Pernod Ricard: Conor McQuaid appointed CEO North America – 11/28/2023 at 6:20 p.m.


(AOF) – Pernod Ricard appoints Conor McQuaid as CEO North America (United States and Canada). He will assume his new role from January 1, 2024. He has 25 years of experience within the Pernod Ricard group and will be based in New York. He succeeds Ann Mukherjee, who wanted to devote herself to her family. Conor McQuaid has held several management positions within the Group. Member of the Executive Committee, he has been Executive Vice-President of Communications, CSR & Public Affairs since 2022, after having been Executive Vice-President of Global Business Development.

He also held the position of Chairman and CEO of Irish Distillers (Jameson).

Alexandre Ricard, Chairman and CEO of Pernod Ricard, said: “The United States remains our largest market and Conor benefits from in-depth knowledge of all aspects of our business and great operational expertise. His leadership and role “the determining factor that he played in the success of Jameson, particularly in the United States, testify to his ability to carry Pernod Ricard’s ambitions into North America.”

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Key points

– World number 2, behind Diageo, in wines and spirits, born in 1975 from the merger between Pernod, founded in 1805, and Ricard, in 1932;

– Activity of 10.7 billion euros, balanced between Europe (29% of sales), the 2 Americas (29%) and Asia (41%) and contributed 63% by the 13 international strategic brands, 18% by the local strategic brands, 6% by specialty brands and 5% by strategic wines;

– Business model based on a decentralized organization between headquarters, 6 brand companies -The Absolut Company, Chivas Borthers, Martell-Mumm-Perrier-Jouët, Irish Distillers, Havana Club International, Pernod Ricard Winemakers- and 5 market companies supporting international and local brands;

-Capital held at 14.06% (20.09% of voting rights) by the founding family, ahead of employees (2.3% and 1.77%) and the Brussels-Lambert group (7.6% and 12 .8%), Alexandre Ricard, general director, chairing the board of 12 members;

-Very healthy financial structure with a net debt of €8.7 billion, the activity generating a cash flow of €2.5 billion.

Challenges

– “Transform & Accelerate” strategic plan with 4 accelerators – dedicated positioning for each brand, premium and luxury services, innovation and digital acceleration – and a tool – The Conviviality Platform to optimize the potential of brands and the distribution network through usage of Data:

– annual growth of 4 to 7% in sales and 50 to 60 basis points in operating margin;

– promotional expenses around 16%;

– “Transform & Accelerate” strategic plan with 4 accelerators – dedicated positioning for each brand, premium and luxury services, innovation and digital acceleration;

– A mission to cultivate the magic of human relationships by “preserving to share” with the ambition of leading and influencing the industry via a growth model based on digital and artificial intelligence the “conviviality platform”: collection and analysis data serving the supply, on each market of the “right product at the right time, to the right consumer and at the right price”;

– “S&R roadmap 2030” environmental strategy in 4 pillars: circular production with 50% reduction in CO2 emissions by 2030; 100% renewable electricity on production sites and 100% recyclable or compostable packaging by 2025 / preservation of terroirs through regenerative agriculture programs, support for + 10,000 farmers and through projects to maintain the biodiversity and water reuse / human enhancement with 0 gender pay gap achieved in 2022; responsible consumption, more than 134 million people reached by the “drink more… water” campaign.

– Segment not very dependent on household consumption, hence growing strength in mature countries with strong positions in white alcohols, rums and aniseed spirits (Ricard, world no. 1), whiskeys and liqueurs (no. 2) , cognacs, brandies and bitters (No. 3);

– launch of green loans and credit facilities;

– Strong pricing power giving visibility to profits and preservation of margins.

Challenges

– Strong seasonality: 2/3 of the activity carried out in the first half (July-December), 1/4 in December and sensitivity of profits to sales in Asia and the Americas;

– New e-commerce operational unit (The Whiskey Exchange, Drinks&Co and Bodeboca);

-Positive impact of the rise of the dollar against the euro and increases in sales prices well accepted by consumers;

– impact of industrial investments (6% of revenues) and promotional expenses (16%);

– After an 8% increase in sales over the first 9 months, 2022/23 objective of a 10% increase in operating profit, higher than that of revenues;

– Dividend of €4.12 and share buyback program of approximately €750M for 2021-2022 and interim dividend of €2.06 payable on July 7;

Learn more about the Agri-food sector

Soaring energy prices and a call for help

In the past, energy represented a fixed cost of 3% of turnover. This year, this percentage rises to 5% or even 7% for VSE-SMEs, according to Ania (National Association of Food Industries. Professionals are very worried because until the end of 2022 they generally benefit from coverage to cushion these increases. However, they are not renewed for 2023 and after. Consequently, 25 of the main inter-professional organizations (Intercéales, Inaporc, Semae, etc.) are calling on the State for help in the face of the erosion of their margins and their capacity to investment.

The State has proposed several devices, including an “electricity shock absorber”, which are considered insufficient. The organizations also deplore the failure of European negotiations to achieve a price shield to avoid distortions of competition. Agriculture and agri-food demand a maximum ceiling price of €180/MWh while many companies buy at prices above €500/MWh on the French market.



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