- Sales down -35.0% on an organic basis1, in line with
expectations
- Significant fall in sales in the Americas linked to an
exceptionally high basis of comparison, major destocking, and
continued normalization of consumption post-Covid
- Very strong growth in the rest of the world, particularly
China, Southeast Asia and the EMEA region
- Full-year guidance confirmed
Regulatory News:
Rémy Cointreau (Paris:RCO) generated consolidated sales of
€257.5 million in the first quarter of 2023-2024, down -35.0% on an
organic basis (+14.3% compared to Q1 2019-20). On a reported
basis, the decline was -37.2%, including a negative currency effect
of -2.2%.
This performance reflects an exceptionally high basis of
comparison (Q1 2022-23 was up +74.0% compared to Q1 2019-20), the
Group’s focus on significantly reducing its Cognac inventories in
the United States, and continued normalization of consumption in
the US.
Against this backdrop, the Cognac division saw sales
retreat -44.7% on an organic basis. The Liqueurs &
Spirits division reported a decline, with sales down -11.4% on
an organic basis. The latter is affected by a phasing effect and a
high basis of comparison, while underlying trends remained solid,
allowing a return to growth from the 2nd quarter.
In the Americas, sales suffered a marked decline, while
in APAC they rose very steeply, boosted by trends in China
and Southeast Asia, along with the continued recovery in Travel
Retail. Lastly, EMEA reported double-digit growth, driven by
all of its regional markets.
Breakdown of sales by division:
€m
(April - June)
Q1
2023-24
Q1
2022-23
Change as reported
Organic change
vs. Q1 22-23
vs. Q1 19-20
Cognac
155.1
292.3
-46.9%
-44.7%
-4.4%
Liqueurs & Spirits
95.0
109.7
-13.5%
-11.4%
+69.7%
Subtotal: Group Brands
250.0
402.0
-37.8%
-35.6%
+14.3%
Partner Brands
7.5
7.9
-5.4%
-4.6%
+13.9%
Total
257.5
409.9
-37.2%
-35.0%
+14.3%
Cognac
First-quarter sales at the Cognac division were down
-44.7% on an organic basis, as expected. This was primarily due to
a significant drop in sales in the Americas, hit by the
combined impact of an exceptionally high basis of comparison (Q1
2022-23 sales were +175.8% compared to Q1 2019-20), the Group’s
focus on significantly reducing inventories, and continued
normalization of consumption. In an increasingly promotional
environment, the Group maintained its value-driven strategy,
holding prices steady.
In APAC, the Chinese market registered another
quarter of very strong growth driven by the recovery in on-trade
business and a particularly strong performance from Rémy Martin
CLUB. It was also driven by robust growth in e-commerce (T-Mall
platform and JD.com during the 6.18 Festival), where sales
outperformed expectations. In the rest of Asia, particularly
Southeast Asian markets, the Cognac division did very well.
In the EMEA region, business was very good in all
regional markets, particularly in AME2 and in Western Europe.
Liqueurs & Spirits
First-quarter sales at the Liqueurs & Spirits
division were down -11.4% on an organic basis, reflecting phasing
effects (distributors built up US inventories at the end of the
fourth quarter ahead of price increases on 1 April 2023), as well
as a very high basis of comparison in the Americas (Q1 2022-23
sales up +127.2% compared to Q1 2019-20).
The underlying trend in the Americas region is solid and
points to very good momentum for the Cointreau brand, which has
just launched its new Margarita Right campaign featuring actress
Aubrey Plaza. The Group expects to return to growth in the second
quarter of 2023-24.
In the EMEA region, sales were very good, reflecting
robust trends throughout the region, particularly in Western Europe
(Germany, France, and Greece) and the United Kingdom. Lastly, in
APAC, the year got off to a good start in the North and
Southeast Asia as well as in Travel Retail business.
Partner Brands
First-quarter sales of Partner Brands were down -4.6% on
an organic basis.
2023-24 outlook
confirmed
In 2023-24, Rémy Cointreau anticipates continued strong
normalization of consumption in the United States, although trends
will nonetheless remain significantly higher than in 2019-20.
At the same time, the Group expects strong growth in the rest of
the world, led by major gains in China, a very good showing in EMEA
and the Rest of Asia, and business similar to levels observed in
2019-20 in Travel Retail.
Against this backdrop, the Group expects sales to remain
stable on an organic basis in 2023-24, with:
- A strong decline in sales in the first half,
reflecting a very strong fall in the United States and high bases
for comparison
- A strong recovery in the second half, driven by a
sharp rebound in the US starting in the third quarter
Rémy Cointreau intends to confirm its level of organic
profitability based on:
- Continued roll-out of a value-driven strategy built on a firm
pricing policy and improved price mix
- Resilient gross margin in a persistently inflationary
context
- Stabilization of the ratio of marketing and communication
spend/sales
- Tight control of overhead costs
The Group estimates that currency will have an unfavorable
impact on:
- Sales: between -€50m and -€60m
- COP: between -€10M€ and -€15m
About Rémy Cointreau
All around the world, there are clients seeking exceptional
experiences; clients for whom a wide range of terroirs means a
variety of flavors. Their exacting standards are proportional to
our expertise – the finely-honed skills that we pass down from
generation to generation. The time these clients devote to drinking
our products is a tribute to all those who have worked to develop
them. It is for these Men and Women that Rémy Cointreau, a
family-owned French Group, protects its terroirs, cultivates
exceptional multi-centenary spirits and undertakes to preserve
their eternal modernity. The Group’s portfolio includes 14 singular
brands, such as the Rémy Martin and Louis XIII cognacs, and
Cointreau liqueur. Rémy Cointreau has a single ambition: becoming
the world leader in exceptional spirits. To this end, it relies on
the commitment and creativity of its 2,021 employees and on its
distribution subsidiaries established in the Group’s strategic
markets. Rémy Cointreau is listed on Euronext Paris.
A conference call with investors and analysts will be held today
by CFO Luca Marotta, from 9:00am (Paris time). Related slides will
also be available on the website (www.remy-cointreau.com) in the
Finance section.
Appendices
Q1 2023-24 sales (April-June
2023)
€m
Reported 22-23
Forex 22-23
Scope 22-23
Organic 22-23
Reported 21-22
Reported change
Organic change
A
B
C
A/C-1
B/C-1
Cognac
155.1
-6.6
-
161.6
292.3
-46.9%
-44.7%
Liqueurs & Spirits
95.0
-2.2
-
97.2
109.7
-13.5%
-11.4%
Subtotal: Group Brands
250.0
-8.8
-
258.8
402.0
-37.8%
-35.6%
Partner Brands
7.5
-0.1
-
7.6
7.9
-5.4%
-4.6%
Total
257.5
-8.9
-
266.4
409.9
-37.2%
-35.0%
Regulated information in connection with this
press release can be found at www.remy-cointreau.com.
Definitions of alternative performance
indicators
Rémy Cointreau’s management process is based on the following
alternative performance indicators, selected for planning and
reporting purposes. The Group’s management considers that these
indicators provide users of the financial statements with useful
additional information to help them understand its performance.
These indicators should be considered as supplementing those
including in the consolidated financial statements and resulting
movements.
Organic sales growth:
Organic growth excludes the impact of exchange rate
fluctuations, acquisitions and disposals.
The impact of exchange rate fluctuations is calculated by
converting sales for the current financial year using average
exchange rates from the prior financial year.
For current-year acquisitions, sales of acquired entities are
not included in organic growth calculations. For prior-year
acquisitions, sales of acquired entities are included in the
previous financial year but are only included in current-year
organic growth with effect from the actual date of acquisition.
For significant disposals, data is post-application of IFRS 5
(which reclassifies entities disposed of under “Net earnings from
discontinued operations” for the current and prior financial year).
It thus focuses on Group performance common to both financial
years, over which local management has more direct influence.
_________________________ 1 All references to “on an organic
basis” in this press release refer to sales growth at constant
currency and consolidation scope 2 Africa and the Middle East
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230724228612/en/
Investor relations: Célia d’Everlange /
investor-relations@remy-cointreau.com Media relations:
Mélissa Lévine / press@remy-cointreau.com
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