Spirits giant Pernod Ricard posted a higher-than-expected 11% organic rise in full-year 2022/23 operating profit amid strong sales.
Pernod Ricard's performance was led by a recovery in demand for its Martell cognac in the fourth quarter in China, where it was able to raise prices.
'A Soft Start'
The French owner of Mumm champagne and Absolut vodka said that in an environment that remained volatile it expected broad-based net sales growth for the full year 2023/24, with a soft start in the first quarter, which started in July, in the key markets of China and the United States.
Challenging macroeconomic conditions would drive down sales in China in the first quarter, with a high year-ago comparison basis expected to ease from the second quarter, the group said in a statement.
In the United States, tough comparatives would also lead to a sales decline in the first quarter, with a positive outlook for the full year, it added.
The world's second-biggest spirits group said that with recurring free cash flow at €1.653 billion, it was offering shareholders a 14% dividend hike to €4.70 per share and a new buyback scheme worth €500 million to €800 million.
Over the twelve months to June 30, 2023, the firm's profit from recurring operations reached €3.348 billion, an organic rise of 11%, beating analysts' expectations of a 9.6% rise and company's guidance for around 10%.
Sales reached €12.137 billion, an organic rise of 10%, with sales in the fourth quarter alone climbing 19%.
“Pernod Ricard once again delivered a very strong full-year performance, achieving double-digit broad-based growth in sales and earnings despite a volatile environment," commented Alexandre Ricard, chief executive.
"The relevance of our growth strategy, the desirability of our brands and the unwavering commitment and agility of our teams enabled us to gain share in most markets and strengthen pricing. Our transformational journey continues to accelerate through the deployment of tech and data-powered organisational, sales and marketing initiatives."
Additional reporting by ESM