Slower than expected recovery in the US
2023-24 guidance adjusted 2029-30 strategic plan
confirmed
- Continued destocking in the US in a worsening market
- Solid growth in sales in China despite a slower than
anticipated post-Covid recovery
- Robust trends in the rest of the world, notably in other Asian
countries, as Travel Retail continues to bounce back
- Adjusted 2023-24 guidance:
- Sales: decline between -15% and -20% on an organic basis (vs
stable previously)
- COP margin: contained organic decrease (vs stable previously)
thanks to deployment of a major cost-cutting plan
Regulatory News:
Rémy Cointreau (Paris:RCO) generated consolidated sales of
€636.7 million in the first half of 2023-2024, down -22.2% on an
organic basis1 (+20.9% compared to 1st half of 2019-20). On a
reported basis, the decline was -26.6%, including a negative
currency effect of -4.4% due primarily to the renminbi and the US
dollar.
Against this backdrop, the Cognac division saw sales
retreat -30.1% on an organic basis in the 1st half. As anticipated,
the Liqueurs & Spirits division returned to growth in
the 2nd quarter (+12.1% on an organic basis) to report steady sales
for the first half (+0.1% on an organic basis).
In the Americas, sales fell a steep -49.9% on an organic
basis in the first half, due to continued destocking and sharp
normalization of consumption in a tough market. In APAC,
sales rose a strong +16.6%, driven by China and Southeast Asia,
along with a recovery in Travel Retail. Lastly, EMEA
reported good resilience, with sales up +8.9%.
Breakdown of sales by division:
€m
(April – September)
H1
2023-24
H1
2022-23
Change as reported
Organic change
vs. H1 22-23
vs. H1 19-20
Cognac
416.1
638.1
-34.8%
-30.1%
+9.4%
Liqueurs & Spirits
206.7
214.5
-3.6%
+0.1%
+55.8%
Subtotal: Group Brands
622.7
852.6
-27.0%
-22.5%
+21.2%
Partner Brands
14.0
14.5
-4.0%
-3.2%
+8.4%
Total
636.7
867.1
-26.6%
-22.2%
+20.9%
Cognac
First-half sales at the Cognac division fell -30.1% on an
organic basis, due primarily to a steep decline in North
America where the Group is targeting a reduction in its
inventories, and facing a normalization of consumption and an
intense promotional environment. In this context, the Group’s
decision to maintain its value-driven strategy through a firm
pricing policy contributed to increased short-term pressure on
volume.
Within APAC, China saw solid growth in sales
during the Mid-Autumn Festival despite a slower than expected
post-Covid recovery. Off-trade distribution channels and direct
sales helped offset softness in on-trade. In the rest of Asia, the
Cognac division continued to report solid trends.
Lastly, EMEA turned in a very strong performance in the
first half, fueled by demand in AME2 and Western Europe.
Liqueurs & Spirits
First-half sales at the Liqueurs & Spirits division
were steady (+0.1% on an organic basis), supported by a marked
acceleration in the 2nd quarter (+12.1% on an organic basis). As
expected, the Americas saw a steep rise in sales in the 2nd
quarter, led by solid momentum in Cointreau, Bruichladdich and The
Botanist.
The EMEA region turned in a solid performance in the 1st
half, reflecting strong trends in Western Europe and in the United
Kingdom. Lastly, the APAC region edged up, underpinned by a
strong showing in North and Southeast Asia, and a recovery in
Travel Retail.
Partner Brands
First-half sales of Partner Brands were down -3.2% on an
organic basis.
Adjusted 2023-24 outlook
Worsening market conditions, primarily in the United States,
have led Rémy Cointreau to update its underlying assumptions for
2023-24 as follows:
- In the United States, market conditions have
deteriorated on the back of a fiercely promotional environment and
a rise in interest rates that has cut distributors’ financing
capacity. Consequently, the rebound in sales initially expected for
the third quarter is now anticipated in fiscal 2024-25.
- In APAC, the Group expects growth in sales, but at a
pace below initial forecasts given the slower than anticipated
post-Covid economic recovery in China.
- Lastly, in the EMEA region, the Group expects more
moderate annual growth in a persistently inflationary context.
In this context, Rémy Cointreau is determined to protect its
2023-24 profitability through tight cost controls, while continuing
to roll out its medium-term plan. To this end, it will:
- maintain a strict and uncompromising pricing policy
- protect its gross margin in a persistently inflationary
environment
- selectively reduce its marketing and communications spend,
particularly for the Cognac division
- significantly reduce other operating costs
As a result, Rémy Cointreau has adjusted its full-year
2023-24 objectives and now expects:
- a decline between -15% and -20% in sales on an organic basis
(vs stable previously)
- a contained organic decrease in COP margin (vs stable
previously) thanks to deployment of a major cost-cutting
plan
Lastly, based on shifts in its geographical mix and the
renminbi’s decline, the Group expects exchange rates to have a
negative impact for the full year for:
- sales: between -€50m and -€60m
- COP: between -€10m and -€15m
Rémy Cointreau is today ahead of its strategic plan and is
underpinned by solid foundations and a long-term vision. This makes
2023-24 a year that will allow the Group to return cognac
inventories in the United States to healthier levels and absorb the
effects of post-Covid normalization before heading into 2024-25
in the best possible conditions, resuming the trajectory it set
itself for 2029-30.
2029-30 objectives confirmed
Rémy Cointreau reiterates both its financial and
extra-financial targets for 2029-30, and its aim to become
the global leader in exceptional spirits.
The Group targets a gross margin of 72% and a Current
Operating Margin of 33% (based on 2019-20 consolidation scope
and exchange rates).
As part of its “Sustainable Exception” plan, Rémy Cointreau aims
to train and engage 100% of its direct partners in agriculture
in sustainable farming practices, targeting a 50% reduction
in carbon emissions per bottle by 2030. This is the first step
towards achieving zero net carbon status in 2050—a trajectory
compatible with holding global warming to +1.5°C as validated by
the Science Based Target Initiative (SBTi).
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 9:00 am (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
23-24
Forex
23-24
Scope 23-24
Organic
23-24
Reported
22-23
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%
Q2 2023-24 sales (July-September 2023)
€m
Reported
23-24
Forex
23-24
Scope 23-24
Organic
23-24
Reported
22-23
Reported change
Organic
change
A
B
C
A/C-1
B/C-1
Cognac
261.0
-23.1
-
284.1
345.9
-24.5%
-17.8%
Liqueurs & Spirits
111.7
-5.7
-
117.4
104.7
+6.7%
+12.1%
Subtotal: Group Brands
372.7
-28.8
-
401.6
450.6
-17.3%
-10.9%
Partner Brands
6.4
0.0
-
6.5
6.6
-2.3%
-1.6%
Total
379.2
-28.9
-
408.0
457.2
-17.1%
-10.8%
H1 2023-24 sales (April-September 2023)
€m
Reported
23-24
Forex
23-24
Scope 23-24
Organic
23-24
Reported
22-23
Reported change
Organic
change
A
B
C
A/C-1
B/C-1
Cognac
416.1
-29.7
-
445.8
638.1
-34.8%
-30.1%
Liqueurs & Spirits
206.7
-7.9
-
214.6
214.5
-3.6%
+0.1%
Subtotal: Group Brands
622.7
-37.7
-
660.4
852.6
-27.0%
-22.5%
Partner Brands
14.0
-0.1
-
14.1
14.5
-4.0%
-3.2%
Total
636.7
-37.8
-
674.5
867.1
-26.6%
-22.2%
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/20231026310970/en/
Investor relations: Célia d’Everlange /
investor-relations@remy-cointreau.com Media relations:
Mélissa Lévine / press@remy-cointreau.com
Remy Cointreau (EU:RCO)
Historical Stock Chart
Von Mär 2024 bis Apr 2024
Remy Cointreau (EU:RCO)
Historical Stock Chart
Von Apr 2023 bis Apr 2024