Rémy Cointreau: Consolidated Preliminary Results for the Year Ended 31 March 2013

  Rémy Cointreau: Consolidated Preliminary Results for the Year Ended 31 March
  2013

                           Excellent Financial Year

                      Current Operating Profit up 18.1%

                Confidence in the Medium and Long-Term Outlook

Business Wire

PARIS -- June 11, 2013

Regulatory News:

Rémy Cointreau’s (Paris:RCO) sales for the financial year ended 31 March 2013
increased by 16.3% to €1,193.3 million. Current operating profit was €245.4
million, a rise of 18.1%, which was a very strong performance given that it
was achieved on the back of double-digit growth the previous year. The current
operating margin rose to 20.6% despite a further increase in marketing
investment.

These results reflect the sales momentum of the Group’s brands in all regions
of the world with double-digit growth in Asia and the US. Europe, despite a
mixed economic environment, also contributed to this performance.

Net profit rose by 17.7% to €130.4 million.

The Group’s net financial debt was €265.5 million even though two acquisitions
were completed during the year, and the Net debt to EBITDA ratio remained
below 1.

The 2012/13 financial year was marked by:

  *a strong increase in current operating profit,
  *double-digit growth in Rémy Martin sales, which went hand-in-hand with
    strong profitability,
  *sustained, strong growth in Asia,
  *a remarkable performance in the US,
  *the strategic acquisition of Bruichladdich, a single malt Scotch whisky,
    and
  *a sound financial position: the Group has €600 million available in
    long-term funding

Key Figures
                      At 31       At 31       % Change
                        March          March
(€ millions)          2013        2012        Published    Organic*
                                                                  
Sales                   1,193.3        1,026.1        +16.3           + 8.8
Current operating       245.4          207.7          +18.1           +12.3
profit
as % of sales           20.6%          20.2%          -               20.9%
Other operating         (7.5)          (3.0)          -               -
income and expenses
Operating profit        237.9          204.7          -               -
Net profit exc.         151.5          123.9          +22.3           -
non-recurring items
Net profit – Group    130.4       110.8       +17.7        -
share
*on a like-for-like basis


Divisional Analysis of Current Operating Profit
(€ millions)              At 31     At 31     % Change
                             March        March
                         2013      2012      Published    Organic
Rémy Martin                  216.6        173.0        +25.2        +18.6
Liqueurs & Spirits           45.2         52.6         (14.1)          (16.7)
Total Group brands           261.8        225.6        +16.0           +10.3
Partner brands               3.8          4.2          (9.0)           + 9.5
Holding company costs        (20.2)       (22.1)       N/A             N/A
Current operating         245.4     207.7     +18.1        +12.3
profit
                                                                       

Rémy Martin – Once again, the brand reported a remarkable performance: a 21.5%
increase in sales to €719.8 million and a 25.2% rise in current operating
profit to €216.6 million, under the combined effect of price increases and
very high quality innovations, particularly in Asia, as well as in the US
where consumer demand was strong. Russia contributed to this substantial
growth, as did some Western European countries which are seeing positive
trends.

There was a further improvement in the operating margin to 30.1% (29.2% the
previous year), despite another increase in marketing investment.

Liqueurs & Spirits – Overall sales in this division were €239.1 million, an
increase of 10.8% compared with the previous year. This performance was all
the more remarkable in light of the fact that Europe is the division’s primary
market. Cointreau also performed well, not only thanks to the US but also to
Western Europe. Despite the continued challenging economic situation in
Greece, Metaxa reported growth thanks to Eastern European markets.
Bruichladdich, added to this division’s portfolio since 1 September 2012, did
not have a significant impact during the period.

Current operating profit declined to €45.2 million due, as anticipated, to a
substantial increase in sales and marketing investment in the divisional
brands overall. The operating margin was 18.9%.

Partner Brands – Sales grew by 7.6% to €234.4 million, together with operating
profit of €3.8 million.

Consolidated results

Sales of €1,193.3 million represented an increase of 16.3% (up 8.8%
organically, with 10.3% organic growth for Group brands).

Current operating profit rose by 18.1% to €245.4 million (+12.3% organically),
with an increase of 20.6% in operating margin compared with the previous year.
This performance was achieved thanks to a further significant improvement in
gross profit, accompanied by increased advertising and marketing investment to
support the brands.

Operating profit was €237.9 million, after deducting a €7.5 million charge
that primarily included expenses related to the two acquisitions.

Net financial expenses amounted to €20 million, a significant decline of €15.3
million which was primarily due to movements in the value of interest rate and
foreign exchange hedging instruments.

The income tax charge of €72 million reflected an effective tax rate of 33.1%,
higher than the rate of 27.9% applicable in the previous year.

The share in the loss of associates primarily originated from Dynasty. The
Chinese group, Dynasty Fine Wines Ltd, in which Rémy Cointreau holds a 27%
stake, issued a profit warning in February 2013 flagging a loss for the 2012
financial year after several years of declining results. Since Dynasty’s
annual financial statements were still pending publication at Rémy Cointreau’s
balance sheet date, the Group carried out an impairment test on the value of
its equity investment, on the basis of which an impairment charge of €15.9
million was recognised.

The Group’s share of net profit, excluding non-recurring items, was €151.5
million, an increase of 22.3% compared with the previous year.

The Group’s share of net profit rose by €20 million to €130.4 million, an
increase of 17.7% after the Dynasty provision.

Net financial debt was €265.5 million, an increase of €76.9 million after
taking into account the €167.4 million impact of the two acquisitions
completed during the year. The net debt to EBITDA ratio was 0.99. At 31 March
2013, Rémy Cointreau had confirmed financial resources of €600 million.

Shareholders’ equity was €1,094.8 million with a stronger balance sheet. 
Following implementation of the share buyback programme in December 2011 and
May 2012, the Group holds 1.4 million treasury shares, accounting for 2.8% of
its share capital and valued at €96.1 million.

During the 2012/13 financial year, the Euro/US Dollar rate was very close to
that of the previous year, at USD 1.35/€1 versus USD 1.34/€1. Foreign exchange
movements had a positive effect of €12 million on net profit.

On 10 June 2013, Rémy Cointreau announced that it had signed an agreement with
the Nordic group, Altia, in respect of the transfer of Larsen Cognac including
the brand, industrial and commercial assets and inventories, to enable the
entity to operate as a going concern.

A cash dividend of €1.40 per share will be put to a shareholders’ vote at the
Annual General Meeting to be held on 24 September 2013.

Outlook

In a worldwide economic environment which lacks visibility, particularly in
Europe, but nevertheless remains favourable for the premium spirits industry,
Rémy Cointreau remains true to its long-term high value strategy.

The Group will continue to rely on its very high quality brands, its
innovation policy, the dynamism of its distribution network and its strict
cost control, and remains confident in its capacity to continue to generate
profitable growth over the medium to long term.

Contact:

Rémy Cointreau
Analysts:
Frédéric Pflanz, 00 33 1 44 13 44 34
or
Press
Joëlle Jézéquel, 00 33 1 44 13 45 15
or
Caroline Sturdy, 07775 568 500
 
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