Emerging markets key to drinks industry says Pernod

But the French drinks giant's policy of not issuing a detailed forecast until its annual shareholder meeting in November disappointed investors. Shares in the world's second-largest spirits group after Diageo fall about 3 per cent following the results, which were in line with market hopes.

Chief executive Pierre Pringuet said the maker of Glenlivet, Ballantine's and 100 Pipers would continue to boost marketing spend on its top 14 brands to bolster consumption. It is also looking for strong cash generation to cut debt.

Pernod, whose other brands include Mumm champagne and Martell cognac, has been offloading assets to cut the debt it racked up when it bought Absolut vodka company Vine & Sprit two years ago.

Pringuet said sales over the summer were positive, after he unveiled a 4 per cent rise in recurring operating profit for the year to 30 June to €1.8 billion (1.5bn), helped by improving trends in the US, eastern Europe and duty-free markets.

Net profit nudged up 1 per cent to ?€951 million, while a total dividend of €1.34 was announced.

"The world is doing better," said Pringuet, predicting the global drinks market would grow this year, underpinned by strong growth in Asia and Latin America and a gradual recovery in consumer spending in the US.

There were also "encouraging" signs in Europe but austerity measures to rein in government spending were taking their toll in Greece while Spain was still on a negative trend, he noted.

Among the group's whisky brands, Chivas sales by value grew by 5 per cent globally, while Glenlivet sales were 7 per cent stronger. A spokesman for Chivas Brothers said: "We are pleased with the overall performance of our brands over the last year which benefited from a significant rebound in the second half, demonstrating the resilience of true premium brands."

Both Pernod and Diageo suffered in the downturn as consumers cut back on spending and moved to cheaper drinks but are now benefiting from an emerging market-led recovery in demand.

Last week, Diageo forecast slightly higher profits growth this year driven by developing markets but said the strength of the economic recovery was variable and its rate of improvement would depend on it.

Pernod - known for its anise-flavoured aperitifs - said it would provide its earnings outlook for the current year at its AGM, due to be held on 10 November.

One analyst noted: "Like in past years, managers remain very cautious in terms of guidance."

Many analysts favour Pernod shares over Diageo due to the French group's greater exposure to Asia and its full ownership of a cognac, Martell, compared with Diageo, which only gets 7 per cent of its profits from Asia and is part owner of Hennessy cognac. Pringuet said Pernod had completed its €1bn asset disposal plan and was "well on track" to generate free cash flow from operations of €3bn over the three years to 2010-11.