Pernod Ricard S A

Alex and Hélène will go through the presentation, which is available on our website, after which we're going to run a short Q&A session. But before we begin, we'd like to showcase a short video highlighting our recent Chivas Regal global campaign.

We're not like those who came before us. The old ways to get to the top. Forget it. We make our own rules. Respect earned, not inherited. Self-made, hustle-loving, fearless. We are the new royalty. Born for a new kind of success. Sharing what we learn and the rewards we earn. I rise, we rise.

Well, good morning to all of you. First of all, I do hope you had a great summer period, sipping the right cocktails based on the right brands. So let's present to you our fiscal year 23 sales and results. Well, first of all, we had a very strong fiscal year 23 performance in an environment which is normalizing. We had a very strong and diversified performance, basically with growth driven across all regions and across all categories. One of our key objectives was to protect our growth margin, and we did. We sustained our growth margin and expanded our operating margin. We kept on investing in our brand's sustainable growth and desirability with record level of investments in ANP, in CAPEX and in strategic inventory to fuel our future growth. We continue to actively manage our portfolio, focusing on priority premium plus brands. Our ongoing transformation continues and accelerates. We are progressing towards our 2030 sustainability and responsibility targets. And we continue to deploy our conviviality platform. Of course, all of this is translating into long-term shareholder value creation. You see our total shareholder return of 18% in fiscal year 23. And today we're announcing our intention to do a share payback this fiscal year, somewhere between half a billion and 800 million euros. Here you have the key highlights. I won't dwell into them. Hélène will present them to you in more detail. As I mentioned, our growth is really broad-based. It's been driven by all regions, with also very strong pricing execution across the globe and resilient volumes. So our 10% global organic net sales growth is composed of 1% resilient volumes, 8% strong pricing execution, and a one percent positive mix you see two percent organic sales growth in america's eight percent across europe and 17 in asia rest of the world and strong pricing basically across the globe Also, and this is core to our strategy, which is to diversify the sources of our growth. You see here six categories have driven approximately 85% of our growth and premiumization also being at the core of our strategy. You see premium plus brands that have driven roughly 80% of the growth. and with the prestige segment growing at plus 15%. So if you look at our Scotch portfolio, it grew organically 17%. You look at our Irish whiskey portfolio, driven, of course, by Jameson, double-digit with 11% growth, same growth rate for Cognac and Brandy's, same growth rate of double-digit at 11% for vodka, 8% growth for gin, and same... as for cognac irish whiskey and vodka for indian whiskeys at double digit 11 growth and you see that contribution is very well balanced perfectly in line with our intent Still obsessed by our consumers, consumer centricity really fueling our innovations, driving consistent brand investments as well across the globe. A strong innovation strategy. I would just like to underline the soon to come launch of Absolute and Ocean Spray, which is our first co-branded RTD range. And you see a few other initiatives. And let's pause here with a small commercial. Okay. This past fiscal year has been our most active year in terms of portfolio management in a decade. We've invested more than 1 billion euros to complement our portfolio in attractive categories in North America. So after north american whiskey and our latest investment there with jefferson's a few years back we've increased exposure to tequila we've penetrated the flavored north american whiskey market and we've increased our exposure to ready to drinks by the way tequila north american whiskey flavored whiskey and rtds are the fastest growing categories in north america so it's This is not just a coincidence. It's perfectly in line with our strategic roadmap. And we also strengthened our partnership with Sovereign Brands, which is the most innovative and creative beverage alcohol company in the U.S. So very active year, as well with the divestment of Klein Campbell here in France, which we announced just ahead of summer. Just a quick focus on our capacity to integrate bolt-on acquisitions. We took that example amongst many, which is Malfi. And you look at our capacity to integrate these acquisitions into our distribution network. to increase of course significantly the volumes. So ever since we acquired Malfi in 2019, our sales volumes were multiplied by three and even more so in value, driving even more margin improvement as well. and increasing the number of markets where the brand is present. So this is the perfect illustration of our bolt-on acquisition strategy with Pernod Ricard's distribution network. Again, very important sustainability and responsibility being at the core of our growth model based on four key pillars. Nurturing terroir, number one, valuing people, number two, circular making, number three, and responsible hosting, number four. Within each of these pillars, we have a number of very clear ambitious targets, some by 2030, others by 2025. It's something that we monitor of course very, very closely. Around nurturing terroir, I think regenerative agriculture is one of the most important topics on which we are working. On valuing people, we are perfectly in line with our ambitions where we want to get to top management balance in terms of gender. We also have gender pay equity. In terms of circular making, and we'll talk about this a bit later in the presentation, of course, we're investing heavily in terms of reducing our carbon footprint, both on Scope 1 and 2, but also with very strong initiatives on Scope 3 through partnerships with our partners, supplier partners, whether it's agricultural or industrial. And finally, responsible hosting, which is very specific to our industry and where we leverage the power of our brands to drive responsible consumption messages around the globe and engage with our consumers. So delivering sustainable and stretched profitable growth, this is what we are here to do. We want to build on the strengths of our growth model, which is a triptych, the most comprehensive portfolio of brands in the industry, the most comprehensive route to market with a presence across all regions. and most importantly, winning culture. And I'd like to take this opportunity as well to thank all of our teams around the world for the very strong results Bernard Ricard delivered. And of course, beyond that triptych, our growth model, which is powered by what we call the conviviality platform and the key digital programs leveraging algorithms or leveraging artificial intelligence to be able to activate a lot more brands. So moving from six to eight brands activated across the globe to 15 to 20 brands, what we like to call precision. at scale, leveraging tech and data. So we already gave you in the recent past, I think it was last February, some clear examples around some of our key digital programs. The first one being Maestria, which is mapping, thanks to Consumer Insight, mapping all the moments of consumption in any given market and addressing all of these with a clear portfolio strategy. Matrix, as well, again, maximizing our marketing investments by touchpoints, leveraging, again, very insightful data and our algorithms. Same thing for promotional efficiency, using our tool and algorithm called Vista RevUp. And finally, around D-Star, which is Salesforce automation, again, leveraging the power of tech and data. And it's all about having the right brand at the right time, at the right place, at the right price, with the right message targeting the consumer. And of course, all this delivering our performance, our roadmap, as we announced it, we're perfectly in line with what we said we would deliver, as you can see, despite the small blip in 2020 with COVID. we came back to exactly our ambition, which is the upper end of the 47% top-line growth with margin expansion of roughly 50 to 60 bps per annum. And this, of course, results in a sustainable long term value creation for all of our stakeholders. You see here the TSR over a one, a three and a five year period. But also when I mean all stakeholders, it's also from an SNR point of view. It's also our colleagues from around the world that deliver these results. We're happy and proud to be part of Forbes 2022 World's Best Employers. We also received in 2023 a gold rating from Ecovadis for our sustainability. And finally, the engagement, the commitment of our teams around the world, despite the challenging environment. So again, thank you to our teams. And of course, adapting our operating model to all of the above, should I say, as we have transformed ourselves over the last few years, as we deploy our digital transformation, which we call the conviviality platform, We've also adapted our operating model and governance with a new EXCOMM executive committee to lead our ambition with, of course, Hélène on finance and IT, but also with somebody representing global brands, Phoebe Guetta. Somebody representing global markets, Gilles Bogart, alongside Anne, who represents North America. Maria Pia, who joined us six months ago, who is driving our operations, SNOP. Cédric, which most of you know on HR. Anne-Marie, our general counsel. And finally, Conor McQuaid takes care of corporate communications, SNR, and public affairs. So this is a resized XCOM. We have also an executive leadership team, which regroups basically headquarter functions around the digital IT, but also 10 management entities. We used to have 22. have ten and six global brand companies. So a resized, reshaped operations for Pernod Ricard to adapt ourselves for future growth, leveraging our conviviality platform. And with a clear medium-term financial framework, which we presented to all of you during Capital Markets Day last year, we aim, of course, the upper end of the four to seven top-line growth. We will continue to focus on revenue growth management, enhanced by our proprietary digital predictive tools, one of them being Vista RepUp, already mentioned. Of course, continuous improvement in operational efficiency, building on our culture of excellence, which is something we're now nurturing every single year. Significant NP investments, I mentioned, it's a record level, maintained at roughly 16% of our net sales. drive very strong consumer driven brand equity brand awareness brand consideration with even higher return on investment leveraging again our conviviality platform keeping discipline on our structure costs investing in priorities while maintaining an agile organization you just just showed it aiming at a rate of cost increase below, of course, the top line and finally delivering, therefore, operating leverage of circa 50 to 60 basis points on average within that framework. So that's what we call driving long-term sustainable value creation. A few words on our sales, starting with the U.S. So for this last fiscal year, stable sales within a normalizing market, as you know, after three years post-COVID, a very strong growth. With underlying spirits, value depletions or net sales growth circa 2% for us, and strong consumer resilience. So we... Underwent good depletions value growth for Jameson, for Kahlua, for Malibu, Red Breast, Jeffersons, Altos, Dalmage. A slight decline for Absolut, but strong resilience of the brand for this last fiscal. A very strong price effect of high single digits. Share gains in the Irish and North American whiskey categories in the single malt category. and share gains for both Malibu and Kahlua. We've continued to deploy our RTD portfolio in the US, enjoying very strong double-digit growth. And as I mentioned, we're looking forward to the launch of Absolute Ocean Spray RTD. The successful, very recent integration of Codigo tequila and screwball peanut butter flavored whiskey, which I recommend for those of you who can have access to it in the U.S. Agility in our inventory management and declining sales expected in our first quarter on a high comp basis, but with a positive outlook for the year. So remember, That last year, we significantly increased our prices October 1st, which obviously led to a retailer sell-in ahead of these price increases. And we also sold into our wholesalers ahead of an OND period, back in a time where supply chain disruption was quite huge, which thankfully continued. is over now so declining sales for q1 but positive outlook for the full year and due to the technicalities i just mentioned moving on to china plus six percent uh frankly a strong performance uh throughout the fiscal year in a contrasted year so if you recall we started the year uh very well with a very strong mid-autumn festival performance in fact it was a record performance And then the environment became more challenging with a soft Chinese New Year season. Remember, there were lockdowns ahead of Christmas, and then the zero COVID strategy was stopped, but created quite some disruption, which led to a very soft Chinese New Year, and followed by a very strong rebound in the fourth quarter, with a resumption of consumer activity amplified by a low basis the year before. We ended the year with a very healthy level of inventories by June end in China. We did increase prices. We had a high single-digit price effect. We increased our prices again during the month of May, as we do every year, in fact. The growth was driven by Martel, but as well by our premium brands portfolio led by Absolute and Jameson. We have maintained our value market share in China and we do expect a soft Q1 in China due to challenging macroeconomic conditions and also a high comp basis which is clearly expected to ease from Q2. Remember we're recycling a record mid-autumn festival in China. India, well, excellent growth with continued premiumization momentum. China up 13%. Growth was led both by price and mix. Our strategic international brands continue to enjoy very strong momentum with strong double-digit growth, notably on our Scotch portfolio, Jameson, Absolute, et cetera, et cetera. Our strategic global brands continue to premiumize, and we have a strong focus on Blender Sprite and Royal Stagg. And we maintained our very strong market leadership position in the segment in which we operate. And we just launched L77, launched in 277 in the very dynamic Indian single malt category. Global travel retail, which is continuing to normalize and will continue to normalize this fiscal year with strong recovery as passenger traffic resumes in Asia. So for this last fiscal year, travel retail grew 40%. Passenger numbers are roughly at 90% of pre-COVID levels globally. We have a double-digit price effect and a very favorable mix as a result of the resumption of travel in Asia, led by China. Strong performance, notably on Scotch, on Martel, as well as on Absolute. We've maintained our value leadership and we expect a solid start of the year, this fiscal year, with continued recovery in Asia. Then on the other regions, so for Europe, up 8%, which is a very strong performance for Europe. Resilient volumes across the region with as well a high single digit price effect. We've had a very strong growth in Spain with a very strong on-trade recovery last summer, remember. driven by our gin portfolio, but also by our scotch and vodka brands. Germany also had a very strong year with 8% growth across basically all channels. The UK grew 2%, but we're gaining share in the UK with very strong share gains in the on-trade. Listen, modest growth of Ricard in France, up 1%, after a year of growth as well, so two years of consecutive growth for Ricard, which is really gaining traction again in France. And finally, dynamic performance in Eastern Europe, notably with double-digit growth in Poland. The Americas up 2%, Canada 3%, which is a good overall sales result, with strong growth on Absolute, Jameson, Glenlivet and our specialty brands, and very strong ready-to-drink performance as a category, but ourselves within that category. Brazil, 1% growth, with a slowdown in H2. This is probably one of the markets where we were very aggressive on price, and it hit a little bit our volumes. Mexico, double digit, 12% growth driven by Absolute and our Scotch brands, in particular Chivas. Asia, rest of the world, excellent growth at 17% with 21% growth in Japan, 19% growth in Korea, double digit growth in Taiwan, very strong growth as well in Turkey, 44% led by Chivas and with share gains across the portfolio. 15% growth in Africa, led by South Africa, Nigeria and Kenya, with our whisky brands and Martel. And again, I won't dwell upon it, I already touched upon that, but growth across all our spirit segments, with double-digit growth for our strategic international brands. A word on Jameson, a double digit, 10%, strong growth across Europe and Asia. Volumes continue to grow in fiscal year 23, building on our last year's 10 million case milestone and therefore a driving us to invest a little bit of money in capacity expansion. We'll talk about it a bit later. Very strong pricing, very strong brand equity. U.S. enjoyed a mid-single-digit value depletion growth with very strong growth for Jameson Orange. Very successful innovation. I think it was rated one of the most successful innovations over the last fiscal year in the industry in the U.S., And the continuation of the globalization of the brand. Outside the U.S., Jameson grew 22%. And to be fair, this growth is driven by all regions. And within all regions, I would say all markets. Our Scotch grew 17%, double-digit pricing building on the strong global demand for Scotch. Chivas, we just broke the 5 million case milestone. Chivas is now up 25% in terms of net sales with a clear premiumization ongoing within the whole range. the 18-year-old performance, the 13-year-old performance, and so on. Valentine's, again, double-digit at 13%, with strong growth as well across Asia, but also in European markets such as Spain, and as well in some of our Latin markets, principally Brazil. Royal Salute, up 32%. I mentioned our prestige range is up 15%. In particular, driven by Royal Salute, up 32%, with a strong recovery in travel retail, but also growing in many other markets. And Glenlivet, up 9%, led as well by premiumization within the range, notably in the US, where we gain share in single malt, but as well in Taiwan, in India, and to be fair, in many other markets. Absolute up 10% and with broad-based growth so coming from all regions and again building on the 12 million case milestone we broke last year with strong pricing on Absolute because of its strong brand equity with a very strong performance across Western Europe The strong international development of the brand, led principally by China and India, but without forgetting Mexico, Australia, etc., and the strong rebound in travel retail. and Martel up 10%, principally led by Asia and global travel retail with a strong price effect in line with our value strategy, which is not new, of course, with favorable mix offsetting a very slight volume decline. As I mentioned, we had a record mid-autumn festival last year, and the year was softer in the US, and very strong development in Africa, Middle East, notably in Nigeria, perfectly in line with our internationalization strategy for Martel. More broadly, on the rest of the portfolio, very dynamic performance. Ricard plus 1% for France is very good. I mentioned 15% for our Prestige portfolio. Beefeater up double a digit, led by a dynamic U.S. performance for Beefeater in the U.S. Havana Club up 6%, Malibu 4%, with a nice rebound in the U.S. in H2. And our champagne portfolio, which grew 1%, with a strong rebound in H2. And on that note, over to you, Hélène.