French spirits conglomerate Pernod Ricard saw global sales surge by double digits in the first half of fiscal year 2022, with organic growth up 17%, thanks to the strength of the U.S. dollar and the Chinese yuan, according to the company’s latest earnings report released today.
According to chairman and CEO Alexandre Ricard, the company anticipates overall strong sales growth for the full fiscal year, driven by a rebound in on-premise sales, resilience in the retail sector and a gradual recovery in the travel retail space.
“The execution of our Transform & Accelerate strategy is delivering an excellent and broad-based performance in the first half, with brand share gains in most countries and with all our Must-Win Markets showing very strong growth,” Ricard said in a statement. “I take the opportunity to praise the engagement and performance of our teams throughout the world, who have relentlessly accomplished outstanding work, in an environment still largely disrupted on many fronts by the Covid crisis”
Here are the top-line highlights:
- Organic growth was up 17% to €5.9 billion ($6.8 billion) in the first half of FY2022. Sales in the Americas grew 14% to €1.4 billion ($1.6 billion), driven by the U.S., Brazil and travel retail accounts.
- In Asia, sales rose by 16% fueled by gains in China, India and Turkey, while Europe was up 21%, with rebounds in Spain, France and travel channels.
- The company’s Strategic International Brands (+19%) and Specialty Brands (+21%) portfolios performed particularly well, with products such as Jameson, Martel, Ballantine’s, Absolut and Chivas Regal all reporting double digit growth.
- Strategic Local Brands were up by 14%, driven by the recovery of Seagram’s Indian whiskies, but Strategic Wines fell 6% due to poor harvest.
- Price/mix for Strategic Brands was “strong” at +6% and new innovations were up by 43%.
- Q2 sales were up 14% to €3.2 billion ($3.7 billion), decelerating from 20% growth in Q1.
- Pricing and revenue optimization for the first half of the fiscal year was €1.9 billion ($2.2 billion), showing organic growth of 22%.
- Earnings per share were up 33%.
Looking ahead Pernod Ricard said it expects an “ongoing volatile environment” with more potential disruptions from the pandemic ahead. However, continued omnichannel recovery is continuing to drive diversified sales momentum globally and operating margin is expanding thanks to “dynamic topline” growth.
However, Ricard told Reuters today that it is too early to offer “quantitative guidance” for sales or profit growth.
“We are giving a qualitative guidance,” he told the news organization. “A key unknown is the performance during the Chinese New Year this month… We will have more visibility in mid-March, though we remain very confident over growth momentum.”