Pernod Ricard S A

Good morning, ladies and gentlemen, and welcome to Pernod Ricard, First Alsace, and the Results Call, FY22. We are hosted this morning by Alexandre Ricard, our Chairman and CEO, and Hélène de Tissot, our EVP, Finance, Operations, and IT. We'll take you through the presentation and then take your questions. Alexandre, over to you.

Well, thank you very much for all, and good morning everyone. To all of you, I hope you're well and safe. So, here we go for our half-year results, July 1st to December 31st. First of all, very strong net sales performance, with a record sales of 6 billion euros, an organic growth of 17%, and reported growth of 20%. This is driven by robust consumer demand across most, if not all, markets. This growth is diversified, coming from all the regions and spread amongst all the categories with a clear on-trade rebound and a strong resilience of the off-trade. All must-win markets, and we'll see this in more detail later, are growing strongly and market share gains have occurred in most of our markets internationally. We have a strong price and mix on our strategic brands of 6%. There's also a very strong financial performance. You'll see dynamic sales with phasing of ANP spend resulting in a strong margin expansion of roughly 150 basis points. Very strong cash generation with a recurring free cash flow of 1.4 billion euros, an increase of plus 39% versus the same period last year. Talking about our financial policy, we've continued our active portfolio management with the acquisition of the Whiskey Exchange that we had announced a few months ago, and a minority stake in Sovereign Brands. We have resumed our share buyback with the execution over the first half of this year, fiscal year, of 250 million euros. In terms of business transformation, we call it velocity, of course. We've upgraded the pace at which we're transforming our business, clear drive on our 2030 sustainability and responsibility roadmap, agile resource allocation, investing on our strategic priorities, And finally, very strong progress on our digital transformation. And of course, solid e-commerce growth. So here you have the table summarizing our financial performance. And by the way, if you look at versus pre-COVID as well, you'll see that we're far above the pre-COVID levels. I'll just take the net sales number. So, plus 17% versus last year, but that is 13% above the pre-COVID level. Going forward as well, creating value for all our stakeholders. As I said, we have advanced at pace on our sustainability and responsibility roadmap. I'd just like to stress two messages here. We've run our ISA, which is our internal poll, our employee feedback survey. The one thing is the very, very strong, I would say, the outstanding commitment and engagement of all our employees across the world. And again, I would like to praise their commitment, their work, all the efforts they've been going through for the last years, and in particular, this first half of our fiscal year. The results are there, and without them, the results would not be there. So again, thank you to all our colleagues from around the world for driving such remarkable results. The other topic I'd like to mention on this slide is, of course, we're very, very active on engaging with our consumers around the world around responsible drinking. Our campaign, which was launched last summer as the Entree was reopening, Our campaign about drink more water is a huge success and we have now reached above 60 million young adults over 34 countries. And this is very important for us. Again, agility to gain exposure to fast-growing categories and scale acquired brands. I mentioned the acquisition of the Whiskey Exchange, which will remain absolutely independent. I mentioned the minority stake. We took in sovereign brands and the work we're going to be doing together in terms of co-creation. But also, you know, the successful integration within the Pernod Ricard ecosystem, within the Pernod Ricard distribution network. So Pernod Ricard at the service of entrepreneurs and their little babies, if I may say so. Look at Monkey 47, we've multiplied by four since 2016, the sales of Monkey 47. Multiplied by three for Dan McGuay. Multiplied by two, our American whiskey portfolio. And multiplied by five, the Malfi gin since its acquisition in 2019. So it's quite a nice recipe for success. Well, deep diving clearly by region, you see that all regions are in double-digit growth. America is plus 14%, Asia-Russia, Europe is 16%, Europe plus a remarkable 21%, driving 17%, and, of course, all regions above pre-COVID levels. If we dive into our must-win markets, all of them are in dynamic growth, starting with the U.S., plus 9%, plus 17% versus pre-COVID levels with a strong on-trade recovery, very strong rebound there, and a resilient off-trade, which is driving good sell-out growth for us. The growth is driven by Jameson, but also by Martel, by our super premium whiskeys, our American whiskey portfolio, but as well Red Breast and the higher marks as well of Jameson. Very strong rebound of Jameson in the on-trade. And the recent launch of Jameson Orange, which took place a few days ago, which we expect to see roll out throughout the whole of this second semester. Excellent performance of Martel with the new media campaign, and we'll talk about this a little bit later. Very solid contribution to growth of the Glen Levitt, which is the leading single malt whiskey in the U.S., and, of course, the continued development of our Agave portfolio, in particular, our Mezcal brand, Del Magüey. Global travel retail is still below pre-COVID levels, see, minus 40% versus pre-COVID, but in strong growth, up 38%, so we're really witnessing a steady recovery. of international passenger traffic outside of Asia, principally in Americas, principally in Europe. There's a return to growth in all regions, of course. And finally, a resumption of strong activation. So we're back in investment mode in the travel retail channel, notably behind brands such as Jameson and Chivas Regal. China up 14% and up 28% versus pre-COVID with good growth, with a very good, in fact, MAF. Last semester, a solid Martel sellout, despite some localized on-trade disruption in the first semester related to the sanitary environment. Acceleration, or should I say clear acceleration of the Glen Lubbock, and very strong growth of Roll Salute and Ballantines. As well, a very strong development of Absolute Vodka. And finally, for those who haven't seen, we've unveiled and inaugurated officially the Chuan, which is China's first ever malt whiskey distillery by an international player, by ourselves. The last of our four must-win markets, India up 19% last year and up 12% versus pre-COVID. Listen, broad-based growth, both in terms of our Indian whiskey portfolio, but also in terms of our import brands, our strategic international brands that are in very, very strong growth there. Now, excellent momentum and market share gains in most markets. Indeed, Europe is up 21%, a very strong rebound in France, which should slow down, however, on the second half. Very strong rebound in Spain, up 34%, clearly driven by the reopening of the Antrade, with some strong innovation there. Strong growth of Havana Club in the UK, of Jameson in the UK, of Absolute in the UK. So good performance, very good performance of our spirits portfolio in the UK. Continued good growth in Germany, despite the high comparison last year. Remember, last year, Germany was in strong growth. Very strong growth as well in Russia, driven by our whiskeys, in particular Jameson and Absolute. Sorry, Jameson and Ballantines. And finally, a very strong double-digit growth of plus 22% in Poland, related as well to the rebound of the Entree. America's up 14%. Slight decline in Canada on a very high comparable basis. Very good growth in Brazil as well as in Mexico. Asia, rest of the world, well, up 16%. Good recovery in Japan. Very good growth for our premium international spirit brands in Korea. Outstanding growth in Nigeria, principally driven by Jameson and Martel, and finding very strong double-digit growth in Turkey in particular behind all our whiskeys and Absolute. If we look at our performance from a brand point of view, again, very diversified growth across the whole portfolio with our strategic brands, international brands up 19%, really driven by all our strategic international brands. Our strategic local brands up 14%, particularly our seagram whiskeys. Specialty brands up 21% on the basis of 22% growth last year. So continued very dynamic momentum. Our American whiskeys, of course, some of our malts, of course, now Fijian, Monkey 47, Redbreast, our Agave portfolio, and of course, not forgetting Lillet. A soft first half for our strategic wines, down 6%, in particular related to supply constraints, and a soft harvest for our New Zealand wines. If we look at our brands a little bit in more detail, you see that Martel is up 11%, up 8% versus pre-COVID levels, driven by China, of course, but also driven by the U.S. Jameson up 22%, so continued strong global expansion. So the strong performance is related, of course, to the U.S., but not only. Europe is in very strong double-digit growth. There's Russia, there's Ireland, there's the U.K., there's Germany. We can say it's broad-based, both in emerging markets and in developed markets. and also in sub-Saharan Africa and as well as in Asia, in particular in India. Absolute is up 23% and also up 8% versus pre-COVID levels. Excellent international development for Absolute, up 35% outside of the U.S., but also strong resilience in the U.S. related to the untrade recovery. and with some good pricing globally, especially driven by Eastern Europe and Brazil. Our Scotch portfolio is up 23% and is up 10% versus pre-COVID levels. The key message here is that the growth is broad-based across the portfolio and across the regions. You see Chivas up 23%. You see Ballantines up 29%, the Glenlivet up 21%, and the remarkable performance of Royal Salute up 41%. We've invested quite a lot behind our brands during the first half, with A&P up 16%. We've had great campaigns, Global One behind Chivas 15, which is delivering very strong results. A brand new campaign in India, where we've invested quite significantly over the first half, behind the Blender Sprite, with a new ambassador, Alia Bhatt, and therefore, as I mentioned, a new campaign. We introduced Fill Your World with Wonder with Paris Witt, a very successful campaign as well. And finally, just a last example here, but it's not limited to these four examples, of course. Soar Beyond the Expected, which is the new campaign behind the Martel Blue Swift in the US, which is experiencing a huge success. And I could not resist to show you what this campaign looks like. So maybe we can see a video right now. So video, please.

I've never seen myself as just one thing. And I made sure no one else could either. By staying true to myself, making my own path, rising above expectations, and opening the door for others to be their true selves. The heart spirit made with VSLC cognac, finished in bourbon cast, Martel Blue Swift, stored young and expectant.