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By Swissquote Analysts
Published on 02.09.2021
Morning news

Pernod Ricard FY 2021 Margins Bolstered by Cost Control, Sales Volumes; Invests in US Peer

Topic of the day

Cost discipline helped Pernod Ricard expand its margins in fiscal 2021, the French drinks group said Wednesday, as it revealed that it is taking a minority stake in a U.S. premium-focused peer. Pernod Ricard's operating margin expanded by 213 basis points in the 12 months to end-June, the company said. This was driven by a 64-basis-point increase in the gross margin on stable pricing and better absorption of fixed costs thanks to volume growth, Pernod said. The margin was also boosted by focusing promotional spend on growth markets and categories, and by disciplined control of structure costs, which are expected to increase strongly in the new fiscal year to support future growth, it said. Profit from recurring operations of 2.42 billion euros ($2.86 billion) was boosted by a previously-announced drawback of EUR28 million in the U.S., relating to an August court decision allowing exporters to claim on duties already paid. Sales growth in key markets such as the U.S., as well as China and some European countries, helped offset a decline in travel retail across the board, Pernod said, adding that it expects continued sales momentum in fiscal 2022, especially in the first quarter.

Swiss stocks

The Swiss stock market ended Wednesday slightly up. Initially higher gains melted away, partly due to the disappointing ADP jobs report in the US. The SMI gained 0.2 per cent to 12,433 points. Among the 20 SMI stocks, there were 14 price gainers and 6 price losers. 26.13 (previously: 47.59) million shares were traded. Luxury goods stocks were bought. Traders saw a countermovement after recent losses triggered by concerns about the Chinese market. Julius Baer considers these worries to be exaggerated. Bernstein counters that possible higher taxes on top Chinese earners would be bad news for European luxury goods companies. Richemont gained 2.3 per cent and Swatch 1.5 per cent. Financials were among the gainers. UBS rose 0.5 per cent, Zurich Insurance 0.7 per cent and Swiss Life 1.3 per cent. The weakest stock in the SMI was Givaudan (-0.4 per cent), followed by Sika (-0.4).

International markets


European equity markets ended higher on Wednesday, while Wall Street was mixed after the release of mixed indicators. The Stoxx Europe 600 index gained 0.5% to 473.1 points. In Paris, the CAC 40 and SBF 120 rose 1.2% and 1.1%, respectively. In Frankfurt, the DAX 30 fell 0.1% while the FTSE 100 in London rose 0.4%. In the eurozone, the manufacturing PMI index stood at 61.4 in August compared with 62.8 in July, according to final data released by IHS Markit. The index is slightly lower than the provisional estimate published on 23 August, which stood at 61.5. Also in the euro zone, the unemployment rate fell to 7.6% in July after 7.8% in June, according to statistics published by Eurostat. The jobless rate in the eurozone continued to decline in July as the reopening after the easing of pandemic-related restrictions fueled a strong economic recovery over summer. The eurozone jobless rate fell to 7.6% in July from a revised 7.8% in June, data from the European Union’s statistics agency, Eurostat, showed Wednesday. Carrefour slipped in early trade Wednesday after investor Bernard Arnault said he was selling off what remains of his stake, a move analysts say sends a clearly negative signal concerning the French supermarket group. Late Tuesday, Carrefour said the Agache Group had decided to sell the remainder of its stake. Agache is the holding company of Mr. Arnault, founder and chief executive of France’s largest company by capitalization, luxury-goods conglomerate LVMH Moet Hennessy Louis Vuitton SE. U.K. private-equity firm CVC Capital Partners will return to Australia after a nine-year absence, rebuilding its presence in what it called one of the most active private-equity markets in Asia-Pacific. CVC, which has US$115 billion in assets under management and 24 offices globally, said it would open a Sydney office under Brett Sutton. Mr. Sutton, who founded Affinity Partners’ Australian operations in 2004, has joined CVC as chair of Australia to oversee the expansion.

United States

The Nasdaq rose to a record to start the month, while other U.S. stock benchmarks were mixed. The S&P 500 pared early gains to trade less than 0.1% higher. The benchmark stock index has climbed for seven consecutive months and closed Tuesday slightly below its all-time high. The tech-heavy Nasdaq Composite Index added 0.3% to a new closing high. The Dow Jones Industrial Average slipped around 0.1%. Fresh data released showed that economic activity in the manufacturing sector grew in August. An index of U.S.-based manufacturing rose to 59.9 in August from 59.5 in the prior month, according to the Institute for Supply Management. Amazon. com Inc. said it is seeking to hire about 55,000 people globally among its corporate and technology ranks during a recruiting event set for Sept. 15, as the e-commerce giant continues a hiring spree begun at start of the Covid-19 pandemic. The Seattle-based company is aiming to fill roles in cloud-computing unit Amazon Web Services, as well as in divisions such as Amazon Studios, advertising and its broadband satellite Project Kuiper. The open positions include more than 40,000 roles in the U.S. across 220 locations, including in New York City; Bellevue, Wash.; and Arlington, Va., where the company is opening a large corporate office. Walmart Inc. is hiring 20,000 workers for its supply-chain operations ahead of the holidays, highlighting the growing role of distribution and delivery as the retailer competes with e-commerce giant Inc. The new hires will be permanent positions aimed at supporting Walmart through the holiday surge and beyond, the retailer said Wednesday.


There is no uniform trend on the stock markets in East Asia and Australia on Thursday. While in Shanghai (+0.5%) and Hong Kong (+0.1%) the upward trend of the past few days continued, in Soul the Kospi fell by 0.9 per cent. Here, stronger-than-expected inflation data for August weighed. Consumer prices rose by 2.6 per cent year-on-year, while economists had expected only 2.3 per cent.


Treasury yields traded mixed Wednesday, after a report on U.S. private-sector employment came in weaker than forecast. The 10-year Treasury note yield was at 1.301%, compared with 1.303% on Tuesday.


IR lowers Kering target to 720 (800) EUR – Hold
IR lowers Lufthansa target to 7,80 (9,20) EUR – Sell
SMC rises Adesso target to 215 (142) EUR – Strong Buy

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