Regulatory News:
Press release - Paris, 7 February 2019
Pernod Ricard RI:
VERY GOOD H1 FY19
+7.8% ORGANIC SALES GROWTH (+5.0% REPORTED)
+12.8% ORGANIC GROWTH IN PRO1 (+10.6% REPORTED)
+11% NET PROFIT FROM RECURRING OPERATIONS2
CONTINUED DELEVERAGING: NET DEBT / EBITDA AT 2.6X3
UPGRADE OF FY19 GUIDANCE4:
ORGANIC GROWTH IN PRO BETWEEN +6% AND +8%
FY19-21 PLAN "TRANSFORM & ACCELERATE":
SALES +4 TO +7% WITH OPERATING LEVERAGE OF C. 50-60 BPS PER ANNUM
SALES
Sales for H1 FY19 totalled €5,185m, with organic growth of +7.8% and reported growth of +5.0%, due to negative FX.
Growth continued to be dynamic, thanks to the consistent implementation of the medium-term growth and operational excellence roadmap:
- good diversified growth
- strong price / mix, in particular on the Strategic International Brands
- positive impact of earlier Chinese New Year5 which will unwind in H2
- significant progress on FY16-20 Operational Excellence roadmap: expectation is to complete €200m P&L savings by end June 2019, one year ahead of plan
Strong dynamism reflected consistent long-term investment:
- Americas: robust growth +4%, with USA growing broadly in line with market
- Asia-Rest of World: strong acceleration +16%, thanks to China and India (with both markets further enhanced by technical factors5) and Africa Middle-East
- Europe: stable overall, with continued momentum in Eastern Europe but contrasted performance in Western Europe
Very strong performance across portfolio, with strong price/mix at +2.3%:
- Strategic International Brands: +10%, strong growth driven by Martell, Jameson, Scotch, Gin and Champagne and very good price/mix effect (+5.9%)
- Strategic Local Brands: +11%, acceleration thanks to Seagram's Indian whiskies (including positive pricing)
- Specialty Brands: +11% with very strong growth of Lillet, Monkey 47 and Altos
- Strategic Wines: -8%, due to implementation of value strategy and high comparison basis on Campo Viejo (+23% in H1 FY18.)
Q2 Sales were €2,798m, with +5.6% organic growth (+3.2% reported), following a Q1 that was enhanced by phasing and the comparison base.
H2 growth is expected to moderate due to Martell sustainable growth management, wholesaler inventory optimisation in USA and a commercial dispute in France and Germany.
________________________
1 PRO: Profit from Recurring Operations
2 Reported Group share
3 Based on average EUR/USD rates: 1.18 in 2018 vs. 1.13 in 2017
4 Guidance given to market on 29 August 2018 of organic PRO growth between +5% and +7%
5 CNY: Chinese New Year on 5 Feb 2019 vs. 16 Feb 2018; India: low comparison basis due to lapping highway ban in Q1 FY18
RESULTS
H1 FY19 PRO6 was €1,654m, with organic growth of +12.8% and +10.6% reported. For full-year FY19, the FX impact on PRO is estimated at c. +€30m7.
The H1 organic PRO margin was up very significantly, by +148bps, thanks to:
- very strong topline growth
-
Gross margin expansion +71bps, partially favoured by earlier CNY
- improved pricing driven by Martell, Seagram's Indian Whiskies, Chivas, Jameson and Perrier-Jouët
- negative mix impact due to acceleration of Seagram's Indian Whiskies, although their margin is improving
- COGS inflationary pressure mostly offset by Operational excellence initiatives
- A&P: +5% with reduction in A&P ratio due to H1/H2 phasing
- Structure cost discipline: +5%.
H2 margin to be softer due to managing Martell growth sustainability, finished goods' inventory optimisation in USA and A&P phasing.
The H1 FY19 corporate income tax rate on recurring items was c.25%; the rate is expected at c. 26% for full-year FY19.
Group share of Net PRO1 was €1,105m, +11% reported vs. H1 FY18, thanks mainly to excellent improvement in PRO.
Group share of Net profit was €1,023m, -11% reported vs. H1 FY18, despite excellent improvement in PRO due to lapping positive non-recurring items in H1 FY18 (one-off Scotch bulk sale, tax reimbursement and re-evaluation of deferred tax pursuant to the USA tax reform.)
FREE CASH FLOW AND DEBT
Free Cash Flow was €585m, in decline vs. H1 FY18, due to positive non-recurring one-offs in H1 FY18.
Net debt decreased by €152m vs. H1 FY18 to €7,223m at 31 December 2018 despite the €93m increase in the dividend payment. The Net Debt/EBITDA ratio at average rates8 was down significantly to 2.6x at 31 December 2018.
The average cost of debt was 3.8% for H1 FY19 and expected at c. 3.9% for full year FY19.
__________________________
6 PRO: Profit from Recurring Operations; A&P: Advertising & Promotional expenditure
7 Based on average FX rates projected on 24 January 2019, particularly a EUR/USD rate of 1.14
8 Based on average EUR/USD rates: 1.18 in 2018 vs. 1.13 in 2017
TRANSFORM & ACCELERATE 3-YEAR PLAN
"Transform & Accelerate" started in FY19 with the objective of embedding dynamic growth and improving operational leverage, in line with the objective of maximising long term value creation.
FY19-21 ambition:
- +4% to +7% topline growth, leveraging key competitive advantages and consistent investment behind key priorities
- focus on pricing and building on operational excellence initiatives, with new plan aiming at delivering additional savings of €100m by FY21
- strong A&P investment, maintained at c.16% of Sales, with careful arbitration to support must-win brands and markets while stimulating innovation
- discipline on Structure costs, investing in priorities while maintaining agile organisation, with growth below topline growth rates
- Operating leverage of c.50-60 bps, provided topline is in +4 to +7% bracket.
REMINDER OF FINANCIAL POLICY
- progressively increase dividend distribution to c. 50% of Net profit from Recurring Operations by FY20 (NB FY18 dividend at 41%)
- commitment to active portfolio management and value-creating M&A while retaining investment grade rating.
As part of this communication, Alexandre Ricard, Chairman and Chief Executive Officer, declared,
"H1 FY19, the first semester of our new Transform & Accelerate 3-year plan, was very strong. While enhanced by phasing, it confirms the acceleration of our growth, resulting from our long-term investment strategy.
For full year FY19, in an environment that remains uncertain, we aim to continue dynamic and diversified growth across our regions and brands. By the end of June 2019, we will have completed our operational excellence plan announced in 2016, delivering €200m of P&L savings one year ahead of plan.
We are increasing our guidance for FY19 organic growth in Profit from Recurring Operations to between +6% and +8% while improving operating leverage by c. 50bps. We will continue to roll out our strategic plan, focused on investing for sustainable and profitable long-term growth."
All growth data specified in this press release refers to organic growth (at constant FX and Group structure), unless otherwise stated. Data may be subject to rounding.
A detailed presentation of H1 FY19 Sales and Results can be downloaded from our website: www.pernod-ricard.com
Audit procedures have been carried out on the half-year financial statements. The Statutory Auditors' report will be issued following their review of the management report.
Definitions and reconciliation of non-IFRS measures to IFRS measures
Pernod Ricard's management process is based on the following non-IFRS measures which are chosen for planning and reporting. The Group's management believes these measures provide valuable additional information for users of the financial statements in understanding the Group's performance. These non-IFRS measures should be considered as complementary to the comparable IFRS measures and reported movements therein.
Organic growth
Organic growth is calculated after excluding the impacts of exchange rate movements and acquisitions and disposals.
Exchange rates impact is calculated by translating the current year results at the prior year's exchange rates.
For acquisitions in the current year, the post-acquisition results are excluded from the organic movement calculations. For acquisitions in the prior year, post-acquisition results are included in the prior year but are included in the organic movement calculation from the anniversary of the acquisition date in the current year.
Where a business, brand, brand distribution right or agency agreement was disposed of, or terminated, in the prior year, the Group, in the organic movement calculations, excludes the results for that business from the prior year. For disposals or terminations in the current year, the Group excludes the results for that business from the prior year from the date of the disposal or termination.
This measure enables to focus on the performance of the business which is common to both years and which represents those measures that local managers are most directly able to influence.
Profit from recurring operations
Profit from recurring operations corresponds to the operating profit excluding other non-current operating income and expenses.
About Pernod Ricard
Pernod Ricard is the world's n°2 in wines and spirits with consolidated Sales of €8,987m in FY18. Created in 1975 by the merger of Ricard and Pernod, the Group has undergone sustained development, based on both organic growth and acquisitions: Seagram (2001), Allied Domecq (2005) and Vin&Sprit (2008). Pernod Ricard holds one of the most prestigious brand portfolios in the sector: Absolut Vodka, Ricard pastis, Ballantine's, Chivas Regal, Royal Salute and The Glenlivet Scotch whiskies, Jameson Irish whiskey, Martell cognac, Havana Club rum, Beefeater gin, Malibu liqueur, Mumm and Perrier-Jouët champagnes, as well Jacob's Creek, Brancott Estate, Campo Viejo and Kenwood wines. Pernod Ricard employs a workforce of approximately 18,900 people and operates through a decentralised organisation, with 6 "Brand Companies" and 86 "Market Companies" established in each key market. Pernod Ricard is strongly committed to a sustainable development policy and encourages responsible consumption. Pernod Ricard's strategy and ambition are based on 3 key values that guide its expansion: entrepreneurial spirit, mutual trust and a strong sense of ethics.
Pernod Ricard is listed on Euronext (Ticker: RI; ISIN code: FR0000120693) and is part of the CAC 40 index.
Appendices
Emerging Markets
Asia-Rest of World | Americas | Europe | |||||
Algeria | Malaysia | Argentina | Albania | ||||
Angola | Mongolia | Bolivia | Armenia | ||||
Cambodia | Morocco | Brazil | Azerbaijan | ||||
Cameroon | Mozambique | Caribbean | Belarus | ||||
China | Namibia | Chile | Bosnia | ||||
Congo | Nigeria | Colombia | Bulgaria | ||||
Egypt | Persian Gulf | Costa Rica | Croatia | ||||
Ethiopia | Philippines | Cuba | Georgia | ||||
Gabon | Senegal | Dominican Republic | Hungary | ||||
Ghana | South Africa | Ecuador | Kazakhstan | ||||
India | Sri Lanka | Guatemala | Kosovo | ||||
Indonesia | Syria | Honduras | Latvia | ||||
Iraq | Tanzania | Mexico | Lithuania | ||||
Ivory Coast | Thailand | Panama | Macedonia | ||||
Jordan | Tunisia | Paraguay | Moldova | ||||
Kenya | Turkey | Peru | Montenegro | ||||
Laos | Uganda | Puerto Rico | Poland | ||||
Lebanon | Vietnam | Uruguay | Romania | ||||
Madagascar | Zambia | Venezuela | Russia | ||||
Serbia | |||||||
Ukraine | |||||||
Strategic International Brands' organic Sales growth
Volumes
H1 FY19 |
Organic Sales growth
H1 FY19 |
Volumes | Price/mix | |||||
(in 9Lcs millions) | ||||||||
Absolut | 6.2 | -1% | -2% | 1% | ||||
Chivas Regal | 2.6 | 7% | 2% | 5% | ||||
Ballantine's | 4.3 | 8% | 8% | 0% | ||||
Ricard | 2.5 | 5% | 6% | -1% | ||||
Jameson | 4.3 | 8% | 6% | 2% | ||||
Havana Club | 2.5 | 1% | 2% | -2% | ||||
Malibu | 1.8 | -5% | -6% | 1% | ||||
Beefeater | 1.7 | 9% | 10% | -1% | ||||
Martell | 1.7 | 23% | 15% | 8% | ||||
The Glenlivet | 0.7 | 11% | 10% | 1% | ||||
Royal Salute | 0.1 | 15% | 15% | 0% | ||||
Mumm | 0.5 | 2% | 0% | 2% | ||||
Perrier-Jouët | 0.2 | 12% | 5% | 7% | ||||
Strategic International Brands | 29.1 | 10% | 4% | 6% | ||||
Sales Analysis by Period and Region
Net Sales
(€ millions) |
H1 FY18 | H1 FY19 | Change | Organic Growth | Group Structure | Forex impact | |||||||||||||||||||||||||||||||
Americas | 1,369 | 27.7% | 1,389 | 26.8% | 20 | 1% | 51 | 4% | (5) | 0% | (26) | -2% | |||||||||||||||||||||||||
Asia / Rest of World | 2,015 | 40.8% | 2,266 | 43.7% | 251 | 12% | 323 | 16% | (0) | 0% | (73) | -4% | |||||||||||||||||||||||||
Europe | 1,552 | 31.4% | 1,530 | 29.5% | (23) | -1% | 4 | 0% | (9) | -1% | (17) | -1% | |||||||||||||||||||||||||
World | 4,937 | 100.0% | 5,185 | 100.0% | 248 | 5% | 378 | 8% | (14) | 0% | (115) | -2% | |||||||||||||||||||||||||
Net Sales
(€ millions) |
Q1 FY18 | Q1 FY19 | Change | Organic Growth | Group Structure | Forex impact | |||||||||||||||||||||||||||||||
Americas | 639 | 28.7% | 636 | 26.6% | (3) | 0% | 15 | 2% | (3) | 0% | (15) | -2% | |||||||||||||||||||||||||
Asia / Rest of World | 916 | 41.1% | 1,084 | 45.4% | 169 | 18% | 208 | 23% | (0) | 0% | (39) | -4% | |||||||||||||||||||||||||
Europe | 671 | 30.2% | 667 | 27.9% | (4) | -1% | 7 | 1% | (4) | -1% | (8) | -1% | |||||||||||||||||||||||||
World | 2,226 | 100.0% | 2,387 | 100.0% | 161 | 7% | 230 | 10% | (7) | 0% | (62) | -3% | |||||||||||||||||||||||||
Net Sales
(€ millions) |
Q2 FY18 | Q2 FY19 | Change | Organic Growth | Group Structure | Forex impact | |||||||||||||||||||||||||||||||
Americas | 730 | 26.9% | 753 | 26.9% | 23 | 3% | 36 | 5% | (2) | 0% | (10) | -1% | |||||||||||||||||||||||||
Asia / Rest of World | 1,100 | 40.6% | 1,182 | 42.2% | 82 | 7% | 116 | 11% | (0) | 0% | (34) | -3% | |||||||||||||||||||||||||
Europe | 881 | 32.5% | 863 | 30.8% | (18) | -2% | (4) | 0% | (5) | -1% | (9) | -1% | |||||||||||||||||||||||||
World | 2,711 | 100.0% | 2,798 | 100.0% | 87 | 3% | 148 | 6% | (8) | 0% | (53) | -2% | |||||||||||||||||||||||||
Note:
Bulk Spirits are allocated by Region according to the Regions' weight in the Group
FY18 numbers restated for IFRS 15 norm as per Press Release 25 September 2018
Summary Consolidated Income Statement
(€ millions) | H1 FY18 | H1 FY19 | Change | ||||
Net sales | 4,937 | 5,185 | 5% | ||||
Gross Margin after logistics costs | 3,027 | 3,239 | 7% | ||||
Advertising and promotion expenses | (771) | (799) | 4% | ||||
Contribution after A&P expenditure | 2,257 | 2,440 | 8% | ||||
Structure costs | (761) | (786) | 3% | ||||
Profit from recurring operations | 1,496 | 1,654 | 11% | ||||
Financial income/(expense) from recurring operations | (153) | (157) | 2% | ||||
Corporate income tax on items from recurring operations | (333) | (379) | 14% | ||||
Net profit from discontinued operations, non-controlling interests and share of net income from associates | (16) | (13) | -19% | ||||
Group share of net profit from recurring operations | 994 | 1,105 | 11% | ||||
Other operating income & expenses | 62 | (66) | NA | ||||
Financial income/(expense) from non-recurring operations | 4 | 1 | NA | ||||
Corporate income tax on items from non recurring operations | 87 | (18) | NA | ||||
Group share of net profit | 1,147 | 1,023 | -11% | ||||
Non-controlling interests | 16 | 14 | -17% | ||||
Net profit | 1,163 | 1,036 | -11% | ||||
Note:
FY18 numbers restated for IFRS 15 norm as per Press Release 25 September 2018
Profit from Recurring Operations by Region
World | ||||||||||||||||||||||||||||
(€ millions) | H1 FY18 | H1 FY19 | Change | Organic Growth | Group Structure | Forex impact | ||||||||||||||||||||||
Net sales (Excl. T&D) | 4,937 | 100.0% | 5,185 | 100.0% | 248 | 5% | 378 | 8% | (14) | 0% | (115) | -2% | ||||||||||||||||
Gross margin after logistics costs | 3,027 | 61.3% | 3,239 | 62.5% | 212 | 7% | 270 | 9% | (3) | 0% | (55) | -2% | ||||||||||||||||
Advertising & promotion | (771) | 15.6% | (799) | 15.4% | (28) | 4% | (40) | 5% | (2) | 0% | 13 | -2% | ||||||||||||||||
Contribution after A&P | 2,257 | 45.7% | 2,440 | 47.1% | 184 | 8% | 230 | 10% | (5) | 0% | (41) | -2% | ||||||||||||||||
Profit from recurring operations | 1,496 | 30.3% | 1,654 | 31.9% | 158 | 11% | 193 | 13% | (8) | -1% | (26) | -2% | ||||||||||||||||
Americas | ||||||||||||||||||||||||||||
(€ millions) | H1 FY18 | H1 FY19 | Change | Organic Growth | Group Structure | Forex impact | ||||||||||||||||||||||
Net sales (Excl. T&D) | 1,369 | 100.0% | 1,389 | 100.0% | 20 | 1% | 51 | 4% | (5) | 0% | (26) | -2% | ||||||||||||||||
Gross margin after logistics costs | 908 | 66.3% | 942 | 67.8% | 34 | 4% | 29 | 3% | (2) | 0% | 7 | 1% | ||||||||||||||||
Advertising & promotion | (283) | 20.7% | (276) | 19.8% | 8 | -3% | 4 | -1% | (1) | 1% | 5 | -2% | ||||||||||||||||
Contribution after A&P | 625 | 45.6% | 666 | 48.0% | 42 | 7% | 33 | 5% | (4) | -1% | 12 | 2% | ||||||||||||||||
Profit from recurring operations | 423 | 30.9% | 470 | 33.8% | 47 | 11% | 36 | 8% | (7) | -2% | 18 | 4% | ||||||||||||||||
Asia / Rest of the World | ||||||||||||||||||||||||||||
(€ millions) | H1 FY18 | H1 FY19 | Change | Organic Growth | Group Structure | Forex impact | ||||||||||||||||||||||
Net sales (Excl. T&D) | 2,015 | 100.0% | 2,266 | 100.0% | 251 | 12% | 323 | 16% | (0) | 0% | (73) | -4% | ||||||||||||||||
Gross margin after logistics costs | 1,166 | 57.9% | 1,353 | 59.7% | 187 | 16% | 231 | 20% | (0) | 0% | (44) | -4% | ||||||||||||||||
Advertising & promotion | (279) | 13.8% | (309) | 13.6% | (30) | 11% | (37) | 13% | 0 | 0% | 7 | -2% | ||||||||||||||||
Contribution after A&P | 887 | 44.0% | 1,044 | 46.1% | 157 | 18% | 194 | 22% | (0) | 0% | (37) | -4% | ||||||||||||||||
Profit from recurring operations | 628 | 31.2% | 766 | 33.8% | 138 | 22% | 167 | 26% | 0 | 0% | (29) | -5% | ||||||||||||||||
Europe | ||||||||||||||||||||||||||||
(€ millions) | H1 FY18 | H1 FY19 | Change | Organic Growth | Group Structure | Forex impact | ||||||||||||||||||||||
Net sales (Excl. T&D) | 1,552 | 100.0% | 1,530 | 100.0% | (23) | -1% | 4 | 0% | (9) | -1% | (17) | -1% | ||||||||||||||||
Gross margin after logistics costs | 953 | 61.4% | 944 | 61.7% | (9) | -1% | 9 | 1% | (1) | 0% | (18) | -2% | ||||||||||||||||
Advertising & promotion | (208) | 13.4% | (214) | 14.0% | (6) | 3% | (7) | 3% | (0) | 0% | 2 | -1% | ||||||||||||||||
Contribution after A&P | 745 | 48.0% | 730 | 47.7% | (15) | -2% | 2 | 0% | (1) | 0% | (16) | -2% | ||||||||||||||||
Profit from recurring operations | 445 | 28.7% | 418 | 27.3% | (27) | -6% | (10) | -2% | (2) | 0% | (15) | -3% | ||||||||||||||||
Note:
Bulk Spirits are allocated by Region according to the Regions' weight in the Group
FY18 numbers restated for IFRS 15 norm as per Press Release 25 September 2018
Foreign Exchange Impact
Forex impact HY1 FY19
(€ millions) |
Average rates evolution | On Net Sales |
On Profit from Recurring Operations |
|||||||
H1 FY18 | H1 FY19 | % | ||||||||
US dollar | USD | 1.18 | 1.15 | -2.0% | 26 | 16 | ||||
Chinese yuan | CNY | 7.81 | 7.91 | 1.2% | (7) | (5) | ||||
Indian rupee | INR | 75.87 | 81.93 | 8.0% | (45) | (16) | ||||
Russian rouble | RUB | 69.03 | 76.13 | 10.3% | (13) | (10) | ||||
Turkish Lira | TRL | 4.30 | 6.44 | 49.6% | (19) | (18) | ||||
Pound sterling | GBP | 0.89 | 0.89 | -0.3% | 1 | (1) | ||||
Other | (58) | 7 | ||||||||
Total | (115) | (26) | ||||||||
For full-year FY19, a positive FX impact on PRO of c. +€30m is expected1
Notes:
Impact on PRO includes strategic hedging on Forex
1. Based on average FX rates for full FY 19 projected on 24 January 2019, particularly EUR/USD = 1.14
Sensitivity of profit and debt to EUR/USD exchange rate
Estimated impact of a 1% appreciation of the USD and linked currencies(1) | ||
Impact on the income statement(2) | (€ millions) | |
Profit from recurring operations | +21 | |
Financial expenses | (2) | |
Pre-tax profit from recurring operations | +19 | |
Impact on the balance sheet | (€ millions) | |
Increase/(decrease) in net debt | +41 | |
(1) CNY, HKD | (2) Full-year effect | |
Balance Sheet
Assets | 30/06/2018 | 31/12/2018 | |||
(€ millions) | |||||
(Net book value) | |||||
Non-current assets | |||||
Intangible assets and goodwill | 16,858 | 16,998 | |||
Tangible assets and other assets | 3,322 | 3,408 | |||
Deferred tax assets | 1,556 | 1,571 | |||
Total non-current assets | 21,737 | 21,976 | |||
Current assets | |||||
Inventories | 5,472 | 5,515 | |||
of which aged work-in-progress | 4,532 | 4,581 | |||
of which non-aged work-in-progress | 71 | 84 | |||
Receivables (*) | 1,122 | 1,991 | |||
Trade receivables | 1,031 | 1,932 | |||
Other trade receivables | 91 | 59 | |||
Other current assets | 280 | 282 | |||
Other operating current assets | 273 | 275 | |||
Tangible/intangible current assets | 7 | 7 | |||
Tax receivable | 177 | 80 | |||
Cash and cash equivalents and current derivatives | 771 | 928 | |||
Total current assets | 7,821 | 8,797 | |||
Assets held for sale | 0 | 6 | |||
Total assets | 29,558 | 30,779 | |||
(*) after disposals of receivables of: | 610 | 772 | |||
Liabilities and shareholders' equity | 30/06/2018 | 31/12/2018 | |||
(€ millions) | |||||
Group Shareholders' equity | 14,797 | 15,479 | |||
Non-controlling interests | 181 | 180 | |||
of which profit attributable to non-controlling interests | 26 | 14 | |||
Total Shareholders' equity | 14,978 | 15,659 | |||
Non-current provisions and deferred tax liabilities | 3,567 | 3,643 | |||
Bonds non-current | 6,777 | 6,865 | |||
Non-current financial liabilities and derivative instruments | 494 | 475 | |||
Total non-current liabilities | 10,838 | 10,983 | |||
Current provisions | 143 | 133 | |||
Operating payables | 1,951 | 2,214 | |||
Other operating payables | 960 | 750 | |||
of which other operating payables | 621 | 683 | |||
of which tangible/intangible current payables | 338 | 66 | |||
Tax payable | 225 | 238 | |||
Bonds - current | 93 | 96 | |||
Current financial liabilities and derivatives | 371 | 706 | |||
Total current liabilities | 3,743 | 4,137 | |||
Liabilities held for sale | 0 | 0 | |||
Total liabilities and shareholders' equity | 29,558 | 30,779 | |||
Analysis of Working Capital Requirement
(€ millions) |
June
2017 |
December 2017 |
June
2018 |
December 2018 |
H1 FY18 WC change* |
H1 FY19 WC change* |
|||||||
Aged work in progress | 4,416 | 4,356 | 4,532 | 4,581 | (25) | 64 | |||||||
Advances to suppliers for wine and ageing spirits | 5 | 24 | 10 | 29 | 20 | 19 | |||||||
Payables on wine and ageing spirits | (107) | (153) | (96) | (172) | (47) | (77) | |||||||
Net aged work in progress | 4,314 | 4,228 | 4,447 | 4,439 | (52) | 7 | |||||||
Trade receivables before factoring/securitization | 1,617 | 2,603 | 1,641 | 2,704 | 1,042 | 1,054 | |||||||
Advances from customers | (16) | (8) | (6) | (6) | 8 | (1) | |||||||
Other receivables | 333 | 315 | 353 | 305 | 5 | (1) | |||||||
Other inventories | 818 | 837 | 869 | 849 | 42 | (16) | |||||||
Non-aged work in progress | 72 | 59 | 71 | 84 | (12) | 11 | |||||||
Trade payables and other | (2,323) | (2,565) | (2,471) | (2,719) | (302) | (238) | |||||||
Gross operating working capital | 502 | 1,241 | 457 | 1,217 | 782 | 809 | |||||||
Factoring/Securitization impact | (557) | (840) | (610) | (772) | (294) | (162) | |||||||
Net Operating Working Capital | (56) | 402 | (153) | 445 | 489 | 648 | |||||||
Net Working Capital | 4,258 | 4,630 | 4,294 | 4,884 | 436 | 654 | |||||||
* without FX effects and reclassifications | Of which recurring variation | 453 | 651 | ||||||||||
Of which non recurring variation | (17) | 3 | |||||||||||
Net Debt
(€ millions) | 30/06/2018 | 31/12/2018 | |||||||||||
Current | Non-current | Total | Current | Non-current | Total | ||||||||
Bonds | 93 | 6,777 | 6,869 | 96 | 6,865 | 6,961 | |||||||
Syndicated loan | - | - | - | - | - | - | |||||||
Commercial paper | 280 | - | 280 | 505 | - | 505 | |||||||
Other loans and long-term debts | 80 | 463 | 542 | 195 | 455 | 651 | |||||||
Other financial liabilities | 360 | 463 | 822 | 700 | 455 | 1,156 | |||||||
Gross Financial debt | 452 | 7,239 | 7,691 | 796 | 7,320 | 8,117 | |||||||
Fair value hedge derivatives – assets | - | - | - | - | - | - | |||||||
Fair value hedge derivatives – liabilities | - | 25 | 25 | - | 14 | 14 | |||||||
Fair value hedge derivatives | - | 25 | 25 | - | 14 | 14 | |||||||
Net investment hedge derivatives – assets | - | - | - | - | - | - | |||||||
Net investment hedge derivatives – liabilities | - | - | - | - | - | - | |||||||
Net investment hedge derivatives | - | - | - | - | - | - | |||||||
Net asset hedging derivative instruments – assets | (1) | - | (1) | - | - | - | |||||||
Net asset hedging derivative instruments – liabilities | - | - | - | 2 | - | 2 | |||||||
Net asset hedging derivative instruments | (1) | - | (1) | 2 | - | 2 | |||||||
Financial debt after hedging | 452 | 7,265 | 7,716 | 798 | 7,334 | 8,132 | |||||||
Cash and cash equivalents | (754) | - | (754) | (910) | - | (910) | |||||||
Net financial debt | (303) | 7,265 | 6,962 | (112) | 7,334 | 7,223 | |||||||
Change in Net Debt
(€ millions) | 31/12/2017 | 31/12/2018 | |||
Operating profit | 1,558 | 1,588 | |||
Depreciation and amortisation | 106 | 111 | |||
Net change in impairment of goodwill, PPE and intangible assets | 1 | 26 | |||
Net change in provisions | (17) | 4 | |||
Retreatment of contributions to pension plans acquired from Allied Domecq and others | 3 | 3 | |||
Changes in fair value on commercial derivatives and biological assets | (2) | (5) | |||
Net (gain)/loss on disposal of assets | (39) | (1) | |||
Share-based payments | 18 | 18 | |||
Self-financing capacity before interest and tax | 1,628 | 1,744 | |||
Decrease / (increase) in working capital requirements | (436) | (654) | |||
Net interest and tax payments | (263) | (374) | |||
Net acquisitions of non financial assets and others | (129) | (131) | |||
Free Cash Flow | 799 | 585 | |||
of which recurring Free Cash Flow | 690 | 622 | |||
Net disposal of financial assets and activities, contributions to pension plans acquired from Allied Domecq and others | 8 | (103) | |||
Dividends paid | (543) | (636) | |||
(Acquisition) / Disposal of treasury shares and others | (32) | (54) | |||
Decrease / (increase) in net debt (before currency translation adjustments) | 231 | (208) | |||
IFRS 15 opening adjustment | 16 | ||||
Foreign currency translation adjustment | 245 | (69) | |||
Decrease / (increase) in net debt (after currency translation adjustments) | 476 | (260) | |||
Initial net debt | (7,851) | (6,962) | |||
Final net debt | (7,375) | (7,223) | |||
Net Debt Maturity at 31 December 2018
[Missing charts are available on the original document and on www.pernod-ricard.com]
Note: Available cash at end December 2018: €0.9bn in cash and €2.5bn syndicated credit not used (syndicated credit coming to maturity in June 2023)
Gross Debt after hedging at 31 December 20181
[Missing charts are available on the original document and on www.pernod-ricard.com]
Natural debt hedging maintained: EUR/USD breakdown close to that of EBITDA
77% of Gross debt at fixed rates
1. includes fair value and net foreign currency asset hedge derivatives
Bond details
Currency | Par value | Coupon | Issue date | Maturity date | |||||
EUR | € 850 m | 2.000% | 3/20/2014 | 6/22/2020 | |||||
€ 650 m | 2.125% | 9/29/2014 | 9/27/2024 | ||||||
€ 500 m | 1.875% | 9/28/2015 | 9/28/2023 | ||||||
€ 600 m | 1.500% | 5/17/2016 | 5/18/2026 | ||||||
USD | $ 1,000 m | 5.750% | 4/7/2011 | 4/7/2021 | |||||
$ 1,500 m | 4.450% | 10/25/2011 | 1/15/2022 | ||||||
$ 1,650 m o/w: | 1/12/2012 | ||||||||
$ 800 m at 10.5 years | 4.250% | 7/15/2022 | |||||||
$ 850 m at 30 years | 5.500% | 1/15/2042 | |||||||
$ 201 m | Libor 6m + spread | 1/26/2016 | 1/26/2021 | ||||||
$ 600 m | 3.250% | 6/8/2016 | 6/8/2026 | ||||||
Net Debt / EBITDA ratio evolution
Closing rate |
Average rate 2 |
||||
EUR / USD rate : Jun FY18 -> Dec FY19 | 1.17 -> 1.15 |
1.19 -> 1.18 |
|||
Ratio at 30/06/2018 | 2.7 |
2.61 |
|||
EBITDA & cash generation excl. Group
structure effect and forex impact |
(0.1) | (0.1) | |||
Group structure and forex impacts | + 0.1 | +0.1 | |||
Ratio at 31/12/2018 | 2.6 | 2.6 | |||
1 Syndicated credit spreads and convenants
are based on the same ratio of the average rate of the last |
|||||
2 Average rate of last twelve months of closing date |
|||||
Diluted EPS calculation
(x 1,000) | H1 FY18 | H1 FY19 | |||
Number of shares in issue at end of period | 265,422 | 265,422 | |||
Weighted average number of shares in issue (pro rata temporis) | 265,422 | 265,422 | |||
Weighted average number of treasury shares (pro rata temporis) | (1,388) | (1,215) | |||
Dilutive impact of stock options and performance shares | 1,437 | 1,274 | |||
Number of shares used in diluted EPS calculation | 265,471 | 265,481 | |||
(€ millions and €/share) | H1 FY18 | H1 FY19 | reported | ||||
∆ |
|||||||
Group share of net profit from recurring operations | 994 | 1,105 | 11% | ||||
Diluted net earnings per share from recurring operations | 3.74 | 4.16 | 11% | ||||
Upcoming Communications
DATE¹ | EVENT | |
Tuesday 19 March 2019 | EMEA LATAM conference call | |
Thursday 18 April 2019 | Q3 FY19 Sales | |
Tuesday 4 june 2019 | Asia Conference call | |
Thursday 29 August 2019 | FY19 Full-year Sales & Results | |
Wednesday 16 October 2019 | Q1 FY20 Sales | |
1 The above dates are indicative and are liable to change |
View source version on businesswire.com: https://www.businesswire.com/news/home/20190206005832/en/
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