The main risks faced by Pernod Ricard; the impact of the risks and a probability index from high (4) to medium (1).

4.

Loss of major industrial site/strategic inventory

Resulting in significant business disruption and unavailability of key brands in the trade.

Toxic contamination

Risk of toxic contamination of a product resulting in major injuries.

Pressure on prices

Risk of margin erosion due to intensified pressure from retailers and fierce competition.

Geopolitical and macro economic instability

Risk of a broad geopolitical turmoil and the resurgence of a macroeconomic crisis.

Negative media/social media campaign

Impacting the image of the Group and/or its key brands.

Regulatory changes  (incl. tax and anti-alcohol)

Strengthening of legislation resulting in restrictions or constraints in different areas (marketing, communication, tax, etc.).

Climate change and environmental damage

Global warming impact on our activities and environmental damage caused by our activities.

Financial risks (FX, interest rates, credit)

Unfavourable evolution of exchange and interest rates or the failure of customers leading to non-collection of receivables.

Counterfeiting/IP rights

Counterfeit and look-alike products damaging brand equity and impacting sales.

3.

Cyberattack

Cyber intrusion compromising systems, websites and data integrity.

Brand portfolio challenges and nonadaptation to new trends (incl. inventory management)

Adapting Pernod Ricard’s portfolio and business model to new trends.

Major litigation

Against Pernod Ricard, its affiliates,  its brands or its management.

Product quality issues

Quality deviation leading to customers’ disappointment and brand image deterioration.

Talent management

Inability to attract, develop and retain talent.

Fraud

Resulting in financial losses or the leakage of sensitive information.

2.

Supply disruption

Due to key supplier failure or volatility of raw materials prices.

Human safety risk

Severe employee accidents and contractors as a result of a criminal event or accident.

1.

Pensions

Unanticipated increase of pension fund deficits and/or cash contributions.