Pernod Ricard Reports 847 Million Euro Net Profit

The Tip Desk · December 31, 2012 · 2 min read

The wines and spirits maker saw consolidated revenue rise 6% to 4,907 million euros in the first half of the 2012/13 fiscal year.

Pernod Ricard reported a net profit attributable to the Group of 847 million euros for the first half of the 2012/13 fiscal year, a 6% increase compared to the same period in 2011/12. Consolidated revenue reached 4,907 million euros, up 6% from 4,614 million euros in the prior year period.

The company said the revenue growth resulted from a 3% internal growth, a 5% favorable currency effect, and a 1% negative perimeter effect. Internal growth was supported by strategic brands including Jameson and Martell, as well as Indian whiskies. Geographically, the company noted strong growth in emerging markets, specifically China and India, and an acceleration in the United States.

Performance in France was impacted by technical and cyclical factors. The company cited a comparison base affected by over-stocking in the first half of 2011/12 ahead of excise duty increases on January 1, 2012. Other factors included a later Chinese New Year and a decline in consumption following higher duties on spirits.

Gross margin after logistics costs rose 8% to 3,096 million euros. The gross margin rate improved 100 pbs to 63.1% from 62.1%, which the company attributed to a stronger progression of Top 14 brands, a favorable price and mix effect, and control of the cost of goods sold.

Operating results showed mixed trajectories. Current operating profit rose 6% to 1,459 million euros, though internal growth for this metric was 1%. The operating margin rate stood at 29.7%, a decrease of 15 pbs. However, the company stated that excluding technical effects, the operating margin rose 68 pbs.

Advertising and promotion investments increased 9% to 888 million euros. These investments represented 18.1% of total revenue, compared to 17.7% in the previous year.

Net debt decreased to 9,148 million euros as of December 31, 2012, down from 9,363 million euros on June 30, 2012. This reduction followed a favorable currency effect.

As part of a strategy to focus on priority brands, the company signed an agreement on July 13, 2012, to sell several aquavit brands and a production site in Denmark for 103 million euros.

Pernod Ricard reiterated its objective of internal growth for current operating profit close to 6% for the full 2012/13 fiscal year.