- Sales down -35,0% on an organic basis1, in line with expectations
- Significant fall in sales in the Americas linked to an exceptionally high basis of comparison, major destocking, and continued normalization of consumption post-Covid
- Very strong growth in the rest of the world, particularly China, Southeast Asia and the EMEA region
- Full-year guidance confirmed
Rémy Cointreau generated consolidated sales of €257.5 million in the first quarter of 2023-2024, down -35.0% on an organic basis (+14.3% compared to Q1 2019-20). On a reported basis, the decline was -37.2%, including a negative currency effect of -2.2%.
This performance reflects an exceptionally high basis of comparison (Q1 2022-23 was up +74.0% compared to Q1 2019-20), the Group's focus on significantly reducing its Cognac inventories in the United States, and continued normalization of consumption in the US.
Against the backdrop, the Cognac division saw sales retreat -44.7% on an organic basis. The Liqueurs & Spirits division reported a decline, with sales down -11.4% on an organic basis. The latter is affected by a phasing effect and high basis of comparison, while underlying trends remained solid, allowing a return to growth from the 2nd quarter.
In the Americas, sales suffered a marked decline while in APAC they rose very steeply, boosted by trends in China and Southeast Asia, along with the continued recovery in Travel Retail. Lastly, EMEA reported a double-digit growth, driven by all of its regional markets.
1 All references to "on an organic basis" in this press release refer to sales growth at constant currency and consolidation scope
Cognac
First-quarter sales at the Cognac division were down -44.7% on an organic basis, as expected. This was primarily due to a significant drop in sales in the Americas, hit by the combined impact of an exceptionally high basis of comparison (Q1 2022-23 sales were +175.8% compared to Q1 2019-20), the Group's focus on significantly reducing inventories, and continued normalization of consumption. In an increasingly promotional environment, the Group maintained its value-driven strategy, holding prices steady.
In APAC, the Chinese market registered another quarter of very strong growth driven by the recovery in on-trade business and a particularly strong performance from Rémy Martin CLUB. It was also driven by robust growth in e-commerce (T-Mall platform and JD.com during the 6.18 Festival), where sales outperformed expectations. In the rest of Asia, particularly Southeast Asian markets, the Cognac division did very well.
In the EMEA region, business was very good in all regional markets, particularly ine AME2 and in Western Europe.
2 Africa and the Middle East
Liqueurs & Spirits
First-quarter sales at the Liqueurs & Spirits division were down -11.4% on an organic basis, reflecting phasing effects (distributors built up US inventories at the end of the fourth quarter ahead of price increases on 1 April 2023), as well as a very high basis of comparison in the Americas (Q1 2022-23 sales up +127.2% compared to Q1 2019-20).
The underlying trend in the Americas region is solid and points to very good momentum for the Cointreau brand, which has just launched its new Margarita Right campaign featuring Aubrey Plaza. The Group expects to return to growth in the second quarter of 2023-24.
In the EMEA region, sales were very good, reflecting robust trends throughout the region, particularly in Western Europe (Germany, France, and Greece) and the United Kingdom. Lastly, in APAC, the year got off to a good start in the North and Southeast Asia as well as in Travel Retail business.
Partner Brands
First-quarter sales of Partner Brands were down -4.6% on an organic basis.
2023-24 outlook confirmed
In 2023-24, Rémy Cointreau anticipates continued strong normalization of consumption in the United States, although trends will nonetheless remain significantly higher than in 2019-20.
At the same time, the Group expects strong growth in the rest of the world, led by major gains in China, a very good showing in EMEA and the Rest of Asia, and business similar to levels observed in 2019-20 in Travel Retail.
Against this backdrop, the Group expects sales to remain stable on an organic basis in 2023-24, with :
- A strong decline in sales in the first half, reflecting a very strong fall in the United States and high bases for comparison
- A strong recovery in the second half, driven by a sharp rebound in the US starting in the third quarter
Rémy Cointreau intends to confirm its level of organic profitability based on :
- Continued roll-out of a value-driven strategy built on a firm pricing policy and improved price mix
- Resilient gross margin in a persistently inflationary context
- Stabilization of the ratio of marketing and communication spend/sales
- Tight control overhead costs
The Group estimates that currency will have an unfavorable impact on :
- Sales: between -€50m and -€60m
- COP : between -€10m and -€15m
Investor relations : Célia d'Everlange / investor-relations@remy-cointreau.com
Media relations : Mélissa Lévine / press@remy-cointreau.com