Profit Drop in US and China
Pernod Ricard posts a 26% profit drop amid persistent weakness in the US and China.
Anonymous
Key Points
1
Regional performance details show Asia and the rest of the world fell 15% to €3.92 billion, with China down 19%; the Americas declined 18% to €2.584 billion and Europe dropped 9% to €2.900 billion.
2
The year was burdened by €114 million of negative perimeter due to brand disposals and a €268 million currency headwind, primarily from the U.S. dollar, Turkish lira and Indian rupee.
3
Pernod Ricard kept its dividend at €4.70 per share, with a final dividend of €2.35 selectable in cash or shares, subject to shareholder approval at the AGM.
4
The company is pursuing a €1 billion efficiency programme, aiming for around 8% structural cost reductions and a boost to free cash flow, with cash conversion around 91%.
5
Looking ahead, management projects broadly stable organic net sales in FY27, with declines expected in the U.S. and China but continued growth in the rest of the world, notably India, implying a lower-end growth trajectory of roughly 3%–6% over 2027–2029.
Pernod Ricard, owner of Absolut vodka and Beefeater gin, reported a 26% drop in annual profit to €1.203 billion as weakness in the U.S. and China offset growth elsewhere Whalesbook. Net sales fell 15% to €9.404 billion, with organic sales declining 3.9%, driven by a 14% U.S. drop and a 19% China plunge Sharecast.
The spirits giant is fighting back with a €1 billion efficiency program and keeping its dividend at €4.70 per share. Management expects roughly flat sales growth in 2027, with continued strength in India offsetting ongoing declines in America and China UK ADVFN.
U.S. and China Drag Down Global Results
The Americas region fell 18% to €2.584 billion, while Asia and the rest of the world dropped 15% to €3.92 billion The Grocer. Europe held up better, declining only 9% to €2.900 billion. Currency headwinds from the U.S. dollar, Turkish lira, and Indian rupee cost the company €268 million Democrata.
Non-recurring costs and brand disposals added another €114 million in losses. Despite these headwinds, UK ADVFN noted that trading improved in the second half of the year, signaling potential momentum heading into 2027.
India Emerges as a Bright Spot
While major markets stumbled, India stood out as a growth driver for Pernod Ricard Whalesbook. The company projects continued expansion in India and the rest of the world for fiscal 2027, even as it braces for further declines in the U.S. and China.
Efficiency Drive Aims to Restore Profitability
Pernod Ricard is pursuing a €1 billion efficiency program targeting around 8% structural cost reductions and improved cash generation Sharecast. The company achieved a 91% cash conversion rate and plans to maintain margins while refining strategy across its mixed macro environment.
For fiscal 2027, management expects broadly stable organic net sales, implying growth of roughly 3%–6% over the next three years UK ADVFN. The firm is balancing cost cuts with strategic investments to navigate the challenging U.S. and Chinese backdrop.
Sentiment
Mostly PositiveNEGATIVENEUTRALPOSITIVE
Publishers
17
Articles
16
Reach
33
A
AnonymousAuthor
