Integrated Annual Report FY21

Dynamic portfolio management, supported by on-trade recovery and off-trade resilience, created significant sales momentum for Pernod Ricard in FY21. Hélène de Tissot discusses how the company successfully weathered the Covid-19 crisis and is now looking towards the future with the implementation of the Finance 4.0 programme.

HOW IS PERNOD RICARD CONTINUING TO DEAL WITH THE IMPACTS OF THIS CRISIS?

HÉLÈNE DE TISSOT___ Since the beginning of the pandemic, we have remained true to the strategy we outlined in 2018, embodied by our ‘Transform & Accelerate’ plan. Our performance throughout this period, especially as reflected in our latest annual results, confirms the relevance of this strategy and the strength of our fundamentals. We have successfully ensured the continuity of all our activities at the vast majority of our production sites and in the field with our customers. This is due to our operational agility, which is driven first and foremost by the commitment of our employees, but also by the introduction of new tools and new working methods, which have proven their efficiency during the crisis. Our transformation is guided by the principles of making decisions more rapidly, pooling our skills and simplifying our processes in order to focus on the essential: creating value over the long term. We must not let up in our efforts: if it is true that times of crisis reveal just how vital operational excellence is for a company, then we must step up our efforts today in order to become even more efficient tomorrow.

HOW DID THE GROUP PRIORITISE ITS INVESTMENTS DURING THE PAST 18 MONTHS OF THE COVID-19 CRISIS?

HÉLÈNE DE TISSOT___ The early days were naturally marked by the day-to-day management of the crisis in order to cope with this unprecedented situation, with our first priority being the health and safety of our employees. We focused on how best to allocate our resources towards the various local requirements imposed by the reality of the pandemic. We proceeded on a market-by-market basis to focus our resources on each potential growth lever. We learned a great deal from that process and continued to build our future growth, whether in terms of advertising and promotional investments, industrial investments or purchases of strategic stocks such as Cognac eaux-de-vie. We also continued to manage our portfolio dynamically, acquiring majority stakes in promising segments and markets such as Ojo de Tigre mezcal, St. Petroni vermouth and Hechicera Colombian rum. Finally, our subsidiaries have shown great discipline in controlling the cost of our structures, thereby contributing to preserving not only our financial performance, but also our rebound capacity.

CAN YOU TELL US MORE ABOUT THE FINANCE 4.0 PROGRAMME? WHAT IS ITS ROLE IN THE GROUP’S TRANSFORMATION AND WHAT ARE ITS OBJECTIVES?

HÉLÈNE DE TISSOT ___ The Group’s digital transformation, which has been underway for quite some time, is not limited to harnessing data on consumer behaviour alone, however decisive this may be. Instead, it involves all our functions with tremendous benefits in terms of operational efficiency. All our finance teams are playing an active role in the adoption of these new cross-functional digital tools. Finance 4.0 is a set of initiatives aimed at putting business forecasting at the heart of our financial planning to optimise resource allocations across the entire value chain. This includes sales; costs of goods sold, including production and logistics costs; efficiency of advertising and promotional investments; optimisation of structures; and industrial investments or strategic inventories. The development of ever more efficient financial information and modelling systems is transforming our working methods, enabling us to better anticipate and prioritise, even in the face of a volatile environment.