 Pernod suffers from sales hangover
(China Daily)
Updated: 2008-07-25 07:47
Pernod Ricard SA, the world's second-largest liquor company, said fourth-quarter sales fell 3 percent on the dollar's slide against the euro and disposals of brands including Rich & Rare whisky and Canei wine. Revenue dropped to 1.50 billion euros in the three months through June from 1.54 billion euros a year earlier, the Paris-based company said yesterday. Excluding currency movements and disposals, sales gained 7 percent, below the survey's 7.5 percent estimate. Pernod was hurt by the dollar's 7.1 percent drop against the euro this year because it gets more than a quarter of revenue from the US, where the economy is slowing as house prices retreat. The distiller, which raised its forecast for annual profit growth yesterday, has sold brands to focus on Martell cognac, Mumm champagne and other more-profitable top sellers. "While growth is slowing, premiumization is still a support in developed countries," Erwan Rambourg, an analyst at HSBC in London with an "overweight" rating on Pernod, said before the figures were released. "The emerging-market story should continue to be a strong sector driver in years to come." Annual sales rose 2 percent to 6.59 billion euros and gained 8.7 percent excluding currencies and disposals. Pernod now expects a 13 percent climb in operating profit for the fiscal year that ended last month, up from 12 percent previously. The French group also said it had completed its acquisition of Vin & Sprit, the Swedish drinks group that owns Absolut, the world's best-selling premium vodka, for 5.69 billion euros including debt. The deal lifted its debt to 11.9 billion euros at the end of June on a pro-forma basis from a little over 6 billion euros. "After Seagram and Allied Domecq in 2001 and 2005, this is the third transformational acquisition for the Group," Pernod Ricard Chief Executive and Chairman Patrick Ricard said in a statement. Pernod, the world's No 2 wine and spirits group behind Diageo, said it was confident in achieving the top end of its estimated cost savings from the acquisition of between 125 million euros and 150 million euros. Pernod added 17 cents, or 0.3 percent, to 56.95 euros in Paris trading on Wednesday. Agencies (China Daily 07/25/2008 page16) |
