Pernod reports FY results on 2nd September. For FY20E, we expect organic sales -7.0% (Europe -4.3%, Americas -2.2%, Asia/RoW -11.9%); our Q420E organic sales estimate is -24.7% (Europe -19.0%, Americas -12.0%, Asia/RoW -39.0%). India has been worse than expected, with the on-trade still not yet re-opened, and a full 6 week restriction on the sale and production of alcohol. Travel Retail remains severely impacted. China is recovering slowly. The positive areas are the US and Western Europe, where consumers have migrated most of their on-trade consumption to the off-trade channel. However, the full extent of layoffs are yet to be felt so the current level of consumption may not be sustainable. We worry about a medium-term reversal of the premiumisation trend, which has added c. 200-300bps to Spirits organic sales growth over the last 5+ years. We assume another year of negative organic sales growth in FY21E (-3.8%), as we expect consumers may continue to favour the off-trade channel during that period, which would have negative implications for price/mix. Diageo recently guided to a slower recovery than the market had hoped for, with organic sales and profits expected to be down y-o-y in calendar H2, though its on-trade Beer business is an additional drag that Pernod is not exposed to. Nevertheless, we expect a cautious outlook from Pernod management at the results. Our FY21E y-o-y organic EBIT estimate is -8.8%, which assumes variable costs are cut only in-line with the sales decline. After raising our estimates, we are still 18% below consensus adj. EPS in FY21E. We leave our €107 target unchanged, which implies a CY21E PE of 19.8x; in our view, this multiple appropriately balances the short-term earnings risk with the longer-term attractions of Spirits.