Rémy profits climb 26.7% as higher-end soars
French drinks group Rémy Cointreau saw its full-year 2017 reported sales grow 4.2% and profits increase by 26.7% after an “excellent” performance from its super- and ultra-premium spirits brands.
Sales to 31 March 2017 hit €1.09 billion (US$1.23bn), with current operating profit soaring to €226.1 million (US$254.3m) on 13.8% organic growth and favourable exchange rates.
Operating profitability climbed 3.7 percentage points to 20.7%, driven by sales of products priced above US$50.
The House of Rémy Martin saw organic sales increases of 10.0% as the Cognac category continued to recover across the Americas and Asia Pacific. Greater China showed a “marked increase” in private consumption over the second half of the year, the company notes.
Current operating profit for the brand increased by 32.6% to €185.2m (US$208.3m) with “very favourable” mix and price effects offsetting a double digit increase in marketing investment.
The liqueurs and spirits division, which includes Cointreau, Islay spirits and other single malt whiskies, saw organic growth increase by 1.3%, a figure hit by Passoã’s move to joint-venture management with Bols, and the acquisition of France’s Domaine des Haute Glaces whisky distillery, and Westland craft whiskey producer in the US.
Operating profits climbed 19.9%, led by Cointreau, Metaxa and The Botanist gin.
Partner brands sales fell as distribution agreements with Champagne brands Piper-Heidsieck and Charles Heidsieck ended in France, Belgium and travel retail. Rémy Cointreau added that sales of other partner brands across Europe, Middle East and Africa “performed well”.
“By 2019-20, bolstered by a significant development in its profitability over the last two years, the Group is now anticipating a current operating margin between 21.5% and 22.5% (compared with 18.0% and 20.0% previously),” the company said in its financial statement.
“For 2017-18, Rémy Cointreau is anticipating another year of growth in its current operating profit, at constant exchange rates and scope.”