Rémy Cointreau reports mixed Q1 performanceBy Kristiane Sherry
Rémy Cointreau generated sales of €223.3 million for the first quarter of 2015/16, achieving reported growth of 3.9%.
However organic sales declined by 9.0%, a fall “in line with expectations,” the Group said in a statement.
Asia Pacific and the Americas saw weakness due to “technical effects”, while Europe, Middle East and Africa (EMEA) posted a healthy performance.
The Group has implemented a Strategic Plan, which is impacting performance as expected. Key aspects of the Plan include a focus on improving product mix, adapting the global distribution network, and streamlining on-trade contacts in China.
Q1 does not traditionally make a significant contribution to annual sales, the Group noted. It also confirmed its objective of delivering positive growth in current operating profit for the 2015/16 fiscal year at constant exchange rates and scope.
Performance by product group
Rémy Martin performed well across EMEA, bolstered by strong growth in African markets, the UK, France and Germany, in addition to accelerated demand in the US, the Group said.
However the brand was hit by the accelerated introduction of the Strategic Plan, and the continued caution of wholesalers across China.
The Liqueurs and Spirits division recorded declining sales (down 13.8% in organic terms) following several quarters of very strong growth. The Group attributes the weak performance to the effect on strong comparables in the US, the timing of Easter, distributor changes in certain markets, and macroeconomic factors, especially in Russia and Greece.
Cointreau saw slight growth in Western Europe, bolstered by the introduction of Cointreau Blood Orange, a travel retail exclusive available in major European and US airports.
Metaxa sales fell significantly over the quarter as consumption fell in Greece, Eastern Europe and in travel retail as Russian customer spend weakened. However Central Europe maintained double digit growth.
Mount Gay performed well over the period, posting double digit growth thanks to favourable mix effects – in particular, Black Barrel and XO – in the US, Barbados, France and in travel retail.
Islay spirits Bruichladdich and The Botanist continued to perform well thanks to new account listings in target markets: travel retail, the US, Japan, France, Germany and Belgium.
St-Rémy sales decreased primarily due to Canadian distributor changes, while Passoa’s decline was attributed to a high comparable in France (the impact of the 2014 FIFA World Cup) and the highly competitive Western European market.
Partner brand sales continue to perform well in EMEA, however the end of the Piper Heidsieck and Charles Heidsieck distribution contract in the US impacted the division’s performance.