PERNOD RICARD - Universal Registration Document 2019-2020

4. RISK MANAGEMENT Risk factors

Risk hierarchy Risks relating to business activities

Pressure on prices Geopolitical and macroeconomic instability Negative media/social media campaign Cyberattack Brand portfolio challenges (incl. inventory management) and non-adaptation to new trends Product quality issues Supply disruption Talent management Fraud

Industrial and environmental risks

Climate change and environmental damage Loss of major site/strategic inventory Toxic contamination Human safety risk

Legal and regulatory risks

Regulatory changes: Business ethics — Taxes and levies — Regulatory environment — Major litigation Counterfeiting/IP rights

Financial risks

Financial risks: FX — Interest rate — Credit — Pension funds

Risk factors exist in a limited number of categories depending on their nature. Within each category, the most important risk factors are presented first.

4.2.1

Impact of the Covid-19 pandemic on Pernod Ricard’s

key risk factors and outlook Many of the risks mapped have materialised in one way or another (personal safety, legal restrictions on the sale of alcohol, financial risks) or have required heightened vigilance (cyberattack, supply disruption) in the context of the Covid-19 pandemic. Main impact of the sanitary crisis resulted in a sharp decline in Group sales linked to the lockdown, notably with widespread closures in the hospitality sector and a strong decline in the travel retail business. In the short term, this required a series of measures to: protect the health and safety of employees by rigorously applying — the recommendations of local authorities and the World Health Organization (partial shutdown of operations, widespread working from home for staff, rotation of teams, etc.);

ensure the continuity of our industrial, commercial and logistical — operations; and adapt the management of our business and secure financing — (extensive cost reduction programme, €2 billion bond issue in April 2020). In the longer term, the general challenges identified before the pandemic remain as important as ever to maintain the resilience of Pernod Ricard’s business model. These include adapting to new consumer trends, embracing digital technology and ensuring the agile management of distribution channels.

131

Pernod Ricard Universal Registration Document 2019-2020

Made with FlippingBook flipbook maker