Pernod Ricard TR sees Q1 improvement in Korea
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According to Pernod Ricard travel retail witnessed an “improving trend in travel retail Americas” with a “return to growth [and] better performance from duty free across zone, product mix and pricing.”
However, the travel retail division admitted that it battled a ‘difficult environment’ in Asia for Q1 ‘impacted by tough commercial negotiations’. More positively the same division said that Korea duty free appeared to show improvement.
A sales decline for travel retail in Europe was apparently caused by weakness in Eastern Europe; something which the company has been battling for the last few years.
Highlights from the Pernod Ricard Q1 FY2017 results. The company does not share its travel retail results, but does provide some commentary on the division.
Group wide, For FY17, as indicated in September, Pernod Ricard expects good sales growth to continue in USA, India, Jameson and innovation. It also expects sales to improve vs FY16 in China, Absolut and Chivas.
There will be a ‘continued focus on the operational efficiency roadmap and priority brands and innovations’ and ‘continued deleveraging and strong cash flow generation’.
Pernod Ricard shares its strong lineup of strategic brands (for the whole group).
For FY17 the company is looking for organic growth in profit from recurring operations between +2% and +4%.
*Shipments brought forward from July to June2015 ahead of back-office mutualisation between Ricard and Pernod on 1 July 2015.
Questions & Answers
Q.What caused the sales decline for Pernod Ricard's travel retail division in Europe?
What caused the sales decline for Pernod Ricard's travel retail division in Europe?
The sales decline in Europe for the travel retail division was reportedly due to weakness in Eastern Europe. The company has faced this issue for the last few years.
Q.Which specific brands does Pernod Ricard expect to see improved sales for in FY17?
Which specific brands does Pernod Ricard expect to see improved sales for in FY17?
Pernod Ricard anticipates improved sales for Absolut and Chivas in FY17, compared to FY16. They also expect continued good sales growth for Jameson.
Q.What is Pernod Ricard's forecast for organic growth in profit from recurring operations for FY17?
What is Pernod Ricard's forecast for organic growth in profit from recurring operations for FY17?
For FY17, Pernod Ricard is aiming for organic growth in profit from recurring operations to be between +2% and +4%. This is a group-wide target.
Q.Why did Pernod Ricard battle a 'difficult environment' in Asia for Q1?
Why did Pernod Ricard battle a 'difficult environment' in Asia for Q1?
The travel retail division experienced a 'difficult environment' in Asia for Q1 because it was impacted by tough commercial negotiations. This contrasts with improvement seen in Korea duty free.
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