Pernod Ricard: Confidence in China post the CMD in Shenzhen
Pernod Ricard: (BUY-Top Picks, Fair Value EUR156 vs. EUR153 (+11%))Confidence in China post the CMD in Shenzhen (report out today)
The Capital Market Day of Pernod Ricard for its Asia division was held in Shenzhen in China. Nothing in the way of fresh financial guidance has been provided. But the event clearly strengthened our confidence in the group’s position in Asia, and more specifically in China. Company’s sales in the country posted 19% organic sales growth in 9M, implying a very strong acceleration vs last year (+2%). The drivers are diversified, with cognac, whiskies and other international brands (Absolut vodka, Jameson, Mumm & Perrier Jouet) performing very strongly. The price/mix environment in the country is improving. As a consequence,we should an acceleration of the operating leverage from 2018/19. Our EBIT estimates over the next three years are increased by 2% on average. Our Fair Value is raised to EUR156 from EUR153. We reiterate our Buy recommendation
Pernod Ricard produces and distributes wines and spirits. Co. produces aniseed products, vodka, whisky, cognac, rum, gin, liqueurs, champagnes and wines. Co.'s activity is organized around families of products built around brands. Its brands portfolio includes: ABSOLUT vodka, Ricard pastis, Ballantine's, Chivas Regal and The Glenlivet Scotch whiskies, Jameson Irish whiskey, Martell cognac, Havana Club rum, Beefeater gin, Kahlua and Malibu liqueurs, Mumm and Perrier-Jouet champagnes as well as Jacob's Creek and Brancott Estate wines. Co. is structured into four segments constituted by the following geographic regions: France, Europe (excluding France), Americas, Asia/Rest of the World.
Since 1996, Bryan, Garnier & Co has been growing with an absolute conviction that the investment banking landscape would experience a major revolution: most of the large local generalist banking groups will disappear to the benefit of a handful of global powerhouses, and an emerging group of independent, highly specialised boutique investment banks.
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