INTEGRATED ANNUAL REPORT FY22

Exploring our shared performance

  1. 01 Loss of major industrial site/strategic inventory Resulting in significant business disruption and unavailability of certain key brands in Pernod Ricard markets. Toxic contamination Resulting in major consequences for consumers and commercial and reputational risk for the brands.
  2. 02 Major cyberattack Cyber intrusion compromising systems, websites and data integrity.
  3. 03 Geopolitical and macroeconomic instability Risk of a broad geopolitical disturbance or the resurgence of a macroeconomic crisis. Anti-alcohol environment and regulations Strengthening of legislation resulting in new restrictions or constraints regarding advertising and distribution of alcoholic beverages. Regulatory risks Triggering price increases and/or higher costs for the company or even administrative and criminal penalties. Pressure on prices and margins Risk of margin erosion due to intensified pressure from retailers, fierce competition and potential increase in terms of cost of goods sold and logistics expenses. Climate change and environmental damage Global warming impact on our activities and environmental damage caused by our activities.
  4. 04 S&R challenges Good Times from a Good Place, 2030 S&R roadmap made up of four pillars for which qualitative and quantitative objectives have been identified. All of these commitments represent real challenges that the Group is intent upon tackling.
  5. 05 Product quality issues Leading to customer discontent and brand image deterioration. Health & safety Severe accident involving an employee or contractor as a result of a criminal or industrial incident.
  6. 06 Supply chain disruptions Major unpredictable event complexifying the access to markets; key supplier failure; unavailability of raw material. Fast-changing consumer behaviours Consumer behaviours changing at a fast pace in terms of expectations and trends (product categories, distribution channels, consumer experiences). Financial risks (FX, interest rates, credit) Unfavourable evolution of exchange and interest rates or the failure of customers leading to non-collection of receivables. Talent management Inability to attract, develop and retain talent. Negative media coverage Impacting the image of the Group and/or its key brands.
  7. 07 Pensions Unanticipated increase of pension fund’s deficits and/or cash contributions.
  8. 08 Major litigation Against Pernod Ricard, its affiliates, its brands or its management. Fraud Resulting in financial losses or the leakage of sensitive information.
  9. 09 Counterfeiting/IP rights Counterfeit and look-alike products damaging brand image and impacting sales.

Methodology:

In 2021, the Group carried out an in-depth review of its risk map, a risk management tool. Top Management actively participated and all Pernod Ricard functions and affiliates were involved. This map, reproduced on the previous page, visualises the issues at stake, without replacing the explanations provided in chapter 4 of the FY22 Universal Registration Document. This map is reviewed annually to take into account the major changes in the risk environment to which the Pernod Ricard Group is exposed.