricard’s portfolio is favorably oriented toward premium brands Prestige Ultra Premium > $84 Super Premium $42 - $83 $26 - $41 $17 - $25 $10 - $16 Standard Premium Super Premium + 74% of Pernod Ricard Net Sales(1) in Premium and above 1. Pernod Ricard net sales for the first 9 months of FY 201
Slide 8: A value-creative business model
Deutsche Bank conference – 20th June 2012 A value-creative business model - TEXT Spirits within the consumers’ goods universe Major achievements… … based on a strong business model Striving for global leadership Pernod Ricard’s ambitions 8
Slide 9: Successful strategic refocus and value-creative M&A
Successful strategic refocus and value-creative M&A December 2001 Net Sales(1) Profit from recurring operations(1) 1,9 7,6 x4 x6 1,8 July 2005 0,3 2000 2011 2000 2011 Market cap 21 July 2008 x7 Total 3 20 billion euros 2000(2) 2012(3) 1. Wines & Spirits business 2. Early Jan 2000 3. Average of the l
Slide 10: Organic growth has outpaced sector and main competitor
Pernod Ricard’s organic growth has outpaced that of the sector and that of its main competitor FY09 FY10 FY11 H1 FY12 Net sales +0% +2% +7% +11%2 organic growth Main international competitor +0% +2% +5% +7% EBIT1 +4% +4% +8% 17%3 organic growth Main international competitor +4% +2% +5% 9% 1. Operati
Slide 11: Rapid deleveraging
Rapid deleveraging FCF from recurring operations Net debt/EBITDA(1)(2) 7 6.2 1 400 6 1 200 -0.8x 5.4 1 000 4.9 800 5 -0.5x 1,275 1,191 €m 1,160 4.4 600 -0.5x 3.9 400 4 -0.5x 200 0 3 FY09 FY10 FY11 FY08 FY09 FY10 FY11 FY12* * As expected according to Pernod Ricard guidance Strong cash generation and
Slide 12: 2008 V&S acquisition debt fully refinanced
2008 V&S acquisition debt fully refinanced Sizeable and successful bond issues leading to over 75% bond proportion in total debt • EUR 1.0bn (Mar. 11) and USD 5.0bn (Apr. 11 to Jan. 12) • 5-year to 30-year maturities • Leveraging excellent market conditions and Pernod Ricard’s regained Investment Gr
Slide 13: A value-creative business model
Deutsche Bank conference – 20th June 2012 A value-creative business model - TEXT Spirits within the consumers’ goods universe Major achievements… … based on a strong business model Striving for global leadership Pernod Ricard’s ambitions 13
Slide 14: A business model built on six pillars
A business model built on six pillars A comprehensive portfolio of Premium brands Pernod Ricard’s 6 strategic pillars 14
Slide 15: Comprehensive portfolio of Premium brands
Comprehensive portfolio of Premium brands The Pernod Ricard House of Brands, covering all key categories Global Icons (2) Priority Premium Priority Prestige Spirit Brands (7) Spirit & Champagne Brands (5) Priority Premium Wine Brands (4) Key Local Spirit Brands (18) 15
Slide 16: A business model built on six pillars
A business model built on six pillars A comprehensive portfolio of Premium brands Premiumisation: Pernod Ricard’s innovation and sizeable marketing 6 strategic pillars investment 16
Slide 17: Premiumisation: sustained by innovation and marketing investment
Premiumisation: sustained by innovation and sizeable marketing investment A strategic priority that promotes greater profitability Premiumisation meets consumer expectations: • “Drinking less but better” in developed markets • Interest in inspirational brands, especially in emerging markets Premium
Slide 18: A business model built on six pillars
A business model built on six pillars A comprehensive portfolio of Premium brands Premiumisation: Pernod Ricard’s innovation and sizeable marketing 6 strategic pillars investment Decentralisation and our own Distribution network 18
Slide 19: Decentralization and our own distribution network
Decentralization and our own distribution network Duality Brand companies/Market Strong wholly-owned network, the most comprehensive in companies the industry PERNOD RICARD HOLDING In more than 70 countries BRAND DISTRIBUTION COMPANIES COMPANIES THE ABSOLUT PERNOD RICARD COMPANY ASIA CHIVAS BROTHERS
Slide 20: A business model built on six pillars
A business model built on six pillars A comprehensive portfolio of Premium brands Premiumisation: Pernod Ricard’s innovation and sizeable marketing 6 strategic pillars investment The Group’s strength Decentralisation and our own in emerging markets: Distribution network an asset for future growth 20
Slide 21: Strength in emerging markets is an asset for future growth
Pernod Ricard’s strength in emerging markets is an asset for future growth Western Style Spirits (ranking among International Groups)) # 2 RUSSIA #2 POLAND #1 CHINA #1 CENTRAL EUROPE #1 MEXICO # 1 INDIA #2 BRAZIL # 2 SOUTH AFRICA #2 CHILE # 1 ARGENTINA 21
Slide 22: Strength in emerging markets is an asset for future growth
Pernod Ricard’s strength in emerging markets is an asset for future growth Profit from recurring Sales We are the clear market leader in operations Asia, the Group’s fastest-growing H1 2011/12 region. 39% 39% Emerging markets are the most 61% 61% dynamic: the rise of a middle class attracted by Prem
Slide 23: A business model built on six pillars
A business model built on six pillars A comprehensive portfolio of Premium brands Premiumisation: Staff united Pernod Ricard’s innovation and sizeable marketing by a strong culture 6 strategic pillars investment The Group’s strength Decentralisation and our own in emerging markets: Distribution netw
Slide 24: Staff united by a strong culture
Staff united by a strong culture Our Business Model Our Values Our Style Entrepreneurial Spirit Decentralisation Reciprocal Sense of Loyalty Conviviality Strong Code of Ethics A collective commitment to perform A genuine source of competitive advantage of Pernod Ricard employees In a decentralised s
Slide 25: A business model built on six pillars
A business model built on six pillars A sense of social responsibility A comprehensive portfolio of and ethical commitment Premium brands since the Group’s creation Premiumisation: Staff united Pernod Ricard’s innovation and sizeable marketing by a strong culture 6 strategic pillars investment The G
Slide 26: Social responsibility and ethical commitment since the Group's creation
Social responsibility and ethical commitment since the Group’s creation Three priorities underpin Group policy A responsible attitude to drinking Developing A commitment shared by cultural initiatives or Environmental all Group employees as community responsibility business demonstrated by the proje
Slide 27: A value-creative business model
Deutsche Bank conference – 20th June 2012 A value-creative business model - TEXT Spirits within the consumers’ goods universe Major achievements… … based on a strong business model Striving for global leadership Pernod Ricard’s ambitions 27
Slide 28: European roots, global reach
European roots, global reach Truly global business, with an increasing share of Asia-RoW region 9 months 2010/11(1) 9 months 2011/12(1) 9% 9% 37% 39% 28% 26% 27% 25% Asia-RoW America Europe (excl. France) France Recent weakening of the EUR vs. USD has a positive impact on Pernod Ricard’s P&L • € +13
Slide 29: Emerging Markets are already as profitable as Mature Markets
Emerging Markets are already as profitable as Mature Markets HY1 11/12 Organic growth in Emerging Markets 39% Sales 61% +18% HY1 11/12 Profit from 39% Recurring 61% +22% Operations Emerging Markets Mature Markets Emerging Markets continue to deliver fast and profitable growth 1. As of end of March 2
Slide 30: Ambition to seize all regional opportunities
Ambition to seize all regional opportunities to deliver strong global growth Asia: Leverage Pernod Ricard’s position to strengthen its leadership • Deliver superior profitable growth by expanding dominance in the core business (Super Premium+ for affluent consumers & Indian whiskies) • Seize a major
Slide 31: A value-creative business model
Deutsche Bank conference – 20th June 2012 A value-creative business model - TEXT Spirits within the consumers’ goods universe Major achievements… … based on a strong business model Striving for global leadership Pernod Ricard’s ambitions 31
Slide 32: Guidance for FY 2011/12
Guidance for FY 2011/12 PRO(1) Financial debt Organic growth in Net Debt(2) / EBITDA(2) profit from recurring close to 3.9 operations close to +8% at 30 June 2012 1. Profit from Recurring Operations 2. Converted at the average rates, syndicated credit method 32
Slide 33: A leadership ambition
A leadership ambition Outgrow the industry thanks to the continued Premiumization strategy, enhanced by further efforts towards innovation Lead value growth in key spirits categories: • Cognac: Grow Martell value in the mid-teens, in particular leveraging further the unique price/mix opportunity off
Slide 34: NWA
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