Pernod Ricard "Q4/FY 26 results preview: Weak trends persist" (Neutral) Aujla

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Pernod Ricard "Q4/FY 26 results preview: Weak trends persist" (Neutral) Aujla

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such that we forecast Q4 -14% organic sales in US which flat Canada and Latam cannot

06/26E 5.63 5.68 1 5.73

offset. In Europe (UBSe Q4 -1.2% vs cons -1%), per NielsenIQ (link), Pernod's sales 06/27E 5.59 5.77 3 5.83

trends in Europe further deteriorated showing fiscal Q4 to date -4.4% versus fiscal Q3 06/28E 5.84 6.02 3 6.13

-1.1% alongside share losses (-20bps vs Q1 flat) and relatively stronger declines in

France and Germany. We also note visible slowdown in Spain while Poland is still Sanjeet Aujla

soft. On top of this, negative phasing from an earlier Easter should weigh on group Analyst

performance in the region. As such, we expect sell-in to come in at -1.2% vs +0.6% in sanjeet.aujla@ubs.com

+44-20-7567 4529

Q3. In Asia-RoW (UBSe Q4 -0.7% vs cons +1.2%), we forecast strong growth in India,

to be offset by weakness in travel retail. Middle East - We expect China -LSD%, as Arnaud Autier

lapping of prior year trade loading in Cognac ahead of the anti-dumping investigation is Associate Analyst

arnaud.autier@ubs.comoffset by strong growth in the non-Cognac portfolio.

+44-20-7901 6849

FY27 outlook: We forecast FY27E to be a transition year with +1.3% org. sales growth,

below the medium-term 3-6% framework, as we expect continued declines in China

and the US. We expect no margin improvement in FY27 (vs cons +10bps) with gross

margin down mainly due to inflation of wet goods which should offset savings on

SG&A. On FY27E EPS, we are -1% below consensus. We expect an improvement in FCF

to €1.2bn from lower capex and investments in strategic stock, which is however still not

enough to cover group dividend on top of still elevated ND/EBITDA ratio (UBSe 3.73x vs

VA cons 3.52x).