Pernod Ricard: Solid Performance in Line with Guidance

  Pernod Ricard: Solid Performance in Line with Guidance

Business Wire

PARIS -- August 29, 2013

Regulatory News:

Press release - Paris, 29 August 2013

In summary:

In 2012/13, Pernod Ricard delivered a solid performance within, as
anticipated, a less favourable environment than in 2011/12:

  *Organic growth in profit from recurring operations was 6%^(1), in line
    with the stated guidance.
  *Emerging markets^(2) maintained double-digit growth^(1) (+10%) despite a
    slowdown in the second half of the year, particularly in China. Mature
    markets were stable^(1): strong growth in the US (+8%^(1)) and
    declines^(1) in the French and Spanish markets.
  *The Top14 continued to drive growth^(1). With sustained value growth
    (+5%^(1)) these brands grew more quickly than the Group’s average
    (+4%^(1)). This was particularly due to Jameson and Martell’s outstanding
    performances^(1) and to solid growth in white spirits.
  *Premiumisation and innovation remained the Group’s growth drivers, as
    testified by a still highly favourable price/mix (+5%^(1) for the Top 14).
    Premium^(3) brands increased their share of sales from 73% to 75%.
  *The operating margin recorded its best growth in three years (+42 bps^(1))
    due to the combined effect of continued premiumisation and good control of
    resources.
  *The considerable decrease of €635million in net debt was due to a cash
    flow generation higher than in the previous year. The net debt / EBITDA
    ratio fell to 3.5^(4) at the end of June 2013.

Reflecting on these results, Pierre Pringuet, Vice Chairman and Chief
Executive Officer of PernodRicard, commented: “Despite a less buoyant
environment than that of last year, we achieved our guidance.”  He
continued,“Our global and balanced exposure to emerging and mature markets
will allow us to seize all opportunities. We therefore remain confident in our
ability to pursue our growth.”

At its meeting of 28 August 2013, chaired by Danièle Ricard, the Pernod Ricard
Board of Directors approved the financial statements for the 2012/13 financial
year ended 30 June 2013.

Full-year and quarterly sales

Full-year sales totalled €8,575 million (excluding tax and duties), which
included €5,065million from mature markets and €3,510million from emerging
markets^(2). This represents an increase of 4%:

  *organic growth of €319million, or +4%
  *a negative Group structure effect of €70million (-1%), primarily related
    to the disposal of certain Canadian activities in 2011/12 and Scandinavian
    and Australian activities in 2012/13
  *a favourable foreign exchange effect of €110million (+1%) primarily
    related to the USD and CNY

Consolidated sales for the fourth quarter 2012/13 totalled €1,925 million.
This growth resulted from:

  *organic growth of 5%
  *a negative Group structure effect of -1% primarily related to the disposal
    of certain Scandinavian and Australian activities in 2012/13
  *a negative foreign exchange effect of -3% primarily related to the USD,
    JPY and INR

Analysis of sales by geographic region

Asia/Rest of the World (40% of sales)

Dynamism remained sustained (+7%^(1)) despite a slowdown compared with the
previous financial year.

Martell (+16%^(1)) remained the main growth driver with substantial price/mix
(+7%^(1)). This performance was driven by China (market growth, market share
gains, restocking to standard levels), Travel Retail, Malaysia and Indonesia.

Indian whiskies (+19%^(1)) remained very buoyant with good price/mix
(+6%^(1)), thanks in particular to premiumisation (Royal Stag Barrel Select
and Blender’s Pride Reserve Collection).

The decline^(1) of Scotch whiskies was largely due to China, South Korea and
Thailand. The excellent performance^(1) in the Middle East should be noted
(especially Chivas in Turkey).

The good development^(1) of the new growth drivers (Absolut, Perrier-Jouët,
Mumm, Jameson and Jacob’s Creek) continued.

The performance of the regions’ main markets can be summarised as follows:

  *China: growth remained buoyant (+9%^(1)) albeit lower than in 2011/12.
    Growth was driven by double-digit increases^(1) for Martell, Jacob’s Creek
    and Absolut, coupled with restocking to standard levels. Scotch whiskies
    (market in decline) and the most exclusive^(5) spirits (curb on
    conspicuous consumption) experienced a challenging year.
  *India: local whiskies maintained their strong momentum (+16%^(1)). Good
    development of the Top 14 (+17%^(1), with significant pricing) was driven
    by Chivas, Absolut and The Glenlivet.
  *Travel Retail: double-digit growth^(1) was due to the solid results posted
    by Martell and the Top 14 Scotch whiskies, particularly superior qualities
    (Royal Salute, Chivas18years old, The Glenlivet 18years old,
    Ballantine’s 17years old).
  *Other emerging markets^(2): healthy growth in Africa/Middle East
    (+12%^(1)), Indonesia and Malaysia.
  *South Korea: sales were off^(1) in a challenging market (decline of the
    traditional on-trade) affecting Imperial in particular. The Top14
    continued its development, particularly Absolut (now the second largest
    brand of the Top 14) and Perrier-Jouët, driven by the modern on-trade.
  *Thailand: in a market that remains challenging, the substantial
    decline^(1) was primarily due to 100 Pipers. The brands Absolut (+9%^(1))
    and Jacob’s Creek (+15%^(1)) maintained their momentum.
  *Japan: good results (+3%^(1)) were due to the performances of Mumm
    (+18%^(1)), Perrier-Jouët (+21%^(1)) and Café de Paris.
  *Australia: the Top14 recorded sustained growth of +6%^(1), primarily
    driven by Mumm.

Americas  (27% of sales)

Growth (+7%^(1)) was driven by Premium^(3) brands and the US.

The Top 14 grew +8%^(1), thanks to Jameson, The Glenlivet, Absolut and Malibu
in the US, Absolut and Martell in Mexico, as well as Chivas and The Glenlivet
in Travel Retail.

Priority Premium Wines (+5%^(1)) continued to grow with favourable price/mix.

Key local brands grew 7%^(1), with double-digit growth^(1) for Passport. The
healthy development of Wiser’s was notably bolstered by the innovations
launched in the flavoured American whiskey segment.

The performance of the region’s main markets can be summarised as follows:

  *US: strong growth of +8%^(1). The Top14 (+8%^(1)) was the main driver,
    with price/mix of +5%^(1). The good overall performance of other brands
    (Avión, Mumm Cuvée Napa, Aberlour, Plymouth and Wiser’s) should be noted.
    Premium^(3) brands retained their momentum: Absolut (+2%^(1), value growth
    driven by favourable price/mix), Jameson (+26%^(1), still the main growth
    driver), Malibu (+5%^(1), solid growth confirmed following 2011/12, which
    benefited from the launch of numerous innovations), The Glenlivet
    (+22%^(1), strong increase in both volume and pricing), Chivas (+5%^(1),
    stabilisation of volumes and very favourable price/mix for the second
    consecutive year) and Perrier-Jouët (+14%^(1), excellent volume growth and
    very favourable price/mix).

  *Canada: The Glenlivet, Jameson, wines and Wiser’s reported good results.
  *Brazil: the market experienced difficulties due to a more challenging
    macro-economic environment and the application of the “VAT” reform.
    Underlying trends remain good for Absolut (+24%^(6) in a category up
    +13%^(6)) and Ballantine’s.
  *Mexico enjoyed renewed growth (+5%^(1)) following the introduction of a
    new high-value strategy. The Top14 experienced very good development
    (+13%^(1)) with significant pricing.
  *Travel Retail: growth (+7%^(1)) was driven by Chivas, The Glenlivet and
    Royal Salute.
  *Other markets: all reported growth^(1) including several in double-digits.

Europe excluding France  (25% of sales)

Stability^(1) in Europe excluding France with strong growth in the East and a
decline in the West

Growth of the Top 14 (+2%^(1)) was driven mainly by Jameson, Absolut, Chivas
and Beefeater. These brands grew both in the East and in the West.
Ballantine’s (Spain), Mumm, Perrier-Jouët, Malibu (UK) and Ricard declined.

Sales of Priority Premium Wines increased (+1%^(1)) thanks to Campo Viejo and
Brancott Estate.

Key local brands (+2%^(1)) were driven by the continued revival of ArArAt (up
more than 50%^(1) in 2 years) and Olmeca (up more than 50%^(1) in 3 years) and
the good performances of Seagram’s Gin (Spain), Passport (Eastern Europe) and
Wyborowa (Poland).

Growth remained strong in Eastern Europe (+11%^(1)):

  *Russia (+16%^(1)) remained the main contributor to growth. Its performance
    was driven by Jameson, ArArAt (which regained its rank as the portfolio’s
    #2 brand), Chivas, Ballantine’s, Passport and Olmeca
  *Poland (+2%^(1)): the improved trend was mainly due to the recovery of
    Wyborowa, which is back to growth^(1). Also noteworthy is the healthy
    progression of Absolut (+7%^(1)), Chivas (+12%^(1)) and Passport
    (+16%^(1))
  *Ukraine continued to grow^(1), despite a more challenging macro-economic
    environment, with growth still driven by whiskies (Jameson, Ballantine’s,
    Chivas and Passport), Absolut and ArArAt

Western Europe declined 3%^(1), within an economic environment that remains
challenging:

  *the drop was attributable primarily to Southern Europe, in particular to
    Spain (-7%^(1)), despite market share gains and the healthy growth of
    Beefeater (+4%^(1))
  *quasi-stability^(1) in the UK
  *Germany and Travel Retail reported good performances^(1)

France  (8% of sales)

The performance (-7%^(1)) reflected a still challenging environment,
compounded by unfavourable technical effects.

Sales declined following the very steep rise in excise duty introduced on 1
January 2012 and against the backdrop of a recession…

  *Pernod Ricard’s underlying performance is in line with a declining spirits
    market (-2%^(6))
  *the first half of the year was adversely affected by technical effects:
    residual inventory reduction and non-renewal of certain promotional
    activities
  *spring weather was particularly poor

… but several Premium^(3) brands reported very good results:

  *Havana Club +14%^(1), Absolut +5%^(1), The Glenlivet +20%^(1)
  *double-digit growth^(1) of superior qualities (Chivas 18 years old,
    Perrier-Jouët Belle Epoque, Jameson Select Reserve, etc.)

Sales analysis by brand

Top 14

The Top 14 grew +5%^(1):

  *volumes were stable despite the decline of Ricard and Ballantine’s
    (particularly exposed to Western Europe)
  *price/mix was very favourable (+5%^(1))

Martell had a very good year (+15%^(1), with price/mix of +10%^(1)), partly
boosted by restocking.

The excellent performance of Jameson (+17%^(1)) means it has become the second
largest contributor to Group growth. The brand reported double-digit growth ^
(1) across all its major markets (US, Russia, South Africa, etc.)

White spirits reported a good overall performance^(1):

  *Absolut (+5%^(1)) accelerated its value growth:
  *growth^(1) in all regions
  *improved price/mix, especially in the US
  *double-digit growth^(1) in Asia-RoW with positive development in China and
    a trajectory that remains spectacular in South Korea (sales multiplied by
    3 in
    3 years)
  *Havana Club (+3%^(1)) recorded an improved trend ^ compared to the
    previous financial year: good performances in Germany and France,
    continuing difficulties in Spain and Italy
  *Beefeater (+3%^(1)) reported solid growth, especially in Spain, US, UK and
    Russia
  *Malibu experienced a slight decline (-1%^(1)), primarily due to Western
    European markets (France, UK and Spain), whilst growth remained sustained
    in its main market (US) with accelerated momentum for the original
    version, which is reaping the rewards of numerous innovations launched
    more than one year ago

Slowdown in the growth^(1) of Scotch whisky:

  *difficult year in Asia and persisting difficulties in Spain
  *but The Glenlivet achieved record growth (+22%^(1)) with a double-digit
    increase^(1) across all regions
  *and Chivas posted excellent price-mix (+5%^(1)) with notably volume growth
    of +8% for Chivas18years old

The decline^(1) of Ricard was due to reduced consumption in France (increase
in excise duty and poor weather) and exacerbated by unfavourable technical
effects. Nevertheless, the brand gained market share^(6).

Mumm was in decline^(1) (essentially due to France), but Perrier-Jouët
grew^(1) (greater global exposure) particularly in the Americas (+11%^(1)) and
Asia-RoW (+17%^(1)).

Priority Premium Wines

Priority Premium Wines grew +2%^(1), due to the implementation of a combined
strategy of high-value and geographic diversification.

This growth was driven by a price/mix effect of +3%^(1) and particularly
buoyant sales in Asia (+15%^(1)). In Europe, these brands reported growth^(1)
in both the West and the East.

Priority Premium Wines also reported sustained growth (+6%^(1)) in their
contribution after advertising and promotion expenditure.

18 key local brands

The overall performance of the 18 key local brands remained good (+6%^(1)):

  *The momentum of Indian whiskies, which outperformed the market in value
    terms, continued (+19%^(1)). ArArAt (+21%^(1)), Passport (+20%^(1)) and
    Olmeca (+14%^(1)) maintained double-digit growth^(1). Wyborowa enjoyed
    renewed growth (+5%^(1)).
  *100 Pipers remained in decline (-13%^(1)) as did Imperial (-3%^(1)).
    Pastis 51 and Clan Campbell, both particularly exposed to the French
    market, experienced a decline^(1).

Premium^(3) brands now represent 75% of Group sales, a two-percentage point
increase compared to the previous financial year.

Analysis of Profit from Recurring Operations

Gross margin (after logistics costs)  reached €5,351 million, an increase of
+5%^(1).

The gross margin / sales ratio  improved substantially to 62.4%, from 61.4% 
in the previous year (+98bps, organic growth of +79bps). These results were
the combination of:

  *favourable price effect (+4% for the Top 14): significant price increases
  *slightly favourable forex effect

Advertising and promotion expenditure totalled €1,644million, an increase of
+3%^(1). A&P expenditure:

  *was targeted on the Top 14, which accounted for almost 90% of the
    increase^(1)
  *increased significantly in the US and in emerging markets^(2)
  *was optimised in certain mature markets: Western Europe -3%^(1); France
    -10%^(1)

The advertising and promotion expenditure to sales ratio was stable (19.2%).

Structure costs increased +7%^(1) to €1,477million. The structure costs to
sales ratio was 17.2%.

Pernod Ricard continued to allocate resources to emerging markets^(2), which
accounted for almost 80% of the increase^(1) in structure costs: strengthening
of the distribution network (China, India, Russia, Africa, etc.) and creation
of subsidiaries in Sub-Saharan Africa.

The increase^(1) in structure costs was below inflation in Western Europe and
stable^(1) in France.

The end of the implementation of the Agility project explains the slowdown in
structure cost growth^(1) in the second half of the year.

Profit from recurring operations was €2,230million, an increase of +6%^(1),
in line with guidance.

The operating margin recorded its largest expansion (+42bps^(1)) in three
years, due to:

  *continued implementation of the premiumisation strategy, with a positive
    effect on gross margin
  *good control of resources

The Group structure effect on profit from recurring operations was slightly
unfavourable (mainly due to the disposal of the Scandinavian activities) at
€20million. The positive foreign exchange effect (+€19 million) was
primarily due to the strengthening of the USD and CNY.

Emerging markets^(2)  continued to increase their relative significance in
profit from recurring operations: 44% in 2012/13 compared to 39% in 2011/12.
This increase had a positive impact on margins.

Analysis of net profit

Financial income / (expense) from recurring operations was an expense of €527
million, compared to €509 million the previous year:

  *the average cost of debt was 5.3%: a controlled increase (5.1% the
    previous year), in line with our forecasts.
  *the structural decrease in financial expenses began in January 2013 and
    will continue in 2013/14. The average cost of debt in 2013/14 is estimated
    to be less than 5%.

Corporate income tax on recurring operations was a charge of €430 million,
i.e. an effective tax rate of 25.2%. The increase (23.5% last year) was
primarily due to new tax reforms, particularly in France (impact:
€25million).

Group share of net profit from recurring operations reached €1,255 million.
Its sustained increase of +5% was primarily driven by the operating
performance.

Non-recurring items included:

  *other operating income and expenses, resulting in a net expense of
    €124million, mainly comprising restructuring costs (especially in Spain,
    Australia and New Zealand), and asset impairment (notably Brancott Estate
    for €64million)
  *a net non-recurring financial expense of €12million, mainly comprising
    foreign exchange losses
  *corporate income tax on non-recurring items was a net income of €71
    million: technical items mainly related to the discounting of deferred tax
    rates

The Group share of net profit thus totalled €1,189 million, an increase of
+4%.

Financial Debt, Free Cash Flow and Dividend

Net debt decreased significantly by €635million to reach €8,727million at
the end of June 2013.

This reduction resulted from a higher cash flow generation before translation
adjustment (€474million: improvement of +€89million over 2011/12) and a
favourable translation impact of €161million.

Cash flow generation before translation adjustment consists of (i)a solid
Free Cash Flow of €924million, (ii)a net expense of €15 million from
disposals, acquisitions of shares and other items, and (ii)dividends of
€435million.

Free cash flow was virtually unchanged compared to the previous financial year
despite the substantial increase in long-term investments (strategic
inventories and capital expenditure):

  *self-financing capacity grew in line with the growth in profit from
    recurring operations
  *capital expenditure (€294million in 2012/13) increased by €35million,
    to fund the extension of distillation and storage capacities in particular
    for whiskies
  *strategic inventories accelerated their increase (+€266million vs.
    +€157million in 2011/12) to support future growth of Martell, whiskies
    and champagnes
  *operating WCR was stable in days of sales (21days), i.e. a controlled
    increase of €28million. As a reminder, operating WCR had decreased in
    2011/12 thanks to optimisation initiatives
  *cash financial expenses increased in line with the increase in accounting
    financial expenses
  *cash tax increased given the increase in profits and in the tax rate
    (unfavourable impact of new fiscal measures in France for approximately
    €16million)
  *cash out tied to non-recurring items experienced a significant decline

The net debt to EBITDA ratio continued to improve to 3.5^(4) despite weakening
currencies of certain emerging markets^(2).

A dividend of €1.64 (+4%) is proposed in respect of the 2012/13 financial
year, in line with the customary policy of cash payout of approximately 1/3 of
net profit from recurring operations.

Conclusion and outlook

Pernod Ricard delivered a solid performance in 2012/13 within a less
favourable macro-economic environment.

For 2013/14, the macroeconomic outlook is likely to be as follows:

  *global economic growth generally comparable^(7) to that of 2012/13
  *emerging^(2) markets in sustained growth albeit to a lesser extent and
    with trends that differ per country
  *on-going good growth in the United States
  *continued difficulties in Western Europe but with initial signs of
    improvement

In this context, Pernod Ricard’s global and balanced exposure is an asset with
which to seize growth opportunities.

Pernod Ricard therefore remains confident in its ability to pursue its growth.

1) Organic growth
2) List of emerging markets available in appendix
3) Retail price > USD 17 for spirits and > USD 5 for wine
4) Margin and debt ratios are based, for the USD, on the average rate for the
relevant periods
5) Retail price>USD 200
6) Nielsen data
7) Source: IMF

About Pernod Ricard

Pernod Ricard is the world’s co-leader in wines and spirits with consolidated
sales of €8,575 million in 2012/13. 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,
Campo Viejo and Graffigna wines. Pernod Ricard employs a workforce of nearly
19,000 people and operates through a decentralised organisation, with 6 “Brand
Companies” and 80 “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.

Audit procedures on the consolidated financial statements have been carried
out. The Statutory Auditors’ report will be issued following their review of
the management report.

The Annual Financial Report related to this press release and the presentation
to financial analysts are available at www.pernod-ricard.com.

EMERGING MARKETS

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

BRANDS ORGANIC GROWTH

                                                     
                       Volumes FY
                       2012/13          Net Sales       Volume
                      (million         organic         growth       Price/mix
                       9-litre          growth
                       cases)
Absolut *              11.6             5%              2%           3%
Chivas Regal           4.9              5%              0%           5%
Ballantine's           5.9              -6%             -4%          -2%
Ricard                 4.6              -9%             -11%         2%
Jameson *              4.3              17%             10%          6%
Havana Club *          3.9              3%              2%           0%
Malibu                 3.7              -1%             -1%          0%
Beefeater *            2.6              5%              3%           2%
Kahlua                 1.6              -1%             -4%          3%
Martell *              2.0              15%             5%           10%
The Glenlivet *        1.0              22%             18%          5%
Mumm                   0.6              -4%             -5%          1%
Perrier-Jouët *        0.2              7%              1%           6%
Royal Salute           0.2              -4%             -6%          2%
Top 14                 47.3             5%              0%           5%
                                                                 
Jacob's Creek          6.6              1%              -3%          4%
Brancott Estate        1.9              3%              3%           0%
*
Campo Viejo *          1.9              10%             10%          0%
Graffigna              0.3              -5%             -15%         10%
Priority Premium       10.7             2%              -1%          3%
Wines
                                                                     
* All-time
record volume
                                                                     

SUMMARY CONSOLIDATED INCOME STATEMENT

                                                         
(€ millions)                    30/06/2012    30/06/2013    Variation
                                                           
Net sales                       8,215         8,575         4%
Gross Margin after logistics    5,047         5,351         6%
costs
A&P expenditure                 (1,571)       (1,644)       5%
Contribution after A&P          3,476         3,707         7%
expenditure
Structure costs                 (1,362)       (1,477)       8%
Profit from recurring           2,114         2,230         6%
operations
Financial income/(expense)         (509)            (527)            3%
from recurring operations
Corporate income tax on
items from recurring               (377)            (430)            14%
operations
Net profit from discontinued
operations, minority            (27)          (19)          -31%
interests and share of net
income from associates
Group share of net profit       1,201         1,255         5%
from recurring operations
                                                                     
Other operating income &           (145)            (124)            -15%
expenses
Non-recurring financial            (39)             (12)             -68%
items
Corporate income tax on
items from non recurring           130              71               -45%
operations
                                                         
Group share of net profit       1,146         1,189         4%
Minority interests              27            19            -30%
Net profit                      1,174         1,208         3%
                                                                     

FOREIGN EXCHANGE EFFECT

                                                                
Forex                                                                           On Profit
impact FY                Average rates evolution                 On          from
2012/13                                                             Net         Recurring
(€                      2011/12    2012/13    %           Sales       Operations
millions)
US dollar         USD       1.34       1.29       -3.3%       63          39
Chinese           CNY       8.50          8.08          -5.0%       50          35
renminbi
Korean won        KRW       1.51          1.43          -5.0%       14          8
Japanese          JPY       105.19        113.62        8.0%        (11)        (5)
yen
Pound             GBP       0.85          0.83          -2.3%       9           (10)
sterling
Indian            INR       67.10         70.97         5.8%        (31)        (13)
rupee
Swedish           SEK       9.00          8.53          -5.2%       4           (13)
krone
Currency
translation                                                                     (21)
variance/FX
hedging
Other                                                  12          (2)
currencies
Total                                                  110         19
                                                                                

GROUP STRUCTURE EFFECT

                                                  
Group structure YTD June 2012/13                          On Profit from
(€ millions)                           On Net Sales       Recurring
                                                          Operations
Scandinavian activities                (26)               (10)
Canadian activities                    (10)               (3)
Australian activities                  (11)               (3)
Other                                  (24)               (4)
Total Group Structure                  (70)               (20)
                                                          

CONSOLIDATED BALANCE SHEET

                                                            
Assets                                          30/06/2012    30/06/2013
(€ millions)
(Net book value)                                             
Non-current assets
Intangible assets and goodwill                     17,360           16,753
Tangible assets and other assets                   2,477            2,507
Deferred tax assets                             1,965         1,721
Total non-current assets                        21,802        20,981
                                                                    
Current assets
Inventories                                        4,295            4,484
of which aged work-in-progress                     3,431            3,617
of which non-aged work-in-progress                 64               69
Receivables (*)                                    1,197            1,159
Trade receivables                                  1,102            1,090
Other trade receivables                            96               69
Other current assets                               179              209
Other current assets                               172              203
Tangible/intangible current assets                 7                6
Tax receivable                                     29               27
Cash and cash equivalents                       821           620
Total current assets                            6,522         6,499
                                                                    
Assets held for sale                               52               8
                                                            
Total assets                                    28,375        27,488
                                                                
(*) after disposals of receivables of:             500           505
                                                                    
CONSOLIDATED BALANCE SHEET
                                                            
Liabilities and shareholders’ equity            30/06/2012    30/06/2013
(€ millions)
                                                            
                                                            
Shareholders’ equity                            10,803        11,183
Minority interests                                 169              168
of which profit attributable to minority        27            19
interests
Shareholders’ equity – attributable to          10,972        11,351
equity holders of the parent
                                                                    
Non-current provisions and deferred tax            4,134            3,855
liabilities
Bonds                                              8,044            6,949
Non-current financial liabilities and           1,511         915
derivative instruments
Total non-current liabilities                   13,689        11,719
                                                                    
Current provisions                                 178              163
Operating payables                                 1,526            1,546
Other operating payables                           896              924
which other operating payables                     635              635
Tangible/intangible current payables               261              288
Tax payable                                        129              127
Bonds                                              153              1,001
Current financial liabilities and               824           656
derivatives
Total current liabilities                       3,707         4,418
                                                                    
Liabilities held for sale                       7             0
Total current liabilities                       28,375        27,488
                                                                    

CHANGE IN NET DEBT

                                                            
(€ millions)                                    30/06/2012    30/06/2013
                                                            
Self-financing capacity                         2,064         2,323
Decrease (increase) in working capital             (55)             (255)
requirements
Financial result and tax cash                      (803)            (903)
Net acquisitions of non financial assets        (251)         (241)
Free Cash Flow                                  955           924
Disposals/acquisitions assets and others           (176)            (10)
Change in Group structure                          -                (8)
Dividends and others                            (395)         (432)
Decrease (increase) in net debt (before         385           474
currency translation adjustments)
Foreign currency translation adjustment         (710)         161
Decrease (increase) in net debt (after          (325)         635
currency translation adjustments)
Initial debt                                       (9,038)          (9,363)
Final debt                                      (9,363)       (8,727)
                                                                    

ANALYSIS OF WORKING CAPITAL REQUIREMENT

                                                             
                                                                   FY            FY
                               June        June        June        2011/12       2012/13
(€ millions)                2011     2012     2013                  
                                                                   WC            WC
                                                                   change*       change*
                                                                    
Aged work in progress          3,090       3,431       3,617       157           263
Advances to suppliers
for wine and ageing            10          7           6           (0)           (0)
spirits
Payables on wine and        128      90       91          0          12
ageing spirits
Net aged work in            2,971    3,348    3,532       157        250
progress
                                                                                 
Trade receivables before       1,793       1,602       1,595       82            70
factoring/securitization
Advances from customers        6           4           12          (2)           8
Other receivables              (51)        260         266         (1)           17
Other inventories              724         801         799         45            33
Non-aged work in               61          64          69          2             8
progress
Trade payables and other    1,741    2,061    2,079       182        94
Gross Operating working     781      662      638         (51)       26
capital
                                                                                 
Factoring/Securitization    425      500      505         51         22
impact
Net Operating Working       356      162      133         (102)      4
Capital
                                                                
Net Working Capital         3,327    3,510    3,665       55         255
                                                                             
* Without FX effects and                   Of which
reclassifications                          recurring               94         294
                                           variation
                                           Of which non
                                           recurring               (39)       (39)
                                           variation

SALES ANALYSIS BY REGION

                                                                                                         
Net Sales
                FY 2011/12               FY 2012/13               Change               Organic Growth       Group                Forex impact
(€                                                                                                          Structure
millions)
France          746      9.1%         695      8.1%         (51)    -7%       (51)    -7%       (0)     0%        0        0%
Europe
excl.           2,137       26.0%        2,132       24.9%        (5)        0%        8          0%        (26)       -1%       12          1%
France
Americas        2,167       26.4%        2,316       27.0%        149        7%        142        7%        (30)       -1%       37          2%
Asia /
Rest of         3,165    38.5%        3,431    40.0%        267     8%        220     7%        (14)    0%        60       2%
the World
World           8,215    100.0%       8,575    100.0%       359     4%        319     4%        (70)    -1%       110      1%
                                                                                                                           
Net Sales
                Q4 2011/12               Q4 2012/13               Change               Organic Growth       Group                Forex impact
(€                                                                                                          Structure
millions)
France          152         8.0%         177         9.2%         25         17%       25         17%       (0)        0%        0           0%
Europe
excl.           481         25.3%        470         24.4%        (11)       -2%       9          2%        (13)       -3%       (7)         -1%
France
Americas        578         30.4%        609         31.6%        31         5%        51         9%        (0)        0%        (20)        -3%
Asia /
Rest of         690      36.3%        670      34.8%        (21)    -3%       14      2%        (5)     -1%       (30)     -4%
the World
World           1,901    100.0%       1,925    100.0%       24      1%        99      5%        (18)    -1%       (57)     -3%
                                                                                                                           
Net Sales
                HY2 2011/12              HY2 2012/13              Change               Organic Growth       Group                Forex impact
(€                                                                                                          Structure
millions)
France          229         6.4%         321         8.8%         92         40%       92         40%       (0)        0%        0           0%
Europe
excl.           905         25.1%        887         24.2%        (19)       -2%       15         2%        (22)       -2%       (11)        -1%
France
Americas        1,001       27.8%        1,034       28.2%        33         3%        70         7%        1          0%        (38)        -4%
Asia /
Rest of         1,466    40.7%        1,426    38.9%        (40)    -3%       27      2%        (9)     -1%       (57)     -4%
the World
World           3,602    100.0%       3,668    100.0%       66      2%        203     6%        (30)    -1%       (106)    -3%

PROFIT FROM RECURRING OPERATIONS BY REGION

World                                                                                                           
                                                                                                                                    
(€ millions)       FY 2011/12                 FY 2012/13                 Variation             Organic Growth        Group                Forex impact
                                                                                                                     Structure
Net sales          8,215         100.0%       8,575         100.0%       359        4%         319        4%         (70)       -1%       110        1%
(Excl. T&D)
Gross margin
after              5,047         61.4%        5,351         62.4%        305        6%         263        5%         (20)       0%        61         1%
logistics
costs
Advertising        (1,571)       19.1%        (1,644)       19.2%        (73)       5%         (47)       3%         1          0%        (28)       2%
& promotion
Contribution       3,476      42.3%        3,707      43.2%        231     7%         216     6%         (18)    -1%       33      1%
after A&P
Profit from
recurring          2,114      25.7%        2,230      26.0%        117     6%         118     6%         (20)    -1%       19      1%
operations
                                                                                                                                                     
Asia/Rest of
World
                                                                                                                                    
(€ millions)       FY 2011/12                 FY 2012/13                 Variation             Organic Growth        Group                Forex impact
                                                                                                                     Structure
Net sales          3,165         100.0%       3,431         100.0%       267        8%         220        7%         (14)       0%        60         2%
(Excl. T&D)
Gross margin
after              1,898         60.0%        2,120         61.8%        222        12%        184        10%        (4)        0%        42         2%
logistics
costs
Advertising        (625)         19.8%        (663)         19.3%        (37)       6%         (20)       3%         1          0%        (17)       3%
& promotion
Contribution       1,272      40.2%        1,457      42.5%        185     15%        164     13%        (4)     0%        25      2%
after A&P
Profit from
recurring          880        27.8%        1,016      29.6%        136     15%        119     14%        (4)     0%        20      2%
operations
                                                                                                                                          
PROFIT FROM RECURRING OPERATIONS BY REGION
Americas
                                                                                                                                    
(€ millions)       FY 2011/12                 FY 2012/13                 Variation             Organic Growth        Group                Forex impact
                                                                                                                     Structure
Net sales          2,167         100.0%       2,316         100.0%       149        7%         142        7%         (30)       -1%       37         2%
(Excl. T&D)
Gross margin
after              1,362         62.9%        1,490         64.3%        128        9%         109        8%         (5)        0%        24         2%
logistics
costs
Advertising        (405)         18.7%        (454)         19.6%        (49)       12%        (41)       10%        (0)        0%        (8)        2%
& promotion
Contribution       958        44.2%        1,036      44.7%        79      8%         68      7%         (5)     -1%       16      2%
after A&P
Profit from
recurring          582        26.9%        607        26.2%        25      4%         24      4%         (7)     -1%       8       1%
operations
                                                                                                                                                     
Europe
excluding
France
                                                                                                                                    
(€ millions)       FY 2011/12                 FY 2012/13                 Variation             Organic Growth        Group                Forex impact
                                                                                                                     Structure
Net sales          2,137         100.0%       2,132         100.0%       (5)        0%         8          0%         (26)       -1%       12         1%
(Excl. T&D)
Gross margin
after              1,245         58.3%        1,251         58.7%        6          0%         16         1%         (11)       -1%       0          0%
logistics
costs
Advertising        (347)         16.3%        (354)         16.6%        (6)        2%         (5)        1%         1          0%        (2)        1%
& promotion
Contribution       898        42.0%        897        42.1%        (1)     0%         12      1%         (10)    -1%       (2)     0%
after A&P
Profit from
recurring          470        22.0%        459        21.5%        (12)    -2%        3       1%         (10)    -2%       (4)     -1%
operations
                                                                                                                                          
PROFIT FROM RECURRING OPERATIONS BY REGION
France
                                                                                                                                    
(€ millions)       FY 2011/12                 FY 2012/13                 Variation             Organic Growth        Group                Forex impact
                                                                                                                     Structure
Net sales          746           100.0%       695           100.0%       (51)       -7%        (51)       -7%        (0)        0%        0          0%
(Excl. T&D)
Gross margin
after              541           72.5%        490           70.5%        (51)       -10%       (47)       -9%        (0)        0%        (5)        -1%
logistics
costs
Advertising        (193)         25.9%        (174)         25.0%        19         -10%       20         -10%       0          0%        (0)        0%
& promotion
Contribution       348        46.6%        316        45.5%        (32)    -9%        (27)    -8%        (0)     0%        (5)     -1%
after A&P
Profit from
recurring          181        24.3%        149        21.4%        (33)    -18%       (28)    -15%       (0)     0%        (5)     -3%
operations

Contact:

Pernod Ricard
Jean TOUBOUL, +33 (0)1 41 00 41 71
VP, Financial Communication & Investor Relations
or
Sylvie MACHENAUD, +33 (0)1 41 00 42 74
Director External Communications
or
Alison DONOHOE, +33 (0)1 41 00 42 14
Investor Relations
or
Carina ALFONSO MARTIN, +33 (0)1 41 00 43 42
Press Relations Manager
 
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