Pernod Ricard (RI) H2 2025 earnings summary

Executive summary

• Organic net sales declined 3% year-over-year, with reported sales down 5.5–6% due to adverse FX and market softness in China, the US, and Travel Retail Asia, but volume grew 2% for the third consecutive semester.

• Operating margin expanded organically by 64bps, supported by €900m in efficiency gains and strict cost discipline.

• Free cash flow rose 18% to €1.133bn, driven by improved working capital management and reduced CapEx after FY24 peak.

• Portfolio management included the disposal of the wine business and the announced sale of Imperial Blue in India, both accretive to margins.

• A stable dividend of €4.70 per share is proposed, unchanged from FY24.

Financial highlights

• Net sales: €10,959m, down 3% organic and 5.5% reported year-over-year, with a negative FX impact of €277m.

• Profit from recurring operations was €2,951m, down 0.8% organic and 5.3% reported.

• Group share of net profit increased 10% due to lower non-recurring costs, while EPS declined 8% to €7.26 due to FX and higher financial expenses.

• Free cash flow: €1,133m, up 18% year-over-year.

• Net debt at year-end was €10.7bn, down €224–300m year-over-year; leverage ratio increased to 3.3x due to lower reported EBITDA.

Outlook and guidance

• FY26 is expected to be a transition year, with Q1 impacted by inventory adjustments in the US and China and excise tax changes in India; organic net sales growth expected to improve in H2.

• Strategic investments are expected below €900m, with further improvement in cash conversion targeted at 80%.

• Medium-term guidance: organic net sales growth of 3–6% per annum and annual organic operating margin expansion, supported by a new €1bn efficiency program.

• Currency headwinds are expected to be significant in FY26.