Dry season at Pernod Ricard
The reported decline in sales was 7% due to a highly unfavourable foreign exchange effect.
The Top 14 declined 2% as a result of a slight reduction in volumes and unfavourable mix (decline of Martell in China). However, despite a more challenging business environment, pricing remained solid at +2%. The good performance of Key Local Brands (+4%) should be noted, supported by positive pricing. Mix was negative.
As a result of strict control of resources, the operating margin rate increased +52 bps in organic terms, the strongest increase in four years. As a result, profit from recurring operations recorded organic growth of +2% to € 2,056 million.
The foreign exchange impact was highly unfavourable (€-199 million on PRO, as announced). It had a significant impact on the reported change in profit from recurring operations (-8%).
The net financial expense from recurring operations improved by € 98 million due to a very significant reduction in the cost of debt to 4.6% (compared with 5.3% for the 2012/13 financial year).
Group share of net profit from recurring operations decreased by 3%. This decline was lower than the reported decrease in PRO, due to the sharp reduction in financial expenses and the stabilisation of the income tax rate. In organic terms, it grew +9%.
Pernod Ricard announced plans to cut 900 jobs. Pierre Pringuet, Chief Executive Officer of Pernod Ricard, stated: "Despite an environment that was more difficult than anticipated, we have delivered the guidance announced in February, proof of everyone's commitment, which I would like to commend. We are seriously committed to the Allegro project: this operational efficiency project must enable us to maximise our future growth while generating a hard figure of €150 million of savings." ■