* Full-year profit from recurring operations rises 6 pct
* Organic sales up 3.9 pct, below some analysts' estimate
* Signs of stabilisation in Europe-CEO
* Mid-sized acquisitions possible-CEO
(Recasts with analysts comments, expectations, share price;
By Lionel Laurent
PARIS, Aug 29 French alcoholic drinks maker
Pernod Ricard reported annual sales growth slightly
below some analysts' expectations, hit by persistent weakness in
The world's second-biggest spirits group after Britain's
Diageo relies on Asia for about 40 percent of sales.
Like its rivals, it has been hurt by a government clampdown on
luxury gifts in China, in addition to the slowdown in economic
growth in the country.
However, buoyant demand from other Asian markets such as
Malaysia and India - as well as "significant" price hikes -
helped the owner of Mumm champagne and Absolut Vodka grow net
profit by 4 percent to 1.2 billion euros.
Organic profit, which excludes the impact of acquisitions
and divestitures, rose 6 percent to 2.2 billion euros, squarely
hitting Pernod's target for the fiscal year ended in June.
Net sales for the year rose 4 percent to 8.58 billion euros.
Organic sales rose 3.9 percent, which was a shade below the 4.1
percent expected by analysts, according to Investec.
"The problem remains Asia, and particularly China, where
growth slowed materially in the fourth quarter," said Investec
analyst Martin Deboo in a research note.
Pernod shares were down 2.1 percent to 88.76 euros at 1234
GMT - the second-biggest faller on France's CAC 40 blue-chip
index, which was up 0.5 percent.
And the uncertainty in China may continue to weigh on the
shares in the short term, according to Citigroup analysts.
"We are less optimistic about the long-term prospects for
China," Citi said in a note. Sales for the year rose 9 percent
in China, though that was lower than the previous year.
Still, Pernod expects its geographic diversity to help it in
the new year.
"There will no doubt be less dynamic growth from emerging
markets (this year)... But the U.S. market remains very robust
and there are some signs of stabilisation in Europe," Chief
Executive Pierre Pringuet told Reuters.
"We remain confident in our ability to pursue our growth."
The company also raised its dividend by 4 percent to 1.64
Pernod Ricard has over the past four decades outgrown its
origins as a maker of French aniseed-flavoured liqueur and built
up an international empire of brands including Ballantine's
scotch and Beefeater gin.
Since spending 5.6 billion euros on buying Absolut Vodka
parent V&S in 2008, the company has been cutting debt and
selling assets and is now in a position to make medium-sized
acquisitions even as it seeks to protect its credit rating, its
CEO told Reuters.
"Medium-sized acquisitions are entirely feasible for us ...
in the hundreds of millions of euros up to 1 billion," Pringuet
Although not all of Pernod's flagship brands have resisted
the past year's economic slowdown in Europe, with volumes of
Ricard and Ballantine's down 11 percent and 4 percent
respectively, several products including Absolut and Jameson hit
all-time volume highs in 2012/2013.
($1 = 0.7496 euros)
(Additional reporting by Martinne Geller in London; Editing by
James Regan and Pravin Char)