Pernod Ricard SA · EURONEXT:RI
Pernod Ricard SA — Q1 2009/10 Earnings Presentation
36 slides from Pernod Ricard SA's earnings presentation, Oct 22, 2009
Slide 1: 2009/10 1st Quarter Net Sales
2009/10 1st Quarter Net Sales Sales in line with our expectations 1st quarter 2009/10 Sales down 4%* with a positive price/mix effect 22 October 2009 1 * Organic growth
Slide 2: Presentation structure
Presentation structure - Overall analysis - Portfolio review - Growth by region - Conclusion and outlook 2
Slide 3: 2009/10 1st quarter economic environment
2009/10 1st quarter economic environment Continuing growth in the new economies (excepting Eastern Europe) Europe) First signs of recovery in Western countries, but without any significant significant impact on our markets to date Strong recent depreciation of USD against the EUR, but with an averag
Slide 4: 2009/10 1st quarter key figures
2009/10 1st quarter key figures Sales: € 1,646 million, organic decline of 4% Sales: • in line with our expectations • compared to a very high comparison basis (+7%(1) in the 1st quarter 2008/09) Good resilience of key brands with a very favourable mix / price Good effect: Top 15(2): Volume -9%, Val
Slide 5: Major technical items in 1st quarter 2009/10: adverse items
Major technical items in 1st quarter 2009/10 1st quarter 2009/10 affected by adverse items … 1 • Chivas: distribution taken back in Japan as of 1 October 2009 no deliveries to Kirin in Q1 2009/10 (about ¼ of drop in brand volume) • ABSOLUT: last months of distribution by Maxxium and Future Brands Br
Slide 6: Major technical items in 1st quarter 2009/10: favourable items
Major technical items in 1st quarter 2009/10 … but also by a number of favourable items: … • China: Olympics in Q1 2008/09 (closure of on- on-trade outlets) • Spain: expectations of an excise duty increase • Venezuela: new route to market 6
Slide 7: Sales analysis over 1st quarter 2009/10
Sales analysis over 1st quarter 2009/10 (€ millions) 1,756 (66) (24) (20) 1,646 -4% -1% -1% -6% 08/09 Organic Forex Group 09/10 Q1 sales growth impact structure Q1 sales Organic growth: -4% (Spirits -2%, Wines & Champagne -13%) Organic Group structure: contribution of Vin&Sprit operations, amounting
Slide 8: Organic sales growth by quarter in 2008/09 and 2009/10
Organic sales growth by quarter in 2008/09 and 2009/10 10 +7% 5 +3% 0 -5 -3% -10 -15 -12% -20 Q1 Q2 Q3 Q4 08/09 08/09 08/09 08/09 15 10 5 0 -5 -4% -10 Q1 09/10 Q1: the most unfavourable comparatives of the financial year 8
Slide 9: Presentation structure
Presentation structure - Overall analysis - Portfolio review - Growth by region - Conclusion and outlook 9
Slide 10: Portfolio review
Portfolio review TOP 15 Volume: - 9%* Sales: - 5%* *Organic growth calculated over 2 months from August to September for ABSOLUT 10
Slide 11: Portfolio review
Portfolio review Volume* -10% Sales* -7% Shipments down 10% over Q1 2008/09, on an artificially high comparison basis following the strong sales recorded by Maxxium and Future Brands prior to the takeover of brand distribution by Pernod Ricard from 1 October 2008 (Q1 2008/09 volume +10%) US: •Deplet
Slide 12: Portfolio review
Portfolio review Volume -17% Sales* -7% High comparative: Q1 2008/09 +10% Asia: Asia •16% decline, half of which was caused by the lack of deliveries in Q1 in Japan due to the transfer of distribution from Kirin to PR Japan on 1 October 2009 •Significant growth in China (with a volume transfer from
Slide 13: Portfolio review
Portfolio review Volume -13% Sales* -15% Ballantine’ Ballantine’s Finest: Finest volume -10% •Significant decline in Eastern Europe (Russia, Romania, Serbia, Bulgaria) •Resilience in Spain •Slight drop in France (Nielsen -2.5%) due to shift of promotions to Q2 •Growth in Poland, Portugal, Greece and
Slide 14: Portfolio review
Portfolio review Volume -3% Sales* +2% US: continuing strong growth in depletions (+29%), confirmed by Nielsen volume +22% Europe: Europe •Good performance in Scandinavia •Stable in Ireland, UK and Germany •Decline in Eastern Europe (but wholesalers’ sales increasing in Russia) Drop in South Africa
Slide 15: Portfolio review
Portfolio review Volume +4% Sales* +13% Martell VS -28%, Noblige +57%, Cordon Bleu +15% Continuing very positive price and mix effect over the 2009/10 financial year Strong growth due to China, Taiwan and Vietnam Volume +3% Sales* +6% Strong progression in France, Greece, Chile and Canada Modest gro
Slide 16: Portfolio review
Portfolio review Volume -1% Sales* +2% Good overall performance: •France: slight decline by the brand due to difficult on-trade situation. Modest growth in off-trade volume •Modest overall growth in other European markets, markets with good performances in Spain and Belgium Volume -7% Sales* -3% Spa
Slide 17: Portfolio review
Portfolio review Volume -9% Sales* -9% New digital marketing platform, running in the US and rolling out in Europe US: strong recovery by Malibu with depletions +16%, not yet reflected in shipments (stable) Europe: Europe decline in major markets (UK, France, Spain and Germany) and in Eastern Europe
Slide 18: Portfolio review
Portfolio review Volume -13% Sales* -7% strategy combined with controlled production costs, resulted in a 7%* Value strategy, increase in the brand’s contribution in Q1 UK: sharp decline in volume, due to promotion reduction Growth in all other markets in particular in the US and Australia Volume -1
Slide 19: Portfolio review
Portfolio review Volume -22% Sales* -18% France: France strong decline in shipments due to restocking of July 2008 but Nielsen +4% in a market up1% in value in Q1 2009/10 Deteriorating on-trade market Drop in volume across all other markets, with marked decreases in the US and the UK Volume -35% Sal
Slide 20: Key local brands
30 key local brands Our portfolio of 30 key local brands confirmed its resilience at a time of economic crisis: volume +1% and sales +2%* over Q1 2009/10: • Continuing very strong growth of local whisky brands in India: Royal Royal Stag (+33%), Blender’ Blender’s Pride (+19%) and Imperial Blue (+26%
Slide 21: Presentation structure
Presentation structure - Overall analysis - Portfolio review - Growth by region - Conclusion and outlook 21
Slide 22: Asia – Rest of World
Asia – Rest of World Organic Forex Group (€ millions) Q1 08/09 Q1 09/10 growth impact structure Sales 498 514 +3% - - Asia: strong growth in Asian emerging markets +16%* • Very strong growth in India (+26%*), in China (+19%*) and in Vietnam (+21%*). China benefited from a favourable comparative (Oly
Slide 23: Americas
Americas Organic Forex Group (€ millions) Q1 08/09 Q1 09/10 growth impact structure Sales 467 456 -2% - -1% US: • Depletions became positive over Q1, for the first time since summer 2008 • Shipments down due to the timing vs Q1 08/09 of distributors’ Christmas and New Year’s orders and the ABSOLUT t
Slide 24: Europe
Europe Organic Forex Group (€ millions) Q1 08/09 Q1 09/10 growth impact structure Sales 630 520 -11% -4% -3% Region that remains the most impacted by the crisis and therefore suffered the sharpest decline over Q1 2009/10 Central and Eastern Europe: Europe substantial declines in Russia and Poland ag
Slide 25: France
France Organic Forex Group (€ millions) Q1 08/09 Q1 09/10 growth impact structure Sales 161 157 -3% - - More difficult environment overall with accelerated decline of on-trade and downward price pressure in off-trade Decline primarily due to the Mumm brand, adversely affected by difficult market con
Slide 26: Analysis of Sales by geographic region
Analysis of Sales by geographic region Q1 08/09 Q1 09/10 9% France 10% 28% 31% Europe Americas 36% 32% Asia and ROW 28% 27% Asia / Rest of World, driven by China and India, increased its share of Group sales 26
Slide 27: Growth in new economies
Growth in new economies QI 08/09 sales Q1 09/10 sales 30% New 33 % economies Mature 70% markets 6 7% New economies confirm their role as growth drivers for the Group, with a +6%* sales increase in Q1 2009/10 * Organic growth, including Vin&Sprit over 2 months 27
Slide 28: Presentation structure
Presentation structure - Overall analysis - Portfolio review - Growth by region - Conclusion and outlook 28
Slide 29: Conclusion and outlook
Conclusion and outlook Q1 2009/10 proved satisfactory in comparison with a record Q1 20 2008/09. 08/09. Q2 performance will have to be viewed against comparatives which remain high Sales in Q1 2009/10 reflect: • a positive price / mix effect • a European market that remains difficult … • … but buoya
Slide 30: Pernod Ricard
% Pernod Ricard
Slide 31: Appendices
WM, =< Pernod Ricard Vy Appendices SS Oa SO
Slide 32: Strategic brands' organic growth
Strategic brands’ organic growth Volumes organic Net Sales organic growth growth Absolut (*) -10% -7% Chivas Regal -17% -7% Ballantine's -13% -15% Ricard -1% 2% Martell 4% 13% Malibu -9% -9% Kahlua -14% -14% Jameson -3% 2% Beefeater -7% -3% Havana Club 3% 6% The Glenlivet -7% -8% Jacob's Creek -13%
Slide 33: Sales by region
Sales by region € million Q1 08/09 Q1 09/10 Variation Organic Growth Group Structure Forex impact France 161 9% 157 10% (4) -2% (4) -3% 0 0% 0 0% Europe excl. France 630 36% 520 32% (111) -18% (66) -11% (18) -3% (27) -4% Americas 467 27% 456 28% (11) -2% (10) -2% (2) -1% 2 0% Asia / Rest of the Worl
Slide 34: Foreign exchange effect
Foreign exchange effect Average rates evolution Forex impact Q1 2009/2010 On Net Sales (€ million) A08/09 A09/10 % US Dollar USD 1.50 1.43 -5% 15 Chinese Yuan CNY 10.29 9.77 -5% 6 British Pound GBP 0.80 0.87 10% (9) Swedish Krona SEK 9.47 10.41 10% (3) Japanese Yen JPY 161.76 133.85 -17% 3 Mexican P
Slide 35: Reminder of sensitivity of profit and debt to EUR/USD exchange rate
Reminder of sensitivity of profit and debt to EUR/USD exchange rate Estimated impact of a 1% depreciation of the USD and linked currencies(1): • – € 12 m on profit from recurring operations(2) (PRO) and + € 3 m on financial expenses, expenses, i.e. – € 9 m on pre- pre-tax profit from recurring opera
Slide 36: Group structure effect
Group structure effect Group structure Q1 2009/2010 On Net Sales (€ million) V&S acquisition 30 Other (including Wild Turkey, Tia Maria, Stolichnaya...) (50) Total Group Structure (20) 36