Pernod Ricard: FY19 Half-year Sales and Results

PARIS–(BUSINESS WIRE)–Regulatory News:

Press release – Paris, 7 February 2019

Pernod Ricard (Paris: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. +€30m
7.

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
expected
1

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

twelve
months of closing date

2 Average rate of last twelve months of
closing date

 

Contacts

Julia Massies / VP, Investor Relations & Internal Audit +33 (0)1 41 00
41 07
Adam Ramjean / Investor Relations Manager +33 (0)1 41 00 41 59
Fabien
Darrigues / External Communications Director +33 (0)1 41 00 44 86
Emmanuel
Vouin / Press Relations Manager +33 (0)1 41 00 44 04

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