Pernod Ricard SA · EURONEXT:RI
Pernod Ricard SA — Q3 2010/11 Earnings Presentation
52 slides from Pernod Ricard SA's earnings presentation, May 5, 2011
Slide 1: 2010/11 Q3 Sales
2010/11 Q3 Sales Good 3rd quarter 2010/11 in line with the first half of the financial year Confirmation of guidance for organic growth in profit from recurring operations close to +7% for the 2010/11 financial year 5 May 2011 This presentation can be downloaded from our website: www.pernod-ricard.c
Slide 2: Presentation structure
Presentation structure • Overall analysis • Growth by region • Portfolio review • Conclusion and outlook 2
Slide 3: Key figures to 31 March 2011
Key figures to 31 March 2011 Sales: € 5,902 million (+11%, organic growth +7%) Top 14: volume +7%, sales +11%* Emerging markets**: sales +16%* Mature markets: sales +2%* * Organic growth ** Annual GNP per capita < USD 10,000 3
Slide 4: Environment in 3rd quarter 2010/11
Environment in 3rd quarter 2010/11 Average EUR/USD rate virtually unchanged in Q3 2010/11 vs. Q3 2009/10 yet: • Weaker USD at end March 2011 than at end March 2010 (EUR/USD 1.42 on 31 March 2011 vs. 1.35 on 31 March 2010) • Ongoing depreciation of the USD compared to appreciation in Q3 and Q4 2009
Slide 5: Nine-month sales growth to March 2011
Nine-month sales growth to 31 March 2011 +7% -3% +7% (143) 350 368 +11% 5,902 5,326 9-month sales 09/10 Organic growth Forex effect Group structure 9-month sales 10/11 Organic growth: +7% (Spirits +8%, Wines stable) Forex effect primarily related to the rise of the USD, as well as many other cur
Slide 6: 3rd quarter sales growth
3rd quarter sales growth +3% -2% +5% 43 (38) 78 +5% 1,620 1,537 Q3 09/10 sales Organic growth Forex effect Group structure Q3 10/11 sales Organic growth: +5% (Spirits +6%, Wines -2%) Forex effect primarily due to the appreciation of the following currencies: CNY, AUD, INR, KRW, MXN, GBP, etc.
Slide 7: Organic sales growth by quarter 2009/10 and 2010/11
Organic sales growth by quarter 2009/10 and 2010/11 20 +16% 15 10 2009/10 5 +3% 0 -5 -2% -4% -10 Q1 Q2 Q3 Q4 09/10 09/10 09/10 09/10 20 15 +10% 2010/11 10 +6% +5% Significant growth in Q3 5 2010/11 despite the difficult 0 comparison basis -5 -10 Q1 Q2 Q3 10/11 10/11 10/11 7
Slide 8: 3rd quarter 2010/11 trends and key events
3rd quarter 2010/11 trends and key events Continued strong growth of our strategic brands with a further increase in the share of the premium portfolio Confirmation of strong growth in emerging markets*(+15%**) and stability** in mature markets (impacted by certain unfavorable technical factors)
Slide 9: Main technical effects of Q3 2010/11
Main technical effects of Q3 2010/11 UK: sales ahead of rise in excise duties on 1 April 2011 China: as anticipated, growth in Q3 2010/11 below that of HY1 (9-month cumulative growth of 25%*): Q3 2010/11 hampered by the timing of the Chinese New Year (03/02/2011 vs. 14/02/2010) Volume shifts f
Slide 10: Presentation structure
Presentation structure • Overall analysis • Growth by region • Portfolio review • Conclusion and outlook 10
Slide 11: Organic sales growth by region
Organic sales growth by region 9 months 9 months Q3 2009/10 2010/11 2010/11 Asia-RoW +10% +15% +10% Americas +3% +6% +11% Europe (excluding France) -6% 0% -6% France +1% +4% +4% World +2% +7% +5% All regions contributed to the acceleration of growth over the first 9 months of the fiscal year: • Asia
Slide 12: Asia – Rest of World
Asia – Rest of World Analysis by category 9 months 9 months (€ millions) ∆ Organic ∆ 2009/10 2010/11 Sales* 1,746 2,156 +23% +15% * Including customs duties Strong dynamism confirmed Martell: Martell remains the leading growth driver of the region even after the expected technical slowdown in Q3
Slide 13: Asia – Rest of World: Analysis by country
Asia – Rest of World Analysis by country China: very strong growth (+25%*) driven by Martell and Scotch whiskies. As expected, technical slowdown anticipated in Q4 (estimated annual growth between 20%* and 25%*) India: 32%* growth with very strong progression of local whiskies and the Top 14 O
Slide 14: Americas
Americas Analysis by category 9 months 9 months (€ millions) ∆ Organic ∆ 2009/10 2010/11 Sales 1,369 1,564 +14% +6% Accelerating growth Acceleration of organic growth in Q3 2010/11 (+11%* vs. +4%* in HY1 2010/11) Top 14 (+9%*): the main source of growth, with Jameson in the US, ABSOLUT in the US
Slide 15: Americas: Analysis by country: US
Americas Analysis by country: US Gradual market recovery: Nielsen 9 months 2011 +2% and NABCA +3% Faster growth of premium brands, improved trends in the on-trade, and decline in promotional intensity of certain competitors In this context Pernod Ricard is benefitting from its premium positionin
Slide 16: Americas: other countries
Americas Analysis by country: other countries in the Americas Canada: moderate sales growth with strong growth of ABSOLUT, Jameson, Havana Club and Graffigna, but declines of Malibu and Jacob’s Creek Mexico: significant growth with strong performances by Chivas, Ballantine’s, Jameson, The Glenli
Slide 17: Europe (excluding France)
Europe (excluding France) Analysis by category 9 months 9 months (€ millions) ∆ Organic ∆ 2009/10 2010/11 Sales 1,686 1,633 -3% - Sales stable* for the 9 months Stable* at end March, a marked improvement compared to the trend of the same period of the previous financial year. Decline of -6%* in Q3
Slide 18: Europe (excluding France): Analysis by country
Europe (excluding France) Analysis by country Western Europe: sales down 2%* • Germany: strong growth, supported by ABSOLUT, Havana Club and Amaro Ramazzotti • Decline in Spain after a difficult Q3 (smoking ban, unfavourable comparatives/strong sales in March 2010, later Easter) and in the UK, nev
Slide 19: France
France 9 months 9 months (€ millions) ∆ Organic ∆ 2009/10 2010/11 Sales 525 549 +4% +4% Sustained solid growth Continued strong performance of the Top 14 (+6%*), in particular: Ricard, ABSOLUT, Chivas, Mumm, Perrier-Jouët, Jameson, Ballantine’s and Havana Club Ricard, benefitting from the launch
Slide 20: Sales analysis by geographic region
Sales analysis by geographic region 9 months 9 months 2009/10 2010/11 10% 9% 33% France 37% 32% Europe 28% Americas Asia & RoW 25% 26% Strong increase in Asia & Rest of World’s share of Group sales 20
Slide 21: Sales breakdown between emerging markets and mature markets
Sales breakdown between emerging markets* and mature markets 9 months 2009/10 9 months 2010/11 33% 38% 62% 67% Emerging markets* Mature markets Emerging markets*: +16%** growth, accounting for 80% of the Group’s total growth Mature markets: +2%** growth * Annual GNP per capita < USD 10,000 **
Slide 22: Presentation structure
Presentation structure • Overall analysis • Growth by region • Portfolio review • Conclusion and outlook 22
Slide 23: Organic sales growth by category
Organic sales growth by category % of FY 9 months Q3 sales 2009/10 2010/11 2010/11 Top 14 Spirits & Champagnes 59% +4% +11% +8% Priority Premium Wines 5% -2% +1% -5% 18 key local spirits brands 17% +4% +2% +2% Other 19% -3% 0% +3% Total 100% +2% +7% +5% Very favourable growth mix Premium brands* rep
Slide 24: Top 14 Spirits & Champagne
Portfolio review Top 14 Spirits & Champagne Volume: +7% Sales: +11%* % of Group sales: 59% *Organic growth 24
Slide 25: Top 14 Spirits & Champagne: acceleration of growth
Top 14 Spirits & Champagne Acceleration of growth compared to 2009/10 with price/mix remaining very favourable (+4%) Volume organic Net Sales 5 out of 14 brands reported Price/mix effect growth organic growth double-digit organic sales Absolut 7% 7% 0% growth Chivas Regal 9% 9% 1% Ballantine's 7%
Slide 26: Top 14 Spirits & Champagne: Iconic Brands
Top 14 Spirits & Champagne Iconic Brands Confirmed growth in the US (volumes +3%, sales +1%*) and outside the US (volumes +10%, sales +12%*) with an overall price/mix that turned positive to +2% in Q3 ABSOLUT broke its volume record with nearly 11 million 9L cases in Q3, based on the 12 months endin
Slide 27: Top 14 Spirits & Champagne: Premium Brands
Top 14 Spirits & Champagne Premium Brands Launch of the new bottle in February 2011 with significant market share gains in the off trade Continued very strong growth in the US (> +30%*), in Eastern Europe and Africa/Middle East Very strong growth of “3 Años” in Germany and “Añejo Blanco” in Cuba (un
Slide 28: Top 14 Spirits & Champagne: Prestige Brands
Top 14 Spirits & Champagne Prestige Brands Very strong growth (+25%*) with very favourable price/mix due to the success of Martell in Asia (+33%* in China) Rapid development in all key markets: China, Asia Duty Free, Taiwan, Vietnam, etc. Good performance by the brand in the US and very strong growt
Slide 29: Major Marketing Initiatives & Innovation
Major Marketing Initiatives & Innovation Top 14 Spirits & Champagnes *Organic growth 29
Slide 30: ABSOLUT marketing initiatives
ABSOLUT Night: TV commercials in Brazil, Chile, Italy, Mexico and Greece ABSOLUT Wallpaper campaign in Italy to Launch of ABSOLUT Svea “redesign & reinvent your city” launches limited edition in Sweden “Ron English” artist limited edition 30
Slide 31: Chivas Regal initiatives
Launch of Chivas Regal 18 Vivienne Westwood Limited Edition at London Fashion Week Chivas Regal 25 - Title Sponsor of Asian Film Awards March 2011 Pre-Awards TV advertising Awards Ceremony in Hong Kong 31
Slide 32: Ballantine's initiatives
Ballantine’s Finest new TV commercial “Leave an Impression” Ballantine’s Championship South Korea April 2011 Bar installations 32
Slide 33: Martell initiatives
New Martell Noblige New Martell VSOP TV campaign in China and Taiwan packaging 33
Slide 34: Jameson film sponsorship
Jameson continues film sponsorship… 2011 Jameson / Empire Jameson “Cult Film Club” “Done in 60 Seconds” competition with Kevin Spacey Jameson’s St. Patrick promotion at Gatwick Airport with a limited edition 34
Slide 35: Launch of the new Ricard bottle
Launch of the new Ricard bottle 35
Slide 36: Havana Club and Beefeater initiatives
Shooting begins on Havana Club-sponsored movie “7 Days in Havana” Beefeater “Winter Gin” 36
Slide 37: The Glenlivet and Royal Salute initiatives
“The Glenlivet Archive,” a one-of-a-kind collection, sold for GBP 20,000 at “Masters of Spirits” in Singapore “Royal Salute World Polo – Nations Cup” in Dubai, January 2011 37
Slide 38: Malibu and Kahlúa initiatives
Success of the mix of famous Competition to win a Italian DJ duo “Crookers” “Delicioso Night In” with celebrity chef Aarón Sánchez New application Malibu Music Mixer downloaded more than 300,000 times in the first three months 38
Slide 39: Mumm and Perrier-Jouët initiatives
Launch of “Les Menus de Légende” Celebrating Perrier-Jouët’s bicentenary 2011 Edition where Mumm invites top chefs to reinterpret classic menus (www.menusdelegende.com) International Bicentenary Dinner, Beaux-Arts, Paris US artist Daniel Arsham created a diptych sculpture containing 2 magnums of Bel
Slide 40: Priority Premium Wines
Priority Premium Wines Volume: stable Sales: +1%* % of group sales: 5% Volume -4% Sales* -1% Volume +5% Sales* -1% Volume +9% Sales* +10% Volume +13% Sales* +23% *Organic growth 40
Slide 41: Priority Premium Wines initiatives
Priority Premium Wines Jacob’s Creek sponsor of the Australia Tennis Open for Brancott Estate’s sponsorship of the the 2nd year with 1.9 billion viewers in 2011 2011 Rugby World Cup Campo Viejo’s new press campaign in Spain Launch in Australia of Jacob’s Creek Sparkling’s campaign “Together We Spark
Slide 42: 18 key local spirits brands
18 key local spirits brands Volume: +5% Sales: +2%* % of Group sales: 17% *Organic growth 42
Slide 43: Presentation structure
Presentation structure • Overall analysis • Growth by region • Portfolio review • Conclusion and outlook 43
Slide 44: Conclusion
Conclusion Confirmation of improved business trends Good Q3 at +5%* despite a challenging comparison basis Nine-month organic sales growth of +7%* supported by: • Strong growth in emerging markets (+16%*) • Confirmed recovery in mature markets (+2%*) Portfolio premiumisation: • Top 14 +11%* wi
Slide 45: Outlook
Outlook These good results strengthen our confidence to achieve our objectives: Organic growth in profit from recurring operations for the 2010/11 financial year close to +7% Net Debt*/EBITDA* ratio close to 4 at the 30 June 2012 year end *Translated at the average foreign exchange rates for the yea
Slide 46: Next communications
Next communications Conference calls with Regional CEOs: • Europe: Thursday 23 June 2011 with Laurent Lacassagne • America: Thursday 15 December 2011 with Philippe Dréano Next communications from Pernod Ricard Holding: • Capital Markets Days 2010/11: 24 and 25 May 2011 in New York • 2010/11 annu
Slide 47: Pernod Ricard
%% o> Pernod Ricard Créadeurs de comivialié
Slide 48: Appendices
AA a“ Pernod Ricard Créatetips de cowivialité Appendices
Slide 49: Strategic brands organic growth
Strategic brands organic growth Volume organic Net Sales Price/mix effect growth organic growth Absolut 7% 7% 0% Chivas Regal 9% 9% 1% Ballantine's 7% 9% 2% Ricard 0% 3% 4% Jameson 20% 22% 2% Malibu 1% -2% -3% Beefeater 3% 3% 0% Kahlua -3% -3% 0% Havana Club 14% 8% -6% Martell 14% 25% 11% The Glenli
Slide 50: Sales by region
Sales by region Net Sales HY1 2009/10 HY1 2010/11 Change Organic Growth Group Structure Forex impact (€ millions) France 397 10.5% 415 9.7% 18 5% 18 5% (0) 0% 0 0% Europe excl. France 1,247 32.9% 1,235 28.8% (12) -1% 24 2% (68) -5% 31 2% Americas 1,000 26.4% 1,151 26.9% 151 15% 38 4% (4) 0% 117 12%
Slide 51: Foreign Exchange Effect
Foreign Exchange Effect Forex impact YTD March 2010/11 Average rates evolution On Net (€ millions) Sales 2009/10 2010/11 % US Dollar USD 1.43 1.34 -6.4% 78 Chinese Yuan CNY 9.77 8.93 -8.6% 49 Indian Rupee INR 67.23 60.94 -9.4% 30 Korean Won KRW 1.69 1.53 -9.6% 20 Russian Ruble RUB 43.23 40.42 -6.5%
Slide 52: Group Structure Effect
Group Structure Effect Group structure YTD March 2010/11 On Net Sales (€ millions) Scandinavian assets (64) Other (78) Total Group structure (143) 52