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June 4, 2020, 2:07 a.m. EDT

Remy Cointreau sets new targets as profits plunge

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By Pietro Lombardi

Remy Cointreau SA said Thursday that it expects a tough first part of its fiscal year, followed by strong performance in the last six months, and it presented new mid-term targets after fiscal 2020 profit fell sharply.

The French spirits maker said it expects current operating profits to fall by 45% to 50% organically in the first half of its new fiscal year, while its performance in China and the U.S. should lead to a strong recovery in the second half. It slightly improved its sales outlook for the first quarter, which is now expected to decline by roughly 45% organically.

The company also presented its longer-term outlook, targeting gross margin of 72% and current operating margin of 33% by 2030.

The guidance comes at the end of a difficult year, marked by the coronavirus pandemic, trade and geopolitical tensions and internal changes, it said.

Net profit for the year ended March 31 fell 29% to 113.4 million euros ($127.2 million). It fell 32% organically.

Current operating profit dropped 19%, while sales fell 9% to EUR1.02 billion.

Earlier this year, the company had suspended its annual and mid-term guidance following the appointment of a new chief executive.

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