Drinks group Pernod Ricard is targeting a slight rise in profits, echoing similar guidance from rival Diageo on signs that consumer demand is slowly recovering from the effects of the financial crisis.
Paris-based Pernod today announced it was targeting 2009-2010 organic growth in profit from recurring operations of between 1 per cent and 3 per cent.
Pernod, the world's second largest spirits group by volume, added it remained confident in the quality of its drinks portfolio, which includes Absolut vodka and Chivas Regal whisky.
"The group highlights that, even if the general economic environment remains difficult, particularly in Europe, early signs of improvement are appearing in certain markets," Pernod said in a statement.
Diageo CEO Paul Walsh said yesterday the world's largest liquor maker will see a "long and slow" recovery from recession in its biggest markets, and plans to compensate by expanding in emerging economies.
The US and Europe will take more time than Asia to rebound, Mr Walsh (54) said. Diageo saw sales growth stall in the United States toward the end of last year as distributors stopped ordering and depleted inventories, while consumption faltered in European markets from Spain to Ireland.
The CEO said he plans to expand in Latin America, Asia and Africa to guard against any future slowdown.
Diageo, the world's biggest spirits group, last month kept its guidance for low single digit organic growth in operating profit for 2010.
Pernod reported a 4 per cent fall in first-quarter underlying sales last month, although the result beat market forecasts and the company said it had seen early signs of a recovery in some of its markets.
Pernod shares closed down 1.7 per cent at €56.79 on Friday, giving the company a market capitalisation of around €14.7 billion ($21.79 billion). The stock, which fell 33 per cent last year, has risen around 14 per cent so far this year.
Pernod is holding a combined general meeting of shareholders in Paris today to approve the 2008/09 consolidated and company financial statements at June 30th, 2009, and to set the amount of the dividend for the year.
Reuters