Half Year 2026 Pernod Ricard SA Earnings Call Transcript
Key Points
- Pernod Ricard SA (PDRDF) has made rapid progress on its €1 billion operational efficiency program, showing strong cost discipline and a reduction in structural costs by 10% in the first half.
- The company has a strong focus on cash generation, with free cash flow improving by approximately 10% to €482 million, despite a decline in profit from recurring operations.
- Pernod Ricard SA (PDRDF) has a diversified and balanced global footprint, with stable sales outside the US and China, and growth in markets such as Turkey (up 27%), Ireland (up 3%), and Japan (up 6%).
- The company is leveraging data and artificial intelligence to meet evolving consumer trends, focusing on convenience, affordability, and premiumization, with successful innovations like Absolute Tabasco.
- Pernod Ricard SA (PDRDF) is actively managing its portfolio, with strategic disposals like Imperial Blue in India, contributing to a cumulative €1.5 billion in proceeds, and focusing on premium brands with growth potential.
- Net sales are down approximately 6% organically, with significant declines in key markets like the US (down 15%) and China (down 28%), impacted by inventory adjustments and macroeconomic headwinds.
- The profit from recurring operations declined by 7.5% organically and 18.7% on a reported basis, largely due to foreign exchange impacts and trade tariffs.
- The company faces challenges from COGS inflation, particularly on aged liquids, which have only been partially mitigated by operational efficiencies.
- Pernod Ricard SA (PDRDF) is experiencing a soft consumer confidence environment, particularly in China, with a cautious trade sentiment ahead of Chinese New Year.
- The company's net debt to EBITDA ratio stands at 3.8 times, with a focus on deleveraging to bring it below 3 times by fiscal year 2029, indicating a need for continued financial discipline.
Good morning everyone. We are pleased to have you for our H1FY26 results. Alexand Ricard and Helene de Tissot will take you through the highlights before we open the Q&A session. Over to you, Alexandra.
Well, thank you very much, Joel, and, good morning, to, all of you. I suggest we go into our first half of fiscal year 26, sales and results.
Now, before we deep dive into all the details of this first half, I would like us to, for a couple of minutes just sit back and Think about the underlying, I would say mindset, that underpins, these results and what we're about to share with you for the short and medium term.
So steering with agility.
Discipline and strategic conviction in what we call a transition period.
So first of all, and I hope you'll get a gist of this, in
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