Pernod Ricard: FY20 Half-Year Sales and Results

Solid H1 FY20 on High Basis of Comparison +2.7% Organic Sales Growth (+5.6% Reported) +4.3% Organic Growth in PRO1 (+8.1% Reported) New FY20 Guidance2 Reflecting Current COVID-19 Assumptions: Organic Growth in PRO Between +2% and +4%

Regulatory News:

Press release - Paris, 13 February 2020

Pernod Ricard (Paris:RI):

SALES

Sales for H1 FY20 totalled €5,474m, with organic growth of +2.7% and reported growth of +5.6%, with a favourable FX impact linked to USD and Emerging market currency appreciation vs. Euro.

Pernod Ricard delivered solid results in a challenging environment, with broad-based growth:

• Diversified growth across Regions, with robust performance of Must-win markets USA, India and China, further enhanced by earlier Chinese New Year³
• Dynamic performance of Strategic International Brands, in particular Jameson, Martell, The Glenlivet, Malibu, Ballantine’s, Royal Salute and Beefeater
• Continued strong pricing: +2% on Strategic brands
• Focus on operational excellence and resource allocation, driving strong organic improvement in PRO margin +51bps.

We continued to roll-out the Transform & Accelerate 3-year strategic plan:

• Implementation of 2030 Sustainability & Responsibility roadmap
• Launch of Reconquer project to resume growth in France and reorganisation of Wine business to reignite its performance
• Active portfolio management: completion of TX, Rabbit Hole and Castle Brands acquisitions.

Sales growth was robust, with a very strong basis of comparison: +2.7% vs +7.8% in H1 FY19. The Must-win markets posted the following performance:

• USA: +4%, good growth driven by Whiskies and Specialty brands
• China: +11%, strong H1 on a high comparison basis (H1 FY19 +28%), enhanced by earlier Chinese New Year³
• India: +5% good H1 in a volatile context, with a high basis of comparison (H1 FY19 +24%)
• Travel Retail: robust Sell-out, but H1 FY20 impacted by shipment phasing.

There was diversified growth throughout the Regions:

• Americas +2%: good growth in USA partially offset by weaker Mexican market and phasing in Travel Retail
• Asia-RoW +3%: growth driven mainly by China and India, dampened by the transfer of Imperial Korea to a third-party distributor
• Europe +3%: strong growth with improving trends, driven by Germany, UK and Eastern Europe acceleration, but difficulties remaining in France.

Q2 Sales were €2,991m, with +3.8% organic growth (+6.9% reported), following a soft Q1 FY20 (at +1%), and enhanced by earlier Chinese New Year.

RESULTS

H1 FY20 PRO was €1,788m, with organic growth of +4.3% and +8.1% reported. For full-year FY20, the FX impact on PRO is estimated at c. +€70m⁴.

The H1 organic PRO margin was up by +51bps, thanks to:

• Strong pricing on Strategic brands: +2%
• Gross margin in slight decline -15bps, following particularly strong H1 FY19 (+71bps):
  • Positive impact of earlier Chinese New Year but negative mix of India
  • Cost of Goods headwinds (in particular agave and grain neutral spirit (GNS) in India)
• A&P: increase broadly in line with Sales, with strong arbitration and focus behind strategic priorities
• Structure: -2% thanks to strong discipline and favourable phasing (growth expected for full-year FY20)
• Positive FX impact of +€59m thanks mainly to USD (EUR/USD 1.11 in H1 FY20 vs. 1.15 in H1 FY19) and Emerging market currency appreciation vs. Euro

The H1 FY20 corporate income tax rate on recurring items was c.24%; the rate is expected at c. 25% for full-year FY20.

Group share of Net PRO was €1,216m, +10% reported vs. H1 FY19, thanks mainly to strong improvement in PRO.

Group share of Net profit was €1,032m, +1% reported vs. H1 FY19, despite strong improvement in PRO due mainly to non-recurring items.

FREE CASH FLOW AND DEBT

Free Cash Flow was €570m, while increasing Capex and the ageing stock inventory build, as expected.

Net debt increased by €1,608m⁵ vs. 30 June 2019 to €8,228m at 31 December 2019 due mainly to increased M&A cash-out, an increased dividend payment and the start of the share buy-back programme⁶ with €223m purchased in H1 FY20. In H2 FY20, the programme will continue, with a new clip of €300m maximum, to be executed by 30 June 2020.

The Net Debt/EBITDA ratio at average rates⁷ was 2.7x at 31 December 2019.

As part of this communication, Alexandre Ricard, Chairman and Chief Executive Officer, declared, “H1 FY20 demonstrated solid growth and resilience of our business model. Our 3 year-plan Transform& Accelerate is driving success, as evidenced by the diversification of the sources of growth in terms of geographic footprint and categories, continued strong pricing and ultimately the improvement in operating leverage.

Looking to H2 FY20, the environment remains particularly uncertain from a geopolitical standpoint, with the additional pressure related to the COVID-19 outbreak. While we cannot currently predict the duration and extent of the impact, we remain confident in our strategy. Our first priority is to ensure the safety and wellbeing of our employees and business partners. I would like to praise the exemplary behaviour of our teams during this difficult time. We fully support their efforts, as well as those of the Chinese people and authorities to contain the epidemic.

Assuming a severe impact of COVID-19, mainly on Q3 FY20, we are at this stage providing a guidance of organic growth in Profit from Recurring Operations for full-year FY20 of +2% to +4% and will continue to closely monitor our environment. We will stay the strategic course and maintain priority investments in order to continue maximising long-term value creation.”

All growth data specified in this press release refers to organic growth (at constant FX and Group structure), unless otherwise stated. Data may be subject to rounding.

A detailed presentation of H1 FY20 Sales and Results can be downloaded from our website: www.pernod-ricard.com

Audit procedures have been carried out on the half-year financial statements. The Statutory Auditors’ report will be issued following their review of the management report.

Definitions and reconciliation of non-IFRS measures to IFRS measures
Pernod Ricard’s management process is based on the following non-IFRS measures which are chosen for planning and reporting. The Group’s management believes these measures provide valuable additional information for users of the financial statements in understanding the Group’s performance. These non-IFRS measures should be considered as complementary to the comparable IFRS measures and reported movements therein.

Organic growth
Organic growth is calculated after excluding the impacts of exchange rate movements and acquisitions and disposals.

Exchange rates impact is calculated by translating the current year results at the prior year’s exchange rates.

For acquisitions in the current year, the post-acquisition results are excluded from the organic movement calculations. For acquisitions in the prior year, post-acquisition results are included in the prior year but are included in the organic movement calculation from the anniversary of the acquisition date in the current year.

Where a business, brand, brand distribution right or agency agreement was disposed of, or terminated, in the prior year, the Group, in the organic movement calculations, excludes the results for that business from the prior year. For disposals or terminations in the current year, the Group excludes the results for that business from the prior year from the date of the disposal or termination.

This measure enables to focus on the performance of the business which is common to both years and which represents those measures that local managers are most directly able to influence.

Profit from recurring operations
Profit from recurring operations corresponds to the operating profit excluding other non-current operating income and expenses.

1 PRO: Profit from Recurring Operations

2 Guidance given to market on 29 August 2019 of organic PRO growth between +5% and +7%

3 Chinese New Year: 25 January 2020 vs. 5 February 2019

4 Based on average FX rates projected on 11 February 2020, particularly a EUR/USD rate of 1.11

5 Including €531m of lease liability, pursuant to implementation of IFRS16 norm

6 of up to €1bn over FY20 and FY21, announced on August 29th, 2019

7 Based on average EUR/USD rates: 1.12 in 2019

About Pernod Ricard
Pernod Ricard is the No.2 worldwide producer of wines and spirits with consolidated sales of €9,182 million in FY19. Created in 1975 by the merger of Ricard and Pernod, the Group has developed through organic growth and acquisitions: Seagram (2001), Allied Domecq (2005) and Vin&Sprit (2008). Pernod Ricard, which owns 16 of the Top 100 Spirits Brands, holds one of the most prestigious and comprehensive brand portfolios in the industry, including: Absolut Vodka, Ricard pastis, Ballantine’s, Chivas Regal, Royal Salute, and The Glenlivet Scotch whiskies, Jameson Irish whiskey, Martell cognac, Havana Club rum, Beefeater gin, Malibu liqueur, Mumm and Perrier-Jouët champagnes, as well Jacob’s Creek, Brancott Estate, Campo Viejo, and Kenwood wines. Pernod Ricard’s brands are distributed across over 160 markets, and by its own direct salesforce in 73 markets. The Group’s decentralised organisation empowers its 19,000 employees to be true on-the-ground ambassadors of its vision of “Créateurs de Convivialité.” As reaffirmed by the Group’s three-year strategic plan, “Transform and Accelerate,” deployed in 2018, Pernod Ricard’s strategy focuses on investing in long-term, profitable growth for all stakeholders. The Group remains true to its three founding values: entrepreneurial spirit, mutual trust, and a strong sense of ethics. As illustrated by the 2030 roadmap supporting the United Nations Sustainable Development Goals (SDGs), “We bring good times from a good place.” In recognition of Pernod Ricard’s strong commitment to sustainable development and responsible consumption, it has received a Gold rating from Ecovadis and is ranked No. 1 in Vigeo Eiris for the beverage sector. Pernod Ricard is also a United Nation’s Global Compact LEAD company. Pernod Ricard is listed on Euronext (Ticker: RI; ISIN Code: FR0000120693) and is part of the CAC 40 index.

Appendices

Emerging Markets

Asia-Rest of World				Americas		Europe
Algeria		Mongolia		Argentina		Albania
Angola		Morocco		Bolivia		Armenia
Cambodia		Mozambique		Brazil		Azerbaijan
Cameroon		Myanmar		Caribbean		Belarus
China		Namibia		Chile		Bosnia
Congo		Nigeria		Colombia		Bulgaria
Egypt		Persian Gulf		Costa Rica		Croatia
Ethiopia		Philippines		Cuba		Georgia
Gabon		Senegal		Dominican Republic		Hungary
Ghana		South Africa		Ecuador		Kazakhstan
India		Sri Lanka		Guatemala		Kosovo
Indonesia		Syria		Honduras		Latvia
Iraq		Tanzania		Mexico		Lithuania
Ivory Coast		Thailand		Panama		Macedonia
Jordan		Tunisia		Paraguay		Moldova
Kenya		Turkey		Peru		Montenegro
Laos		Uganda		Puerto Rico		Poland
Lebanon		Vietnam		Uruguay		Romania
Madagascar		Zambia		Venezuela		Russia
Malaysia						Serbia
						Ukraine

Strategic International Brands’ organic Sales growth

		Volumes H1 FY20		Organic Sales growth H1 FY20		Volumes		Price/mix
		(in 9Lcs millions)
Absolut		6.3		-1%		1%		-2%
Chivas Regal		2.6		-2%		-3%		1%
Ballantine's		4.4		5%		3%		1%
Ricard		2.4		-5%		-5%		0%
Jameson		4.6		9%		9%		0%
Havana Club		2.5		6%		0%		6%
Malibu		2.0		13%		9%		4%
Beefeater		1.9		12%		13%		-1%
Martell		1.6		4%		-3%		8%
The Glenlivet		0.7		15%		8%		6%
Royal Salute		0.1		17%		12%		5%
Mumm		0.5		-3%		-6%		3%
Perrier-Jouët		0.2		1%		-12%		13%
Strategic International Brands		29.8		4%		2%		2%

Sales Analysis by Period and Region

Net Sales (€ millions)		H1 FY19			H1 FY20			Change			Organic Growth			Group Structure			Forex impact
Americas		1,389	26.8%		1,461	26.7%		72	5%		22	2%		15	1%		35	2%
Asia / Rest of World		2,266	43.7%		2,415	44.1%		149	7%		68	3%		16	1%		64	3%
Europe		1,530	29.5%		1,598	29.2%		69	4%		47	3%		7	0%		14	1%
World		5,185	100.0%		5,474	100.0%		289	6%		137	3%		39	1%		113	2%
Net Sales (€ millions)		Q1 FY19			Q1 FY20			Change			Organic Growth			Group Structure			Forex impact
Americas		636	26.6%		674	27.1%		37	6%		14	2%		2	0%		21	3%
Asia / Rest of World		1,084	45.4%		1,116	44.9%		32	3%		(4)	0%		4	0%		32	3%
Europe		667	27.9%		694	27.9%		27	4%		21	3%		2	0%		4	1%
World		2,387	100.0%		2,483	100.0%		96	4%		31	1%		8	0%		57	2%
Net Sales (€ millions)		Q2 FY19			Q2 FY20			Change			Organic Growth			Group Structure			Forex impact
Americas		753	26.9%		788	26.3%		34	5%		8	1%		13	2%		14	2%
Asia / Rest of World		1,182	42.2%		1,299	43.4%		117	10%		73	6%		12	1%		32	3%
Europe		863	30.8%		904	30.2%		42	5%		26	3%		5	1%		10	1%
World		2,798	100.0%		2,991	100.0%		193	7%		106	4%		31	1%		56	2%

Summary Consolidated Income Statement

(€ millions)		H1 FY19		H1 FY20		Change
Net sales		5,185		5,474		6%
Gross Margin after logistics costs		3,239		3,419		6%
Advertising and promotion expenses		(799)		(842)		5%
Contribution after A&P expenditure		2,440		2,577		6%
Structure costs		(786)		(789)		0%
Profit from recurring operations		1,654		1,788		8%
Financial income/(expense) from recurring operations		(157)		(164)		5%
Corporate income tax on items from recurring operations		(379)		(392)		3%
Net profit from discontinued operations, non-controlling interests and share of net income from associates		(13)		(15)		17%
Group share of net profit from recurring operations		1,105		1,216		10%
Other operating income & expenses		(66)		(152)		NA
Financial income/(expense) from non-recurring operations		1		(1)		NA
Corporate income tax on items from non recurring operations		(18)		(31)		NA
Group share of net profit		1,023		1,032		1%
Non-controlling interests		14		14		4%
Net profit		1,036		1,046		1%

Profit from Recurring Operations by Region

World
(€ millions)		H1 FY19			H1 FY20			Change			Organic Growth			Group Structure			Forex impact
Net sales (Excl. T&D)		5,185	100.0%		5,474	100.0%		289	6%		137	3%		39	1%		113	2%
Gross margin after logistics costs		3,239	62.5%		3,419	62.5%		180	6%		78	2%		20	1%		82	3%
Advertising & promotion		(799)	15.4%		(842)	15.4%		(43)	5%		(21)	3%		(7)	1%		(15)	2%
Contribution after A&P		2,440	47.1%		2,577	47.1%		136	6%		57	2%		13	1%		66	3%
Profit from recurring operations		1,654	31.9%		1,788	32.7%		134	8%		71	4%		3	0%		59	4%
Americas
(€ millions)		H1 FY19			H1 FY20			Change			Organic Growth			Group Structure			Forex impact
Net sales (Excl. T&D)		1,389	100.0%		1,461	100.0%		72	5%		22	2%		15	1%		35	2%
Gross margin after logistics costs		942	67.8%		986	67.5%		44	5%		5	1%		11	1%		28	3%
Advertising & promotion		(276)	19.8%		(285)	19.5%		(9)	3%		(1)	0%		(2)	1%		(6)	2%
Contribution after A&P		666	48.0%		701	48.0%		35	5%		4	1%		9	1%		22	3%
Profit from recurring operations		470	33.8%		486	33.3%		16	3%		(8)	-2%		5	1%		18	4%
Asia / Rest of the World
(€ millions)		H1 FY19			H1 FY20			Change			Organic Growth			Group Structure			Forex impact
Net sales (Excl. T&D)		2,266	100.0%		2,415	100.0%		149	7%		68	3%		16	1%		64	3%
Gross margin after logistics costs		1,353	59.7%		1,442	59.7%		89	7%		38	3%		6	0%		45	3%
Advertising & promotion		(309)	13.6%		(341)	14.1%		(32)	10%		(20)	7%		(4)	1%		(8)	2%
Contribution after A&P		1,044	46.1%		1,101	45.6%		57	5%		18	2%		2	0%		37	4%
Profit from recurring operations		766	33.8%		833	34.5%		67	9%		36	5%		(2)	0%		33	4%
Europe
(€ millions)		H1 FY19			H1 FY20			Change			Organic Growth			Group Structure			Forex impact
Net sales (Excl. T&D)		1,530	100.0%		1,598	100.0%		69	4%		47	3%		7	0%		14	1%
Gross margin after logistics costs		944	61.7%		991	62.0%		46	5%		35	4%		3	0%		9	1%
Advertising & promotion		(214)	14.0%		(216)	13.5%		(2)	1%		0	0%		(1)	0%		(1)	1%
Contribution after A&P		730	47.7%		775	48.5%		45	6%		35	5%		2	0%		8	1%
Profit from recurring operations		418	27.3%		468	29.3%		50	12%		43	10%		(0)	0%		7	2%

Foreign Exchange Impact

Forex impact H1 FY20 (€ millions)			Average rates evolution						On Net Sales		On Profit from Recurring Operations
			H1 FY19		H1 FY20		%
US dollar	USD		1.15		1.11		-3.7%		50		29
Chinese yuan	CNY		7.91		7.80		-1.3%		8		6
Indian rupee	INR		81.93		78.59		-4.1%		25		8
Russian rouble	RUB		76.13		71.19		-6.5%		10		8
Other									20		7
Total									113		59
For full-year FY20, a positive FX impact on PRO of c. +€70m is expected1
Notes:
Impact on PRO includes strategic hedging on Forex
1. Based on average FX rates projected on 11 February 2020, particularly EUR/USD rate of 1.11

Sensitivity of profit and debt to EUR/USD exchange rate

Estimated impact of a 1% appreciation of the USD and linked currencies(1)
Impact on the income statement(2)	(€ millions)
Profit from recurring operations	15
Financial expenses	(1)
Pre-tax profit from recurring operations	14
Impact on the balance sheet	(€ millions)
Increase/(decrease) in net debt	+41
(1) CNY, HKD	(2) Full-year effect

Balance Sheet

Assets		30/06/2019		31/12/2019
(€ millions)
(Net book value)
Non-current assets
Intangible assets and goodwill		17,074		17,640
Tangible assets and other assets		4,002		3,626
Deferred tax assets		1,590		1,615
Total non-current assets		22,665		22,882
Current assets
Inventories		5,756		6,046
aged work-in-progress		4,788		5,047
non-aged work-in-progress		79		76
other inventories		889		923
Receivables (*)		1,226		2,159
Trade receivables		1,168		2,101
Other trade receivables		59		58
Other current assets		359		302
Other operating current assets		291		295
Tangible/intangible current assets		67		7
Tax receivable		105		89
Cash and cash equivalents and current derivatives		929		1,180
Total current assets		8,375		9,776
Assets held for sale		5		97
Total assets		31,045		32,755
(*) after disposals of receivables of:		674		827
Liabilities and shareholders’ equity		30/06/2019 restated*		31/12/2019
(€ millions)
Group Shareholders’ equity		15,987		15,687
Non-controlling interests		195		220
of which profit attributable to non-controlling interests		27		12
Total Shareholders’ equity		16,182		15,907
Non-current provisions and deferred tax liabilities		3,584		3,619
Bonds non-current		6,071		7,618
Lease liabilities - non-current		-		424
Non-current financial liabilities and derivative instruments		379		92
Total non-current liabilities		10,034		11,753
Current provisions		149		213
Operating payables		2,187		2,429
Other operating payables		1,058		770
of which other operating payables		660		721
of which tangible/intangible current payables		398		49
Tax payable		307		389
Bonds - current		944		948
Lease liabilities - current		-		93
Current financial liabilities and derivatives		182		240
Total current liabilities		4,826		5,082
Liabilities held for sale		2		14
Total liabilities and shareholders' equity		31,045		32,755

Analysis of Working Capital Requirement

(€ millions)		June 2018		December 2018		June 2019		December 2019			H1 FY19 WC change*		H1 FY20 WC change*
Aged work in progress		4,532		4,581		4,788		5,047			64		123
Advances to suppliers for wine and ageing spirits		10		29		12		13			19		1
Payables on wine and ageing spirits		(96)		(172)		(105)		(182)			(77)		(77)
Net aged work in progress		4,447		4,439		4,695		4,878			7		47
Trade receivables before factoring/securitization		1,641		2,704		1,842		2,928			1,054		1,070
Advances from customers		(6)		(6)		(24)		(17)			(1)		7
Other receivables		353		305		338		340			(1)		(20)
Other inventories		869		849		889		923			(16)		15
Non-aged work in progress		71		84		79		76			11		(3)
Trade payables and other		(2,471)		(2,719)		(2,717)		(2,951)			(238)		(206)
Gross operating working capital		457		1,217		405		1,299			809		864
Factoring/Securitization impact		(610)		(772)		(674)		(827)			(162)		(143)
Net Operating Working Capital		(153)		445		(269)		472			648		721
Net Working Capital		4,294		4,884		4,427		5,350			654		768
* at average rates		Of which recurring variation									651		763
		Of which non recurring variation									3		5

Net Debt

(€ millions)		30/06/2019						12/31/2019
		Current		Non-current		Total		Current		Non-current		Total
Bonds		944		6,071		7,015		948		7,618		8,566
Syndicated loan		-		-		-		-		-		-
Commercial paper		-		-		-		-		-		-
Other loans and long-term debts		177		363		540		226		81		307
Other financial liabilities		177		363		540		226		81		307
Gross Financial debt		1,121		6,434		7,555		1,174		7,698		8,873
Fair value hedge derivatives – assets		-		(13)		(13)		-		(15)		(15)
Fair value hedge derivatives – liabilities		-		2		2		-		0		0
Fair value hedge derivatives		-		(12)		(12)		-		(15)		(15)
Net investment hedge derivatives – assets		-		-		-		-		-		-
Net investment hedge derivatives – liabilities		-		-		-		-		-		-
Net investment hedge derivatives		-		-		-		-		-		-
Net asset hedging derivative instruments – assets		-		-		-		-		-		-
Net asset hedging derivative instruments – liabilities		0		-		0		4		-		4
Net asset hedging derivative instruments		0		-		0		4		-		4
Financial debt after Hedging		1,121		6,422		7,543		1,178		7,684		8,862
Cash and cash equivalents		(923)		-		(923)		(1,152)		-		(1,152)
Net financial debt excluding lease liability		198		6,422		6,620		26		7,684		7,710
Lease Liability *		-		-		-		93		424		517
Net financial debt		198		6,422		6,620		120		8,108		8,228

*Lease liabilities at 31 December 2019 include the contract previously qualified as “Financial leases” and disclosed under “Other loans and financial debts” at 30 June 2019 for an amount of €28 million.

Change in Net Debt

(€ millions)		31/12/2018		31/12/2019
Operating profit		1,588		1,636
Depreciation and amortisation		111		174
Net change in impairment of goodwill, PPE and intangible assets		26		8
Net change in provisions		4		75
Retreatment of contributions to pension plans acquired from Allied Domecq and others		3
Changes in fair value on commercial derivatives and biological assets		(5)		(3)
Net (gain)/loss on disposal of assets		(1)		(7)
Share-based payments		18		21
Self-financing capacity before interest and tax (1)		1,744		1,903
Decrease / (increase) in working capital requirements		(654)		(768)
Net interest and tax payments		(374)		(401)
Net acquisitions of non financial assets and others		(131)		(164)
Free Cash Flow (2)		585		570
of which recurring Free Cash Flow (3)		622		627
Net acquisition of financial assets and activities and others		(103)		(540)
Dividends paid		(636)		(843)
(Acquisition) / Disposal of treasury shares		(54)		(228)
Decrease / (increase) in net debt (before currency translation adjustments and IFRS 16 non cash impacts)		(208)		(1,041)
IFRS 15 opening adjustment		16
Foreign currency translation adjustment		(69)		(36)
Non cash impact on lease liabilities (4)				(531)
Decrease / (increase) in net debt (after currency translation adjustments and IFRS 16 non cash impacts) (5)		(260)		(1,608)
Initial net debt		(6,962)		(6,620)
Final net debt		(7,223)		(8,228)
Note: IFRS16 impacts are: (1) +56M€ / (2) +42M€ / (3) +38M€ / (4) -531M€ / (5) -489M€

Net Debt Maturity at 31 December 2019

€ billions

[Missing charts are available on the original document and on www.pernod-ricard.com]

Note: Available cash at 31 December 2019: €1.2bn in cash and €2.5bn syndicated credit not used (syndicated credit coming to maturity in June 2024)

Gross Debt after hedging at 31 December 2019

• 13% floating rate and 87% fixed rate
• 46% in EUR and 54% in USD

Bond details

Currency		Par value		Coupon		Issue date		Maturity date
EUR		€ 850 m		2.000%		3/20/2014		6/22/2020
		€ 650 m		2.125%		9/29/2014		9/27/2024
		€ 500 m		1.875%		9/28/2015		9/28/2023
		€ 600 m		1.500%		5/17/2016		5/18/2026
		€ 1,500 m o/w:				10/24/2019
		€ 500 m		0.000%				10/24/2023
		€ 500 m		0.500%				10/24/2027
		€ 500 m		0.875%				10/24/2031
USD		$ 1,000 m		5.750%		4/7/2011		4/7/2021
		$ 1,500  m		4.450%		10/25/2011		1/15/2022
		$ 1,650 m o/w:				1/12/2012
		$ 800 m at 10.5 years		4.250%				7/15/2022
		$ 850 m at 30 years		5.500%				1/15/2042
		$ 201  m		Libor 6m + spread		1/26/2016		1/26/2021
		$ 600  m		3.250%		6/8/2016		6/8/2026

Net Debt / EBITDA ratio evolution

		Closing rate		Average rate(1)
EUR/USD rate Jun FY19 -> Dec FY20		1.14 -> 1.12		1.14 -> 1.12
Ratio at 30/06/2019		2.3		2.3
EBITDA & cash generation excl. Group structure effect and forex impacts		0.1		0.1
Group structure(2) and forex impacts		0.2		0.3
Ratio at 31/12/2019		2.7		2.7 (3)
(1) Last-twelve-month rate
(2) Including IFRS 16 impact
(3) Syndicated credit leverage ratio restated from IFRS16 is 2.6

Diluted EPS calculation

(x 1,000)		H1 FY19		H1 FY20
Number of shares in issue at end of period		265,422		265,422
Weighted average number of shares in issue (pro rata temporis)		265,422		265,422
Weighted average number of treasury shares (pro rata temporis)		(1,215)		(1,462)
Dilutive impact of stock options and performance shares		1,274		1,303
Number of shares used in diluted EPS calculation		265,481		265,263
(€ millions and €/share)		H1 FY19		H1 FY20		reported
						∆
Group share of net profit from recurring operations		1,105		1,216		10.0%
Diluted net earnings per share from recurring operations		4.16		4.58		10.1%

Current COVID-19 assumptions, with impact on FY20 PRO

China:

• On-trade

All outlets closed in February, and till end of June in Hubei province
Gradual recovery starting from March, back to normal by June

• Off-trade

Significant impact on Traditional and Modern outlets in late January and February
Recovery in March

Travel Retail Asia

• Reduction in Chinese passenger numbers of c. 2/3 in February and March
• Gradual recovery starting from April, back to normal by June

FY20 Impact from China + Travel Retail Asia lost Sales:

• Impact on Group FY20 Sales: c. -2%
• Priority investments maintained throughout Group, while activating targeted mitigation measures
• Impact on Group FY20 PRO: c. -3%

Upcoming Communications

DATE¹		EVENT
Tuesday 10 March 2020		North America Conference Call
Thursday 23 April 2020		Q3 FY20 Sales
Tuesday 26 May 2020		Sustainability & Responsibility conference
1 The above dates are indicative and are liable to change

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20200212005993/en/