VERY STRONG AND DIVERSIFIED YTD SALES: +6.3% ORGANIC GROWTH (REPORTED: +4.9%)
Q3: +2.5% SOLID ORGANIC GROWTH, AS EXPECTED, REFLECTING CHINESE NEW YEAR
PHASING1 AND START OF WHOLESALER INVENTORY OPTIMISATION IN USA
INCREASED FY19 GUIDANCE2:
ORGANIC GROWTH IN PROFIT FROM RECURRING OPERATIONS OF C. +8%
Sales for the first 9 months of FY19 totalled ' 7,188 million, with organic growth of +6.3%, driven by the Emerging markets (+15%):
' Americas +3%: good performance with USA broadly in line with market; start of USA wholesaler inventory optimisation in Q3
' Asia-RoW +12%: very strong performance driven by dynamic growth in China and India
' Europe +1%: very good Sales in Eastern Europe and contrasted performance in Western Europe.
Reported growth was +4.9% due to an unfavourable FX impact. For full-year FY19, a positive FX impact of c. +'20m is expected3.
Sales for the third quarter of FY19 totalled ' 2,003 million, including organic growth of +2.5% and reported growth of +4.5%:
' Americas +2%: improving performance in Latin America and shipments reflecting start of wholesaler inventory optimisation in USA
' Asia-RoW +3%: growth in line with expectations, with sustainable growth management of Martell following earlier Chinese New Year1 and route-to-market change in Korea
' Europe +2%: improvement driven by very strong performance in Russia and UK, despite commercial dispute in France and Germany
As part of this communication, Alexandre Ricard, Chairman and Chief Executive Officer, stated, 'Growth was very strong and diversified in the first 9 months of FY19, responding to our long-term investment strategy. For full year FY19, in an environment that remains uncertain, we aim to continue dynamic and diversified growth across our regions and brands. We expect organic growth in Profit from Recurring Operations of c.+8%. We will continue to roll out our strategic plan 'Transform & Accelerate', focused on investing for sustainable and profitable long-term growth.'
All growth data specified in this press release refers to organic growth (at constant FX and Group structure), unlessotherwise stated. Data may be subject to rounding. A detailed presentation of Sales for the third quarter of FY19 can be downloaded from our website.
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 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 us 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.
Profit from recurring operations
Profit from recurring operations corresponds to the operating profit excluding other non-current operating income and expenses.
1 CNY: Chinese New Year on 5 February 2019 vs. 16 February 2018
2 Guidance communicated to market on 29 August 2018 of organic growth in Profit from Recurring Operations of +5% to +7%, revised on 7 February 2019 to between +6% and +8%
3 Based on average FX rates projected at 11 April 2019, particularly a EUR/USD rate of 1.14
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