Remy Cointreau FY Organic Sales Down 10.7%

REPLAY VIDEO
Your next video will start in
Pause

Recommended Videos

  • Info

  • Comments

  • VIDEO TEXT

April 17 (Bloomberg) –- Bloomberg’s Manus Cranny reports on earnings for Remy Cointreau and the state of the spirits industry. He speaks to Mark Barton on Bloomberg Television’s “Countdown.” (Source: Bloomberg)

Remi four -- cointreau.

Coming in below estimates and organic sales falling by nearly 11%. the market was estimating just under 10% drop.

It doubled digit drop in organic sales looking for a decline of 9.7%. the key brand, remy cointreua brandy, dropping 12 point eight percent.

A three-way meson three of the big benchmarks.

How much of that is down to china?

They are saying that most of this movement is down to china.

That is where they are seeing the anticorruption movement.

What they are saying is that they see the full year, the guidance the fall between 35% and 40%. to give you a sense, 50% of remy's profitability comes from china.

They have been adversely affected by the chinese anticorruption extravagance policy.

A negative impact on consumption premium risk.

Once you have stopped consuming high-end premium spirits, will the chinese return?

That's the critical issue.

They were warned in january but it's whether the break of trend and consumption.

A strong performance, up over 7.7%. they also said russia, japan, and africa are reporting strong growth.

Nowhere near as important as the chinese business.

A miss on the top line numbers and guidance that says profitability operating profit will fall.

And it cited the prior forecast for significant double-digit fall.

You wonder if it were the prior forecast.

It looks to be worst.

That is a profit warning.

If you want to wrap it up that way.

Fourth-quarter revenue, taking the first quarter of the living year including the chinese new year and we saw revenue significantly missing their coming in at 186 million down from 229 million.

Louis vuitton sought down and i read an interesting note from sanford bernstein.

They said, look, there's been a huge movement i the government to close down what they called the erotic sector or high and karaoke bars.

Can you tell me the difference between high end and low?

I said i could show them a broad range.

You have visited many in your day.

Their range from fairly well and to fairly high-end.

[laughter] "i will survive." [laughter] it had to be gloria gaynor.

A bit of pet shop boys.

I like that song.

We are getting off track.

You are taking me off track.

I was staying very focused on high-end karaoke.

Come back to me.

The question is sanford bernstein saying there will be no recovery in the cognac market until they get through 2015. it is a boozy day for manas.

What are the challenges?

What are the challenges right now for the alcoholic drink industry?

We just talked about china for remy cointreau.

The chinese spirits market is worth about $70 billion to the booze companies.

That's over 40%. that's the challenge.

You have a currency risk in asia-pacific.

You have changing societal issues.

The second issues is if you are the hunter or the hunted.

They are the hunted.

Potential.

We need to be careful with this.

He might look across the numbers.

Now they are warning again and again and one can say perhaps it offers residual value.

We know they raise their bid.

Bloomberg industries wrote a lovely piece.

If this deal goes through, it will take 2014 into the year, the busiest day year for booze making.

That's a multibillion-dollar deal.

You have this deal with united.

It's a question of trying to grab.

Are their value assets that the booze companies are prepared to pay for?

I spoke to campari ceo.

They have made smaller deals in the last month.

He said it is a very fragmented industry and there will be further deals.

There are huge pieces that can fit into your business.

And the united states will play a critical role.

Will the united states outweigh what is happening in emerging markets?

The u.s. is critically important.

There is a wonderful line that the one thing that could not work in united states of america is vodka.

Banca could drag the u.s. down.

Smirnov is the third biggest selling spirit.

They own smirnov.

What's happening in the u.s. and the campari ceo said it's all about the brown stuff, the whiskeys, the bourbons.

That is what is becoming more popular in united states of america.

With those of brands comes the premium is a nation as well.

We are seeing it in the booze industry.

Digagio they have the guinness brand that sells very well.

You are looking at a tough consumer.

In latin america, venezuela.

I love venezuela.

You have to strip the venezuela numbers out when they come.

Reading through some of the comments from the market analysts, you have sandberg -- sanford bernstein and they say probably more so on the beer side and valuations seem to have bottomed and people are looking through the emerging-market foreign-exchange saying traps the worst of that cycle has passed according to janet yellen.

I'm calling it the yellen express.

Is he terms, easy street.

Up the equity markets go and of course, it is a reprieve and a model for the emerging-market central bankers to say good old janet is on our side.

Low interest rates were a little bit longer.

We are done with the booze.

This text has been automatically generated. It may not be 100% accurate.

Advertisement

BTV Channel Finder

Channel_finder_loader

ZIP is required for U.S. locations

Bloomberg Television in   change