Rémy Cointreau cheers Q1 results as sales surge 9.9%

Rémy Cointreau reported sales of €240.2 million ($276m) in the first quarter of 2017/2018 financial year, an improvement of 9.9% from the previous year.

The maker of Rémy Martin cognac and Cointreau liqueurs credits its good performance to strong growth in the Asia Pacific region, with strong gains in Greater China, Singapore and improvement in Japan.

The group said that its cognac brands which contributes 65% of group sales rose 18.7% in the three months to June 30, up from 6.2% in the fourth quarter.

The firm notes that its good results were bolstered by “rich” set of initiatives including the Louis XIII Limited Edition expression The Legacy and the release of Rémy Martin XO Cannes 2017 in Travel Retail.

Rémy Cointreau said that its liqueurs and spirits division reported a 0.9% gain (-1.9% organic) due to deconsolidation of the Passoã /Lucas Bols joint-venture, which masks the strong performance of the division’s other remaining brands (+7%).

The partner brands declined -18% due to the end of the distribution agreement for the champagne brands (Piper-Heidsieck and Charles Heidsieck).

Geographically, the company saw double-digit sales decline in Western Europe due in part to the deconsolidation of the Passoã champagne.

Central and Southern Europe posted high-digit growth, driven by solid momentum in the Czech Republic and Slovakia, while Russia and North East Europe recorded double-digit gains.

In Africa, the company notes that it entered a new phase of regional expansion led by strong growth in South Africa and improvement in Nigeria.

The company has been focusing on selling spirits above $50 or more as part of a strategy that has benefitted from strong demand in China, compared to its French rival, Pernod Ricard which has focused on marketing cheaper brands in China.

Bolstered by its positive start to the year, Rémy Cointreau confirms its guidance of growth in current operating profit over the financial year 2017/18, assuming constant exchange rates and consolidation scope.

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