Pernod Ricard (PR) has released its third-quarter results and appears pleased with the figures Its media release purring with pleasure. It recorded 3 per cent organic* sales growth over the quarter, bringing organic growth for the year to 4 per cent.
* Organic growth is calculated after excluding the impacts of exchange rate movements and acquisitions and disposals.
Appearing pleased and being pleased are two separate things. PR admits the third quarter was “softer”. This, it says, was because the Chinese New Year fell on 28 January 2017, versus 8 February 2016.
Sales totalled €1.99 billion ($2.88 billion). The Americas (North and South) were up 8 per cent. Also up was east and west Europe, by 7 per cent. But Asia and the rest of the world was down 2 per cent.
Chairman and CEO Alexandre Ricard skipped over the third quarter, moving the focus to the year to date:
“We have strong year-to-date sales growth at +4 per cent. In an uncertain environment, our strategy is consistent and driving results, in particular in terms of diversifying the sources of growth.
We confirm our FY17 guidance of organic growth in Profit from Recurring Operations of between +2 per cent and +4 per cent.”
That’s a neat, safe spreading of bets at 2 to 4 per cent, especially three quarters through the year. The first nine months generated sales of €7.05 billion – a lot of coin in any denomination. The full 2016 year generated €8.68 billion, so exceeding that is a good possibility.
The Americas were up 5 per cent (organic), with the Jameson and Martell brands carrying the company, and Absolut putting on the brakes, being in decline. For the three quarters, Asia and rest of the world kept its nose in front with a 1 per cent increase. India is giving the company, indeed all imported and a lot of domestic alcohol, a hard time. China is stable but South Korea continues to decline.
In Europe, France was ahead, but only just, Spain was the star, recording growth of 4 per cent. The UK experienced “dynamic growth boosted by advance shipments linked to price increases”. Which could mean future shipments will be down.
There was good news for the wine portfolio, which increased sales by 7 per cent. The point to note: it was driven by Spanish brand Campo Viejo.
Elin McCoy, writing on the Bloomberg website on 23 April, broached the subject of expensive cabernet sauvignon:
“Good cabernets are getting ever more expensive: US$100, $200, $300 are regular prices out of Napa Valley and in Bordeaux, especially for new labels primping for cult-worthy status…”
Her article recommends cabernet sauvignons at cheaper prices, from other regions, not only in the US, but Chile, Australia and South Africa. Her recommendations total 15. The pleasing aspect is that three of the wines (20 per cent) are from Australia. Her selection and reviews:
2013 Wynns Cabernet Sauvignon Black Label (US$40): The first vintage of this widely available Australian red from Coonawarra was 1954, and although it is reasonably priced, it has found success at auction. Succulent, richly fruity, with notes of licorice and aromas of berries and violets, it’s also powerful and structured enough for long ageing.
2013 Vasse Felix Estate Cabernet Sauvignon (US$40): Australia’s Margaret River region south of Perth is a wine paradise for cabernet grapes. This winery is the region’s founding estate, and its medium-bodied red is savoury and fruity, with wonderful fruit and spice notes and a plush texture.
2012 Leeuwin Estate Art Series Cabernet Sauvignon (US$50): Sadly, many of Western Australia’s top cabs are hard to find outside the country. This one, from the Margaret River region, is not. It’s packed with layers of savoury flavours – fruit, cedar, and tobacco – and has the kind of structure you need for ageing.