Consolidated Financial Statements
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GB 2003 rd Pernod Ricard 2003 The world’s 3 largest wine & spirits group The year 2003 CONSOLIDATED RESULTS 3,534 m€ Net Sales +6.8% Profit before tax: 638 m€ +12.3% Group net profit: 464 m€ WINE & SPIRITS 0.77 +8.1% Net financial debt/Shareholders’ equity Sales organic growth at constant exchange (OCEANE included) rates basis and consolidation scope basis 737 m€ Operating profit +15.5% Operating profit organic growth at constant exchange rates basis 21.5 % Operating profit margin GB 2003 rd Pernod Ricard 2003 The world’s 3 largest wine & spirits group The year 2003 CONSOLIDATED RESULTS 3,534 m€ Net Sales +6.8% Profit before tax: 638 m€ +12.3% Group net profit: 464 m€ WINE & SPIRITS 0.77 +8.1% Net financial debt/Shareholders’ equity Sales organic growth at constant exchange (OCEANE included) rates basis and consolidation scope basis 737 m€ Operating profit +15.5% Operating profit organic growth at constant exchange rates basis 21.5 % Operating profit margin The brands of the Group CHIVAS REGAL • RICARD • MARTELL • JACOB’S CREEK • SEAGRAM’S GIN The Pernod Ricard • JAMESON • PASTIS 51 • HAVANA CLUB • business model CLAN CAMPBELL • RAMAZZOTTI • THE GLENLIVET • WILD TURKEY • ROYAL SALUTE • BUSHMILLS • OLMECA • WYBOROWA • SANDEMAN* Pernod Ricard is comprised of brand A shared owners, many with production facilities, culture • FOUR ROSES* • 100 PIPERS • LARIOS • ARARAT • and distribution subsidiaries, of all which Painted on paper made of rice, the work of Gong Yan SUZE • ROYAL STAG • DITA • MONTILLA • BECHEROVKA operate with a large degree of autonomy. combines a traditional The decentralisation of decision-making at technique with a modern form of expression. The operating level is the key principle on which • BLENDERS PRIDE • SOMETHING SPECIAL artist uses great sensitivity * distribution brands the Pernod Ricard organisation is founded. in presenting openness Pernod Ricard S.A. to the world and its cultures, the sharing and conviviality The holding company defines the Group’s embodied by the Group Commercial positions on the international strategy and key policies. It oversees the and its products. spirits market Group’s activities and promotes the sharing Major brand owners Regions of “best practices” within the Group. The brand owners develop products and Ricard Pernod Ricard Europe define global strategy for their brands. Pernod Pernod Ricard The distribution subsidiaries adapt this North America strategy to their local market, in agreement Chivas Brothers A Chinese woman, born in 1977, Gong Yan is with the brand owners. Pernod Ricard a graduate of the School of Martell & Co Central and South Fine Arts at the University This balance, resulting from the America of Shanghai, and of the École Nationale Supérieure constructive interplay between brand Irish Distillers des Beaux-Arts in Paris. owners and distribution subsidiaries, Pernod Ricard Asia She has been exhibiting her work in Paris and Shanghai is fundamental to the Group’s effective Orlando Wyndham since 2002. performance. It encourages taking Pernod Ricard responsibility as well as providing Wyborowa S.A. South Asia motivation at all levels within the business, the sign of an entrepreneurial spirit, a key feature in the Group's culture. JOINT VENTURE TRAVEL RETAIL Pernod Ricard Havana Club int. World Trade n°1 n°1 n°2 n°2 n°6 Design, creation and publication in Continental Europe in Central and South in Asia Pacific in Travel Retail in North America TERRE DE SIENNE and Ireland America www.terredesienne.com Source : International Wine and Spirit Record 2003 The brands of the Group CHIVAS REGAL • RICARD • MARTELL • JACOB’S CREEK • SEAGRAM’S GIN The Pernod Ricard • JAMESON • PASTIS 51 • HAVANA CLUB • business model CLAN CAMPBELL • RAMAZZOTTI • THE GLENLIVET • WILD TURKEY • ROYAL SALUTE • BUSHMILLS • OLMECA • WYBOROWA • SANDEMAN* Pernod Ricard is comprised of brand A shared owners, many with production facilities, culture • FOUR ROSES* • 100 PIPERS • LARIOS • ARARAT • and distribution subsidiaries, of all which Painted on paper made of rice, the work of Gong Yan SUZE • ROYAL STAG • DITA • MONTILLA • BECHEROVKA operate with a large degree of autonomy. combines a traditional The decentralisation of decision-making at technique with a modern form of expression. The operating level is the key principle on which • BLENDERS PRIDE • SOMETHING SPECIAL artist uses great sensitivity * distribution brands the Pernod Ricard organisation is founded. in presenting openness Pernod Ricard S.A. to the world and its cultures, the sharing and conviviality The holding company defines the Group’s embodied by the Group Commercial positions on the international strategy and key policies. It oversees the and its products. spirits market Group’s activities and promotes the sharing Major brand owners Regions of “best practices” within the Group. The brand owners develop products and Ricard Pernod Ricard Europe define global strategy for their brands. Pernod Pernod Ricard The distribution subsidiaries adapt this North America strategy to their local market, in agreement Chivas Brothers A Chinese woman, born in 1977, Gong Yan is with the brand owners. Pernod Ricard a graduate of the School of Martell & Co Central and South Fine Arts at the University This balance, resulting from the America of Shanghai, and of the École Nationale Supérieure constructive interplay between brand Irish Distillers des Beaux-Arts in Paris. owners and distribution subsidiaries, Pernod Ricard Asia She has been exhibiting her work in Paris and Shanghai is fundamental to the Group’s effective Orlando Wyndham since 2002. performance. It encourages taking Pernod Ricard responsibility as well as providing Wyborowa S.A. South Asia motivation at all levels within the business, the sign of an entrepreneurial spirit, a key feature in the Group's culture. JOINT VENTURE TRAVEL RETAIL Pernod Ricard Havana Club int. World Trade n°1 n°1 n°2 n°2 n°6 Design, creation and publication in Continental Europe in Central and South in Asia Pacific in Travel Retail in North America TERRE DE SIENNE and Ireland America www.terredesienne.com Source : International Wine and Spirit Record 2003 A shared culture with global ambitions Pernod Ricard is a developer of both global and local brands. This reflects a strategic outlook that has proven its effectiveness: local brands strengthen the distribution networks in their various markets, thereby supporting the development of the Group’s global brands. The decentralised structure of Pernod Ricard clearly differentiates it from the rest of its sector. This structure creates a strong culture within the Group, uniting its workforce. At its core, this culture motivates individuals, ensuring that the entrepreneurial spirit is shared and encouraged. This combination of ambition and culture has built the success of the Group in 2003. It is how Pernod Ricard intends to pursue its development in the future. Contents Pernod Ricard 2/3 > Key figures 4/5 > Message from the Chairman and Chief Executive Officer 6/7 > Interview with the Directors General The year 2003 in review 10/11 > Relaunch of Chivas Regal, Martell and The Glenlivet 12/13 > Dynamic performance by growth drivers: Jameson, Havana Club, Ramazzotti 14/15 > Profitable growth for Jacob’s Creek 16/17 > Expansion in Asia 18/19 > Performance in the United States 20/21 > Steady growth in Europe 22/23 > Maintained market share in France 24/25 > Signs of recovery in Central and South America and dynamism of Travel Retail sector A committed Group 28/31 > Corporate governance 32/33 > Transparency with shareholders 34/37 > Men & women sharing the same passion 38/41 > Ethical and social commitment to responsible drinking 42/44 > Caring for our environment Financial report 47/67 > Management Report 68/74 > Report of the chairman on internal controls 75/111 > Consolidated financial statements 112/127 > Corporate governance 128/137 > General information 138/164 > Parent company financial statements 165/177 > Presentation and text of resolutions proposed to the general meeting 178/180 > Persons responsible for the reference document 181/182 > Index/reconciliation table Key (excluding dutiesandtaxes/ineuromillions) 1999 2000 340 213 Wine &Spirits Otherbusinessactivities 3,590 1999 2000 1,569 2,021 Profit beforetax Consolidated profit 369 4,382 (in euromillions) 1,760 2,622 195 Sales Consolidated figures 2001 2002 2003 4,555 411 2001 20021,918 2003 2,637 358 figures Group netprofit 3,408 1,428 4,836 597 413 3,419 115 3,534 638 464 (1) Profit beforetaxnetofincometax, incomefromassociates andminorityinterests. 1999 2000 3.26 Profit aftertaxpershare/ Profit aftertaxpershare 1.28 Wine &Spirits Otherbusinessactivities 1999 2000 263 110 372 dividend pershare Operating profit 3.70 302 119 (in euromillions) 421 1.28 (in euros) 2001 2002344 2003 107 451 2001 2002 2003 4.18 (1) 1.44 710 40 750 Dividend pershare 6.25 737 2 1.80 739 6.58 1.96 Wine & Spirits 3 Breakdown of sales by geographic area Breakdown of operating profit by (excluding duties and taxes/in euro millions) geographic area (in euro millions) 3,408 3,419 710 737 Pernod Ricard Annual report 2003 1,918 1,760 1,569 344 302 1,330 835 651 263 277 176 137 1,360 770 708 294 179 149 873 241 258 182 3125 676 393 762 236 252 168 22 17 149 21 546 592 500 510 581 106 120 93 95 114 1999 2000 2001 2002 2003 1999 2000 2001 2002 2003 France Europe Americas (1) France Europe Americas (1) Rest of world Rest of world (1) In 1999, the Americas area is included in the rest of world area. (1) In 1999, the Americas area is included in the rest of world area. Net financial debt/Shareholders' equity Evolution of net debt at 31 December (at 31 December/in euro millions) 1.5 1.47 1.47 3,695 1.2 2,791 1.08 497 2,109 0.9 0.73 0.77 508 0.6 2,294 0.49 1,601 2001 2002 2003 2001 2002 2003 OCEANE converted (1) OCEANE included (2) Net debt excluding OCEANE OCEANE (1) In February 2004, the share price exceeded the OCEANE conversion price:€ 95.96.