2015 AT A GLANCE

Annual Report 2014 / 2015 P E R N O D R I C A R D AT A GLANCE × Pernod Ricard at a glance × Key figures Forty years ago this year, Paul Ricard an...
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Annual Report 2014 / 2015

P E R N O D R I C A R D AT A GLANCE

× Pernod Ricard at a glance ×

Key figures

Forty years ago this year, Paul Ricard and Jean Hémard founded Pernod Ricard. The two partners set out to take on the world, with the ambitious goal of one day becoming the global leader in the sector. With direct operations in 85 countries, the Group is now the world’s second-largest wine and spirits company and continues to expand worldwide, the latest addition being a new affiliate in Mozambique. One of the milestones of 2015 was the appointment of Paul Ricard’s grandson, Alexandre Ricard, as Chairman and Chief  Executive Officer. Since taking the reins in February, Alexandre Ricard has set his sights on making the Group the global industry leader. He has established two priorities to reach this goal: top line growth – which he calls “the mother of all battles” – and instilling a winning mindset in each of the company’s 18,000 employees. “My key goal isn’t change but acceleration”, Mr Ricard told analysts and investors at Capital Market Day, on 4 June 2015. The Group has initially decided to focus on revamping its strategic model, in light of the ongoing challenges posed by the macroeconomic environment. The model draws on the fundamentals that underpin Pernod Ricard’s success: a complete portfolio of Premium brands; a strategy based on Premiumisation, growth and innovation; a unique corporate culture; and a decentralised organisation. The new model places consumers at the centre of the Group’s entire strategic approach, which is based on the idea that shoppers are no longer loyal to a single brand, but rather to a variety of brands, choosing one that matches each occasion. Faithful to their role as “Créateurs de Convivialité”, the people at Pernod Ricard aim to ensure that each of the company’s brands are present to enhance these convivial occasions. Four ‘essentials’ – Operational Excellence, Talent Development, Sustainability & Responsibility and Route to market/Consumer – and four ‘accelerators’ – Portfolio Management, Digital Acceleration, Innovation, Premiumisation and Luxury – form the capstone of the model, which is applied to all the Group’s ‘battlegrounds’. This “At a glance” report provides an overview of all the elements required to understand Pernod Ricard in a few pages, from strategy to key figures, organisation and governance.

No. 2 WORLDWIDE

No. 1 WORLDWIDE

in wines & spirits

in Premium and prestige spirits(2)

19 BRANDS among the top 100 worldwide(1)

€8,558 M

18,421

€2,238 M

in sales

employees

in profit from recurring operations up 2% compared with 2013/14(3)

Key dates 2015 th

40

anniversary

2014

Pernod Ricard acquires a majority shareholding in Avión Premium tequila.

2005

Acquisition of Allied Domecq, in partnership with Fortune Brands.

1989

Acquisition of the Orlando Wyndham Group.

Alexandre Ricard becomes Chairman and Chief Executive Officer on 11 February 2015.

2013

Responsible drinking: the Group launches the Wise Drinking app.

2001

Acquisition of a stake in Seagram’s Wine & Spirits business.

1988

Acquisition of Irish Distillers.

2008

Acquisition of Vin&Sprit, owner of Absolut vodka.

1993

Joint venture formed with Havana Club International.

1975

Pernod Ricard founded.

(1)Source: Impact, February 2015. (2)Source: “The Pernod Ricard Market View”, based on IWSR data from late 2014, premium spirits: ≥ US$17; prestige spirits: ≥ US$84. (3)Organic growth.

I

× Pernod Ricard at a glance ×

× Pernod Ricard at a glance ×

A new strategic model: our 8 business priorities Pernod Ricard’s new strategic policy does not represent a radical change: it’s a new synthesis that brings together all of the Group’s traditional tenets – decentralisation, Premiumisation and a unique corporate culture – plus new growth drivers, to create a single strategic model containing eight business priorities.

CONSUMER AT THE HEART

This model is centred on consumers, who are the focus of four ‘essentials’: Operational Excellence, Talent Development, Sustainability & Responsibility and Route to market/ Consumer. These are coupled with four ‘accelerators’: Portfolio Management, Digital Acceleration, Innovation, and Premiumisation and Luxury. These eight priorities must all contribute to a single objective: increased turnover.

OUR BUSINESS PRIORITIES - DEFINED

OPERATIONAL EXCELLENCE Reduce completixity & foster efficiency. TALENT DEVELOPMENT Recruit, retain & develop diverse teams. SUSTAINABILITY & RESPONSIBILITY Lead the industry in sustainability & responsibility. ROUTE TO MARKET/CONSUMER Prioritise our channel focus and engage our customers.

PORTFOLIO MANAGEMENT Optimise our portfolio for maximum competitive advantage. DIGITAL ACCELERATION Accelerate the integration of digital into everything we do. INNOVATION Experiences, services & products to scale. PREMIUMISATION AND LUXURY Premiumise the portfolio & lead the luxury segment.

4 Essentials for capitalising on our fundamental principles

4 Accelerators for gaining speed in our operations

The 4 Essentials should be viewed as the foundation on which the 4 Accelerators will rest. The aim of Operational Excellence is to streamline our procedures by taking advantage of our uniquely decentralised organisation. By setting priorities, simplifying tasks and pooling resources, the Group can redouble the speed and agility of its organisation. Our second priority is Talent Development: the Group capitalises on its unique culture both to develop its in-house staff and to attract talented new employees. The third essential, Sustainability & Responsibility, has long been a Pernod

The 4 Accelerators are major growth drivers for Pernod Ricard. Thanks to a Portfolio Management that is among the most comprehensive in the industry, the Group can capitalise on every moment for consumption and convivialité. The goal is simple: to place the most appropriate product from the portfolio at the centre of each of these moments. Digital Acceleration is another growth driver, one that can now give us a worldwide presence as we seek to build a direct relationship with consumers. Innovation is a timetested component of Pernod Ricard’s strategy and remains

Ricard mainstay and now needs to be taken even further, to encompass the Group’s entire brand territory and become a driver of positive, long-term growth. Lastly, Route to market/ Consumer is a critical concern: it determines how our brands are available, visible and activated among consumers within both traditional distribution channels (On-Trade, Off-Trade and Travel Retail) and new ones (e-Commerce and HomeTrade).

II

the critical nexus of the Group’s future growth when it comes to services, experiences and custom-tailored products: an entire ecosystem focusing on innovations with high potential. The last accelerator is Premiumisation and Luxury: continuing our efforts to move our brand portfolio upmarket and capture the luxury market with the aim of becoming the market leader.

III

× Pernod Ricard at a glance ×

× Pernod Ricard at a glance ×

The brand portfolio

Organisation

Since its inception, Pernod Ricard has built a unique Premium brand portfolio with international reach, covering all categories of wines and spirits.

Decentralisation is the founding principle behind Pernod Ricard’s organisation. Continuous dialogue between the Brand Companies and the Market Companies ensures the involvement of all stakeholders in the business, and a decision-making process that is as close as possible to the consumer. The Headquarters defines the major strategic guidelines, coordinates global actions, and monitors compliance with the Group’s policies.

THE TOP 14 SPIRITS AND CHAMPAGNE BRANDS

——

2 global icons

distributed across all channels, they are priority growth drivers in each market and receive substantial advertising and promotional investment.

7 Strategic Premium spirits brands

5 Strategic Prestige spirits and champagne brands

destined to become the icons of tomorrow, these seven brands are distributed in all channels. They are supported by significant investment, which is targeted according to local market conditions.

flagships of the Group’s Premiumisation strategy, these brands are particularly appealing to consumers who are drawn to luxury and expect an exclusive and privileged relationship. They are mainly offered in select channels (wine merchants, prestigious establishments, etc.).

PERNOD RICARD HEADQUARTERS THE ABSOLUT COMPANY

PERNOD RICARD ASIA

CHIVAS BROTHERS

PERNOD RICARD AMERICAS

MARTELL MUMM PERRIER-JOUËT

PERNOD RICARD EMEA

IRISH DISTILLERS

BRAND MARKET COMPANIES COMPANIES

PERNOD S.A. RICARD S.A.

PERNOD RICARD WINEMAKERS HAVANA CLUB INTERNATIONAL(1)

5 PRIORITY PREMIUM WINE BRANDS

increasingly popular during moments of consumption previously reserved for spirits, such as the aperitif, priority wines have been grouped into one organisation, Pernod Ricard Winemakers, in order to develop a global portfolio strategy.

18 KEY LOCAL SPIRITS BRANDS

through their strong local presence, particularly in the off-trade segment, they ensure the Group’s leadership in strategic markets.

IV

(1) Joint-venture

The Brand Companies

The Headquarters

The Market Companies

are located in their home countries of their portfolio. They are in charge of developing the overall strategy of the brands and activation solutions enabling the Market Companies to ensure their local implementation. They are also responsible for the production and management of their industrial facilities.

defines the Group’s strategy and oversees its implementation. Its responsibilities are centred on three main areas: governance functions (strategy, mergers and acquisitions, finance, legal affairs, corporate communication, talent management, Corporate Social Responsibility, etc.), cross-functional initiatives with high added value (digital marketing, luxury, innovation, etc.) as part of the merger of the Marketing and Sales divisions, shared resources (Pernod Ricard Research Centre, IT, etc.).

are 85 companies linked to regions (Pernod Ricard Asia, Pernod Ricard Americas, Pernod Ricard EMEA), with the exception of the two French Market Companies, Pernod and Ricard. Their mission is to activate the Group’s international brand strategies in their markets and to manage local and regional brands. They also ensure the implementation of the Group’s strategy and key policies in their markets.

V

× Pernod Ricard at a glance ×

× Pernod Ricard at a glance ×

Brand Companies

Market Companies

The six Brand Companies are located in the home countries of the spirits and wine brands that they produce. They are responsible for the global strategy of the brands in their portfolio and for working alongside the Market Companies to market those brands.

The Market Companies promote and market both local and international Group brands in the local markets under their responsibility, with the common goal of achieving operational excellence.

MARTELL MUMM PERRIER-JOUËT

CÉSAR GIRON Chairman & CEO CHARLES-ARMAND DE BELENET Global Marketing Director ÉRIC DOUVIER Human Resources Director CARLTON GREER General Counsel BENJAMIN HALB Chief Financial Officer PIERRE JOUNCOURT Operations Director Martell MICHEL LETTER Deputy Managing Director AOC Champagne VANESSA WRIGHT Communications Director

MANAGEMENT COMMITTEES

ABSOLUT MALIBU KAHLÚA

PAUL DUFFY Chairman & CEO KICKI ALM VP Human Resources XAVIER BEYSECKER VP Marketing Absolut ROLF CASSERGREN VP Operations Malibu & Kahlúa PAULA ERIKSSON VP Corporate Communications & CSR OLIVIER GASPERIN VP Finance / Administration CRAIG JOHNSON VP Marketing Malibu & Kahlúa STÉPHANE LONGUET Managing Director Challenger Vodkas LARS LJUNGHOLM VP Legal & Regulatory Affairs JONAS TÅHLIN Managing Director Absolut Elyx ANNA SCHREIL VP Operations Absolut

JAMESON

CHIVAS REGAL THE GLENLIVET BALLANTINE’S BEEFEATER ROYAL SALUTE

LAURENT LACASSAGNE Chairman & CEO GORDON BUIST Production Director HERVÉ FETTER Finance & MS Director SOPHIE GALLOIS Marketing Director AMANDA HAMILTON STANLEY General Counsel SCOTT LIVINGSTONE Human Resources Director ALISTER MCINTOSH Manufacturing Director TONY SCHOFIELD Public Affairs Director

ANNA MALMHAKE Chairwoman &CEO ANTOINE BROCAS Legal Director SIMON FAY International Marketing Director ROSEMARY GARTH Corporate Affairs & Communications Director TOMMY KEANE Production Director PAT MAGEE Managing Director Ireland COLM MAGUIRE Human Resources Director JULIEN SOISSON Chief Financial Officer

HAVANA CLUB

JUAN GONZÁLEZ Chairman JÉRÔME COTTIN-BIZONNE Chief Executive Officer NICK BLACKNELL International Marketing Director LARISA FUENTE Human Resources Director ANDRÉ LEYMAT Industrial Director JULIÁN MACHÍN Chief Financial Officer IVETTE MARTÍNEZ Sales and Marketing Director, Cuba SERGIO VALDÉS Director of Exports

JACOB’S CREEK BRANCOTT ESTATE CAMPO VIEJO GRAFFIGNA KENWOOD

JEAN-CHRISTOPHE COUTURES Chairman & CEO CHRISTIAN BARRÉ Managing Director Pernod Ricard Winemakers Spain CHRISTIAN CAMPANELLA Human Resources Director JULIEN HÉMARD Managing Director Pernod Ricard Pacific DAVE KLUZ Strategy & New Business Director LUDOVIC LEDRU Chief Financial Officer BRETT MCKINNON Global Operations Director KATE THOMPSON Legal Corporate Affairs and Communications Director ANNE TREMSAL Global Marketing Director

CHRISTIAN PORTA Chairman & CEO Pernod Ricard EMEA JEAN-CHARLES CASTELLANO Human Resources Director Pernod Ricard EMEA NICOLAS KRANTZ Administrative & Financial Director Pernod Ricard EMEA OLIVIA LAGACHE General Counsel Pernod Ricard EMEA JEAN-MARC ROUÉ Operations Director Pernod Ricard EMEA ALBENA TRIFONOVA Business Development Director Pernod Ricard EMEA CORNELIU VILSAN Operational Marketing Director Pernod Ricard EMEA

MANAGEMENT COMMITTEES

PHILIPPE DRÉANO Chairman & CEO Pernod Ricard Americas GEOFFROY GERMANO VP Marketing Pernod Ricard Americas THIERRY POURCHET VP Finance & Operations Pernod Ricard Americas CÉDRIC RAMAT VP Human Resources Pernod Ricard Americas AUDREY YAYON-DAUVET VP Legal & Public Affairs Pernod Ricard Americas



NOEL ADRIAN Managing Director Pernod Ricard Mexico PIERRE-YVES CALLOC’H Managing Director Pernod Ricard Colombia JUAN MIGUEL CASELLAS Managing Director Pernod Ricard Chile THIBAULT CUNY Managing Director Pernod Ricard Brasil BRYAN FRY Managing Director Pernod Ricard USA FRANCK LAPEYRE Managing Director Pernod Ricard Americas Travel Retail BENOIT LAUG Managing Director Pernod Ricard Argentina PATRICK O’DRISCOLL Managing Director Corby Spirit & Wine Ltd.

PHILIPPE SAVINEL Chairman & CEO MATHIEU DESLANDES Marketing Director CHRISTIAN FIATTE Commercial Director FRANÇOIS PATSCHKOWSKI Human Resources Director BERNARD PECH Operations and Innovation Director VINCENT TURPIN Chief Administrative and Financial Officer



PHILIPPE GUETTAT Chairman & CEO Pernod Ricard Asia GLEN BRASINGTON VP Marketing Pernod Ricard Asia BERNARD COULATY VP Human Resources Pernod Ricard Asia QUENTIN JOB VP Innovation & Commercial Development Pernod Ricard Asia CYRIL SAYAG VP Legal & Public Affairs Pernod Ricard Asia HÉLÈNE DE TISSOT VP Finance Pernod Ricard Asia

FABRICE AUDAN Managing Director Pernod Ricard Northern Europe ÉRIC BENOIST Managing Director Pernod Ricard Central Europe PHILIPPE COUTIN Managing Director Pernod Ricard Eastern Europe DAVID HAWORTH Managing Director Pernod Ricard Western Europe ÉRIC LABORDE Managing Director Pernod Ricard Iberia DENIS O’FLYNN Managing Director Pernod Ricard UK LAURENT PILLET Managing Director Pernod Ricard Sub-Saharan Africa CÉDRIC RETAILLEAU Managing Director Pernod Ricard Southern Europe SELÇUK TUMAY Managing Director Pernod Ricard MENAT IAN WILLIAMS Managing Director Pernod Ricard Travel Retail Europe



PAUL-ROBERT BOUHIER Managing Director Pernod Ricard Singapore-IndochinaThailand DAVID FREEBORN Managing Director Pernod Ricard Gulf GUILLAUME GIRARD-REYDET Managing Director Pernod Ricard India JEAN-ÉTIENNE GOURGUES Managing Director Pernod Ricard China MOHIT LAL Managing Director Pernod Ricard Asia Travel Retail KEVIN LEE Managing Director Pernod Ricard Malaysia-IndonesiaPhilippines HORACE NGAI Managing Director Pernod Ricard Greater China TIM PAECH President & CEO Pernod Ricard Japan JEAN-MANUEL SPRIET Managing Director Pernod Ricard Korea

PHILIPPE SAVINEL Chairman & CEO STÉPHANE DEHLINGER Human Resources Director STÉPHANIE DURROUX Marketing Director SÉBASTIEN MOUQUET National Sales Director JEAN-MICHEL SENAUD Operations Director VINCENT TURPIN Chief Administrative and Financial Officer

The management structures in this annual report are presented as at 23 September 2015, the date on which it was filed with the AMF, the French market regulator.

The management structures in this annual report are presented as at 23 September 2015, the date on which it was filed with the AMF, the French market regulator.

VI

VII

× Pernod Ricard at a glance ×

× Pernod Ricard at a glance ×

The global spirits market Regional focus

3

5 | Cognac & brandy 7%

5| A  nise-based spirits No.    1 / 9%

6 | Bitters 6% 2

2

7| A  nise-based spirits 2%

6| C  ognac & brandy No.    3 / 4%

3

6 | Travel Retail 4%

2

7 | A frica / Middle East 4%

4.2% 2.6%

3.1% 2.3%

-5.5%

Examples of brands in the Pernod Ricard portfolio

Martell Noblige, Royal Salute, The Glenlivet Nàdurra, Martell Cordon Bleu Chivas 18

Chivas 12YO, Havana Club 7YO

Source: ISWR data, volumes at late 2014.

VIII VIII

+4.8% +3.8%

+4.1% Asia

Travel Retail

Africa / Middle East

Oceania

Source: “The Pernod Ricard Market View”, based on ISWR data, volumes at late 2014 for ‘international spirits’.

EUROPE, AFRICA AND MIDDLE EAST

1.7%

-0.2%

Jameson, Ricard, Beefeater, Absolut, Ballantine’s Finest, Kalhúa

North Western Central & Eastern America Europe South Europe America

Ranking among international groups

STANDARD – BETWEEN US$10 AND US$17

3.9%

PREMIUM – BETWEEN US$17 AND US$26

8.6%

SUPER-PREMIUM – BETWEEN US$26 AND US$42

PRESTIGE – ABOVE US$84

7.4%

ULTRA-PREMIUM – BETWEEN US$42 AND US$84

(3) Price for a 75 cl bottle in the United States.

A  nnual average change in volume from 2004 to 2014

8 | O ceania 2%

Pernod Ricard 3 regions for global leadership

Evolution in international spirits consumption by price segment(3)

E  volution in volume from 2013 to 2014

+4.6%

5 | Asia 8%

7| B  itters No.    2 / 3%

(1) Source: “The Pernod Ricard Market View”, based on ISWR data, volumes at late 2014 for ‘international spirits’. (2) Ranking among international groups.

+5.4%

4 | E astern Europe 8%

+2.4%

4| O  ther whiskies No.    4 / 10%

4 | Liqueurs 10%

3 | C entral & South America 11%

+0.3%

3

1 4

+1.6%

1

3| L  iqueurs No.    2 / 10%

1

4

+2.3%

3 | Other whiskies 14%

2 | Western Europe 27%

5

+0.3%

4

7 8

+0.8%

2 | Scotch whiskies 19%

6

2| S  cotch whiskies No.    2 / 27%

5

1 | North America 36%

 verage annual evolution A from 2004 to 2014

+0.1%

6

1| W  hite spirits & rums No.    3 / 37%

7

 volution in volume from E 2013 to 2014

+0.3% -0.2%

6

1| W  hite spirits & rums 43%

Evolution in global spirits consumption by geographic region

+3.4%

5

7

Breakdown of global spirits consumption by geographical region

Breakdown of Pernod Ricard’s(1) volumes & the Group’s position(2)

Breakdown of international spirits consumption(1)

+2.1%

Category focus

100 Pipers, Seagram’s Gin, Malibu

AMERICAS No. 3 in the United States / No. 2 in Brazil No. 2 in Canada / No. 4 in Mexico No. 2 in Chile

No. 1 in France / No. 1 in Spain / No. 1 in Poland No. 1 in Germany / No. 2 in the Nordic Countries No. 2 in the United Kingdom / No. 3 in Italy No. 1 in Eastern Europe / No. 2 in Greece No. 2 in Russia No. 1 in the Czech Republic No. 2 in Ireland No. 2 in South Africa No. 2 in Angola / No. 2 in Turkey No. 1 in Portugal

TRAVEL RETAIL

ASIA-PACIFIC

No. 2 in Travel Retail

No. 1 in India* / No. 1 in China / No. 2 in Thailand No. 2 in South Korea / No. 2 in Japan No. 3 in Australia /No. 1 in Malaysia Source: ISWR data, volumes at late 2014. * Internal data.

IX IX

× Pernod Ricard at a glance ×

Pernod Ricard worldwide

× Pernod Ricard at a glance ×

Pernod S.A. Ricard S.A.

Pernod Ricard Americas

The Absolut Company

Chivas Brothers Irish Distillers

HEADQUARTERS

Havana Club International

Pernod Ricard Asia Martell Mumm Perrier-Jouët

Pernod Ricard EMEA

Pernod Ricard Winemakers

×

Key figures

3

Regions(1)



6

Brand Companies



85

Market Companies



101

HEAD OFFICES BRAND COMPANIES

HEAD OFFICES PERNOD RICARD REGIONS

101 PRODUCTION SITES IN 23 COUNTRIES

Havana - Cuba / Paris - France / Dublin - Ireland / London - United Kingdom / Stockholm - Sweden / Sydney - Australia

New York - United States / Paris, Marseilles, Créteil - France / Hong Kong - China

Argentina / Armenia / Australia / Brazil / Canada / China / Cuba / Czech Republic / England / Finland / France / Greece / India / Ireland / Italy / Mexico / New Zealand / Poland / Scotland / South Korea / Spain / Sweden / United States

production sites PERNOD RICARD LOCATIONS

(1) Asia and Rest of the World, Americas, Europe (including France).

X

XI

× Pernod Ricard at a glance ×

The Board of Directors

× Pernod Ricard at a glance ×

As at 30 June 2015, the Board of Directors is composed of:

The Pernod Ricard Board of Directors oversees the Group’s governance, in accordance with ethics and transparency rules. The Board members, who bring together complementary skills and experience, ensure that the Group pursues its strategy and is managed in the best interests of the business and its shareholders.

ORGANISATION AND METHOD OF OPERATION

CHANGES IN THE COMPOSITION OF THE BOARD OF DIRECTORS DURING THE FINANCIAL YEAR

The Board of Directors is composed of 14 members (including two Directors representing employees), with 6 independent Directors. Pernod Ricard applies the independence criteria established in the AFEP-MEDEF Code. (Note that the two Employee Directors are not taken into account when ascertaining the Board’s independence.) The upcoming renewal of Board members’ terms in 2015 and 2016 should provide an opportunity for the Group to make further progress toward diversity and gender balance.

ALEXANDRE RICARD

PIERRE PRINGUET

Chairman and Chief Executive Officer

Vice-Chairman of the Board of Directors

WOLFGANG COLBERG(1)

ANDERS NARVINGER(1)

NICOLE BOUTON(1)

LAURENT BURELLE(1)

IAN GALLIENNE(1)

CÉSAR GIRON

MARTINA GONZALEZ-GALLARZA

PAUL-CHARLES RICARD

GILLES SAMYN(1)

VERONICA VARGAS

At the Shareholders’ Meeting held on 6 November 2014, Ms Martina Gonzalez-Gallarza and Mr Ian Gallienne saw their terms renewed for four years, and Mr Gilles Samyn was appointed to a four-year term as Director. At the Board of Directors meeting held on 11 February 2015, Ms Veronica Vargas was co-opted as a Director, replacing Ms Danièle Ricard. This co-option is subject to ratification at the Shareholders’ Meeting that will take place on 6 November 2015.   THE BOARD OF DIRECTORS IN 2014/2015

CHAIRMAN AND MANAGING DIRECTOR FUNCTIONS REUNITED With Mr Pierre Pringuet’s term as Chief Executive Officer ending in February 2015, in accordance with the Company’s articles of association, and Ms Danièle Ricard resigning from the Board, the Board of Directors decided on 11 February 2015 to reunite the functions of Chairman and Chief Executive Officer and to name Alexandre Ricard as Chairman & Chief Executive Officer. The Company has established safeguards to ensure a balance of powers and good governance. The Chairman & CEO is backed by two General Management bodies, the Executive Board and the Executive Committee. In addition, the Board has set up internal limits on powers: the Chairman & CEO is required to request prior authorisation from the Board in order to carry out certain transactions, such as acquisitions or divestments above €100 million and loans above €200 million. Lastly, the Board has created four specialised committee – including the Strategic Committee in February 2015 – comprising a large majority of independent Directors responsible for preparing the work of the Board of Directors on specific topics.

The Board of Directors met nine times during the financial year that closed on 30 June 2015, with an attendance rate of 97.5%. The average length of the meetings was approximately three and a half hours. The Board approved the half-year and annual financial statements as well as the financial communication policy, examined the budget, oversaw preparations for the Combined Shareholders’ Meeting and approved the proposals for resolutions. The state of the business – activity, results and cash flow – was discussed at each meeting.

Permanent Representative of Société Paul Ricard

The Board devotes much of its agenda to reports and discussion concerning the work of its Committees, examining governance issues such as the decision to reunite the Chairman and Chief Executive Officer functions, as well as its own composition. The Board also commissioned a formal external review of its work by an outside firm.

SYLVAIN CARRÉ Employee Director

MANOUSOS CHARKOFTAKIS

HERVÉ JOUANNO Executive Committee representative to the Board (non-Director)

Employee Director

(1) Independent Director

XII

XIII

× Pernod Ricard at a glance ×

× Pernod Ricard at a glance ×

Committees of the Board of Directors The Board of Directors delegates responsibility to its specialised committees for the preparation of specific topics submitted for its approval. Four Committees – the Strategic Committee; Audit Committee; Nominations, Governance and CSR Committee; and Compensation Committee – put forward topics relevant to their area of responsibility and submit their opinions and recommendations to the Board.

Strategic Committee Composition as at 30 June 2015:

Chairman: Mr Alexandre Ricard Members: Mr Laurent Burelle(1) Mr Wolfgang Colberg(1) Mr Ian Gallienne(1) Mr César Giron Mr Pierre Pringuet Half of the Directors who sit on the Strategic Committee are independent Directors (50%). The Strategic Committee (created on 11 February 2015) met once in 2014/2015, to review the strategic challenges facing the Group. The attendance rate was 84%.

Audit Committee Composition as at 30 June 2015:

review of the main provisions of French and foreign legislation or regulations, reports and commentaries with regard to corporate governance, risk management, Internal Control and audit matters; examination of the interim financial situation as at 31 December 2014; review of the consolidated financial statements at 30 June 2015 (these financial statements were reviewed at the meeting of 25 August 2015); monitoring of the Group’s cash flow and debt; risk management review; Internal Control assessment; review of Internal Audit reports drafted during the 2014/2015 financial year; approval of the Group’s Internal Audit plan for 2015/2016.

Nominations, Governance and CSR Committee Composition as at 30 June 2015:

Chairman: Mr Wolfgang Colberg(1) Members: Mr Anders Navinger(1) Mr Gilles Samyn(1)

Chairwoman: Ms Nicole Bouton(1) Members: Mr César Giron Mr Anders Narvinger(1)

The three Directors who sit on the Audit Committee are independent Directors (100%). The members of the Audit Committee were specifically chosen for their expertise in accounting and finance, assessed in terms of their training and professional experience.

Two of the three Directors who sit on the Nominations, Governance and CSR Committee are independent Directors (66.66%). Mr Alexandre Ricard, in his capacity as Chairman and CEO, works with the Committee on matters related to the appointment of Directors, in accordance with the AFEP-MEDEF Code.

The Audit Committee met four times in 2014/2015, with an attendance rate of 100%. In accordance with its Internal Regulations and in liaison with the Statutory Auditors and the Consolidation, Finance and Internal Audit Departments of the Company, the Audit Committee’s work mainly related to the following issues:

This Committee met five times in 2014/2015, with an attendance rate of 100%. The main activities of the Nominations, Governance and CSR Committee during the year were as follows:

Management Structures study and recommendations concerning changes in the composition of the Board of Directors and the Committees, in particular with regard to gender balance; selection process for new Directors and review of candidates; study and recommendations on the Group’s new governance structure (Chairman and Chief Executive Officer functions reunited); organisation and follow-up on the external review of the Board of Directors’ work, conducted once every three years; annual audit of the independence of the Board members; review of CSR issues and the Group’s action plans; annual review of Pernod Ricard SA’s policy on equal opportunities and pay; annual review of the Group’s Talent Management policy.

General Management Since 11 February 2015, the General Management of the Group has been carried out by the Chairman & CEO and two Managing Directors responsible for Finance & Operations and Human Resources & Corporate Social Responsibility, respectively.

The Group’s management structures are organised around the General Management, the Executive Board and the Executive Committee. The Executive Board is composed of the General Management, the General Counsel and the Global Business Development Director. The Executive Committee is composed of the Executive Board and the Chairmen of the direct affiliates.

The General Management coordinates the Group Executive Committee’s meetings. Meetings between General Management and the direct affiliates are held several times a year; topics covered include strategy, the budget, business reviews and every other year the four-year plan.

Executive Board The Executive Board is the permanent body responsible for coordinating and directing the Group. It is comprised of the Group’s General Management, General Counsel and Global Business Development Director.

Compensation Committee Composition as at 30 June 2015:

The Executive Board initiates and reviews all decisions relating to Group affairs and submits such matters to the Board of Directors when approval is required. It also organises the work of the Executive Committee.

Chairwoman: Ms Nicole Bouton(1) Members: Mr Ian Gallienne(1) Mr Anders Narvinger(1) Mr Manos Charkoftakis(2)

All Directors sitting on the Compensation Committee, excluding the Employee Director, are independent Directors(3) (100%).

As at 1st September 2015, the Executive Board is composed of:

During the 2014/2015 financial year, the Compensation Committee met five times, with an attendance rate of 100%. The main activities of the Compensation Committee during the year were as follows: review and proposals to the Board of Directors on the compensation to be paid to the Executive Directors and on provisions relating to their retirement schemes and any other benefits granted to them; proposals and annual review of the rules that determine the variable portion of the compensation of Executive Directors in line with the Company’s short-term, medium-term and long-term strategies; recommendations on the total amount of Directors’ fees to be submitted for approval to the Shareholders’ Meeting, as well as how they should be distributed; follow-up on the compensation policy governing senior managers of Pernod Ricard group companies; work to ensure that the compensation policy for senior managers is consistent with the policy for Executive Directors; proposals on the general policy for allocation of stock options and performance-based shares, in particular the terms applicable to the Company’s Executive Directors; approval of information provided to the shareholders in the annual report on the various activities of the Compensation Committee.

ALEXANDRE RICARD Chairman & CEO GILLES BOGAERT Managing Director, Finance and Operations

BRUNO RAIN Managing Director, Human Resources and Corporate Social Responsibility

IAN FITZSIMONS General Counsel CONOR MCQUAID Global Business Development Director

(1) Independent Director. (2) Employee Director. (3) In accordance with the AFEP-MEDEF Code, Employee Directors are not taken into account when calculating the percentage of independent Directors.

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× Pernod Ricard at a glance ×

Pernod Ricard at a glance ××Pernod glance××

Executive Committee

The Executive Committee helps develop the Group’s strategy and coordinates between the Headquarters and the affiliates, as well as among the affiliates themselves (Brand Companies and Market Companies).

AS AT 23 SEPTEMBER 2015

Working under the authority of the General Management, the Committee is responsible for conducting the Group’s business activities and ensuring that its main policies are applied.

The Executive Committee is the Group’s management body comprising the Executive Board and the chairmen of the direct affiliates.

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02

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09

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In this capacity, during its monthly meetings (11 per year), the Executive Committee: analyses the progress of the Group’s activities; actively participates in setting financial and operating objectives (financial results, debt and qualitative objectives); reviews brand and market strategies, analyses results and evaluates any changes in the organisation; approves the Group’s main policies and ensures they are implemented.

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Philippe Dréano Chairman & CEO of Pernod Ricard Americas

04

Ian FitzSimons General Counsel

07

Philippe Savinel Chairman & CEO of Ricard SA and Pernod SA

09

Laurent Lacassagne Chairman & CEO Chivas Brothers

11

Paul Duffy Chairman & CEO The Absolut Company

14

Alexandre Ricard Chairman & Chief Executive Officer

02

Gilles Bogaert Managing Director, Finance and Operations

05

Christian Porta Chairman & CEO of Pernod Ricard EMEA

08

Anna Malmhake Chairwoman & CEO of Irish Distillers

10

Bruno Rain Managing Director, Human Resources and Corporate Social Responsibility

12

Pierre Coppéré Executive Senior Vice-President in Charge of Growth Initiatives

15

Jean-Christophe Coutures Chairman & CEO of Pernod Ricard Winemakers

03

Conor McQuaid Global Business Development Director

06

César Giron Chairman & CEO of Martell Mumm Perrier-Jouët

13

Philippe Guettat Chairman & CEO Pernod Ricard Asia

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× Pernod Ricard at a glance ×

Headquarters Directors Pernod Ricard Headquarters is composed of the Group’s nine functional departments, which are organised around the General Management. These departments spearhead the Group’s strategy in their respective areas of expertise and coordinate implementation with the affiliates. They are tasked with uniting the entire organisation behind the Group’s two priorities: accelerating the topline growth and instilling a winning mindset at every level.

CORPORATE AFFAIRS AND CSR

JEAN RODESCH Institutional Affairs and CSR Director JOSÉ-RAMON FERNANDEZ VP European Affairs

LEGAL

JEAN-BAPTISTE BRIOT Financial Control Director

MATHIEU PROT Group Intellectual Property Director

OLIVIER GUELAUD Treasury Director

PHILIPPE PROUVOST Senior Executive Director Corporate Legal Affairs & Board Secretary

JULIA MASSIES VP Financial Communication and Investor Relations

The staff of the Headquarters and the Paris-based affiliates pose together at Responsib’ALL Day 2015

STEPHEN FISHER VP Brand Security

GWENAEL MORIN Tax Director BENOIT BECU Consolidation Director ISABELLE COLIN Financial Services Director, Head Office & EMEA

BIG

ALAIN DUFOSSE Managing Director, Breakthrough Innovation Group VLASTIMIL SPELDA Director, Breakthrough Innovation Group

COMMUNICATION

FINANCE

VICTOR JEREZ Director, Group Strategy and M&A

OPERATIONS

PETER MOREHEAD Group Operations Director

BENOIT CUIGNET Front Office Treasury Director

MARK HARRISON Global Supply Chain Director

NICOLAS PIKETTY Internal Audit Director

HERVÉ JOUANNO Global Procurement Director

AMÉLIE VIRAT Management Control Director

JEAN-FRANÇOIS ROUCOU Sustainable Performance Director

GLOBAL BUSINESS DEVELOPMENT

HUMAN RESOURCES

THIBAUT DE POUTIER Executive Vice President On-Trade & Luxury Commercial Development

JAIME JORDANA Human Resources Development Director

VINCENT BEAUMONT Research Centre Director

ALBAN MARIGNIER Pernod Ricard University Director

ANTONIA MCCAHON Global Digital Acceleration Director

VÉRONIQUE JACQUET Director Human Resources Headquarters

FLORENCE RAINSARD Consumer Insights & Experience Director

GÉRALDINE NOEL Compensation, Benefits and International Mobility Director

OLIVIER ROUCHE Off-Trade Commercial Development Director

ESTELLE RIVALS Global Human Resources Project and Diversity Director

ANDRÉ HÉMARD VP Corporate Social Responsibility ARMAND HENNON VP Responsible Marketing & CSR - France

× Pernod Ricard at a glance ×

LAURENT SCHEER Public Affairs Director - France OLIVIER CAVIL Communications Director

TAREEF SHAWA Luxury & CRM Director

CHRISTINE LABORDE Internal Communications Director

YVES SCHLADENHAUFEN Innovation and Portfolio Strategy Director

SYLVIE MACHENAUD External Communications Director

SIMON VANMOPPES On-Trade Commercial Development Director

GROUP INFORMATION SYSTEMS

MATHIEU LAMBOTTE Chief Information Officer FRÉDÉRIC ANDRÉ IT Governance Director JEAN-FRANÇOIS BERNARD Chief Technical Officer GABRIEL ROTELLA VP IT Solutions

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× Pernod Ricard at a glance ×

× Pernod Ricard at a glance ×

18,000 employees united behind a strong corporate culture

Key Corporate Social Responsibility principles

Pernod Ricard’s organisational model is embodied first and foremost by the Group’s corporate culture, which ensures cohesion and a commitment to reaching goals among all employees. This represents a substantial competitive advantage and one of the main factors driving the Group’s success. THE PERNOD RICARD VALUES

A MODEL

Decentralisation

Entrepreneurial spirit Mutual trust Strong sense of ethics

Pernod Ricard is convinced that its financial performance is inseparable from its social responsibility. Its constant aim is to reconcile economic efficiency with social welfare and environmental protection. The Group fully complies with the 10 principles of the United Nations Global Compact. A pioneer in Corporate Social Responsibility, with the creation almost fifty years ago of the Institut Océanographique Paul Ricard or the IREB* by Jean Hémard, Pernod Ricard has made ethics a core principle of its development. The Group continues to perpetuate the heritage of its founders through its CSR model, based on three priorities and the empowerment of its employees. The first of these priorities is promoting responsible drinking. The Group enforces the five commitments signed by the industry (IARD**) such as reducing drink driving. Protecting our planet

Entrepreneurial spirit: is at the heart of Pernod Ricard’s identity and forms an essential element in the Group’s philosophy, given its decentralised nature. Having an entrepreneurial mindset is the ability to make choices and decisions. Mutual trust: Managers at every level motivate their direct staff in line with the Pernod Ricard Charter. In return, employees can count on their manager to support their initiatives and take responsibility with them.

* I nstitut de Recherches scientifiques sur les Boissons (Institute for scientific Research on Beverages). ** International Alliance for Responsible Drinking.

CSR POLICY: 4 AREAS OF COMMITMENT

AN ATTITUDE

95%

Conviviality

92%

of affiliates carried out at least one responsible drinking initiative in 2014/2015

“A COLLECTIVE COMMITMENT TO PERFORMANCE”

Pernod Ricard has made a commitment to respect the operational independence of its affiliates, based on the principle of subsidiarity. This unique approach enables decision-making closest to the market, in turn allowing faster responses to the needs of customers and consumers.

and developing our local communities are the two other priorities of Pernod Ricard’s CSR strategy. The Group ensures that the terroirs from which its brands originate are preserved, and partners up with local communities around its sites. Lastly, activating these three drivers is based on one fundamental principle, placed at the center of our CSR model: empowering our employees as both beneficiaries and ambassadors. Pernod Ricard’s annual initiative, Responsib’ALL Day, organized for the fifth consecutive year on 11 June 2015, is a great example of our employees’ commitment to CSR. From Auckland to Los Angeles, all employees stop their activities and dedicate an entire day to promoting responsible drinking, the first priority of our CSR model.

Decentralisation and these three values take on their full meaning when paired with an attitude: conviviality. This is what makes the Pernod Ricard culture so unique. Pernod Ricard encourages simple, direct relations between its various levels of hierarchy, which speeds up decision-making.

of affiliates display the “no alcohol for pregnant women” logo on their bottles

-8%

78%

of employees have taken part in training

reduction in workplace accidents resulting in lost time

629

reduction in energy consumption and 26% reduction in CO2 emissions per unit produced at production sites between 2010 and 2015

suppliers have signed a pledge to comply with sustainability principles (at end-June 2015)

60%

Strong sense of ethics: Pernod Ricard expects all its employees to have a strong sense of ethics based on two main principles: ‘respect’ and ‘transparency’.

-16% 96%

of affiliates have conducted at least one initiative in support of local community development

of production sites have ISO 14001 certification

Key figures I SAY survey June 2015

Key figures I SAY survey June 2015

In June 2015, Pernod Ricard launched the third edition of I SAY, a global opinion survey that achieved an exceptional 84% response rate. It is worth noting that the results remained stable – at levels far above those of other fast-moving consumer goods companies (FMCGs) – despite the difficult macroeconomic environment and the implementation of the Allegro operational excellence project throughout 2014/2015.

The I SAY survey conducted in June 2015 demonstrates that employees understand and support the Corporate Social Responsibility policy:

94%

are proud to work for Pernod Ricard (5% above the FMCG average)

94%

wholeheartedly share the Group’s values (7% above the FMCG average)

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87%

employee engagement rate (7% above the FMCG average)

83%

of employees are aware of the CSR policy and the four areas of commitment

90%

believe that their affiliate is a socially responsible stakeholder in its community

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85%

say that they are encouraged within their department to act responsibly

P E R N O D

R I C A R D

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