The Rémy Cointreau /zigman2/quotes/206802273/delayed FR:RCO -0.17% group posted sales of €780.9 million in the first nine months of its financial year 2020/21, down 4.1% on a reported basis and down 1.6%* on an organic basis (assuming constant exchange rates and consolidation scope). Even amid the continuing significant impact of the global COVID-19 pandemic, the Group’s sales bounced back 25.1%* in the third quarter (after falling 16.4%* in the first half of the year).
Thanks to very strong growth in the third quarter (up 33.1%*), year-to-date sales of Cognac were stable (on an organic basis). This performance was mainly driven by catch-up effects in the United States, where consumption remains very buoyant, and a quickening recovery in Mainland China. The Liqueurs & Spirits division also enjoyed an upturn in the third quarter (up 7.2%*), led by the United States, Australia and the United Kingdom. The division’s sales were down 6.2% on an organic basis over the nine-month period. Generally speaking, they continue to be adversely affected by their significant exposure to the on-trade channel (particularly in Europe).
The Americas region has posted strong growth in the year-to-date thanks to excellent performance in the United States. Despite returning to modest growth in the third quarter, buoyed by Mainland China and Australia, sales in the Asia-Pacific region as a whole continued to decline over the period. Lastly, the Europe, Middle East & Africa region showed a sequential improvement in the third quarter but continued to be hit hard by the closure of the on-trade channel. Only the United Kingdom has really seen dynamic at-home consumption since the start of the pandemic.
Breakdown of sales by division:
|9 months||9 months||Change|
|(€m)||to 31/12/20||to 31/12/19||Reported||Organic(*)|
|Liqueurs & Spirits||187.2||202.5||(7.6%)||(6.2%)|
|Subtotal: Group Brands||759.6||791.4||(4.0%)||(1.5%)|
Cognac sales held steady over the nine-month period (up 0.1%*). After declining 18.1%* in the first half, they grew very strongly in the third quarter, up 33.1%*, thanks to catch-up effects in US shipments, where our brands continue to enjoy a very strong demand for at-home consumption. Momentum also quickened in China thanks to the success of our cognac brands during the
Mid-Autumn Festival and “Double Eleven” celebrations. Although their decline slowed, duty-free sales remain weak and the slow reopening of the on-trade channel continues to affect new markets (Southeast Asia, Africa and Latin America).
Liqueurs & Spirits
Liqueurs & Spirits were down 6.2%* in the year-to-date, though this masked a real recovery in the third quarter (up 7.2%*). Sales at the House of Cointreau rose over the period, buoyed by double-digit growth in the third quarter driven by the United States as well as the UK, Australia and Belgium.
The Whisky business also posted growth in the year-to-date, with accelerated trends in the main domestic markets making up for lower duty-free sales.
Sales of the House of Metaxa , St-Rémy brandy, The Botanist gin and Mount Gay rum all remained depressed over the period, mainly due to persistent weakness in the EMEA region and the duty-free channel.
After bouncing back over the summer, Partner Brand sales were once again hit by the closure of the on-trade channel in Western Europe. As a result, year-to-date sales were down 5.8%*.
In a still uncertain public health, economic and geopolitical environment, the Rémy Cointreau Group remains confident of its ability to emerge stronger from the crisis .
Having completed the first nine months of its financial year, the Group can thus confidently reiterate its 2020/21 full-year guidance . As expected, it is anticipating buoyant organic sales growth in the fourth quarter , albeit less strong than in the third quarter, due to strategic inventory management. Rémy Cointreau is also maintaining its forecast of positive organic growth in its 2020/21 Current Operating Profit .
Furthermore, the Group now estimates that this performance will be tempered by adverse foreign exchange and scope effects of -€8.0 million and -€2.0 million respectively.
Sales and organic growth by division
First quarter 2020/21 sales (April-June 2020)
|Liqueurs & Spirits||46.1||0.2||0.0||45.9||55.3||(16.7%)||(17.0%)|
Second quarter 2020-21 sales (July-September 2020)
|Liqueurs & Spirits||66.0||(2.0)||0.4||67.5||75.9||(13.1%)||(11.0%)|
First half 2020-21 sales (April-September 2020)
|Liqueurs & Spirits||112.1||(1.8)||0.4||113.4||131.2||(14.6%)||(13.6%)|
Third quarter 2020-21 sales (September-December 2020)
|Liqueurs & Spirits||75.1||(3.2)||1.9||76.4||71.2||5.4%||7.2%|
9-month sales 2020-21 (April-December 2020)
|Liqueurs & Spirits||187.2||(5.0)||2.3||189.8||202.5||(7.6%)||(6.2%)|
Definitions of alternative performance indicators
Rémy Cointreau’s management process is based on the following alternative performance indicators, selected for planning and reporting purposes. The Group’s management considers that these indicators provide users of the financial statements with useful additional information to help them understand the Group’s performance. These alternative performance indicators should be considered as supplementing those included in the consolidated financial statements and the resulting movements.
Organic sales growth
Organic (i.e. like-for-like) growth is calculated excluding the impact of exchange rate fluctuations, acquisitions and disposals.
The impact of exchange rates is calculated by converting sales for the current financial year using average exchange rates from the previous financial year.
For acquisitions in the current financial year, sales of acquired entities are not included in organic growth calculations. For acquisitions in the previous financial year, sales of acquired entities are included in the previous financial year but are only included in organic growth calculations for the current year with effect from the anniversary date of the acquisition.
For significant disposals, data is post-application of IFRS 5 (under which sales of entities disposed of are systematically reclassified under “Net earnings from discontinued operations” for the current and previous financial year).
This indicator serves to focus on Group performance across both financial years, which local management is more directly capable of influencing.
(*) Organic growth is calculated assuming constant exchange rates and consolidation scope.
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SOURCE: Rémy Cointreau
Laetitia Delaye – +33 (0)7 87 25 36 01
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