Whisky giant cheers strong sales of premium brands

Spirits giant Pernod Ricard, which owns Chivas Regal and The Glenlivet Scotch whiskies, has reported annual results in line with market hopes, hailed strong growth across its premium brands and unveiled a €1 billion (£900 million) share buyback.

Pernod Ricard owns Chivas Regal and The Glenlivet Scotch whiskies through its Chivas Brothers business. Picture: John Devlin

The world’s second biggest spirits group, behind Johnnie Walker maker Diageo, said it had “continued to leverage” its premium portfolio, resulting in strong growth across all key spirits categories.

After stripping out the impact of currency movements and acquisitions, annual group sales rose 6 per cent to €9.2bn, underpinned by blockbuster growth of 21 per cent in China and a 20 per cent surge in India.

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Regionally, full-year sales were driven mainly by Asia. In the Americas there was growth of 2 per cent with sales acceleration in Canada, strong growth in Latin America and figures broadly in line with the market in the US.

In Europe, the sales gain was a more modest 1 per cent, with continued strong growth in Eastern Europe partly offset by Western Europe. The group pointed to a difficult market in France and commercial disputes.

Alexandre Ricard, chairman and chief executive of the French group, said: “[Financial year 2019] was an excellent year, demonstrating clear business acceleration, while investing for long-term value creation.

“For 2020, we will continue implementing our ‘Transform & Accelerate’ plan, with increasing support for our priority brands, markets, strategic investments and ‘Sustainability & Responsibility 2030 Roadmap’.”

The group, which is behind Absolut Vodka, Martell cognac and Beefeater gin, has also agreed to buy Kentucky-based Castle Brands for some $223 million plus debt.

Pernod raised its dividend to €3.12 and said it plans a share buy-back programme for a maximum amount of €1bn. It is due to be implemented over the 2020 and 2021 financial periods and shares acquired via the buy-back programme will be cancelled.

In April, Pernod Ricard agreed a deal to swallow Malfy, an Italian “super-premium” gin brand.

The agreement was struck with Biggar & Leith, a US-based firm which owns a small portfolio of spirits brands.

Biggar & Leith’s name originates from its founder’s great-great-great-great grandfather, Thomas Gladstone, who left his home in Biggar in 1746 for the port of Leith where he apprenticed and then started his own wine and spirits merchant.