Pernod Sees Its Annual Earnings Benefiting From Stronger Dollar

Pernod Ricard SA (RI), France’s biggest distiller, said it expects fiscal 2013 earnings to benefit from foreign-exchange movements this year as the dollar strengthens against the euro.

So-called profit from recurring operations, or operating profit excluding some items, will increase by about 25 million euros ($32.7 million) this year due to currency impacts, Pernod said today, based on an exchange rate of $1.29 per euro.

“Our foreign exchange is largely linked to the dollar and pegged currencies to the dollar,” Chief Financial Officer Gilles Bogaert said today in a telephone interview. “The stronger the dollar is, the better the forex impact is.” Pernod, which sells brands from Absolut vodka to Chivas Regal whisky in countries from the U.S. to China, states its results in euros. Its fiscal year ends June 30.

The Paris-based company, which reported third-quarter sales today, had anticipated a “slightly positive” improvement this year at the time of its first-half results in February.

“The beauty of our business model is that we have very high margins and strong pricing power,” Bogaert said. “We have the ability to absorb currency fluctuations.” The company has seen the dollar range from about $1.18 to about $1.60 to the euro in the past four or five years, he said, and “we have been able to operate quite well within that range.”

Bogaert said that the current euro-dollar rate “probably reflects our views on the normal parity between the euro and dollar.”

To contact the reporter on this story: Clementine Fletcher in London at

To contact the editor responsible for this story: Celeste Perri at

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