Cognac recovery buoys Rémy Cointreau sales

Rémy Cointreau’s full year sales increased 8.9% to reach €1.05bn (US$1.19bn) in 2015/16, largely driven by the continued recovery of the Cognac market.

Rémy Cointreau CEO Eric Vallat (left) and One Life/Live Them ambassador Jeremy Renner as One LIfe/Live Them launches

Current operating profit stood at €178.4 million, up 6.1% organic (+14.4% reported), in line with the growth targets set in June 2015. Rémy Cointreau cited optimised overheads and the strong performance of its “exceptional spirits” (priced above US$50) as growth drivers.

Consolidated net profit increased 10.6% to €102.4 million, while net profits soared 16.7% to €110.4 million, excluding non-recurring items.

Net earnings per share – excluding non-recurring items – came in at €2.27, up 16.4%. A dividend of €1.60 per share (up 4.6%) will be put to the vote at the annual general meeting.

The EMEA (Europe, Middle East and Africa) region delivered a “strong performance”, said the company, while the Americas region benefited from “remarkable” growth in the group’s brands, and the “favourable” environment for dark spirits. Business in Asia Pacific saw “significant growth” in the second half of the year.

Performance by division

Following two years of declines, Cognac brand Rémy Martin saw sales increase 3.2% on an organic basis, thanks to strong sales in the US, Africa, South East Asia and Japan.

A key driver was the “One Life/Live Them” campaign, which resulted in strong growth in 1738 Accord Royal and Club in the US and Asia respectively. Meanwhile, Louis XIII reaped rewards from the “100 Years: The Movie You Will Never See” initiative.

Despite an “effective” premiumisation strategy for the Liqueurs and Spirits portfolio – Cointreau, Metaxa, Mount Gay, Bruichladdich, The Botanist – sales declined 1.5% on an organic basis.

Initiatives including the travel retail exclusive launch of Cointreau Blood Orange and Metaxa Angels’ Treasure contributed to growth in the second half of the year, but did not compensate for weaknesses in Greece and Russia, and “technical factors” in the first half, the company said.

Looking forward, Rémy Cointreau said it was confident in its acceleration strategy of moving upmarket and expects to “deliver growth in current operating profit, assuming constant exchange rates and consolidation scope, in financial year 2016-2017”.