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?

Crystal Head Vodka revives 'knock-off' lawsuit

Globefill Inc has returned to court in a trade dress infringement case against more...

Deep Eddy Vodka hits one million case sales

Heaven Hill Brands-owned Deep Eddy Vodka has exceeded one million annual case more...

Jameson launches two RTD cans in UK

Jameson is continuing its efforts to “recruit younger consumers into the more...

Judge dismisses Empire/Breakthru fraud case

A US judge has dismissed a fraud case brought by Empire Merchants against more...

Stoli targets millennials with new TV ad

Stolichnaya Vodka has unveiled its first television commercial in seven years more...

Jägermeister on 'solid' growth trajectory

German herbal liqueur brand Jägermeister recorded "solid" single-digit volume more...

Diageo opens Bulleit Distilling Co in Kentucky

Diageo has officially opened its US$115 million Bourbon distillery in Shelby more...

Gin added to UK inflation basket

Gin has been added to the inflation basket after a 13-year absence due to the more...

HSBC bullish on spirits stock investments

Vodka has edged whisky as the preferred spirit among Britons, according to a more...

Baijiu category beats whisky on value

The global baijiu category has overtaken whisky to become the most valuable more...

Jägermeister grows exec board to three

Mast-Jägermeister has appointed Christopher Ratsch as its latest board member, more...

Distell and Stock Spirits ink UK distribution deal

Central and Eastern European producer Stock Spirits has expanded its more...

Halewood secures £50m to grow portfolio

Whitley Neill gin maker Halewood Wines & Spirits has secured a £50 million more...

Constellation Brands boosts paid parental leave

US-based drinks group Constellation Brands has expanded its paid parental leave more...

Rémy Martin unveils XO Cannes release

Cannes Film Festival's official supplier Rémy Martin has unveiled its annual more...

Top 10 little-known Irish whiskey facts

From the world's most expensive bottling to the origin of the Irish coffee, we more...

Sidney Frank rebrands as Mast-Jägermeister US

Sidney Frank Importing Company has changed its name to Mast-Jägermeister US more...

Boutique-y intros gin with botanicals sent into space

Newly formed That Boutique-y Gin Company has launched a gin made exclusively more...

Vinexpo sets sights on US in 2018

After success in Europe and Asia, the team behind international wine and more...

Fever-Tree celebrates 'exceptional' FY results

Premium tonic and mixer brand Fever-Tree has hailed an "exceptional year of more...