now for no recar Shares are falling today the French maker of absolute vodka and Jameson Whiskey expect sales in the U.S decline in the first quarter as a boom in demand for premium Spirits loses steam joining us now from the company's headquarters in Paris is Alexander Riccar the CEO of purno Ricard Alexander thank you so much for joining us this morning look Shares are down about 4.4 percent I'm sure you're going to tell me that that you don't care about one day price moves which is fair enough but but what do you make of of what seems to be a sense of investor disappointment in this set of results listen I I have to say I'm a bit surprised indeed um I I don't look at share price day to day you're right that being said coming out of a very strong uh set of results very strong performance for the year with double-digit growth uh Topline 10 organic growth coming from all regions very drug-based growth coming from basically all our spirit categories with six key Spirit categories driving more than 85 percent of our growth and and very strong as well profit growth with Pro uh profit from recurring operations growing double digit 11 with some margin expansion and a clear protection of our gross margin so very strong set of results maybe markets are currently focused on on very short-term deliverables because we did indicate that we were expecting a soft q1 you mentioned the US the underlying consumption in the US just to be clear is is resilient then there's phasing and technical issues which will lead us to believe we'll have a soft q1 in the U.S but a positive outlook for the full year in the US of course how would you characterize the American Consumer right now well the American Consumer is resilient uh I mean premiumization is still ongoing although there is a Slowdown in the pace of premiumization given the the global uh environment but at the end of the day we do see a resilience for the American Consumer the American Consumer trading down or simply buying less how are their spending habits changing spending and still growing the U.S market is is a four to five percent value growth mortgage Market on average over time we've just come out of a an amazing period of double that growth rate per annum so the last three years post covid have grown on average for our industry around eight percent so what we're seeing is a normalization based on a high uh basis but the market is still growing we believe it's growing in the low single digit maybe around one and two percent and the real question is the rate of recovery to to that longer term trend of four to five percent so still positive Dynamics with a lot of inventory management happening after after a couple years of uh of supply chain disruption can you continue to pass on some of the increasing input prices that you've seen to consumers or are they kind of hitting a wall here especially in the United States listen to be fair uh inflation has been there we've been hit by inflation in terms of our costs and and therefore we were driven by price increases to cover for uh inflation we do believe when we look uh specifically our at ourselves that inflation is going to ease and has started easing especially regarding transportation and and therefore you should expect a more normal behavior and more normal I would say uh pricing I'm just looking over some analyst notes on on your earnings at the moment one bright spot at least from city they're pretty excited about this buyback that you've announced for 2024 500 million to 800 million euros they said it was unexpectedly large should soften any blow of other concerns talk to me about the upper end of that the 800 million euros how ambitious do you see that as being well over the last two years we've done a sure buyback programs of uh 750 million so we we just came out of a 750 million share buyback program over the the fiscal year 23. we've guided a 500 to 800 million uh Euro share buyback for for this uh current year which now started this current year we'll see we have the flexibility and uh you know as as we we go through the year we'll see uh uh where we we end up between 500 and 800 million uh Alexander I'm also told by one of our producers that that you just returned from a trip in China what was it like over there what kind of conversations were you having well listen first of all uh a lot of excitement uh I I met all our our teams in China they're excited because of uh the end of the zero covet strategy so therefore they they're they're happy to be to be to be a little bit like us now so we did experience all a bit of Revenge conviviality starting March it's fair to say that and obviously the macro economic situation in China has slowed down and it is having somewhat of a an impact on on consumer demand in particular in in the late night uh trade nightclubs but we are seeing the emergence of live bars where you have live entertainment we are seeing the the development of the the cocktail culture as well we do expect because of the environment somewhat of a soft start for sure this quarter in China bear in mind we're lapping a very strong mid-autumn Festival last year which was a record year for us and a previous year which was even stronger so we're lapping two years of very strong growth it was 23 q1 two years ago it was nine percent again last year so we do expect a soft q1 I gotta ask the cocktail culture what's what's the favorite drink out there out there so listen you have a you have many many cocktails because you have mixologists that that are really happy to experience all the different cocktails whether it's based with with cognac and and the leading brand which is our brand Martel but as well for instance absolute Cosmos you see that as well and and whiskey based Cocktails so it's basically cognac based cocktails whiskey based cocktails and vodka based cocktails interesting um let me take you back to the to the data and the numbers and what you're seeing you're talking about a soft q1 expected in China how long do you think that's going to last because what some analysts are telling us is the consumer hasn't really fully felt the impact of some of this housing downturn and some of the weaker data we're seeing out of China well we we expect uh Improvement as of Q2 and again in part Amplified by uh by favorable comes so contrary to the q1 where we're lapping a a very strong year last year Baron one you had lockdowns and and covet impacts in China in our Q2 uh October November December and then we had a very poor Chinese New Year because the zero covet strategy stopped just ahead of Chinese New Year and it was a big mess for Chinese New Year so we'll have a very favorable comes entering in our in rq2 as of October you know and know it's not an enormous it's never been an enormous piece of your business Russia but you did get some Flack for saying you'd resume Market exports to Russia and then kind of did an about face after there was a bunch of consumer pressure talk me through the decision making there I understand that it's still going to take some time to kind of wind down those operations what made you do the about face listen we we stopped shipments to Russia last April and we stopped uh definitively so we're winding down the inventory but there's not much left and we're closing uh closing our operations in in Russia which our distribution basically will end up with a rep office uh we're well underway with the with this uh and uh and that's basically it you're either in or out and in our case we made that decision uh back in April May of uh of this year Axon we're in we're in the environment right now here in Europe we're extremely concerned about stagflation given higher inflation data that's come in and weakening growth given your exposure and what you see to the consumer do you see any hints of that of undue inflation yet consumers and an economy that's that's slowing down or halting at the same time as well as in uh Europe uh so far delivered by the way the last 12 months in Europe have been very strong Europe delivered eight percent uh net sales growth uh this for Europe uh is uh is quite High obviously I don't think this this kind of level of growth is is sustainable forever of course but we do see a resilience people you know people Reserve uh some part of their discretionary spend to go out and to celebrate together and because the environment to be fair uh is is of course not the most celebratory environment we know for many many reasons but people still want to keep that discretionary spend for their uh Gatherings with family and friends at affordable levels um Alexander before we let you go I have to say there's one question that that I've really been dying to ask so you've got to forgive me for this one but it used to be that celebrities would launch perfume cologne Brands now it seems like ever everybody wants to have an alcohol brand from Clooney to Kendall Jenner what do you make of that trend is that sustainable are they making good stuff listen it's a great question we we've always uh by the way uh had had the celebrity endorsement for some Brands leveraged uh some celebrities on other brands or or some celebrities can be actors can be famous people can be singers and so on and so forth what it does mean is the spirits the premium Spirits industry is so attractive that a lot of people want to get into it and like in anything some will succeed and others won't but bear in mind it does require a strong expertise in terms of marketing of course in terms of execution in terms of sales execution and so on really great to get your thoughts today that's Alexander Ricard CEO of Pino recarm