Rémy posts profit gains bolstered by China

Rémy Cointreau’s reported operating profit soared 15.9% in the first half of the 2016/17 financial year, buoyed by the continuing recovery in China led by the group’s “highest-end” products.

Rémy Cointreau’s H1 sales were bolstered by the “highest-end” products. Pictured here is Rémy Martin’s Louis XIII Black Pearl

Sales hit €513.4 million for the period, up 2.5% on a reported basis, while the augmented operating profit reached €123.9m.

A positive foreign exchange effect also bolstered the headline numbers, and offset increased investments in communication activities.

Excluding non-recurring items, the group share of net profit stood at €76 million, up 11.8% on a reported basis.

The latest statement follows the disclosure of Rémy Martin’s first-half sales in October which showed reported sales for the six months to September grew 2.5%, with the second quarter posting 6.2% gains.

Sales for the 2016/17 first quarter slipped 2.1% to €218.6 million, with the Rémy Martin Cognac brand decreasing by 3.2%.

The first half was an eventful one for the group. In addition to issuing a convertible 10-year bond for €275m in September, the group also entered into an agreement with Lucas Bols for a Passoã joint venture, and announced it was looking to acquire the Domaine des Hautes Glaces distillery.

Cognac brand Rémy Martin was a star H1 performer, posting 5.1% organic sales growth, with profits up 18.7% on a reported basis.

According to Rémy Cointreau, the growth is attributed to “outstanding performances” in the Americas region and “renewed growth” in Greater China.

Earlier this year CEO Eric Vallat confirmed the brand would pull its VS expressions, which resulted in favourable volume and mixed effects, with growth coming from the brand’s high-end expressions.

While macroeconomic and technical factors were a “drag” on 2015/16 performances, the Liqueurs & Spirits portfolio was “back on track” in H1 2016/17. Organic sales growth stood at 5.1%, with core European and US markets driving the recovery.

Cointreau posted a “solid” performance led by the US and France, while Metaxa “confirmed its return to growth” with improved momentum in CIS/Russia and a stabilisation in Greece.

The Islay Spirits portfolio – Bruichladdich, Port Charlotte and Octomore Scotch whiskies and The Botanist gin – continued to record double digit growth, however Mount Gay and St-Rémy rums saw a sales dip as the upscaling process accelerates.

“Fully in line with the Group’s forecasts, Rémy Cointreau confirms its guidance of growth in current operating profit over the financial year 2016/17, assuming constant exchange rates and consolidation scope,” the group said in its statement.