PERNOD RICARD - 2018-2019 Universal registration document

5.

MANAGEMENT REPORT Analysis of business activity and results

Group Net Profit from 5.2.6 recurring operations

and resource focus on key priorities. The currency effect (+1%, or +€25 million) was primarily due to the stronger US Dollar but partially offset by weaker emerging market currencies, most notably the Turkish Lira, Indian Rupee and Chinese Renminbi. The scope effect remained limited (-0%, or €(9) million). Including the currency and scope effect, Profit fromRecurring Operations grew +9,5% on a reported basis.

Tax on Profit from Recurring Operations stood at €(586) million. This represents a tax rate on recurring items close to 26%, a slight increase vs. FY18 driven by profit increase in countries with a higher tax rate. Non-controlling interests amounted to €(27) million. Group Net Profit from recurring operations increased by +9.5% to €1,654 million. Diluted Net Profit per share from recurring operations stood at €6.23, up +10%. Group Net Profit 5.2.7 Other non-recurring operating income and expenses amounted to €(206) million. Non-current financial income (expense) equalled net income of €3 million. Non-current tax was a net income of €4 million. Accordingly, Group Net Profit stood at €1,455 million, a decrease of (8)% on FY18. This decrease in Group share of Net profit, despite excellent PRO growth, was driven mainly by one-off items in FY19 and an unfavourable basis of comparison due to positive exceptional items in FY18 (sale of bulk Scotch whisky inventory; reimbursement of French tax on dividends and revaluation of deferred tax assets and liabilities in USA).

Financial income/(expense)

5.2.5

fromrecurring operations Financial expenses from recurring operations were €(314) million, compared with €(301) million the previous period. This represented a slight increase in financial expense from recurring operations mainly due to higher short-term USD interest rates over the period and increased financing costs in emerging markets. The debt structure at 30 June 2019 was as follows: the bond portion was approximately 93% of gross debt; — the fixed rate portion was 82% of total debt; — the maturity of gross debt was 6 years; — the Group had €0.9 billion in cash and €2.5 billion in undrawn — syndicated credit facility; structuring the debt by currency (USD: 55%) provides a natural — hedging mechanism with debt by currency matched with cash flow by currency.

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2018-2019

PERNOD RICARD UNIVERSAL REGISTRATIONDOCUMENT