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?

Pernod Q3 sales struggle due to China slump

French drinks group Pernod Ricard has reported a 3% sales decline in its fiscal more...

Shareholder revolt leads to Stock CEO resignation

Stock Spirits Group's CEO Chris Heath has stepped down from the company with more...

Courvoisier launches China exclusive expression

Beam Suntory has introduced Courvoisier Gala Club, a no-age-statement Cognac more...

Hine marks Queen's birthday with single vintages

The only Cognac house to hold a Royal Warrant, Hine has launched a pair of 1986 more...

Patrón CMO concern over 'inferior products'

Following an influx of new and recently acquired Tequila brands, Patrón more...

Reward for return of stolen Pappy Van Winkle

A reward of several thousand US dollars is being offered to anyone who can more...

Rémy Cointreau confirms Asia rebound

French drinks group Rémy Cointreau has bounced back from long-running more...

Stock says shareholder has 'conflict of interest'

Stock Spirits Group has urged shareholders to reject resolutions proposed by more...

Rémy GTR intros limited Cognac collection

Rémy Cointreau Global Travel Retail has launched the first expression in Carte more...

Angel's Envy founder invests in Bourbon brand

A new spirits sales and marketing firm launched by the co-founder of Angel’s more...

One in three parents would buy children alcohol

More than one third of parents in the UK would buy alcohol for their underage more...

Nielsen CGA publishes first on-trade report

Gin sales in the UK on-trade grew 13.6% in the 12 months leading up to the end more...

Walsh Whiskey announces new distribution deals

Walsh Whiskey Distillery has agreed two new distribution deals to expand its more...

Danzka Vodka makes return to US market

Danzka Vodka will return to the US market after signing a distribution deal more...

Brown-Forman splashes £285m on Scotch brands

Brown-Forman has reached a “definitive agreement” to acquire The BenRiach more...

SPI Group names Dmitry Efimov as CEO

Stolichnaya Vodka producer SPI Group has appointed Dmitry Efimov as its new CEO more...

William Grant family wealthiest in UK spirits

The family owners of Scotland-based William Grant & Sons have retained their more...

Bonhams HK to sell 100-year-old Rémy Martin

Bonhams Hong Kong is readying to host its Fine Wine, Whisky and Cognac Sale, more...

Oldest Cognac secures Guinness World Record

Cognac Gautier 1762 has been officially recognised by the Guinness World more...

Rémy Cointreau adds new director to GTR team

Rémy Cointreau has a new marketing and business development director for more...