PERNOD RICARD - Universal Registration Document 2019-2020

6. CONSOLIDATED FINANCIAL STATEMENTS Notes to the consolidated financial statements

The Group is focused on a single activity, the production and sale of wines & spirits, and has three operating segments covering three regions, namely America, Europe and Asia/Rest of the World (RoW). Group Management assesses the performance of each operating segment on the basis of net sales and Profit from Recurring Operations, defined as the gross margin after logistics costs, less advertising and promotion investments and structure costs. The operating segments presented are identical to those included in the reporting provided to General Management, in particular for the performance analysis.

Items in the income statement and the balance sheet are allocated on the basis of either the destination of sales or profits. Operating segments follow the same accounting policies as those used for the preparation of the consolidated financial statements. Intra-segment transfers are transacted at market prices.

At 30.06.2019 € million

Asia/Rest of World

Americas

Europe

Total

Income statement items Segment net sales

3,902

5,891

4,224

14,017

o /w intersegment sales

1,357

1,926

1,552

4,835

Net sales (excluding Group)

2,545

3,965

2,672

9,182

Gross margin after logistics expenses

1,698

2,308

1,643

5,648

Contribution after advertising and promotion

1,193

1,716

1,228

4,137

Profit from recurring operations

785

1,179

617

2,581

Other information Current investments

50

72

277

398

Depreciation, amortisation and impairment

29

47

219

295

At 30.06.2020 € million

Asia/Rest of World

Americas

Europe

Total

Income statement items Segment net sales

3,747

5,181

4,032

12,960

o /w intersegment sales

1,298

1,715

1,500

4,512

Net sales (excluding Group)

2,449

3,467

2,532

8,448

Gross margin after logistics expenses

1,599

1,969

1,519

5,086

Contribution after advertising and promotion

1,138

1,452

1,169

3,759

Profit from recurring operations

718

938

605

2,260

Other information Current investments

113

233

611

957

Depreciation, amortisation and impairment

972

133

251

1,356

The segment information includes the impacts of IFRS 16 applicable from 1 July 2019, without restatement of the information presented at 30 June 2019. The implementation of IFRS 16 has no material impact on Profit from Recurring Operations.

The impact of right-of-use assets on current investments and depreciation, amortisation and impairment expense is as follows:

At 30.06.2020 € million

Asia/Rest of World

Americas

Europe

Total

Current investments

71

168

355

594

Depreciation, amortisation and impairment

13

43

57

113

177

Pernod Ricard Universal Registration Document 2019-2020

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