Pernod Ricard SA · EURONEXT:RI
Pernod Ricard SA — Q1 2008/09 Earnings Presentation
38 slides from Pernod Ricard SA's earnings presentation, Oct 30, 2008
Slide 1: 2008/09 1st Quarter Net Sales
2008/09 1st Quarter Net Sales Strong organic growth in 2008/09 1st quarter: +7% 30 October 2008 1
Slide 2: Presentation structure
Presentation structure - Overall analysis - Portfolio review - Growth by region - Conclusion and outlook 2
Slide 3: 2008/09 1st quarter environment
2008/09 1st quarter environment Continuing strong growth in emerging markets Continuing Contrasting situations in western countries Contrasting Strong appreciation of the USD against the EUR: Strong EUR / USD rate 1,60 1,58 at 30 June 2008 1,50 1,43 at 30 Sept. 2008 1,40 1,30 1,24 at 27 Oct. 2008 1,
Slide 4: 2008/09 1st quarter key figures
2008/09 1st quarter key figures Sales: € 1,756 million, up 13%, of which organic growth of 7%, Sales: driven by super premium spirits(1), emerging markets(2) and certain western countries Strong growth of key brands with a strong mix and price increases Strong increases effect: Top 14: Volume +2%, V
Slide 5: 2008/09 1st quarter highlights
2008/09 1st quarter highlights Strong 7%(1) sales growth, in spite of the very high comparison basis (+12%(1) in 2007/08 1st quarter) with a very strong month of September 2008/09 1st quarter affected by: • Negative items: comparison basis, destocking pressure in the US, Olympics in China, … • Posit
Slide 6: Strong organic growth in 2008/09 1st quarter
Strong organic growth in 2008/09 1st quarter (€ million) 188 1,756 101 (89) 1,557 -6% +12% +7% +13% 07/08 Organic Forex Group 08/09 Q1 sales growth impact structure Q1 sales Organic growth: +7% (Spirits +6%, Wines +8%) Group structure: contribution of Vin & Sprit operations, amounting amounting to €
Slide 7: Impact of foreign exchange movement
Impact of foreign exchange movement Positive Impact of the US dollar rise in value: Profit from Financial (€ million) recurring Debt expenses operations Estimated impact of a 1% rise in value of the US dollar vs the Euro + 12* (4) ≈ 70 • A positive impact on PRO and operating profit margin • A posit
Slide 8: Debt management
Debt management No liquidity risk: • Pernod Ricard currently has about € 400 million in cash and € 2 billion in undrawn credit lines • No uncovered refinancing maturities in 2008/09 and 2009/10 • The € 2 billion to be refinanced in 2010/11 will be largely covered by by asset disposals and expected c
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: +2%* Sales: +7%* *Organic growth calculated based on TOP 14 brands, excluding ABSOLUT VODKA 10
Slide 11: Portfolio review
Portfolio review 10% volume growth Nielsen last 3 months: months US +2%, Spain +8%, Poland +20%, Brazil +42%, France +23%, Greece +12%, … Consolidated sales since 23 July 2008 include Vin & Sprit’s direct sales to the US and Maxxium subsidiaries’ local depletions in their respective markets These lo
Slide 12: Portfolio review
Portfolio review Volume +10% Sales* +11% Chivas 18 and 25 years old grew by +31% vs +9% for Chivas 12 years old Asia: • Growth due in particular to Duty Free, Persian Gulf, Thailand and Vietnam • Decline in China, due to the Olympics Europe: • Contrasting developments in Western Europe: growth in th
Slide 13: Portfolio review
Portfolio review Volume +6% Sales* +9% Ballantine’s Finest: • Western Europe: rise in France, Germany and Switzerland, stability in Italy, decline in Spain and Portugal • Very strong expansion in numerous Central and Eastern European countries: Poland, Russia, Hungary, Romania, Lithuania, Bulgaria,
Slide 14: Portfolio review
Portfolio review Volume +10% Sales* +17% US: continuing strong double-digit growth reaffirmed by Nielsen +30% and NABCA +25% Satisfactory growth in Europe with contrasting situations: decline in Ireland and the UK, but growth in France, Eastern Europe, Spain, Germany and Duty Free Slower growth in S
Slide 15: Portfolio review
Portfolio review Volume -14% Sales* +5% Declining volumes, in line with our plans, against a high comparison basis; expected recovery in Q2 2008/09 Very positive pricing effect, following the significant price increases implemented in Q1 and Q3 2007/08 Volume +11% Sales* +9% In Europe: double-digit
Slide 16: Portfolio review
Portfolio review Volume -2% Sales* -2% France: stability of the brand in a stable market Overall decline in other European markets particularly in Spain Volume +1% Sales* +6% Europe: • Spain: growth due to distribution gains, in a declining category • Decline in the UK, France and Italy but strong g
Slide 17: Beefeater 24: Daring London Glamour
Beefeater 24: Daring London Glamour •Create the world’s best Super Premium gin Creating the World’s Best Super Premium Gin. International launch on 30 October Roll-out in Spain, US, Travel Retail, 17 UK & Russia
Slide 18: Portfolio review
Portfolio review Volume -11% Sales* -9% Stability in Europe with contrasting situations: decline in the UK, Spain, the Netherlands, Greece and Belgium, but strong growth in Germany, Poland, Russia and Italy US: Malibu suffered from destocking by certain distributors and its exposure to “casual on-tr
Slide 19: Portfolio review
Portfolio review Volume +0% Sales* +1% Growth in Europe, driven by the UK Decline in the US Very strong growth in New Zealand (launch of ‘3 Vines’ and promotional activities) but slight decline in Australia (high basis of comparison) Volume +15% Sales* +15% Strong recovery, with double-digit growth
Slide 20: Portfolio review
Portfolio review Volume +7% Sales* +16% Double-digit growth in France, with market share gains Decline in the UK and Belgium, but strong growth in Italy, Spain and Switzerland Volume +24% Sales* +29% Strong double-digit growth in all regions and all three major markets: US, France and UK Perrier-Jou
Slide 21: Other spirit brands
Other spirit brands Satisfactory overall growth by all other spirit brands, with contrasting situations, due in particular to how dynamic their respective key markets are: • Very good performance by our local brands: Amaro Ramazzotti in Germany, Wisers in Canada, Royal Stag in India, Ararat in Russi
Slide 22: Presentation structure
Presentation structure - Overall analysis - Portfolio review - Growth by region - Conclusion and outlook 22
Slide 23: Contribution to Organic Growth / Region
Contribution to Organic Growth / Region 1,658 32 2 31 36 1,557 2% 32% 31% 35% 100% Asia & Americas Europe France Q1 08/09 Q1 07/08 RoW on a like-for-like basis All regions contributed to sales growth 23
Slide 24: Asia – Rest of World
Asia – Rest of World Organic Group (€ million) Q1 07/08 Q1 08/09 Forex impact growth structure Sales 499 498 +7% -10% 2% Asia: • Strong growth in Emerging Asian markets by 13%* • Strong growth in India and by Duty Free • Benefiting from the strong price increases implemented over the previous financ
Slide 25: Americas
Americas Organic Group (€ million) Q1 07/08 Q1 08/09 Forex impact growth structure Sales 393 467 +9% -7% +18% North America: US: • Continuing slight sales growth* due to dynamic Duty Free operations and performing brands: Jameson, The Glenlivet, Wild Turkey, Perrier-Jouët, Mumm Napa, Campo Viejo… •
Slide 26: Europe
Europe Organic Group (€ million) Q1 07/08 Q1 08/09 Forex impact growth structure Sales 508 630 +7% -3% +20% Eastern Europe and Central Europe: continuing strong double-digit growth*, driven by Russia (price increases on October 1st), Ukraine, Poland, Romania, Bulgaria and Kazakhstan Western Europe:
Slide 27: France
France Organic Forex Group (€ million) Q1 07/08 Q1 08/09 growth impact structure Sales 157 161 +1% - +1% Growth was primarily driven by Mumm, Ballantine’s and Havana Club Ricard: Stability of the brand in a stable market Overall good performance of whiskies despite a technical decline on Chivas Rega
Slide 28: Sales analysis by geographic region
Sales analysis by geographic region Q1 07/08 Q1 08/09 10% France 9% 32% 28% Europe Americas 33% 36% Asia and 25% RoW 27% The Vin & Sprit integration automatically increased the relative size of Europe and the Americas 28
Slide 29: Presentation structure
Presentation structure - Overall analysis - Portfolio review - Growth by region - Conclusion and outlook 29
Slide 30: Conclusion & Outlook
Conclusion & Outlook The strong Q1 2008/09 performance, The power of our distribution network and of our portfolio, portfolio, and the strength of Pernod Ricard’ Ricard’s business model: high responsiveness due to decentralisation, decentralisation,…… … enable us to confirm, in spite of the overall
Slide 31: Pernod Ricard
% “> Pernod Ricard
Slide 32: Appendices
S% “> Pernod Ricard Appendices SS OS
Slide 33: 2008/09 1st quarter net sales: Strategic brands
2008/09 1st quarter net sales Strategic Brands Sales Volume and Organic Growth Net Sales Q1 2008/09 Volume growth organic growth Chivas Regal 10% 11% Ballantine's 6% 9% Ricard -2% -2% Martell -14% 5% Malibu -11% -9% Kahlua -13% -15% Jameson 10% 17% Beefeater 1% 6% Havana Club 11% 9% The Glenlivet 20
Slide 34: 2008/09 1st quarter net sales: Sales by region
2008/09 1st quarter net sales Sales by region € million Q1 2007/08 Q1 2008/09 Change Organic Growth Group Structure Forex impact Wines & Spirits France 157 10% 161 9% 4 2% 2 1% 1 1% 0 0% Wines & Spirits Europe excl. France 508 33% 630 36% 122 24% 32 7% 103 20% (13) -3% Wines & Spirits Americas 393 2
Slide 35: Forex impact analysis
2008/09 1st quarter net sales Forex impact analysis Forex % of total impact Q1 forex (€ million) impact US Dollar USD (24.3) 27.2% British Pound GBP (19.1) 21.4% Korean Won KRW (15.1) 16.9% Indian Rupee INR (9.6) 10.7% Thai Baht THB (4.8) 5.3% Canadian Dollar CAD (4.4) 5.0% New Zealand Dollar NZD (3
Slide 36: Group structure analysis
2008/09 1st quarter net sales Group structure analysis € million V&S acquisition 213.5 Other (25.6) Total Group Structure 187.8 36
Slide 37: Pro forma net debt aged analysis
2008/09 1st quarter net sales Pro forma* net debt aged analysis 8 7 6 5 Cash 4 Other Debts 3 Bonds 2 Syndicated loan 1 0 -1 2008/2009 2009/2010 2010/2011 2011/2012 2012/2013 2013/2014 * Net debt after impact of the Vin & Sprit acquisition, converted at €/$ rate of 1.58 37
Slide 38: New Pernod Ricard segmentation
2008/09 1st quarter net sales New Pernod Ricard segmentation Local / Value International Prestige > $ 84 400 Ultra Premium $ 42 - $ 84 200 Super Premium $ 26 - $ 41 100 Premium 120 $ 17 - $ 25 Standard 80 $ 10 - $ 16 Local / Value 50 < $ 10 Off-trade RSP for 75cl in the US 38