Pernod Ricard, the global wine and spirit producer, has reported a 1% decline in organic net sales to €2,013m in Q1 2013/2014, with sales affected by difficult comparatives, a slowdown in emerging markets and an “unfavourable” product mix.
The company pointed out that the first quarter of the previous year saw high growth in major markets, with the US at +16%, China at +18%, and Russia at +28%), and for its Martell brand (+23%).
Sales in mature markets declined by 1%, with a “strong performance” in Western Europe mitigated by unfavourable comparatives in the US.
Sales in emerging markets fell 2% and were “significantly impacted” by strong comparatives (+13% in Q1 2012/13) and comparatives in China.
Reported growth fell 9%, “due to a particularly unfavourable foreign exchange impact over the period”.
There was a 5% sales decline in its top 14 products, with volumes down 1%. The mix was negative (-6%), “particularly due to the decline of Martell and Ballantine’s in Asia, yet pricing remained favourable (+2%)”.
The growth of Priority Premium Wines (+1%) was driven by Brancott Estate and Campo Viejo.
However, Pernod Ricard said the 18 key local brands (+8%) posted a “very good performance, in particular for brands targeting emerging middle classes” - sales grew 8%.
Pierre Pringuet, chief executive, said: “Our first quarter was adversely affected by the slowdown of emerging markets and unfavourable technical effects. However, we remain confident in the diversity of our portfolio and the strength of our distribution network.
“We anticipate organic growth in full-year profit from recurring operations between +4% and +5%.”
