Good morning. This is the conference operator. Welcome, and thank you for joining the Pernod Ricard third quarter 2023 sales conference call and webcast. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask question pressing star and one on your keypad. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Ms. Florence Tresarrieu, Head of Investor Relations. Please go ahead, madam. Good morning, everyone. We're very pleased to welcome you to our nine-month sales call. Hélène de Tissot, our Group CFO, will take you through the presentation of those results, and then we will take your question. Hélène, over to you. Thank you, Florence. Good morning, everyone. I'm pleased to report very strong broad -based growth in our first nine months of fiscal year 2023, in a normalizing environment with a high single-digit pricing in all regions. Organic growth is at +8% at book level, with Asia rest of the world growing at +12%. Very strong growth led by India, travel retail and Turkey offsetting China. Solid performance in Japan, in Thailand, in Korea, and continued rebound in Southeast Asia. Europe is growing at +6%. The value-driven growth led by Spain, travel retail and Germany. Americas is growing at +2% with growth driven by LatAm. Our reported growth for the nine months is at +13%, benefiting over the last nine months from the positive FX impact, which is currently starting to fade with euro gaining some strength versus U.S. dollar. We have a very significant pricing impact at +9% across regions. Volumes are resilient, growing at +1%. As already mentioned during the H1 call, the environment is normalizing with a strong gradual recovery in China following the end of the COVID policies. It's positive impact on our travel retail business and a normalization in the U.S. after a few years of very strong growth. We see strong momentum behind our diversified spirit portfolio with 6 categories driving 90% of the growth. This diversification, I must say, is a key driver of our performance. We've been consistently delivering a broad-based and diversified growth across geographies and across categories. We are leveraging the industry broadest and most comprehensive premium portfolio. Those six categories that are driving 90% of this first nine months growth are Scotch whisky, Irish whiskey, Indian whisky, vodka, gin and as well no low drinks, mainly Lillet. Our Strategic International Brands are growing by 7%, notably with the Scotch portfolio, Jameson and Absolut. Our Strategic Local Brands are very dynamic, growing at +11%, driven by growth of Seagram's Indian Whisky, Seagram's Gin and Kahlúa. We have as well continued momentum in Specialty Brands growing at +10%, notably with Lillet, that I mentioned already, but as well Aberlour, Altos, Malfy and Redbreast. Wines are at -2%, softness mostly from the U.K.. Moving now to our performance by geographies and starting by our four maturing markets, which are delivering a strong underlying performance. I'll start with the U.S. U.S., the 9 months top line is at -1% due to high comp last year, mainly in Q3. Spirits depletion are growing at +2%, which is a solid performance in a normalizing environment. Q3 in fiscal year 2023 has been impacted by the H1 phasing and as well as high comparison basis. Please remind that last year the Q3 was growing at +23%. We have a strong high single digit price effect across the portfolio this year. A solid performance of Jameson sold St. Patrick's Day. We are expecting strong sales in Q4 against low comparison basis, along with additional price increases on some brands that are happening as we speak. China, the nine months performance is at -5% due to sub CNY and inventory adjustments. We have seen very dynamic sell-out at the end of Q3, may, meaning the month of March, with good post CNY season activity. We are expecting very strong sales in Q4 as consumer demand recovery is further amplified by favorable comparison basis. Last year, Q4 was very subdued. Strong demand, as I just mentioned, sorry, in March, but Martell sales in January and February have been impacted by soft festive season and as well some adverse phasing. We did adjust our inventory in Q3. We have a continued development for the wider portfolio, including Absolut and the Glenlivet. We've been announcing portfolio-wide price increase that are gonna be executed in May. Global travel retail, the nine months performance is at + 33%. Very strong sales recovery with a gradual resumption of Chinese travel. We are on track for profit recovery to pre-COVID levels at year-end. We've been increasing our price at a high single-digit level. Our sales currently at circa 80% of pre-COVID levels. There is a notable recovery driving very strong premium Scotch development. Moving now to India. India is at plus 15% in these nine months with continued excellent performance with strong premiumization, strong volume growth with a favorable mix led by Royal Stag, and as well the strong development of our Strategic International Brands portfolio. We've been increasing prices at mid-single digits, which is, I must say, excellent in the context of India with as well very strong Revenue Growth Management initiatives. Moving now to other geographies with strong value-led growth across regions and dynamic pricing execution. Americas 9 months is up +2% with a low single-digit growth in Canada with strong share gains on most brands. Brazil is posting a good growth driven by Chivas Regal, Ballantine's and Absolut with as well solid pricing. Mexico is in double-digit growth from Scotch portfolio, Absolut and Martell. Excellent pricing. Nine months in Europe is at +6% with France flat with market share gains and good growth from Ricard. Spain is posting a double-digit growth with solid pricing. There is an on-trade rebound, notably with Absolut, Ballantine's and gin. U.K. is in modest growth with dynamic spirit portfolio offset by wine performance, and we are as well increasing our price strongly. Germany, dynamic growth mainly from strong lead performance. Asia rest of the world, nine months is at +12%. Strong double digits in Japan with Chivas, Pernod and Ballantine's. Korea as well, very strong double-digit growth driven by premium Scotch portfolio and Jameson. Taiwan and Southeast Asia continue rebound on low comparison basis. Turkey continued excellent growth, notably behind Scotch portfolio. Moving now to our recent acquisition in our number one market, the U.S. Fiscal year 2023 has been a very active year of investment with acquisitions enabling us to reinforce our existing comprehensive portfolio in the U.S. We already mentioned, Sovereign Brands and Código in the first half, so I will insist a bit more on Skrewball, which is the most recent addition in a very attractive category, the flavored whiskey. This is complementing our portfolio and we're very much in tune with the consumer demand in the U.S. On Código, you can see on that slide, we are launching an ambitious, media campaign for the summer in key states, and with there will be some large rules in trendy neighborhoods. More to come on these brands. Moving to the outlook. In a persistently volatile environment and a normalizing market, we are confident in delivering the strong performance in fiscal year 2023 with very strong Q4 sales on favorable comparison basis while ensuring healthy levels of inventory everywhere, with continued focus on Revenue Growth Management and operational efficiencies to offset cost pressure in a high inflationary environment. The A&P ratio for the year would be at circa 16% of net sales, and we continue disciplined investment in structure. The CapEx is estimated at circa 6% of net sales, and we keep accelerating investments in strategic inventories. We're gonna launch imminently a final EUR 300 million tranche to complete our share buyback program, which I remind you will amount to circa EUR 750 million for the fiscal year 2023. We expect some positive currency effect. Our guidance for fiscal year 2023 is to deliver an organic growth of circa 10% in Profit from Recurring Operations with some expansion in organic operating margin. Thank you, Hélène. Now turning to your questions. Please, maximum two questions each because you've got a number on the call this morning. Operator, if you can direct us to the first question, please. This is the conference operator. We will now begin the question-and-answer session. The first question is from Edward Mundy of Jefferies. Please go ahead. Sorry. The first question is from Simon Hales of Citi. Sorry. Please go ahead. Thank you. Morning, Hélène, morning, Florence. So two questions. Firstly, Hélène, just on China, can you just give us a little bit more color around your comments you made there? You know, are inventory levels normal at the end of March, or are you still going to have to make some seasonal adjustments to inventory as we head into Q4? Are you able to provide any sort of headline numbers when you talk about strong exit rate in March? Can you talk about, you know, what level of consumer uptake you're actually seeing at all? Secondly, just on the US, you know, you highlighted normalizing depletion trends of 2%. I just wanted to confirm, is that a number for you of 2% or is that a market number of 2%? How do you think about depletion trends in the U.S. over the coming couple of quarters? Do you think we'll return back towards 3%-4% rates or is 2% the new normal for now? Okay. Thank you very much. It's more four questions than two, but I'll try to answer quickly. Starting with the U.S., the depletion at the two are numbers. We were already anticipating a normalization of the market, as you know, which means that we believe that it's gonna come back to the pre-COVID growth, which was more mid-single digits. Right now, it's fair to say that the market is probably more at a kind of low single digit circa +2%, +3%. With our deflation at +2%, we are quite aligned with this trend. Our expectation is still that the normalization to mid-single digit will happen. Difficult to say exactly when, but that's our strong conviction. China. China, as I said, the month of March has been quite strong in both channels. I must say the on-trade traffic is back probably to circa 80%. With Central China, which is a bit faster than South. Night club are still softer, but we see a good recovery in KTVs. When it comes to the off-trade, we see as well good demand in shops. Our numbers for the March intake on Martell are very, very strong. The level of inventory in China at the end of Q3 is where it should be, I must say. The inventory adjustment has been made quite fast. That's why we are in a strong position to fully capture the opportunity of the recovery in China for Q4 and as well execute our price increase in I would say, excellent conditions, those price increasing implemented in May. Brilliant. Very clear. Thank you. The next question is from Edward Mundy of Jefferies. Please go ahead. Morning, Hélène. Morning, Florence. Two questions, please. The first is on your margin guidance. I think previously you were guiding for sustaining operating margin, and now you're guiding for some margin expansion. Could you perhaps talk about sort of what's changed in terms of that outlook? Second of all, on India, there's been some, you know, recent media speculation in New Delhi. Perhaps you could provide some color on to what extent that could be contained at that particular region or whether there's a risk that could spread a little bit further. Yes. Thank you very much. It's, I will start with the margins. I think, first, we are obviously now almost at a 10 month of the fiscal year, so we have a strong visibility on the underlying demand which remains quite strong. That's why we are delivering this type of performance. We keep increasing our prices. We did it strongly in H1, as you remember. We did it again in Q3 in many markets like the U.S., like many markets in Europe, like France, like Germany, like Spain, like U.K., like Italy, and as well in many other markets. This is obviously giving us the confidence that we can protect our gross margin because the inflation is still quite high in term of impact on our COGS. Pricing is as well to continue. We're gonna accelerate the A&P versus H1 to achieve the circa 60% of net sales and can continue investing in a very disciplined way on structure costs. That's why at the end of the day, thanks to this very dynamic top line, which is as well obviously quite a good thing to absorb fixed costs, we believe we can improve and deliver some operating margin expansion. The second question on India. India, the weight of Delhi, circa 5%, of the net sales in the country. The license has been suspended since early September. You see our performance despite that suspension. Having said that, we are obviously working hard to have this license renewed in the coming weeks and months. It's more or less, as I said, circa 5%, which means at group level it's less than 0.5% of our top line. I take the opportunity of your question to say that India for us is a mostly market. Performance is excellent. We've been increasing prices to the highest level versus the recent past. All the fundamentals are very strong in terms of consumer confidence, in terms of demographics, in terms of urbanization. Again, we have very strong brand equity that we've been building over the past 20 years and even more than that. We are very ambitious for India in the short and mid long term. Very good. Thank you. The next question is from Trevor Stirling of Bernstein. Please go ahead. Morning, Hélène. Quite two questions. The first one is, you've done a lot of deals in the U.S., Hélène, and very underlying high growth businesses. How much do you think that's going to enhance your growth rate in the U.S.? You know, if you roughly said, could you give us a percentage in terms of the improvement you think you'll get in your organic growth rate in the U.S.? Second question, in terms of costs and the outlook for next fiscal year, could you spot commodities have fallen a long way, energy prices are down, that should feed through into lower glass prices. Do you think that means that the outlook for fiscal 2024 should be one of margin expansion? I'll start with the second question. Please give us some time to fine-tune what should be the right level of ambition for fiscal year 2024. Coming back to your question on the pressure coming from inflation, as I was alluded to, it's still high. On many components of our costs, wet goods, dry goods, what I can share with you already is that there is some moderation in term of distribution and logistic costs, but moderation, that doesn't mean that we are benefiting from, I would say, now tailwind versus the headwinds we are facing, but it's moderating. we'll have obviously, and hopefully more visibility for the, in the months to come to give you a better forecast for our fiscal year 2024. On your first question, in the U.S., as I shared before, we are very excited with the addition of those brands in our portfolio. It's our number one market. We want to be obviously very consumer-centric in the U.S. and everywhere else, but in the U.S. as well. Those brands are very exciting, very well-positioned in, as well, very dynamic and exciting categories. They are already quite sizable, I must say. When you look at Skrewball, it's 600,000 cases. Bumbu, it's probably around 300,000 cases. Código, close to 100,000 cases. Our teams are already working hard to seize the opportunity coming from the growth that those brands are gonna deliver. To be a bit more technical, this contribution to growth will still be in a kind of in our perimeter effects for the months to come. Contributing to the organic growth, probably starting in fiscal year 2025. Super. Thank you very much, Hélène. The next question is from Olivier Nicolaï of Goldman Sachs. Please go ahead. Hi, good morning, Hélène, Florence. Just one question on my side to bring down the average. On duty-free, you actually flag that you're on track for profit recovery. On same time, you said that in terms of net sales, you're at 80% to pre-COVID levels. When would you expect net sales in duty-free to reach back the level that you had pre-COVID? Thank you. Yeah, thank you. I mean, first, I must say that the our expectation for the weeks and months to come for travel retail are very positive, obviously, because there was already a strong recovery happening in many geographies. Things are getting much better now in China. We are still obviously not back to pre-COVID. I think the estimates for the calendar year 2023 is probably that we could be globally back to maybe half of what China Chinese travel used to be by the end of December. If it's happening sooner, obviously we'll be quite happy to seize that opportunity. The reason why we were already indicating the fact that we should be back to pre-COVID level in term of profit is that we don't believe that the full recovery versus pre-COVID will happen as fast as by the end of June. Thanks to premiumization and pricing, we'll be back to pre-COVID level in term of profits by the end of June. To answer your question, I think it's obviously depending mainly from the pace of the recovery of Chinese travel, for which there could be as well some I would say administrative constraints in the months to come in term of visa, in term of airline traffic and so on. Obviously the environment is getting much, much better and this is good news. We are very strongly positively exposed to the travel retail. This is as well a very premium part of our portfolio and our teams are fully ready to be very visible in the airports and attract the travelers. Thank you very much. The next question is from Celine Pannuti of JP Morgan. Please go ahead. Thank you very much. Good morning, everyone. My first question, I would like to come back to the U.S. You said depletion is running at 2%. At H1, you said depletion was running at 3%. I mean, roughly speaking, it implies it's flat for the third quarter. Could you give us a bit more details on what's going on because you have high pricing, I mean, are you seeing people downtrading? Are you seeing volume pressure? At which point, you know, the recovery in the market may mean that there will be a need of moderating that pricing strategy? My second question is on Europe. Seems there's been a bit of normalization there. Could you give us a bit of a flavor of how the market is evolving in Western Europe? Especially I think some of the corporates have been talking maybe about the consumer weakening a bit. Thank you for that. Okay, thanks. I'll start with Europe. Honestly, in Europe the trend is very similar to H1. Quite dynamic performance in Europe with strong price increase, which are necessary in a context where again, we are facing high inflation in term of costs. We've been increasing prices mainly in Q3. It's true that there was some timing effect H1 versus Q3 because of the phasing of this price increase but at the end, the underlying demand is quite solid. The first question on the US. It's true that, you know, the your understanding is correct. We're talking about +2% versus +3%, which I would say is very consistent with the normalization of the environment that we were expecting. As I said, the market is probably now at this level of low single-digits. That's the normalization we were expecting. Having said that, it's still keeping the benefit of COVID, which was a very strong growth in the U.S., as I said for a few years now. The normalization is expected. Your question in terms of value ahead of volume. Price increases are key value lever as we speak. That's true for performance and probably as well for the market. The volumes are softening, which for us is probably mainly linked to that normalization of the market. We are obviously tracking and monitoring the brand elasticities and as well the price increase policy of competition. Having said that, I mean, our brands are really more exposed to the premium part of the market, which are naturally less elastic. We don't see any downtrading to answer your question. When I look at the value growth that we did deliver over the last 9 months, for instance, we have very good numbers from Jameson, from our specialty Irish whiskey that are quite super premium and above and strong double digits. Jefferson's as well is in double digits in terms of depletion. No, no downtrading, as far as we can see. Thank you. The next question is from Mitch Collett of Deutsche Bank. Please go ahead. Good morning. I've also got two questions. My first one, apologies if you've already given this, but given some of the puts and takes in terms of phasing in Q3, could you just give us a depletion number for the group for Q3 worldwide? Secondly, I guess it's linked to your final point there about not seeing any down trading. I think in the nine months, your volume growth was +1%, pricing was +9%, and sales growth was +8%. I appreciate there may be some rounding, but that implies mix is -2%. Can you comment on how much of that negative mix is country mix and how much of it is product mix? Yes. Sorry, the sound was really not good, but I hope I understand your question correctly. We don't give the numbers for depletion rate, but what I can tell you is that this is something that we are tracking market by market to make sure that we have shipments following depletion. Meaning that we started the year with a very healthy level of trade inventory everywhere. This is exactly as well our intention for the end of June to close with a very healthy level of trade inventory everywhere. Your second question in terms of mix, it's true that there is some slightly negative mix in the nine-month figures. It's mainly a market mix. To be very clear, it's coming from those technicalities in Q3 in China and in the U.S. Got it. Thank you. The next question is from Chris Pitcher of Redburn. Please go ahead. Thank you very much. Could I go back to China again, please, and try to understand. Can I confirm that you were down over 30% in the third quarter just in terms of the maths of that? On that basis, how do you think you're doing in terms of market share in China? There's a lot of mixed messages coming out of your competitors. Do you think the industry as a whole perhaps misjudged selling ahead of Chinese New Year? It sounds like you've now removed all the excess stock. Just to confirm that. Secondly, on CapEx, I know you've guided previously to elevated CapEx, given where we are today, can you give us a bit more color perhaps on how long you expect that elevated level to remain, and break out a bit more detail where the extra EUR couple hundred million is being spent for us to check that? Thank you. Yeah. Thanks. China, I think, please first keep in mind that there was some timing effect of the earlier Chinese New Year versus last year. That's why H1 was anyway reflecting this earlier phasing, whatever was the expectation for the I would say dynamic of CNY. Honestly, I think, we were not expecting an amazing CNY knowing as you, as you probably remember that, starting in October, and it was already, it was still the case, sorry, in November and December, the situation linked to the COVID restrictions was quite strong in terms of restrictions. There was no expectation of a spectacular CNY. I think our selling were managed to make sure that we would be able to seize the opportunity of what could have been a good CNY. CNY was soft, and that's why there was a need to obviously adjust the inventory to make sure that we could again land in a very healthy position at the end of June. As I mentioned before, we are already at the end of March in a good place. That's why we expect a strong Q4. in term of market share, we don't track it on a monthly basis, but I can tell you that we've been consistently investing behind our brands to keep strong equity and the fact that we are implementing this level of price increase in May as well, a good sign in term of confidence on where we are in term of brand equity. To be even more specific in term of media spend for Martell, we believe that we have increased our share of voice. We are in a good place to again, to really seize the recovery of the Chinese consumer demand in the weeks and months to come. Hélène. Yeah. Can I confirm, the destocking in China, it would be over EUR 100 million if I've got the calculation right. Could you confirm that? We don't give numbers by quarter, but this is a significant decline in Q3 for all the reason I mentioned, and again, we expect a strong Q4. For the CapEx, we gave this number of circa 6% for this year. It's stronger than it used to be. I think we've been as well quite explicit in term of what are the very significant and strategic projects that we'll be implementing in the months and years to come, especially in Scotland and in Ireland, but as well in the U.S. Most of them are really to increase our production capacity, and as well to to do that with a very strong S&R ambition in terms of carbon neutrality. Those those initiatives are obviously not going to happen in few months only. It's going to be over a few years. You can expect some innovation in our CapEx to to deliver this project in the years to come. Thank you. The next question is from Jeremy Fialko of HSBC. Please go ahead. Hi. Morning. Jeremy, HSBC here. A couple of questions. First one is on the U.S., and we talk about this normalization of the market. When you, like, dive a little bit deeper into that and you look at the different kind of metrics through which the market grows, be it the penetration of spirits, the frequency of consumption, the pace of premiumization. If you were to look at those different components, and, you know, which ones have necessarily slowed the most, could you pick any out? Just talk a little bit more about, okay, what is it that's, you know, made this market slow amongst the different potential drivers of that. Then the second question is on Russia. Could you just clarify what you have now sort of started doing in Russia in terms of receiving shipments? We know you started doing Absolut, you're not going to do that anymore. Could you say what you're doing in Russia and I guess what the underlying rationale behind that is? Thanks. For the U.S., I mean, the normalization, as I said, was expected when it comes to your question in term of premiumization, I would say the pace of premiumization is moderating, but we don't see downtrading. The premium category is growing. It's true that the ultra and super premium categories are in slight decline, but the value category as well. In term of specificity, true that there were probably as well some impact from the withdrawal of COVID stimulus program, especially for the cognac category and as well the high-end tequila. Key trends remain, I would say, quite consistent versus the recent past, meaning that the trends, for instance, of mixology and of convenience. The normalization of the consumption patterns is as well to be taken into consideration in context of price increases that are ensuring the value growth. The volume softening again, is a result of the normalization of the market. Your second question on Russia. Let me come back on the broader situation. First, we firmly condemn this war, and we have done so from the very beginning. We have as well immediately provided substantial assistance to Ukrainians via international relief programs, but as well directly to our local teams in many different ways. Activity in Russia is not business as usual. Not only do we fully comply with all international sanctions, but we go beyond them as we have stopped marketing investment, and we have significantly reduced the number of brands imported. Our primary focus remains the protection of our local teams wherever they are. Okay, thanks. We're gonna take the last question. Ms. Tresarrieu, this was the last question. I'm sorry. Okay. Thank you. Thank you very much. Thank you, Hélène, and thank you all for your questions. Okay, thank you, thank you to all. Again, this was a very strong nine months for us in term of performance. We've some technicalities in Q3, which I hope I explained well. We are guiding for a strong full year with organic growth of our Profit from Recurring Operations at circa just 10% with some operating margin expansion. Thank you very much for your attention and talk to you soon. Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones. Thank you.