Pernod Ricard: FY20 Guidance Updated1 to Reflect Business Activity: Profit From Recurring Operations Organic Decline of c. -...
23 Juillet 2020 - 7:30AM
Business Wire
Regulatory News:
Trading Statement - Paris, 23 July 2020
On 24 March 2020, Pernod Ricard shared its assumptions regarding
the COVID-19 pandemic, leading to guidance of organic decline in
Profit from Recurring Operations for FY20 of c. -20%, resulting
from the following assumptions:
- China: very limited business in February and March; slow
recovery from April
- Travel Retail: 80% business decline for the period from
February to end June
- Other markets:
- Off-trade, representing c. ¾ of Sales: c.10% Sales reduction
from mid-March to end June
- On-trade, representing c. ¼ of Sales: no Sales from mid-March
to end June, as outlets are shut or not reordering.
On balance, these assumptions have proven to be directionally
correct, in particular as regards China and Travel Retail. There
have however been some notable differences, mainly with India being
subject to a full six-week lockdown of all sales and production,
but more resilience in the Off-trade, especially in the USA and
Western Europe.
As a result, and thanks to strong cost mitigation, Pernod Ricard
now expects an organic decline in Profit from Recurring Operations
for FY202 of c. -15%.
All growth data specified in this press release refers to
organic growth (at constant FX and Group structure), unless
otherwise stated. Data may be subject to rounding.
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 financial statements in
understanding the Group’s performance. These non-IFRS measures
should be considered as complementary to the comparable IFRS
measures and reported movements therein.
Organic growth
Organic growth is calculated after excluding the impacts of
exchange rate movements and acquisitions and disposals.
Exchange rates impact is calculated by translating the current
year results at the prior year’s exchange rates.
For acquisitions in the current year, the post-acquisition
results are excluded from the organic movement calculations. For
acquisitions in the prior year, post-acquisition results are
included in the prior year but are included in the organic movement
calculation from the anniversary of the acquisition date in the
current year.
Where a business, brand, brand distribution right or agency
agreement was disposed of, or terminated, in the prior year, the
Group, in the organic movement calculations, excludes the results
for that business from the prior year. For disposals or
terminations in the current year, the Group excludes the results
for that business from the prior year from the date of the disposal
or termination.
This measure enables to focus on the performance of the business
which is common to both years and which represents those measures
that local managers are most directly able to influence.
Profit from recurring
operations
Profit from recurring operations corresponds to the operating
profit excluding other non-current operating income and
expenses.
About Pernod Ricard
Pernod Ricard is the No.2 worldwide producer of wines and
spirits with consolidated sales of €9,182 million in FY19. Created
in 1975 by the merger of Ricard and Pernod, the Group has developed
through organic growth and acquisitions: Seagram (2001), Allied
Domecq (2005) and Vin&Sprit (2008). Pernod Ricard, which owns
16 of the Top 100 Spirits Brands, holds one of the most prestigious
and comprehensive brand portfolios in the industry, including:
Absolut Vodka, Ricard pastis, Ballantine’s, Chivas Regal, Royal
Salute, and The Glenlivet Scotch whiskies, Jameson Irish whiskey,
Martell cognac, Havana Club rum, Beefeater gin, Malibu liqueur,
Mumm and Perrier-Jouët champagnes, as well Jacob’s Creek, Brancott
Estate, Campo Viejo, and Kenwood wines. Pernod Ricard’s brands are
distributed across over 160 markets, and by its own direct
salesforce in 73 markets. The Group’s decentralised organisation
empowers its 19,000 employees to be true on-the-ground ambassadors
of its vision of “Créateurs de Convivialité.” As reaffirmed by the
Group’s three-year strategic plan, “Transform and Accelerate,”
deployed in 2018, Pernod Ricard’s strategy focuses on investing in
long-term, profitable growth for all stakeholders. The Group
remains true to its three founding values: entrepreneurial spirit,
mutual trust, and a strong sense of ethics. As illustrated by the
2030 roadmap supporting the United Nations Sustainable Development
Goals (SDGs), “We bring good times from a good place.” In
recognition of Pernod Ricard’s strong commitment to sustainable
development and responsible consumption, it has received a Gold
rating from Ecovadis and is ranked No. 1 in Vigeo Eiris for the
beverage sector. Pernod Ricard is also a United Nation’s Global
Compact LEAD company. Pernod Ricard is listed on Euronext (Ticker:
RI; ISIN Code: FR0000120693) and is part of the CAC 40 index.
1 Guidance given to market on 24 March 2020 of organic decline
in Profit from Recurring Operations of c. -20% and confirmed on 23
April 2020 at the 9M Sales release. 2 FY20 Results to be announced
on 2 September 2020.
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Julia Massies / VP, Financial Communications & Investor
Relations, +33 (0) 1 70 93 17 03 Charly Montet / Investor Relations
Manager, +33 (0) 1 70 93 17 13 Alison Donohoe / Press Relations
Manager, +33 (0) 1 70 93 16 23 Emmanuel Vouin / Press Relations
Manager, +33 (0) 1 70 93 16 34
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