Pernod Ricard could consider US acquisitions of up to EUR 1bn - exec
French beverages group Pernod Ricard [EPA:RI] could consider new targeted acquisitions in the US as part of its growth strategy, CEO Alexandre Ricard said during the H1 FY15-16 financial results presentation today, 11 February, in Paris.
Pernod Ricard could consider deals from EUR 50m to up to EUR 1bn for targets that can strengthen its market share and complement its brand portfolio, CFO Gilles Bogaert said on the sidelines of the presentation.
The US is a growing market and a key priority for the group in terms of sales and innovation, he added. He declined to give further details on how much Pernod Ricard could spend on acquisitions this year. Ricard and Bogaert also declined to comment on the share of cash on hand they could use to finance potential acquisitions.
According to a French press report published last June, the group’s debt would prevent it from launching a major acquisition.
The group’s net debt increased by EUR 237m in H1 FY15/16 and stands as of today at EUR 9.25bn, according to a company press release. This is partly explained by an unfavorable foreign currency impact linked to the fact that 60% of the group debt is in USD, Bogaert said, adding the average cost of the debt decreased to 4.2% vs. 4.6% in H114/15.
The group’s H1 FY15/16 recurring free cash flow increased by 10% compared to H1 FY14/15 and stands at EUR 544m.
Sales for H1 FY15/16 increased by 3% compared to H114/15 and reached EUR 4.95bn. The group generated EUR 8.55bn in net sales for FY14/15.
The Americas region represented 28% of the group's total sales in H1 FY15/16 and registered a 4% growth compared to last year. This improvement was driven by the US where in H1 FY15/16 sales increase by 3% versus H1 FY14/15, according the company press release.
Pernod Ricard’s latest transactions in the US include the acquisition of a majority stake in Avión Spirits, owner of the ultra-premium tequila brand Avión, from its joint-venture partner Tequila Avión, in July 2014 and its June 2014 acquisition of the assets related to US Kenwood Vineyards.
The company’s most recent acquisition was announced last month.The group acquired a majority stake in dry-gin brand Monkey 47 from German Black Forest Distillers, for an undisclosed amount .