Alexandre Ricard: impact of coronavirus impossible to guess

After Diageo predicted coronavirus could knock £200m from its profits in the first half of 2020, Alexandre Ricard, the chairman and CEO of Pernod Ricard, said it was impossible to foretell the effect of the virus on his company.

Alexandre Ricard

“I don’t think we should be distracted by how it may impact us this week or next. Frankly your guess is as good as mine. We just don’t know how this will pan out”, he said in London on Thursday.

Earlier this month, Pernod Ricard predicted a “severe impact” on its Asian travel retail sales for the third quarter of its financial year as a result of COVID-19, with a significant hit to passenger traffic and business performance visible in early February.

In its forecast for the second half of the financial year to the end of June, Pernod Ricard said the COVID-19 outbreak would cut overall group sales by 2% and slash 3% on profit from recurring operations for its full financial year.

As a result, Pernod Ricard cut its full-year profits forecasts to organic growth of between 2% and 4% from the 5% to 7% indicated in the autumn of 2019.

Ricard said today that he would have a better picture of what effect the virus was having when he saw the figures for the company’s third quarter, which closes at the end of March. That will include the impact of sales on the important Chinese New Year period earlier this month.

However, he said Pernod Ricard would not alter its overall strategy in the face of the virus. “I just don’t want us to get distracted”, he said.