Pernod Ricard S A

Good morning, everyone. We're very pleased to welcome you to our nine-month sales call. Hélène de Tissot, our group CFO, will take you through the presentation of those results, and then we will take your questions. Hélène, over to you. Thank you, Florence.

Good morning, everyone. I'm pleased to report very strong vote-based growth in our first nine months of fiscal year 2023 in a normalizing environment with a high single-digit pricing in all regions. So organic growth is at plus 8% at book level, with Asia and the rest of the world growing at plus 12%, very strong growth led by India, travel retail, and Turkey, offsetting China. Solid performance in Japan, in Thailand, in Korea, and continued rebound in Southeast Asia. Europe is growing at plus 6%, the value-driven growth led by Spain, travel retail, and Germany. Americas is growing at plus 2% with growth driven by LATAM. Our reported growth for the nine months is at plus 13%, benefiting over the last nine months from the positive FX impact, which is currently starting to fade with euro gaining some strength versus US dollar. We have a very significant price impact at plus 9% across regions. Volumes are resilient, growing at plus 1%. As already mentioned during the H1 call, the environment is normalizing with a strong gradual recovery in China following the end of the COVID policies, its positive impact on our travel retail business, and a normalization in the U.S. after a few years of very strong growth. We see strong momentum behind our diversified spirit portfolio with six categories driving 90% of the growth. This diversification, I must say, is a key driver of our performance. We've been consistently delivering a broad-based and diversified growth across geographies and across categories. We are leveraging the industry's broadest and most comprehensive premium portfolio. Those six categories that are driving 90% of this first nine-month growth are Scotch whiskey, Irish whiskey, Indian whiskey, vodka, gin, and as well, Merlot drinks, mainly Lillet. So our strategic international brands are growing by 7%, notably with the Scott portfolio, Jameson, and Absolute. Our strategic local brands are very dynamic, growing at plus 11%, driven by growth of Seagram Indian Whiskeys, Seagram Gin, and Kalua. We have as well continued momentum in specialty brands, growing at plus 10%, notably with Lillet that I mentioned already, but as well Aberlour, Altos, Malfi, and Red Breast. wines are at minus 2%, softness mostly from the UK. So moving now to our performance by geographies and starting by our four must-win markets, which are delivering a strong underlying performance. I'll start with the US. So USA, the nine-month top line is at minus 1% due to high complex Germany in Q3. So spirits depletion are growing at plus 2%, which is a solid performance. in a normalizing environment. Q3 in fiscal year 2023 has been impacted by the H1 phasing and as well a high comparison basis. Please remind that last year the Q3 was going at 23%. We have a strong high symbiotic price effect across the portfolio this year, a solid performance of Jameson through St. Patrick's Day, and we are expecting strong sales in Q4 against low comparison basis along with additional price increases on some brands that are happening as we speak. China, the nine-month performance is at minus 5% due to sub-CNY and inventory adjustments. We have seen very dynamic sell-out at the end of Q3, meaning the month of March, with good post-CNY season activity. We are expecting very strong sales in Q4, as consumer demand recovery is further amplified by favorable comparison basis. Last year, Q4 was very subdued. So, strong rebound, as I just mentioned, in March, best market sales in January and February have been impacted by a soft festive season and as well some adverse phasing, and we did adjust our inventory in Q3. We have a continued development of the wider portfolio, including Absolute and the Glenlivet. And we've been announcing a portfolio-wide price increase that are going to be executed in May. Global travel retail, the nine-month performance is at plus 33%, very strong sales recovery with a gradual resumption of Chinese travel. We are on track for profit recovery to pre-COVID levels at year-end. We've been increasing our price at a high single-digit level, Our net sales are currently at circa 80% of pre-COVID levels, and there is another recovery driving very strong premium Scotch development. Moving now to India, India is at plus 15% in these nine months, with a continued excellent performance with strong premiumization, strong value growth with a favorable mix led by a rally style, and as well the strong development of our strategic international branch portfolio. We've been increasing prices at mid-single digits, which is excellent in the context of India, with as well very strong revenue growth management initiatives. Moving now to other geographies, with strong value-led growth across regions and dynamic pricing executions, America's 9-month is up just 2%, with a low single-digit growth in Canada, with strong share gains on most brands. Brazil is putting a good growth, driven by Chivas, Regal, Valentine's, and Absolute, with a strong solid pricing. Mexico is in double-digit growth from Scotch portfolio, Absolute, and Mattel, excellent pricing. Nine months in Europe is at plus 6%, with France flat with market share gains and good growth for America. Spain is posting a double-digit growth with solid pricing. There is a non-trade rebound, notably with Absolute, Valentine's, and Gin. UK is in modest growth with dynamic spirit portfolio upset by wine performance, and we are as well increasing our price strongly. Germany, dynamic growth mainly from strong Lille performance. Asia restored the world. Minimum is up to 12%. Strong double-digit in Japan with Shiba, Spaya, Jwet, and Valentine. Korea, as well, very strong double-digit growth driven by premium Scotch Portfolio and Jensen. Taiwan and Southeast Asia continued to rebound on a low-competition basis, and Turkey continued excellent growth, notably behind Scotch Portfolio. Moving now to our recent acquisition in our number one market, the U.S. So fiscal year 23 has been a very active year of investment with acquisitions, enabling us to reinforce our existing comprehensive portfolio in the U.S. We already mentioned Sovereign Brands and Codigo in the first half, so I will insist a bit more on Scruble, which is the most recent addition in a very attractive category, the flavored whisky. So this is complementing our portfolio, and we are very much in tune with the consumer demand in the U.S. On Codigo, you can see on that slide, we are launching an ambitious media campaign for the summer in key states, and there will be some large rules in trendy neighborhoods. So more to come on these brands. And then moving to the outlooks. So in a persistently volatile environment and a normalizing market, we are confident in delivering the strong performance in fiscal year 2023 with very strong Q4 sales on favorable comparison basis while ensuring healthy levels of inventory at your end everywhere. We continue focus on revenue growth management and operational efficiencies to offset cost pressure in a high inflationary environment The E&P ratio for the year would be at circa 16% of net sales, and we continue disciplining investment and structure. The capex is estimated at circa 6% of net sales, and we keep accelerating investments in strategic inventories. We're going to launch imminently a final €300 million trench to complete our share-buy-back program, which I remind you will amount to circa €750 million for the fiscal year 2023. we expect some positive currency effect. So our guidance for 5,023 is to deliver an organic growth of circa 10% in profit from recurring operations with some expansion in organic operating margin.

Thank you, Hélène. Now turning to your question. So please, maximum two questions each because you've got a number on the call this morning. So, operator, if you can direct us to the first question, please.