Pernod Ricard (RI) H2 2024 earnings summary

Executive summary

• Organic net sales declined 1% (reported -4%), or grew +1% excluding Russia, as strong mature and emerging market performance offset normalization in the US and challenges in China.

• Profit from recurring operations grew 1.5% organically (reported -7%), with margin expansion driven by pricing, efficiencies, and cost discipline.

• Group share of net profit fell 35% year-over-year, impacted by non-recurring expenses and adverse FX.

• Portfolio actively managed with disposals of local and wine brands and acquisitions in fast-growing categories, including a partnership with Almave.

• Sustainability initiatives advanced, with validated emissions reduction targets and progress in distillation, packaging, transportation, and agriculture.

Financial highlights

• Net sales: €11,598m, down 4% reported, down 1% organic year-over-year, with a negative FX impact of €784m.

• Profit from recurring operations: €3,116m, up 1.5% organic, down 7% reported.

• EPS: €7.90, down 13% year-over-year; group net profit down 35% due to non-recurring expenses and FX.

• Free cash flow: €963m, down 33% year-over-year, reflecting lower profit and increased strategic investments.

• Proposed dividend: €4.70 per share, flat year-over-year, with an 8.5% CAGR since FY19.

Outlook and guidance

• Medium-term framework targets upper end of +4% to +7% organic net sales growth and +50–60bps operating margin expansion.

• FY25 expected to return to organic net sales growth and sustain margin, with a soft Q1 due to US inventory adjustments and weak China macro.

• No formal FY25 guidance yet, but rest of world expected to perform well despite US and China headwinds.