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