Rémy Cointreau: Fiscal year 2015/16

Regulatory News:

Rémy Cointreau (Paris:RCO) generated sales of €223.3 million during the first quarter of the 2015/16 fiscal year, achieving reported growth of 3.9%.

In organic terms, sales declined by 9.0%, in line with our expectations. This trend should be seen in the context of the implementation of our medium term Strategic Plan. Several technical effects impacted the Group over the first quarter, resulting in a decline in the Asia Pacific and Americas regions. Europe, Middle East & Africa (EMEA) posted a healthy performance over the period, supported by excellent momentum in Africa and improved consumer trends in Western Europe.

It should be noted that the first quarter does not traditionally make a significant contribution to annual sales.

Sales breakdown by division:

(*) Organic growth is calculated based on constant exchange rates and consolidation scope

Rémy Martin

The decline in sales over the first quarter was due to the accelerated introduction of the Strategic Plan (improved product-mix, adaptation of the global distribution network, streamlining of on-trade contracts in China) and the continued caution of wholesalers in Greater China.

Conversely, the Rémy Martin brand enjoyed healthy momentum in the EMEA region (supported by Africa, the UK, France and Germany) as well as an acceleration in demand in the US for superior qualities.

Liqueurs & Spirits

Following several quarters of very strong growth, the division recorded declining sales in its three major regions (down 13.8% in organic terms), during the start of the fiscal year. This performance can be explained by a combination of both technical (high comparables for Cointreau in the US, the timing of Easter, changes in distributors in certain markets) and macro-economic (Russia, Greece) factors.

The fall in sales of Cointreau primarily reflects a very high comparable in the US, whilst demand for the brand remained excellent, as suggested by strong depletion growth over the period. The brand also benefited from slight growth in Western Europe and the successful launch of Cointreau Blood Orange, a Travel Retail exclusive, in the major European and US airports.

Metaxa sales fell significantly over the quarter, impacted by the slowdown in consumption in both Greece and Eastern Europe and in Travel Retail purchasing by Russian customers. Central Europe maintained its double digit growth over the period.

Mount Gay achieved double digit growth over this first quarter, thanks to very favourable mix effects (success of the Black Barrel and XO qualities) in the US, as well as in Travel Retail, Barbados and France.

The Islay Spirits (Bruichladdich/The Botanist) continued their strong growth over the early part of this fiscal year, aided by new account listings in their target markets (Travel Retail, US, Japan, France, Germany and Belgium).

The decrease in St-Rémy sales over the first quarter was primarily due to a change in distributor in Canada (its leading market) whilst Passoa’s decline reflects a high comparable in France (2014 FIFA World Cup effect) and an environment that remains highly competitive in Western Europe.

Partner Brands

Whilst sales of partner brands continued to do well in the EMEA region, the end of the champagne brands distribution contract (Piper Heidsieck and Charles Heidsieck) in the US during the first quarter impacted on the division’s performance.

2015/16 outlook

At the end of this first quarter — in line with Group forecasts — Rémy Cointreau confirms its objective of delivering positive growth in current operating profit for the 2015/16 fiscal year, at constant exchange rates and scope.

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