Rémy Cointreau : Interim Results for the Six Months Ended 30 September 2013

  Rémy Cointreau : Interim Results for the Six Months Ended 30 September 2013

Business Wire

PARIS -- November 26, 2013

Regulatory News :

Rémy Cointreau’s (Paris:RCO) sales for the six months to 30 September 2013
were €558.0 million, an organic decline of 3.6% compared with the same period
the previous year, during which strong growth of 13.3% was reported. Although
the Group maintained a strong momentum in the US and Europe, this did not
offset the slowdown recorded in China.

Current operating profit was €132.7 million, an organic decline of 7.3%
compared with high comparative figures in 2012, during which 18% growth was
achieved. The current operating margin improved slightly to 23.8%, compared
with 23.7% for the same period last year.

Key Figures

(€m)                      6 months to  6 months to  % Change
                         30.09.13     30.09.12     Organic^(1)  Published
Net sales                  558.0         595.8         (3.6%)       (6.3%)
Current operating profit   132.7         141.5         (7.3%)        (6.2%)
Current operating margin   23.8%         23.7%         -             -
Net profit (Group share)   69.3          86.6          -             (20.0%)
Net profit (exc.           85.5          88.5          -             (3.4%)
non-recurring items)
Net margin (exc.           15.3%         14.9%         -             -
non-recurring items)
Net debt/EBITDA ratio      1.09          0.86          -             -
Net earnings per share
(exc. non-recurring       1.73         1.84         -            -

^(1)at comparable exchange rates

Current operating profit by division

(€m)                      6 months to  6 months to  % Change
                         30.09.13     30.09.12     Organic^(1)  Published
Rémy Martin                116.1         131.4         (11.7%)      (11.7%)
Liqueurs & Spirits         20.9          19.3          +2.6%         +8.2%
Sub-total – Group brands   137.0         150.8         (9.9%)        (9.1%)
Partner brands             4.5           2.3           +74.6%        +90.6%
Holding company costs      (8.7)         (11.6)        (24.7%)       (24.7%)
Total                     132.7        141.5        (7.3%)       (6.2%)

^(1)at comparable exchange rates



The data provided below is expressed in millions of euros and changes are

Rémy Martin
The 10.4% decline in sales to €327.2 million reflected the unfavourable
situation in the Chinese market for imported spirits, which was not offset by
the growth noted in the Americas and Europe regions. The temporary slowdown in
sales momentum in China, which does not in any way detract from the brand’s
fundamentals, did not constrain the House of Rémy Martin’s strategic and
targeted investment in this region.

Current operating profit totalled €116.1 million, a decline of 11.7%. The
current operating margin was 34.5%, virtually unchanged from the 34.9% level
recorded in the previous period. This performance was a result of maintaining
a high gross margin, increased targeted marketing investment and strict
control of both the structure and distribution costs.

Liqueurs & Spirits
Sales totalled €120.4 million, an increase of 10.2% compared with the previous
period, with all regions recording growth. Cointreau grew in the US and other
countries in the Americas region, as well as in its key European markets.
Metaxa, Mount Gay and St-Rémy all performed well over the first six months of
the financial year. The single malt Scotch whisky, Bruichladdich, acquired in
September 2012, continued its expansion within the Group’s network.

Current operating profit increased by 2.6% to €20.9 million, with maintained
high levels of marketing investment. The current operating margin was 16.0%,
compared with 17.2% for the same period the previous year. Excluding
Bruichladdich, currently being integrated into the network, the margin would
have been 18.1%, an increase of almost 1 percentage point.

Partner Brands – The 6.0% increase in sales was due, in particular, to the
solid performance of the Scotch whisky brands distributed in the US. The
divisional operating profit was €4.5 million, compared with €2.3 million for
the same period last year.

Consolidated results

Current operating profit declined by 7.3% and by 6.2% in published data due to
a net foreign exchange gain of €1.5 million. The average €/USD book rate was
1.32 for the period compared with 1.27 for the same period last year. Taking
into account its hedging policy, the Group achieved an average collection rate
of 1.31, compared with 1.34 in the same period last year. After taking into
account impacts totalling €3.5 million, primarily related to the Larsen
transaction, operating profit was €129.2 million.

Net financial expense was €10.7 million, an increase of €1.2 million,
primarily related to movements on foreign exchange and interest hedging

The tax charge was €38.2 million, representing a tax rate of 32.2%, which was
stable compared with the same period last year.

The share in profit from associates primarily related to the equity investment
in the Chinese Group, Dynasty. At 31 March 2013, Rémy Cointreau recognised a
€15.9 million impairment charge on its securities. At 30 September 2013, the
Dynasty Group had neither published its 2012 Annual results nor its 2013
Interim results. Rémy Cointreau subsequently carried out a further review
following which it recognised an additional impairment charge of €10.9



Net profit consequently declined by 20.0% in published data to €69.3 million.
Earnings per share were €1.40 compared with €1.80 for the same period the
previous year. Excluding non-recurring items, net profit was €85.5 million, a
moderate decline of 3.4%, with earnings per share of €1.73, compared with
€1.84 the previous year.

Net debt was €304.6 million, an increase of €39.1 million since the beginning
of the financial year, primarily due to the seasonality of working capital
requirements. The net debt to EBITDA bank ratio was 1.09 at the end of
September 2013, compared with 0.99 at the end of March 2013. At 30 September
2013, the Group had €665 million in confirmed financial resources.

Financial highlights

On 22 July 2013, the Fitch ratings agency accredited Rémy Cointreau with an
investment grade rating (BBB- with a Stable outlook). On 10 October, Standard
& Poor’s upgraded Rémy Cointreau’s rating to BBB- Positive outlook followed,
on 24 October, by Moody’s, which upgraded its rating to Baa3 Stable outlook.

On 13 August, the Group completed a €65 million bond issue with a 10-year
maturity and a fixed coupon of 4%.

On 19 November, Rémy Cointreau announced that it had reallocated the shares
purchased under its share buyback programme. Out of a total of 1,428,794
shares held by the Group, 1,150,000 were cancelled as part of a share capital
reduction approved on the same day, with the remaining 278,794 shares being
reallocated to servicing long-term incentive plans.


In an uncertain economic environment in Europe and against the backdrop of a
sharp slowdown in China, which remains impacted by high inventory levels in
distribution and poor short-term visibility, the business environment will be
less favourable in the second half of the year. This situation will adversely
affect the full-year current operating profit, which is expected to record a
substantial double-digit decline at the end of the financial year, following
many years of sustained, steady growth. Nevertheless, the Group remains
confident in its medium and long-term outlook in Asia, particularly in China,
where its development potential remains unaffected.

Rémy Cointreau is resolutely pursuing its strategy of developing its upmarket
brands and creating long-term value. Due to the quality of its brand
portfolio, supported by targeted investment, continued resolute innovation,
the qualitative strengthening of its distribution, and strict cost control,
the Group is confident in the capacity of its value adding model to bring
about a return to steady growth.


The regulatory information in respect of this announcement is available at


Rémy Cointreau
Analysts: Luca Marotta (Analysts) Tel: 00 33 1 44 13 45 13
Press: Joëlle Jézéquel (Press) Tel: 00 33 1 44 13 45 15
Caroline Sturdy Tel: 07775 568 500
Press spacebar to pause and continue. Press esc to stop.