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Tuesday, June 28, 2022
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    HomeBusinessPernod Ricard banks on digital push to boost growth

    Pernod Ricard banks on digital push to boost growth

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    Pernod, whose brands include Martell cognac, Mumm champagne and Absolut vodka, reiterated it aimed to lift its operating profit margin by 50-60 basis points per year

    French spirits group Pernod Ricard said on Wednesday it was banking on its portfolio of high-end brands and a growing use of data to better predict customers’ habits and fine-tune pricing to accelerate sales growth over the mid-term.

    The world’s second-biggest spirits group behind Diageo , said it would aim to deliver annual organic sales growth at the upper end of a 4-7% growth range over the mid-term.

    Pernod, whose brands include Martell cognac, Mumm champagne and Absolut vodka, reiterated it aimed to lift its operating profit margin by 50-60 basis points per year, provided it could deliver annual organic sales growth within the 4-7% range.

    Pricing will be key, further enhanced by the use of data to predict customers’ habits and industry trends, it said.

    Pernod Ricard also vowed to improve operational efficiency and keep advertising and promotional spending at 16% of sales.

    Pernod Ricard is due to hold a Capital Market Day later on Wednesday to detail its strategy and digital transformation.

    The financial targets unveiled on Wednesday are largely seen a continuation of prior ambitions under the group’s three-year “Transform & Accelerate” plan launched in 2018.

    By 0713 GMT, Pernod shares were down 1% at 179 euros, underperforming their European sector which was down 0.4%.

    “The company has not pushed the bar too high, which leaves scope for overdelivery if growth comes through faster, as well as reducing the risk of disappointment if growth comes through slower,” Jefferies analysts said in a note.

    JP Morgan analysts however noted: “We think for now the continuity of the financial targets offers a reassuring message amid a volatile market and investors sentiment that has turned somehow cautious on spirits.”

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