Annual Report 2011 - Analist.be

Percentage of share capital .................................................................... 9.8%Percentage of voting rights .............................................................. 9.0%Contribution to GBL’s adjusted net assets .................... 16.2%Dividends collected by GBL ........................... EUR 38 millionOverview of the activitiesProfileSince its founding in 1975, Pernod Ricard has achieved significant internal growthand made numerous acquisitions, in particular Seagram in 2001, Allied Domecqin 2005 and Vin&Sprit in 2008, thus becoming the world’s co-leader in the Wine &Spirits market.The group has a strong presence on every continent and a sound position in theemerging Asian, Eastern European and South American markets. It produces anddistributes a range of 14 key brands of spirits and champagne and 4 brands of“Priority Premium Wines” as well as 18 local brands that are leaders on their markets,and a large number of regional brands. The group’s leading brands are:• Top 14: spirits: Absolut, Ballantine’s, Beefeater, Chivas Regal, Havana Club,Jameson, Kahlúa, Malibu, Martell, Ricard, Royal Salute and The Glenlivet;champagnes: Mumm and Perrier-Jouët;• Priority Premium Wines: Brancott Estate, Campo Viejo, Graffigna and Jacob’s Creek.Pernod Ricard is number one in Premium spirits (retail price > USD 17) with leadingpositions in top-of-the-range scotches and in Premium vodka with Absolut. Thegroup’s “premiumisation” strategy consists of giving priority to upmarket productsoffering a large margin and meeting consumers’ growing demands while reducingthe group’s exposure to economic cycles. Pernod Ricard’s strategy is based on fourkey areas:• investing first and foremost in world-class strategic brands;• adding premium brands to position the company at the top end of the market andthus accelerate growth and boost profitability;• expanding in emerging markets that offer the strongest growth prospects;• continuing to grow through acquisitions after reducing debt in order to remain adynamic player in the consolidation of the Wines & Spirits sector.The group’s general organisation is structured around Pernod Ricard, the“Holding Company” that owns the companies referred to as “Brand Companies”and either directly or indirectly through holding companies called “Regions”, theso-called “Market Companies”. The Holding Company is in charge of certainreserved functions such as defining the group strategy, managing investments andfinancial structure. The Brand Companies are responsible for brands strategy anddevelopment as well as production. The Regions provide operational and financialcontrol of the subsidiaries in a given geographical region (Asia, America and Europe).The Market Companies handle distribution and development of brands on localmarkets. Some companies combine the activities of the Brand Companies andMarket Companies.Overview of 2010-2011Pernod Ricard demonstrated aremarkable performance for the financialyear ended on 30 June 2011, with:• an acceleration of turnover organicgrowth driven by a historic high involumes for the Top 14 as a wholeas well as for 7 of its brands;• increased earnings, higher thantargets set at the start of thefinancial year, coupled with strongerinvestments in advertising and onits strategic brands;• a significant debt reduction andfurther refinancing.The economic environment wascharacterised by an upturn inconsumption on most markets, but alsoby strong currency volatility (in particularthe EUR/USD rate) and historicallylow interest rates on the euro and theUS dollar.The year saw the introduction oforganisational changes related to theconclusion of the Agility project:• creation of a new Brand Companycalled Premium Wine Brands, whichencompasses all the group’s prioritywine brands;• expansion of the remit of “The AbsolutCompany” to cover all internationalvodkas in the portfolio;• creation of a new region, PernodRicard Sub-Saharan Africa, operatingas a subsegment of Pernod RicardEurope.Annual Report 2011 35