Pernod Ricard (RI) investor relations material

Route to market and distribution changes

• Recent transitions involved 11 states, with Texas as the largest, moving to Southern Glazer's, and several states shifting to Reyes for RTDs and Johnson Brothers for others.

• The transition has been largely seamless, with fill rates above 80% and minimal financial disruption.

• The new structure enables closer collaboration and more disciplined engagement with key wholesalers, especially Southern, now covering five major states.

• The approach is based on a 'fittest athlete by state' philosophy, optimizing distributor partnerships for each market.

• The gem portfolio is now incubated with specialized distributors to unlock growth for under-prioritized brands.

Brand and portfolio strategy

• Focus is on Power Six brands, with over 70% of A&P resources allocated to them, and targeted innovation such as Malibu Pink and Malibu-Dole collaborations.

• RTD (ready-to-drink) strategy emphasizes spirit-based products, leveraging existing brands rather than launching new-to-world brands.

• Jameson continues to drive growth, with tailored strategies by state, new pack sizes, and targeted recruitment of under-indexed consumer segments.

• Martell and Chivas are prioritized in select states, while Seagram's is managed with a commercial focus and minimal A&P investment.

• Innovation is aligned with long-term brand architecture, not just short-term gains.

Financial performance and resource allocation

• Sell-out is at -7% and sell-in at -14%, reflecting ongoing destocking and distributor transitions.

• Resource allocation is increasingly data-driven, with AI tools (Matrix) guiding over 70% of A&P decisions.

• SG&A and organizational structure are being optimized for agility and efficiency, minimizing duplication.

• RTDs represent 2% of net sales, with a gross margin of about 30% compared to 70% for the broader portfolio.

• Tariff repayments are beginning to flow through, supporting financial recovery.