Limited fall in current operating margin
thanks to strict cost controls Roll-out of new cost-cutting
plan totaling over €50 million 2024-25 objectives confirmed
and quantified
- Sales down -15.9% on an organic basis
- Gross margin: -1.4 pts on an organic basis, at a high
72.5%, i.e. +3.0 points compared to 2019-20
- Roll-out of new cost-cutting plan totaling over
€50m
- COP: €147.3m (-17.6% on an organic basis), setting
margin at 27.6% (+1.0 pts as reported, including -0.5 pts
organically)
- 2024-25 objectives confirmed and quantified:
- Organic sales decline of between -15% and -18%
- COP margin of between 21% and 22%, on an organic
basis
- 2029-30 strategic plan confirmed
Regulatory News:
Rémy Cointreau (Paris:RCO) generated consolidated sales
of €533.7 million in the first half of 2024-25, a fall of -15.9% on
an organic basis. On a reported basis, the figure was down -16.2%,
including a negative currency effect of -0.3% due primarily to
trends in the renminbi.
Current Operating Profit stood at €147.3 million, down
-17.6% on an organic basis. This trend reflects a marked decline in
sales, most offset by a sharp reduction in costs. Current
operating margin thus rose by +1.0 points as reported, to 27.6%
(including -0.5 points on an organic basis).
Sales - in € million (unless
otherwise stated)
H1 2024-25
H1 2023-24
Reported change
Organic change
vs. H1 23-24
vs. H1 19-20
Sales
533.7
636.7
-16.2%
-15.9%
+1.5%
Gross margin (%)
72.5%
72.2%
+0.3 pts
-1.4 pts
+3.0 pts
Current Operating Profit
147.3
169.1
-12.9%
-17.6%
-2.8%
Current operating margin (%)
27.6%
26.6%
+1.0 pts
-0.5 pts
-1.2 pts
Net profit – Group share
92.0
113.0
-18.6%
-24.2%
-9.6%
Net margin (%)
17.2%
17.7%
-0.5 pts
-1.8 pt
-2.0 pts
Net profit – Group share excl.
non-recurring items
91.6
113.0
-19.0%
-24.6%
-4.0%
Net margin excl. non-recurring items
(%)
17.2%
17.7%
-0.6 pt
-1.8 pts
-0.9 pts
EPS – Group share (€)
1.80
2.24
-19.4%
-24.9%
-11.7%
EPS – Group share excl.
non-recurring items (€)
1.80
2.24
-19.7%
-25.3%
-6.2%
Net debt /EBITDA ratio
1.90x
1.57x
+0.33x
+0.33x
+0.51x
Éric Vallat, CEO,
commented:
"In a complex economic and geopolitical context, Rémy Cointreau
was able to hold margins steady in the first half of the year
through rigorous cost management and our now more agile
organization. While the US recovery is expected to be very slow,
recent encouraging signs for Cognac plus resilience observed in
Liqueurs & Spirits confirm the relevance of our strict pricing
strategy. In China, despite uncertain conditions, we continued to
gain market share thanks to the desirability of our brands, our
ability to innovate, and our strong presence in e-commerce. Looking
ahead, the second half will see continued efforts to rein in costs
as part of our €50m full-year savings plan. But it’s essential that
we not lose sight of our goals—and in that respect the time has
come to prepare for recovery. We thus plan to begin reintroducing
targeted investments in marketing as early as H2, to support peak
activity in both the United States and China. Thanks to the quality
of our brands and our teams’ engagement and talent, we can look to
the future with confidence as we press ahead. I would like to take
this opportunity to extend my warmest thanks to all our employees,
whose responsiveness and creativity are critical assets as we
prepare for recovery and work to achieve our medium-term
goals."
Current Operating Profit by
division
In €m (unless otherwise stated)
H1 2024-25
H1 2023-24
Reported change
Organic change
vs. H1 2023-24
vs. H1 2019-20
Cognac
126.5
145.3
-13.0%
-17.9%
-9.1%
As % of sales
37.0%
34.9%
+2.1 pts
-0.2 pts
+0.5 pts
Liqueurs & Spirits
30.0
30.3
-1.1%
-3.3%
+34.3%
As% of sales
16.5%
14.7%
+1.8 pts
+1.5 pts
-0.5 pts
Subtotal: Group brands
156.5
175.6
-10.9%
-15.4%
-2.9%
As % of sales
29.9%
28.2%
+1.7 pts
+0.1 pts
-1.4 pts
Partner brands
(0.6)
0.2
-408.6%
-431.0%
+14.5%
Holding Company costs
(8.6)
(6.7)
+27.9%
+27.8%
-4.9%
Total
147.3
169.1
-12.9%
-17.6%
-2.8%
As % of sales
27.6%
26.6%
+1.0 pts
-0.5 pts
-1.2 pts
Cognac
Cognac division sales fell -17.5% on an organic
basis, including a -14.2% slide in volume and -3.3% of price mix.
This primarily reflected ongoing inventory adjustments in the
Americas, where the market was shaped by normalization of
consumption, high interest rates, and a fiercely promotional
environment. At the same time, the APAC1 region reported a limited
fall thanks to growth in sales of Rémy Martin CLUB and e-commerce
in China. Lastly, the EMEA2 region showed a marked decline in sales
that was affected by the intensely promotional market in Europe and
destocking effects in Africa.
Current Operating Profit fell -17.9% on an organic basis
to total €126.5 million, with current operating margin all but
unchanged at -0.2 points on an organic basis, and up +2.1 points to
37.0% as reported. These trends reflect a steep fall in sales and a
-1.0-point decline in gross margin on an organic basis (down from a
high basis of comparison) due to rising production costs and an
unfavorable mix effect. At the same time, the Group cut back its
marketing and communication spend, taking a more targeted approach.
Even so, outlays were higher than in 2019-20. Lastly, the
implementation of strict controls on overhead costs helped mitigate
the impact of lower sales.
Liqueurs & Spirits
In the Liqueurs & Spirits division, sales fell
-12.0% on an organic basis, including a -12.6% decline in volume
and an +0.6% rise due to price mix. These trends reflected a
tougher market in the Americas, despite resilient
depletions3 in the United States, a slowdown in the whisky
category in China, and lower consumption in Southeast Asia. By
contrast, growth in the EMEA region bounced back in the second
quarter, driven by a number of activations over the summer.
Current Operating Profit edged down -3.3% on an organic
basis to total €30.0 million, with a sharp rise in margin—up +1.5
points on an organic basis, and up +1.8 points to 16.5% as
reported. This trend reflected a lower gross margin (-2.0 points on
an organic basis) due to rising production costs and a negative mix
effect, entirely offset by a more selective approach to investment
in marketing and communications and a reduction in overheads.
However, after several years of overweighting the marketing and
communications investment in Liqueurs & Spirits (compared with
the Cognac division’s spend) to boost brand awareness, current
outlays are still well above levels observed in 2019-20.
Partner Brands
Sales of Partner Brands were down -25.0% on an organic
basis.
Current Operating Profit stood at -€0.6 million in the
first half of 2024-25, compared with €0.2 million in the first half
of 2023-24.
Consolidated results
Current Operating Profit (COP) stood at €147.3 million,
down -12.9% as reported (-17.6% on an organic basis). This includes
a -15.4% organic decline in Current Operating Profit for Group
brands, a negative contribution from Partner Brands, and a slight
increase in holding company costs, as most cost optimizations were
achieved in the first half of 2023-24.
These figures include a positive currency effect of +€7.9
million, primarily linked to trends in the US dollar. The average
euro/dollar exchange rate stood at 1.09 in H1 2024-25, unchanged
from H1 2023-24, while the average collection rate improved from
1.12 in H1 2023-24 to 1.07 in H1 2024-25.
Current Operating Margin stood at 27.6%, down -0.5 points
on an organic basis (-1.2 points compared to H1 2019-20) and up
+1.0 points as reported. This reflects the combined impact of:
- a 1.4-pt organic decline in gross margin (nonetheless up
+3.0 pts compared to 2019-20) to a persistently high 72.5%, due to
high production costs and, to a lesser extent, a negative mix
effect.
- A lower marketing and communications spend (an organic
decrease of 3.4 pts in ratio to sales), to a level that nonetheless
remains well above that observed in 2019-20 (up 3.5 pts).
- A controlled rise in the overhead cost ratio (an organic
increase of 2.6 pts in ratio to sales, i.e. up 0.7 pts compared to
2019-20) despite a 6.8% reduction in the cost base on an organic
basis.
- A favorable currency effect of +1.6 pts.
Operating profit totaled €147.5 million in H1 2024-25,
down -12.8% as reported. This includes +€0.2 million in other
operating income and expense.
Financial expense totaled -€21.1 million in H1 2024-25
(vs. -€15.7 million in H1 2023-24). This reflects the full-year
impact of the €380 million bond issue made in September 2023.
Taxes came to €34.8 million, for an effective tax rate of
27.5% in H1 2024-25 (27.7% excluding non-recurring items), compared
with 26.6% in H1 2023-24 (unchanged when adjusted for non-recurring
items). This marginal difference was due primarily to changes in
the geographical mix of business.
Net profit – Group share stood at €92.0 million, down
-18.6% as reported, setting net margin at 17.2%, down -0.5 points
as reported.
EPS – Group share was €1.80, down 19.4% as reported
compared with H1 2023-24.
Net debt totaled €644.3 million, down €5.4 million from
31 March 2024. The trend in free cash flow reflects the drop in
EBITDA, which was partially offset by efforts to optimize working
capital requirement and capital expenditures.
As a result, the ratio of net debt/EBITDA came to 1.90x
at 30 September 2024, compared to 1.68x on 31 March 2024 and 1.57x
on 30 September 2023.
Outlook confirmed and
quantified
In light of a persistent lack of visibility on the timing of
recovery in the United States, and worsening market conditions in
China, Rémy Cointreau has assumed the following trends in
2024-25:
- Americas: no return to growth before the fourth quarter
of 2024-25 at the earliest
- APAC: sequential sales deterioration in the second half
compared with the first half
- EMEA: continued subdued consumer trends in the second
half of the year
In this worsening economic environment, Rémy Cointreau remains
determined to protect as much as possible its current operating
margin (in organic terms), through continued tight cost controls
and implementation of a new cost-cutting plan totaling more than
€50 million.
As a result, for full-year 2024-25, Rémy Cointreau
expects:
- An organic sales decline of between -15% and -18%
- Current operating margin to stand between 21% and 22% on
an organic basis.
Rémy Cointreau expects exchange rates to have the following
full-year impact:
- Sales: between -€4m and -€8m (primarily in
H2)
- COP: between +€5m and +€10m (primarily in
H1)
The Group has also taken note of the provisional decision of
the Chinese Ministry of Commerce (MOFCOM) to apply additional
duties of 38.1% on cognac imports coming into China starting
October 11, 2024. If this decision is confirmed, the impact would
be marginal for the 2024-25 fiscal year, and the Group would
activate its action plan to mitigate the effects from 2025-26.
2024-25 will be a year of transition, with highlights including
finalization of destocking in the Americas, and 2025-26 will mark a
resumption of the trajectory set for 2029-30:
- high single-digit annual growth in sales on average and on an
organic basis
- a gradual organic improvement in Current Operating Profit
margin
Rémy Cointreau reiterates its financial targets for
2029-30: a gross margin of 72% and a Current Operating
Margin of 33% based on 2019-20 consolidated scope and exchange
rates.
A webcast for investors and analysts will be held today,
starting at 9.00 (CET) with Marie-Amélie de Leusse, Chairwoman;
Eric Vallat, CEO; and Luca Marotta, CFO. Presentation slides are
available online at www.remy-cointreau.com under “Finance”.
Post-closing events
Anti-dumping investigation into imports
of European brandy entering China
Since 5 January 2024, Rémy Martin has been the target of
anti-dumping proceedings as part of an investigation launched by
the Ministry of Commerce of the People’s Republic of China
(MOFCOM). This investigation concerns all European producers of
distilled grape exported to China.
On 8 October 2024, MOFCOM announced that a deposit would be
required, based on provisional anti-dumping duties, for all
products entering China after 11 October 2024. For Rémy Martin
cognacs, it set this provisional additional duty at 38.1%.
On 11 November 2024, MOFCOM announced that a bank guarantee
would be an acceptable means of meeting the deposit requirement.
Based on the schedule for anti-dumping proceedings, the final
amount due will be confirmed by 5 January 2025, with a possible
6-month extension (anti-dumping proceedings cannot exceed 18
months).
Rémy Cointreau contests the methodology used to calculate these
duties, which do not reflect its export model focusing on the
premium end of the market. Proceedings are currently underway and
concern all players in the sector in France and in the European
Union. The outcome is uncertain. There was no impact on financial
statements at 30 September 2024 beyond external legal and
administrative expenses recorded under “Other non-recurring income
and expenses”.
If these provisional duties are confirmed, the full-year impact
would be marginal for the 2024-25 fiscal year, and the Group would
activate its action plan to mitigate the effects from 2025-26
on.
Rémy Cointreau acquires stake in
ecoSPIRITS, first investment for RC Ventures
RC Ventures, Rémy Cointreau’s new corporate venture capital
fund, has made its first investment by taking a minority stake in
ecoSPIRITS. The start-up has just closed a strategic financing
round, with RC Ventures joining other key investors.
EcoSPIRITS is a circular economy start-up which specializes in
low carbon distribution technology for premium spirits and wines.
Its closed loop packaging system fully replaces the single use
glass bottle, eliminating virtually all packaging waste in the
supply chain and significantly reducing carbon emissions.
Becoming a shareholder cements the existing operational
relationship between ecoSPIRITS and Rémy Cointreau, which began in
2022.
RC Ventures was created to support the growth of high-potential,
innovative start-ups that share Rémy Cointreau’s vision and values
in the wider world of wines and spirits. Rémy Cointreau works
through the fund to offer these young companies financial support
and to share its operational expertise. Yet while the start-ups
will tap into the experience of its global teams, the Group is keen
to preserve the autonomy and fierce entrepreneurial spirit that are
vital to their ability to create value.
At the same time, RC Ventures will help Rémy Cointreau
anticipate and test new market trends, reinforce its innovative
capacity and explore new product categories, client experiences,
and technologies within the wine and spirits ecosystem. RC Ventures
will be fully operational from 2025-26.
Appendices
Sales and Current Operating Profit by
division
€m (unless otherwise stated)
H1 2024-25
H1 2023-24
Change
Reported
A
Organic
B
Reported
C
Reported
A/C-1
Organic
B/C-1
Sales
Cognac
341.5
343.0
416.1
-17.9%
-17.5%
Liqueurs & Spirits
181.7
181.8
206.7
-12.1%
-12.0%
Subtotal: Group Brands
523.2
524.9
622.7
-16.0%
-15.7%
Partner Brands
10.5
10.5
14.0
-24.7%
-25.0%
Total
533.7
535.3
636.7
-16.2%
-15.9%
Current Operating Profit
Cognac
126.5
119.3
145.3
-13.0%
-17.9%
As % of total sales
37.0%
34.8%
34.9%
+2.1 pts
-0.2 pts
Liqueurs & Spirits
30.0
29.3
30.3
-1.1%
+3.3%
As% of total sales
16.5%
16.1%
14.7%
+1.8 pts
+1.5 pts
Subtotal: Group Brands
156.5
148.6
175.6
-10.9%
-15.4%
As % of total sales
29.9%
28.3%
28.2%
+1.7 pts
+0.1 pts
Partner Brands
(0.6)
(0.6)
0.2
-408.6%
-431.0%
Holding Company costs
(8.6)
(8.6)
(6.7)
+27.9%
+27.8%
Total
147.3
139.4
169.1
-12.9%
-17.6%
As % of total sales
27.6%
26.0%
26.6%
+1.0 pts
-0.5 pts
Summary income statement
€m (unless otherwise stated)
H1 2024-25
H1 2023-24
Change
Reported
Organic
Reported
Reported
Organic
A
B
C
A/C-1
B/C-1
Sales
533.7
535.3
636.7
-16.2%
-15.9%
Gross margin
386.9
379.3
459.9
-15.9%
-17.5%
Gross margin (%)
72.5%
70.9%
72.2%
+0.3 pts
-1.4 pts
Current Operating Profit
147.3
139.4
169.1
-12.9%
-17.6%
Current operating margin (%)
27.6%
26.0%
26.6%
+1.0 pts
-0.5 pts
Other non-current income and expenses
0.2
0.2
-
-
-
Operating profit
147.5
139.5
169.1
-12.8%
-17.5%
Net financial result
(21.1)
(21.9)
(15.7)
+34.4%
+39.8%
Profit before Tax
126.4
117.6
153.4
-17.6%
-23.3%
Corporate income tax
(34.8)
(32.4)
(40.8)
-14.7%
-20.6%
Tax rate (%)
(27.5%)
(27.5%)
(26.6%)
-1.0 pts
-1.0 pts
Share in profit (loss) of
associates/minority interests
0.4
0.4
0.4
+4.8%
+4.8%
Net profit – Group share
92.0
85.6
113.0
-18.6%
-24.2%
Net margin (%)
17.2%
16.0%
17.7%
-0.5 pts
-1.8 pts
Net profit – Group share excl.
non-recurring items
91.6
85.2
113.0
-19.0%
-24.6%
Net margin excl. non-recurring items
(%)
17.2%
15.9%
17.7%
-0.6 pts
-1.8 pts
EPS – Group share (€)
1.80
1.68
2.24
-19.4%
-24.9%
EPS – Group share, excluding
non-recurring items (€)
1.80
1.67
2.24
-19.7%
-25.3%
Cash-Flow statement
As of September 30 (in €m)
2024
2023
Change
Opening net financial debt (April
1st)
(649.7)
(536.6)
-113.1
Gross operating profit (EBITDA)
174.3
195.4
-21.2
WCR for eaux-de-vie and spirits in ageing
process
(3.4)
(0.8)
-2.6
Other working capital items
(115.3)
(172.1)
+56.8
Capital expenditure
(26.8)
(45.8)
+19.1
Financial expenses
(28.8)
(13.9)
-15.0
Tax payments
(1.4)
(61.8)
+60.4
Net flows on other non-current income and
expenses
(6.2)
-
-6.2
Free Cash-Flow
(7.6)
(99.0)
+91.4
Other proceeds/disposals
3.2
0.3
+3.0
OCEANE conversion impact on Financial
debt
-
50.8
-50.8
Conversion differences and others
9.8
(5.9)
+15.7
Other Cash flow
13.0
45.2
-32.2
Total cash flow for the period
5.4
(53.8)
+59.2
Closing net financial debt (September
30)
(644.3)
(590.5)
-53.8
A Ratio (Net debt/EBITDA)
1.90
1.57
0.33
Balance sheet
As of September 30 (in €m)
2024
2023
Non-current assets
1,029.0
1,023.4
Current assets
2,344.6
2,520.3
o/w inventories
1,973.0
1,839.3
o/w Cash and equivalent
48.6
277.6
Total Assets
3,373.5
3,543.7
Shareholders’ equity
1,899.8
1,778.2
Non-current liabilities
585.4
758.5
o/w Long-term financial debt
511.4
691.5
Current Liabilities
888.3
1,006.9
o/w Short-term financial debt
181.5
176.6
Total Liabilities and Shareholders’
equity
3,373.5
3,543.7
Definitions of alternative
performance indicators
Due to rounding, the sum of values presented in this document
may differ from totals as reported. Such differences are not
material.
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 the Group’s
performance. These alternative performance indicators should be
considered as supplementing those included in the consolidated
financial statements and the resulting movements.
Organic growth in sales and Current Operating Profit
Organic growth is calculated excluding the impact of exchange
rate fluctuations, acquisitions and disposals. This indicator
serves to focus on Group performance common to both financial
years, which local management is more directly capable of
measuring.
The impact of exchange rates is calculated by converting sales
and Current Operating Profit for the current financial year using
average exchange rates (or, for Current Operating Profit, the
hedged exchange rate) from the previous financial year.
For acquisitions in the current financial year, sales and
Current Operating Profit of acquired entities are not included in
organic growth calculations. For acquisitions in the previous
financial year, sales and Current Operating Profit of acquired
entities are included in the previous financial year; however, they
are only included in current year organic growth calculations with
effect from the anniversary date of the acquisition.
For significant disposals, data is post-application of IFRS 5,
under which results of entities disposed of are systematically
reclassified under “Net earnings from discontinued operations”.
Indicators “excluding non-recurring items”
The two items set out below constitute key indicators for
measuring recurring business performance, since they exclude
significant items which, by virtue of their unusual nature, cannot
be considered inherent to the Group’s ongoing performance:
- Current Operating Profit consists of operating profit
before other non-recurring operating income and expenses.
- Net profit attributable to the Group excluding non-recurring
items consists of net profit attributable to the Group adjusted
to exclude other non-recurring operating income and expenses,
associated tax effects, profit from deconsolidated, divested and
discontinued operations and the contribution from dividends paid in
cash.
Gross operating profit (EBITDA)
This measure, which is used in particular to calculate certain
ratios, equates to Current Operating Profit less amortization and
depreciation expenses on intangible assets and property, plant and
equipment for the period, expenses arising from stock option plans,
and dividends received from associates during the period.
Net debt
Net financial debt as defined and used by the Group is equal to
the sum of long- and short-term financial debt and accrued
interest, less cash and cash equivalents.
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 1,943 employees and on its
distribution subsidiaries established in the Group’s strategic
markets. Rémy Cointreau is listed on Euronext Paris.
Regulated information in connection with this
press release can be found at www.remy-cointreau.com
________________________ 1 Asia-Pacific 2 Europe, Middle East
and Africa 3 Wholesalers’ sales to retailers
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241127761623/en/
Investor relations: Célia d’Everlange /
investor-relations@remy-cointreau.com Media relations:
Mélissa Lévine / press@remy-cointreau.com
Grafico Azioni Remy Cointreau (EU:RCO)
Storico
Da Gen 2025 a Feb 2025
Grafico Azioni Remy Cointreau (EU:RCO)
Storico
Da Feb 2024 a Feb 2025
