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Pernod Ricard Results: 2005 1st Half Year; Closure of 18-month Period
Wine and Spirits operating profit: ¤ 287million + 7.9% (organic growth)
Net current profit: ¤ 182 million +4.4% (+10.3% excluding Forex effect)
Dividend: ¤ 1.08
Rapid integration of the Allied Domecq business
Paris, 22 September 2005 — The Board of Directors of Pernod Ricard, meeting on 21 September 2005, approved the financial statements for the 1st half of 2005 as well as those for the 18-month period ending 30 June 2005.
Wine and Spirits 1st half year
Wine and Spirits 2005 sales were ¤ 1,650 million up 9.4% with a
constant perimeter and exchange rates and up 8.8% excluding bulk sales.
Operating profit of ¤ 287 million was up by 7.9% (organic growth) and
up by 2.4% after negative currency effect.
This good performance reflects the growth in volumes of a number of key brands (Chivas Regal, +19%, Martell +8%, Jameson +13%, The Glenlivet +6%, Royal Salute +8%)
Overall, the volumes of 12 key brands grew by 6% and their sales value by close to 11%.
This improvement in profit was also due to control of operating costs (+6.5% with constant exchange rates) and despite the sharp increase in advertising and promotion expenditure (+13.1% with constant exchange rates).
Growth of the key brands was evident in all regions, except for France.
- Sales in Asia/Rest of the world grew (excluding currency
effect) by 18.4%. Due to the exceptional dynamism of this region, the
decision was taken to greatly accelerate our advertising and promotion
expenditure by 35% (excluding currency effect) to establish our brands
with consumers and grow our market share. Despite this expenditure,
operating profit grew by 8.1% (organic growth).
- The Americas reported the strongest growth in operating
profit of 19.7%. North America (organic growth in operating profit of
7.6%) continued its sustained growth based on the increase in its
portfolio of premium brands (Jameson, Wild Turkey, The Glenlivet and
Chivas). South America more than doubled its operating profit, due to a
sharp increase for Chivas and other imported whiskies.
- Europe remained dynamic and reported organic growth of 8.6%
in operating profit. This performance, in a difficult environment, was
based on a continued investment in people and advertising and promotion
in Western European markets, where we gained market shares, and on the
rapid emergence of certain new markets in Eastern Europe such as Russia
and the Czech Republic, which are new areas of growth.
- In France, we offset the decline in our anise brands by the strength of our whisky, rum and vodka brands. However, the advertising and promotion expenditure had a negative impact on operating profit, which fell by 9.6%.
1st half year consolidated financial statements
The net current profit was up 4.4% to ¤ 182 million (up 10.3% excluding currency effect).
Consolidated operating profit was ¤ 288 million, with only ¤ 1 million from "Other Activities".
In total, the profit before tax grew by 1.2% to ¤ 246 million. the tax rate was 23.9% compared to 26.4% at 30 June 2004.
Group net profit declined by 7.2% to ¤ 157 million, due to an exceptional expense of ¤ 20 million arising from the preparation for the Allied Domecq acquisition.
18-month financial statements
For the 18 months to 30 June 2005, consolidated sales were ¤ 5,241
million, gross profit was ¤ 3,447 million, and operating profit was ¤
1,030 million.
Group net profit was ¤ 644 million.
Net debt at 30 June 2005 was ¤ 1,991 million.
Dividend
The Board will propose to the General Meeting of 10 November 2005 the
payment of a balance of dividend of ¤ 1.08 payable on 17 November 2005.
This is in addition to the two previous interim payments of ¤ 0.98 and
¤ 1.16 paid in January and June 2005 respectively. The dividend for the
18 months period is thus ¤ 3.22.
Allied Domecq acquisition
The acquisition of Allied Domecq, occurred on 26 July 2005 and the
process of integration started immediately. It has already been
completed in many countries. Commenting on both the Group results and
the integration process, Patrick RICARD stated: