PERNOD RICARD - Universal Registration Document 2019-2020

6. CONSOLIDATED FINANCIAL STATEMENTS Notes to the consolidated financial statements

Breakdown of net sales

Net sales at 30.06.2019

Net sales at 30.06.2020

Change (€m)

Change (%)

€ million

Strategic International Brands

5,811

5,268

(543)

-9%

Strategic Local Brands

1,754

1,599

(155)

-9%

Strategic Wines

451

431

(19)

-4%

Specialty Brands

301

373

72

24%

Other products

865

776

(89)

-10%

TOTAL

9,182

8,448

(734)

-8%

Notes to the income statement NOTE 3 Other operating income and expenses Note 3.1

Other operating income and expenses include impairment of property, plant and equipment and intangible assets, costs relating to restructuring and integration, capital gains or losses on disposals, as well as other non-recurring operating income and expenses. These other operating income and expenses are excluded from the Profit from Recurring Operations given their unusual, abnormal and infrequent nature, which would distort the reading of the Group’s performance.

Other operating income and expenses are broken down as follows:

30.06.2019

30.06.2020

€ million

Impairment of property, plant and equipment and intangible assets

(69)

(1,007)

Gains or losses on asset disposals and acquisition costs

(29)

11

Net restructuring and reorganisation expenses

(77)

(178)

Disputes and risks

3

(47)

Other non-current operating income and expenses

(33)

(63)

OTHER OPERATING INCOME AND EXPENSES

(206)

(1,283)

At 30 June 2020, other operating income and expenses primarily consisted of: impairment losses on property, plant and equipment and intangible — assets for €1,007 million, resulting in particular from brand impairment tests, mainly on the Absolut brand for €912 million; restructuring expenses relating to various reorganisation projects, — including the “Reconquer” project announced on 1 October 2019;

as well as certain costs generated by the Covid-19 health crisis for — approximately €37 million, in particular penalties and costs relating to the cancellation of events or the closure of sales outlets imposed by local authorities for €18 million and donations, the production of hydro-alcoholic gel as part of the fight against the pandemic and employee protection measures for €10 million. These expenses were recorded in accordance with the Group’s accounting rules given their unusual, abnormal and infrequent nature and their materiality.

Financial income/(expense) Note 3.2

30.06.2019

30.06.2020

€ million

Interest expenses on net financial debt Financial expenses on lease liabilities Interest income on net financial debt

(329)

(340)

-

(14)

32

36

Net financing cost

(297)

(319)

Structuring and placement fees

(2) (5)

(2)

Net financial impact of pensions and other long-term employee benefits

0

Other net current financial income (expense)

(10)

(7)

Financial income/(expense) from recurring operations

(314)

(328)

Foreign currency gains/(loss)

2

(19) (19)

Other non-current financial income/(expenses) TOTAL FINANCIAL INCOME/(EXPENSE)

1

(310)

(366)

178

Pernod Ricard Universal Registration Document 2019-2020