Press releases

Operating profit, Wine & Spirits: + 106%
Earnings per share: + 43%
Above-target results

Paris, 19 March 2003 - The Board of Directors of Pernod Ricard met on 18 March 2003 under the chairmanship of Patrick Ricard to approve the financial statements for 2002.

Seagram successfully integrated; operating profit from Wine & Spirits: €710 million

The Wine & Spirits division generated sales of €3.4 billion in 2002, up 78%. Of this total, €1.4 billion was attributable to Seagram brands and €2 billion to Pernod Ricard's historical brands, giving organic growth of 4.5%.

Operating profit was €710 million, a rise of 106% (7.5% commercial organic growth). This was achieved by rationalising distribution costs, overheads and expenses, while maintaining a high level of advertising and promotional investment (21.4% of sales).

The operating margin of the Wine & Spirits division was 20.8%, higher than the target figure announced in early 2002. This result reflects the successful integration of Seagram.

Divestment of non-core businesses

Pernod Ricard sold the bulk of its non-core businesses (distribution, soft drinks) during the year. Sales from these activities fell to just €1.4 billion, down sharply compared with 2001, for a €40 million contribution to operating profit. By year's end, the disengagement was almost complete.

Consolidated sales and profit

In 2002, Pernod Ricard earned operating profit of €750 million, up 67%, on consolidated sales (ex duty and taxes) of €4.8 billion, up 6.2%.

The net interest expense remained in check at €153 million, largely as a result of a rapid debt paydown. At end-2002, total borrowings excluding OCEANE convertible bonds stood at €2.3 billion, a reduction of €1.4 billion. Gearing was 0.88, better than the target ratio of 1:1.

Exceptional income for the year amounted to €10 million, compared with €220 million in 2001 (impacted by the substantial disposal gain on Orangina). Consolidated net profit was €413 million, a rise of 15% on the previous year.

Earnings per share rose 43% to €7.47. (EPS calculated net of exceptional goodwill amortisation and diluted for the OCEANE issue but before the bonus issue of 14/2/03.)

Dividend

The board of directors will recommend a dividend of €1.8 per share to the Annual General Meeting on May 7th. This is the same per-share amount as in 2001 but an increase of 25% taking into account the 1-for-4 bonus issue of 14 February 2003.

Board appointments

The board of directors has co-opted Lord DOURO, Arthur Charles Valerian WELLESLEY  to replace Mr Jean-René Fourtou. Lord DOURO will serve as a director until Mr Fourtou's term of office expires.

Conclusion

Commenting on the year's results, Patrick Ricard said: "The Group's remarkable performance in 2002 fully confirms the logic of the strategy initiated with the acquisition of Seagram's brands. We look forward with confidence to the growth of the business and indeed 2003 has started strongly, but in the uncertain geopolitical and economic situation, we will reserve guidance on performance to the shareholders' meeting".

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