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Pernod Ricard has returned to growth

Staff writer |
Pernod Ricard has returned to growth in the three months from June to September, and is forecasting profit from recurring operations to increase organically by 1 to 3% for the full year to end-May next year.

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The company posted organic sales growth of two percent for the first quarter of its financial year, despite a fall in sales in China and a mixed performance in Europe.

Chief executive Pierre Pringuet commented on the quarter reflecting its "resilience in a difficult context," and total sales reached EUR 2 billion, broadly flat from the same quarter last year. Of the latest total, EUR 1.2bn related to mature markets and EUR 817 million to emerging markets. Sales of its top 14 brands jumped by two percent year-on-year to reach EUR 1.3bn.

Net sales in Europe amounted to EUR 652m, down from EUR 666m, while for the Americas the total was EUR 530m, from EUR 532m 12 months previously. For Asia and the rest of the world the figure grew from EUR 814m to EUR 855m.

Looking at Asia, the firm highlighted an "excellent" quarter in India, where sales increased by 21 percent.

However China remains a difficult market, and while volumes are improving the business said sales fell by nine percent in the quarter on a negative mix, with the following three months set to be dragged down by a later Chinese New Year.

Turning to Europe, sales were down in Germany and Poland, but Spain experienced its first growth since 2008, and the performance in France and the UK was "satisfactory," the company said.

In the UK, the firm said the business performance was positive, boosted by a very strong showing from priority premium wines Campo Viejo and Brancott Estate.

The Glenlivet single malt whisky experienced net sales growth of 17 percent, while Chivas Regal, one of the company's global icon brands, saw its net sales increase by nine percent.

The brand that showed the highest growth in net sales was Kahlua at 23 percent, with the biggest drop by Havana Club and Malibu, which both fell by seven percent.

Pernod Ricard said it expects the environment to remain challenging around the world, but nonetheless forecast measured improvement in sales growth.

The Chinese market will improve gradually and growth will remain "soft" in the US, it also said.

Alexandre Ricard, deputy chief executive, added: "We plan to increase investment behind our priority brands and innovations."

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