Rémy ‘confident’ in growth despite profit plunge

5th June, 2014 by Amy Hopkins

French drinks group Rémy Cointreau has predicted a return to growth in the next year despite a massive net profit decline of 46.9% in 2013/14.

Remy-Cointreau

Rémy Cointreau is “confident” that it will see a return to growth in 2014/15 despite significant declines in the past year

Announcing its full year financial results for 2013/14, the Rémy Martin and Mount Gay rum producer revealed that its profits totalled €80.2m, compared to €151.5m in previous year, while its sales dropped by 13.5% to €1,031 billion, compared with €1,193bn in 2012/13.

The company has experienced a number of difficulties in the past year, predominantly for its Rémy Martin Cognac, which has been hit by a widespread crackdown on extravagant spending in the Chinese market.

As such, the brand suffered a sales decline of 20.8% to €551.2m and operating profit decline of 43.9% to €125.4m due to an intentional destocking effort in China.

Shock departures

Adding to Rémy Cointreau’s woes in 2013/14 was the shock resignation of its CEO Frédéric Pflanz in January this year, having only taken up the role three months previously.

Meanwhile, later that same month, Patrick Piana, CEO of Rémy Cointreau’s Cognac business Rémy Martin, also left his post.

Both of these surprise departures caused the group’s credit rating to be downgraded to “negative” by Fitch Ratings. However, its shares were later driven up 11% in April this year amid rumours suggesting the company was being eyed for takeover by Brown-Forman.

Sales of the group’s Cointreau liqueur experienced a “slight decline”, however Metaxa and Mount Gay rum saw double-digit growth. Overall, Rémy Cointreau’s spirits and liqueurs sales, excluding Remy Martin, grew by 3.3% to €237.3m, but operating profit dropped 21.2% to €37.1m due to a “competitive European environment”.

“Uncertain” environments

Looking at the year ahead, Rémy noted that environments remained “uncertain” due to a “transforming” Chinese spirits market and a “weak” macro-economy in Western Europe.

However, it asserted its “confidence” that it will experience a return to growth in 2014/15 due to its management policies, “prudent” inventories and “resolute” pricing.

“Rémy Cointreau remains convinced of the relevance of its high value strategy and the upmarket positioning of its brands in the context of strong global demand for authentic and superior quality spirits,” a statement from the group read.

“As a result, the group will resolutely pursue its marketing investment, its creative innovations and the expansion of its distribution network, whilst maintaining strict cost control.

“All these elements make the group confident in its ability to return to profitable and steady growth in the future.”

Leave a Reply

If that's interesting, how about these?

NZ proposes 68-hour Rugby World Cup booze bill

An alcohol watchdog has slammed proposals by MPs to permit New Zealand bars to more...

Pernod Ricard launches social media guide

Pernod Ricard UK has launched a social media guide aimed at retailers to help more...

John Dewar & Sons powers Scottish homes

John Dewar & Sons is upholding its commitment to sustainability with a new more...

Alcohol sales in Scotland on the rise

Alcohol sales in Scotland increased last year, bucking the downward trend since more...

Gin and vodka boost UK summer spirits sales

Gin and vodka have been identified as the main value drivers in the UK spirits more...

Brown-Forman sees marginal sales decline

Brown-Forman has seen a marginal decline in its Q1 reported net sales, however more...

Vodka's performance in six key markets

Vodka may be hot stuff in some of the world’s emerging markets, but in its more...

1897 Quinine Gin launches in UK

Maverick Drinks has introduced 1897 Quinine Gin on World Mosquito Day, with more...

Amarula producer reports strong spirits sales

Amarula liqueur and Bisquit Cognac producer Distell has reported a 10.4% more...

Quintessential Brands eyes travel retail growth

Bloom Gin owner Quintessential Brands has added three new members to its more...

Heaven Hill acquires Deep Eddy Vodka

Heaven Hill Brands has acquired fast-growing Deep Eddy Vodka, just three months more...

Pernod Ricard's top brands in 2014/15

While a significant number of Pernod Ricard’s key brands reported flat or more...

US spirits consumption up for 18th year

Spirits consumption in the US has increased for the 18th consecutive year, with more...

Polish woes persist for Stock Spirits as sales dive

Leading Central and Eastern European spirits group Stock Spirits has seen its more...

Stock Spirits to treble UK business with new team

Following the announcement that Stock Spirits’ sales and profits plummeted in more...

Fast-ageing reactor to 'revolutionise' craft spirits

Silicon Valley-based Lost Spirits Technology has patented a new “ageing more...

Southern Comfort expands makeover to RTDs

Southern Comfort has redesigned the packaging of its ready-to-drink range for more...

Pernod Ricard writes down value of Absolut

Pernod Ricard has been hit by a 15% drop in 2014/15 full year net profits more...

Cognac fan downs bottle in airport LAGs dispute

A Chinese passenger who was told at airport security that she could not board a more...

The week in pictures

Boozy sorbets, asparagus munching, whisky-containing ice sculptures and another more...