Pernod Ricard SA
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Pernod Ricard SA
Pernod Ricard SA, a stalwart in the global spirits industry, has its roots deeply entrenched in the tradition of French alcoholic beverages. Born from the merger of two well-known French anise-based spirit companies, Pernod and Ricard, in 1975, the company has grown into a formidable player in the international market. Pernod Ricard's journey is a tale of strategic vision and expansion, marked by a series of astute acquisitions. From bringing Chivas Brothers and Jameson Irish Whiskey into its fold to adding Malibu Rum and Absolut Vodka, the company has leveraged both organic growth and smart acquisitions to craft a diverse portfolio that appeals to a wide range of tastes and preferences.
The company's operational ethos revolves around building iconic brand narratives and tapping into the premiumization trend—consumers' increasing willingness to pay for superior quality and craftsmanship in their alcoholic drinks. Pernod Ricard earns its revenue by producing and distributing its renowned brands across virtually every continent, with a robust distribution network fostering both on-premise and off-premise sales. This involves selling directly to retailers, bars, and restaurants, as well as through wholesalers who help navigate complex local regulations worldwide. Moreover, the company invests heavily in marketing and brand storytelling, capitalizing on its brands' heritage and aspirational qualities that resonate with consumers seeking luxury experiences. Through this multifaceted approach, Pernod Ricard has positioned itself as not just a purveyor of spirits, but a creator of global moments of conviviality.
Pernod Ricard SA, a stalwart in the global spirits industry, has its roots deeply entrenched in the tradition of French alcoholic beverages. Born from the merger of two well-known French anise-based spirit companies, Pernod and Ricard, in 1975, the company has grown into a formidable player in the international market. Pernod Ricard's journey is a tale of strategic vision and expansion, marked by a series of astute acquisitions. From bringing Chivas Brothers and Jameson Irish Whiskey into its fold to adding Malibu Rum and Absolut Vodka, the company has leveraged both organic growth and smart acquisitions to craft a diverse portfolio that appeals to a wide range of tastes and preferences.
The company's operational ethos revolves around building iconic brand narratives and tapping into the premiumization trend—consumers' increasing willingness to pay for superior quality and craftsmanship in their alcoholic drinks. Pernod Ricard earns its revenue by producing and distributing its renowned brands across virtually every continent, with a robust distribution network fostering both on-premise and off-premise sales. This involves selling directly to retailers, bars, and restaurants, as well as through wholesalers who help navigate complex local regulations worldwide. Moreover, the company invests heavily in marketing and brand storytelling, capitalizing on its brands' heritage and aspirational qualities that resonate with consumers seeking luxury experiences. Through this multifaceted approach, Pernod Ricard has positioned itself as not just a purveyor of spirits, but a creator of global moments of conviviality.
Volumes Return to Growth: Q3 volumes grew by about 1% after four semesters of decline, signaling improving momentum.
Mixed Regional Performance: India and Travel Retail posted strong growth, while the U.S. and China remained weak, with U.S. net sales down 8% and China impacted by a challenging macro environment.
Inventory Adjustments: U.S. inventory reductions continued in Q3 at both retail and wholesale levels and are expected to persist into fiscal 2025.
Margin Expansion Confidence: Management expects to deliver about 1% organic operating profit growth for the full year, driven by top line acceleration, operational efficiencies, and cost control.
Flat Full Year Sales Guidance: Pernod Ricard reiterated guidance for broadly stable organic net sales for FY24, with stronger Q4 expected to offset earlier declines.
Brand Investment: A&P spend is being maintained at around 16% of sales, with even higher investment in the U.S., as the company leans into brand activation and digital initiatives.
Positive Long-Term Outlook: Management remains confident in the medium-term growth framework of 4–7% organic sales growth and 60bps operating leverage.