Pernod Ricard results boosted by US and Irish whiskey

Strong US sales and the continued success of Jameson has prompted a strong first half for Pernod Ricard.

Pernod Ricard’s chairman and chief executive officer Alexandre Ricard

The French-based company reported strong half-year results, with organic sales up 4% to €5,061 million, and profit also rising 4% to €1,500 million. However it reported unfavourable impact of foreign exchange, with reported sales up by only 2% and pricing that despite becoming positive ” remained subdued”.

A strong second quarter in the US provided a welcome boost to the half yearly results, resulting in a 4% increase over the six months, and organic growth of 7%. Asia, which accounts for around 40% of the business, also saw a stronger second quarter, up 4% compared to -2% in quarter one, contributing a 1% change overall to €2.040 million, or 3% organically. Similarly Europe rose 1% overall across the half (3% organic)  although the figures show this was slower in the second quarter than its 4% growth in the first quarter.

There was also an improvement in China, Travel Retail and Russia, the company said, while vodka brand Absolut, Martell and Chivas also saw improved performance. There was however a slow down in India on the back of the temporary effect of demonitisation of certain Indian bank notes, which was announced by the Indian government in November and lead to cash shortages across the country.

But it was Irish whiskey brand Jameson which proved to be was the strongest of its international brands, with organic sales of 20% and volumes up 16% to 2.6 million 9L cases, and a 4% price/mix. Martell also saw growth of 7% to 1.3 million 9L cases, however the price mix fell for Royal Salut (-4%) resulting in a 7% volume rise while organic sales rose only 3%.

Innovation was also a high spot, with brands such as Jameson Caskmates, Lillet and Olmeca Altos contributing 1% to the overall growth, it said.

Chairman and chief executive officer Alexandre Ricard said the strong half-year results delivering a continued performance improvement in an “uncertain environment”.

“Our strategy remains consistent and is driving results. For full year FY 17, in an uncertain environment, we plan to continue improving our business performance year-on-year vs. FY 16. We will continue to support priority markets, brands and innovations while focusing on operational excellence. We expect to deliver organic growth in Profit from Recurring Operations in line with the guidance of +2% to +4%,” he said.