Message from the Chairman and CEO

To create the conditions for sustainable growth that respect our environment and our communities and are collectively profitable for all our stakeholders.

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Alexandre Ricard

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Building for the Long Term was the title of the book written in 2005 by my uncle Patrick Ricard on the 30th anniversary of our Group’s creation. A visionary declaration or a subject already relevant 15 years ago, I followed in his footsteps by writing the following message to our employees on 18 December 2018: “Our core purpose is to work together to create the conditions for sustainable growth – growth that respects our environment and our communities and is collectively profitable for all our stakeholders: employees, shareholders, customers, consumers and citizens.” 

So how gratifying it was to see this ethos promoted in a recent statement signed by the heads of 200 of America’s largest firms including Amazon’s Jeff Bezos, Apple’s Tim Cook, JPMorgan Chase’s Jamie Dimon, Boeing’s Dennis Muilenburg and General Motor’s Mary Barra. In a mission statement published on 19 August, they all declared, “Each of our stakeholders is essential. We commit to deliver value to all of them, for the future success of our companies, our communities and our country.” A virtuous circle that reflects the words of BlackRock’s Larry  Fink, another of the statement’s signatories: “Purpose is not the sole pursuit of profits, but the animating force for achieving them.” 

It is my sincere belief that profit and purpose are not at odds – in fact they go hand-in-hand. Achieving its purpose is the best way for a company to create the most value – value that is more stable and more robust, as it is to the advantage of all stakeholders. Shareholders who choose to take a long-term view are the primary, but not the only, beneficiaries of lasting value. By definition, achieving purpose means taking a long-term view: it requires creating the conditions for healthy growth built on sustainable fundamentals, the performance of which is measured not solely by financial criteria, but also by social and environmental standards. The prevailing trend is no longer a strictly economic definition of corporate performance, but one of sharing and passing on heritage. This may explain why companies where there has been, and remains, a significant family investment perform better over the long term, as confirmed in The Family Business Model by the Credit Suisse Research Institute. According to this study, over the last nine years, family-owned firms outperformed the benchmark index by 47%. 

For Pernod Ricard, these values are not new, as evidenced by the creation of our Oceanographic Institute in 1966. Neither did the Group suddenly define its purpose in response to the recent French Action Plan for Business Growth and Transformation. For us, the term we use has always been ‘vision’ and ours has long been summed up by three words – Créateurs de convivialité. Our entire strategy, business model and organisation are driven by this mission.

“In essence, conviviality is social. It flourishes in a spirit of sharing, of respect for one’s host, for their culture and environment.”

Alexandre Ricard, Chairman and CEO of Pernod Ricard

Being ‘creators of conviviality’ means bringing people together in moments of sharing and celebration, occasions that are authentic and sincere, simple and generous, sources of joy and togetherness. By fulfilling this vision, we at Pernod Ricard will ultimately achieve our ambition of leadership. If we ensure that our brands are at the centre of each social interaction, we will become the industry leader. 

Fulfilling our vision also means ensuring positive returns for as many people as possible. In essence, conviviality is social. It flourishes in an environment of sharing and of respect for one’s host, their culture and environment. Conviviality doesn’t tolerate excess. It is measured, open-minded and benevolent. This is the philosophy that underpins our new Sustainability & Responsibility roadmap to 2030, Good Times from a Good Place, which we launched this spring. This roadmap is central to our three-year business strategy "Transform & Accelerate", with planned investment of hundreds of millions of euros over the next decade.

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"Transform & Accelerate" is the result of the joint efforts of 1,000 employees who worked tirelessly from January to June 2018 to define it. In its first year, the plan has achieved excellent results – the best since 2012 – which I won’t dwell on as they are detailed in the following pages. My aim here is to put this strategy into a broader perspective. It is a story in which we continue to evolve and adapt without ever losing our identity. Being ‘long-term’ doesn’t mean taking our time or avoiding change. On the contrary, change allows us not just to go the distance, but to accelerate to achieve our ambition more quickly. This is what motivates us every day. It’s a question of method, of priorities and of mindset. 

Pernod Ricard boasts amazing talent, producing and distributing a peerless portfolio of brands around the world, from China and India to the United States and Global Travel Retail, our four ‘must-win’ markets. I am convinced that today we are the best placed in our sector to capture future growth. What better proof than the results of our recent employee survey in which our employees, voiced their confidence in the future? Their commitment is demonstrated in our exceptionally high level of employee engagement and the record subscription rate for our first employee stock ownership plan.  

Pernod Ricard boasts amazing talent, producing and distributing a peerless portfolio of brands around the world, from China and India to the United States and Global Travel Retail, our four ‘must-win’ markets. I am convinced that today we are the best placed in our sector to capture future growth. What better proof than the results of our recent employee survey in which our employees, voiced their confidence in the future? Their commitment is demonstrated in our exceptionally high level of employee engagement and the record subscription rate for our first employee stock ownership plan. 

 

Happy reading. 

DISCOVER OUR INTEGRATED ANNUAL REPORT FY19

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