Pernod Ricard Holding

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ANNUAL REPORT 2O13 / 2O14

tRanS MissiOn ANNUAL REPORT 2013 / 2014 REPORT ANNUAL

Barry Crockett and Brian Nation (Irish Distillers) : For some ten years, Barry has been passing on to Brian all the expertise as Master Distiller. A knowledge that Barry acquired during 47 years working for Jameson. WorldReginfo - 567200b7-e8fc-4f35-866b-335e869dfe88 Table of Contents

AT A GLANCE

P.III THE FIVE DRIVERS P.IV KEY FIGURES P.V KEY DATES P.V I HOUSE OF BRANDS P.VIII LOCATIONS P. X GOVERNANCE P.XVII ORGANISATION P.XVIII CORPORATE SOCIAL RESPONSIBILITY TRANS / MISSION STRATEGY

P. 4 MESSAGE FROM DANIÈLE RICARD, CHAIRWOMAN OF THE BOARD P. 6 JOINT INTERVIEW WITH PIERRE PRINGUET, VICE-CHAIRMAN AND CHIEF EXECUTIVE OFFICER, AND ALEXANDRE RICARD, DEPUTY CHIEF EXECUTIVE OFFICER AND CHIEF OPERATING OFFICER P.8 FOCUS ON ALLEGRO ORIGIN / P. 9 A YEAR AT A GLANCE ORIGINALITY BRANDS 01

P.12 INTERVIEW WITH THIERRY BILLOT, MANAGING DIRECTOR, BRANDS P.16 GLOBAL ICONS P.22 STRATEGIC PREMIUM SPIRITS BRANDS P.31 STRATEGIC PRESTIGE SPIRITS & CHAMPAGNE BRANDS P.38 PRIORITY PREMIUM WINE BRANDS P.43 KEY LOCAL BRANDS P.44 INTERVIEW WITH IAN FITZSIMONS, GENERAL COUNSEL

LOCAL / GLOBAL MARKETS 02

P.48 INTERVIEW WITH ALEXANDRE RICARD, DEPUTY CHIEF EXECUTIVE OFFICER & COO P.52 ASIA P.54 PACIFIC P.55 AMERICAS TODAY / P.57 EUROPE TOMORROW P.59 AFRICA & MIDDLE EAST HR & CSR P.60 FRANCE 03 P.66 INTERVIEW WITH BRUNO RAIN, MANAGING DIRECTOR, HUMAN RESOURCES AND CORPORATE SOCIAL RESPONSIBILITY P.68 CSR MODEL & SUSTAINABLE COMMITMENT P.72 HUMAN RESOURCES P.78 RESPONSIBLE DRINKING P.82 ENVIRONMENT P.85 COMMUNITIES AND PARTNERS PERFORM / INFORM FINANCE 04 P.92 INTERVIEW WITH GILLES BOGAERT MANAGING DIRECTOR, FINANCE P.94 KEY FIGURES P.98 SHARE PERFORMANCE P.102 SHAREHOLDER COMMUNICATIONS

This Report is not the Group’s Reference Document. The Reference Document was filed with the French Financial Markets Authority (AMF) on 24 September 2014. It is available through the Group’s website on www.pernod-ricard.com and the AMF website on www.amf-france.org WorldReginfo - 567200b7-e8fc-4f35-866b-335e869dfe88 2013 / 2014

at A Glance WorldReginfo - 567200b7-e8fc-4f35-866b-335e869dfe88 INTRO

CREATED BY THE LINK-UP OF THE FRENCH PERNOD AND RICARD COMPANIES IN 1975, TODAY PERNOD RICARD IS THE WORLD CO-LEADER OF WINE & SPIRITS.

THE GROUP CONDUCTS OVER 90% OF ITS BUSINESS OUTSIDE OF FRANCE. SINCE ITS INCEPTION, IT HAS GROWN BOTH ORGANICALLY AND THROUGH A SERIES OF ACQUISITIONS, OF WHICH THREE WERE PARTICULARLY TRANSFORMATIONAL: SEAGRAM (2001), ALLIED DOMECQ (2005) AND VIN&SPRIT (2008) WERE PURCHASED FOR A TOTAL OF CLOSE TO €20 BILLION.

TODAY, THE GROUP BOLDLY DECLARES ITS AMBITION: TO BECOME THE NUMBER 1 IN THE INDUSTRY. ALREADY THE LEADER OF THE PREMIUM SEGMENT, THE ONE THAT CONTRIBUTES THE MOST TO THE SECTOR’S GROWTH, PERNOD RICARD HAS OPTED FOR A SUSTAINABLE GROWTH MODEL BASED ON 5 DRIVERS. WorldReginfo - 567200b7-e8fc-4f35-866b-335e869dfe88 At a Glance

BRANDS: A comprehensive portfolio of international Premium brands,

5 01 driving the Group’s growth The five Since its beginning, and particularly over the last decade, Pernod Ricard has built one of the most comprehen- StrATEGiC sive portfolios of Premium brands in the industry on an international scale. This portfolio covers all spirits categories and is illustrated by the ’House of Brands’ concept, which classifies Drivers the Group’s priority brands into three segments: the ’Top 14’, which consists of the Group’s 14 strategic spirits and cham- PREMIUMISATION and INNOVATION: pagne brands. The Top 14 includes: accelerators of value creation • 2 global icons, Pernod Ricard’s strategy is built on creating value • 7 strategic Premium spirits brands, 02 through a systematic policy of brand upscaling, • 5 Prestige spirits and champagne or ’Premiumisation’. This value strategy is part of a brands; long-term vision based on strong and continuous investment the 4 priority Premium wine brands; in the Group’s strategic brands. Pernod Ricard is one of the the 18 key local spirits brands. industry’s biggest investors in marketing expenditure, which represents close to 20% of its net sales. The Group invests heavily and continually to bring about innovation. It is placed at the heart of its ambition, vision and work. Innovation isn’t just about marketing, it concerns all areas of the business: sales, human resources, production, legal, finance and communications. By creating the conditions for profitable and sustainable growth, the Group intends to consolidate its position as leader of the Premium and Prestige segment.

DECENTRALISATION: A unique organisation to capture all growth opportunities Pernod Ricard’s organisation is unique in its indus-

03 try. The Group has opted for decentralisation: the 80 Market Companies are all managed as independent profit centres and form a wholly owned distribution network that is fully committed to its brands. This structure ensures decision-making that is closer to the markets, enabling the Group to respond more swiftly to the needs of customers and consumers. This flexible and responsive structure has consistently shown its ability to boost individual motivation and collective performance. This is the case in its historical markets and emerging CULTURE: A strong cor- markets alike, where Pernod Ricard teams are optimally posi- porate culture driven by tioned to take full advantage of every opportunity for growth. 18,000 employees

04 In a decentralised organisation, it is the corporate culture that binds everyone together. A HISTORICAL COM- At Pernod Ricard, this culture is MITMENT TO ETHICS, grounded in three values: of which every employee • entrepreneurial spirit; 05 is an ambassador • mutual trust; There is no leadership with- • and a strong sense of ethics. out a deep sense of responsibility. Since it was founded, the Group has The policy of Human Resources man- been committed to Corporate Social agement promotes leadership skills, Responsibility. It has set up a model mobility and diversity and encour- based on four areas of commitment: ages an attitude of conviviality. This • empower our employees; corporate culture is seen as a real • promote responsible drinking; competitive asset. • protect our planet; • develop our local communities and involve our partners.

III WorldReginfo - 567200b7-e8fc-4f35-866b-335e869dfe88 At a Glance

kEy FiGures

Co- No.1 leaDer in premium OF WINE & SPIRITS AND PRESTIGE WORLDWIDE SPIRITS WORLDWIDE

19 BRANDS

AMONGST THE WORLD’S TOP 100(1)

+2%(2)

€7,945 m 18,523 €2,056 m NET SALES EMPLOYEES PROFIT IN 80 COUNTRIES FROM RECURRING OPERATIONS

(1) Source: Impact 2013, published in February 2014. (2) Organic growth.

IV WorldReginfo - 567200b7-e8fc-4f35-866b-335e869dfe88 At a Glance

kEy DatES

2014 2013 2008

Pernod Ricard strengthens its Pernod Ricard accelerates its Acquisition of Vin&Sprit, the portfolio: in April, the Group presence in Africa. Six affiliates owner of ABSOLUT, making acquires Kenwood, a Premium set up in the continent’s key Pernod Ricard the world co- Californian wine, and in July markets: Ghana, Angola, Kenya, leader of the industry. increases its shares in Super Namibia, Nigeria and Morocco. Premium Tequila Avión. Launch of the ’Allegro’ operational efficiency project.

2005 2001 1993

Acquisition of Allied Domecq, in Purchase of 39.1% of Seagram’s Pernod Ricard and the Cuban partnership with Fortune Brands. Wine & Spirits businesses: inte- company Cuba Ron create Ha- The Group doubles in size and gration of Chivas Regal Scotch vana Club International, a 50/50 becomes the world number 2 in whisky and Martell cognac. joint venture for the market- Wine & Spirits. ing and distribution of Havana Club rum.

1989 1988 1975

Acquisition of the Orlando Acquisition of Irish Distillers, the Pernod Ricard is created by Wyndham Group, an Australian leading producer of Irish whis- the link-up of two French an- producer of wines, including the key and owner of Jameson. ise-based spirits companies: Jacob’s Creek brand. Pernod, which was founded in 1805, and Ricard, founded by Paul Ricard in 1932.

V WorldReginfo - 567200b7-e8fc-4f35-866b-335e869dfe88 Brands portfolio

House of BranDs

A House of Brands— to segment an international Premium brand portfolio

GLOBAL ICONS

STRATEGIC PREMIUM SPIRITS BRANDS

KEY LOCAL BRANDS

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The Pernod Ricard House 5 Prestige brands: flagships of the of Brands is comprised of: Group’s Premiumisation strategy, these brands are particularly ap- The Top 14 spirits and cham- pealing to consumers who are pagne brands, including: drawn to luxury and expect an exclusive and privileged relation- 2 global icons: distributed across ship. They are mainly offered in all channels, they are priority select channels (wine merchants, growth drivers in each market prestigious establishments, etc.). and receive substantial advertising and promotional investment. 4 priority Premium wine brands: increasingly popular dur- 7 Premium brands: destined to ing moments of consumption become the icons of tomorrow, previously reserved for spirits, these seven brands are distribut- such as the aperitif, priority wines ed in all channels. They are sup- have been grouped by Pernod ported by significant investment, Ricard into one organisation in which is targeted according to order to develop a global port- local market conditions. folio strategy.

18 key local spirits brands: through their strong local presence, particularly in the off-trade segment, they ensure the Group’s leadership in strategic markets.

5 4

STRATEGIC PRIORITY PRESTIGE SPIRITS PREMIUM WINE AND CHAMPAGNE BRANDS BRANDS

VII WorldReginfo - 567200b7-e8fc-4f35-866b-335e869dfe88 Locations

Pernod Ricard worldwide — IRISH DISTILLERS

PERNOD RICARD AMERICAS

CHIVAS BROTHERS

HAVANA CLUB INTERNATIONAL

HEAD OFFICES HEAD OFFICES 101 PRODUCTION SITES BRAND COMPANIES PERNOD RICARD REGIONS IN 23 COUNTRIES Havana / Cuba New York / USA Argentina - Armenia - Australia Paris / France Paris, Marseille, Créteil / France Brazil - Canada - China - Cuba Dublin / Ireland Hong Kong / China Czech Republic - England - Finland London / United Kingdom France - Greece - India - Ireland Stockholm / Sweden Italy - Mexico - New Zealand Sydney / Australia Poland - Scotland - South Korea PERNOD RICARD Spain - Sweden - USA LOCATIONS

VIII WorldReginfo - 567200b7-e8fc-4f35-866b-335e869dfe88 At a Glance

3 (1) 6 80 101 REGIONS BRAND MARKET PRODUCTION COMPANIES COMPANIES SITES

HOLDING THE ABSOLUT COMPANY

PERNOD RICARD EMEA PERNOD RICARD ASIA

SOCIÉTÉ MARTELL MUMM PERNOD PERRIER-JOUËT — SOCIÉTÉ RICARD

PERNOD RICARD WINEMAKERS

(1) Asia and Rest of the World, Americas, Europe (including France).

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Board of DirectorS

Pernod Ricard’s Organisation and method The Board approved the annual of operation and interim financial statements Board of Directors The Board of Directors is com- and the terms of financial com- oversees the posed of 16 members, includ- munications, reviewed the budget, ing two Directors representing prepared for the Combined (Or- Group’s governance, employees, as well as seven in- dinary & Extraordinary) Share- in accordance dependent Directors. It should holders’ Meeting, and approved be noted that the two Directors the draft resolutions. The current with ethics and representing employees are not state of the business was dis- transparency rules. taken into account when ascer- cussed at each of these meetings, taining the Board’s independ- including operations, results and ence. Pernod Ricard applies the cash flow. Combining independence criteria provided personalities with for in the AFEP-MEDEF corporate governance code. complementary experience and Separation of the roles of Chairman skills, it ensures that and Chief Executive Officer strategy In order to adapt the Group’s governance and allow for natural is respected. succession within the Company’s It also guarantees executive management, the Board of Directors separated the role that the Group’s of the Chairman from that of the management Chief Executive Officer in 2008. is carried out in The Chairman of the Board of Directors organises and directs the best interests the Board’s operations and reports Subsequent changes of the business and these developments back to the in the composition Shareholders’ Meeting. He or she of the Board of Directors its shareholders. oversees the proper functioning Since the terms of office of of the Company’s managing Martina Gonzalez-Gallarza and Ian bodies and in particular, ensures Gallienne will expire at the close that the Directors are in a position of the Shareholders’ Meeting of to fulfil their duties. The Chief Exec- 6 November 2014, in accordance utive Officer is granted full powers with the recommendations of the to act in the name of the Company Nominations and Governance under any circumstances. Committee, the renewal of said terms for a period of four years Changes in the composition will be proposed. of the Board of Directors In addition, Michel Chambaud during the financial year informed the Board of Directors The Shareholders’ Meeting of of his decision to resign from 6 November 2013 renewed the his position as a Director of the directorships of Danièle Ricard, Company with effect from Laurent Burelle, Michel Cham- 6 November 2014. baud and Société Paul Ricard In order to replace Michel SA represented by Paul-Charles Chambaud, based on the recom- Ricard for four years, and re- mendation of the Nominations newed the term of office of Anders and Governance Committee, Narvinger for two years. the Board of Directors decided During the financial year ended to propose to the Shareholders’ 30 June 2014, the Board of Directors Meeting of 6 November 2014 met eight times with an attendance the appointment of Gilles Samyn rate of 97.5%. Meetings lasted ap- as an Independent Director for a proximately 3½ hours on average. four-year term.

X WorldReginfo - 567200b7-e8fc-4f35-866b-335e869dfe88 At a Glance

As at 27 August 2014, the Board of Directors was composed of:

O1 DANIÈLE RICARD Chairwoman of the Board of Directors O2 O1 O2 O3 PIERRE PRINGUET Vice-Chairman of the Board of Directors and Chief Executive Officer O3 ALEXANDRE RICARD Deputy Chief Executive Officer and Chief Operating Officer O4 FRANÇOIS GÉRARD O4 O5 O5 CÉSAR GIRON O6 MARTINA GONZALEZ- GALLARZA O7 PAUL-CHARLES RICARD Permanent Representative of Société Paul Ricard O6 O7 O8 NICOLE BOUTON(1) O9 LAURENT BURELLE(1) 1O MICHEL CHAMBAUD(1) 11 WOLFGANG COLBERG(1) O8 O9 1O 12 IAN GALLIENNE(1) 13 SUSAN MURRAY(1) 14 ANDERS NARVINGER(1) 15 SYLVAIN CARRÉ(2)

11 12 16 MANOUSOS CHARKOFTAKIS(2)

13 14

15 16

(1) Independent Director. (2) Director representing employees.

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Committees of the Board of Directors

The Board of Directors delegates responsibility to its specialised committees for the preparation of specific topics submitted for its approval. Three committees handle subjects in the area for which they have been given responsibility and submit their opinions and recommendations to the Board: the Audit Committee, the Compensation Committee and the Nominations and Governance Committee.

Audit Committee Approval of the Group’s Internal Audit The activities of the Nominations and Composition at 27 August 2014: plan for 2014/2015 at the meeting of Governance Committee have included: Chairman: 16 June 2014. This Audit plan was Formalisation of the schedule and Michel Chambaud(1) prepared and approved, taking into method of appointment of Directors Members: account the Group’s main risks; representing employees, annual review Susan Murray(1) Internal Control assessment: the Group of the independence of Board members; Wolfgang Colberg(1) sent its affiliates a self-assessment ques- Annual self-assessment of the François Gérard tionnaire making it possible to evaluate operation of the Board and drafting of whether their Internal Control system recommendations; Three of the four Directors who sit on was adequate and effective. Based on Study and proposal of the Board’s the Audit Committee (75%) are independ- the Group’s Internal Control Principles composition in terms of the number of ent Directors. The members of the Audit and in compliance with the French Fi- female Directors; Committee were specifically chosen for nancial Markets Authority (AMF) refer- Review and analysis of the insurance their expertise in accounting and finance, ence framework for risk management policy covering Directors and Executive assessed in terms of their training and and Internal Control (“Cadre de référence Directors; professional experience. de l’Autorité des Marchés Financiers Meeting of Committee members and The Internal Regulations of the Audit (AMF) sur le dispositif de gestion des the designated Directors representing Committee, updated during the year, risques et de Contrôle Interne”) and employees; were approved at the Board of Directors’ the latter’s Application Guide published Thoughts on the future composition meeting of 21 January 2014. The Audit in 2007 and updated in July 2010, this and reduction of the Board of Directors; Committee met four times in 2013/2014 questionnaire covers corporate govern- Update of the Internal Regulations with an attendance rate of 94%. ance practices, operational matters and of the Nominations and Governance In accordance with its Internal Regula- IT support. Responses to the question- Committee; tions and in liaison with the Statutory naire were documented and reviewed Annual review of Pernod Ricard SA’s Auditors and the Consolidation, Finance by the Regions and the Group’s Internal policy on equal opportunities and pay; and Internal Audit Departments of the Audit Department. An analysis of the Annual review of the Group’s Talent Company, the Audit Committee’s work returned questionnaires was presented to Management policy and presentation mainly related to the following issues: the Audit Committee at the meeting on of the succession plans for the Group’s Review of the main provisions of French 26 August 2014; main leaders. and foreign legislation or regulations, Review of Internal Audit reports: in reports and commentaries with regard to addition to the audits and checks carried Compensation Committee corporate governance, risk management, out by the various affiliates on their own composition at 27 August 2014: Internal Control and audit matters; behalf, 23 Internal Audits were performed Chairwoman: Nicole Bouton(1) Review of the interim financial state- in 2013/2014 by the Internal Audit teams. Members: ments at 31 December 2013 during the A full report was drawn up for each Anders Narvinger(1) meeting of 11 February 2014; audit covering the types of risks identified Ian Gallienne(1) Review of the consolidated financial – operational, financial, legal or strategic – Manousos Charkoftakis, statements at 30 June 2014 (these finan- and their management. Recommen- Employee Director cial statements were reviewed at the dations are issued when deemed nec- meeting of 26 August 2014): the Audit essary. The Audit Committee approves All Directors sitting on the Compensa- Committee met with Management and the recommendations of all the audit tion Committee, excluding the Employee with the Statutory Auditors in order to reports issued and checks the progress Director, are independent Directors discuss the financial statements and ac- in implementing the recommendations (100%). During the 2013/2014 financial counts, and their reliability for the whole from previous audits. year, the Compensation Committee Group. It notably examined the conclu- met six times with an attendance rate sions of the Statutory Auditors and the Nominations and Governance of 100%. The Compensation Commit- draft presentation of financial reporting; Committee tee’s main task is to set out the policy Monitoring of the Group’s cash flow composition at 27 August 2014: for remunerating the Group’s Executive and debt; Chairwoman: Nicole Bouton(1) Director(s) in line with the recommen- Risk management: the Group’s main Members: dations of the AFEP-MEDEF Corporate risks are regularly presented in a detailed Anders Narvinger(1) Governance Code to which the Company presentation to the Audit Committee César Giron adheres. Further details of the work of the (the meetings of 10 December 2013 and Compensation Committee are provided 16 June 2014 were mainly dedicated to Two of the three Directors of the Nom- in the paragraph “Directors’ compensa- risk management). In addition, customer inations and Governance Committee tion” in Section 4 “Management Report” risk management and the monitoring of (i.e. 66.66%) are independent Directors. of the Registration Document. business continuity plans were subject The Chief Executive Officer, Pierre Pringuet, to cross-functional reviews in 2013/2014, is associated with the work of the Commit- in order to strengthen the processes in tee in matters relating to the appointment place in the Group’s affiliates. The Inter- of Directors. nal Regulations of the Audit Committee During the 2013/2014 financial year, and the Internal Audit Charter were the Committee met five times with an updated during the year; attendance rate of 100%.

(1) Independent Director.

XII WorldReginfo - 567200b7-e8fc-4f35-866b-335e869dfe88 At a Glance

Management StructureS

The Group’s General Management At 24 September 2014, For the 2013/2014 financial year, the Executive Board management the Group’s General Manage- is composed of :(2) structures are ment was carried out by the Chief Executive Officer, the Deputy Chief PIERRE PRINGUET organised around Executive Officer and Chief Operat- Vice-Chairman of the Board the General ing Officer (also Managing Director, and Chief Executive Officer Management, the Markets ), and three Managing Directors responsible for ALEXANDRE RICARD Executive Board - Brands(1), Deputy Chief Executive Officer and the Executive - Finance, and Chief Operating Officer - Human Resources and Corporate Committee. Social Responsibility. THIERRY BILLOT The Executive Managing Director, Brands Board is composed Executive Board The Executive Board is the perma- GILLES BOGAERT of the General nent body responsible for coordi- Managing Director, Finance Management nating the Group’s Management. It is comprised of the General BRUNO RAIN and the General Management and the General Managing Director, Counsel. Counsel. The Executive Board Human Resources and defines the Group’s strategy and Corporate Social Responsibility The Executive objectives, and initiates and Committee is reviews all decisions relating to IAN FITZSIMONS the Group’s affairs. It submits such General Counsel composed of the matters to the Board of Directors Executive Board when its approval is required. Lastly, it organises the work of the and the chairmen of Executive Committee and defines the direct affiliates. its members’ objectives, in particular through the four-year plan, the budget and reviews of ongoing activities.

(1) From February 2015, as part of the Allegro operational efficiency project, all of the members of the Executive Committee (Managing Directors of the Regions and Brand Companies) will report directly to the Group’s Chief Executive Officer. The functions of Managing Director, Brands, and Managing Director, Markets, will not be replaced. —— (2) Due to the changes caused by the Allegro project and announced after the close of the financial year, all management structures described in this Annual Report are presented as at 24 September 2014, the date on which the report was filed with the AMF. Recent changes are indicated by a footnote. ——

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The Executive Committee

The Executive Committee is the Group’s managing body that brings together the Executive Board and the chairmen of direct affiliates.

01 02 03 04 05 06 07 08

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he Executive Committee At 24 September 2014, the Executive Committee helps to develop the is composed of: Group’s strategy and coor- T dinates between the Hold- O1 O9 ing Company and its affiliates, LAURENT LACASSAGNE PIERRE PRINGUET as well as between the affiliates Chairman & CEO of Chivas Brothers Vice-Chairman themselves (Brand Companies and and Chief Executive Officer Market Companies). O2 Under the General Management’s BRUNO RAIN 10 authority, it is responsible for Managing Director, Human IAN FITZSIMONS conducting the Group’s business Resources and Corporate Social General Counsel activities and ensuring that its Responsibility 11 main policies are applied. O3 PIERRE COPPÉRÉ

PHILIPPE GUETTAT Chairman & CEO In this capacity, during its monthly Chairman & CEO of Martell Mumm of Pernod Ricard Asia meetings (11 per year), the Perrier-Jouët Executive Committee: 12 analyses the progress of the O4 PHILIPPE SAVINEL Group’s activities; GILLES BOGAERT Chairman & CEO of Ricard actively participates in setting Managing Director, Finance financial and operating objec- 13 tives (financial results, debt and O5 JEAN-CHRISTOPHE qualitative objectives); ALEXANDRE RICARD COUTURES reviews brand and market Deputy Chief Executive Officer Chairman & CEO strategies, analyses results and and Chief Operating Officer of Pernod Ricard Winemakers evaluates any changes in the O6 14 organisation; PAUL DUFFY ANNA MALMHAKE approves and implements the Chairman & CEO Chairwoman & CEO Group’s main policies. of The Absolut Company of Irish Distillers

O7 15 CHRISTIAN PORTA CÉSAR GIRON Chairman & CEO Chairman & CEO of Pernod of Pernod Ricard EMEA 16 O8 PHILIPPE DRÉANO THIERRY BILLOT Chairman & CEO Managing Director, Brands of Pernod Ricard Americas

09 10 11 12 13 14 15 16

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Holding Company Management

At 24 September 2014, the Holding Company’s management is composed of:

JEAN-BAPTISTE BRIOT ALBAN MARIGNIER Financial Control Director Pernod Ricard University Director

OLIVIER CAVIL CONOR MCQUAID(1) Communications Director Chief Marketing Officer

JOHN CORRIGAN GWÉNAEL MORIN(1) Industrial Operations Director Tax Director

The primary objectives OLIVIER GUELAUD THIBAUT DE POUTIER DE SONE of the Holding Company’s Treasury Director Commercial Development Director management are: to prepare and coordinate the ANDRÉ HÉMARD MATHIEU PROT decisions and actions to be taken Corporate Social Responsibility Director Intellectual Property Director by the Holding Company; to exchange information on the Group’s operations, and on ARMAND HENNON PHILIPPE PROUVOST Public Affairs Director, Corporate Legal Affairs Director actions undertaken or to be taken France and Secretary of the Board by each of the operational management departments; VICTOR JEREZ MARTIN RILEY(1) to prepare for specific decisions Audit and Development Director Chief Marketing Officer that are the responsibility of the Group’s General Management. JAIME JORDANA JEAN RODESCH Human Resources Development Institutional Affairs Director and CSR Director

MATHIEU LAMBOTTE(1) JEAN TOUBOUL(2) Chief Information Officer Financial Communication and Investor Relations Director

(1) With effect from 1 September, Mathieu Lambotte was appointed Chief Information Officer, replacing Jean Chavinier, who had announced his retirement; Gwénael Morin was appointed Tax Director, replacing Julien Soisson who was appointed Chief Financial Officer at Irish Distillers (Jameson); and Conor McQuaid was provisionally appointed Chief Marketing Officer. He is working closely with Martin Riley, who he will succeed on 1 January 2015. (2) With effect from 1 October, Julia Massies is appointed Financial Communication and Investor Relations Director, replacing Jean Touboul who was appointed Managing Director of Pernod Ricard Taiwan.

XVI WorldReginfo - 567200b7-e8fc-4f35-866b-335e869dfe88 At a Glance

Organisation

Decentralisation is the founding principle behind Pernod Ricard’s organisation and operations. Continuous dialogue between the Brand Companies and the Market Companies ensures the involvement of all stakeholders in the business, and a decision-making process that is as close as possible to the consumer. The Allegro operational efficiency project seeks to reinforce this principle, by refocusing the various entities around their priority objectives, whilst enhancing the fluidity and pertinence of the exchanging of information by developing common tools. The Holding Company defines the major strategic guidelines, coordinates global actions, and monitors compliance with the Group’s policies.

PernoD RIcard HoldinG

the absolut Pernod Ricard companY AsiA

chivas brothers Pernod Ricard AmericaS Co

Martell Mumm Brand mpanies Perrier-jouët Pernod Ricard

mpanies EmeA

irish Distillers Market Co Société Pernod Ricard PernoD Winemakers

Havana club Société international(1) RicarD

The Brand Companies The Holding Company The Market Companies are located in their home coun- defines the Group’s strategy and are 80 companies linked to regions tries of their portfolio. They are in oversees its implementation. Its (Pernod Ricard Asia, Pernod charge of developing the overall responsibilities are centred on Ricard Americas, Pernod Ricard strategy of the brands and activa- three main areas: EMEA), with the exception of the tion solutions enabling the Market Governance functions (strategy, two French Market Companies, Companies to ensure their local mergers and acquisitions, financing, Pernod and Ricard. Their mission implementation. They are also legal affairs, corporate communica- is to activate the Group’s inter- responsible for the production and tion, talent management, corporate national brand strategies in their management of their industrial social responsibility, etc.) markets in order to manage local facilities. Cross-functional initiatives with and regional brands. They also high added value (digital market- ensure the implementation of ing, luxury, innovation, etc.) as part the Group’s strategy and key of the merger of the Marketing and policies in their markets. Sales divisions Shared resources (Pernod Ricard Research Centre, IT, etc.)

(1) Joint venture.

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Key Principles of CSR

Pernod Ricard is convinced that The Group continues to build Pernod Ricard employees took a its financial performance is in- on its founders’ legacy with a break from their normal work to separable from its social respon- CSR platform built around four dedicate their day to promoting sibility. It aims to always reconcile areas of commitment: The first responsible drinking. economic efficiency with social is the empowerment of employ- The other two priority areas for welfare and environmental pro- ees, both as beneficiaries and Pernod Ricard are the protection tection. as ambassadors of the Group’s of the planet and the develop- The Group fully complies with CSR commitment. As part of ment of local communities. The the ten principles of the United its second area of commitment, Group is committed to preserving Nations’ Global Compact. A pi- responsible drinking, the Group the land from which its brands oneer in CSR, for over 40 years held its annual Responsib’ALL originate and to building part- Pernod Ricard has made ethics a Day event on 22 June 2014. nerships with the communities key principle of its growth. From Auckland to Los Angeles, surrounding its sites.

THE GrOuP’s VALUES

A WAY ENTREPRENEURIAL SPIRIT A WAY OF WORKING OF BEING — MUTUAL TRUST — DECENTRALISATION SENSE OF ETHICS CONVIVIALITY

A COLLECTIVE COMMITMENT TO PERFORMANCE

CSR Model

4 AREAS OF COMMITMENT

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CSR Commitments in Figures

2.6% 41% OF PAYROLL OF EXTERNAL INVESTED RECRUITS IN TRAINING ARE WOMEN

93% OF AFFILIATES HAVE 96% LED AT LEAST ONE OF PRODUCTION INITIATIVE TO SITES ARE ISO 14001 PROMOTE RESPONSIBLE CERTIFIED DRINKING

99.1% -76% OF CAMPAIGNS REVIEWED REDUCTION OF THE SOLID WERE IN COMPLIANCE WASTE LANDFILLED WITH THE PERNOD RICARD OR INCINERATED CODE FOR COMMERCIAL BETWEEN COMMUNICATIONS 2010 AND 2014

1997 START OF CORPORATE 60% OF AFFILIATES HAVE LED SPONSORSHIP OF AT LEAST ONE INITIATIVE THE CENTRE POMPIDOU, TO SUPPORT LOCAL EUROPE’S LEADING COMMUNITIES CONTEMPORARY ART MUSEUM

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ART

VEE SPEERS FOR PERNOD RICARD

FOR ITS 39TH YEAR OF ARTISTIC CARTE BLANCHE, Pernod Ricard invited 18 of its employees to work with Australian photographer Vee Speers. The artist moved to Paris in the 1990s, after starting out in Sydney. Her series “Bordello”, “Birthday Party”, “Immortal” and “Bulletproof” have garnered her worldwide acclaim.

On the subject of transmission, the photographer chose to present 9 diptychs featuring Pernod Ricard employees. In their daily work, each duo is brought together through the sharing of expertise, through the transfer of know-how, or through similar functions. Vee Speers reinterpreted their stories in 9 poetic scenes using a unique colour palette. The photographer’s subjects came from a wide range of countries, functions and affiliates, but they all had one thing in common: each of them is one of the Group’s 18,000 “créateurs de convivialité”.

Ambassadors of Pernod Ricard’s commitment to art, they reflect a historical legacy begun by Paul Ricard, whereby a piece is commissioned by a contemporary artist to illustrate the cover of its Annual Report. For the past five years, this commission has focused on photography.

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THE R&D CENTRE OF PERNOD RICARD (CRPR) LEND VALUABLE SUPPORT TO PROJECT LEADS. THEREFORE, DOMINIQUE OFFERED THE BENEFIT OF HIS TECHNICAL KNOWLEDGE TO JANNA, ONE OF THREE WINNERS OF THE KANGAROO FUND.

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DOMINIQUE VESPERINI, R&D APPLICATIONS TECHNICIAN, CENTRE DE RECHERCHE PERNOD RICARD JANNA BERG, BRAND MANAGER, NEW BUSINESS, THE ABSOLUT COMPANY – KANGAROO FUND WINNER

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DANIÈLE RICARD Chairwoman of the Board of Directors chairWoman’s Message —

“We bring you the assurance of a long- established Group, so that together we can steer Pernod Ricard to new peaks of success.”

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Dear Sir, Madam,

Two years ago, when the Board of Directors appointed me its Chairwoman following the passing of Patrick Ricard, I accepted this mission to ensure the continuation of the Group’s strategy and independence in more challenging macro-economic times. I would like to thank the Directors for the trust they placed in me.

This period of transition was necessary to prepare for Alexandre Ricard to take up the post of Chairman and CEO, scheduled for February 2015. Patrick Ricard and Pierre Pringuet worked together for a long time to make this seamless handover possible. It is this long-term vision, which carries the full support of your reference shareholder, the Ricard family, that has been the strength behind the key principles of your Group for the last 40 years. Having been a member of the Board since it was established in 1975, I would like to take this opportunity to pay tribute to all those successive management teams that have made our company a great world leader. And to salute Pierre Pringuet in particular, who has been Chief Executive Officer since 2000 and whose term of office comes to an end in early 2015.

Under his leadership, Pernod Ricard has undergone some remarkable developments, growing as much externally, with the acquisition of Allied Domecq and Vin&Sprit, as through organic growth, by inspiring the Group with a genuine spirit of innovation in recent years, and leading it into the modern age. Over the last few months, together with Alexandre Ricard, he has been fully committed to launching a wide-ranging operational efficiency plan with the determined aim of adapting the organisation’s structure to meet the challenges of the future; our Group is now well equipped to take its place as world leader. On behalf of all of us, I would like to express our gratitude to Pierre Pringuet.

With his profound commitment to our values, Alexandre Ricard will open a new chapter in the history of Pernod Ricard, which celebrates its 40th anniversary this year. He will be able to capitalise on his international experience, his knowledge of the industry and his keen insight into how this business is developing, whilst remaining focused on creating value in the long term. Therefore, we bring you the assurance of a long-established Group, so that together we can steer Pernod Ricard to new peaks of success.

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traNs-

MissiOn Pernod Ricard posted organic growth in line with its stated objectives. JOINT INTERVIEW What is your take — on the year’s results? Pierre Pringuet: We were confronted by a much tougher environment than expected. In particular, our results were affected by two major factors: a sudden drop in the consumption of imported spirits in China and an unfavourable currency impact that was unprecedented (-€535 million impact on net sales, for a 7% decline, and -€199 million impact on profit from recurring operations, an 8% decline). Excluding Forex impacts and changes in Group structure, sales were stable and profit from recurring operations was up 2% (in line with February’s market guidance). We also reduced our debt. Given the context, it was a solid performance. I should un- derline that this was achieved without compromise, whether on selling prices, stock levels or marketing expenditure, which remained high (almost 19% of net ALEXANDRE RICARD, PIERRE PRINGUET, sales). Our employees deserve Vice-Chairman of the Board of Directors the credit for this success: on be- Deputy Chief Executive Officer half of the General Management, and Chief Operating Officer and Chief Executive Officer I would like to thank them for their dedication.

Alexandre Ricard: I also want to thank each of the Group’s employees for this achievement. Once “Winning the battle for growth: again, despite the challenging this must be everyone’s watchword. circumstances, their commitment was unwavering. This was espe- To achieve it requires an ambitious strategy cially true in markets under considerable strain: I’m referring to and an efficient organisation. China, where the teams realigned But what’s more, it is the mindset our offering to contain the resulting 23% decline of our business. that distinguishes winning teams: simplicity, That decline was above all due to a slowing economy, combined the ability to take risks, rapid execution – with government measures to that’s the mindset that drives us. discourage conspicuous consumption, mainly aimed at luxury goods. It will take us on the path to leadership, Excluding China, we posted excellent results across all emerg- which is our ambition.” ing countries (+7%) – especially India, Brazil, and Eastern and Central Europe.

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As for mature countries, some more flexible. Three principles un- conviviality – the cornerstone “IN A CHALLENGING posted strong growth, such as derpin this project: prioritisation, of our culture – should not be Canada, the United Kingdom, simplification and mutualisation. reduced to just a way of working ENVIRONMENT, Germany and France. In contrast, Prioritisation aims to refocus each together. It is a key advantage that WE DELIVERED the United States grew at a slower entity on its own core mission and in difficult times helps promote a pace, against an 8% increase in the to align our organisation with our culture of cooperation, dialogue ON OUR STATED previous fiscal year. business opportunities. and collaboration. Allegro embod- In the name of prioritisation, we ies what drives our Group’s teams OBJECTIVES.” Are these challenges have grouped together Sales and in their daily work: a collective PIERRE causing you to re-examine Marketing departments at the commitment to performance. PRINGUET your strategy? Holding Company to create a 360-degree approach to the con- What is your outlook P. P. : No, of course not. Our sumer. Six cross-functional depart- for 2014/2015? Group’s growth has relied for sev- ments have been created (e.g., in- eral years on the three pillars of novation, luxury, digital marketing), P. P. : Our aim this year is to see Premiumisation, Innovation and with each representing a Group a return to growth of net sales, geographic expansion. priority. The digital revolution, for despite an economic climate Firstly, Premiumisation is a key example, which impacts both the that is expected to remain chal- driver of value creation: it con- relationship with consumers and lenging, with pressure on pric- tinued to be so in 2013/2014, as our internal ways of working, re- es. We expect the US market evidenced by the +2% price effect quires a comprehensive approach to remain sluggish, while the on the Top 14. At the same time, involving all skill-sets. Chinese market should gradually our Premium brands’ share of net Next, we have to simplify the recover. The Forex context should sales rose further, from 75% to way we work in order to focus improve, especially with the dol- 76% (against 69% five years ago). on what’s essential and speed up lar’s appreciation. Examples include the success of decision-making. We have thus super-Premium drinks such as streamlined the European organ- A.R.: In this gradually improving Tequila Avión, ABSOLUT ELYX isations, going from 42 markets environment, we will be able to and Jacob’s Creek Double Barrel. to 10 management entities repre- reinvest one-third of the savings The second growth engine is senting several markets. made through the Allegro pro- Innovation, which is crucial to Lastly, resource sharing means ject, i.e. €50 million, in our priority drive the market: meeting consum- pooling our resources and means brands and innovations. ers’ expectations by creating new in order to optimise their use. product offerings. This is the case Specifically on this last point, the Can you talk about with Brancott Estate Flight Song, support services of Pernod SA the transition that will take a new addition to the range that and Ricard SA will be combined, place in early 2015? corresponds to the trend of lighter regional hubs have been cre- alcohol wines, as well as Ballan- ated in Singapore and Hong P. P. : I will turn 65 in January 2015. tine’s Brasil, a Scotch-whisky based Kong, and, lastly, a central hub In accordance with our bylaws, my spirit in which lime peel has been has been established in Paris term will automatically end at the macerated. The latter is a highly for the legal management of all Board of Directors’ meeting of original offering that expands the our intellectual property. 11 February 2015, at which time boundaries of the category. the board will appoint Alexandre The third pillar of our strategy is A.R.: Allegro is grounded in the Ricard as Chairman and CEO. geographic expansion by cap- Group’s core principles. Accord- I do not see this as a transition but turing new markets. In this area ingly, decentralisation, which as a “transmission”. In any case, “ONE-THIRD Sub-Saharan Africa again con- allows decisions to be taken growth is and always will be our OF ALLEGRO’S firmed its potential for growth closer to our customers, remains No. 1 priority. with a sales increase of 23%. at the heart of our model. We are SAVINGS WILL BE strengthening the relationship A.R.: Indeed, winning this battle REINVESTED A.R.: It’s not so much our strategy between the brands and the mar- serves our long-term ambition that we need to change as it is our kets. Decentralisation has never of leadership. But that won’t be IN OUR PRIORITY organisation that we need to ad- meant that each affiliate had to enough: it also requires a mind- just – specifically in order to better do everything by itself. Allegro set, a desire to win, an attitude BRANDS AND align it with our strategic priorities. thus encourages the sharing of that must constantly guide all our INNOVATIONS TO That’s the purpose of the Allegro expertise and operating as a net- actions. We must return to greater project launched in February. Our work through the deployment of simplicity, be willing to take risks, SUPPORT LONG- objective is to create the condi- collaborative digital platforms. and be faster in everything we do. TERM GROWTH.” tions internally to better capture Allegro capitalises on all the future growth opportunities. The Group’s values: the entrepreneurial ALEXANDRE whole challenge is ultimately to re- spirit, mutual trust and conviviality. RICARD bound faster, stronger and farther The main objective of our markets, than the competition. for example, is to flawlessly exe- cute the global strategies defined Can you tell us more about by the Brand Companies. But such this project? excellence in execution will only happen through the appropriate P. P. : Allegro is a Group-wide pro- and innovative use of activation ject with only one objective: to tools developed by the marketing make our organisation faster and teams. It’s a virtuous circle. Lastly,

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FocuS on AllegrO — IN A CHALLENGING ECONOMIC CLIMATE, THE ALLEGRO OPERATIONAL EFFICIENCY PROJECT WAS LAUNCHED ACROSS THE GROUP IN FEBRUARY 2014. IT AIMS TO STRENGTHEN PERNOD RICARD’S ORGANISATIONAL MODEL IN ORDER TO BE ABLE TO SEIZE ALL OPPORTUNITIES FOR GROWTH.

IT IS BASED ON THREE KEY PRINCIPLES: PRIORITIZATION, SIMPLIFICATION AND MUTUALIZATION.

PRIORITISE SIMPLIFY THE ORGANISATION MUTUALISATION: SHARING AND FOCUS EFFORTS AND PROCESSES RESOURCES AND EXPERTISE

THE BRAND COMPANIES HOLDING BACK OFFICES MUST FOCUS ON: All Executive Committee (COMEX) Merger of the back offices (human The definition members (CEOs of Regions and Brand resources, IT, finance) of Pernod SA and of the global brand strategy Companies) report directly to the Group’s Ricard SA on a single location in Marseille Chief Executive Officer, with effect from The development of operational tools February 2015: consequently the positions Creation of regional back office hubs to implement this strategy of Managing Director, Brands, in Asia (Singapore, Hong Kong) in the markets and Managing Director, Markets, will not be replaced after this date Single back office for Australia, THE MARKET COMPANIES New Zealand and Pacific Travel Retail MUST FOCUS ON: Merging the Marketing and Sales divisions for a holistic approach INTELLECTUAL PROPERTY Excellence in execution to the consumer to influence buyer decisions Creation of a single global hub at the point of sale PERNOD RICARD EMEA: for the legal management of all brands

THE HOLDING COMPANY Merging 42 markets into 10 Management IT MUST FOCUS ON: Entities Increased convergence Its governance functions (strategy, ROLL-OUT OF COLLABORATIVE mergers and acquisitions, finance, legal DIGITAL PLATFORMS Optimised organisation of the Group’s IT affairs, corporate communication, talent function based on two key objectives: management, social responsibility, etc.) Business Information Sharing • Global management of infrastructures and lighter internal reporting • Development of shared business Cross-group initiatives solutions with high added value (digital, luxury, MyBrands to facilitate the definition portfolio innovation/management, etc.) and implementation of brand strategies

Shared functions MyPortalTouch: for employees, (Pernod Ricard Research Centre, IT, etc.) a unique and 100% mobile portal to access all internal resources

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JULY 2013 2013 / 2014 LAUNCH OF THE DAT- DIGITAL ACCELERATION TEAM Bringing together more than 80 employees At a GlancE from diverse regions, brands and departments, — the “Digital Acceleration Team” project is launched in order to develop major digital initiatives that will support business. IN A CHALLENGING ECONOMIC

ENVIRONMENT, THE YEAR OCTOBER 2013 PREMIUM WINE BRANDS WAS MARKED BY MAJOR PROJECTS BECOMES PERNOD TO CAPTURE NEW GROWTH RICARD WINEMAKERS OPPORTUNITIES: The Brand Company that brings together Pernod OPTIMISATION OF THE GROUP’S Ricard’s priority wines ORGANISATION, INNOVATIONS, unveiled a new corporate name and a new vision – EXPANSION THROUGH TACTICAL “Leading Wine Innovation” – which clearly reflects ACQUISITIONS AND DIGITAL its ambition: to become ACCELERATION. the world leader in Premium wines.

FEBRUARY 2014 LAUNCH OF THE ALLEGRO PROJECT In its half-year results, Pernod Ricard announced the launch of “Allegro”, a project aiming to keep improving the Group’s operational efficiency. It aims to strengthen the Group’s organisation in order to generate future growth, by seizing new opportunities (particularly innovation and digital) and increasing the speed of execution (see opposite).

JANUARY 2014 2ND EDITION OF INNOVATION DAY

In Paris, Pernod Ricard held its second APRIL 2014 Innovation Day, an event dedicated to the press ACQUISITION and to investors, on the subject of “The Future OF KENWOOD of Conviviality”. The Group used the event to showcase its most recent digital advancements and Pernod Ricard strengthened its “Project Gutenberg”, which reinvents wine portfolio with the acquisition the at-home cocktail experience. of Kenwood, a Premium Californian wine.

MAY 2014 SUBSEQUENT EVENTS: 4TH EDITION OF JULY 2014 RESPONSIB’ALL DAY TEQUILA AVIÓN On 22 May, all of the Pernod Ricard became the Group’s employees took majority shareholder of the a break from their normal owner of the ultra-Premium work in order to dedicate tequila brand Avión, three a day to promoting years after the signature of responsible drinking. a joint-venture agreement.

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WITH 14 STRATEGIC PREMIUM AND PRESTIGE SPIRITS AND CHAMPAGNE BRANDS (THE “TOP 14”), 4 PRIORITY WINE BRANDS AND 18 KEY LOCAL BRANDS, PERNOD RICARD’S HOUSE OF BRANDS DRIVES THE GROUP’S INTERNATIONAL GROWTH.

The Group’s policy of continuous innovation enables it to expand its portfolio, whilst retaining the legacy and expertise of its brands, some of which have been in existence for a century or more. Offering the consumer new experiences without breaking with history and tradition, the portfolio’s brands are able to harness every opportunity for growth.

GUTENBERG REINVENTING THE COCKTAIL EXPERIENCE DEVELOPED BY BIG (BREAKTHROUGH INNOVATION GROUP), THE GUTENBERG PROTOTYPE IS REVOLUTIONISING THE “BAR AT HOME” CONCEPT. THIS DESIGNER LIBRARY, MADE UP OF “CONTAINER BOOKS” EACH HOLDING A SEALED BOTTLE OF SPIRITS, IS CONNECTED TO A SERVICE PLATFORM: FROM BASIC HOME DELIVERY TO A WHOLE RANGE OF TUTORIALS ABOUT MIXOLOGY. CREATING AND INVENTING COCKTAILS FOR FRIENDS IS BECOMING MORE INTUITIVE AND MORE ENTERTAINING.

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THIERRY BILLOT Managing Director, Brands Affirming the meaning and substance of our brands —

“Consistency, substance and value are the cornerstones of our approach to innovation.”

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For several years now, Pernod Ricard’s Premiumisation IN YOUR DAY-TO-DAY- strategy has been key to the Group’s successful growth. WORK, WHAT VALUES In challenging market conditions, is the Pernod Ricard AND PRINCIPLES DO portfolio still well-positioned? YOU TRY TO CONVEY? Thierry Billot : More than ever! Our annual results prove that Premiumi- For a Group like Pernod Ricard, sation is still relevant, as seen in the price effect of the Top 14, which is up where innovation is key, this 2% this year. Over and above the figures, every Pernod Ricard brand has firstly means encouraging our a reason for inclusion in our portfolio. Today we have a comprehensive teams to ignore the status quo, range, positioned around a robust “Premium/Super Premium” centre of and to go beyond their com- gravity which, once more this year and despite the challenging climate, fort zone in order to grow. has increased its importance in our net sales. In this respect, China is It also involves nurturing our an emblematic example: though the slowdown in growth and austerity differences in-house, in other measures have had a huge impact on the occasions and establishments words fostering diversity it- of choice where Prestige products are consumed – thus Martell, Chivas self, the mother of creativity, Regal or Royal Salute –, our brands located in the core of the market, in order to make more of a dif- which are more affordable for the middle classes, have performed better ference in the outside world. in this adverse environment. Such is the case, for example, of Noblige in Finally, our conviviality and the Martell range, and Ballantine’s Finest. simplicity are not incompat- Outside China, our brands are also perfectly positioned to capture growth ible with our high standards opportunities in Africa and the Middle East, or elsewhere, whether it be and the quest for quality. Chivas Regal, Martell or G.H. Mumm in the Super Premium segment, Jameson, ABSOLUT or Ballantine’s in the Premium segment, or Passport in the standard whisky segment. individual needs, in line with new consumer aspirations. We are currently The balance of our portfolio means we can remain dynamic on mature at the prototype stage, before moving on to experimentation in early 2015. markets that have shown positive signs of recovery this year. Thus the Gutenberg is also a symbol of the tangible results of implementing our Top 14 was up 9% in Germany, up 5% in the United Kingdom and up 4% innovation ecosystem. This ecosystem also includes the Kangaroo Fund, in France, thanks to the performance of brands such as ABSOLUT, allowing Group employees to suggest and develop breakthrough ideas Jameson, and Havana Club. The only cloud on the horizon is the thanks to this internal investment fund. Three ideas taken from the first United States, where intense competition on the vodka market took its edition are currently at the priming phase and should be available on the toll on ABSOLUT. market soon. Our philosophy regarding innovation is clear: it must be consistent with the history of our brands or our portfolio, to ensure that it Has the weaker performance of Prestige enhances their influence and substance to enable sustainability, and finally and Ultra Prestige brands in comparison to core products to create value and form part of the Premiumisation strategy. in the Premium and Super Premium ranges affected your approach in the Luxury segment? How is digital technology being incorporated No, of course not. Our approach in the luxury segment is to into the brand strategy? adopt a long-term view, and will not change at the first sign of economic We do not see digital technology as an objective in itself, but rather as uncertainty. The population of high-net-worth individuals, consumers an essential means of connecting our brands with consumers. It must be with access to over one million dollars in cash, is continuing to grow incorporated within a wider strategy for managing points of contact with by 1 million people every year. These consumers have extremely our consumers, which of course covers digital technology, television, press, high standards and are firmly attached to both the appearance and points of sale and bars. Today, no medium other than digital technology is the substance of brands. The exclusivity of the relationship, the stringent capable of delivering the right message to the right target at the right time. attention to detail both in terms of our brand codes and their presenta- Even so, digital space is infinite, and it is thus impossible to define your tion at every point of contact, the authenticity of our products’ history share of voice, in contrast to conventional media. It may also be seen as and the selective nature of our distribution are major strengths when too intrusive and aggressive. Content quality and delivery of a real service implementing our Luxury strategy. are thus essential in order to stand out in this space. This is one of the objectives of the DAT (Digital Acceleration Team) project. In the United States, the recent acquisition of Kenwood’s Premium Californian wines has strengthened The Allegro project, launched in February 2014, is designed Pernod Ricard’s position in the wine market. to help Brand Companies to refocus on their priority What is the Group’s specific strategy in this segment? objectives. Can you tell us a little more about First of all, it is worth remembering that the wine segment is their reorganisation and its effects over the coming year? complementary to our spirits segment. On many markets, Wines and This operational efficiency project is intended to increase speed, so that Spirits are consumed at the same occasions. The acquisition of Kenwood we can benefit from all growth opportunities more quickly. Each entity is is fully in line with the multi-origin strategy of our portfolio, one that is primarily focused on its priority objectives so as to avoid duplication and already made up of wines from Australia with Jacob’s Creek, from New dispersion. To this end, the responsibilities of Brand Companies are based Zealand with Brancott Estate, from Spain with Campo Viejo and from around the development of a comprehensive Brand Design strategy and Argentina with Graffigna. We needed a strong brand in the United States the development of operational Brand Delivery solutions. The fluidity of to boost our presence in that market, and to establish a comprehensive exchanges between Brand and Market Companies is crucial to the success wine portfolio internationally. of this reorganisation, and will be facilitated by the implementation of a new tool known as MyBrands. Specifically, this will provide markets with Pernod Ricard also relies on marketing innovations the strategic content and brand activation tools they need, and conversely, to promote growth. With this in mind, you recently it will feed back all local initiatives to brands, thus allowing filtering and developed a unique concept known as Gutenberg. for the best practices to be identified. Thus it really is a virtuous circle! Can you tell us about it? Finally, these priority objectives were closely calibrated with our business This is the first public, concrete achievement from the Breakthrough Inno- challenges. For that reason, the Marketing and Business Development de- vation Group (BIG), an organisation devoted to breakthrough innovation. partments were merged with the Holding Company, thus acknowledging Gutenberg is an “online liquid library” aiming to revolutionise the “bar at the need to integrate our actions targeted at consumers, and allowing us home” concept. It represents a decisive breakthrough in “the conviviality to refocus on our six strategic priorities, which include digital technology, of the future”: a fun online experience that is responsible and tailored to luxury and innovation.

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The global SpiriTs MarKet — category focus

BREAKDOWN OF INTERNATIONAL BREAKDOWN OF PERNOD RICARD’S VOLUMES(1) SPIRITS CONSUMPTION(1) AND GROUP’S POSITION(2)

WHITE SPIRITS WHITE SPIRITS AND RUMS AND RUMS NO.2 51% 28%

OTHER WHISKIES OTHER WHISKIES NO.1 18% 35%

SCOTCH WHISKIES SCOTCH WHISKIES NO.2 7% 17%

COGNAC AND BRANDY COGNAC AND BRANDY NO.2 14% 4%

LIQUEURS LIQUEURS NO.2 6% 7%

BITTERS BITTERS NO.2 2% 3%

ANISE-BASED SPIRITS ANISE-BASED SPIRITS NO.1 2% 6%

(1) Western-style spirits, excluding ready-to-drink, wines and wine-based aperitifs and champagnes. (2) Ranking among international groups.

EVOLUTION IN INTERNATIONAL SPIRITS CONSUMPTION BY PRICE SEGMENT(3) (3) Price for a 75 cl bottle. EVOLUTION IN VOLUME FROM 2012 TO 2013

AVERAGE ANNUAL EVOLUTION IN VOLUME FROM 2003 TO 2013 +10% +8.3% BETWEEN USD 26 AND 42 BETWEEN USD 42 AND 84 – – +4.4% +3.7% BETWEEN USD 10 AND 17 ABOVE USD 84 ABOVE BETWEEN USD 17 AND 26 +3.2% – +2.8% – – +2.0% +1.9% +0.6% PRESTIGE ULTRA-PREMIUM SUPER-PREMIUM PREMIUM STANDARD -1.2%

Examples Royal Salute, Martell Noblige, Chivas 12YO, Jameson, Ricard, 100 Pipers, of brands in the Martell XO The Glenlivet Nàdurra Havana Club 7YO Beefeater, Seagram’s Gin, Pernod Ricard ABSOLUT, Malibu portfolio Ballantine’s, Source: IWSR, data at year-end 2013. Kalhúa

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BrAnd CompaNieS The six Brand Companies are located in the home countries of the wine and spirits brands they produce. They are responsible for the worldwide strategy of the brands in their portfolio and, in conjunction with the Market Companies, its implementation in the markets.

THE ABSOLUT CHIVAS MARTELL HAVANA CLUB COMPANY BROTHERS MUMM INTERNATIONAL — — PERRIER-JOUËT — ABSOLUT CHIVAS REGAL — HAVANA CLUB MALIBU THE GLENLIVET MARTELL — KAHLÚA BALLANTINE’S G.H.MUMM JUAN GONZÁLEZ, — BEEFEATER PERRIER-JOUËT Chairman PAUL DUFFY, ROYAL SALUTE — JÉRÔME COTTIN-BIZONNE, Chairman & CEO — PHILIPPE GUETTAT, Chief Executive Officer KICKI ALM, LAURENT LACASSAGNE, Chairman & CEO NICK BLACKNELL, VP Human Resources Chairman & CEO CHARLES-ARMAND International Marketing Director KRISTER ASPLUND, ÉRIC BENOIST, DE BELENET, LARISA FUENTE, VP Operations Marketing Director Global Marketing Director Human Resources Director ABSOLUT GORDON BUIST, ÉRIC DOUVIER, ANDRÉ LEYMAT, XAVIER BEYSECKER, Production Director Human Resources Director Industrial Director VP Marketing RICK CONNOR, STÉPHANIE DURROUX, JULIÁN MACHÍN, ABSOLUT Public Affairs Director Strategy & Development Director Chief Financial Officer ROLF CASSERGREN, HERVÉ FETTER, SUSAN GUSTAFSSON, IVETTE MARTÍNEZ, VP Operations Finance & MIS Director General Counsel Sales and Marketing Director, Malibu & Kahlúa SCOTT LIVINGSTONE, BENJAMIN HALB, Cuba PAULA ERIKSSON, Human Resources Director Chief Financial Officer SERGIO VALDÉS, VP Corporate ALISTER MCINTOSH, MICHEL LETTER, Export Director Communications & CSR Manufacturing Director Deputy Managing Director, OLIVIER GASPERIN, AMANDA HAMILTON AOC Champagne VP Finance STANLEY, JEAN-MARC MOREL, CRAIG JOHNSON, General Counsel Deputy Managing Director, VP Marketing AOC Cognac PERNOD Malibu & Kahlúa VANESSA WRIGHT, RICARD STÉPHANE LONGUET, Communications Director WINEMAKERS MD, Challenger — Vodkas IRISH DISTILLERS JACOB’S CREEK LARS LJUNGHOLM, BRANCOTT ESTATE VP Legal & Regulatory — JAMESON CAMPO VIEJO Affairs GRAFFIGNA JONAS TÅHLIN, — MD, ABSOLUT ELYX ANNA MALMHAKE, — Chairwoman & CEO JEAN-CHRISTOPHE COUTURES, SIMON FAY, & International Marketing Director Chairman CEO ROSEMARY GARTH, CHRISTIAN BARRÉ, Corporate Affairs & Managing Director Pernod Ricard Communications Director Winemakers Spain CARLTON GREER, CHRISTIAN CAMPANELLA, Legal Director Human Resources Director PAT MAGEE, JULIEN HÉMARD, Managing Director Ireland Managing Director Pernod Ricard Pacific COLM MAGUIRE, Human Resources Director DAVE KLUZ, Strategy & New Business Director PETER MOREHEAD, Production Director LUDOVIC LEDRU, Chief Financial Officer JULIEN SOISSON, Chief Financial Officer BRETT McKINNON, Global Operations Director KATE THOMPSON, Legal, Corporate Affairs and Communications Director ANNE TREMSAL, Global Marketing Director

Due to the changes initiated by the Allegro operational efficiency project and announced after the close of the financial year, all management structures described in this report are presented as at 24 September 2014, the date on which it was filed with the AMF.

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ABSOLUT “In nurturing— artistic discourse, ABSOLUT maintains its distinctive identity”

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s the leader in Welcome to my apocalypse the Premium vod- At the 2014 Art Basel in Hong ka category and Kong, ABSOLUT further extend- the world’s fifth ed its commitment to transform- best-selling in- ative experiences in collaborat- A ternational spirit, ing with Naddim Abbas, one of ABSOLUT’s international part- the city’s hottest young artists. nerships with contemporary Abbas’ “Apocalypse Postponed” artists continue to be one of its art bar, designed in a cyber punk defining characteristics. motif with tones of concrete grey, was positioned on the 17th floor In nurturing artistic discourse and of a newly opened but not yet providing a forum for ideas that renovated tower. ABSOLUT ELYX stir the art world and society at Those entering the artist’s literal THE HIGH-END EXTENSION large, ABSOLUT maintains its and conceptual construction of a distinctive identity, engaging con- “safe haven” could complete their THROUGH ITS ULTRA-PREMIUM ABSOLUT ELYX, sumers, inviting exploration, dar- experience of animated sound- THE BRAND THAT TRANSFORMED VODKA ing transformation and commu- scapes, live music and theatrical INTO A PREMIUM PROPOSITION 30 YEARS AGO CONTINUES TO TRANSMIT ITS ULTRA-CHIC, nicating through a medium that performances with Abbas-de- AUTHENTICALLY LUXURIOUS CULTURE. speaks to everyone, everywhere. signed limited edition cocktails. IN 2013/2014, ABSOLUT ELYX Among the selections, the “Iron GREW +48% IN VALUE, RANKING Transform today… Rice Bowl”: puffed rice infused N°3 ULTRA-PREMIUM VODKA WORLDWIDE. and tomorrow ABSOLUT Vodka and White ABSOLUT’s on-going global Chocolate syrup stirred and served “Transform Today” campaign in- straight up in a metal rice bowl. spires global audiences to participate in a creative process, to Innovation driven break free from the idea that any- In the U.S., the introduction of thing is predetermined and to be the flavoured ABSOLUT Craft actors of their future through the limited edition for bartenders Scan this flashcode for photos and videos of the year’s events transformative power of artistic stirred new interest. Experimen- by ABSOLUT expression. It also embodies the tation also continued during the brand’s philosophy that moderni- year with ABSOLUT Amber, an sation must be rooted in authen- oak-aged vodka transcending the ticity and essential identity. traditional distinction between white and dark spirits. Created by It launched with an integrated exposing the original ABSOLUT communication campaign es- to a selection of Swedish, French tablishing the message “Trans- and American oak types (no less form Today”, and focused on than 8 different wood varieties), the personal transformation ABSOLUT Amber sits in a category of globally known artists in of its own. fields as diverse as technology (Aaron Koblin), music (Wood- Recognizing art works kid) and graphic novels (Rafael and words Grampá). ABSOLUT then went As part of its commitment to from saying to doing, through supporting contemporary artists, ground-breaking artistic collab- the brand celebrates the creative orations with Rafael Grampá, process through the biennial as well as ABSOLUT Art Bars ABSOLUT Art Award. In 2013, the installations within the frame- award for the first time recognised work of its on-going partnership two winners: contemporary artist with Art Basel, organiser of the Renata Lucas, as well as art writer world’s premier modern and con- and artist Coco Fusco. This new temporary art shows. ABSOLUT format reflects the brand’s support collaborates with selected artists for both ground breaking artistic 11.1 MILLION CASES at the Art Basel fairs to produce practice and the development of SOLD unique art bar installations. For critical art theory. each collaboration, the artist de- Its restless quest to foster crea- signs and installs the large scale tivity and challenge assumptions presentation and is given carte is inspired by the brand’s deep blanche to create an entire art traditions. Its DNA is imprinted -1% world, down to the cocktail nap- by its single source origin: every IN VALUE kins. Working with a mixologist, bottle of ABSOLUT Vodka is the artist also creates a series of made with the grains and waters signature cocktails that reflect from its home in Åhus, in south- the art bar’s theme. ern Sweden, ensuring consistent richness and flavour throughout +11% the world. IN VALUE IN THE UK

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Chivas “Chivas Regal— attracts urban, upwardly mobile consumers who identify with the brand’s values”

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ne of the world’s The finals in New York pitted most iconic and the winners of preliminary heats 4.6 truly global brands, held in 10 markets. Contestants MILLION CASES SOLD Chivas Regal’s were judged on their creativity persistent appeal and their knowledge of each O continues to attract era’s cocktail heritage, the urban, upwardly mobile consum- name, appearance and quality of -4% ers who identify with the brand’s their cocktail creation and their IN VALUE values of success and chivalry. ability to bring its story to life. The overall winner, announced Timeless appeal at an exclusive ceremony at Since its launch more than 100 the NoMad hotel in New York: years ago, Chivas Regal has laid American bartender, Masahiro claim to the title of the world’s Urushido, creator of “The +5% IN VOLUME IN AFRICA first luxury Scotch whisky, New Pal”, a classic cocktail for a defining a new level of prestige. timeless iconic brand. Reflecting its universal appeal to consumers in 150 countries, Dressed in style Chivas Regal today is a Pernod Extending its Made for Gentle- Ricard global icon brand that men collaborations with luxury epitomizes the style, substance craftsmen in packaging limited and exclusivity of a super- editions of Chivas Regal 12 YO, Premium spirits brand. the brand announced a new partnership during the year with In 2013-2014, Chivas Regal again Patrick Grant, a modern icon in demonstrated its ability to in- menswear design on London’s novate, engaging consumers Savile Row. to accelerate its growth in the emerging and mature markets The limited edition gift tin that have remained dynamic. transmits the innate style and sophistication associated with Historical values today’s modern gentleman and In the “The Barman,” the latest celebrates the shared values of instalment of the brand’s “Live Grant and Chivas Regal: mas- with Chivalry” campaign, “Game tering complexity through fine of Thrones” actor Charles Dance craftsmanship to achieve per- provides the narrative on a jour- fect balance in form and finish. ney through iconic cocktail eras HEART OF OAK of the past, and the various Growth and stability genres of bar patrons – as seen Emerging markets continued to A SPECIAL TRIBUTE TO JAPANESE CULTURE through the eyes of the person be increasingly important dur- AND TASTES, CHIVAS MIZUNARA BLENDS who serves them. In showcasing ing the year, including Turkey CAREFULLY SELECTED SINGLE MALT the timeless nature of Chivas (+17%), Africa (+8%) and Eastern AND GRAIN SCOTCH WHISKY, MARRIED and the values that enable us Europe, helping to re-balance IN JAPANESE MIZUNARA OAK. to “really get the measure of a the structural effect of market PERFECTLY BALANCED, THIS NEW REFERENCE man’s character”, the ad under- changes in China and Travel IS IDEALLY POSITIONED TO TARGET lines the brand’s association Retail. Marketing initiatives fo- A MARKET WHERE DOMESTIC WHISKY SHOWS with the modern gentleman’s cused on engaging consumers SOLID GROWTH OVER THE MEDIUM TERM. integrity and generosity of spir- digitally each day helped accel- it. Translated and adapted for erate growth in some dynamic key markets, the ad quickly and emerging economies, with vol- effectively connected with con- ume increases of +8% in Mexico sumers in 28 countries around and 9% in Brazil. the world. Other strong markets for the Scan this flashcode for photos Creating tomorrow’s brand included India (+9%) and videos of the year’s events classics and Australia (+23%), while by Chivas Chivas Regal knows the im- good performance in mature portance the barman’s opin- markets such as France (+6%), ion. With its global competi- Germany (+14%) and Japan (+8%) tion Chivas Masters, it asked confirmed the brand’s capabil- the world’s best bartenders to ity to innovate for success (see help find the next generation side box). of classic cocktails. Entrants were invited to create drinks inspired by four great cocktail eras: the Classic Age (1880- 1920), the Post War Boom (1945-1965), the Disco Years (1975-1990) and the modern Age of Revivalism.

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ONE HELPED TO CREATE BALLANTINE’S BRASIL, WHILE THE OTHER LAUNCHED IT ON HER HOME MARKET. TOGETHER, KATERINA AND ZÉLIE WERE THE ARCHITECTS OF THE PRODUCT’S SUCCESS IN FRANCE.

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KATERINA SYMIAKAKI, MARKETING MANAGER, CHIVAS BROTHERS ZÉLIE DANGUY JANNEQUIN, SENIOR BRAND MANAGER, PERNOD SA

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ith its exten- its product range to diversify sive range the times and places of con- Ballantine’s and strong sumption. The cultural fusion, Premium cues, launched in January in France “The brand successfully— reaches Ballantine’s and Spain, unleashed a series of W continued inspiring and inventive recipes – middle classes in emerging markets to introduce new consumers including the ‘Highland Samba’, as the demand for Premium products to Premium Scotch whisky. In the ‘Glen Rio’, and the ‘Caledin- emerging markets, the brand ho’ cocktails. The enthusiastic increases” welcomed consumers in rap- response helped inject new idly growing middle classes energy into well-established as they “traded up” from local markets while Ballantine’s spirits to international brands. Brasil’s innovative combination At the same time, Ballantine’s heightened the brand’s visibility ability to innovate has helped and enabled additional inroads re-energize mature markets in other markets in which it in which it is well-established, was rolled out, including its including through the launch of namesake country. Ballantine’s Brasil, a new product with a dynamic flair that has Elevate your game stirred excitement with consum- Ballantine’s was able to lever- ers in both new and traditional age strengths that include its markets. global range, a reputation for authenticity and strong Premium 5.9 Translatable appeal positioning to elevate the MILLION CASES Distilled in Scotland for over brand in markets around the SOLD a century, Ballantine's built on world. Blended from specially its reputation as a reference selected single malt and grain for Scotch whiskies throughout whiskies, its ultra-Premium -5% the world. Whether in Latin Golf limited editions performed VALUE GROWTH America, Eastern Europe, well, including in the Travel Angola or South Africa, Ballan- Retail channel. Ballantine’s 40 YO tine’s demonstrated its ability limited edition set a strong +13% to anticipate and position itself prestigious tone, further so- IN VOLUME to respond to consumers’ emula- lidifying the brand’s high-end IN EASTERN EUROPE tive lifestyle choices. The brand positioning. successfully used music, digital and other new media to communicate its values and point of view and proactively engage audiences. Growth during the year was particularly dynamic in Latin America (+7% in volume) as well as in Russia (+20%), Poland (+13%) and elsewhere TRUE in Eastern Europe. Ballantine’s TRANSMISSION continued to achieve good pen- — etration in several sub-Saharan Building on its Leave African countries (+47% in an impression campaign, Angola), providing a new stim- Ballantine’s continued to expand its footprint with the launch ulus for the brand’s growth. of Stay True, the campaign’s Through its strong Premium latest evolution with a strong positioning, Ballantine’s is also focus on music platforms and well positioned to benefit from engaging consumers through the growth of middle classes, appealing digital content. especially in large markets such Among the campaign’s shareable as India (+18%) and Brazil, where short films, renowned Spanish Scotch whisky already repre- professional skateboarder Kilian sents the highest percentage Martin stays true to his heritage and passion for gymnastics of imported spirits consumption. as he interprets Carmen’s “Toreador Song” in Buenos Aires’ Brazilian spirit classic Teatro Avenida. Stirring things up in mature markets, Ballantine’s ventured into new territory with its spirit drink, Ballantine’s Brasil. Created from a Scotch whisky blend steeped with Brazilian lime peel and a hint of vanilla, Ballantine’s Scan this flashcode for photos Brasil epitomizes the brand’s and videos of the year’s events innovation policy, broadening by Ballantine’s

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ith its global Sparkling innovation presence, an The staccato burst of exploding appealing, corks striking a wall-mounted Malibu dynamic drum kit set the tone for the image and introduction of the brand’s “Malibu has become— the essential W a strategy ground-breaking new Malibu of constant innovation, Malibu Sparkler. The rhythmic percus- ingredient for summery drinks is well-positioned for further sion from the corks firing from by riding a wave of popularity progress in both established their bottles, the music starting and emerging markets. An au- its beat… The blend of sparkling for coconut waters” thentic Caribbean drink, Malibu coconut water and Caribbean is the number one rum-based rum has proven an instant hit coconut-flavoured spirit in with young adults since its the world – sold in more than Pop Solo music video heralded the 120 countries, it is instantly beverage’s U.S. launch in Febru- recognisable by its signature ary. Bottled in both coconut and white bottle with its sunset- peach flavours, the refreshing silhouetted palm trees. In 2013/ new cocktail reflects the brand’s 2014, Malibu’s positioning as a success in both innovation and leader helped it ride a wave of Premiumisation, expanding popularity for coconut waters, Malibu into the multi-category propelled by consumer demand refreshment opportunity. Mali- for lighter drinks. The brand bu further displayed its capacity succeeded in connecting as the to innovate with the introduction ideal ingredient for summery of Flavour Sensations products drinks by reinforcing its social, in the spring, with Orange Float playful image and Caribbean as its newest addition. heritage.

Campaigning for summer 3.5 MILLION CASES In order to further reinforce its SOLD summer season identity, the brand designed a dedicated platform to capitalise on and play a greater role in the sum- -4% mer period. Malibu developed IN VALUE the Summer You campaign: a new look-and-feel, a set of TV commercials, films for online sharing, print material… +5% The campaign leveraged digital IN VOLUME media, with the “Best Summer IN GERMANY Ever Project” – a global content hub launched in June, showcasing a group of five cast-mem- TWO-WAY STREET bers experiencing their best — summer ever while travelling In China, exceptional around Europe and the US. reconnaissance by Malibu marketing and sales teams The “Best Summer Ever” identified opportunity spaces campaign builds on a world- in the market and transmitted wide cultural phenomenon of it to the global brand team at young adults sharing memo- The Absolut Company – who rable experiences from their responded with a new iteration summers via social media. of Malibu as a ready-to-drink The campaign’s 60-second cocktail, launched on the Chinese promotional film features market this spring in three different flavours: Sunshine One Republic’s “Life in Color” as Lemonade, Cool Coconut and the soundtrack. A 40-day reality Tropical Cola. The success of series is being aired on YouTube the brand in connecting with and shared across social media. consumer expectations is again Documenting a group of friends confirmed by the product’s on an unforgettable road trip, strong early performance. the series brings great summer experiences to life in a format that’s accessible to Malibu’s target consumers.

Scan this flashcode for photos and videos of the year’s events by Malibu

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brand built on train April, held in a former brew- dition, strong fun- ery in the city’s hip East end. Kahlúa damentals and an Front and centre amidst iconic image as Coffee Fest’s 20,000 revellers, “Kahlúa accelerated— its transition the world’s number the Kahlúa bar proved one A one coffee liqueur, of the most popular spots, from a winter-selling brand into Kahlúa is experiencing some particularly in the evening a year-round reference” important changes. The hero in- when visitors could blind-taste gredient in such classic cocktails as Kahlúa ingredients as well the White Russian, Black Russian, as enjoy Espresso Martinis, and Mudslide is being rediscovered Kahlúa Mochas and The in new markets, by new consumers Alvarez Brothers. In New York, and in new seasons. 2013/2014 the brand’s proposal for a new marked the year the brand began summer event, the Kahlúa to accelerate its transition from its Summer Shake-up, kicked off traditional winter selling season aboard the Intrepid Sea, Air & into a year-round choice, introduc- Space Museum. Guests were ing limited edition Pumpkin Spice, able to enjoy the frozen and iced an innovative new flavour for au- cocktail offerings followed by a tumnal enjoyment, and frozen screening of a summer movie and iced cocktails especially for classic, part of a series of unique summertime. For the brand that and non-traditional events in created the category, these inno- select spots across the U.S. vations manage to revitalise inter- In the meantime, Facebook est in coffee liqueurs, taking aim followers went up 30% in a few at an important trend: the advent couple of weeks, while activity of flavour. also spiked on the brand’s Pinterest, Instagram and Twitter Globally relevant accounts. Throughout the year, the brand followed its strategy of innovation, combined with offering consumers a rediscovery of simple classic cocktails that deliver great taste. Reflecting the increased White Russian popularity, Kahlúa Original posted growth in several key markets. The brand also exhibited strength outside the U.S., with strong growth in Japan (+8% in volume) following the launch of two Kahlúa flavours during the year. Kahlúa French Vanilla was introduced in October 2013 as a chain exclusive with volume retailer, Don Quijote, while Kahlúa Mocha was launched nationally WELCOME, in March 2014. Other markets GREAT PUMPKIN! tapping into the flavoured trend — were Australia and Canada, Standing at the intersection where limited editions were of two categories being steered by the trend launched, resulting in significant of flavourisation – coffee and holiday sales and generating liqueurs –, Kahlúa scored high news in the markets. Another with its U.S. introduction of market showing renewed inter- limited edition Pumpkin Spice. est is Mexico, home to Kahlúa’s The flavourful combination birth in 1936 in Veracruz, with of natural pumpkin, cinnamon, +9% in value. The international ginger and nutmeg, proved achievements of the brand are a popular new accompaniment, just in time for the American generating additional interest in fall holidays of Halloween Kahlúa activities and new prod- and Thanksgiving. uct launches in more markets outside the U.S.

Coffee, cocktails 1.6 -7% +16% and shaking it up! MILLION CASES IN VALUE IN VOLUME Kahlúa was the hit of the party SOLD IN THE UK as it connected with the young Scan this flashcode for photos and vibrant coffee culture at the and videos of the year’s events four-day London Coffee Festival by Kahlúa

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founder’s authentic The year marked the third edition voice, passionate of the highly successful interna- and knowledgea- tional short film competition, Jameson ble consumers and Jameson First Shot, in partner- the imaginative use ship with Academy Award-win- “As the leader— of Irish whiskeys, A of filmmaking all ning actor, Kevin Spacey and contributed to continued success his production company, Trigger Jameson continued to drive growth during the year for Jameson, the Street Productions. The competi- in the category” world’s leading Irish whiskey. tion offers three up-and-coming talents the opportunity to hone Positioned for growth their craft with the support and As the No.1 Irish whiskey world- guidance of the industry’s most wide (with 65% market share in accomplished professionals. volume globally), Jameson con- Starring in this year’s First Shot tinued to drive growth in the films: Uma Thurman. booming category. Jameson’s strengths, including quality dis- Lights, action, engage! tinctions such as 2013 Distiller Jameson’s innovative use of digi- of the Year, helped it climb to the tal and film is enabling the brand 18th position among top inter- to transform relationships with national spirits brands – which its fans. The compelling content represents a climb of 14 spots generated by Jameson First Shot between 2009 and 2013. helps foster dialogue and shape The U.S. market (up 9%) led viewpoints while providing real- growth across all regions dur- time analytics. One measure of ing the year. Increased volumes Jameson’s ability to connect: in Germany (+29%), or South its winning films have attracted Africa (+5%) helped drive global 15 million online views and sales close to five million cases, counting. a more than 10-fold increase since 1988. The brand also The spirit of Dublin built on last year’s success- Other notable activities included ful activities in Russia, France the release of a new Limited Edi- and South Africa while con- tion of the brand’s iconic bottle, tinuing its growth in other in celebration of St. Patrick’s Day, key markets, including for the fourth year running. The World Travel Retail, the UK, sights, sounds and atmosphere of Canada and Australia. Jameson’s Dublin were transmitted through +12% increase in value contin- the design by award-winning ued to outpace volume growth Irish illustrator, Dermot Flynn, (+9%), reflecting the effective in celebration of Jameson’s Premiumisation strategy. Irish character.

Tasteful craftsmanship Marketing activities reinforced Jameson’s differentiating qualities with target consumers, underlining its unique character through the “Taste” campaign, airing in markets around the world. The back to basics message, delivered in founder John Jameson’s invitational tone, JAMESON MEETS responds to a consumer focus CRAFT BEER on brands able to clearly and — rationally convey their qualities. Jameson collaborated with The campaign’s creative look Beavertown Brewery, a leading and feel uses graphic icons from British Premium craft beer the Jameson bottle to recall the micro-brewery, which produced craft involved in the making of “Ger’onimo”, a limited edition this world-class whiskey. of Jameson cask-aged stout, released in time for the day of Ireland’s patron saint. And now, the film As part of its Film Tribe Influenc- ers targeting strategy, Jameson continued its commitment to the craft of film, embodied through 4.7 +12% +13% MILLION CASES GROWTH IN VALUE IN VALUE IN events and activities like the SOLD THE UNITED STATES Jameson Cult Film Club, Done Scan this flashcode for photos in 60 Seconds and the Jameson and videos of the year’s events Empire Awards. by Jameson

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FOR SOME TEN YEARS, BARRY HAS BEEN PASSING ON TO BRIAN ALL THE EXPERTISE AS MASTER DISTILLER OF JAMESON. A KNOWLEDGE THAT BARRY ACQUIRED DURING 47 YEARS AT IRISH DISTILLERS.

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BARRY CROCKETT, FORMER MASTER DISTILLER, IRISH DISTILLERS BRIAN NATION, MASTER DISTILLER, IRISH DISTILLERS

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avana Club… mediate professional acclaim. The very name This new rum was awarded two Havana Club conjures up the gold medals by German tast- unique atmos- ing institute ISW. Havana Club “The brand’s— strategy focuses phere of Havana: Especial is set to grow rapidly H its music, its in Germany, where it was first on its Cuban origin and the worldwide dance, its culture… and, of course, launched, then in France and in popularity of the mojito” its legendary rum that the Cubans numerous other markets. proudly call “El Ron de Cuba”, The brand’s second key focus produced in keeping with the is to continue its strategy of true tradition of the island, to “Havanización”, a comprehensive offer an authenticity which has communication campaign that been largely responsible for the Havana Club has been conduct- brand’s influence over the last ing for several years to enable 20 years. Since Pernod Ricard people to discover and appre- took over the worldwide distri- ciate Havana, its people and its bution of Havana Club in 1993, atmosphere. Cuban culture was sales have multiplied 10-fold. The also at the heart of the celebra- Cuban brand is now the world’s tions marking the 20th anniver- number 3 international rum brand sary of the Pernod Ricard/Cuba and the number 1 rum in the Ron joint-venture, attended by Premium and Premium+ cate- its Cuban partners, customers gories. Today, Havana Club is the and members of the artistic world’s best known authentic community. And finally, another Cuban rum, and its products are highlight of the year was the exported to more than 120 coun- 10th Havana Club International tries, in particular in Europe as Cocktail Grand Prix, an event well as in the Americas. which brought together 47 bar- Thanks to an assertive marketing tenders from 42 countries to strategy, focused on the Cuban compete for the title of the best origin and worldwide populari- Havana Club Cantinero. The ty of the mojito, growth targets challenge: to create a unique were met in 2013/2014, with a cocktail for the future, which 5% increase in value. It should is worthy of a place along- also be noted that very strong side the great Cuban classics, sales of Havana Club were seen the mojito, the daiquiri and the in its two main export markets presidente. of Germany (+18% by value) and France (+15%), as well as double- digit growth in some thirty other countries, such as the United Kingdom and Mexico. The situation remained less favourable in the challenging markets of Spain and Chile. In the emerging countries of Asia, HAVANA CULTURA: however, the adventure is just be- PREPARING ginning, with the brand promoting FOR THE FUTURE the rum culture to bartenders and — exclusive spirits outlets. Largely unknown by the general public until “El Ron de Cuba”, between recently, Cuban culture tradition and modernity is now enjoying international Acknowledged by experts and recognition thanks to the Havana Cultura programme, bartenders alike as one of the created and supported best aged rums in the world, by Havana Club. Many Cuban Havana Club resolutely declares artists and designers from its ambitions: to remain faithful the worlds of music, dance, to the long-standing tradition literature and graphic arts of Cuban rum-making while be- – such as Danay Suárez or coming the icon of the island’s Gente de Zona – have risen contemporary culture. Firstly, in popularity thanks to this by taking an innovative ap- unique programme. proach, such as with the launch of Havana Club Especial. This new recipe was designed by 4 +5% +18% Havana Club’s master blend- MILLION GROWTH IN VALUE er, who developed a process of CASES SOLD IN VALUE IN GERMANY double-ageing in wooden casks Scan this flashcode for photos to produce a smoother, slight- and videos of the year’s events ly sweeter-tasting rum, to im- by Havana Club

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imited editions, this union once more, the brand redesigned pack- entrusted architects Dominique aging, offbeat Jakob and Brendan MacFarlane Ricard communications… with the design of a pair of sculpt- Although the ed carafes: one for the Ricard, “Between— creative daring L recipe for Ricard the other for the water. This pastis has not changed since stylish, limited edition duo was and respect for historical values, its creation in 1932, its legend available in France through Ricard ensures it stands out” continues to grow: a balance certain high-end wine merchants, between creative daring and bars and restaurants. respect for historical values, Spring 2014 saw the launch of Ricard ensures it stands out, a new collector’s bottle, created so as to remain the bench- by Isabelle Cornaro, to further mark brand for conviviality. showcase the brand. Discov- This aperitif from Marseilles has ered by the Ricard Corporate long been the world leader in Foundation, this young artist anise-based spirits. In 2013/2014, has designed a radiant, luxury it recorded a growth of 4% in product, which takes its inspira- value. Ricard also continued to tion directly from the decorative be the best-selling of all spirits motifs of the 1930s, paying trib- in France and Belgium, with ute to the era when the brand market shares of 46% and 68% first appeared. In a nod to the respectively. The Spanish mar- founder, it features the return of ket offers the brand significant the acanthus leaf motif, chosen opportunities for expansion, in 1932 by Paul Ricard himself with growth of +3% by volume to adorn the label of his bottle. having been recorded in that And as mixing a pastis is an art country. The highly competitive form, Mathieu Lehanneur de- aperitifs market has been hit signed a new range of serving by further tax increases on items – a glass and a carafe – spirits in recent years, particu- designed to lead the different larly in France and Belgium. In stages of the Ricard ritual. The order to retain its position as foot of the glass has thus been the market leader, Ricard pays designed to hold one measure close attention to shifts in con- of Ricard, with 5 measures of sumer expectations and adapts water in the body. its public communications accordingly.

Returning to our roots: the refreshing Ricard taste One year ago, Ricard launched a new campaign, “Jaune avec un grand R” (“Golden with a capital R”), a rather cheeky and humor- ous proclamation of its mar- RICARD, A PIONEER ket-leading position, its energy OF CREATIVE and its creativity. Designed in COMMUNICATION the form of calligrams – in line SINCE 1932 with Ricard’s longstanding ad- — vertising tradition –, the images In addition to having invented symbolise the brand’s iconic the pastis which bears his attributes: gold, the brand’s em- name, Paul Ricard was also blematic colour, R, for its crea- a pioneer of product-based tor Paul Ricard, the classic blue communication. Since 1932, the history of Ricard has background, the golden balloon been marked by promotional glass. This year, Ricard has tak- items that bear witness to its en the floor again with a second constant evolution. Water jugs, work of art, which celebrates glasses, trays, etc. Those many the characteristically refresh- items continually reinvent the ing taste of Ricard, that of cold Ricard ritual, enriching the water and ice-cubes at the heart brand’s epic tale of advertising of the Ricard ritual. over the decades.

Creativity - the lifeblood of the brand As the source of inspiration for 4.8 +4% 41.5% MILLION IN VALUE MARKET SHARE OF many designers for more than CASES SOLD ANISE-BASED SPIRITS 80 years, Ricard symbolises Scan this flashcode for photos IN FRANCE* the sublime chemistry of pastis and videos of the year’s events * Nielsen, FYTD 2014. and water. In order to showcase by Ricard

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ith its in- Trendsetter ternational Beefeater special editions Beefeater fame as an helped create passion for the influential, brand and infuse the energy “Beefeater has— effectively leveraged fashionable, behind the rediscovery of gin. W vibrant city, The embodiment of contempo- the global appeal of London to lead London’s creative spirit con- rary cocktail culture, Beefeater a resurgence in gin consumption” tinues to generate excitement 24 super-Premium edition regis- throughout the world and to tered its fifth year of very strong inspire Beefeater. Building on growth while the brand’s new its unique identification with small-batch, hand-produced London, where its record of Burrough’s Reserve expanded distilling authentic London gin into 10 markets in its first year in its city of origin is second to as an ultra-Premium gin. none, Beefeater has a strong platform to reinforce its contem- The year also saw a class of true porary, dynamic feel, particularly connoisseurs of fine spirits – and in appealing to the key young key consumer influencers – take adults consumer audience as a on the global challenge of creat- trendy, lively choice. ing the world's most outstanding cocktails in Beefeater’s third Through a combination of Global Bartender Competition. events, advertising and special Leading bartending talents from editions, the brand has effective- 26 countries demonstrated their ly leveraged the global appeal creativity and mixology skills of London to lead a resurgence at the finals in London, won by in gin consumption. Jason Williams of “The Rook” bar in Sydney, Australia, with his Bringing The Spirit ‘Werewolves of London’ cocktail. of London alive He impressed the judges with his A key event during the year came blend of Beefeater 24 gin, orange with the opening of “Beefeater and peach liquor, lemon juice and London – The Home of Gin”, frankincense bitters, finished off London’s first ever gin distillery with a green tea mist. visitor centre. This new site ampli- fies Beefeater’s unique position as the last traditional gin brand still distilled in London, carrying on a tradition since the 1860s.

Visitors to the distillery, located in Kennington, London, are invited on a walk through the history of London gin, before visiting the still house itself, smelling and touching the botanicals that make Beefeater’s London Dry Gin LONDON, unique. The visit is concluded by MY HOMETOWN a tasting of the finished, award- — winning product. In transmitting the London aura in overseas markets, Building the world of gin Beefeater’s innovative digital As the category’s No. 2 Premi- advertising campaign, um gin, Beefeater is leading a “My London”, brings London to life by featuring real process of seeding into markets Londoners who reveal the around the world, such as Eastern secrets of their city. In sharing Europe (+5% in volume) or Greece what they love about their (+30%). hometown with people around the world, these ambassadors Beefeater also continued to show reinforce the iconic image its resiliency with its ability to of Beefeater’s physical generate growth even in mature and spiritual home. markets. In its home market, the United Kingdom, Beefeater posted +23% growth. In Spain, at a time when all other spirit catego- 2.6 STABLE +5% ries are in decline, the gin catego- MILLION CASES IN VALUE IN VOLUME SOLD IN EASTERN EUROPE ry is increasing and Beefeater has become the country’s number Scan this flashcode for photos one spirit brand, with more than and videos of the year’s events one million cases sold annually. by Beefeater

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bove all, the histo- This is a product which is de- ry of the house of signed to appeal to new connois- Martell is one of seurs of cognac, and particularly to Martell both a terroir and Russian consumers, who are eager a man of excep- to purchase prestige products that “The oldest of the— great cognac Houses A tional character: its are made in France. founder, Jean Martell. Launched continues to recruit new consumers” this year in honour of the brand’s Travel Retail: a showcase creator, Martell Caractère is a for excellence cognac for those who embody Other highlights of the past year the courage and determination include the Travel Retail launch of Jean Martell, who overcame all of the Martell Cordon Bleu obstacles to create what is now the “Tribute to Cellar Masters” limited oldest of the great cognac Houses. edition and the Millésimes 1971 In fact, it is in this spirit of conquest Collection, a selection of prestig- that the brand has chosen this ious eaux-de-vie which have been blend to revitalise its sales in the aged in the “Chais de la Coquille”, United States, the world’s largest the House’s oldest cellars, for importer of cognac. Numerous over 40 years. Created as a limited celebrities from the worlds of arts series, it embodies the exception- and business attended the launch al qualities of elegance, balance of this cognac in Los Angeles in the and complexity that characterise autumn of 2013, and it is already Martell cognacs. well recognised by connoisseurs. The launch event offered the opportunity to show the preview of Martell Icons of Caractère, a short film produced in collaboration with American actor Andy Garcia. Martell is also continuing to expand into new markets, particularly in South Africa and Nigeria.

Recruiting new consumers Launched in China in September 2013, Martell Distinction is specifically designed for the Chinese market, as the ideal accompaniment to a meal. In creating this CLOSE TO 300 new product, Martell drew upon YEARS OF HISTORY the full range of the House’s — expertise, and upon its absolute In 2015, the Martell house mastery of wine-making tech- will celebrate its tercentenary; niques, in particular. The result is three hundred years of history an exceptionally aromatic taste, which is inextricably linked to the town of Cognac, its terroir which complements the flavours and its people. In preparation of Asian cuisine perfectly. This for these birthday celebrations, addition to the range has helped Martell has launched the brand to consolidate its a “Grand Récolte” amongst position in China, despite the cognac enthusiasts, to research austerity measures which have and compile previously unseen affected sales of top-of-the range archive documents. products, and to continue to Adverts, letters, account books, photos, promotional items attract new consumers. and testimonials have been gathered throughout this The art of living process, to produce an ‘à la française’ outstanding archive that As the very embodiment of illustrates the social, economic French flair and elegance since and industrial history and the its foundation, the House chose importance – even then! – to launch Paris Style, its first lim- of local and international partners. ited edition Martell VSOP, which takes its inspiration from the Parisian district of Saint-Germain- des-Prés, and from the artistic, 1.9 -9% NO. 2 intellectual and cultural life of the MILLION CASES IN VALUE COGNAC BRAND IN French capital. The spirit of the SOLD VOLUME AND VALUE, INTERNATIONAL LEADER Left Bank is also reflected in the IN THE XO CATEGORY label, with the symbolic reference Scan this flashcode for photos to the iconic Morris columns, which and videos of the year’s events are famous throughout the world. by Martell

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FROM PRODUCTION TO COMMUNICATION… AT OPPOSITE ENDS OF THE CHAIN, FRÉDÉRIC AND CARMEN ADD VALUE TO THE LEGACY OF THE HOUSE OF MARTELL.

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CARMEN GUERRERO, EXTERNAL COMMUNICATION PROJECTS COORDINATOR, PERNOD SA FRÉDÉRIC POTIER, PLANT MANAGER, MARTELL, MARTELL MUMM PERRIER-JOUËT

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ne of the prestige Leading the category references in the Number one in the U.S., the The Glenlivet Pernod Ricard world’s largest single malt mar- portfolio, The ket, The Glenlivet continues to “The Glenlivet— is well-positioned Glenlivet contin- lead the category’s global boom, O ues to help lead growing at a double-digit pace to continue to lead the global ascendancy a global “malt boom”. Founded in over 40 countries, many of of single malt whisky” in 1824 by George Smith, The them new to single malt. The Glenlivet is crafted in the remote brand’s quality, authenticity and Livet Valley at the heart of Scot- engaging brand activations are land's Speyside region, considered credited with having attracted to be the premier region for Scotch more new consumers than any whisky. other single malt, reinforcing its As demand for single malt reputation as “the single malt Scotch whisky continued to that started it all.” soar in 2013, The Glenlivet also The Glenlivet showed particu- further strengthened loyalty lar strength during the year in among its already passionate markets such as South Africa network of ambassadors, the (+34%), the UK (+10%), Canada “Guardians”, through imaginative (+13%) and India (+52%), where new consumer interactions. it became the leading single malt. The brand also demonstrated continued resiliency 981 in Taiwan (+1%) and Germany THOUSAND CASES (+4%). Strong performance of SOLD innovations helped to capture value, including the Travel Retail exclusive The Master Distillers +8% Reserve (+22%). IN VALUE Strong assets Combined with its internation- +5% ally acclaimed, award-winning IN VALUE IN taste, and the on-going pop- THE UNITED STATES ularity of its super-Premium, ultra-Premium and Prestige references, The Glenlivet is Sharing knowledge well-positioned to build on its Leveraging trends in favour of momentum and continue to craftsmanship and authenticity, lead the global ascendancy of the brand built on the success of Premium+ single malt whisky. last year’s The Glenlivet Alpha “mystery” whisky launch by turning to its followers for help in the creation of its new limited edition. Combining innovation in both RETURN product development and digital TO THE ROOTS interaction, The Glenlivet invited — its ambassadors to participate Another example of in selecting its newest crafted The Glenlivet’s success was the strong reception for its new product through a series of specialist offering, Nàdurra whisky fairs and tastings. The Oloroso. The first major hugely popular The Glenliv- expression to be matured et Guardians Chapter limited purely in rare sherry casks, edition was an instant collec- Nàdurra Oloroso is produced tor’s item – and met with the without chill-filtration to deliver full approval of Alan Winchester, more body and a richer texture, the master distiller. staying true to the style of whisky as it was enjoyed in the The campaign extended The 19th century, and capitalising Glenlivet’s tradition of valuing on the trend for quality, crafted its direct relationship with con- brands with a true heritage. sumers through live events and digital interaction. The brand’s 300,000 online followers include a core of single malt connoisseurs who engage unreservedly in the on-going global conversation, asking questions and expressing Scan this flashcode for photos their opinions, generating loyalty and videos of the year’s events and preference for the brand. by The Glenlivet

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utside of France – at the Imbibe Sommelier Wine the main market Awards for its G.H.MUMM for G.H.MUMM Rosé and a Gold Medal at G.H.MUMM champagnes –, the San Francisco Internation- the brand is con- al Wine Competition for its “The ‘red sash’— brand has grown O tinuing to grow, iconic G.H.MUMM Cordon maintaining its position as the Rouge cuvée. to play an essential part third-largest international cham- in celebrations” pagne house. The same ranking has also been achieved in Asia, a region with strong potential for the brand, which posted solid value growth in the region in 2013. G.H.MUMM has seen its sales rise in 2013/2014 due to the exporting of its champagnes to Australia, Japan and Singapore.

The brand synonymous with success The “red sash” brand continues to be known for playing its part in celebrations. A partner to Formula One Grand Prix events 638 since 2000, the G.H.MUMM THOUSAND CASES Cordon Rouge jeroboam has SOLD WORLDWIDE come to be considered as the icon of “shared victory”. Pulling in close to two billion viewers around the world, the cham- +2% GROWTH IN VALUE pagne ceremony is a high point in a competition conveying values that the brand holds dear: passion and the quest for performance. As a symbol +41% of its pride in continuing this IN VALUE tradition, G.H.MUMM unveiled IN AUSTRALIA* its new victory bottle at the 2013 Monaco Grand Prix; a G.H.MUMM Cordon Rouge jeroboam with a contemporary REINVENTING design. TRADITION — A legacy of excellence Following an initial In order to offer exclusive expe- collaboration with designer riences to champagne lovers, Patrick Jouin in 2011, G.H.MUMM endeavours to G.H.MUMM asked Ross present different Prestige Lovegrove to revisit the ritual cuvées, such as the most recent of sabrage, a long-practiced 2006 Millésimé, an exceptional technique for opening a champagne bottle, which blend created by Didier Mariotti, is attributed to Napoleon’s the House’s Cellar Master since cavalry regiments. The famous 2006. Twelfth in a line contin- designer has therefore turned uing the wine-making legacy the sabre into a new and for almost two centuries, he is contemporary object, with responsible for blending each smooth and fluid lines. A way vintage in the purist style of of uniting two worlds: that of a G.H.MUMM, by drawing on his historic champagne house that wealth of experience and his is always on the leading edge and that of an internationally personal touch. The brand’s renowned designer, a key know-how is renowned among influence on aesthetic the world’s leading experts expression in the 21st century. in the field – in 2013/2014, G.H.MUMM champagnes were awarded 19 prizes in the world’s most prestigious tasting competitions. Most notably, in 2013 the house won the Internation- al Wine Challenge (IWC) Trophy Scan this flashcode for photos for its Blanc de Blancs Mumm and videos of the year’s events * Nielsen, 12-month value, end of June 2014. de Cramant cuvée, a Gold Medal by G.H.MUMM

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errier-Jouët is going Time, the installation presented by through something Studio Glithero at the last Design Perrier-Jouët of a golden era, or Miami/ show, the House was there a “belle époque”, as once again this year, presenting “The House— reaffirms its style, the French might a piece by artist Simon Heijdens, P say – not only has entitled Phare n° 1–9. This pro- which has long been associated the brand consolidated its position ject was created as an homage to with artistic creation and as the world’s third best-selling nature, which has inspired the brand for its Prestige cuvées, it spirit of the champagne house artisanal craft” has recorded fine performances for more than a century. This was across its historic markets, such a fantastic opportunity to highlight as France, the USA, Italy and, of Perrier-Jouët’s history and its two- course, Japan, which has become hundred-year-old association with the brand’s largest export mar- Art Nouveau, a style with aesthetics ket. Characterised by its historical and emotion at its core. attachment to Art Nouveau, the House has remained faithful to its A member of the elite fundamentals, showcasing on the In the same vein, Perrier-Jouët bottles of its Belle Époque cuvée took part in Monaco’s prestigious the famous anemones created Rose Ball with its Belle Époque by Emile Gallé in 1902 – a motif Rosé 2004 cuvée. This charity inspired by Japanese floral prints gala evening, first hosted almost and designs. They represent a key 60 years ago by Princess Grace of element of the new Perrier-Jouët Monaco, strengthens the historic Grand Brut design, launched in relationship between the princi- autumn 2013. This reaffirms the pality and the champagne house. champagne House’s style, which It is a prestigious partnership that has long been associated with ar- forms part of a long tradition, and tistic creation and artisanal craft. Perrier-Jouët has been associated with many great princely and royal events since its creation. 272 THOUSAND CASES SOLD WORLDWIDE +16% IN VALUE

No. 3 CHAMPAGNE HOUSE IN THE USA* PERMANENCE AND PATIENCE Art Nouveau: everyday — beauty and emotion Undeniably, one of the great True to its penchant for art, in 2013, defining qualities Perrier-Jouët also unveiled the of the Perrier-Jouët house is consistency. Over two InBloom Fresh Box case, the result centuries, its heritage has been of its collaboration with Benjamin passed down by just seven Graindorge, an up-and-coming cellar masters, and the current French designer. Fascinated by incumbent, Hervé Deschamps, the richness of nature, Benjamin has held the position Graindorge has created an ex- for over 30 years. In 2013, ceptional case, with its refined, he launched his eighth vintage, contemporary lines, inspired Belle Époque 2006. Matured by the buds and fluid forms of for almost six years under the chalk of the House’s historic Art Nouveau. In keeping with the cellars, this new cuvée is idea of a protective cocoon, the the quintessential expression InBloom Fresh Box resembles of Perrier-Jouët’s style. a flower that is ready to bloom, delicately enveloping the Grand Brut and Blason Rosé cuvées. Art Nouveau was also the focus of the 9th Design Miami/ show, the world’s largest design and modern * International champagne houses, volumes. art fair, bringing together collec- Scan this flashcode for photos tors, gallery owners and art critics and videos of the year’s events from across the globe. After Lost by Perrier-Jouët

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eginning where A striking new bottle the new other whiskies offering contained a special end is the defining batch of Royal Salute 21 Year Old Royal Salute signature of Royal designed to be highly sought- Salute. The Scotch after by whisky collectors and “The brand focuses— on increasing B whisky brand takes connoisseurs around the world. its name from the Royal Navy's its footprint beyond China through traditional 21-gun salute that has Polo events generate its international approach been fired to honour dignitaries, international appeal sovereigns and nations since Royal Salute continued its spon- to luxury markets” medieval times in the United sorship of the world’s most pres- Kingdom. Long associated tigious international polo events with prestigious events, the first through its Royal Salute World bottles of Royal Salute were Polo Series, held across the created for the coronation of Americas, Asia, Pacific, Europe Queen Elizabeth II in 1953. In and the Middle East. Among 2012, Royal Salute became the the year’s highlights was the first ever brand to be officially December 2013 Maharaja associated with the Royal Gun of Jodhpur Golden Jubilee Cup Salutes at the Tower of London, tournament, played in the foot- as part of a long-term partnership hills of the Umaid Bhawan Palace with the independent charity in Jodhpur, India, at which Royal Historic Royal Palaces. Salute celebrated its fourth year as sponsor. Spectacular images from Expanding range the tournament were captured by Over the year, the brand focused German model and photographer on increasing its footprint beyond Johannes Huebl, who shared a its largest market, China, where digital record with his 150,000 it is the No. 1 Prestige whisky. followers via Instagram. In July Through its international ap- 2014, the brand was on hand at proach to luxury markets, Royal Guards Polo Club as the official Salute has succeeded in building sponsor of the Audi International a strong presence in South Korea Polo world-class match between 183 (+12%) and Vietnam (+7%), while Argentina and England for one of THOUSAND CASES broadening its presence in new polo’s most prestigious trophies, SOLD and emerging markets around the the Coronation Cup. The brand world such as Brazil. Travel Retail has also been a sponsor of the (+9% in value) also represents a Sentebale Royal Salute Polo Cup, key channel. the charity founded by England’s -8% VALUE GROWTH The brand also has expanded Prince Harry and Lesotho’s Prince by widening its range, such as Seeiso. The organisation works through the introduction of its with local grassroots associations Diamond Tribute 60th anniversary to help some of Lesotho’s most +14% IN VALUE IN ASIAN edition and Limited Edition vulnerable children. TRAVEL RETAIL Polo Batch, in recognition of the brand’s association with world polo. In extending its partnerships with luxury retailers, the brand has further broadened its ability SENSING LUXURY to connect directly with high net — worth consumers. In Shanghai, Royal Salute’s “Alchemy” exhibition of sculpture, film, food and music Gateway to luxury: polo celebrated the brand’s special Being the king of sports and the artistry through a series sport of kings, the power and of immersive spaces, grace of the game of polo, the each representing one skill of the players, integrity and of the brand’s signature blends. honour are values which are also Each blend’s space transmitted inherent to Royal Salute whisky. the sights, sounds, tastes, smells and feel that inspired it, The brand’s World Polo platform providing guests now extends to 14 countries. Royal with an interactive sensory Salute’s commitment is personi- experience of discovery. fied through its ambassador and the world’s leading polo player, Argentine Facundo Pieres, who appeared in a new print advertising campaign during the year. In December, Royal Salute celebrated its commitment to polo with Scan this flashcode for photos the launch of its first-ever World and videos of the year’s events Polo Limited Edition bottle. by Royal Salute

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or a brand that has an opportunity to create their earned more than own personalised wines and to Jacob’s Creek 7,000 medals over work one-on-one with an expert the last 30 years, and winemaker. Piloted in Auckland, “To hold its position— as a pioneer been ranked one New Zealand, this innovative ap- F of the world’s most proach to consumer engagement in the Premium wine landscape, the brand admired wine brands,(1) Jacob’s had an extremely positive impact, taps into new consumer trends” Creek shows a remarkable ability with 86% of attendees reporting to continue to deliver innovation. that the experience increased Whether it’s launching a new their consideration of the brand. brand identity, partnering with Attendees at the Blend bar one of tennis’ greatest champions created more than 1,200 person- or creating culinary matches with alized wines in under 2 months, some of Asia’s most prestigious exceeding all expectations. The chefs, the brand’s year was de- most popular red and white fined by the exploration of new wines created by consumers opportunities. Throughout all this, were then produced for the Jacob’s Creek has always stayed New Zealand market. true to its winemaking philosophy, remaining firmly connected with Open personality its rich heritage and provenance, In addition to its high-profile whilst creating high quality con- tennis sponsorships, including temporary Australian wine styles the Australia Open, Jacob’s Creek that express true varietal character. continued to score points with This approach has helped Jacob’s fans of both wine and tennis Creek maintain a top position in through its popular Open Film many markets, including its home Series, featuring four-time market, Australia. Australian Open men’s singles champion Andre Agassi. In the Ground breaker third instalment, Agassi takes To hold its position as a pioneer viewers on a journey across in the Premium wine landscape, America, sharing an intimate Jacob’s Creek must keep lead- look at his own provenance – the ing wine innovation, tapping into people and places that helped to new consumer trends and daring shape his character. This year the to explore uncharted territory. In Open campaign benefited from Japan, as a follow up to the success- increased exposure with nearly ful launch of WAH white in 2013, 700,000 views of the Open films Jacob’s Creek’s collaboration with and digital reach of 10 million. renowned chef Toru Hashimoto resulted in the creation of the in- (1) Drinks International Magazine. novative WAH Red. The master chef travelled to Australia’s Barossa Valley, the home of Jacob’s Creek, to work directly with winemakers to create the perfect blend to accompany his dishes, prepared in the Edo-style Kaiseki tradition. A NEW BRAND ICON The WAH range has exceeded — its sales target by more than 60% With the first brand refresh in Japan, which has grown to be since 1976, Jacob’s Creek the world’s 15th largest wine con- sought to connect its sumption market. A second col- contemporary style with its laboration with internationally-re- rich heritage. The new brand icon embodies the Jacob’s nowned Thai chef Ian Kittichai has Creek story – with vine leaves resulted in the creation of Lamoon, on either bank of the creek, the world’s first wine developed which flows from its humble specifically for Thai cuisine. beginnings and ultimately into a wine glass. The elegant and Knowing what you want confident visual refreshes the The brand also responded to a brand’s clarity, whilst proudly growing consumer demand for celebrating the legacy and craftsmanship of its history. sweeter style wines by creating a wine that offers a perfect balance of sweetness and acidity, with a light and fresh finish. Twin Pickings, 6.2 -6% +23% with a drop of Moscato Bianco, MILLION CASES IN VALUE IN VOLUME hit retailers in the UK in July. SOLD IN INDIA The brand’s latest experiential Scan this flashcode for photos activation, the “Blend” pop-up and videos of the year’s events bar, provided consumers with by Jacob’s Creek

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rue to its reputa- ensures that all of the distinctive tion as a pioneer Marlborough flavours found in Brancott Estate of Marlborough a full-strength wine are retained. Sauvignon Blanc, Crafted with grapes harvest- Brancott Estate ed earlier in the season, when “The brand— constantly works T continues to push sugar levels are naturally low- the frontiers of winemaking. er, Flight Song retains true on improving its winemaking processes The launch of ultra-Premium Sauvignon Blanc freshness and its references” Brancott Estate Chosen Rows and ripe flavours. Flight Song Marlborough Sauvignon Blanc Marlborough Sauvignon Blanc 2010 further establishes the 2012 won Gold in the Sauvi- brand’s Premiumisation. The gnon Blanc category of the New brand also followed up on last Zealand International Wine year’s success with Brancott Show. Its March 2014 launch Estate Flight, its early harvest, in North America helped drive low alcohol innovation, by intro- strong performance in the U.S. ducing Brancott Estate Flight (+17%) and Canada (+7%). Song in the U.S. It responds to consumer demand for a lighter style that doesn’t compromise the wine’s taste and flavour complexity.

The Chosen Rows journey The creation of this new benchmark began in 2008. A large team – including experts in winemaking, viticulture, as well as research and development – 2.1 studied the fundamentals MILLION CASES SOLD of Sauvignon Blanc from every angle and managed trials across 14 specially selected Marlborough vineyard blocks. +9% The team consulted with a IN VALUE Professor of Oenology at the University of Bordeaux, Denis Dubourdieu, one of the world’s most renowned Sauvignon +7% Blanc experts, who came to IN VOLUME IN THE U.K. New Zealand in February 2009 to inspect the vineyards and discuss winemaking processes. As the project moved toward culmination, numerous tastings were held with media and trade PIONEERS professionals, the key ‘gatekeep- OF MARLBOROUGH ers’ who influence and speak to — the ultimate consumers. The Building on its original result of these collaborations Marlborough Sauvignon Blanc is an award-winning fine wine story, Brancott Estate of great palate weight and celebrated its pioneering role texture that conveys its sense through the rollout of a global advertising of place through its signature campaign – “Pioneers”. fruit expression. This year, the This campaign portrays super-Premium wine launched chalkboard artists creating with great success in the U.K., innovative drawings, further reinforcing Brancott evoking the pioneering spirit Estate’s position as the number of the winemakers who one New Zealand wine brand by created the first Marlborough volume in that market. Sauvignon Blanc in an area considered too cold to grow grapes. Fresh taste, full flavours With Flight Song, wine lovers in the U.S. now have the freedom to enjoy the full flavour of the original Marlborough Sauvignon Blanc but with 20 percent fewer calories than a typical wine Scan this flashcode for photos of the same varietal. Brancott and videos of the year’s events Estate’s winemaking approach by Brancott Estate

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MIRIAM AND KENNY PUT ON A UNIQUE EVENT TO CELEBRATE THE TASTE AND AROMA OF CAMPO VIEJO, GIVING BRITISH WINE-LOVERS AN AUTHENTIC SPANISH EXPERIENCE… IN LONDON.

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MIRIAM ECEOLAZA ZABALZA, GLOBAL MARKETING DIRECTOR, PERNOD RICARD WINEMAKERS SPAIN KENNY HYSLOP, HEAD OF EXPERIENTIAL MARKETING, PERNOD RICARD UK

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ith its strong brand Number one Rioja identity and capabil- The brand’s reputation for quali- W ities for innovation, ty has contributed to three years Campo Viejo, Pernod Ricard’s of double-digit growth, making Campo Viejo flagship Rioja wine, continued it Spain’s best known wine to lead the market. Through brand, the world’s No. 1 Rioja an innovative global experien- brand and a leading brand in — tial campaign, Campo Viejo’s the U.S. Campo Viejo also con- Spanish expression came alive tinues to diversify and grow in in cities around the world, new markets, including Russia supported by the launch of the (+45%) and Canada (+43%). Limited Edition Reserva, with Success for the brand doesn’t label design by street artists stop there: not only is Campo Okuda and Remed. The brand Viejo the UK’s No. 1 Rioja 2.1 also strengthened its environ- brand,(1) but Campo Viejo MILLION CASES SOLD mental credentials with the Tempranillo has been ranked release of its first organic wine, the No. 1 red wine in the UK Ecológico. and the 3rd biggest-selling wine +10% in the UK by value.(2) Campo GROWTH Spanish spirit in the street Viejo also extended its leader- IN VOLUME Building on the momentum of its ship in key international mar- AND VALUE prior year launch, Campo Viejo’s kets, building on innovations “Streets of Colour” campaign such as the launch of Garnacha +43% went truly global in 2014, ex- Rioja. Considered the fruitiest IN VOLUME IN panding into new regions includ- expression of Rioja, Garnacha CANADA ing: Miami (wall painting), Oslo is grown from Campo Viejo’s (school art contest), Dublin (lo- old vines in the historic terroir cal urban artists and tapas) and of Rioja Baja, traditionally the Toronto. In Brussels, more than warmest part of the region. 20,000 consumers participated in an itinerant food truck-painting event in March. At the April (1) By volume and value AC Nielsen 26.04.14. event in Barcelona, the team (2) Growing at 25.2% MAT AC Nielsen engaged 20 journalists in the 26.04.14. “colour tastings”, participated in a school art partnership and conducted in-store events involving a local artist. The London event in May was bigger and better than ever before and resulted in the Scan this flashcode for photos sale of more than 25,000 glasses and videos of the year’s events of Campo Viejo. by Campo Viejo

Graffigna — 244 ith over 140 years of the foot of the Andes. In the THOUSAND CASES winemaking expertise, region’s dry climate, with more SOLD W Graffigna continues to than 300 days of annual sunshine set the pace for the Argentinian and wide temperature variations, wine market in North America, he recognized the potential to -3% particularly in Canada, where it create full-bodied, elegant and GROWTH IN VALUE is growing ahead of the category aromatic wines, understanding (+14%). that altitude would enhance the quality of local red varietals. Growing higher Elevation Red Blend is scheduled +14% Graffigna’s success was fur- for launch in 2015 in Canada. IN VALUE IN CANADA ther enhanced by the launch of Centenario Elevation Red Blend in March, which was positively received by the network and trade in the U.S. The wine pays tribute to founder Santiago Graffigna, who brought with him from Italy a passion for wine and access Scan this flashcode for photos to European vine varieties, and and videos of the year’s events founded the estate in 1870 at by Graffigna

42 WorldReginfo - 567200b7-e8fc-4f35-866b-335e869dfe88 annual report 2013 / 2014 pernod ricard Key loCal BranDs — The 18 key local brands, often leaders in their markets, ensure that Pernod Ricard has a strong presence in the distribution channels where they are sold. Reflecting local preferences in spirits consumption, they offer the Group’s international brands real opportunities for market penetration in selected territories, particularly in emerging countries.

100 PIPERS IMPERIAL BLUE ROYAL STAG NO.1 NO.6 NO.3 STANDARD WHISKY WHISKY WHISKY IN THAILAND IN INDIA IN INDIA / NO.2 IMPERIAL SUZE STANDARD WHISKY NO.2 NO.1 IN ASIA WHISKY IN BITTERS SOUTH KOREA IN FRANCE PASTIS 51 NO.2 OLMECA SEAGRAM’S GIN ANISE-BASED SPIRIT NO.1 NO.1 IN FRANCE TEQUILA GIN IN RUSSIA IN THE UNITED STATES BECHEROVKA NO.2 PASSPORT WISER’S BITTERS NO.2 NO.1 IN CZECH REPUBLIC STANDARD WHISKY WHISKY IN BRAZIL IN CANADA ARARAT NO.2 AMARO RAMAZZOTTI WYBOROWA BRANDY NO.2 NO.1 IN RUSSIA BITTERS STANDARD VODKA IN GERMANY IN POLAND BLENDERS PRIDE NO.2 RUAVIEJA SOMETHING SPECIAL WHISKY NO.1 NO.7 IN ARGENTINA LIQUEUR WHISKY IN SPAIN IN VENEZUELA CLAN CAMPBELL NO.1 PREMIUM WHISKY IN FRANCE

Source: The Pernod Ricard Market View, based on IWSR, data at year-end 2013.

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IAN FITZSIMONS General Counsel Looking beyond Our BordeRs —

“Whether in terms of data governance or a systematic approach to innovation, our legal teams must go beyond the national frameworks to support the company’s transformations, brought about by technological change and accelerated globalisation.”

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Pernod Ricard’s Premiumisation strategy – its upscaling IN YOUR DAY-TO-DAY into the luxury goods market – is fuelling counterfeiters’ WORK, WHAT VALUES greed. What impact has this scourge of counterfeit AND PRINCIPLES products had on the Group? DO YOU TRY TO PUT Ian Fitzsimons : Whether it concerns counterfeit bottles, counterfeit ACROSS? labels or attempts to pass off lower quality spirits for the genuine Data protection, brand protec- article, these are all criminal activities that pose health problems for tion, combating corruption and consumers, tarnish the brands’ image and cause direct financial losses competition law are just some for the company. The counterfeiting business is booming, with almost examples of our work. There no sector left unscathed. The luxury sector has been particularly badly are so many areas which, giv- hit. To protect its brands from the many attacks they face, Pernod en the context of globalisation Ricard has led a long and active campaign against counterfeiters, and rapid technological change, particularly in sensitive markets such as China (along with Colombia, can only be understood from a Thailand, Indonesia and Vietnam), where certain high-end brands, global perspective. I encourage like Chivas Regal, Royal Salute and Martell Cordon Bleu, have to be my teams to take on these chal- protected from the phenomenon. lenges using a cross-functional approach, by strengthening the What measures has Pernod Ricard put in place to combat coordination of local and glob- counterfeiting? How effective have they been? al teams on the one hand, and In 2013/2014, Blue Lotus – the anti-counterfeiting programme launched that of the legal teams with by Pernod Ricard in 2007 – achieved exemplary results in China thanks other functions. The sharing and to the work of five dedicated key teams made up of legal experts, transparency of information are investigators, engineers, public affairs and communicators. A result key in order to ensure optimal of the Group’s commitment to innovation and digital technology, the coordination and effectiveness Blue Lotus teams have developed a new solution to authenticate our in our subject areas. bottles and guarantee that they can be traced: the traceability sticker. The principle is simple: using their smartphone, consumers can now scan a QR code to verify a bottle’s authenticity. This process is all the more useful as it facilitates the traceability of the supply chain, interaction with consumers and their involvement in product verification, and access to the brands’ digital world. Internally, the seal vector – a coded square that is impossible to photocopy – allows our investigation teams to carry out an additional check. Of course, the Group is working in close cooperation with local public authorities on the ground, particularly in connection with legal proceedings. This year, the work of the Group’s legal teams has helped to sentence 63 counterfeiters to a total of 71 years in prison and to fines totalling close to RMB 7,000,000 (approx. €830,000).

How is the fight against counterfeiting perceived locally? We are continuing to strengthen our cooperation with local authorities in the fight against counterfeiting, which negatively impacts the image of countries where it is prevalent. To raise awareness of this, Pernod Ricard runs local communication campaigns, for example Has the acceleration of digital technology and the mass in China, to highlight the means used to guarantee the authenticity expansion of available data – the “big data” – brought to of our products. Moreover, consumers’ use of the traceability label is light new legal challenges, particularly in terms meeting with increasing success. Following these encouraging results, of personal data protection? new initiatives are being planned for the coming months to promote Yes, absolutely. Digital technology forms an integral part of con- the use of QR codes outside of large Chinese cities. sumers’ daily life. It offers them a way to interact with our brands, allowing us to know more on their preferences and buying behaviour. What about online counterfeiting? Internally, this results in an acceleration of global IT projects relating Faced with the development of digital technology, Pernod Ricard to the implementation of the Group database and, consequently, a has made the fight against online counterfeiting its latest mission. wide-ranging assessment of data governance within the Group that aims Furthermore, we are the first international company to have signed a to anticipate its usage and make it secure. The advent of this new disci- cooperation agreement with the Chinese online retailer Alibaba. In total, pline has led our legal teams to reconsider their priorities. A legal expert 630 links to counterfeit products have already been removed and seven specialising in digital technology issues has recently been recruited at online shops closed. Group level to provide us with specific skills in this area.

Has Pernod Ricard’s strong dynamic of innovation revealed new needs in terms of asset protection? Of course, and this tendency is even stronger given the digital revolution we were just discussing. Project Gutenberg, for example, is an example of this complexity. With its connected platform and its one-to-one distribution model, we now have to protect an entire ecosystem. More than ever, we have to develop a holistic approach to innovation, taking each aspect of a project into consideration at every step of its creation: from securing initial discussions to protecting intellectual rights, which includes the new brand, patents, designs and models, and so on.

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LocAL Global WorldReginfo - 567200b7-e8fc-4f35-866b-335e869dfe88 02

PERNOD RICARD’S 80 MARKET COMPANIES, GROUPED INTO THREE REGIONS, ARE THE EXPRESSION OF ITS DECENTRALISED MODEL. THEY ARE TASKED WITH PROMOTING AND MARKETING THE BRANDS IN THE GROUP’S PORTFOLIO, AND ARE LOCATED IN THE HEART OF THE MARKETS FOR WHICH THEY ARE RESPONSIBLE.

MAESTRIA PORTFOLIO PRIORITIZATION CONSUMERS DETERMINE THEIR CHOICES AMONGST SPIRITS BRANDS AND CATEGORIES DEPENDING ON DIFFERENT NEED-STATES AND CONSUMPTION OCCASIONS. MAESTRIA IS A PORTFOLIO PRIORITIZATION APPROACH WHICH HELPS PERNOD RICARD ALLOCATE ADVERTISING & PROMOTION INVESTMENTS AGAINST THE MOST PROMISING OPPORTUNITIES, KEEPING IN MIND CONSUMERS’ MOTIVATIONS AND STAYING TRUE TO THE BRANDS’ GLOBAL PLATFORMS. WITH MAESTRIA, THE GROUP ENSURES THE EFFECTIVENESS OF A&P EXPENDITURES.

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ALEXANDRE RICARD Deputy Chief Executive Officer and Chief Operating Officer

INNOVATION, DIGITAL, LUXURY, AND WINNING NEW MARKETS: We’re aligning the Group’s organisation to seize all future growth opportunities.— “Two-thirds of purchasing decisions are made at point of sale; we must therefore win the battle being played out there, in order to win the consumer at that specific moment.”

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In your view, how did the markets perform WHAT ARE THE in 2013/2014? PRINCIPLES AND Alexandre Ricard: Pernod Ricard’s net sales reflect a challenging VALUES THAT YOU TRY environment,posting a 7% decline. However, excluding foreign cur- TO CONVEY ON A rency effects, organic growth was virtually unchanged. In addition to DAILY BASIS? currency effects, growth was heavily impacted by China, the Group’s The values that I try to convey second largest market. Net sales there fell 23% due to the coun- are those that have led my own try’s economic slowdown and the anti-extravagance measures taken actions for years: an entrepre- by the government. In the United States, Pernod Ricard’s largest neurial spirit and the desire to market, sales showed only moderate growth of 1%, not enough to win, strengthened by a passion offset China’s weaker performance. Moreover, some markets faced for our business, our brands and major economic hurdles, such as Spain, which saw net sales fall our history. I also attach great by 7%. The year was also disappointing for Travel Retail Americas importance to efficiency through and Europe. Finally, some Asian countries such as South Korea simplicity, common sense, and and Thailand had to address structural problems that, once again, respect for the women and men weighed on our sales performance. whom I collaborate with. We did, however, post strong performances in emerging markets led by India, Brazil, Russia and Poland (they grew by 7% excluding China), and a recovery in some mature markets, such as Germany (+7%), France (+3%), the UK (+3%), Canada (+2%), Japan (+6%) and Australia (+8%). These results clearly reinforce the relevance of our model, which is based on a balanced geographic presence and an expansion strategy.

Speaking of expansion strategy, which new areas are you targeting? In terms of new territories, sub-saharan Africa is the first place that comes to mind. The Group achieved a strong performance there this year, growing 23%, and most of the affiliates were created less than two years ago. We will pursue our efforts across the continent. Looking more broadly at areas of new growth, we have defined three priorities that we need to address on a cross-functional and holistic basis. The first, Innovation, to capture growth opportunities arising from the emergence of new occasions and avenues What implications did Allegro have of consumption. This year in the United States, for example, we for Market Companies? launched Brancott Estate Flight Song to target the growing demand As with Brand Companies, we reviewed the Market Companies’ for lighter wines. In Asia, Martell Distinction cognac was created organisational structure based on three principles: prioritisation, for the Chinese market as the perfect match for meals. We are also simplification and mutualisation. In terms of prioritisation, we re- deploying innovative marketing and distribution strategies, such as focused them on a central mission: excellence in execution, with a Chivas Home Parties in Colombia that surf the trend of “Hometain- clear focus on the “last three feet” of the consumer. Two-thirds of ment” – i.e., the increasingly frequent hosting of friendly gatherings purchasing decisions are made at point of sale; we must therefore in our consumers’ homes. win the battle being played out there, in order to win the con- The second is the digital revolution and its impact on our B2C sumer at that specific moment. Prioritisation is also reflected in (Business to Consumer) relationships and our ways of working. the creation of “Brand and Market Combinations” (BMCs), which Here, the Group launched a digital transformation programme in associate a given brand with a given market. Depending on their 2013: the Digital Acceleration Team (DAT). DAT is centred on three strategic weight, we will distinguish “Lead” BMCs from “Classic” key areas of our relationship with consumers: the use of Big Data, BMCs. In terms of simplification, we grouped the 42 European which allows us to learn more about their preferences and to acti- markets into ten “management entities”. As for mutualisation, we vate the most relevant contact points at the right time; optimisation would merge the back office functions of Pernod SA and Ricard of CRM (customer relationship management), and finally, e-com- SA (Human Resources, IT, Finance). We also created regional merce, whether B2B (Business to Business) or B2C. Related projects hubs in Asia. The transition includes changes in the top manage- also pertain to the digital culture of our teams and adapting our ment: the two Managing Director posts for Brands and Markets ways of working. will not be replaced. Finally, we need to capture the luxury segment with a dedicated and comprehensive approach to both the markets and our portfolio. What is the financial outlook for the coming year? We realigned our organisation to address these major challenges We expect a gradual improvement in sales, mainly due to the with the launch of an operational efficiency project in February: progressive recovery of the Chinese market. More generally, the “Allegro”. business environment will continue to be challenging, with strong pressure on prices: we will stay in line with the strict policy that we committed to this year. Our priority remains to support the growth of our brands through continued investments in targeted advertising and promotional expenditure across our portfolio. With that in mind, we created the Maestria project, whose pilot was launched in Eu- rope this year and which is now being rolled out across all markets. Its aim is to help Pernod Ricard allocate advertising and promotional expenditure based on opportunities that will bring the best long-term results.

49 WorldReginfo - 567200b7-e8fc-4f35-866b-335e869dfe88 BREAKDOWN OFGLOBAL CONSUMPTION SPIRITS NO.4 INTHEUNITEDKINGDOM NO.2 INEASTERN EUROPE NO.1 INCZECHREPUBLIC NO.2 AFRICA INSOUTH THE MIDDLEEAST NO.1 INTHENORDIC NO.1 INGERMANY NO.2 INIRELAND NO.1 INPOLAND NO.1 INANGOLA NO.1 INFRANCE NO.2 INTURKEY NO.2 INGREECE NO.2 INRUSSIA AFRICA AND NO.1 INSPAIN NO.3 INITALY COUNTRIES EUROPE, — BY GEOGRAPHICALREGION

The GlobalSpirits Western-style spirits, excluding ready-to-drink, aperitifs, winesandwine-based andchampagnes. regions for aglobal leadershiP OCEANIA MIDDLE EAST AFRICA - TRAVEL RETAIL EASTERN EUROPE ASIA & CENTRAL WESTERN EUROPE NORTH AMERICA P SOUTH AMERICA SOUTH

8% ern

NO.2 INGLOBAL TRAVEL RETAIL

regional focus 4% Market

Ranking amonginternationalgroups. 36%

Source: IWSR, 2013. dataatyear-end O 8% 11% 27% TRAVEL RETAIL — — d Markets — 3 50 R AMERICA NORTH +3% EVOLUTION INGLOBAL CONSUMPTION SPIRITS

+3.6% EVOLUTION INVOLUME ic FROM 2012TO 2013

ASIA + 0.9% A

+4.0% BY GEOGRAPHICALREGION TRAVEL RETAIL

rd +1.2% +3.8% AMERICA CENTRAL & SOUTH SOUTH +3.9 % +5.9%

WESTERN EUROPE

NO.3 INTHEUNITEDSTATES 0 %

AVERAGE ANNUAL EVOLUTION NO.2 KOREA INSOUTH -0.2% NO.3 INVENEZUELA NO.1 INARGENTINA NO.3 INAUSTRALIA NO.2 INTHAILAND NO.1 INMALAYSIA EASTERN EUROPE NO.2 INCANADA FROM 2003TO 2013 NO.2 INMEXICO ASIA-PACIFIC NO.3 INBRAZIL NO.2 INJAPAN NO.1 INCHINA NO.1 INCHILE NO.1 ININDIA AMERICAS +2.7% +4.5% — — AFRICA - AFRICA - MIDDLE MIDDLE EAST +3.9% +5.6% OCEANIA -0.5%

+2.0%

WorldReginfo - 567200b7-e8fc-4f35-866b-335e869dfe88 annual report 2013 / 2014 pernod ricard

MarKet CompaNieS The Market Companies of Pernod Ricard are responsible for promoting and selling the Group’s local and international brands on the local markets they are responsible for. Their common goal is to deliver excellence is sales execution.

PERNOD PERNOD PERNOD SOCIÉTÉ RICARD ASIA RICARD RICARD PERNOD — AMERICAS EUROPE, — PIERRE COPPÉRÉ, — MIDDLE EAST CÉSAR GIRON, Chairman & CEO PHILIPPE DRÉANO, Chairman & CEO Pernod Ricard Asia & AFRICA Chairman & CEO — MATHIEU DESLANDES, GLEN BRASINGTON, Pernod Ricard Americas Marketing Director VP Marketing CHRISTIAN PORTA, GEOFFROY GERMANO, Chairman & CEO CHRISTIAN FIATTE, Pernod Ricard Asia Commercial Director Marketing Pernod Ricard EMEA BERNARD COULATY, FRANÇOIS PATSCHKOWSKI, Pernod Ricard Americas JEAN-CHARLES VP Human Resources THIERRY POURCHET, Human Resources Director Pernod Ricard Asia CASTELLANO, VP Finance & Operations Human Resources Director BERNARD PECH, Operations and Innovation Director QUENTIN JOB, Pernod Ricard Americas Pernod Ricard EMEA VP Innovation & Commercial CEDRIC RAMAT, VINCENT TURPIN, Development NICOLAS KRANTZ, Chief Administrative VP Human Resources Administrative & Financial Director Pernod Ricard Asia and Financial Officer* Pernod Ricard Americas Pernod Ricard EMEA CYRIL SAYAG, AUDREY YAYON-DAUVET, OLIVIA LAGACHE, VP Legal & Public Affairs VP Legal & Public affairs Pernod Ricard Asia General Counsel Pernod Ricard Americas Pernod Ricard EMEA HÉLÈNE DE TISSOT, — JEAN-MARC ROUÉ, VP Finance NÖEL ADRIAN, Pernod Ricard Asia Operations Director SOCIÉTÉ Managing Director Pernod Ricard EMEA — Pernod Ricard Mexico RICARD FRANCESCO TADDONIO, — PAUL-ROBERT BOUHIER, PIERRE-YVES CALLOC'H, Marketing & Development Director Managing Director Managing Director PHILIPPE SAVINEL, Pernod Ricard Singapore- Pernod Ricard EMEA Chairman & CEO Pernod Ricard Colombia ALBENA TRIFONOVA, Indochina-Thailand JUAN MIGUEL CASELLAS, STÉPHANE DEHLINGER, Business Development Director Human Resources Director CON CONSTANDIS, Managing Director Pernod Ricard EMEA Managing Director, Pernod Ricard Chile SOPHIE GALLOIS, Pernod Ricard Asia Travel Retail — Marketing Director THIBAULT CUNY, FABRICE AUDAN, DAVID FREEBORN, Managing Director SÉBASTIEN MOUQUET, Managing Director Managing Director National Sales Director Pernod Ricard Brasil Pernod Ricard Nordics & Baltics Pernod Ricard Gulf BRYAN FRY, JEAN-MICHEL SENAUD, PHILIPPE COUTIN, Operations Director JEAN-ÉTIENNE GOURGUES, Managing Director Managing Director Managing Director Pernod Ricard USA VINCENT TURPIN, Pernod Ricard Eastern Europe Chief Administrative Pernod Ricard China FRANCK LAPEYRE, GUILLAUME GIRARD-REYDET, and Financial Officer MOHIT LAL, Managing Director Managing Director Managing Director, Pernod Ricard Americas Pernod Ricard India Pernod Ricard Central Europe Travel Retail DAVID HAWORTH, KEVIN LEE, BENOIT LAUG, Managing Director Managing Director Managing Director Pernod Ricard Western Europe Pernod Ricard Malaysia-Indonesia- Pernod Ricard Argentina Philippines ÉRIC LABORDE, PATRICK O’DRISCOLL, Managing Director HORACE NGAI, Managing Director Corby Pernod Ricard Iberia Managing Director Spirit & Wine Ltd. Pernod Ricard Greater China JEAN-LOUIS LABORDE, Managing Director TIM PAECH, * From 1st August, 2014, Pernod SA's President & CEO, Pernod Ricard MENA Administrative and Financial Management Pernod Ricard Japan DENIS O’FLYNN, will be held by Vincent TURPIN, Managing Director JEAN-MANUEL SPRIET, also Administrative and Financial Director President & CEO, Pernod Ricard UK at Ricard SA. Vincent replaces in this role Régis SOUILLET, who decided to carry Pernod Ricard Korea LAURENT PILLET, Managing Director on with his career outside of the Group. Pernod Ricard Sub-Saharan Africa This announcement has a temporary nature, in the wait for the implementation of the CÉDRIC RETAILLEAU, Managing Director support functions mutualisation project contemplated within the Leaders project, which Pernod Ricard Southern Europe is currently under consultation and examination IAN WILLIAMS, by employee’s representatives. Managing Director Pernod Ricard Travel Retail Due to the changes initiated by the Allegro operational efficiency project and announced after the close of the financial year, all management structures described in this report are presented as at 24 September 2014, the date on which it was filed with the AMF.

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espite a slower economic environment in Asia during 2013/2014, Pernod D Ricard nonetheless achieved resilient growth in vodka, champagne and whiskies, under- ASIa scoring the region’s strong medium and long-term potential. ABSOLUT ELYX (+38%), Perrier-Jouët (+26%) and Jameson (+14%) led strong volume growth, The Glenlivet also performed well, while Indian whiskies Royal Stag and Imperial Blue are scoring important gains in their home market.

Female empowerment leads innovation As in markets throughout the world, woman power continues to drive growth in Asia. In response, Pernod Ricard continued to build on its female-targeted offerings. In Japan, it introduced a new melon flavour to its popular line AFTER 10 YEARS OF SUSTAINED GROWTH, of Café de Paris sparkling wines. The pairing of the flavoured THE ASIAN REGION HAS SHOWN A SLIGHT Café de Paris wines with original food recipes have proven SLOWDOWN, MAINLY IMPACTED highly popular with Japan’s “Mademoiselle” cooking class BY THE CHINA MARKET DESTOCKING AND group. In China, Perrier-Jouët’s Belle Epoque Edition Première ANTI-EXTRAVAGANCE MEASURES. 2007 offered a stylish and refreshing bouquet, perfect OVER THE REGION, PERNOD RICARD BRANDS for spring. The “feminine” floral SOUGHT GROWTH THROUGH MARKETING and fruity aromas were designed to appeal to the rapidly growing STRATEGIES FOCUSED PARTICULARLY ON TWO consumer class. CONSISTENT TRENDS: THE RISING INFLUENCE OF FEMALE CONSUMERS AND THE INCREASING OPPORTUNITY OF MEAL TIME CONSUMPTION.

On the menu with internationally renowned Regional teams also capitalized Thai chef Ian Kittichai, placed -4% on the progress made in posi- Jacob’s Creek at the heart of NET SALES tioning brands for meal occa- Thai cuisine. (ORGANIC GROWTH) sions, introducing new products to accompany specific menus. In China, a collaborative effort was made with famous Chinese -3% PROFIT FROM restaurant Da Dong to match the RECURRING OPERATIONS new Martell Distinction cognac (ORGANIC GROWTH) with Chinese cuisine. In Japan, Jacob’s Creek followed up on last year’s success with WAH white wine as a sushi accompaniment by introducing WAH red wine as the perfect complement to Japanese Yakitori and Wagyu steak. Meanwhile, in Thailand, the November launch of new LAMOON Premium red wine, created in cooperation

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Tribal strategy growth, while 100 Pipers is No. 2 The region’s key marketing strat- in blended Scotch and The egy of leveraging engaging brand Glenlivet is No. 1 for single experiences with “tribes” of core malts. New business model- consumer segments continued ling and portfolio prioritization to meet with success in gener- initiatives were undertaken in ating influence through brand some markets to respond to the ambassadors. Gatherings of the market conditions, notably in Chivas “MBA Brothers” tribe in South Korea and Thailand. A new Japan feature not only local Chi- business model implemented in vas Brothers awards to young April refocuses on key referenc- entrepreneurs for their social es and strategic management design work, but also cross-MBA of channels. Similar processes student interaction, thus increas- have been launched this year in ing brand advocacy towards the China and India. targeted tribe. In Hong Kong, the Chivas 18 Architecture and On target with consumers Design Awards recognize profes- in the digital sphere sional creativity among young Pernod Ricard teams launched architects. In India, Jameson initiatives to leverage the digital engages film tribe members at- revolution as it plays out across tracted to showings of its “Done Asia. A sophisticated customer in 60 seconds” short films. Two relationship management sys- local film celebrity brand ambas- tem, customized to respond to sadors helped attract the public Asia’s highly diversified cultures to the viewing finals. and rapidly shifting consumer behaviours, was implemented CHIVAS Appealing to new first in Hong Kong and Asia to LEGENDS DINNER ENGAGES consumers help engage target customers WITH DUBAI HIGH CIRCLES At the same time, changing and high net worth individuals. consumer behaviour and expec- The platform is planned for CHIVAS IMMERSED DUBAI’S HIGH CIRCLES OF BUSINESS, tations open additional opportu- broad roll-out throughout the SOCIAL AND MEDIA IN CHIVAS LEGENDS DINNER nities, such as first trial product region over the upcoming year. WITH HONOURABLE PRESENCE OF ACADEMY AWARDS® choices in cocktails, wine and In China, the company launched WINNER JEREMY IRONS. THE EXCLUSIVE DINNER white spirits. In addition to the its third e-shop for wines in ATTRACTED MORE THAN 200 HIGH NET WORTH INDIVIDUALS launch of Martell Distinction, December 2013 on the popular AND CREATED MASSIVE ONLINE BUZZ OF MORE THAN another innovation was the in- T-Mall online shopping portal. 600,000 IMPRESSIONS. troduction of Ballantine’s Brasil, The platform has broadened the a blended Scotch whisky that exposure of Pernod Ricard wine represents a fusion between brands to more than 4 billion the traditions of Scotland and the T-Mall users. passion of Brazil. The attraction and conversion of beer drinkers to wine and spirits also continued with the launch of pre-mixed Malibu in a beer-sized 250-ml bottle. The new format was successfully launched in April across six pilot cities in China.

Rising stars and streamlining actions Strong results in the region included the first-year performance of Cambodia and volume growth of more than 51% in Laos / Myanmar. Japan saw increased ABSOLUT volumes for Perrier-Jouët as well as gains by Martell following the ART COLLABORATION local affiliate’s regain of direct distribution control in February. ABSOLUT’S COLLABORATION WITH WORLD-RENOWNED India, the company’s fourth larg- INDIAN ARTIST ANISH KAPOOR REACHED est market, continued to perform ITS CULMINATION AT THE INDIA ART FAIR, strongly with volume growth WHERE THE ARTIST’S MASTERPIECE REPRESENTATION of 17%. Pernod Ricard is the OF ABSOLUT’S CREATIVE ESSENCE WAS UNVEILED market’s No. 1 international IN JANUARY 2014. player in Western-style spirits and imported vodka. Roy- al Stag and Blenders Pride also continue to show strong

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lobal appreciation for ultra-Premium tequila Avión its portfolio of wines signalled an unquenched deter- – including Jacob’s mination to offer the most dy- Creek, Brancott Es- namic portfolio in the industry. G tate, Stoneleigh and Pa- St Hugo – demonstrate Pernod Australia and New Zealand have Ricard’s capacity for conveying also been the setting for the de- local values that speak to con- but of some of the Group’s most sumers globally – and in the exciting innovations in recent brands’ home markets. Jacob’s years. Responding to rising con- Creek underlined the themes sumer interest in sophisticated ciFic of provenance and cultural her- offerings, introductions have in- itage with Australia’s Longest cluded Jacob’s Creek Twin Pick- Reserve Table, in Sydney, gath- ings and Brancott Estate Flight. ering 700 passionate diners who Jameson also introduced the each contributed a dish repre- region’s first ‘St. Patrick’s Live’ senting their culture and shared event in 2014, bringing the glob- their stories in a celebration of al celebration of Dublin’s tastes cultural heritage and diversity. and sounds to Sydney. Meanwhile, G.H.MUMM continued its progression in the re- Meanwhile, Jacob’s Creek im- gion with 33% volume growth, mersed consumers in the brand Chivas Regal posted +15% and with the creation of the ‘Blend’ The Glenlivet achieved perfo- bar. This pop-up installation in mances of +18%. Auckland gave consumers the opportunity to work one-on- Snowy fields one with a winemaker to create and sunlit beaches a bottle of their own unique, ABSOLUT’s partnership with signature blend. The latest in Baz Luhrmann produced a winemaking technology was PROVENANCE HOLDS A SPECIAL tribute to the internationally used to bottle each unique wine, renowned film director’s home- which came complete with a MEANING IN AUSTRALIA land, the “Land of Oz”, which personalised label. resonated well in the Australian AND NEW ZEALAND: IT IS market. ABSOLUT Oz, launched Also in Auckland, Stoneleigh’s in March, was born from a ‘Wonder of Nature’ urban oa- AN INDICATOR OF CHARACTER, mid-December 2012 pilgrimage sis offered an innovative way CULTURE AND AUTHENTICITY. by Luhrmann to Sweden – “in an to express the brand’s defining intense snowfall”, he notes – to qualities. A unique suspended A RESPECT FOR THE POWER visit the source of ABSOLUT’s garden, creating an inner city, pure waters in Åhus. The prod- multi-sensory escape for vis- OF PROVENANCE HAS HELPED uct of his collaboration with the itors, celebrated wonders of distillery’s master craftsmen, a nature – including the heat-re- PERNOD RICARD EFFECTIVELY spiced orange flavoured blend, taining stones in Stoneleigh’s evokes the warmth of Australia’s vineyard that warm the vines GROW ITS PORTFOLIO OF BRANDS beach culture. during the night to create the brand’s unique wines. IN PACIFIC REGION MARKETS: Poured from the Luhrmann-de- REGIONALLY PRODUCED WINES, signed limited edition bottle, ABSOLUT Oz feels right at AS WELL AS IMPORTED SPIRITS home as part of one of the specially designed cocktails that pay AND CHAMPAGNE BRANDS. tribute to some of Australia’s best loved beaches, including The Tama-Glama Beach, The Hells Bells Beach, The Cable Beach ‘Stairway to the Moon’ and The South Avoca Elevator. MELBOURNE ON THE SEINE — The latest addition to the AB- Race-goers at the 2013 Melbourne Cup could be forgiven SOLUT family of flavours, AB- if they felt they’d been transported back in time to the heart SOLUT Oz is helping to further of Paris: G.H.MUMM’s partnership with fellow French icon, drive growth for the flavoured the Moulin Rouge, proved the talk of the Carnival. vodka segment in Australia. To complement the French touch brought by the prestigious champagne brand, a troupe of 16 cabaret dancers, Adventure lab flown in from Paris, entertained guests with the joyous sights and sounds of the French Cancan. The Pacific teams continued to shake up the market through new products. Launches of French aperitif Lillet,and the

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everaging one of the experiences with specific con- most comprehensive sumer targets, Pernod Ricard portfolios in the in- Americas has set an objective dustry, Pernod Ricard to be the industry e-leader by L is positioned to suc- expanding its Data strategy set Ame- ceed throughout the region. in motion in 2012 across more In North America, Jameson is markets. The region is also posting +9% in volume, while embedding digital into brand The Glenlivet engages and strategies with examples such connects with its consumers as Barman in Brazil, Moscato through The Glenlivet Guardi- Mondays in Canada and Chivas ricas ans Chapter project. These suc- Home Parties in Colombia. cesses are complimented by the innovation and Premiumisation Having been one of the first strategy, such as the roll out of 100% digital-exclusive cam- ABSOLUT ELYX and Martell paigns, Barman in Brazil lever- Caractère, wine category growth aged the power of digital media with the Kenwood Vineyards ac- programmatic buying in an ef- quisition, and continued digital fort to explore different ways of investments. In Latin America, impacting the right consumer. Pernod Ricard is well-posi- This strategy produced strong tioned in the growing whisky consumer views results in the category, serving luxury tastes key asset – the brand television through Chivas Regal, welcom- commercial. In the meantime, ing consumers trading up with Chivas Home Parties in Colom- Ballantine’s and recruiting new bia continued to successfully consumers with Passport while engage consumers through continuing to lead the Premi- the powerful delivery of Home um vodka segment with ABSO- Parties and a network of influ- LUT’s successful performance ential brand ambassadors. The PERNOD RICARD BRANDS ARE in Brazil (+7% in volume). program is so well perceived that it is being expanded across SUCCESSFULLY TRANSMITTING Leading the Online the country, adapted to other Revolution brands and piloted in new mar- THEIR VALUES ACROSS THE REGION, Digital growth continues to be kets, beginning with Mexico. particularly strong in a region Another successful case was PROPOSING NEW MOMENTS AND where consumer expectations Jacob’s Creek #MoscatoMonday. PLACES OF CONSUMPTION WITH for everything-digital have be- Leveraging a moment of social come the norm. The trend is bonding during the airing of INNOVATIONS, DIGITAL INVESTMENTS creating a reformulation of the The Bachelorette TV show, the value equation, with consumers brand addressed its target con- AND NEW ROUTE-TO-MARKET increasingly drawn to experienc- sumers – young women – in a es, in addition to products. With social media engagement cam- PROJECTS. the power of digital to amplify paign. The program successfully and create more personalized recruited new consumers with

From big and dynamic markets like the U.S., Brazil and Mexico, to strengthening growth engines like Colombia, Chile and Peru, Group brands are well positioned to capitalize on emerging trends in consumer preferences and demographics.

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a growth of 33% to 44% within the target group in 2013. These, +2% together with many other initia- NET SALES tives, reflect the region’s recent (ORGANIC GROWTH) effort to re-organize its marketing structure to accelerate digital capabilities and build a scalable digitally savvy team. +8% PROFIT FROM RECURRING Transcending OPERATIONS (ORGANIC GROWTH) boundaries Recent marketing initiatives are transitioning international, cultural and behavioural boundaries to create new places and times to enjoy Pernod Ricard brands. Leading Canadian whisky Wiser’s and the international tequila Olmeca effectively introduced J.P. Wiser’s and Altos, respectively, that specially tailor to the U.S. market. ABSOLUT also continued to upend norms, creating new consumption occasions through innovations like the ABSOLUT Lunch Break. The strong reception from consumers, daring to “live the night during the day” by breaking away from their desks to spend their lunch hour on the dance floor, has already spread the initiative from New York to San Francisco, Chicago and Philadelphia. NEW U.S. REFERENCE Balanced WITH KENWOOD PURCHASE growth outlook Looking ahead, Pernod Ricard PERNOD RICARD’S ACQUISITION OF CALIFORNIAN SONOMA Americas will continue to rein- VALLEY-BASED KENWOOD VINEYARDS EXTENDS THE force its presence in the field. COMPANY’S WINE PRESENCE ON ITS FIRST MARKET. In the U.S., renegotiation of its THE OPERATION OPENS THE WAY TO NEW GROWTH distribution agreement results OPPORTUNITIES IN BOTH THE $4 BILLION U.S. WINE MARKET in dedicated additional resourc- AND OTHER KEY TARGETS. es to Pernod Ricard brands at KENWOOD’S DISTINGUISHED PREMIUM WINES FURTHER its two primary distributors STRENGTHEN THE PERNOD RICARD WINEMAKERS (increased number of sales rep- PORTFOLIO AND EXTEND ITS MULTI-ORIGIN, resentatives dedicated to the MULTI-MARKET STRATEGY. Group’s brands, better alignment of distributors with Pernod Ricard’s objectives, strengthened partnerships). Meanwhile, the recently launched “Ventas Directas” project in Colombia is showing promising results in generating direct, door-to-door sales. This approach relies on a network of specially selected MEETING THE DEMAND product advocates, selling in well-connected circles to con- NEW PRODUCT DEVELOPMENTS LIKE BRANCOTT sumers seeking the best prod- ESTATE’S FLIGHT SONG ALSO SYMBOLISE PERNOD ucts and the best parties. RICARD’S INITIATIVES FOR GROWTH IN WINES: LAUNCHED IN NORTH AMERICA IN MARCH 2014, FLIGHT SONG REPRESENTS A NEWER, LIGHTER EXPRESSION OF THE TRADITIONAL MARLBOROUGH SAUVIGNON BLANC.

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n the one hand, refocus on priority international sales are stable in brands, thereby strengthening the mature coun- their performance. tries of Western O Europe, where an Eastern Europe: eU- upscaling of wine and spirits a changing landscape consumption has been ob- In Eastern Europe, the wine served. On the other hand, and spirits market is returning Eastern European countries re- to ‘normal’ levels of growth after main dynamic, despite a slight several years of huge increases, slowdown in demand. Faced mainly due to the slowdown in RopE with rebalancing growth be- Russian GDP growth, the crisis tween these two major regions, in Ukraine and the increase in Pernod Ricard is adapting in tax on alcohol, all of which had order to consolidate its posi- an adverse effect on consumption in its various markets and tion. In the main segments seize new opportunities. There (vodka, whisky, rum, gin), Per- is one overriding aim: to always nod Ricard’s growth neverthe- respond to local specificities. less remains very dynamic. For over a decade, Premium spirits Western Europe: have been benefiting from the new sources of growth westernisation of the emerg- Having been somewhat turbu- ing middle classes, who are lent since the 2008 financial gradually turning away from crisis, the markets of South- mainstream vodkas in favour of ern Europe now seem to have more aspirational brands. Whis- achieved stability and, in some kies Ballantine’s and Jameson cases, are even showing signs are taking full advantage of this of recovery. While the situation trend, particularly in Russia, remains delicate in Southern Bulgaria and Kazakhstan, where CHANGING HABITS, countries, there are initial signs the Group successfully gained a of improvement in Italy, Portu- foothold at a very early stage. TOUGHER REGULATIONS... gal and, to a lesser extent, Spain. Now considered to be the un- It is in Northern Europe, though, disputed leader in Central and CURRENT CHANGES IN EUROPE that the recovery is most strik- Eastern Europe*, Pernod Ricard ARE LEADING PERNOD RICARD ing, as in the United Kingdom, is outperforming in Poland too, where the Group recorded a rise drawing both on its very well- TO TAKE A PRAGMATIC APPROACH in sales (+4%) and especially in known local vodka brands, such Germany, a strategic country as Wyborowa, and on booming TO ADAPT TO NEW MARKET NEEDS. for Pernod Ricard, now more imported brands like Ballan- so than ever before. Having tine’s (+13%), Jameson (+9%) TO MEET THIS CHALLENGE, long favoured traditional local and Havana Club (+16%). products, German consumers THE GROUP IS CONTINUING have begun to develop a taste *International spirits and champagnes for imported wines and spirits, TO FOCUS ON THREE KEY DRIVERS: offering a very promising source PREMIUMISATION, INNOVATION of growth for the Group’s international brands, such as Ha- AND DIGITALISATION. vana Club, which achieved an excellent increase in 2013/2014 (+18% in value). Consequently, the Group has chosen this highly competitive German market to officially launch two innovations: Havana Club Especial, a premium amber rum, especially prized by barmen for making cocktails; and Ramazzotti Aperitivo Rosato, a new variant for Germany’s most popular imported digestif brand, best known for its “Amaro” after- dinner digestif.

During 2012/2013 in Denmark, the Group took the decision to move away from two local brands: Aalborg aquavit and Gammel Dansk bitters. The dis- posal allowed the sales force to

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An innovation laboratory In a region where Pernod Ri- card strives to achieve growth in terms of both volume and value, the Group continues to focus on PREMIUMISATION : innovation by constantly seeking out new flavours, new consump- LAYING CLAIM tion moods, new distribution TO ITS AUTHENTICITY channels, new services and so on. Its goals are to change the per- FOR THE LAUNCH OF THE NEW HAVANA CLUB AÑEJO ception of its brands, create new ESPECIAL DESIGN AND RECIPE, HAVANA CLUB FOCUSED moments of conviviality and win ON ITS CUBAN ROOTS AND ITS AUTHENTICITY. over new kinds of customers. This CREATED BY MASTER BLENDER ASBEL MORALES, is the case not only of Ramazzot- THIS BLEND OF AGED RUMS OFFERS A RICH AROMATIC ti Aperitivo Rosato, launched to PROFILE, IDEAL FOR CLASSIC CUBAN COCKTAILS, expand the positioning of the WHILST IT IS ALSO POTENTIALLY ATTRACTIVE traditional digestif brand as an TO CONSUMERS FROM BEYOND THE RUM CATEGORY, aperitif, but also of Ballantine’s SUCH AS WHISKY DRINKERS. in Spain, where recent activations have allowed better targeting of consumers aged 45 and over, and no longer just the young adult segment. These effective initiatives are to be developed further LILLET as part of the Maestria pilot pro- BREAKS RECORDS ject, designed to optimise Pernod Ricard’s portfolio approach and SINCE THE ACQUISITION OF LILLET IN 2008, PERNOD RICARD being trialled this year in several HAS OPENED THE DOOR TO INTERNATIONAL SUCCESS European countries. FOR THE FAMOUS FRENCH APERITIF. GERMANY HAS NOW BECOME THE BRAND’S LEADING The digital transition MARKET, AHEAD OF THE UNITED STATES, WITH SUSTAINED In order to attract new consum- GROWTH ONCE AGAIN THIS YEAR (+54%). ers, digital development has be- AND THE STORY DOESN’T END THERE, BECAUSE come a key strategic focus for the TWO NEW MARKETS, SWITZERLAND AND AUSTRIA, Group in recent years. A proven ARE MAKING THEIR MARK WITH RECORD ANNUAL GROWTH method is applied to check the OF OVER 200%! relevance of each new service: rapid trial on a small-scale market test. In 2014, Great Britain was the testing ground for Sipstor, an e-commerce portal for fans of Pernod Ricard’s brands, prior to its roll-out in the rest of Europe. This project is one that encapsu- lates the Group’s desire to fully integrate digital technologies within its strategy. To bring about this change, Europe has also significantly increased the use of CRM* initiatives to exploit digital No. 1 data and better target messag- IN EUROPE, INCLUDING FRANCE* es to consumers. Following in the footsteps of Poland and the United Kingdom, there are now 12 markets preparing to roll out these tools. In social media, the +2% highlight of the year was the NET SALES, INCLUDING FRANCE launch of the Wispr site, designed (ORGANIC GROWTH) to enable the bartending community to keep in touch, exchange tips, stay up-to-date with the latest industry news and take part in +3% competitions and training events. PROFIT FROM RECURRING OPERATIONS, INCLUDING FRANCE It is an essential channel for easi- (ORGANIC GROWTH) ly staying in touch with these key promoters of the Pernod Ricard brand portfolio.

(1) CRM: Customer Relationship * International spirits Management. and champagnes

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Sub-SahaRan AFRica AfriCa Pernod Ricard has big plans continues to benefit from for Sub-Saharan Africa, where high potential in South Africa. & it expects to find significant Growth there is slower than sources of long-term growth. it has been in the past, due to The increasing wealth of the the more challenging econom- upper classes and the grow- ic environment. But the Group ing numbers of middle classes, has managed to hold its own by MiddLe young people and city dwellers, focusing on several brands that provide great opportunities are already well-established: for branded products, such as Jameson, Ballantine’s and The Chivas, Jameson and Ballan- Glenlivet, which are continuing East tine’s whiskies, ABSOLUT vodka, to grow at 5%, 107% and 34% Martell cognac and G.H.MUMM respectively. Pernod Ricard’s and Perrier-Jouët champagnes. African adventure is only just beginning, of course, but in time PERNOD RICARD IS REAPING Following a targeted roll-out in it will offer new opportunities to a number of priority countries expand its customer base. THE REWARDS OF ITS PROACTIVE – South Africa, Nigeria, Kenya, STRATEGY IN THE NEW EMERGING Angola and Ghana – the Group In the meantime, the Group is now ready for action in a mar- is focusing on significant and COUNTRIES OF SUB-SAHARAN ket that is currently considered targeted investments in public to be one of the leading growth communication, with Africa-spe- AFRICA, NORTH AFRICA AND regions. The 2013/2014 finan- cific advertising campaigns, cial year was marked by some such as the latest Chivas ad THE MIDDLE EAST. resounding successes, such as featuring an international star Jameson selling 30 thousand with African roots, Chiwetel THIS PROGRESS GOES HAND cases in Kenya this year*. This Ejiofor. But Pernod Ricard does success story owes much to the not intend to stop there and is IN HAND WITH THE CONTINENT’S brand’s reputation in certain in- already planning to open new ECONOMIC DYNAMISM. fluential countries such as South sales offices and affiliates to Africa and the United States, further strengthen its presence and to a particularly well-honed on the ground. digital strategy, which make it one of the social networks’ most liked brands. Pernod Ricard * Duty Free included

MiddLe East & NortH AfriCa Despite unfavourable geopo- cusing on the Group’s Premium litical conditions, North Afri- brands. In the rest of the region, ca and the Middle East still the growth strategy is bearing represent regions that offer fruit, particularly for Jameson a wealth of opportunities for (+31% in volume), Ballantine’s, Pernod Ricard. This is the case Beefeater, The Glenlivet (+23%) in Morocco, where the company and also Olmeca (+24%). Riding ABSOLUT, has been established for more high on the increasing influ- than a year now and where the ence of social networks in the REVEALING TALENT super-Premium brands have Middle East, Pernod Ricard — grown significantly, with AB- continues to attract large num- In June 2014, ABSOLUT joined forces with one of the most prestigious music events in Africa, SOLUT recording an increase bers of consumers who are the MTV Africa Music Awards, to promote African artists of 47%, Chivas Regal +62% and highly committed to its flagship throughout the world. At the grand final in Durban, Ballantine’s +15%. In Turkey, brands. ABSOLUT is the most South Africa, the Transform Today Award by ABSOLUT Pernod Ricard performed influential spirits brand in North paid special tribute to the younger generation’s strongly in the face of fierce Africa and the Middle East, ability to transform the image of Africa. competition and increased alco- particularly in Jordan, Morocco, hol taxes: +17% for Chivas and Israel and Lebanon. +5% for ABSOLUT. This is the result of a winning strategy, fo-

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FranCE

SURPRISE THE CONSUMERS, IMPROVE THEIR EXPERIENCE, CHANGE THEIR PERCEPTION OF A PRODUCT… THIS IS THE CHALLENGE THAT PERNOD S.A. AND RICARD S.A. HAVE TAKEN UP AND MET IN FRANCE, REVITALISING A MATURE AND HIGHLY COMPETITIVE MARKET BY FOCUSING ON INNOVATION AND CREATIVITY.

While wine and spirits consumption in France remains sluggish overall, with a slight fall in volumes of -0.3% in 2013*, the French continue to treat themselves by buying “smart”. The Pernod Ricard brands have long supported this trend by offering high-end products as well as those for more special occasions. As such, this year has seen some excellent performances, particularly for Ballantine’s (+3%), but also for Ricard (+2.5%**), the Clan Campbell (+8%**) and Chivas Regal (+5%**) whiskies; for ABSOLUT vodka (+18%**); and Lillet aperitif wines (+20%**). In spite of a price war between stores, the off-trade segment made a significant contribution to boosting the spirits market (+1% in value***).

* The Pernod Ricard Market View, based on IWSR data ending 2013 Total Western style spirits + champagne ** Nielsen, FYTD 2014 in value *** Nielsen FYTD 2014

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ernod SA classic French aperitif – and fo- icard SA: The poster features Colin Scott, revisits its cus on serving it in a “Piscine” between the Master Blender, and Graeme classics goblet as a long drink. But the tradition and Mitchell, the manager of the Chi- Pernod SA con- results show that the gamble modernity vas Regal storage warehouses. P tinues to focus on paid off: over 500,000 bottles R Ricard SA has con- These two men strive day in day innovation in order to win over sold since the product launched; solidated its leadership of the spir- out to emulate the gestures of the new consumers. Among the availability in 90% of off-trade its market with a market share in Chivas brothers, who were pioneers high points of the year was the stores; marketing in nearly 5,000 value terms of 18% in 2013/2014 in in the blending of malt and grain launch of Ballantine’s Brasil – French bars and restaurants, the off-trade segment.* The com- whiskies. a Scotch whisky-based spirit and 160,000 additional house- pany’s adherence to certain found- Meanwhile, the Ricard brand is partly infused with Brazilian holds – 40% of which had not ing principles, namely quality and bringing the quality of its crafts- lime zest. Ballantine’s Brasil been consumers of anise-based expertise, strongly contribute to manship to two new ready-to-drink is particularly intended to be drinks – and lastly, the award of this bond. The most recent Clan cocktails recipes: Red Bliss and enjoyed as a cocktail, the Caip- the 2013 LSA Innovation Trophy. Campbell campaign bears witness Yellow Bliss, created by mixologist iballsao, with ice, sugar and Drawing on a digital strategy to this, with its affirmation of the Sandrine Houdré-Grégoire. Based wedges of lime – an opportuni- that is now well-established brand’s authenticity by emphasis- on fruit juices and natural flavour- ty to offer a fresh approach to at Pernod, 51 Rosé deployed ing the complementarity of nature, ings (cranberry-orange and pome- party drinks. To accompany its some original activation tools ingredients and human expertise, lo-mint), both of these recipes launch, Pernod created a com- to provide consumers with an the essentials for making blended won awards at the 2014 Saveurs prehensive programme of pro- interactive experience. These Scotch whisky. The three diptychs, de l’Année [“Tastes of the Year”] motional events: a large tasting included, among others, the si- featuring employees from the competition. This creativity can campaign, held in nearly 400 multaneous launch of a limited Clan Campbell distilleries, depict also be found at Malibu, which is locations throughout France, edition interactive bottle and an Scottish nature and the men of revisiting a great rum-based cock- along with a “Reveal” soirée, the augmented reality ice-cube app, Clan Campbell with simplicity and tail classic, punch, with three fruit Ballsao Warehouse Party, that “Glaçons” (see sidebar). Based intensity. variants. Another innovation was brought together around 4,000 on this success, the brand has Proud of its Scottish origins, the the “punch pitcher”, a new pitcher people and a viral campaign on continued to spring surprises Clan is also continuing to grow with a cooling tube which allows social networks (Twitter, Tumblr, by launching the 51 Glacial ex- with its new tagline that sounds customers to discover all three Facebook). This innovative oper- perience, combining the fresh- like a rallying call, “Pour le Clan, carefully balanced and crafted rec- ation was a resounding success, ness of both aniseed and mint. le Clan Campbell” (“For the Clan, ipes without any need for ice cubes. with over 250,000 bottles sold in With a 75% positive rating for the Clan Campbell”). More than In the wake of its resounding in- four months, and a total reach purchasing intentions, this new 15 years on from the launch of a ternational success, especially in of 1.7 million people through version should swiftly make its long-running advertising campaign Germany, Switzerland and Austria, the social media campaign. mark within an ever-growing evoking the mystery of Clan Camp- the Lillet brand continues to gain brand portfolio. bell, this instalment represents a ground in France. Available in three In order to offer new experi- major expansion on previous brand versions – Lillet Blanc, Lillet Rouge ences to its consumers, Pernod messages. For the first time in its and Lillet Rosé – it is designed for S.A. develops a strategy based history, the campaign also included active, trendy, urban young women. on constant innovation. Further radio coverage. Since February, Lillet has been or- proof comes from the success of A further illustration is the latest ganising monthly “private cocktail 51 Rosé which, one year on from Chivas Regal advertising campaign, hours” in Paris, in partnership with its launch, continues to perform A Story of Brothers, which focuses My Little Paris and female brands well. It was a bold move: to on the art of blending mastered by favoured by Lillet consumers change the colour of pastis – a brothers James and John Chivas. * Nielsen FY2014

THE ART OF EDUCATING A GROWING ONLINE CONSUMERS PRESENCE — — How can you teach consumers to make a perfect 51 Piscine? To get ever closer to consumers, Société Ricard is expanding its Digitally! First, put a QR code directly onto a 51 bottle digital strategy and offering two new websites. A prestige site, so consumers can download the “Glaçons” ice-cube app. Perrier-Jouët Intimate, has been designed to allow privileged Once the app has launched, consumers see the 51 bottle logo customers to discover and order the champagne house’s vintages on their smartphone and an augmented reality “Piscine” directly from the website. Meanwhile, the Terres de Whisky goblet appears. All they have to do now is throw ice cubes (“Lands of Whisky”) website has been revamped and now offers into the virtual glass! A limited edition such as this helps build whisky lovers a true journey of discovery into the heartlands a unique relationship with customers and maintain an appealing, and expertise of whisky. In addition, a year on from convivial image. the Ricard Rain Bar operation on Facebook, further creative campaigns will soon be launched on social media.

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FROM MARSEILLE TO STOCKHOLM, JEAN-PIERRE AND NINOS ARE WORKING ON THE GROUP’S DIGITAL ACCELERATION: SUPPORTING THE BUSINESS, THE IT DEPARTMENT HELPS THE MARKETING FUNCTION CARRY OUT THEIR MAJOR DIGITAL PROJECTS.

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JEAN-PIERRE MUNT, FRONT OFFICE MANAGER, RICARD SA NINOS ICHO, BRAND MANAGER DIGITAL CONTENT, THE ABSOLUT COMPANY

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SINCE ITS INCEPTION, PERNOD RICARD HAS DEVELOPED A MODEL OF SUSTAINABLE PERFORMANCE WHICH LED TO THE CREATION OF ITS CURRENT CORPORATE ToDay SOCIAL RESPONSIBILITY (CSR) POLICY. The institutions set up by the Group’s founders, such as the Ireb (the French Institute for Scientific Research into Alcoholic Beverages), the Paul Ricard Oceanographic Institute and the Ricard Foundation for contemporary art are widely recognised and now serve as benchmarks in their particular fields. Employees are both beneficiaries and ambassadors TomOR- of the Group’s commitments, which have been formalised by a model based on 4 priority areas: empowering employees; promoting responsible drinking; protecting the planet and developing local RoW communities.

WISE DRINKING THE WORLD’S 1ST APP FOR RESPONSIBLE DRINKING PERNOD RICARD HAS DEVELOPED WISE DRINKING, A FREE MOBILE APP TO ENCOURAGE RESPONSIBLE DRINKING. USERS CAN USE THIS APP, WHICH IS AVAILABLE IN 37 LANGUAGES FOR IPHONE AND ANDROID, TO CALCULATE HOW MANY UNITS OF ALCOHOL THEY ARE CONSUMING IN REAL TIME. BASED ON GEOLOCATION TECHNOLOGY, THE APP ADAPTS ITSELF TO LOCAL LEGISLATION AND INFORMS CONSUMERS OF THE NEAREST MEANS OF TRANSPORTATION IN CASE OF AN EXCESSIVE INTAKE.

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BRUNO RAIN Managing Director, Human Resources and Corporate Social Responsibility StrenGThening our LeaderShip Model — “Allegro embodies the principles of a more efficient organisational model. Our mission is to support its implementation in order to strengthen our leadership.”

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This year was marked by the launch of Allegro, European CSR agreement. This agreement, signed in January 2014 a project which aims to improve operational efficiency. with EFFAT (the European Federation of Food, Agriculture and Tour- Can you tell us more about its wider context? ism Trade Unions), aims to give impetus to the application of CSR Bruno Rain : The schemes that resulted from the company-wide standards in Europe that go beyond local legislation and collective Agility project that we began to roll out in 2009 were designed to agreements and in a wider sense, create a reference framework for professionalise our business lines in order to promote leadership. We Group affiliates. Since February 2014, we have also been a member have endeavoured to develop a global human resources policy based of Transparency International France and attended our first workshop on a new leadership model that guarantees coherent employee man- on the definition of shared lobbying standards. Finally, in the area agement. Today, all of the tools and processes we have implemented of responsible drinking, we made five commitments alongside other are enabling us to consolidate our organisation. industry players at the ICAP (International Center for Alcohol Policies) With the Allegro project, we must accelerate this process in an in- conference, which have contributed to accelerating the implementation creasingly difficult economic climate, by developing an organisational of best practices. As part of this, we designed and shared innovative structure that can better harness future growth opportunities. This initiatives like the Wise Drinking app, which allows users to monitor project is based on three key principles: prioritisation, simplification, their alcohol consumption, and the Smart Barometer, a reporting tool and mutualization. The first two principles echo the second “I Say” used to track commitments in each of our affiliates. survey, conducted in June 2013. Although the survey revealed excellent levels of employee commitment (with 94% of respondents stating that CSR has been established as a key driver in the Group’s they are proud to work at Pernod Ricard), it indicated some significant strategy and employees are its front-line ambassadors. drivers for improvement regarding the speed of decision-making and What actions have you taken in line with these principles? cross-functional collaboration. The Responsib’All Day, now in its fourth year, remains one of the highlights of our year. For one day, all of the Group’s employees come The HR department is taking the lead in supporting together to promote responsible drinking, and this event has become the implementation of the Allegro project. a key part of our commitment. In addition to this day, we are focused What are your priorities? on involving younger Pernod Ricard employees. As part of this, we Firstly, we are supporting our affiliates in defining and implementing sent eight of them to the One Young World Summit, an international new organisational structures and deploying their social initiatives. conference attended by leaders and young talents under the age of Allegro affects all markets, all brand companies and all departments. 30 from around the world. It was so successful that we have decided When we published our annual results, we announced that around 900 to create a Group-level committee based on this model called the employees would be affected(1). Naturally, our foremost priority is to “Youth Action Council”, which will contribute to promoting discussions focus on internal reorganisation. on business and CSR topics between top management and young Our second priority is to support the changes brought about by the employees representing each department. Allegro project, which will lead to new ways of working on a daily basis. It’s about change management. As such, we are rolling out training programmes that aim to explain the new ways of working together to support managers in their jobs and to keep teams mobilised during this transition period. Our employees are at the heart of our business, and the Allegro project is designed to respect the men and women who make up the Group. We have placed them at the centre of our new CSR model, with a commitment to empower our employees.

How have you applied these principles within the Human Resources department? We have reaffirmed our priorities around developing talent, managing IN YOUR DAY-TO-DAY- performance and diversity, which were identified as three major drivers WORK, WHAT VALUES of our HR policy, and defined indicators to allow all affiliates to follow AND PRINCIPLES DO their progression. We have strived to clarify the responsibilities of each YOU TRY TO CONVEY? entity by distinguishing global HR practices to be applied across the We are part of a Group where Group from local HR practices, which will remain at affiliate level. In human sensitivity and contact order to capitalise on existing expertise and avoid any duplication, we are very important, where con- have created communities of experts designed to enrich and co-devel- fidence is essential in creating a op global practices that will subsequently be adopted by everyone. The climate of efficient collaboration aim is to offer employees with HR skills the chance to participate in that is conducive to commitment the global HR strategy, regardless of the entity to which they belong, by and change, even when we are contributing their opinion, experience and vision on aspects of working going through difficult periods. life. With this new, decentralised way of working as the basis of our For me, this confidence develops model, we will be able to make decisions that are more relevant to and improves over the long term affiliates’ needs and priorities. A first group has already been set up through informal and direct focusing on learning and development, and others are being formed communication that fosters that will address themes such as attracting and managing talent, in- discussion and new initiatives. ternational mobility and, of course, diversity.

In the area of CSR, Pernod Ricard has made major commitments this year alongside leading international organisations. What is the aim here? These commitments are a testament to our will to establish ourselves as a benchmark player and take action to advance the practices of our industry. We are one of the very first companies in France to sign a

(1) As discussions with social partners are still ongoing in certain entities as this report goes to print, the final number of staff that are to leave the Group shall be confirmed.

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CSR MoDel PERNOD RICARD CONSIDERS— THAT LEADERSHIP IS CONNECTED WITH A DEEP SENSE OF RESPONSIBILITY, AND IS DEVOTED TO DEVELOPING A STRONG CSR PHILOSOPHY: “EVERYONE IS RESPONSIBLE”. ENCOMPASSING ALL EMPLOYEES AND STAKEHOLDERS, THIS PHILOSOPHY IS EMBODIED IN PERNOD RICARD’S CSR ENGAGEMENT: “RESPONSIB’ALL”.

The Group’s CSR engagement is driven by a vision, “Pernod Ricard contributes to a sustainable world through responsibility and conviviality” and a mission, “to act and to be recognised as the leader of responsibility in the alcohol industry”. Pernod Ricard has therefore established a model based on four areas of engagement, which are clearly reflected in the Group’s daily activities: empower its employees, promote responsible drinking, protect the planet and, lastly, develop communities and engage partners.

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empOwer prOtecT OuR OuR Employees PlaNEt

INFORM ALL EMPLOYEES Promote PROMOTE SUSTAINABLE OF PERNOD RICARD’S AGRICULTURE AND CSR COMMITMENTS ReSpoN- PRESERVE BIODIVERSITY 94% of employees consider 77% of the Group’s vineyards themselves to be fully informed SiBle are certified according to envi- of Pernod Ricard’s priorities in ronmental standards. terms of CSR commitments.* DriNking REDUCE ENERGY develop ENGAGE OUR EMPLOYEES CONSUMPTION AND PROMOTE MODERATE IN CSR ACTIONS COMBAT CLIMATE CHANGE DRINKING OuR AND EMPOWER THEM -12%: Reduction in energy con- TO BE INNOVATIVE AND 93% of affiliates have led at sumption per litre of distilled COMMITTED AMBASSADORS least one initiative to promote Communi- alcohol on production sites be- responsible drinking. 93% of employees hope that the tween 2010 and 2014. international Responsib’ALL -22%: Reduction in CO2 emis- Ties and Day will be held again in 2015.** FIGHT AGAINST DRINK DRIVING sions linked to the consumption of fossil fuels and electricity per ENGage PROMOTE DIVERSITY 72% of affiliates have led at least litre of distilled alcohol between AND RELATIONSHIPS BASED one awareness project on drink 2010 and 2014. OuR ON MUTUAL TRUST AND driving. RESPECT PROMOTE SUSTAINABLE paRtnerS 41% of external hires are women. MAKE MINORS AND YOUNG PRODUCT DEVELOPMENT PEOPLE AWARE OF THE AND REDUCE THE IMPACT CONTRIBUTE TO THE PAY CLOSE ATTENTION RISKS LINKED TO EXCESSIVE OF WASTE DEVELOPMENT OF OUR TO THE WELL-BEING OF OUR OR INAPPROPRIATE LOCAL COMMUNITIES EMPLOYEES AND SUPPORT ALCOHOL CONSUMPTION -76%: Reduction of the solid (ECONOMIC DEVELOPMENT, THEIR DEVELOPMENT waste landfilled or incinerated 60% of affiliates have led at least ENTREPRENEURSHIP, THROUGH FIRST-CLASS between 2010 and 2014. one initiative to educate young SHARING OF CULTURES) HUMAN RESOURCES people. PRACTICES PRESERVE WATER 60% of affiliates have led at RESOURCES least one initiative to support Develop knowledge and skills DISSUADE PREGNANT through training and monitoring: WOMEN FROM DRINKING -10%: Reduction in water con- local communities. sumption per litre of distilled 2.6% of total payroll invested in 2013: Pernod Ricard extends alcohol on production sites ENCOURAGE OUR PARTNERS training, the use of the prevention logo TO RESPECT SUSTAINABLE between 2010 and 2014. 85.7% of employees received an to all of its brands and affiliates DEVELOPMENT PRINCIPLES annual performance review. throughout the world. Promote internal mobility: ROLL OUT EFFICIENT 376 suppliers have signed the 200 internal transfers or moves. ENVIRONMENTAL Supplier CSR Commitment. MAKE STAFF AWARE MANAGEMENT SYSTEMS OF THEIR RESPONSIBILITIES EXPECT OUR LEADERS TO 96% of sites are ISO 14001 LEAD BY EXAMPLE Apply the Commercial Communi- certified. cations Code to all affiliates: Deploy a common leadership 99.1% of campaigns reviewed model: 265 managers have were in compliance with the Per- taken one of the two leader- nod Ricard Code in 2013/2014. ship programmes organised by Make all Group employees Pernod Ricard University (the ambassadors of responsible third will be launched in 2015). drinking: 18,000 employees participate * Internal survey I Say, 2013. in a day dedicated to CSR: ** Internal survey following Responsib’ALL Day Responsib’ALL Day 2014.

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a susTAINabLE commItment — BUILDING ON THE HISTORIC COMMITMENTS OF ITS FOUNDERS, PERNOD RICARD HAS MADE ETHICS A KEY PRINCIPLE OF ITS LONG-TERM GROWTH. FOR THE GROUP, BEING RESPONSIBLE MEANS ACTIVELY CONTRIBUTING TO A GLOBAL EFFORT WITH A COMMON GOAL: TO MAKE DECISIVE PROGRESS IN THE AREA OF SUSTAINABLE DEVELOPMENT.

1938 1970 2003 — — —

Ricard introduces employee Martell The Group signs shareholding. founds Revico, up to the United Nations a company that Global Compact. processes stillage from the Cognac region using anaerobic digestion.

1966 1971 1997 2004 — — — —

Paul Ricard creates the Oceano- Jean Hémard, Pernod Ricard The Group adopts graphic Institute on the island of Chairman of Pernod, founds Ireb, becomes a partner a comprehensive Les Embiez. the Institut de Recherche of the Centre Pompidou, Quality Safety Environment sur les Boissons alcoolisées one of the world’s largest policy. (French Institute for Scientific museums with Europe’s Research on Alcoholic Beverages). leading collection of modern and contemporary art.

1990 2005 — —

Pernod Ricard Pernod Ricard introduces is a founding member self-regulation on the advertising of the European Forum campaigns for its strategic brands. for Responsible Drinking (EFRD), which promotes “If we wish to continue responsible drinking and our business and develop encourages companies our brands over the long in the industry term, we must maintain our to adopt self-regulation commitment to our consumers standards in commercial and to our governing communications. authorities. We want to remind 1975 our consumers to enjoy our — brands responsibly.” Pernod Ricard initiates its Patrick Ricard, collection of original artworks; former Chairman of the Board a piece of art is commissioned and Chief Executive Officer of each year to illustrate the cover Pernod Ricard of the Annual Report. — Signing of a partnership agreement with the L’APPEL non-profit organisation.

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2006 2013 — —

Creation Pernod Ricard of the Ricard extends the use Corporate Foundation. of the ‘No alcohol for — pregnant women’ logo to all Launch of a Sustainable of its brands and affiliates Development Charter throughout the world. with concrete commitments — to employees, consumers, The Group renews its shareholders, suppliers commitment through a new and partners. Environmental Policy. 2012 — — The Group becomes a member of Transparency International. At the Inter- national Center “Pernod Ricard is one of those 2007 for Alcohol Policies companies that are aware — (ICAP) conference, of the need for new interactions Pernod Ricard, speaking with society and policy makers. Its Introduction of bonus share on behalf of 13 major beer, commitment with Transparency awards. wine and spirit producers, International attests to this. announced the industry’s five Our shared conviction is that commitments to promote we need to open up a dialogue responsible drinking. and act on the basis of clear 2008 2011 commitments and practices, — — “As leaders of multinational which involves integrating companies, my colleagues lobbying efforts within ethics New expatriation policy The Group organises the first and I want to actively participate and social responsibility policies, rolled out. Responsib’ALL Day, a day of action in reducing the excessive something that Pernod Ricard and prevention mobilising all or inappropriate consumption has fully understood.” employees around the world. of alcohol, and we aim to put Daniel Lebègue, these commitments into practice — Chairman of Transparency Launch of the Kangaroo Fund with the same vigour International France employee innovation programme. and professionalism that drives — us in our activities.” Signing of Pernod Ricard’s Pierre Pringuet, Responsible Purchasing Policy. Vice-Chairman of the Board — and Chief Executive Officer of Renewal of the partnership Pernod Ricard 2010 with PlaNet Finance, to support — the development of a cooperative of Armenian winemakers. Endorsement of the United Nations CEO Water Mandate “In the Tavush region of Armenia, and the French national strategy Pernod Ricard and PlaNet for biodiversity. Finance have come together — to create cooperatives of small Launch of iMove, the Group’s winemakers. This project helps internal mobility platform. participants to revive ancestral 2014 — knowledge, increase their income, — Creation of Pernod Ricard find long-term financing through University. microfinance, create prospects Pernod Ricard launches its — for future generations and international ‘Wise Drinking’ Launch of the water tank establish a cycle of sustainable application, which is available programme in Haiti and support development: it is a model in 37 languages and can be for students in Vietnam of responsible sourcing.” adapted to local legislation. and Peru with Jacques Attali, the APPEL association. “Raising consumer awareness Chairman of PlaNet Finance is at the heart of our business. It’s the duty of the entire industry to set an example.” Alexandre Ricard, Deputy Chief Executive Officer and Chief Operating Officer, Pernod Ricard

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Human Resources

SUPPORTING ORGANISATIONAL CHANGES AS PART IN ORDER TO FULFILL ITS LEADERSHIP OF THE ALLEGRO PROJECT 2014 was marked by the implementation of the “Allegro” Group AMBITION, PERNOD RICARD project, designed to improve operational efficiency in a more challenging economic environment. This three-year project aims CONTINUES TO IMPLEMENT A HUMAN to provide Pernod Ricard with the structures and ways of working together that are required to make the most of growth oppor- RESOURCES POLICY THAT FOCUSES ON tunities. The role of Human Resources will be to support each entity in defining and implementing new organisational structures, DEVELOPING TALENT AND MANAGING deploying social initiatives and managing change. PERFORMANCE. KEY TO THIS ARE Although Pernod Ricard favours a decentralised approach, so PROCESSES AND PRACTICES WHICH, as to be able to focus on the concerns of employees and be fully compliant with local business practice and legislation, BY RELYING ON A UNIFYING CULTURE, where employee relations are concerned, the Group has set out global HR principles to ensure exemplary performance: focusing ENCOURAGE THE TRANSFER OF SKILLS on transparent and constructive concertation, giving employ- AND HELP FOSTER A SPIRIT ees maximum clarity and listening to their concerns, offering those for whom solutions cannot be found within the Group OF INNOVATION. competitive severance packages and outplacement services to support their career change, and so on. Internal redeployment remains the priority and HR is committed to working hard to identify as many opportunities as possible within the Group and to facilitate transfers. “leadership” item, which is readily identified by employees as the In terms of supporting the change process, role-specific training driving force behind the Group’s programmes have been deployed in each entity. In marketing, strategy. The results achieved for instance, more than 800 employees from the Brand and are largely the fruit of a human Market Companies took part in two-day seminars to discover resources policy built on and the new ways of working together and to learn more about the implemented around a common new tools. leadership model, shared across all of the Group’s affiliates. In addition, the HR function adapts the Allegro principles – prioritisation, simplification and mutualisation – to its specific way Ensuring the dissemination of working, by clarifying strategic priorities and the part played of common social standards by each entity, and distinguishing between global HR practices An established leadership This model, oriented towards that are common to all and those that call for a local approach. model going forward the dissemination of common A new way of working together has also been introduced within Built on a culture of conviviality standards allowing all affiliates the HR function, that of communities of experts. Each community and an entrepreneurial spirit, to move forward, can be found in is comprised of experienced HR professionals selected from the over the years Pernod Ricard has the principles of employee-man- various entities within the Group for their expertise in a particular laid the foundations allowing its agement dialogue that Pernod area, and is responsible for improving and co-developing glob- employees to adhere to a single Ricard develops with its stake- al HR practices in key strategic areas. This allows the Group to ambition: that of making the holders. The collective agree- capitalise on existing expertise and use it to implement solutions Group the leader in its sector. ment signed in January 2014 that are relevant to all. Six communities of experts were launched The results of the second I Say in partnership with EFFAT initially, focusing on developing employees and managing talent. opinion poll highlight this. The (European Federation of Food, A training course has been rolled out to familiarise the HR teams poll, conducted among employ- Agriculture and Tourism Trade with the new ways of working that Allegro entails, and to enable ees in June 2013 by Towers Wat- Unions) illustrates this: it is set them to play their key roles in the change process. son, shows a high level of overall to speed up the dissemination commitment of 86%. Though the of best practices in CSR and HR “culture and values” item remains in all of the Group’s European the key factor in this commit- affiliates, encouraging them to ment, it is closely followed by the consolidate various societal and

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Developing skills by Sharing Expertise — PERNOD RICARD FOCUSES ITS ACTION ON SKILLS DEVELOPMENT, WHICH SPEARHEADS ITS CONQUEST OF LEADERSHIP. THE GROUP ENCOURAGES THE TRANSFER OF KNOWLEDGE AND THE SHARING OF EXPERIENCE VIA TARGETED HR TOOLS AND PROCESSES THAT MAKE EMPLOYEES THE ACTORS OF THEIR CAREER PATHS.

labour commitments, thus sur- Pernod Ricard Pernod Ricard to offer a range passing their legal obligations University, a platform of career opportunities that at- and achieving alignment with for the dissemination tract talented people, thereby the standards in effect within of knowledge contributing to its reputation as the most advanced affiliates. With 430,175 hours of teaching an employer of choice. Inciden- This framework is designed to provided in 2013/2014, Pernod tally, many concrete examples be used as a reference for all the Ricard University is the corner- of career development within Group’s affiliates. stone of talent development the Group have been shared within the Group. Bringing on the Group’s new Careers web- together employees from all site, through testimonials from affiliates, it is a great way to employees all around the world. disseminate the culture, com- This year, there were some 200 in- mitments and best practices of ternational transfers of personnel Pernod Ricard. Its role is to sup- between affiliates. port employees on their career TH!INK, paths by giving them functional A LABORATORY programmes, whilst also en- BASED ON CREATIVE hancing managers’ leadership LEADERSHIP skills. To this end, the Group The ambition of the lab, de- created three modules, Mixers, signed by Pernod Ricard Win- Shakers and Blenders, respec- emakers, is to learn to develop, tively targeting talented young maintain and enhance creativi- Tú enseñas. Tú aprendes. people, experienced managers ty. “We wanted to bring employ- and top management. This ees together around a common year, some 265 employees at- goal: that of being more innova- tended one of the two training tive so we can do things differ- LEADERS programmes already rolled out, A KNOWLEDGE ently and become leaders in our OF TOMORROW Mixers and Shakers. “ACADEMY” category,” said Jean-Christophe Keen to raise awareness of its Based on the Pernod Ricard Coutures, its CEO. One-day cre- cultural model and to share its Mobility, a melting pot Italia model, Pernod Ricard ativity sessions were organised vision of leadership, Pernod Ricard to enhance sharing España rolled out its own am- in 2012, which in turn led to the created a course – lasting around and transfer bitious training programme establishment of the lab con- a hundred hours and leading to Mobility is a significant driver in 2013. Its defining feature is cept, aimed at business man- the awarding of a certificate upon in skills development, allowing that it is run entirely by internal agers who face major business completion – in partnership with more career paths and business staff. Entitled AULA (meaning challenges. The aim is to help the HEC Paris International Busi- lines to intertwine. Whether “classroom” in Spanish), it has them understand the drivers ness School, the HEC Leadership based on function or geogra- already been used in several behind creativity, and provide Certificate, focusing on the relation- phy, Pernod Ricard has always sessions to train staff on key them with tools to allow cre- ship between human capital and encouraged mobility, so as to topics such as project manage- ative thinking to emerge in corporate performance. Organised spread its culture more effective- ment, finance and innovation. their teams. A seven-day pilot into teaching modules, its contents ly and to ensure the exchange Aligned with employee expec- scheme was organised at the touch on various themes such as of knowledge, skills and exper- tations and the strategic needs end of 2013, in which 25 sen- trust, power, innovation and deci- tise within the Group. Mobility is of the company, this internal ior leaders took part. It was a sion-making. The case study devel- an essential avenue towards in- training programme promotes very positive experience for the oped by Pernod Ricard on the issue novation, encouraging the cross- recognition and involvement at participants, and the training of leadership is the programme’s fertilisation of various different all levels. course is set to be rolled out on guiding principle. views and approaches. It enables a larger scale.

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A new employer the most talented graduates. They Attracting brand platform give new recruits the opportunity The employer brand platform to act as true brand ambassadors and retaining talent was formalised and sent out to with companies in local markets. all of Pernod Ricard’s HR teams These roles carry responsibility in 2013. It was created to meet and combine varied activities in in order to support the two-fold challenge of recruit- an international environment. ing the best talents and bringing In order to address the challeng- Performance together the employees. After es brought by the ‘talent war’, identifying the Group’s most dif- Pernod Ricard Asia set up a — ferentiating criteria, the platform Regional Management Train- was built around five of them: ee Programme to attract and much-admired and success- recruit young graduates from ful Premium brands; convivial, Asia’s best universities through- genuine and passionate staff; out the region. It is an 18-month an entrepreneurial spirit; local programme that includes inte- roots linked with a global ambi- gration, mentoring, rotation of AMONG THE GROUP’S STRATEGIC tion; and the ideal environment roles and location, a secondment HR PRIORITIES, THE ABILITY in which to develop. This work to another Asian country, a week on brand identity led to the es- of personal development and, TO ATTRACT AND RETAIN THE BEST tablishment of a careers site 1 finally, a visit to the Pernod Ricard , launched in July, and available Holding Company and the Brand NEW TALENT IS A FUNDAMENTAL in French, English and Spanish. Companies in France. Since 2013, On this site, Pernod Ricard in- 18 talented young people from DRIVER FOR GROWTH. tends to promote the Group’s 6 Asian countries have taken part culture and history by allowing in this programme, and they will IN THIS FIELD, PERNOD RICARD employees to express them- be joined by 10 more in 2015. WORKS TO ESTABLISH A PROACTIVE selves through a series of video testimonials. POLICY, ONE THAT HIGHLIGHTS International programmes to ITS STRENGTHS, SPECIFICALLY accelerate career paths Pernod Ricard and its affiliates are ITS CULTURE, SEEN AS A MAJOR investing heavily in programmes COMPETITIVE ADVANTAGE. aimed at young graduates, with a view to attracting the best of them. One example is the Jameson Graduate Programme 2 , established by Irish Distillers in 1991. This programme gives graduates in sales, marketing and languages the opportunity to start their career in an international environment, progressing through various market companies to work on the Jameson brand. With 36 new recruits in 2013/2014, its significant power continues to grow. In the same vein, The Absolut Company and Chivas Brothers have recently established global programmes designed to attract

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ONE YOUNG WORLD: 2 ENHANCING YOUNG PEOPLE’S SENSE OF RESPONSIBILITY Because CSR is a major driver behind commitment in business, Pernod Ricard decided to send eight young employees to the One Young World Summit in South Africa in October 2013. This sum- INVESTING mit allows talented people under IN THE LEADERS the age of thirty from companies, OF TOMORROW NGOs and universities to discuss Chivas Brothers Limited has adopted key issues in the field of sustain- a mentoring approach in order to able development with opinion motivate its teams and to share the leaders and decision makers who Group’s culture more effectively. The act as advisers. Internally, this affiliate developed an action plan in event inspired the creation of the several stages. To begin with, it set Youth Action Council (YAC), which out the skills it needed to promote. It aims to rally the Group’s emerg- then selected 30 mentors, all senior ing talent around strategic issues. leaders, some of whom are from the Reserved for employees under Management Committee, with each the age of thirty, this Committee being responsible for monitoring an aims to make it easier to feed employee against specific targets. At back initiatives and original best the same time, the affiliate trained practices to senior management, these mentors and produced men- Diversity, an essential at all levels, particularly in the before making them a reality. toring support materials (including part of creativity talent pool and on management It also gives the selected appli- a dedicated forum, a practical guide, The Group considers diversi- committees, through internal cants the chance to develop their and so on). The program intends ty to be a genuine driver for mobility and recruitment. talent by becoming project spon- to develop leaders, and to improve performance and innovation. In terms of promoting female sors, and to provide managers performance, innovation and com- Whether of gender, age, origin leadership in particular, the with a different viewpoint on their munication within the affiliate. It or career path, diversity offers Group is partnering with ex- strategic challenges. has already started to pay off, with a real competitive advantage. ternal initiatives. This year, the employees identified joining the A reflection, as it is, of society the Group became a member of programme. at large, diversity gives a better Catalyst, a non-profit organisa- understanding of consumers; it tion working to assist the devel- is a source of different attitudes opment of women’s careers in and perspectives that encourage business. In another initiative, the germination of ideas and ad- four female executives from aptation to change. head office took part in drafting DIVERSITY: Globally, two priority areas have a fun dictionary on the role of A COMPREHENSIVE been identified: increasing women in business and society, PROGRAMME AT female participation in leading as part of a seminar spread over PERNOD RICARD USA teams, and fostering greater three years and led by the École Improving decision-making, diversity in terms of origin or Normale Supérieure in Paris. strengthening problem-solving career path within Management. Created following meetings with skills and optimising innovation Working groups have been social science researchers, this processes: diversity provides teams established to create concrete work aims to challenge compa- with substantial benefits. With this in initiatives with four priority nies to change attitudes. mind, since 2011 Pernod Ricard USA areas of action: flexibility, to has implemented an integration and strike a balance between work RELYING ON YOUNG diversity programme, “Mirror the and family life; mobility, or how TALENT marketplace”, led by a dedicated to account for dual careers; The mentor role can also be played manager and supported by a mul- mentoring, to accelerate devel- by much younger employees, ti-function team of ambassadors opment and clarity; and com- thus increasing motivation and based across the country. An action munication, to raise awareness involvement. In this instance, it plan allowed significant progress and change attitudes amongst is known as reverse mentoring. to be made: internally, awareness employees. In addition, specific This method was adopted by The was raised through e-learning ses- indicators were set out, and all Absolut Company to enhance the sions and participation in specific affiliates will adhere to these digital technology knowledge of events, bringing together over 40% from now on through the HR its Management Committee mem- of employees. Externally, diversity Scorecard. bers. Sessions of 30-45 minutes will, from this year, be an integral Finally, with effect from the were planned for each member, part of recruitment, with the imple- new financial year, promoting led by a young employee with mentation of specific procedures. diversity will automatically be expert knowledge of the subject. In addition, a page devoted to di- considered in the performance Nine topical issues were discussed, versity has been created on Pernod evaluations of members of man- including social media, a study Ricard USA’s website, thus helping agement: improving the diver- of Google, new digital business to improve the Group’s image as sity of employee backgrounds models, and new trends. an employer.

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ON OPPOSITE SIDES OF THE WORLD, JULIA AND NOEMIE HELP IMPLEMENT THE GROUP’S CSR INITIATIVES, SUCH AS RESPONSIB’ALL DAY, AN IMPORTANT DAY OF ACTION IN WHICH ALL EMPLOYEES TAKE PART.

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JULIA MIZUBAYASHI, PUBLIC AFFAIRS AND INTERNAL COMMUNICATIONS MANAGER, PERNOD RICARD JAPAN NOEMIE BAUER, CSR AND PUBLIC AFFAIRS MANAGER, PERNOD RICARD AMERICAS

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RespoNSible DriNkinG

Solid foundations implement by 2017: reduce un- KEEN TO ENSURE THE RESPONSIBLE Promoting moderate consump- derage drinking, strengthen and CONSUMPTION OF ITS PRODUCTS, tion, combating drink driving, ed- expand marketing codes of prac- ucating at-risk groups, dissuading tice, improve consumer informa- PERNOD RICARD HAS ALWAYS pregnant women from drinking, tion and encourage the devel- making staff aware of their re- opment of responsible product PROMOTED “RESPONSIBLE sponsibilities… These five histor- innovations, educate the general ical committments embody Per- public about the dangers of drink CONVIVIALITY” AS THE REFERENCE nod Ricard’s responsible drinking driving, and enlist the support of MODEL FOR DRINKING ALCOHOL. policy, and are reflected on a daily retailers. Since then, Pernod Ri- basis in a range of initiatives that card has accelerated the imple- focus on raising awareness and mentation of new action plans, prevention. The origins of this in line with these five areas of Following in the footsteps of its founders, the policy lie in the beliefs of Pernod development. Group has developed robust guidelines that Ricard’s founders, who strived to combine elements such as setting a good improve best practices. In addi- Employees, tion to being a member of ICAP, the primary ambassadors example, raising awareness and encouraging Pernod Ricard is notable for being of responsibility moderation, and these recommendations have one of the founding members of For Pernod Ricard, the effective- been further enhanced over time through the the French Institute for Scientific ness of the approach is under- Research on Alcoholic Beverages pinned by active teaching and actions of its affiliates and their stakeholders. (Ireb) and spiritsEUROPE. The education over the long term. This collective approach, created with the aim Group is also an active mem- As such, our employees are the of fostering continuous improvement, has ber of organisations such as the first to embrace these principles, Thai Foundation for Responsi- as they are encouraged to take shifted the lines in raising standards across the ble Drinking (TFRD), as well as, action inside and outside the industry. And, once again this year, this policy Drinkwise in Australia, Drinkaware workplace, by spreading their has led to the development of new projects in in the UK or ARA in South Afri- knowledge and good practices ca. The Group’s pioneering com- using dedicated tools (intranet line with the commitments made at the ICAP mitment has been perpetuated sites, awareness-raising cam- (International Center for Alcohol Policies) and strengthened by its affiliates, paigns, training sessions, etc.). conference in 2012, alongside the industry which are encouraged to adopt Responsib’ALL Day marks the and share the initiatives inspired culmination of this campaign: as a whole. by international commitments, in for 24 hours, all of the Group’s line with local social issues. employees join together to raise awareness about responsible Spreading responsible drinking among customers, dis- practices tributors and the general pub- This desire to act proactively and lic. This year, the commitments to raise awareness within the made during the ICAP confer- industry led to a defining mo- ence provided the foundations ment, at the ICAP conference in for this event and gave birth to late 2012, with the signing by the major programmes across the key players in theindustry of five five continents, ranging from key commitments for responsi- a seminar educating about the ble drinking. Five areas of action dangers of underage drinking that producers are committed to (Pernod Ricard Japan) to train-

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ing on simulators that replicate the effects of drink-driving (Per- nod Ricard South Africa) and visits to retailers to raise their awareness, conducted in association with the wine and spirits distributor Southern Wine & Spirits of America (Pernod Ricard USA).

The fundamental role of partners Pernod Ricard also relies on the recognised expertise of its stakeholders (public authorities, non-governmental organisations, prevention associations, scientific experts, etc.) to develop and expand its activities in order to improve their scope and effectiveness. This collaboration covers a number of educational and awareness-raising programmes conducted by affiliates at a local level. It targets two priorities: the fight against drink-driving and educating at- risk populations.

Self-regulation and ethical marketing Pernod Ricard encourages moderate consumption in line with the standards set by the World Health Organisation. In this respect, its actions cover activities such as disseminating clear and transparent information on the risks related to inappropriate or excessive alcohol consumption, the labelling of bottles as well as advertising displays. More- over, the Group decided not to communicate via traditional or digital media channels targeted WISE DRINKING, E-LEARNING: THE PERNOD RICARD at a predominantly underage au- THE APP PROMOTING MORE EFFECTIVE MODEL: INSPIRING dience. Consequently, the Group RESPONSIBLE COMMUNICATION THE STANDARD was one of the first adopters of DRINKING OF RULES Pernod Ricard’s ethical commit- self-regulation, through its im- Pernod Ricard’s digital know-how Pernod Ricard has made educat- ments, particularly its Commercial plementation of a Commercial and experience in the area of so- ing its employees a key compo- Communications Code, inspired Communications Code, which cial communications for consum- nent of its model’s success. The the standards drafted in connec- takes inspiration from the best ers has led to the creation of ‘Wise Group has opted to use e-learning tion with the European Responsi- codes of conduct. This code Drinking’, a global app designed to to provide training on its Commer- ble Marketing Pact. The aim of this has been further strengthened encourage responsible drinking. In cial Communications Code to as pact, signed in 2013 by eight pro- by the addition of a section practice, the app allows drinkers to many employees as possible. The ducers (including Pernod Ricard), dedicated to digital media, by calculate the number of alcohol new online training programme, is to define a framework for com- imposing a minimum size for units they have consumed in real launched with the support of mercial communications to better prevention messages, as well time, taking their morphology into Pernod Ricard University in June protect minors. It has three objec- as the control of new products. account. What’s more, it adapts to 2014, is divided into five chapters tives: to reduce minors’ exposure An internal approval committee, the local laws in the user’s coun- and, following a test at the end of to advertisements for alcoholic composed of independent mar- try to offer advice and, through the course, employees receive a cer- drinks; to define strict rules to keting experts, ensures its strict use of a geolocation system, indi- tificate validating their knowledge. minimise the appeal of marketing application by checking the ma- cates the nearest means of trans- Mandatory for members of staff communications to minors; and to jority of commercial communi- port. The ‘Wise Drinking’ app is working in marketing functions, strengthen the rules applicable to cations from all of the Group’s available for free in 37 languages the training is also open to all communicating on social media in affiliates (1,800 campaigns on iPhone and Android, and has employees. conjunction with operators. reviewed in nine years, among been downloaded over 26,000 which only 7 have been refused times in a month. by the committee).

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Fight against drinK driving: a Major challenGe —

or over 30 years, Pernod Actions in line with reality Ricard has been involv- Pernod Ricard uses education ing its employees, affil- to encourage responsibility and F iates and stakeholders to change people's attitudes. in the fight against drink driving The Group implements an ap- – a major issue, recognised as proach based on experience in a priority by the whole indus- the field which is tailored to the try. Pernod Ricard, one of the local situation. To this end, it first signatories of the Euro- organises training programmes pean Road Safety Charter in and awareness-raising cam- 2007, implements a proactive paigns created in partnership policy, directly inherited from with prevention associations, its founders, which focuses on as well as local political and three areas of action: informa- social players. Among its prior- tion, prevention and education. ities are the “designated driver” PRIORITISING AT-RISK CORBY SPIRIT To spread its messages more initiative and the checking of POPULATIONS & WINE LTD.: effectively, the Group brings to- blood alcohol levels. In Mexico, In accordance with the commit- FREE TRANSPORT, gether partners who are able to for instance, the Pernod Ricard ments made by the alcoholic A WORLD FIRST pool their expertise and knowl- Mexico Foundation launched a drinks industry at the ICAP con- Entitled “Don’t Pay the Price”, a edge of the field, such as public major awareness-raising cam- ference, Pernod Ricard continues message with a double mean- authorities, prevention associa- paign entitled “You Drink Or You to make a significant contribu- ing that refers both to the price tions and NGOs. It also works Drive” (“O tomas o manejas”). tion by developing new actions of the transport and the risks of internally to develop employees’ In the United Kingdom, Pernod around the world. In Vietnam, drink-driving, the campaign im- sense of responsibility and the Ricard UK has worked with the in order to raise awareness of plemented in Toronto is a fine need to set a good example Automobile Association, draw- the dangers of drinking and example of a perfect partnership. at all levels, by promoting the ing on the conclusions of a sur- driving, especially when driving The initiative, stemming from sharing of good practices and vey it conducted. The result: a on motorways, the Group has Responsib’ALL Day 2013, led the commitment of all players, hard-hitting campaign aimed launched a new pilot campaign. Corby Spirit & Wine Ltd. to sign especially within the context of at the young with the message Targeting the highest-risk groups a three-year partnership with the Responsib’ALL Day. “Drink driving starts with an (young people, truck drivers), the the Toronto Transit Commission excuse”. programme is to be rolled out in (TTC) to offer consumers free seven major cities. Underpinned travel on the night of New Year’s Investing in research by Pernod Ricard’s knowledge Eve. Supported by the Minister of Prevention also involves re- and expertise in promoting Transport and a number of prom- search. To this end, Pernod responsible drinking, the cam- inent local individuals and organ- Ricard supports several or- paign’s message is spread lo- isations (even the Liquor Control ganisations (Ireb and ICAP for cally by the public authorities Board of Ontario – the monopoly example) and undertakes its and several NGOs playing a selling alcoholic beverages in the own research projects, usually key role in the implementation province), the initiative, which was on a cross-disciplinary basis, of change. widely publicised in the press and such as “Safe Roads 4 Youth” across social media, illustrates programme, rolled out in Ar- Pernod Ricard’s ability to bring gentina, Vietnam and South together key social and econom- Africa; this campaign conducts ic players around a major issue. research and implements ac- The campaign was a resounding tions to address the issue of success, both among employees Youth, Road Safety and Alcohol and the general public. in developing countries, with different cultures. Initiated with funding from employees in connection with Responsib'ALL Day and supported by recognised local and international partners (non-governmental organisations and university researchers), the results of this ambitious project will be published shortly. .

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At-risk populations: Preventive MeaSures —

n order to support at-risk the place of consumption, using and vulnerable groups social media and digital tools in (pregnant women, young line with modern lifestyles and I adults, minors, etc.), new forms of usage, as well as Pernod Ricard is committed involving adults – associations, to rolling out targeted educa- educational movements and an tional actions that focus on increasing number of distribu- encouraging people to take tors – in the awareness-raising responsibility for themselves process. Thus, the Group recent- and raising the awareness of lo- ly renewed its partnership with cal intermediaries. In this area, the Erasmus Student Network the keyword remains preven- (ESN), a European programme tion; however, it also involves for student exchanges in Europe, clear messages and initiatives which has adopted a responsible at a grass roots level. drinking programme for which the students themselves are the Minors: education ambassadors. This programme comes first has reached over 110,000 stu- Pernod Ricard has set itself three dents in around thirty countries SPREADING GOOD ALCOHOL I KNOW… objectives: delay the age of the in just three years. Another ex- PRACTICES TO RETAIL- A GOVERNMENT- first drink, reduce the number of ample: in Brazil, the Group is ERS, A PRIORITY BACKED PROGRAMME underage consumers and reduce working in partnership with the IN COLOMBIA In order to address the danger of the quantities drunk by minors NGO Nova Educaçao and, since Focusing on partner points of sale alcohol abuse in Thailand, Per- who are already consumers. To 2011, five thousand students have and promoting responsible prac- nod Ricard Thailand undertook maximise the chances of success, received training through a pro- tices to raise awareness among to launch a wide-scale youth the Group intends to roll out ed- gramme called ‘Na Medida’, us- young people: this is the chal- training programme focusing on ucation projects with the support ing role-playing activities to con- lenge that Pernod Ricard Colom- responsible drinking and the dan- of adults (parents, trainers and vey the message of responsible bia has set itself, through an am- gers of drink-driving. Over time, teachers) who are essential to drinking. To support their work, bitious initiative entitled “Alianza the affiliate has gained the sup- the transmission of information. the Group and its affiliates have + 18”. As the first step, the affiliate port of a number of key players, In Sweden, since 2006, Pernod developed highly effective and worked in conjunction with ICAP including the government, by de- Ricard Nordic and The Absolut entertaining digital apps, in line to develop partnerships with oth- veloping teaching materials. The Company have been conduct- with new attitudes. For example, er players in the industry and the programme has now expanded ing the ‘Prata Om Alkohol’ (“Talk The Wine Line, an app developed local authorities, including the even further, with the involvement about alcohol”) programme in by Pernod Ricard Winemakers in institute for family well-being, a of local producers and interna- Swedish schools, with the par- Australia, which allows drinkers to parents’ association and a scien- tional partners. After raising the ticipation of teachers. More than calculate the amount of alcohol tific foundation. It then conduct- awareness of around 7,000 young 250,000 students have attend- in a glass, has proved extremely ed two waves of communication people, the campaign is a success. ed the course and it has already popular locally: it has received campaigns (with the production of been rolled out in several neigh- 4,500 downloads in one month. a video, a poster and stickers to be bouring countries. In Spain, a placed in points of sale) support- programme focusing on youth Pregnant women: ed by widespread media coverage. and alcohol (‘Adolescencia y extremely Two hundred retailers were initial- Alcohol’) was launched with strict recommendations ly recruited to participate in this the support of a scientific com- On the basis of joint studies and programme. At the end of 2014, mittee. Based on educational knowledge in this area, Pernod the programme will be assessed workshops involving both chil- Ricard was quick to recommend initially by mystery shoppers and dren and parents, it has reached that women adopt a “Zero Al- will be the subject of a scientific close to two million students cohol” policy during pregnancy. report, with the expectation that over a period of ten years. In 2006, the Group was the first purchases by minors will have company in the alcoholic bever- dropped by around 10% by the Young adults: encouraging ages sector to place a warning second year. responsibility logo for pregnant women on the Pernod Ricard is strengthening back label of bottles for sale on the impact of its messages by the European market. It went one deploying innovative actions step further in 2013, by expanding focusing on three areas: organ- this measure to all its brands and ising prevention initiatives at affiliates worldwide.

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EnVirOn- ment

ENVIRONMENTAL EXCELLENCE IS An historical commitment France, Food and Drink Europe For more than 30 years, Pernod and the international BIER (Bev- CENTRAL TO THE QUALITY OF THE Ricard has made protecting the erage Industry Environmental environment one of its priority Roundtable). The organisations PRODUCTS AND REGIONS THAT SHAPE commitments. This undertaking involved in these initiatives benefit was first made by Paul Ricard, the from the opportunities they offer THE IDENTITY OF PERNOD RICARD’S founder of Ricard, who combined to share knowledge that encourag- an entrepreneurial vision with es continuous improvement. For BRANDS. OVER TIME, ITS RESPONSIBLE firmly held environmental princi- example, the work done this year POLICIES, WHICH ARE IMPLEMENTED ples. In 1966, he set up an Ocean- at the FFS, with the support of ographic Institute on the island industry experts and manufactur- AT LOCAL LEVEL BY ITS AFFILIATES, of Les Embiez dedicated to the ers, to define a common standard conservation of marine species, for assessing the environmental HAVE MULTIPLIED, BOOSTED BY A which today plays a leading role footprint of spirits, made a key in protecting the Mediterranean. contribution to informing and de- CULTURE OF SHARING EXPERIENCE. In keeping with these principles, veloping the Group’s ideas about THEY HAVE ALSO EXPANDED, Pernod Ricard has made protect- sustainable product development. ing the environment an integral In November 2013, Pernod Ricard AS ILLUSTRATED BY THE MAJOR part of its business, ensuring that achieved a new milestone by for- natural resources and the regions malising its vision and commit- ADVANCES ACHIEVED THIS where its brands are produced are ments in an environmental policy preserved for the future. This com- based around five priority areas. YEAR, WITH A FOCUS ON TWO KEY mitment has been demonstrated This policy was distributed to all of over the years by the actions of its the Group’s employees and stake- AREAS OF ENVIRONMENTAL POLICY: affiliates, which are encouraged to holders and gives new impetus to A SUSTAINABLE APPROACH implement initiatives locally and its environmental initiatives. to commit to measurable targets TO PRODUCT DEVELOPMENT, AND for their production sites (96% of production sites were ISO 14001 THE PRESERVATION OF BIODIVERSITY. certified in 2014). PERNOD RICARD'S ENVIRONMENTAL An ongoing process POLICY IS BASED ON Pernod Ricard’s environmental strategy has been developed and FIVE COMMITMENTS: formalised, with a strong emphasis placed on responsible practic- 1. Promote sustainable es. Internally, the implementation agriculture and preserve of a range of dedicated methods biodiversity. and tools (including a network 2. Reduce energy consumption of local personnel, training and and combat climate change. intranet platforms), taken from 3. Preserve water resources the roadmap that has been rolled locally. out across the Group, is helping 4. Encourage a sustainable to boost the strategy. Externally, approach to product Pernod Ricard plays an active development and reduce the role in several working groups impact of waste. and round tables organised by professional or governmental 5. Deploy efficient bodies, including the FFS (Fédéra- environmental management tion Française des Spiritueux) in systems.

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Taking the environment The Group has used a pilot car- KAHLÚA: into consideration ried out by one of its affiliates FAVOURING THE USE from the earliest stages to establish a methodology for OF RECYCLABLE of product development the Marketing teams at each of MATERIALS The impact of Pernod Ricard’s the Brand Companies. Its objec- activities on the environment tive is to help them define the AND OPTIMISING begins with the design of its links between the brand and TRANSPORT products and continues through- the environment and encour- The caps of Kahlúa bottles out its supply chain. To reduce age them to implement sus- are now made from recyclable its environmental footprint and tainable measures in line with aluminium and their secondary limit its impact on the environ- the brand’s identity and strate- packaging has been redesigned ment, Pernod Ricard has made gy. Workshops on this topic will to contain more bottles. This designing and developing all of be run until 2016 and will tar- has led not only to fewer broken bottles, thanks to a new, more its products sustainably at all get the Group’s key brands as a EVER-INCREASING stages of their life cycle a pri- priority. solid contact point, but also to ority, in particular by reducing INITIATIVES… less energy consumption relat- All around the world, affiliates the amount of raw materials Eco-design – always ing to transport: for every 11 are implementing a range of used, encouraging the use of a priority journeys that were done pre- responsible practices through- recyclable packaging materials The integrated eco-design ap- viously, just 9 are done today, out the product life cycle and and optimising transportation. proach focuses on developing representing a fuel saving of encouraging partners and sup- This commitment requires a products while reducing their around 22%. cross-functional approach to environmental impact through- pliers to do the same. projects and this year took on out their life cycle. Its principles THE ABSOLUT a new dimension, driven by the have always been promoted by PERNOD RICARD COMPANY: EFFICIENT sharing of good practices and Pernod Ricard as an effective BRASIL: REDUCTION LOGISTICAL collaboration between staff in means of reducing waste. To en- AT THE SOURCE SOLUTIONS different departments. able all of its affiliates to adopt Pernod Ricard Brasil has come The Absolut Company is highly this approach more quickly, the up with the innovative idea of innovative in its use and promo- Integrating environmental Group has this year developed transporting PET bottles in re- tion of sustainable transport. It policies into brand strategy an interactive tool that provides turnable cardboard boxes. This encourages the use of sea trans- In response to consumers’ social advice and methodologies for required significant adaptation port (75% of its transportation and ethical expectations, sus- use by three different divisions of production lines and was im- is carried out by boat) and sup- tainable development is increas- – Marketing, Product Develop- plemented in close collabora- ports alternative energies – its ingly becoming an integral part ment and Purchasing. tion with the affiliate’s suppliers. contracts with wheat suppliers of the brand’s identity, strategy This initiative has enabled for 2014 stipulate that 25% of and development. The emer- Pernod Ricard Brasil to reduce journeys must be made using gence of the concept of corpo- the amount of cardboard boxes biofuels. Keen to advance envi- rate social responsibility has it uses by 88% (a considerable ronmentally friendly practices, this year given new impetus to reduction of 6 tonnes of CO2 in 2007 the affiliate became a Pernod Ricard’s environmental emissions per year). The affili- member of the Clean Shipping policy and has also been identi- ate is hoping to extend this win- Project, a Swedish group that fied as a key factor in achieving ning solution to other types of brings together large manufac- Premiumisation. Our brands packaging (such as caps). turers to develop cleaner, more increasingly seek to highlight efficient shipping solutions. the link between product and PERNOD RICARD The improvements achieved region, in an attempt to con- HELLAS: REDUCING to date include the creation of vey to consumers the passion THE WEIGHT a ranking system for shipping and authenticity that motivate OF BOTTLES companies. producers. In Greece, Pernod Ricard Hellas held an ECO Design committee in Mytilene with participants from various departments (production, purchasing, logistics, etc.). The aim of the meeting was to study and minimize the environmental impact of its new Borzoi gin and vodka packaging and to suggest alternatives. The following ideas were chosen from among the options discussed: reducing the weight of the bottles (by around 13%) and carton cases (by around 1,3%) and increasing the percentage of recycled glass and paper in the materials used.

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Agriculture and biodiversity: High ambitions making commitments for biodiversity for future generations Preserving natural heritage Pernod Ricard, which cultivates and biodiversity (by protecting 5 956 hectares of vineyards soil from erosion and creating and purchases nearly 2.3 mil- natural sanctuaries for wildlife) lion tonnes of agricultural raw is a key concern for Pernod materials every year, has made Ricard and its affiliates. We sustainable agriculture and bi- are investing in a number of odiversity a cornerstone of its wide-ranging programmes, the environmental commitments. results of which are already The preservation of natural re- measurable. In France, Martell sources and the quality of soil has made huge progress in this and land are at the very heart area: after carrying out detailed of its businesses and products: mapping of its ecosystems and PERNOD RICARD CAMPO VIEJO they support a long-term vision evaluating their potential for WINEMAKERS COMBINES of its activities. Since the Group biodiversity, the affiliate identi- AUSTRALIA: INNOVATION AND was founded, it has encouraged fied priority measures and set BEST PRACTICES RESPONSIBILITY its affiliates to experiment with itself a number of targets, such The preservation of ecosystems An innovative, environmentally responsible practices, which as the introduction of grass has shaped the identity and friendly wine – this is the prom- have subsequently been shared planting, which it has also start- success of Pernod Ricard Wine- ise of Campo Viejo Ecológico, and rolled out more widely. This ed to encourage among its sup- makers Australia products. The which was introduced as part year, such practices have once pliers. The same commitment affiliate is involved in a number of the brand’s ambitious action again made significant progress. to preserving natural areas can of programmes to promote the plan to promote biodiversity. be found in New Zealand, where reforestation of indigenous are- In practical terms, the wine is Sustainable agriculture: our affiliate has introduced a as and the preservation of local made in accordance with the quality and traceability programme to re-establish wet- fauna and flora. Its most signif- principles of organic production: From reducing inputs to de- lands in the Kaituna region to icant achievements include its no non-natural products, careful creasing the consumption of restore the original ecosystem. projects in the Jacob’s Creek use of natural resources and water and raw materials and It is also involved in a project to river basin, which encompass a close monitoring throughout the preserving soil, the Group’s vine- protect a native falcon species, range of sustainable initiatives entire production process. Fol- yards apply rigorous standards which is being funded by sales that have become a bench- lowing the introduction of these of sustainable agriculture, most of a special edition Brancott mark for Pernod Ricard brands practices, the vineyard has seen of which are certified according Estate wine. worldwide. These include, for the return of certain species of to the environmental standards example, the replacement of birds and flowers. Butterflies, a of their countries. These re- non-indigenous plants with na- sign of a healthy ecosystem, are sponsible practices have been tive species to help improve bi- used at the site as a bioindica- boosted by a common environ- odiversity (more than 700 trees tor and were therefore chosen mental reporting system that were planted on World Rivers as the wine’s emblem. makes it easier to share results. Day), which led to an increase Today, about 75% of land culti- in the population of frogs, fish vated is watered using drip ir- and birds to this natural area. rigation, while 70% of the land The installation of anti-pigeon has grass sown in between the nets has also helped to prevent rows of plants, which reduces unwanted seeds from being the amount of fertilizer and introduced. pesticides required. This continuous improvement is gradually being extended to our suppliers, who benefit from our affiliates’ technical expertise. For example, Pernod Ricard Winemakers Australia has supported more than 200 suppliers through the Entwine Australia Scheme, a programme that involves obtain- ing ISO 14001 certification and implementing a system for reporting on environmental management practices. Meanwhile, in New Zealand, Brancott Estate helped its suppliers to obtain Sustainable Winegrowing New Zealand accreditation. In Spain, Pernod Ricard Winemakers Spain is encouraging its suppliers to adopt organic practices, in particular the use of sexual confusion to combat pests.

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Develop comMunities And EngaGe PartnerS

DRAWING ON ITS LOCAL ROOTS Fostering the development Armenian wine-makers in the of local communities Tavush province to join together AND ENTREPRENEURIAL SPIRIT, Pernod Ricard and its affili- as a cooperative (see page 86). ates manage concrete projects PERNOD RICARD STRIVES TO in a wide range of fields, so as Entrepreneurial spirit, to meet the expectations and a driving force of economic DEVELOP RELATIONSHIPS WITH needs of local communities development (for example, facilitating access Pernod Ricard and its affiliates ITS STAKEHOLDERS (COMMUNITIES, to education, improving health support and finance projects PARTNERS AND SUPPLIERS) THAT and social conditions, and sup- that are designed to foster en- porting economic development). trepreneurship, a key factor in CREATE VALUE FOR ALL PARTIES. These projects succeed thanks value creation. Here again, the to financial support provided Group is committed to build- ITS COMMITMENT WAS REFLECTED by the Group and also through ing sustainable partnerships, the involvement of local em- with the guiding principle of ONCE AGAIN THIS YEAR BY THE ployees, within the context knowledge sharing, that seek IMPLEMENTATION OF CONCRETE of volunteer programmes. 1 to uncover young talent and, Some are designed to respond more generally, to foster new APPROACHES BASED ON THE to emergency situations, such business. For example, since as in the Philippines, where the 2011, the Group has been work- WIDESPREAD DISSEMINATION Holding Company and Pernod ing alongside Appel, a charita- Ricard Asia provided financial ble association in Vietnam, on OF KNOWLEDGE AND PRACTICES, support to help victims of Ty- the “J’apprends-j’entreprends” THEREBY PROVIDING EVIDENCE phoon Haiyan, and in New York, where the teams from Pernod 1 OF SHARED PROGRESS. Ricard Americas joined forces with New York Cares, a local charity, to clean up East River Park in the wake of Hurricane Sandy. 2 Other long-term programmes have been established alongside NGOs and leading charities. A notable example is the partnership created by Yerevan Brandy Company and PlaNet Finance, which enabled

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project, which helps to facilitate make art more accessible for access to university courses and all. Since 1997, it has helped to entrepreneurship. After an initial develop innovative and collab- selection process from the appli- orative projects, including the cations received, young students virtual Centre Pompidou, which are awarded a grant to finance makes over 450,000 works avail- their higher education, before able to the public via a digital participating in a business de- interface. In November 2013, the velopment competition that Group renewed its sponsorship marks the end of their training. agreement for a further nine 40 young people are currently years, which will strengthen benefiting from the grant, from this historic partnership and which 4 prize-winners were cho- accelerate the sense of collab- sen in 2014. The project’s entre- oration with regard to digital ENCOURAGE EMPLOYEE AN ECONOMIC MODEL preneurial aspect was strength- technology. COMMITMENT WITH A PROVEN ened this year, following the In July 2013, in response to TRACK RECORD creation of a mentoring scheme Pernod Ricard’s commitment is needs expressed by employees In Armenia, following an initiative involving local business leaders. also reflected by its active sup- during the I Say survey, Pernod by the Yerevan Brandy Company port to local heritage, cultures Ricard Asia launched the Em- affiliate, in partnership with the The affiliates have also and traditions. In that respect, ployee Volunteer Programme: NGO PlaNet Finance, wine-mak- launched projects of a similar Pernod Ricard and its affiliates a challenge designed to create ers from the Tavush province have nature: in Dublin, Irish Distillers participate in the organisation healthy competition for CSR joined forces to form a coopera- is funding a programme to en- of cross-disciplinary projects projects. A platform, structured tive. The challenge: to help them able underprivileged students, that support talented individu- around Pernod Ricard’s commit- secure their future by increasing chosen for their entrepreneuri- als: for many years, the Group ments, has been designed to re- the yield from their vines and al spirit, to go to university and, has helped young musicians ceive project proposals from the ensuring that they have a stable through an internship, to learn from the Orchestre-Atelier employees of the Pernod Ricard source of income. The wine-mak- more about its business and ac- Ostinato by offering them the Asia entity. Four of them have ers have benefitted from com- tivities. This year, Irish Distillers opportunity to play concerts in been selected, one following a prehensive and regular techni- also began supporting ICE, a famous venues (Centre Pompi- vote by the Management Com- cal support covering a range of charitable association created to dou, Opéra Bastille, Espace Car- mittee, the other three chosen processes, as well as training help job-seekers to start up their din). On a different note, Havana by the employees, to be fund- on management principles. This own business. Another original Club International has devel- ed and rolled out within the support was combined with a mi- initiative has been launched by oped a Havana Cultura label to following year – to date, three cro-loan to purchase equipment. Chivas Brothers which, in order promote Cuban culture around have already been completed. Launched as a pilot, this project to support the economic devel- the world by shining a spotlight, For the first edition, the win- has been a great success, both opment of communities living in especially online, on 100 Cuban ning projects were as follows: from an economic and a human close proximity to its sites, set artists from a range of disci- creation of a call centre office point of view – as evidenced by up a programme that focuses plines. For its part, Ricard S.A. is for donations to a refuge centre the quantities of grapes produced on learning key entrepreneurial continuing to organise the Prix for young mothers in the Phil- and the development of solidarity skills, accelerated by a mentor- Ricard S.A. Live Music, which ippines; donations for disad- between wine-makers. Thanks to ing scheme (see left). provides a year of support for an vantaged populations in Hong the success of this pilot, 15 other artist as they build their career Kong; creation of an employ- cooperatives are due to be set up Share the diversity (including their participation to ment workshop in Cambodia in the near future, based on the of local cultures the Ricard S.A. Live Sessions based on a digital game; partic- same model. In connection with its culture, tour, a promotion campaign, ipating in a walk in Hong-Kong Pernod Ricard has made diversi- training sessions and material to raise awareness for the cause ty and dialogue with local com- A SPIRIT OF support). Meanwhile, Martell of visually-impaired people. munities the keys to innovation has chosen to support talented ENTREPRENEURSHIP and performance. Having been young photographers from Sin- 60: that is the number of partic- introduced by Paul Ricard, the gapore and track the progress of ipants on the residential training Group’s commitment to art and their careers (see p. 87). programme created by Chivas culture echoes this philosophy. Brothers. This initiative seeks to It has taken various forms over foster an entrepreneurial spirit time: the historic partnership es- among young Scottish people. It tablished with the Centre Pom- was launched in collaboration with pidou in Paris 3 is designed to the Outward Bound Trust, an association that seeks to harness the 3 potential of individuals through activities in natural environments. The objective of this partnership: to develop, through targeted courses and open-air activities, young people’s leadership skills and entrepreneurial spirit. This year, the programme was supplemented by a mentoring scheme, with the close involvement of three of the affiliate’s employees.

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2 AN INNOVATIVE APPROACH TO PRODUCT DEVELOPMENT How can CSR be effectively integrated into new product development, a process which is by definition long, complex, and involves numerous stakeholders? To address this issue, Ricard has, in collaboration with an agency specialising in market research and R&D, developed an effective response comprised of two tools: the first PROMOTING LOCAL is used throughout the process to formalise the questions to be ARTISTS asked and, for each of them, the Supporting and spreading the most pertinent spokesperson, so work of young Singaporean tal- as to ensure that CSR is integrat- ent: that was the approach taken ed at every key stage. The second by Martell, in accordance with its identifies the product’s strengths values of development and cultur- Encouraging our partners markedly this year. In parallel, and weaknesses with regard to al openness, when it created the to respect Sustainable having been successfully tested CSR criteria. The process has ICON Award in 2010. This com- Development principles on some procurement catego- been tested as a pilot on the Bliss petition recognises the work of Partners are associated to Per- ries, Pernod Ricard launched range – Red Bliss and Yellow Bliss, young local photographers. The nod Ricard’s CSR strategy. In the wide-scale use of the Eco- two new ready-to-drink fruit-based winner’s prize includes a trip to this area, the Group is develop- Vadis platform, which assesses cocktails launched by Ricard in France, giving them the oppor- ing, step-by-step, a sustainable suppliers on their CSR practic- October 2013. The assessment, tunity to become more widely procurement process that is de- es. This process, which is based made in accordance with the CSR known and to establish a network. signed to engage its affiliates on collaboration, facilitates the criteria, gave full satisfaction, in Martell also exhibits their work and secure the involvement of exchange of information and particular on two key pillars: part- outside of galleries, in places that its suppliers and subcontractors makes analysis more efficient. ners and consumers. are accessible to the public. For ex- over the long-term. In total, 250 suppliers have ample, in 2013, Sarah Choo Jing’s been graded using this means. award-winning photographs were The first stage has consisted of An important task has also been projected onto a big screen, there- defining a Group-wide common completed in harmonising the by offering spectators a brand new framework for action. Today, this Group’s CSR audit standards. experience. is formalised by a Procurement The selected standards will be Code of Ethics produced in four used to perform CSR audits and languages and a Responsible pool them internally as well as Procurement Policy translated with other manufacturers. TAKING into five languages (English, A RESPONSIBLE French, Spanish, Mandarin and, As regards responsible pro- APPROACH TOWARDS newly this year, Portuguese). curement, collaboration and OUR STAKEHOLDERS the sharing of practices remain The Group strives to take a For its second stage, Pernod the key to the effectiveness of stance based on responsibility Ricard focused on developing approaches and procedures. To with regard to all of its part- processes and tools to mon- this end, the affiliates are en- ners and stakeholders. Its join- itor the practices of its suppli- couraged to share information ing Transparency International ers and to help them to devise, about their own commitments France forms part of this ap- jointly with the affiliates, tar- and accomplishments. proach. The association, which geted action plans. The first is is committed to promoting the Supplier CSR Commitment transparency and integrity, works document, rolled out in Octo- with government representa- ber and also translated into five tives, economic stakeholders languages, through which the and members of civil society to suppliers commit to adopting establish responsible practices. an approach that conforms to The first initiative with which the Pernod Ricard’s CSR require- Group is involved concerns the ments. By the end of June definition of common standards 2014, more than 370 suppliers with respect to lobbying. The had signed this commitment; aim of the work is to establish the copies are available on the responsible rules, formalised by Group’s intranet. Then, the CSR a charter tailored to the specific Risk Mapping Tool allows the circumstances of each signatory Group to map its suppliers and company. analyse their potential risks on CSR topics. With more than 900 suppliers analysed in this way, the approach has expanded

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UNITED BY THEIR SHARED PASSION FOR HAVANA CLUB, FRANÇOIS COORDINATES “HAVANA CULTURA” INITIATIVES TO PROMOTE CUBAN CULTURE, WHICH PABLO IMPLEMENTS IN HIS MARKET, CHILE.

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FRANÇOIS RENIE, COMMUNICATIONS DIRECTOR, HAVANA CLUB INTERNATIONAL PABLO MIZGIER, BRAND MANAGER, PERNOD RICARD ANDES

89 WorldReginfo - 567200b7-e8fc-4f35-866b-335e869dfe88 FINANCE peR- ForM iN- ForM WorldReginfo - 567200b7-e8fc-4f35-866b-335e869dfe88 04

AMID A CHALLENGING ENVIRONMENT peR- IN 2013/2014, PERNOD RICARD’S PERFORMANCES ARE IN LINE WITH THE STATED OBJECTIVES. THIS IS IN SPITE OF BUSINESS BEING IMPACTED BY THE DOWNTURN IN CHINA AND A VERY UNFAVOURABLE CURRENCY EFFECT. ForM The Group delivered organic growth in profit from recurring operations of +2%, without compromising on its pricing policy and whilst maintaining healthy stock levels. By launching the ‘Allegro’ operational efficiency project, Pernod Ricard will maximise its opportunities for future growth based on its strategic drivers: Premiumisation, iN- Innovation and Geographic Expansion.

KENWOOD ForM STRENGTHENING THE WINE PORTFOLIO IN APRIL 2014, PERNOD RICARD STRENGTHENED ITS PREMIUM WINE PORTFOLIO WITH THE ACQUISITION OF KENWOOD VINEYARDS IN CALIFORNIA. THESE WINES FROM THE SONOMA VALLEY ARE LARGELY DISTRIBUTED IN THE UNITED STATES AND IN CANADA. THIS PURCHASE REFLECTS PERNOD RICARD’S CONFIDENCE IN THE DEVELOPMENT POTENTIAL OF ITS WINE PORTFOLIO, AS WELL AS ITS AMBITIONS FOR THE UNITED STATES, THE GROUP’S LARGEST MARKET.

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GILLES BOGAERT Managing Director, Finance Managing Performance in a challenging econoMic Climate —

“Our challenges are to seek out opportunities for growth, to allocate resources properly and to ensure excellence in the implementation of the Allegro project.”

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How would you assess the outcome of the Group’s IN YOUR DAY-TO-DAY performance during the 2013/2014 financial year? WORK, WHAT VALUES Particularly in terms of profit from recurring operations? AND PRINCIPLES Gilles Bogaert : In a climate that was more challenging than that of DO YOU TRY TO PUT the previous year, Pernod Ricard was hit by two main issues: China and ACROSS? currency. Setting aside the effect of currency fluctuations and the scope My priority is to create the con- of consolidation, net sales were stable and the profit from recurring oper- ditions necessary for my team ations increased by 2%. Exceptional cost control resulted in the strongest members to grow as managers, growth in operating margin for 4 years, up by 52 bps. Net profit from by developing a strategic vision, recurring operations is down by 3%, but up by 9% at constant exchange adding value to the business rates, due to a considerable drop in the cost of debt to 4.6%. Finally, net and gaining leadership skills. debt fell by €374 million. I try to help them focus on the real issues and to have a tangi- What impact have fluctuations in exchange rates had? ble impact on how the business A very unfavourable one: -€199 million, i.e. -9%, on profit from recur- operates by making sugges- ring operations. That is an all-time record. The vast majority of cur- tions: of course there are some rencies have depreciated against the euro, particularly the US dollar things we have to do, but what and the currencies of various emerging countries, such as the we do freestyle is what makes Indian rupee, which have been hit by the macro-economic downturn the difference. It seems to me in emerging countries. that the atmosphere in which we work is also crucial, and this What does the Allegro project aim to achieve? is reflected in my motto: work The Allegro project was launched in response to the need to improve seriously without taking yourself operational efficiency at a time when the economic environment too seriously. was becoming more challenging, as the results for 2013/2014 show. By focusing more on our key challenges, simplifying our processes and pooling our resources, we have a greater capacity to stimulate future sales growth while increasing flexibility, a proportion of which could be reinvested in our brands and key innovations. This project will deliver savings in overheads worth €150 million over 3 years. At least 1/3 of these savings will be reinvested in marketing initiatives during 2014/2015 and 2015/2016. Implementation costs are estimated What dividend will you put forward to the Shareholders’ at around €180 million, with €119 million of these being posted in the meeting? Will you be offering a stock dividend option? 2013/2014 financial year. The proposed dividend shall be fixed at €1.64. This will represent a distribution rate of 36.7% of net profit from recurring operations, in Pernod Ricard has purchased Kenwood Californian wines accordance with our distribution policy of approximately 1/3 of net profit and become the majority shareholder in Avión Spirits LLC, from recurring operations. a super-Premium tequila producer. How do these transac- The dividend will be offered in cash. We have reviewed the arrangements tions contribute to the Group’s strategy? for the payment of dividends by Pernod Ricard in great detail. We have For two years, we have been saying that we are open to making arrived at the conclusion that a stock dividend is not in the interests of targeted acquisitions of assets which complement our existing portfo- the company (reduction in Earnings Per Share, adverse impact on cost of lio, particularly in the USA. Both of these acquisitions are in the USA capital) and that it could present some problems for shareholders: there and they fulfil these criteria. Kenwood allows us to fill a strategic gap is no tax advantage for shareholders, issuing discounted shares results in in our wine portfolio while increasing its critical size in the USA. fewer shareholders opting for the cash dividend, and disparity between After the initial investment we made 3 years ago, acquiring a shareholders which has an adverse effect on smaller shareholders who majority shareholding in Avión(1) was the next logical step. With its do not hold sufficient shares to be entitled to a new share. Super-Premium tequila, Avión is perfectly positioned in an attractive sector, with very promising potential for growth. Our intention is The IT department supports the Group’s current digital that these acquisitions should improve the group’s growth profile, acceleration. What are the key stakes for this function? whilst benefiting from the synergies offered by our portfolio and Generally speaking, the Information Technology Department plays and distribution network. will continue to play an increasingly crucial role in business development. The speed with which technology is evolving and the growing need Pernod Ricard carried out a successful bond issue to process and share information demand that IT delivers increasingly amounting to €850 million over 6 years under high-performance, global solutions for a range of functions. very favourable conditions. What financial impact will All this requires greater convergence – tools are increasingly multi- this have for the Group? disciplinary – and the involvement of IT at the very earliest stages Whilst addressing our liquidity needs, this issue also enables us to take of a project. advantage of exceptional financial conditions (a coupon of 2%, the lowest paid at the time by a BBB- graded Group for a euro-denominated What will be your priorities for 2014/2015? issue). It helps to extend and spread debt maturity and to reduce the Apart from driving performance in a volatile economic climate, average cost of the Group’s debt (4.6% in 2013/2014). the challenges for 2014/2015 are to seek out opportunities for growth, to allocate resources properly (advertising and promotional materials, How do you account for the performance of the share price strategic inventories and capital expenditure) and to ensure excel- over the financial year? lence in the implementation of the Allegro project. Finance and IT will Our share price increased by around 3%, but this increase is still low- be particularly involved in simplifying processes, implementing er than that of the CAC40 and STXE 600 Food and Beverage indices. sharing initiatives and developing new collaborative platforms (Business Stock market performance was hit by the slowdown in organic growth Information Sharing, My Brands, My Portal Touch, etc.). in sales and profits (in particular in China) and by highly unfavourable currency fluctuations. (1) Transaction completed during FY 2014/2015.

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Key FigurEs 2013/2014

NET SALES €7,945 m

PROFIT FROM RECURRING OPERATIONS €2,056 m

CONTRIBUTION AFTER ADVERTISING AND NET SALES PROMOTION INVESTMENTS

7,081 7,643 8,215 8,575 7,945 2,956 3,169 3,476 3,707 3,484

09/10 10/11 11/12 12/13 13/14 09/10 10/11 11/12 12/13 13/14

In euro millions

94 WorldReginfo - 567200b7-e8fc-4f35-866b-335e869dfe88 09/10 1,795 2,273 1,911 2,176 11.1 (1) Asfrom 1July2013, withretroactive from effect 1July2012, Pernod Ricard hasappliedthe amendmentstoIAS 19(Employee Benefits)asadoptedby Unionandmandatory theEuropean

25.4% RECURRING OPERATIONS, 721 ABSOLUT In euro millionsandas%ofnetsales 09/10 7,081 OPERATING MARGIN for theGroup since thatdate. Asaresult, thefinancialstatementsfor restated. financialyear 2012/2013have been (2)Netdebtbefore translation adjustment:8,653euro millions. 10/11 1,909 4.6 CHIVAS REGAL 25.0% PROFIT FROM 2,711 2,068 2,114 5.9 11/12 2,114 BALLANTINE’S 750 25.7% 10/11 7,643 AND CHAMPAGNE BRANDS (“TOP 14”) 46.8 MILLIONCASES 4.8

RICARD 12/13 2,231 annual report 2013/2014 26.0%

4.7 (1) BY REGION 3,165 2,167 2,137 In euro millions

JAMESON 14 STRATEGIC SPIRITS 746 SALES 13/14 2,056 11/12 8,215

4.0 25.9% HAVANA CLUB SOLD ASIA /REST OFTHEWORLD 3.5

MALIBU 3,431 2,316 2,132 695 12/13 8,575 2.6

(3) France isnow integrated operating into theEurope segment. BEEFEATER 09/10 FROM RECURRINGOPERATIONS 1.6 951 1,001

KAHLÚA 2, 3,031 2,142 773

(3) 1.9 13/14 7,945 10/11 GROUP NETPROFIT

MARTELL GROUP NETPROFIT In millionsof9–litre cases 1,045 1,092 In euro millions 1.0 THE GLENLIVET 11/12

1,146 1,201 AMERICAS 95 0.6 G.H.MUMM 12/13 566 541 501 187 0.3 1,172 1,228 09/10 PERRIER-JOUËT 1,795 (1) 13/14 0.2 PROFIT FROM RECURRINGOPERATIONS

ROYAL SALUTE EUROPE 1,016 1,185 189 684 558 479 10/11 1,909 ILO CASES 10.6 MILLION FRANCE BY REGION In euro millions pernod ricard 181 880 582 470 PREMIUM WINEBRANDS 11/12 2,114 10,584 09/10 6.2 JACOB’S CREEK SOLD 4 PRIORITY 2.1 10/11 9,038 CAMPO VIEJO 1,016 459 149 607 IN NETDEBT 12/13 In euro millions 2,231 CHANGE 2.1 11/12 9,363

BRANCOTT ESTATE (1)

(2) 0.2 593 884 579 8, GRAFFIGNA 12/13 (3) 727 13/14 2,056

13/14 8,353

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ANNUAL CONSOLIDATED BALANCE SHEET (IN EURO MILLIONS)

ASSETS 30.06.2013(1) 30.06.2014

NET AMOUNTS NON-CURRENT ASSETS INTANGIBLE ASSETS 11,780 11,542 GOODWILL 4,973 4,907 PROPERTY, PLANT AND EQUIPMENT 1,942 2,016 BIOLOGICAL ASSETS 133 150 NON-CURRENT FINANCIAL ASSETS 357 349 INVESTMENTS IN ASSOCIATES 16 15 NON-CURRENT DERIVATIVE INSTRUMENTS 59 63 DEFERRED TAX ASSETS 1,771 1,926 NON-CURRENT ASSETS 21,030 20,968 CURRENT ASSETS INVENTORIES AND WORK IN PROGRESS 4,484 4,861 TRADE RECEIVABLES 1,159 1,051 INCOME TAXES RECEIVABLE 27 37 OTHER CURRENT ASSETS 209 194 CURRENT DERIVATIVE INSTRUMENTS 23 26 CASH AND CASH EQUIVALENTS 597 477 CURRENT ASSETS 6,499 6,646 ASSETS HELD FOR SALE 8 2 TOTAL ASSETS 27,537 27,616

LIABILITIES AND SHAREHOLDERS’ EQUITY 30.06.2013(1) 30.06.2014

SHAREHOLDERS’ EQUITY SHARE CAPITAL 411 411 SHARE PREMIUM 3,052 3,052 RETAINED EARNINGS AND CURRENCY TRANSLATION ADJUSTMENTS 6,379 7,142 GROUP NET PROFIT 1,172 1,016 GROUP SHAREHOLDERS’ EQUITY 11,014 11,621 NON-CONTROLLING INTERESTS 165 157 TOTAL SHAREHOLDERS’ EQUITY 11,179 11,778 NON-CURRENT LIABILITIES NON-CURRENT PROVISIONS 587 564 PROVISIONS FOR PENSIONS AND OTHER LONG-TERM EMPLOYEE BENEFITS 565 569 DEFERRED TAX LIABILITIES 2,924 3,041 BONDS – NON-CURRENT 6,949 6,844 NON-CURRENT DERIVATIVE INSTRUMENTS 152 85 OTHER NON-CURRENT FINANCIAL LIABILITIES 763 830 TOTAL NON-CURRENT LIABILITIES 11,940 11,933 CURRENT LIABILITIES CURRENT PROVISIONS 163 251 TRADE PAYABLES 1,546 1,463 INCOME TAX PAYABLE 127 56 OTHER CURRENT LIABILITIES 924 887 OTHER CURRENT FINANCIAL LIABILITIES 567 290 BONDS – CURRENT 1,001 929 CURRENT DERIVATIVE INSTRUMENTS 89 29 TOTAL CURRENT LIABILITIES 4,418 3,905 LIABILITIES RELATED TO ASSETS HELD FOR SALE 0 0 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 27,537 27,616

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ANNUAL CONSOLIDATED INCOME STATEMENT (IN EURO MILLIONS)

30.06.2013(1) 30.06.2014 NET SALES 8,575 7,945 COST OF SALES (3,224) (2,958) GROSS MARGIN AFTER LOGISTICS EXPENSES 5,351 4,987 ADVERTISING AND PROMOTION EXPENSES (1,644) (1,503) CONTRIBUTION AFTER ADVERTISING & PROMOTION INVESTMENTS 3,707 3,484 STRUCTURE COSTS (1,476) (1,428) PROFIT FROM RECURRING OPERATIONS 2,231 2,056 OTHER OPERATING INCOME 101 60 OTHER OPERATING EXPENSES (214) (300) OPERATING PROFIT 2,119 1,817 FINANCIAL EXPENSES (579) (561) FINANCIAL INCOME 25 76 INTEREST (EXPENSE) INCOME (554) (485) CORPORATE INCOME TAX (374) (305) SHARE OF NET PROFIT/(LOSS) OF ASSOCIATES 1 0 NET PROFIT FROM CONTINUING OPERATIONS 1,191 1,027 NET PROFIT FROM DISCONTINUED OPERATIONS - - NET PROFIT 1,191 1,027 INCLUDING: • ATTRIBUTABLE TO NON-CONTROLLING INTERESTS 19 11 • ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT 1,172 1,016 EARNINGS PER SHARE – BASIC (IN EUROS) 4.45 3.86 EARNINGS PER SHARE – DILUTED (IN EUROS) 4.40 3.82 NET EARNINGS PER SHARE FROM CONTINUING OPERATIONS (EXCLUDING DISCONTINUED OPERATIONS) – BASIC (IN EUROS) 4.45 3.86 NET EARNINGS PER SHARE FROM CONTINUING OPERATIONS (EXCLUDING DISCONTINUED OPERATIONS) – DILUTED (IN EUROS) 4.40 3.82

ANALYSIS OF BUSINESS ACTIVITY BY GEOGRAPHIC AREA (IN EURO MILLIONS)

30.06.2013(1) 30.06.2014 ORGANIC GROWTH(2) ASIA AND REST OF THE WORLD NET SALES 3,431 3,031 (128) -4% GROSS MARGIN AFTER LOGISTICS COSTS 2,120 1,848 (99) -5% ADVERTISING AND PROMOTION (663) (550) 75 -11% CONTRIBUTION AFTER ADVERTISING AND PROMOTIONAL INVESTMENTS 1,457 1,298 (23) -2% PROFIT FROM RECURRING OPERATIONS 1,016 884 (31) -3% AMERICAS NET SALES 2,316 2,142 47 2% GROSS MARGIN AFTER LOGISTICS COSTS 1,490 1,394 51 3% ADVERTISING AND PROMOTION (454) (412) 10 -2% CONTRIBUTION AFTER ADVERTISING AND PROMOTIONAL INVESTMENTS 1,036 982 61 6% PROFIT FROM RECURRING OPERATIONS 607 579 49 8% EUROPE(3) NET SALES 2,827 2,773 47 2% GROSS MARGIN AFTER LOGISTICS COSTS 1,741 1,745 46 3% ADVERTISING AND PROMOTION (527) (541) (24) 5% CONTRIBUTION AFTER ADVERTISING AND PROMOTIONAL INVESTMENTS 1,213 1,204 22 2% PROFIT FROM RECURRING OPERATIONS 607 593 17 3%

TOTAL 30.06.2013(1) 30.06.2014 ORGANIC GROWTH(2) NET SALES 8,575 7,945 (34) 0% GROSS MARGIN AFTER LOGISTICS COSTS 5,351 4,987 (1) 0% ADVERTISING AND PROMOTION (1,644) (1,503) 61 - 4% CONTRIBUTION AFTER ADVERTISING AND PROMOTIONAL INVESTMENTS 3,707 3,484 60 2% PROFIT FROM RECURRING OPERATIONS 2,231 2,056 34 2%

(1) As from 1 July 2013, with retroactive effect from 1 July 2012, Pernod Ricard has applied the amendments to IAS 19 (Employee Benefits) as adopted by the European Union and mandatory for the Group since that date. As a result, the financial statements for financial year 2012/2013 have been restated. (2) Organic growth at constant exchange rates and scope of consolidation. (3) France is now included in the Europe operating segment.

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Share Performance 2013 / 2014

AFTER 3 YEARS OF STRONG GAINS gainst a tense mac- Pernod Ricard shares closed AND HAVING REACHED ITS RECORD HIGH DURING ro-economic back- at €87.70 on 30 June 2014, THE 2012/2013 FINANCIAL YEAR, PERNOD RICARD’S drop in 2013/2014, representing a modest increase SHARE PRICE PERFORMANCE IN 2013/2014 Pernod Ricard’s of +3%. Over the same peri- A share price recorded od the CAC 40 was in sharp WAS MORE SUBDUED WITH +3% GROWTH. THE SHARE PRICE WAS IMPACTED BY SLOWER ECONOMIC a moderate increase growth (+18% in 2013/2014), GROWTH IN NUMEROUS EMERGING MARKETS over the period (+3%), a modest however the index was much AS WELL AS THE WEAKENING OF CERTAIN CURRENCIES. improvement on 2012/2013 (+1%). less resilient over the 2011/2012 IN 2013/2014 INVESTORS’ PREFERENCE FOR CYCLICAL Still faced with uncertainties re- financial year (-20%). AND FINANCIAL STOCKS RESULTED IN A SOLID garding the economic outlook, As such, over a longer period, PERFORMANCE OF THE CAC 40, CLOSING both in developed and emerging Pernod Ricard has posted sub- THE YEAR ENDING JUNE 2014 UP +18%, markets, the financial markets stantially better growth than WITH AN UNDERPERFORMANCE OF THE DEFENSIVE showed a certain hesitation to- that of the CAC 40: over the STOCKS COMPRISING THE INDEX. ward Pernod Ricard shares in past five financial years, Pernod . 2013/2014. The recovery in Eu- Ricard shares have averaged rope has yet to occur and the an annual gain of +16%, double economic indicators in the United that of the French index. Per- Pernod Ricard Share Price: States remain mixed. The slow- nod Ricard’s long-term strategy, down in growth in China has trig- anchored in Premiumisation Slight Acceleration Versus gered asset allocation away from and innovation, is therefore its 2012/2013 listed companies with significant greatest attribute for sustain- exposure to this market. Separate- able value creation, despite ly, political instability in numerous macro-economic cycles. countries around the world and the weakening of several currencies versus the euro were an ex- acerbating factor.

CHANGE IN THE SHARE PRICE OVER ONE YEAR IN COMPARISON WITH THE CAC 40 INDEX; TRADING VOLUMES

+3% 4,423 PTS PERNOD RICARD 3,739 PTS

+18% €87.70 CAC 40 €85.19 565 512 427 506 593 597 820 598 743 561 459 441 12/13 07/13 08/13 09/13 10/13 11/13 01/14 02/14 03/14 04/14 05/14 06/14

PERNOD RICARD CAC 40 VOLUME OF SHARES TRADED (IN THOUSANDS)

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SHARE PRICE OF PERNOD RICARD DIVIDEND OVER AND CAC 40 OVER FIVE YEARS (AT END OF JUNE) THE LAST FIVE YEARS IN EURO 87.70 85.19 84.26 1.64 1.64

Pernod Ricard is traded on the 1.58 1.44 67.97 Paris stock exchange on NYSE 63.98 Euronext SA Paris Eurolist (com- 1.34 partment A) SRD (deferred settlement service). The Group is includ- 4,423 ed in the CAC 40 index, accounting 3,982 for 2% of total market capitalisa- 3,739 3,443

3,197 tion at 30 June 2014. The Pernod Ricard share is eligible for inclusion in the French share savings plan (plan d’épargne en actions, (1)

09/10 10/11 11/12 12/13 13/14 PEA) and for the SRD (deferred

settlement service). 09/10 10/11 11/12 12/13 PERNOD RICARD (EUROS) CAC 40 (POINTS) 13/14

2013/2014 dividend A dividend of €1.64 per share for BREAKDOWN OF SHARE CAPITAL the 2013/2014 financial year will AT 30 JUNE 2014 be submitted for the approval of the Shareholders’ Meeting of SOCIÉTÉ PAUL RICARD (1) 6 November 2014. This dividend 14% is in line with the customary policy of the Group distributing BOARD + MANAGEMENT + EMPLOYEES + TREASURY SHARE approximately one third of the net 2% profit from recurring operations in cash. Taking into account the GROUPE BRUXELLES LAMBERT 8% interim dividend of €0.82 per share paid on 8 July 2014, the U.S. INSTITUTIONAL final dividend payable stands INVESTORS 39% at €0.82 per share and will be detached on 13 November 2014 FRENCH INSTITUTIONAL and paid on 17 November 2014, INVESTORS 9% subject to the establishment of the new settlement cycle in U.K. INSTITUTIONAL France scheduled for 6 October INVESTORS 6% 2014. Under the current rules, any postponement of this reform OTHER FOREIGN AND MISCELLANEOUS INVESTORS would put the payment date back 17% to 18 November 2014. INDIVIDUAL SHAREHOLDERS 5%

SUMMARY OF STOCK MARKET DATA

11/12 12/13 13/14 NUMBER OF LISTED SHARES AT 30 JUNE 265,310,605 265,421,592 265,421,592 AVERAGE NUMBER SHARES (EXCEPT TREASURY SHARES) – DILUTED 265,147,554 266,352,885 265,816,388 STOCK MARKET CAPITALISATION AT 30 JUNE (€M) 22,355 22,611 23,277 GROUP NET PROFIT PER SHARE FROM RECURRING OPERATIONS – DILUTED 4.53 4.71 4.46 DIVIDEND PER SHARE 1.58 1.64 1.64(1) AVERAGE MONTHLY VOLUME OF TRADES 16,451 11,744 12,310 HIGHEST SHARE PRICE 84.26 101.15 94.83 LOWEST SHARE PRICE 56.82 81.34 78.82 AVERAGE SHARE PRICE 71.18 89.94 86.47 SHARE PRICE AT 30 JUNE 84.26 85.19 87.70

(1) Subject to the Shareholders’ approval at 6 November 2014.

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BOTH COMMITTED TO THE GROUP AND PROUD TO WORK FOR IT, RACHNA AND JANE WORK TOWARDS THE SAME GOAL, PERNOD RICARD’S FINANCIAL PERFORMANCE IN A CHALLENGING ECONOMIC CLIMATE.

100 WorldReginfo - 567200b7-e8fc-4f35-866b-335e869dfe88 annual report 2013 / 2014 pernod ricard

RACHNA JINDAL, SENIOR MANAGER, FINANCE, PERNOD RICARD INDIA JANE LI, ASSISTANT BUSINESS ANALYSIS MANAGER, PERNOD RICARD CHINA

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Shareholder Communications —

Communications centred technologies and the use of infor- around education mation. The results will allow the The communications approach Group to optimise its tools and employed in relation to share- its relationship with the mem- holders gives a clear and dynamic bers. The Club Premium provides interpretation of the latest news Pernod Ricard with the oppor- and developments, the brands and tunity to share its commitments, the Group’s results. Modernised traditions and know-how in ex- and digitised in 2011, it is based clusive locations. Like every year, around several tools: the website, shareholders were offered the www.pernod-ricard.com, which is opportunity to visit the cellars of intended to provide a complete G.H.MUMM, Martell and Perrier- and up-to-date overview of the Jouët. They could also attend Group, as well as the Annual concerts performed by the Or- Report, which reviews the bal- chestre-Atelier Ostinato, which is ance sheet for the past year. The supported by the Group. Further- True to its convictions and its roots, Entreprendre magazine enriches more, they were invited to private Pernod Ricard aims to create the programme by presenting per- visits to the “Indiens des plaines” spectives on a theme, in line with exhibition at the Musée du Quai transparent communication with its the Group’s leadership strategy. Branly, to the Henri Cartier-Bres- In order to meet the expectations son event at the Centre Pompidou shareholders, through the sharing of its readers, the magazine is also and to the Vieille-Charité convent highly innovative; internet users in Marseille, which hosted the of its results and its know-how. The are able to vote for the theme works by the winners of the Prix actions proposed within Club Premium, of the following issue via the publi- de la Fondation Ricard award. And cation’s website. finally, two evenings showcasing which is reserved for the Group’s “La route des vins Pernod Ricard” Club Premium: accelerating (“The Pernod Ricard Wine Trail”) shareholders, are in full compliance transmission and Pernod Ricard Prestige cham- Pernod Ricard has made Club pagnes, organised in Paris, gave with this policy, promoting the Premium a key factor in strength- them the opportunity to learn ening its ties with shareholders. more about the Group’s brands. communication of values. With more than 10,000 members, In addition, this year, a training With the aim of further the club is run with a spirit of dy- event has been set up to provide namism and conviviality. Its mem- guidance on interpreting the new strengthening closeness and boosting bers are given access to a special taxation rules. website, a freephone number and exchanges, during the course of email address and a number of dedicated lines of communica- some of events held over the year, tion. During the Christmas season, they also have access to an exclu- shareholders have been consulted on sive selection of products via an their expectations and preferences online store. This year, to better meet members’ expectations, the regarding communications, with Communications Department has launched a consultation on a focus on digital. their usage patterns in relation to

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Discover other information media by Pernod Ricard

GALLERY PERNOD RICARD AND ART

MARCOS LOPEZ, DENIS ROUVRE, EUGENIO RECUENCO, OLAF BREUNING, VEE SPEERS… DISCOVER PERNOD RICARD’S PHOTOGRAPHY CAMPAIGNS SINCE 2010. FLASH THIS CODE TO EXPLORE THE ARTWORK GALLERY AND BEHIND-THE-SCENES VIDEOS.

DIGITAL VERSION OF THE REPORT

FLASH THIS CODE TO ACCESS THE DIGITAL VERSION OF THE ANNUAL REPORT: COMPLEMENT YOUR READING WITH PICTURES REGISTRATION AND VIDEOS OF YEAR’S EVENTS, PRODUCT REGISTRATION DOCUMENT DOCUMENT INNOVATIONS, INTERVIEWS… AND TAKE A 2013/2014 UNIQUE QUIZ THAT WILL TURN YOU INTO A THE REGISTRATION CREATOR OF FLAVOURS. DOCUMENT CONTAINS COMPLETE LEGAL, BUSINESS, FINANCIAL AND ACCOUNTING INFORMATION, WHICH COMBINE TO PROVIDE AN EXHAUSTIVE DESCRIPTION OF PERNOD RICARD FOR FINANCIAL YEAR 2013/2014.

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HEAD OFFICE: 12 PLACE DES ÉTATS-UNIS 75783 PARIS CEDEX 16 – FRANCE TEL.: +33 1 41 00 41 00 FAX: +33 1 41 00 41 41 582 041 943 RCS PARIS

Published by the Communications Department of Pernod Ricard, 12 place des États-Unis, 75783 Paris Cedex 16, France.

Creation, design and production:

Photo credits: Cover and portrait series on pages 2-3, 20-21, 26-27, 32-33, 40-41, 62-63, 76-77, 88-89, 100-101: Photographer: Vee Speers. Art Director: Fanny Dupechez; Producer: Charly Forin (Cinq Étoiles Production) Artistic crew: Sylvain Lemarcis (Hair Stylist), Liz Michael (Make-up Artist), Cédric Tirado (Stylist), Simona Grassano (Stylist Assistant), Manuel Mathis (Juggler), Sidney Kapuskar (Photo Assistant), Julien Paris (Digital Operator). Acknowledgements: Castignolles.

At a Glance pages XI, XIV and XV, Annual Report pages 4, 6, 48, 66, 92: Paolo Verzone/Agence Vu’. Annual Report pages 16, 18, 22 to 25, 28 to 31, 34 to 39, 42: Marc Hallet - studio B. Pages 12, 44: Fabrice Dall’Anese. Page 83 (bottles): Deanna Cagle. Studio photo Pernod Ricard, Marc-André Desanges. Poly. Illustrations pages 11, 47, 65, 91: Juan Ignacio Garcia.

Copies of this document are available on request from the Group’s head office.

Pernod Ricard is committed to responsably— manage its paper purchases. The paper used in the At a Glance booklet is FSC certified. The paper used in the Annual Report is PEFC certified. These 2 certifications guarantee compliance with a globally-recognised set of principles and criteria for forest management.

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series PERNOD RICARD HEAD OFFICE: – Vee for Speers Pernod Ricard

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ANNUAL REPORT 2013 / 2014