PERNOD RICARD : 2006/07 ANNUAL RESULTS - Strong sales and profit margin growth

Market Wire, September, 2007

2006/07 ANNUAL RESULTS

Strong sales and profit margin growth

Sales: EUR 6,443 million ( 9.1%*)

Operating profit from ordinary activities: EUR 1,447 million ( 21%*)

Profit from ordinary activities (Group share): EUR 833 million ( 24%**)

Net profit (Group share): EUR 831 million ( 30%)

Paris, 20 September 2007 - The Pernod Ricard Board of Directors' meeting of 19 September 2007, chaired by Patrick Ricard, approved the financial statements for the 2006/07 financial year ended 30 June 2007.

The 2006/07 fiscal year was a highly successful year for Pernod Ricard, marked by:

- Dynamic sales in all regions, driven by the strong growth of the wine and spirits market and by the Group's performance, which took full advantage of the commercial synergies related to the Allied Domecq acquisition;

- A strong 21%* increase in operating profit from ordinary activities, which resulted from increased sales, higher contribution margin from the portfolio, due to the 15 strategic brands representing a greater share of consolidated sales, and from the achievement of 100% of structure synergies;

- A sharp increase in profit from ordinary activities and improved debt ratios.

* Organic growth measured excluding July for Allied Domecq brands

** Measured on a constant foreign exchange basis

Strong sales growth ( 6.2%)

Net sales for the 2006/07 financial year increased by 6.2% to EUR 6,443 million (excluding duties and taxes). The increase was due to a strong 9.1% organic growth, a 2.8% negative foreign exchange effect and a 0.2% positive Group structure effect.

This strong organic growth was based on the following:

- The good overall performance of our markets, particularly in emerging countries;

- The dynamism of our brand portfolio, in particular our 15 strategic brands, which registered growth of 9%* and 13%* in volume and value, respectively;

- Our powerful global network and commercial synergies related to the Allied Domecq acquisition;

- The relaunch of media and advertising & promotional campaigns for brands acquired as part of the Allied Domecq takeover, which benefited from a substantial increase in advertising expenditure, in particular in the second half-year.

Improved contribution margin from the portfolio

Gross margin increased by 10.2%*, thanks to strong sales growth and the improved gross margin/sales ratio, which rose to 59.8% from 59.0% on a constant foreign exchange basis. The greater proportion represented by the Top 15 brands, the overall evolution of the mix within the Top 15 and the value strategy applied to the whole portfolio all strongly contributed to the improvement, in spite of the rise in alcohol and energy prices.

This good performance made it possible to significantly increase advertising and promotional expenditure, in line with sales growth. The increase was further enhanced in the second half-year due to the roll-out of the new campaigns of brands acquired as part of the Allied Domecq takeover, in particular Ballantine's, Beefeater and Stolichnaya.

The 15 strategic brands attracted more than 70% of marketing expenditure and 90% of growth in the 2006/07 financial year.

All in all, the contribution after advertising and promotional expenses generated by the brand portfolio totalled EUR 2,486 million, ( 10.3%*) being 38.6% of sales ( 60 bp vs 2005/06 on a constant foreign exchange basis).

* Organic growth measured excluding July for Allied Domecq brands

Decrease in the Structure costs / Sales ratio

Structure costs amounted to EUR 1,039 million over the period, compared to EUR 1,075 million in the previous financial year. The speed of the Allied Domecq integration indeed allowed, as planned, the achievement of 100% of the EUR 270 million in synergies in the 2006/07 financial year and to lower the structure costs / sales ratio from 19% before the takeover to 15.6%, excluding the (non cash) impact of the cost of stock options.

Operating profit from ordinary activities

Overall, under the combined effect of growing sales, increased portfolio contribution margin rate and structure synergies, operating profit from ordinary activities grew by 21%* to EUR 1,447 million. The operating profit margin improved by 230 bp to 22.5% compared to the previous financial year, on a constant foreign exchange basis.

Analysis of performance by region

Asia/Rest of the World and America were again the leading profit growth drivers in the financial year, posting increases of 39%* and 21%* in operating profit from ordinary activities, respectively. The two regions generated total operating profit from ordinary activities of EUR 807 million, being 56% of Group profits.

Against the background of an improving economic situation, Europe and France also experienced a 2006/07 financial year of strong growth, with increases in operating profit from ordinary activities of 12%* and 10%*, respectively. This renewed dynamism was generated by stronger sales in numerous markets, such as France, Germany and Italy, and by continuing strong growth in Central and Eastern Europe markets (Russia, Poland). These two regions realised a combined operating profit from ordinary activities of EUR 640 million.