Market Overview

Rémy Cointreau: First-quarter sales 2018/2019 (April 2018 – June 2018)

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A solid start to the year
Group Brands deliver a strong performance
(+8.8%*)
2018/19 guidance confirmed

Regulatory News:

Rémy Cointreau (Paris:RCO) posted sales of €241.5 million in the first
quarter of its 2018/19 financial year, up 0.5% in reported terms. This
reflects organic growth (at constant exchange rates and scope) of 5.9%,
partially offset by unfavourable currency effects.

The Group Brands (+8.8%) had a strong start to the year:
The House of Rémy Martin pursued its upward momentum (+11.1%*)
underpinned by remarkable growth in Greater China and Travel Retail. The Liqueurs
and Spirits
division renewed its growth (+2.8%*) in the first
quarter, driven by the Houses of Cointreau and Metaxa, as
well as the single malt whiskies and The Botanist
gin. Partner Brands continued their decline, in line with the
Group's strategy to gradually refocus on the Group Brands.

Geographically speaking, Asia Pacific posted an excellent performance in
the first quarter, thanks to highly robust trends in Greater China,
Singapore, and Japan. Growth in the Americas was slowed by anticipated
price increases in the beginning of the financial year and will
normalize in the following quarters. The end of distribution contracts
for Partner Brands weighed on the Europe, Middle East & Africa (EMEA)
region and masks a solid underlying performance in Russia, the United
Kingdom and Germany.

Sales breakdown by division:

         
    Pre IFRS 15   Post IFRS 15
  3 months   3 months   Change   3 months
(€ millions)  

to 30/06/18

 

to 30/06/17

 

Reported

 

Organic (*)

 

to 30/06/18

House of Rémy Martin 163.5 156.6 4.4%   11.1% 147.0
Liqueurs & Spirits 57.8 58.6 -1.3% 2.8% 55.3
Subtotal: Group Brands 221.3 215.2 2.8% 8.8% 202.3
Partner Brands 20.2 25.0 -19.2% -19.7% 20.0
Total   241.5   240.2   0.5%   5.9%   222.2

House of Rémy Martin

The House of Rémy Martin continued its positive momentum in the
first quarter (+11.1% in organic terms), thanks to highly favourable
trends persisting in Greater China and sustained growth in Singapore,
Australia, and Japan. The more modest trends in the Americas and EMEA
regions can be explained by the anticipated price increases in the
beginning of the financial year.

The remarkable performance of the House was fuelled by a number of
creative initiatives launched by its two brands during the first
quarter: LOUIS XIII opened two new boutiques — one at the
Harrod's in London and the other at Xian in China. Rémy Martin
unveiled its limited-edition XO Cannes 2018 available exclusively in
Travel Retail. The brand also partnered with the American kinetic artist
Matt W. Moore to design a limited-edition Rémy Martin VSOP and the App
"ARt" using augmented reality, which combines the strong symbols of the
House with his iconic "Vectorfunk" abstract graphics.

Liqueurs & Spirits

The Liqueurs & Spirits division renewed its growth in the first quarter
(+2.8% in organic terms), fuelled by the launch of new communication
campaigns.

The House of Cointreau had a solid start to the year. The launch
of its new campaign "The Art of the Mix" and its activations surrounding
the 70th anniversary of the Margarita are beginning to
bear fruit. The Americas region and the United Kingdom recorded sound
results over the period, and the brand continued its rapid development
in Asia-Pacific. The House of Metaxa enjoyed healthy growth in
Russia/CIS, in Germany and in Travel Retail during the first
quarter.

Mount Gay and St-Rémy had a soft start to the year, as
part of the strategy to reposition these brands upmarket, while The
Botanist
achieved exceptional growth across all geographical areas.
Finally, the vitality of the Whisky business unit primarily
reflects an outstanding performance of the Scottish single malts: the
Progressive Hebridean Distillers have recently unveiled their new
campaign #WeAreIslay, which will be launched in the coming months, along
with new packaging for Port Charlotte.

Partner Brands

Sales continue to decline (-19.7% in organic terms), due to the
termination of new distribution contracts with third-party brands.

2018/19 outlook

On the heels of this positive start to the year, Rémy Cointreau confirms
its guidance of growth in Current Operating Profit over the financial
year 2018/19, assuming constant exchange rates and consolidation scope.

Appendices:

Sales and organic growth by division

Sales in the first-quarter 2018-19 (April to June 2018)

         
    Pre-IFRS 15   Post-IFRS 15
  Reported

18-19

  Currency

18-19

  Organic

18-19 (*)

  Reported

17-18

  Change :

Reported

  Change :

Organic (*)

  Reported

18-19

(€ millions)   A       B   C   A/C-1   B/C-1    
House of Rémy Martin 163,5 -10,5 174,0 156,6 4,4% 11,1% 147,0
Liqueurs & Spirits 57,8 -2,4 60,3 58,6 -1,3% 2,8% 55,3
Subtotal: Group Brands 221,3 -12,9 234,3 215,2 2,8% 8,8% 202,3
Partner Brands 20,2 0,1 20,1 25,0 -19,2% -19,7% 20,0
Total   241,5   -12,8   254,4   240,2   0,5%   5,9%   222,2

Definitions of alternative performance indicators

Rémy Cointreau's management process is based on the following
alternative performance indicators, chosen for planning and reporting.
The Group management considers that these indicators provide financial
statement users with useful additional information for understanding the
Group's performance. These alternative performance indicators should be
considered as supplementing those included in the consolidated financial
statements and the resulting movements.

Starting on April 1st 2018, the Rémy
Cointreau Group applied the standard "IFRS 15 – Revenue from Contracts
with Customers." For the transition, the Group did not opt for
retrospective application. Thus, the comparative period has not been
restated and organic growth is calculated using turnover which excludes
the impact of IFRS 15. The main effect of this standard is the
reclassification of some SG&A costs (notably some promotional expenses)
in deduction of net sales. Its estimated impact on the full-year is a
reduction in net sales amounting to 8% and an accretive effect of about
1.5 points on the Current Operating Margin.

Organic sales growth

Organic growth is calculated excluding the impacts of variations in
exchange rates as well as acquisitions and disposals.

The impact of exchange rates is calculated by converting sales for
the current financial year into the exchange rate of the previous
financial year.

For acquisitions in the current financial year, the sales of the
acquired entity are not included in organic growth calculations. For
acquisitions in the previous financial year, the sales of the acquired
entity are included in the previous financial year but are only included
in organic growth calculations for the current year starting from the
anniversary date of the acquisition.

For significant disposals, we use data following the application of
IFRS 5, which systematically reclassifies the sales of the sold entity
in "Net profit from activities sold or to be sold" for the current and
previous financial year.

This indicator serves to focus on Group performance common to both
financial years, which local management is more directly capable of
influencing.

(*) Organic growth is calculated assuming constant exchange rates and
consolidation scope.

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