Pernod Ricard is confident about its prospects in Asia, helped by cognac and scotch whisky demand in China, the French drinks company's Asia boss has said.
"Despite the [COVID-19] pandemic and the many uncertainties we have to navigate through, our business is resilient, rebounding and continuing its transformation," Pernod Ricard Asia chairman and chief executive Philippe Guettat said on a company YouTube presentation.
Guettat confirmed during a call with analysts the group's medium-term ambition for sales growth rates of high single to low double digits for China and low double digits for India.
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China and India are the group's two largest markets after the US, each accounting for approximately 10% of group sales.
In China, cognac demand is booming in night clubs and is strong in restaurants, with customers spending heavily following the COVID-19 crisis as they were travelling less, Guettat said.
There is also strong demand for scotch whisky in China with strong double digit growth for all brands, including Chivas, Ballantines and Glenlivet. Scotch was attracting a younger crowd, aged below 30.
The south-east Asia market remains difficult as the pandemic is hitting tourism and a recovery is not expected before the second quarter of fiscal year 2022, Guettat said.
Pernod said in April that it expected 10% group organic profit growth for its 2020/2021 financial year after strong demand in its US and Chinese markets helped the French spirits group beat third quarter sales forecasts.
Raised Annual Profit Forecast
Pernod has raised its annual profit forecast as the French drinks company saw a stronger than expected recovery with the removal of COVID-19 curbs, driving its shares to a record high.
The owner of Mumm champagne, Absolut vodka and Martell cognac now expects organic profit growth of approximately 16% for its 2020/2021 fiscal year, up from the previous April forecast of 10%.
Since the start of the year, Pernod stock is up 18.2% versus approximately 13% for the Stoxx 600 Food & Beverage index.
"The pace of recovery is proving stronger than anticipated...Demand is accelerating as restrictions are progressively lifted," the group said in a statement.
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