Pernod Ricard closed FY25 with a performance that reflects both resilience in challenging markets and strong financial discipline.
While organic net sales declined by -3.0%, the group delivered its third consecutive semester of volume growth (+2%) and achieved strong organic operating margin expansion of +64bps.
Sales Performance
Net Sales for FY25 reached EUR 10,959m, down -3.0% organically (-5.5% reported) with adverse FX impacts of -EUR 277m. Despite notable declines in China (-21%), the USA (-6%), and Global Travel Retail (-13%), other regions and brands demonstrated strong growth momentum.
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Americas (-3%):
- USA sales declined, though premium brands like Jameson, Absolut, and Kahlúa outperformed competitors.
- Canada and Brazil posted strong growth, while Mexico showed resilience in whiskies.
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Asia-RoW (-4%):
- India (+6%) remains a key growth engine, driven by premiumisation and double-digit growth of Royal Stag and Jameson.
- China (-21%) faced weak consumer sentiment, although premium brands like Jameson and Absolut grew.
- Turkey and South Africa delivered very strong gains, supported by Chivas Regal, Ballantine’s, Martell, and Jameson.
- Europe (-2%): Solid resilience, with gains in Eastern Europe and France offsetting declines in Germany and Spain. Perrier-Jouët, Jameson, and Chivas performed well.
- Global Travel Retail (-13%): Cognac suspension in China Duty Free weighed heavily, though recovery is expected from Q2 FY26.
By portfolio:
- Strategic International Brands (-4%): Jameson remained resilient; Martell declined in China.
- Strategic Local Brands (+2%): Seagram’s whiskies showed strong momentum.
- Specialty Brands (-7%): Growth from Bumbu, The Deacon, and Château Sainte Marguerite offset declines in Aberlour and Lillet.
- RTDs (+7%): Solid expansion across regions.
Financial Results
- Profit from Recurring Operations: EUR 2,951m, down -0.8% organically.
- Operating Margin: Strong organic expansion (+64bps), supported by the EUR 900m FY23–25 efficiency program and strict cost discipline.
- Free Cash Flow: EUR 1.1bn (+18%), with improved cash conversion thanks to tight working capital management.
- Net Profit from Recurring Operations: EUR 1,829m (-9%).
- Group Net Profit: EUR 1,626m (+10%), helped by lower non-recurring costs.
- EPS: EUR 7.26, down -8% due to FX headwinds and higher financial expenses.
Shareholder Returns
The Board proposed a stable dividend of EUR 4.70 per share.
Strategic Investments
Pernod Ricard continued to invest in long-term growth, with EUR 1.2bn in Capex and Strategic Inventories. Investments peaked in FY24 and are expected to normalize in FY26. Portfolio streamlining continued, including wine business disposals and the Imperial Blue exit in India.
Outlook FY26
The group expects FY26 to be a transition year:
- Q1 to be impacted by US distributor adjustments, soft China demand, and Indian excise policy changes.
- Recovery anticipated from Q2 with the resumption of Cognac sales in China Duty Free and stronger momentum in H2.
- A&P spending to remain around 16% of sales, with efficiency, brand desirability, and innovation at the forefront.
- Focus on protecting margins and strengthening cash generation despite expected FX headwinds.
Strong cash flow, disciplined investments, and consistent margin expansion highlight Pernod Ricard’s ability to balance short-term resilience with long-term growth.
Source: Pernod Ricard