Pernod Ricard Sa · EURONEXT:RI
Pernod Ricard Sa — Pernod Ricard S A — H1 FY23 Earnings Presentation
53 slides from Pernod Ricard Sa's earnings presentation, Feb 16, 2023
Slide 1: Growth data specified in this presentation refers to organic growth, unless otherwise stated Data
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 our website: www.pernod-ricard.com
Slide 2: Very strong, diversified sales; sustaining margins; investing in growth
VERY STRONG, DIVERSIFIED SALES Resilient consumer demand Continued premiumization building on unique portfolio Excellent broad-based growth across all regions SUSTAINING MARGINS DESPITE HIGH INFLATION +10% price effect leveraging superior RGM1 initiatives +3% volumes growth Continued operational eff
Slide 3: Very strong H1 FY23 financial delivery
Very strong H1 FY23 financial delivery Sales Reported +19% Group Share of Net Profit Organic +12% ° E7116M oe, yg, «8 1,792M +29% PRO Reported +21% EPS E2,A23M cveric 412% €6./7 +23% ’ 3ycacr +10% Free Cash Flow Net Debt/ EBITDA €954m 28% 26x +0.2x 1. 3Y CAGR vs H1 FY20 pre COVID, at constant Fx 3 |
Slide 4: Continued excellent broad-based growth across all regions
Continued excellent broad-based growth across all regions Gaining market share in most markets Sales enhanced by phasing in US and China Americas osc! +7% Weight in Sales 28% 3Y CAGR? +9% Pricing? HSD Organic Sales Growth, Including Travel Retail 2. 3Y CAGR vs H1 FY20 pre COVID, at constant Fx Weigh
Slide 5: Very strong, diversified growth across all spirits categories
Very strong, diversified growth across all spirits categories Leveraging the industry's broadest and most comprehensive portfolio with six categories driving c. 90% of the growth Scotch Whisky ea Vodka 22%! +23% "IDe” 8% Irish Whiskey Gin 13% +20% in VE 5% i : = _ Cognac & Seagram's Whiskies Brandie
Slide 6: Buoyant Specialty Brands growing +14% with +22% 3Y CAGR
Buoyant Specialty Brands growing +14% with +22% 3Y CAGR With rapid deployment of KDPs, activating more brands while addressing fast growing demand in an increasingly fragmented market. Specialty Brands doubling weight in Sales since FY19 Lillet oad 3Y CAGR! Italicus 2Y CAGR2 +43% +28% +83% Malfy Red
Slide 7: Driving the attractiveness of our brands with strong investments
Driving the attractiveness of our brands with strong investments Leveraging matrix, strong A&P acceleration in US and Europe c. €1bn investments in A&P in H1 with A&P to Net Sales ratio increases in: \ - USA Sus p Absolut ‘The World of Absolut Cocktails: Jameson's US ‘Widen the Circle’ campaign acro
Slide 8: Brand equity of our premium portfolio supports strong price increases
Brand equity of our premium portfolio supports strong broad-based price increases Further improving value conversion through optimising RGM effectiveness powered by .Y an . REV-UP Leveraging unique portfolio with c.80% of growth led by premium and above brands Driving acceleration of price impacts,
Slide 9: Market Share increase
Share Market Decrease Share increase Net market share Baseline growth Stores with no Increased decreased store changed change in visit store visit visit frequency frequency frequency frequency
Slide 10: Continuing the premiumization of our portfolio
Continuing the premiumization of our portfolio with Innovation, Prestige and active portfolio management Launch of the Absolut Night Range with Royal Salute Platinum Jubilee Edition, ultra Launch of Jameson Single Pot Still in the Absolut Smoky Pifia in Mexico prestige edition celebrating the 70th y
Slide 11: Unique culture of Conviviality and Engagement amplifying performance
Unique culture of Conviviality and Engagement amplifying performance Diversity & Inclusion Strong sense at the core of belonging ‘S—=—) |lsay ‘\ 2022 OUR EMPLOYEE FEEDBACK SURVEY THE DIFFERENCES ARE WHAT MAKE OUR WORLD FLOURISH. LE Dynamic talent management ana | anne i og | a 35% women in Top 77% e
Slide 12: Leveraging innovation, technology and brands to drive sustainable change
Leveraging the power of innovation, technology and our brands to drive sustainable change Investing in new technologies for a carbon Innovating with new sustainable packaging Leveraging the power of our brands to promote neutral future solutions responsible drinking Sourcing ingredients sustainably
Slide 13: Sales Analysis
“e a : a Ss Ls 13 | PERNOD RICARD - FY23 HALF-YEAR SALES AND RESULTS - SALES ANALYSIS Creal a confialite ¥ - — i, Pernod Ricard
Slide 14: Solid first half growth in a normalizing market (USA)
Solid first half growth in a normalizing market + Underlying spirits value depletions growing +3% with continued dynamism in premiumization trends mn * Strong pricing across portfolio following Fall price increases and complementing last year initiatives. New price increases in H2 + Jameson and Jeff
Slide 15: China +4% | +10% 3Y CAGR
» China +4% | +10% 3Y CAGR ’ ee | Confident outlook following lifting of. , Covid restrictions / wa f * Sales impacted by heavy Covid restrictions in Q2 5 ee * Martell enjoyed solid growth with strong Mid Autumn ¢ Festival and soft Q2 due to Covid disruptions * ; * Very strong pricing driving overal
Slide 16: India: on track to deliver profit back to pre-covid level
on track to deliver profit back to pre-covid level, * Very solid low double digit pricing * Very strong brand activation to capture demand recovery «Net Sales now at c. 80% of pre covid levels * Overall'recovery driving very strong premium Scotch development 16)/PERNOD RICARD - FY¥23 HALF-YEAR SALES
Slide 17: India: excellent growth with continued premiumization momentum
Excellent growth with continued premiumization momentum * Very strong revenue growth management driving mid single digit pricing including on Seagram’s whiskies + Favorable mix with faster growth of Royal Stag and Blender’s Pride * Continued very strong momentum of Strategic International Brands in
Slide 18: Europe: excellent performance with very strong pricing
= =~ Excellent performance with very stre pricing across the region? : + France: modest growth, with good momentum on Ric ¢ Spain: double-digit growth with On-trade rebound nota driven by gin portfolio, Absolut and Ballantine’s ¢ UK: growth with dynamic spirits notably Absolut, Jameson, Malibu and M
Slide 19: Americas and Asia-RoW
Americas! +7% | +9% sy cacr * Canada: high single digit growth with good pricing, driven by broad-based dynamism across Strategic International Brands * Brazil: continued excellent performance driven by Scotch Portfolid jy and Absolut, with very strong pricing = * Mexico: strong double-digit growth
Slide 20: Attractiveness of portfolio powering double digit growth across all spirits segments
Attractiveness of our portfolio of brands powering double digit growth across all spirits segments Strategic International Brands 47am ay cAGR? qt ‘ x 66%! growth oy _—~Pricing? +13% , t8% | vp Strategic Local Brands 17% Specialty Brands Strategic Wines 0, 9 4% -2% -1% Msp 1. Weight in H1FY23 Sales
Slide 21: Jameson: all key markets growing
all key markets growing? * Continued good growth of Jameson al g Barrel a} * Strong pricing across regions e and Blac * High single digit value depletion growth in USA Double digit growth in Europe and Travel Retail * Continued strong development in South Africa, Nigeria, India, Korea, Australia and
Slide 22: Chivas Regal, Royal Salute, Ballantine's, The Glenlivet
Chivas Regal 0 au | [ ~ | Excellent growth driven by Travel Retail, Turkey, LATAM, India, Japan, a a ae Spain and Poland Royal Salute 97% 10% So ia Ne! 3 Excellent growth acceleration driven by Travel NX) Taiwan market, China and India Ballantine’s 1m 0% 2 Strong price and mix with growth driven mai
Slide 23: Absolut
Abs cae — he x Continued strong broad-based growths. despite high comparison basis with all key markets growing | + Western Europe in double digit growth with strong price and volume growth * Continued rapid international development ndAB NN India and China x * Solid rebound in Travel Retail across
Slide 24: Martell +3% | +4% 3Y CAGR
Martell +3% | +4% 3Y CAGR * Overall very strong pricing in line with value strategy ¢ Strong double digit pricing drove growth in China in. : with strong Mid Autumn Festival followed with so to COVID . ¢ GTR impacted by Covid in Hainan and shipmepi toward H2 + Soft H1in USA * Continued very strong d
Slide 25: Very strong dynamism and pricing for other Strategic International Brands
Very strong dynamism and pricing for other Strategic International Brands Abe Havana Club | +8% Malibu | +2% on high comparison Mumm and Perrier-Jouét | decline basis on high comparison basis Ms 1. H1 Organic Net Sales growth pooner icara 25 | PERNOD RICARD - FY23 HALF-YEAR SALES AND RESULTS - SALES
Slide 26: Profit
Pernod Ricar =a ol ‘ 1 el PERNOD RICARD - FY23 HALF=YEAR SALES AND RESULTS - PROFIT . Créateutrs de comiiv 3 “4 | a
Slide 27: Sustaining margins thanks to leading premium portfolio, RGM and efficiencies
Sustaining margins thanks to leading premium portfolio, excellent RGM and operational efficiencies Organic PRO +12% Organic Operating Margin stable 3.5% Sy |-6 bps i 33.5%? 1,9981 Reported PRO H1 FY22 Gross Margin A&P Structure costs H1 FY23 i 21 % Price/mix and volumes offsetting high COGS inflatio
Slide 28: Group share of Net Profit from Recurring Operations and EPS
∆ Profit from Recurring Operations 1,998 2,423 +21% Financial expense from recurring operations (102) (134) Income tax on recurring operations (436) (521) Minority interests and other (21) (25) Group share of Net Profit from Recurring Operations 1,438 1,743 +21% Number of shares for diluted EPS (mil
Slide 29: Operating profit and Group share of Net Profit
∆ Profit from Recurring Operations 1,998 2,423 +21% Non-recurring operating income and expenses (2) 86 Operating profit 1,995 2,509 +26% Financial expense (135) (139) Corporate income tax (452) (553) Non-controlling interests and other (19) (25) Group Share of Net Profit 1,390 1,792 +29% • • •
Slide 30: Cash flow & debt
| Rigs Ow & debt .
Slide 31: Solid cash generation
Solid cash generation € millions H1FY22 Amortisation, depreciation, provision movements and other 201 Decrease (increase) in strategic stocks 30 Increase in operating Working Capital Requirement (404) Capital expenditure (159) Financial expense and taxes (282) Non-recurring items (63) Higher working
Slide 32: Strong balance sheet supporting dynamic financial policy
Strong balance sheet supporting dynamic financial policy Net Debt / EBITDA ratio D Ay 2.6xi € millions +141 (80) 9,789 _ ae 7 ie Net Debt 8,657 6d 30 June 2022 FCF M&A, Share Dividends Others (mainly FX translation 31 Dec 2022 buy-back and lease liabilities) other financial operations Net Debt / EBI
Slide 33: Outlook
Outlook In a persistently volatile context, reinforced confidence in de! ive strong performance in FY23 driven by our global footprint an attractiveness of our diversified, premium portfolio : | * Dynamic, broad-based Net Sales growth albeit in a normali environment | * Continuing focus on revenue g
Slide 34: Appendices
Appendices * . ~ Pernod Ricard 34 | PERNOD RICARD - FY23 HALF-YEAR SALES AND RESULTS - APPENDICES Créateurs de comivialité
Slide 35: Definitions and reconciliation of non-IFRS measures to IFRS measures
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 the fin
Slide 36: Upcoming communications
Upcoming communications Date! Event 23 March 2023 North America conference call 27 April 2023 Q3 FY23 Sales conference call 1. Dates are indicative and liable to change a Pernod Ricard 36 | PERNOD RICARD - FY23 HALF-YEAR SALES AND RESULTS - APPENDICES Crdcitesrs de comividlité
Slide 37: Asia-Rest of World, Americas, Europe country lists
Asia-Rest of World Americas Europe Algeria Malaysia Argentina Albania Angola Mongolia Bolivia Armenia Cambodia Morocco Brazil Azerbaijan Cameroon Mozambique Caribbean Belarus China Namibia Chile Bosnia Congo Nigeria Colombia Bulgaria Egypt Persian Gulf Costa Rica Croatia Ethiopia Philippines Cuba Ge
Slide 38: Volumes H1 FY23
Volumes Organic Net Sales H1 FY23 growth of which Volume of which Price/mix H1 FY23 (in 9Lcs millions) Absolut 7.5 +16% +9% +7% Chivas Regal 3.2 +34% +24% +10% Ballantine's 5.3 +17% +1% +16% Ricard 2.6 +10% +8% +2% Jameson 6.4 +19% +11% +8% Havana Club 2.4 +8% +0% +8% Malibu 2.5 +2% (4)% +6% Beefeat
Slide 39: Net Sales by region
Net Sales H1 FY22 H1 FY23 Change Organic Growth Group Structure Forex impact (€ millions) Americas 1,638 27.5% 2,005 28.2% +368 +22% +118 +7% +30 +2% +220 +13% Asia / Rest of World 2,524 42.4% 3,122 43.9% +597 +24% +460 +18% +48 +2% +90 +4% Europe 1,797 30.2% 1,989 27.9% +191 +11% +108 +6% +38 +2% +
Slide 40: Income statement H1 FY22 vs H1 FY23
(€ millions) H1 FY22 H1 FY23 Change Net sales 5,959 7,116 +19% Gross Margin 3,640 4,368 +20% Advertis i ng a nd promotions s pend (840) (994) +18% Contribution after A&P spend 2,801 3,375 +20% Structure cos ts (803) (951) +18% Profit from recurring operations 1,998 2,423 +21% Fi na nci a l i ncome/(
Slide 41: World and Americas H1 FY22 H1 FY23
World (€ millions) H1 FY22 H1 FY23 Change Organic Growth Group Structure Forex impact Net Sales 5 959 100,0% 7 116 100,0% 1 156 +19% 686 +12% 115 +2% 355 +6% Gross margin 3 640 61,1% 4 368 61,4% 728 +20% 424 +12% 77 +2% 227 +6% Advertising & promotion spend (840) 14,1% (994) 14,0% (154) +18% (97) +1
Slide 42: Asia / Rest of the World and Europe
Asia / Rest of the World (€ millions) H1 FY22 H1 FY23 Change Organic Growth Group Structure Forex impact Net Sales 2,524 100.0% 3,122 100.0% 597 +24% 460 +18% 48 +2% 90 +4% Gross margin 1,458 57.8% 1,827 58.5% 369 +25% 285 +20% 48 +3% 36 +2% Advertising & promotion spend (361) 14.3% (400) 12.8% (39)
Slide 43: Average rates evolution and forex impact
Average rates evolution On Profit from Forex impact H1 FY23 (€ millions) On Net Sales Recurring H1 FY22 H1 FY23 % Operations US dollar USD 1.16 1.01 -12.7% +222 +122 Russian rouble RUB 84.86 61.58 -27.4% +47 +39 Turkish Lira TRL 11.42 18.54 +62.3% (59) (52) Indian rupee INR 86.52 82.11 -5.1% +39 +13
Slide 44: Estimated impact of a 1% appreciation of the USD
Estimated impact of a 1% appreciation of the USD Impact on the income statement (1) (€ millions) Profit from recurring operations +19 Financial result (1) Pre-tax profit from recurring operations +18 Impact on the balance sheet (€ millions) Increase/(decrease) in net debt +39
Slide 45: Assets
Assets 30/06/2022 31/12/2022 (€ millions) (Net book value) Non-current assets Intangi bl e a s s ets a nd goodwi l l 17,657 18,306 Ta ngi bl e a s s ets a nd other a s s ets 4,600 4,416 Deferred tax a s s ets 1,844 1,767 Total non-current assets 24,100 24,489 Current assets Inventori es 7,369 7,567
Slide 46: Liabilities and shareholders' equity
Liabilities and shareholders’ equity 30/06/2022 31/12/2022 (€ millions) Group Shareholders’ equity 15,944 16,415 Non-control l i ng i nteres ts 309 343 of which profit attributable to non-controlling interests 35 21 Total Shareholders’ equity 16,253 16,758 Non-current provi s i ons a nd deferred tax
Slide 47: Working capital
June December June December H1 FY22 WC H1 FY23 WC (€ millions) 2021 2021 2022 2022 change* change* Aged work i n progres s 5,373 5,446 5,732 5,873 21 239 Adva nces to s uppl i ers for wi ne a nd a gei ng s pi ri ts 9 14 8 19 5 10 Pa ya bl es on wi ne a nd a gei ng s pi ri ts (93) (147) (115) (238) (
Slide 48: Net financial debt
30/06/2022 31/12/2022 (€ millions) Current Non-current Total Current Non-current Total Bonds 842 9,238 10,079 575 9,732 10,307 Commercial paper 180 - 180 401 - 401 Other loans and long-term debts 226 179 405 157 207 364 Other financial liabilities 406 179 585 558 207 765 Gross Financial debt 1,248 9
Slide 49: Cash flow statement
(€ millions) 31/12/2021 31/12/2022 Opera ting profi t 1,995 2,509 Depreci a tion a nd a mortis a tion 189 204 Net cha nge i n i mpa i rment of goodwi l l , PPE a nd i ntangi bl e a s s ets 8 Net cha nge i n provi s i ons (22) (50) Cha nges i n fa i r va l ue on commerci a l deri va tives , bi ol ogi
Slide 50: Debt maturity profile
2.0 1.5 1.0 1.7 1.5 1.4 0.3 1.2 1.1 0.5 0.8 0.8 0.4 0.5 0.5 0.5 0.5 0.0 0.0 22/23 23/24 24/25 25/26 26/27 27/28 28/29 29/30 30/31 31/32 32/33 …- 41/42 … 50/51 -0.5 Cash Other debts Commercial paper Bonds Syndicated credit -1.8 -1.0
Slide 51: Bond issues
Currency Par value Coupon Issue date Maturity date € 1,500 m o/w: € 500 m 0.000% 24/10/2019 24/10/2023 € 500 m 0.500% 24/10/2027 € 500 m 0.875% 24/10/2031 € 650 m 2.125% 29/09/2014 27/09/2024 € 1,500 m o/w: € 750 m 1.125% 06/04/2020 07/04/2025 € 750 m 1.750% 08/04/2030 EUR € 500 m o/w: € 250 m 1.125
Slide 52: Net debt / EBITDA ratio and exchange rates
(1) Closing rate Average rate EUR/USD rate 30/06/2022 -> 31/12/2022 1.04 -> 1.07 1.13-> 1.05 Ratio at 30/06/2022 2.5 2.4 EBITDA & cash generation excl. Group structure effect and forex impacts 0.0 0.0 Group structure and forex impacts 0.0 0.1 Ratio at 31/12/2022 2.5 2.6 (1) Last-twelve-month rate
Slide 53: Number of shares and diluted EPS calculation
(x 1,000) HY FY22 HY FY23 Number of shares in issue at end of period 261,877 257,947 Weighted average number of shares in issue (pro rata temporis) 261,877 257,947 Weighted average number of treasury shares (pro rata temporis) (1,656) (1,311) Dilutive impact of stock options and performance shares 6