PERNOD RICARD - 2019 NOTICE OF MEETING

4.

THE GROUP IN 2018/19

Contribution after advertising &promotion costs

Group Net Profit fromrecurring operations 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 €1,654million. Diluted Net Profit per share from recurring operations stood at €6.23, up +10%. Group Net Profit 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 €4million. 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 drivenmainly 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 inUSA).

The gross margin (after logistics expenses) amounted to €5,648million, with an increase of +7% (1) (+39bps), due to: strong pricing on Strategic brands of: +2%; y increase in cost of goods (in particular agave, glass and GNS in y India) offset by accelerated completion of Operational Excellence FY16-20 roadmap one year early; negative mix linked mainly to Seagram’s Indian whiskies and USA y wholesaler inventorymanagement. Advertising and Promotion expenses were up +6% (1) to €1,512million (-2 bps), an increase broadly in line with sales, with strong arbitration and focus behind strategic priorities (China and India in particular). Profit fromRecurring Operations Profit from recurring operations was up +8.7% (1) , or €223 million, to €2,581 million. This represented margin expansion of +74bps (1) , a strong improvement thanks to positive pricing, Gross margin improvement and Structure cost discipline. Structure costs increased +4% (1) , a moderate increase in context of business acceleration, thanks to strong discipline 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 from Recurring Operations grew+9,5%on a reported basis. 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 emergingmarkets. The debt structure at 30 June 2019 was as follows: the bond portion was approximately 93%of gross debt; y the fixed rate portion was 82%of total debt; y thematurity of gross debt was 6 years; y the Group had €0.9 billion in cash and €2.5 billion in undrawn y syndicated credit facility; structuring the debt by currency (USD: 55%) provides a natural y hedging mechanismwith debt by currency matched with cash flow by currency. Financial income/(expense) fromrecurring operations

Organic growth is defined on page 25. (1)

23

PERNOD RICARD NOTICEOFMEETING

2019