Pernod Ricard’s operating profit for the full year 2021/22 grew by 19%, which was more than expected. This was due to strong demand for its premium spirits in Europe, China, and the United States, as well as lower costs.
In an environment that remained volatile due to high inflation, the war in Ukraine, and COVID lockdowns in China, the owner of Mumm champagne, Absolut vodka, and Martell cognac anticipated “dynamic broad-based sales growth, on a normalising comparison basis, with a good start to the first quarter,” which began in July.
With recurring free cash flow at a record high of €1.926 billion ($1.93 billion), the second-largest spirits company in the world announced a 32% dividend increase to €4.12 per share and a new repurchase plan for fiscal year 2022/23.
The company’s profit from regular operations reached 3.024 billion euros in the year that ended on June 30. This was a 19% increase from the previous year, which was more than the 18.1% increase that analysts had predicted.
Sales reached 10,701 billion euros, an increase of 17% on an organic basis, with sales rising 8% in the crucial U.S. market, 5% in China, and 26% in India.
Related: Pernod Ricard is betting that its digital push will help it grow.
Pernod said that it gained market share in most markets and that price increases in most markets were in the mid-single-digit range, which made up for the effect of rising costs.
Pernod, like competitor Diageo, has profited from drinkers upgrading to more costly drinks since the beginning of the epidemic. It was also said that strong domestic spending, the reopening of pubs and restaurants, and a quick recovery in travel helped boost sales.
In addition, the company expressed confidence in achieving its mid-term objective for the fiscal years 2023–2025.
Mid-term, Pernod aims to achieve yearly organic sales growth at the upper end of a range between 4 and 7 percent. The company also wants to increase its operating profit margin by 50 to 60 basis points every year if it can grow its organic sales by 4 to 7 percent every year.
$1 = 0.9989 euros)
