Pernod Ricard: Good overall performance in Q1 2012/13

  Pernod Ricard: Good overall performance in Q1 2012/13

 Guidance for organic growth in Profit from Recurring Operations close to +6%
                        for the 2012/13 financial year

Business Wire

PARIS -- October 25, 2012

Regulatory News:

Press release - Paris, 25 October 2012

In summary

Pernod Ricard (Paris:RI) achieved a good overall performance for the first
three months of the 2012/13 financial year despite a less favourable
macro-economic environment and a difficult base of comparison, with:

  *reported growth of +11%
  *organic sales growth of +5%:

       *double-digit growth^(1) in emerging markets^(2)
       *solid growth^(1) in North America
       *softness^(1) in Western Europe

  *as anticipated, a less favourable macro-economic environment than that of
    the 2011/12 financial year, both in emerging and mature markets
  *unfavourable comparatives, with organic growth of +11% for the first three
    months of the 2011/12 financial year

Pierre Pringuet, Chief Executive Officer of Pernod Ricard, took this
opportunity to comment: “In a less favourable macro-economic environment we
realised a good overall performance in the first quarter.” He added: “We
remain confident in our capacity to continue to grow and are setting a target
for organic growth in Profit from Recurring Operations close to +6% for the
2012/13 financial year.”

Overall analysis

The Pernod Ricard Board of Directors, meeting 24 October 2012 and chaired by
Danièle Ricard, approved the financial statements for the first quarter
2012/13.

Pernod Ricard’s consolidated net sales (excluding taxes and duties) totalled
€2,203 million for the first three months of the 2012/13 financial year (from
1 July to 30 September 2012), compared to €1,987 million in the same period
of the previous year. This 11% increase equates to:

  *organic growth of +5%
  *a negative Group structure effect limited to 1%, primarily due to the
    disposal of certain Canadian activities in 2011/12
  *a highly-favourable 7% positive foreign exchange impact, primarily due to
    the USD and the Chinese Renminbi

For the full 2012/13 financial year, the updated foreign exchange impact on
profit from recurring operations is estimated at €42 million.

During the first quarter of 2012/13, strategic brands reported sustained value
growth: Top 14 sales grew +7%^(1) with a continued highly favourable price/mix
(+8%^(1)).

Growth^(1) remained strong in emerging markets^(2) (+13%), although below that
of the 2011/12 financial year (+17%^(1)), and mature markets proved resilient
with a stable^(1) performance (vs. +2%^(1) over the full 2011/12 financial
year).

By region:

  *more moderate, yet still strong growth in Asia (+13%^(1)), with China
    (+18%^(1)) and India (+18%^(1)) remaining the main growth drivers
  *strong momentum in the United States
  *ongoing, marked bipolarisation in Europe, with continued sustained growth
    in Eastern Europe and a challenging start to the year in Western Europe
    (-6%^(1)), which is showing softness compared to financial year 2011/12
  *decline^(1) in France due to depressed consumption (related to the excise
    duty hike of 1 January 2012) and the end of destocking

The comparatives for the first quarter of 2012/13 are difficult (+11%^(1) in
the first quarter of 2011/12) due to (i) the exceptional performances achieved
in China (+25%^(1)) and India (+29%^(1)) and (ii) the recovery of Duty Free
sales in the Americas in the first quarter of 2011/12.

Organic growth for the second quarter of 2012/13 will be adversely affected by
the technical effects of the second quarter of 2011/12 (French pre-buying
ahead of the excise duty hike and an early Chinese New Year), which had a
positive effect of €124 million on sales and €77 million on Profit from
Recurring Operations.

Detailed analysis by region

  *Asia/Rest of the World reported more moderate yet still strong growth of
    +20% to €951 million, with organic growth of +11%. Martell remains the
    main growth driver (+24%^(1), yet with a less dynamic underlying trend),
    bolstered by very favourable price/mix, followed by Indian whiskies
    (+21%^(1)). The continued strong performance of the new growth drivers
    (Jacob’s Creek, Absolut and champagne) should also be noted. Conversely,
    Scotch whiskies experienced a slowdown (particularly in Korea, China and
    Thailand).

       *China: in a less favourable environment, growth remains very dynamic
         (+18%^(1)) driven by Martell (market share gains in a less dynamic
         yet still growing cognac market) and new growth drivers (Jacob’s
         Creek, Absolut and Perrier-Jouët). Given a more difficult economic
         backdrop, the first quarter proved challenging for Scotch whiskies,
         the decline of which was in line with the market
       *India: very good performance of the Group which outperformed market
         growth in value terms, thanks to Indian whiskies (+20%^(1)) as well
         as the rapid development of international brands: Top 14 (+10%^(1))
         driven by Chivas Regal, The Glenlivet and Absolut
       *Japan: strong performance of the Top 14 (+8%^(1)), driven by
         Perrier-Jouët, Ballantine’s and Martell, and of Café de Paris
       *Australia: market share gains^(3) (+7% in value in a market +3%)
         driven by the growth of Jacob’s Creek (+8%^(1)), but an overall sales
         decline^(1) mainly due to a difficult basis of comparison
       *Africa/Middle East: slowdown (+5%^(1)) due to the challenging
         geopolitical climate in the Middle East
       *Other markets: continued growth in Duty Free, Vietnam and Taiwan,
         albeit at a slower pace than in the 2011/12 financial year. However,
         South Korea and Thailand remain structurally challenging markets.

  *In the Americas, solid growth was driven by the Premium^(4) brands of the
    Top 14 (primarily Jameson, The Glenlivet and Perrier-Jouët), which
    benefited from very favourable price/mix. Sales grew +14% to €579
    million, representing organic growth of +7%^(1).

       *UnitedStates:double-digitgrowth^(1).
         The Group benefited from (i)an improvement in its underlying trends,
         (ii)pricing acceleration, (iii)a catch-up on shipments during the
         first quarter, following excellent depletions in June 2012, and
         (iv)early order taking ahead of price increases and the
         holidayseason.
         For the last Nielsen period, Pernod Ricard’s brands reported value
         growth of +4.1%, an improvement compared to the rolling 12-month
         trend (+2.6%). More specifically, Absolut (Nielsen +2.5%) confirmed a
         trend that has turned positive since January; Jameson (Nielsen +25%)
         is still the main growth driver; Malibu (Nielsen +6%) benefited from
         numerous innovations (Malibu Red in particular); Perrier-Jouët grew
         volumes significantly and benefited from highly favourable price/mix
         as well as early order taking for the holidays; The Glenlivet
         (Nielsen +12%) enjoyed sustained growth.
       *Brazil: shipment declines in the first quarter of 2012/13, primarily
         due to the reduction of wholesaler stocks, particularly following (i)
         price increases on 1 July 2012 and (ii) the extension of tax reforms
         (VAT prepayment); but underlying trends remain very positive with
         strong double-digit growth of strategic brands (Absolut, Chivas) and
         of Passport
       *Mexico: improved trends (sales virtually stable^(1) vs. -12%^(1) in
         the 2011/12 financial year) with (i)the first positive effects from
         the new business model, (ii)strong growth of the strategic brands
         (Top 14: +19%^(1)), specifically due to a price effect turned highly
         positive once again, and (iii)the continued decline of non-strategic
         brands
       *Duty Free: significant sales decline^(1), largely due to technical
         effects and very high comparatives (business recovery in the first
         quarter of 2011/12) and the postponement of certain shipments to the
         second quarter of 2012/13
       *Venezuela: volume declines^(1), partly technical (delay in obtaining
         fiscal stamps), somewhat offset by positive price. Depletions were
         positive for the quarter.

  *In Europe (excluding France), sales were stable at €524million, an
    organic decline of -1%.

       *Eastern Europe reported sustained growth (+14%^(1)):

            *Russia: the main market contributing to growth (Top 14:
              +18%^(1)) driven by Jameson, Chivas, ArArAt, Olmeca and
              Ballantine’s
            *Ukraine (+8%^(1)): growth driven by Jameson, Becherovka, ArArAt,
              Absolut, Ballantine’s and Chivas
            *Poland (-4%^(1)): decline in the first quarter (adversely
              affected by a commercial dispute, now resolved), but improved
              trend for local vodkas, especially Wyborowa: +27%^(1)
            *Czech Republic: temporary total ban on spirits sales^(5)
              following a health issue caused by illicit products

       *Softness in Western Europe (-6%^(1)):

            *limited decline of the Top 14 (-2%^(1)) and slower growth of key
              local brands
              (-14%^(1))
            *situation remains challenging in Spain (-5%^(1)), particularly
              for Ballantine’s
            *decline in Germany (-6%^(1)) and Duty Free, primarily due to
              technical effects (the end of certain promotions and difficult
              comparatives)

  *InFrance,salestotalled€149million,adecline^(1)of-8%.
    Following the average excise duty hike of +14% as of 1 January 2012, the
    decline in consumption for the entire spirits market was -2.5% with an
    even more significantly affected aniseedcategory(-5.2%).
    Against this backdrop, Pernod Ricard gained market share (Nielsen -2.1%
    since 1 January
    2012)withnotablythecontinuedexcellentperformanceofHavanaClubandAbsolut.
    For the first quarter of 2012/13, shipments posted a significant decline
    (-8%^(1)) amplified by technical effects including (i)residual destocking
    (representing approximately half of the decline for the quarter) and
    (ii)the non-renewal of certain promotional activities.

Detailed analysis by brand

The growth mix remains positive with the Top 14 continuing to grow at a more
rapid pace than the Group’s overall portfolio:

  *The Top 14 remains the main growth driver (volumes -1% and sales +7%^(1)),
    with

       *Price/mix that remains highly favourable overall
       *Continued exceptional performances of Martell (+23%^(1)) and Jameson
         (+17%^(1))
       *Growth of white spirits:

            *Absolut: continued recovery in the US
            *Havana Club: improved trend
            *Beefeater: outstanding growth, particularly in Spain and the US
            *Malibu: driven by innovations

       *Difficult Q1 2012/13 for Scotch whiskies, due to:

            *slower growth in Asia (short-term in China, structural in Korea)
            *difficulties in the Spanish market
            *certain unfavourable technical effects (significant Duty Free
              shipments in 2011/12, excise duty hike in France, etc.)

       *Decline^(1) of Ricard due to depressed consumption in France (excise
         duty hike), magnified by technical effects (remainder of destocking,
         promotional phasing)
       *Strong performance  overall for champagnes

  *Strong performance overall for the 18 key local brands (volumes +7% and
    sales +6%^(1)) with the continued dynamism of Indian whiskies (+21%^(1))
    which outperformed the market and of Passport +19%^(1), ArArAt +40%^(1)
    and Olmeca +34%^(1)
  *Priority Premium Wines (volumes -3% and stable^(1) sales) continued their
    high-value strategy and geographic diversification, with price/mix of
    +3%^(1) in total and +25%^(1) sales growth in Asia.

Strong marketing innovation policy

Marketing innovation remains at the heart of the premiumisation strategy. Here
are a few examples:

  *ABSOLUT TUNE: the unexpected and sparkling combination of ABSOLUT vodka
    and crisp Sauvignon Blanc, for a new drinking experience.
  *Chivas: continued implementation of the strategy aimed at strengthening
    the brand’s global stature through dedicated advertisements for Chivas
    Regal 18YO, an original limited edition in partnership with luxury shoe
    designer Tim Little, and the creation of a magnum specially designed for
    night on-trade.
  *Ballantine’s: creation of the first programmable t-shirtOS which allows
    sharing of your Facebook status, tweets, photos, etc. on your t-shirt from
    your smartphone.

(1) Organic sales growth
(2) List of emerging markets provided in the appendix
(3) Aztec panel (wine & spirits) at 16/09/2012
(4) US retail price > USD 17 for spirits and > USD 5 for wines
(5) Spirits with alcohol content of >20% banned from 17/09/2012 to 27/09/2012

Pernod Ricard is the world’s co-leader in wines and spirits with consolidated
sales of € 8,215 million in 2011/12. Created in 1975 by the merger of Ricard
and Pernod, the Group has undergone sustained development, based on both
organic growth and acquisitions: Seagram (2001), Allied Domecq (2005) and Vin
& Sprit (2008). Pernod Ricard holds one of the most prestigious brand
portfolios in the sector: 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, Kahlúa and Malibu liqueurs,
Mumm and Perrier-Jouët champagnes, as well Jacob’s Creek, Brancott Estate
(formerly Montana), Campo Viejo and Graffigna wines. Pernod Ricard employs a
workforce of nearly 18,800 people and operates through a decentralised
organisation, with 6 “Brand Companies” and 75 “Market Companies” established
in each key market. Pernod Ricard is strongly committed to a sustainable
development policy and encourages responsible consumption. Pernod Ricard’s
strategy and ambition are based on 3 key values that guide its expansion:
entrepreneurial spirit, mutual trust and a strong sense of ethics.

Pernod Ricard is listed on the NYSE Euronext exchange (Ticker: RI; ISIN code:
FR0000120693) and is a member of the CAC 40 index.

                       Appendices 1^st quarter 2012/13

Analysis of sales by                                                         
region
          
Net Sales
            Q1 2011/12       Q1 2012/13       Change       Organic      Group        Forex
(€                                                         Growth       Structure    impact
millions)
                                                                         
France      162    8.1%     149     6.8%     (12)   -8%   (12)  -8%   0     0%    0    0%
Europe
excl.       524     26.4%    524     23.8%    0      0%    (8)    -1%   (2)    0%    10    2%
France
Americas    508     25.6%    579     26.3%    71     14%   32     7%    (16)   -3%   54    11%
Asia /
Rest of     794    39.9%    951    43.2%    158   20%   83    11%   (1)   0%    76   10%
the World
World       1,987  100.0%   2,203  100.0%   216   11%   95    5%    (19)  -1%   140  7%
                                                                                           

Organic sales growth of the Top 14 brands

                Net Sales organic
                                  Volume growth  Price/mix
                growth
                                                  
                                                 
Absolut         1%                  -2%             3%
Chivas Regal    0%                  -6%             6%
Ballantine's    -10%                -8%             -2%
Ricard          -13%                -14%            2%
Jameson         17%                 12%             6%
Malibu          2%                  1%              0%
Beefeater       9%                  5%              4%
Kahlua          19%                 8%              11%
Havana Club     2%                  -1%             3%
Martell         23%                 10%             13%
The Glenlivet   24%                 20%             4%
Royal Salute    2%                  -3%             5%
Mumm            -6%                 -6%             1%
Perrier-Jouët   43%                 33%             10%
Top 14          7%                  -1%             8%
                                                    

Foreign exchange impact

Forex impact Q1 2012/13
                              Average rates evolution     On Net Sales
(€ millions)
                             2011/12  2012/13  %        
                                                     
US dollar                 USD   1.41     1.25     -11.4%   61
Chinese yuan              CNY   9.07      7.95      -12.3%   41
Pound sterling            GBP   0.88      0.79      -9.8%    10
Canadian dollar           CAD   1.38      1.25      -10.0%   6
Australian dollar         AUD   1.35      1.20      -10.4%   6
Korean won                KRW   1.53      1.42      -7.5%    5
Japanese yen              JPY   109.82    98.38     -10.4%   4
Taiwan dollar             TWD   41.18     37.29     -9.4%    3
New Zealand dollar        NZD   1.70      1.55      -8.8%    2
Russian ruble             RUB   41.15     39.99     -2.8%    2
Mexican peso              MXN   17.38     16.48     -5.2%    2
Hong Kong dollar          HKD   11.01     9.71      -11.8%   2
Malaysian ringgit         MYR   4.27      3.91      -8.5%    2
Brazilian real            BRL   2.31      2.54      10.1%    (2)
Indian rupee              INR   64.67     69.01     6.7%     (9)
Other currencies                                      7
Total                                                 140

Group structure effect

Group structure Q1 2012/13
                            On Net Sales
(€ millions)
                            
Canadian activities          (7)
Other                        (12)
Total Group Structure        (19)

Emerging markets

                                      
Asia-Rest of World  Americas            Europe
Algeria             Argentina           Albania
Cambodia             Bolivia              Armenia
Cameroon             Brazil               Azerbaijan
China                Caribbean CESAM      Balkans
Egypt                Chile                Belarus
Gabon                Colombia             Bosnia
India                Costa Rica           Bulgaria
Indonesia            Cuba                 Croatia
Iran                 Dominican Republic   Georgia
Iraq                 Ecuador              Hungary
Ivory Coast          Guatemala            Kazakhstan
Jordan               Honduras             Latvia
Laos                 Mexico               Lithuania
Lebanon              Panama               Macedonia
Madagascar           Paraguay             Moldova
Malaysia             Peru                 Poland
Maldives             Puerto Rico          Romania
Mauritius            Uruguay              Russia
Morocco              Venezuela            Ukraine
Persian Gulf
Philippines
Saudi Arabia
Senegal
South Africa
Sri Lanka
Syria
Thailand
Tunisia
Turkey
Vietnam
                                          

Contact:

Pernod Ricard
Jean TOUBOUL, +33 (0)1 41 00 41 71
Financial Communication - Investor Relations VP
or
Stéphanie SCHROEDER, +33 (0)1 41 00 42 74
External Communications Deputy Director
or
Alison DONOHOE, +33 (0)1 41 00 42 14
Investor Relations
or
Florence TARON, +33 (0)1 41 00 40 88
Press Relations Manager
 
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