In fact, Pernod Ricard's fiscal year got off to a shaky start when it published its quarterly results yesterday. Consolidated sales fell by 8% - including the currency effect - despite an equivalent rise in prices.
Sales fell in the United States and China, where the Group nevertheless maintains a "positive" outlook. Other markets were stable. It would be premature to speak of a hangover after an exceptional previous fiscal year; rather, we should emphasize that we are witnessing a normalization of activity.
Over the long term, Pernod Ricard's business has been distinguished more by its stability than by its pace of growth. Despite an exceptional brand portfolio - Jameson, Ballantines, Absolut, Malibu, Havana Club, Perrier-Jouët, Ricard, Pastis 51, Chivas Rigal, The Glenlivet, etc. - the potential for organic expansion remains limited. - the potential for organic expansion remains limited.
If we want to move up a gear, we have to turn to acquisitions. Historically, however, the French family-owned group has been more timid - some would say more conservative - in this respect than Diageo. It is also less aggressive with financial leverage than its British rival, resulting in significantly lower profitability.
Two houses, two methods. The approach is different - more family-oriented perhaps - but just as commendable. The market, moreover, values both groups on the same basis, i.e. at an average multiple of x25 profits over the last decade.
In the United States, Brown-Forman continues to stand apart. The owner of the Jack Daniels brand boasts incomparably superior profitability and has traditionally traded between x30 and x40 earnings. It's true that he's focused on the world market, and has proved a particularly astute acquirer over the last cycle.