Pernod Ricard has a cautious view on how economies might develop in light of the turmoil in credit markets, but it has seen no signs of slowdown yet, Managing Director Pierre Pringuet told Reuters on Thursday.
Pringuet said he saw no material impact on Pernod's own finances arising from the credit market crisis and reaffirmed the group's interest in buying either Sweden's Absolut vodka or full rights to Russia's Stolichnaya vodka. It already owns the rights outside Russia, though these are due to end in 2010.
"We are in an economic situation today which is, I would not say troubled, but at least uncertain, given the financial crisis," Pringuet said in a telephone interview on the company's full-year results.
"We had a very good start to the year in July and August, with development completely in line with that of past months. We have not sensed any change in the economy. But I think it would be imprudent today to say there is not going to be one," he added.
In a statement, Pernod predicted another "strong" year of sales after like-for-like sales growth of 9.1 percent in its financial year just ended. Pringuet said the group would be more precise at its annual shareholder meeting on November 7.
Sweden's government has said it plans to sell state alcohol group Vin & Sprit, which owns Absolut, a brand that analysts say could be worth $6 billion. A deal would force Pernod to take on fresh debt on top of what it already has following its July 2005 merger with Allied Domecq. Pringuet said, however, the credit market turmoil had not hit the company's finances. "We don't have any problems of liquidity of any kind," he said, noting only a small fraction of the syndicated debt taken on in 2005 was due to mature in 2008.
He said the group expected a cost of debt of 5 to 5.5 percent this year, and probably closer to 5 percent after the cut in rates by the US Federal Reserve, compared with 5 percent on average in 2006/07. The company's debt fell to 6.5 billion euros last year from 6.9 billion. Pringuet said Pernod Ricard was interested in acquiring all of Vin & Sprit, not just Absolut, and was continuing talks with Russian authorities about acquiring full rights to Stolichnaya. He said Pernod Ricard was not interested in owning both vodka brands, however.