Published On 09/13/2016

2015/2016 full-year Sales and Results




Solid and encouraging FY16 performance

+2% organic Sales growth (+1% reported)

+2% organic growth in PRO[1] (+2% reported)

Strong free cash flow growth: +31%


FY17 guidance:
organic growth in PRO between +2% and +4%


Press Release, Paris - 1 September 2016


Sales for FY16 totalled €8,682m. Organic Sales growth was +2%, improving vs. FY15 when restated for French technical impact[2]. Reported Sales growth was +1%.

The improvement was mainly driven by the USA and Spain:

  • Americas: acceleration of growth +4% vs. +2% in FY15, notably driven by USA 
    (+4% in FY16 vs. stable in FY15)
  • Asia-Rest of World: +1% thanks to double-digit growth in India and Africa/Middle East but difficulties in China (-9%), Korea and Travel Retail
  • Europe:  improvement (+1% vs. stable in  FY15) driven by Spain, with encouraging growth in most markets, but a technical(2) decline in France.  European growthrestated for French technical impact(2): +3%

Stable Top 14 and good dynamism of Priority Premium Wines and Key Local Brands:

  • Strong performance of Jameson, Ballantine’s, Perrier-Jouët and Indian whiskies
  • Difficulties for Chivas and Absolut (but improving yoy underlying trends in USA)
  • Priority Premium Wines: growth acceleration driven by Campo Viejo

Innovation driving growth:

  • Sustained A&P investment driving encouraging results on innovation: +1% out of overall Group Sales growth of +2% in FY16
  • Innovation driving premiumisation
  • Successful launch of Jameson Caskmates, The Glenlivet Founder’s Reserve and Chivas Extra

Q4 Sales were €1,869m, -1% in organic growth (-7% reported.)  Restated by technical impact in France(2) and shipment phasing in USA, Sales at +2%, consistent with underlying trends and full-year performance.



FY16 PRO was €2,277m, with organic growth of +2% and +2% reported:

  • Lower Gross margin pressure vs. FY15: -13bps in FY16 vs. -105bps in FY15
    • Improving pricing: +1% (vs. flat in FY15)
    • Negative mix driven by geography (India growth vs. China decline)
    • Tight management of costings: +1% Cost Of Goods Sold at comparable mix
  • A&P: +1% with quasi stability in ratio at 19% Sales, to support key innovation projects and must-win markets (USA in particular)
  • Very tight management of Structure costs, with growth in line with Sales

PRO margin improved +7bps thanks to tight management of resources and operational efficiency initiatives.

The corporate income tax rate on recurring items was quasi stable at c. 25%.

Group share of Net PRO was €1,381m, +4% reported vs. FY15 and at a historical high.

Group share of Net profit was €1,235m, +43% reported vs. FY15, also at a historical high.



Cash generation was strong, with Recurring Free Cash Flow of €1,200m, +4% vs. FY15.

Net debt decreased by €305m to €8,716m mainly driven by very strong Free Cash Flow of €1,061m.

The average cost of debt reduced to 4.1% vs. 4.4% vs FY15.  The expected cost for FY17 is c. 3.8%.

The Net debt / Ebitda ratio at average rates was 3.4[3] at 30/06/16, down from <3.5 at 30/06/15. The organic improvement was significant at 0.3, but dampened by adverse FX on emerging market currencies.

Refinancing was made at excellent conditions.  Moody’s upgraded Pernod Ricard to Baa2/P2 in May 2016.



A dividend of €1.88 is proposed for the Annual General Meeting, +4% vs FY15,corresponding to a pay-out ratio of 36%, in line with the customary policy of cash distribution of approximately one-third of Group net profit from recurring operations.



Significant initiatives were accomplished to deliver the mid-term strategic roadmap, as outlined during the June 2015 Capital Market Day, and further improve performance:

  • USA and innovation accelerating 
  • Organisational changes to drive stronger performance
    • Simplification of Americas region
    • Creation of 2 Management Entities in Mexico and Brazil
    • Creation of Global Travel Retail, reporting directly to HQ
    • Finalisation of transformation of Pernod Ricard USA
    • Adjustment of organisation in China to new market context
    • Organisational changes in Korea
  • Implementation of operational efficiency roadmap:
    • Covering supply chain, manufacturing, procurement and A&P
    • Will contribute to improving PRO margin medium-term.  Over the period FY16 to FY20, total gross P&L savings of €200m are expected (mainly A&P and Gross margin and to a lesser extent Structure costs), of which approximately half will be reinvested into A&P. 
    • Total cash savings of €200m are also expected over the period FY16-20.
  • Active portfolio and resource allocation management
  • Targeted M&A with disposal of non-core assets (eg Paddy) and acquisition focus on fast-growing premium+ segments (Monkey 47.)

Pernod Ricard is confident in its ability to deliver medium-term objectives:

  • Topline growth 4 to 5 %
  • Operating margin improvement.


As part of this communication, Alexandre Ricard, Chairman and Chief Executive Officer, declared, “FY16 was a solid and encouraging year, delivering Profit from Recurring Operations in line with guidance while maintaining investment and implementing significant initiatives to deliver our medium-term strategy and objectives.

For full year FY17, in a contrasted environment, we expect to continue improving our business performance year-on-year vs. FY16, supporting priority markets, brands and innovations and focusing on operational excellence.  As a consequence, our guidance for FY17 is organic growth in Profit from Recurring Operations between +2% and +4%.”


All growth data specified in this presentation refers to organic growth, unless otherwise stated.  Data may be subject to rounding. 

A detailed presentation of FY16 Sales and Results can be downloaded from our

Audit procedures have been carried out on the full-year financial statements. The Statutory Auditors’ report will be issued following their review of the management report.


Definitions and reconciliation of non-IFRS measures to IFRS measures

Pernod Ricard’s management process is based on the following non-IFRS measures which are chosen for planning and reporting. The Group’s management believes these measures provide valuable additional information for users of the financial statements in understanding the Group’s performance. These non-IFRS measures should be considered as complementary to the comparable IFRS measures and reported movements therein.


Organic growth

Organic growth is calculated after excluding the impacts of exchange rate movements and acquisitions and disposals.

Exchange rates impact is calculated by translating the current year results at the prior year’s exchange rates.

For acquisitions in the current year, the post-acquisition results are excluded from the organic movement calculations. For acquisitions in the prior year, post-acquisition results are included in the prior year but are included in the organic movement calculation from the anniversary of the acquisition date in the current year.

Where a business, brand, brand distribution right or agency agreement was disposed of, or terminated, in the prior year, the Group, in the organic movement calculations, excludes the results for that business from the prior year. For disposals or terminations in the current year, the Group excludes the results for that business from the prior year from the date of the disposal or termination.

This measure enables to focus on the performance of the business which is common to both years and which represents those measures that local managers are most directly able to influence.


Free cash flow

Free cash flow comprises the net cash flow from operating activities excluding the contributions to Allied Domecq pension plans, aggregated with the proceeds from disposals of property, plant and equipment and intangible assets and after deduction of the capital expenditures.


“Recurring” indicators

The following 3 measures represent key indicators for the measurement of the recurring performance of the business, excluding significant items that, because of their nature and their unusual occurrence, cannot be considered as inherent to the recurring performance of the Group:

-       Recurring free cash flow

Recurring free cash flow is calculated by restating free cash flow from non-recurring items.

-       Profit from recurring operations

Profit from recurring operations corresponds to the operating profit excluding other non-current operating income and expenses.

-       Group share of net profit from recurring operations

Group share of net profit from recurring operations corresponds to the Group share of net profit excluding other non-current operating income and expenses, non-recurring financial items and corporate income tax on non-recurring items.


Net debt

Net debt, as defined and used by the Group, corresponds to total gross debt (translated at the closing rate), including fair value and net foreign currency assets hedging derivatives (hedging of net investments and similar), less cash and cash equivalents.



EBITDA stands for “earnings before interest, taxes, depreciation and amortization”. EBITDA is an accounting measure calculated using the Group's profit from recurring operations excluding depreciation and amortization on operating fixed assets.



[1] PRO = Profit from Recurring Operations

[2] Shipments brought forward from July to June 2015 ahead of back-office mutualisation between Ricard and Pernod on 1 July 2015


[3] Average EUR/USD rate of 1.11 in FY16 vs. 1.20 for FY15

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About Pernod Ricard

Pernod Ricard is the No.2 worldwide producer of wines and spirits with consolidated sales of €9,182 million in FY19. Created in 1975 by the merger of Ricard and Pernod, the Group has developed through organic growth and acquisitions: Seagram (2001), Allied Domecq (2005) and Vin&Sprit (2008). Pernod Ricard, which owns 16 of the Top 100 Spirits Brands, holds one of the most prestigious and comprehensive brand portfolios in the industry, including: Absolut Vodka, Ricard pastis, Ballantine’s, Chivas Regal, Royal Salute, and The Glenlivet Scotch whiskies, Jameson Irish whiskey, Martell cognac, Havana Club rum, Beefeater gin, Malibu liqueur, Mumm and Perrier-Jouët champagnes, as well Jacob’s Creek, Brancott Estate, Campo Viejo, and Kenwood wines. Pernod Ricard’s brands are distributed across 160+ markets and by its own salesforce in 73 markets. The Group’s decentralised organisation empowers its 19,000 employees to be true on-the-ground ambassadors of its vision of “Créateurs de Convivialité.” As reaffirmed by the Group’s three-year strategic plan, “Transform and Accelerate,” deployed in 2018, Pernod Ricard’s strategy focuses on investing in long-term, profitable growth for all stakeholders. The Group remains true to its three founding values: entrepreneurial spirit, mutual trust, and a strong sense of ethics. As illustrated by the 2030 roadmap supporting the United Nations Sustainable Development Goals (SDGs), “We bring good times from a good place.” In recognition of Pernod Ricard’s strong commitment to sustainable development and responsible consumption, it has received a Gold rating from Ecovadis and is ranked No. 1 in the beverage sector in Vigeo Eiris. Pernod Ricard is also a United Nation’s Global Compact LEAD company.
Pernod Ricard is listed on Euronext (Ticker: RI; ISIN Code: FR0000120693) and is part of the CAC 40 index.

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