The Rémy Cointreau Group has reported sales up 9.9% to €240.2m ($279.8m) in the first quarter of its 2017/18 financial year, up 9.9% in reported terms, although results would have been even better but for distorted year-on-year portfolio comparisons.
The company reported organic growth of 8% – at constant currency and scope – with group brands at the fore of growth (+12.3%). The acquisitions of Westland and Domaine des Hautes Glaces in January 2017 are also said to have contributed favourably.
‘REMARKABLE PERFORMANCE’ BY RÈMY MARTIN
Rémy management said Q1 momentum received a strong boost thanks to a ‘remarkable performance by the House of Rémy Martin’, which benefited from the broad appeal of its brands and its upmarket strategy.
However, the decline in Liqueurs & Spirits revenues resulted from the deconsolidation of Passoã sales, which conceals the strong growth of the division’s remaining brands (+7%). The trend in Partner Brands sales can be attributed primarily to the end of the distribution agreement for the champagne brands.
Meanwhile, the Asia Pacific region returned an ‘excellent’ Q1 performance, with brisk business said to have been conducted in Greater China and Singapore, as well as improved trading in Japan. The Europe, Middle East & Africa region (EMEA) also achieved strong growth in the quarter, driven by Africa, Russia and Central Europe. Rémy added that the Americas region was faced with a particularly high basis for comparison.
Turning to the House of Rémy Martin, the company said it continued its positive momentum in Q1 with organic growth of 18.7%. The performance was generated by the continuation of highly favourable trends in Continental China and an improved environment in Macao, Hong Kong and Japan.
The EMEA region also benefited from a new phase of expansion by the company in Africa, while the recovery in Russia was confirmed.
SUCCESSFUL NEW LAUNCHES
In its results statement, the company said: “A rich set of initiatives was once again reflected in highly positive mix benefits over the period. LOUIS XIII launched the limited edition The Legacy (500 crystal magnum decanters hand-signed by four generations of LOUIS XIII cellar masters) and Rémy Martin unveiled its limited edition XO Cannes 2017, available exclusively in travel retail.
“In its constant quest for innovation, Rémy Martin also launched its mixed-reality experience, ‘Rooted in Exception’, with the Microsoft HoloLens headset in the United States.
Less dynamic was the Liqueurs & Spirits division which reported a minus 1.9% ‘organic’ sales fall due to the deconsolidation of the Passoã brand 1 December 2016 which is now managed by a Lucas Bols-led joint venture. As such, the group said this blip ‘concealed’ what would otherwise have been ‘strong growth by the division’s brands (+7%) in the first quarter’.
SOLID START FOR COINTREAU IN CHINA AND RUSSIA
By contrast, the House of Cointreau reported a solid start to the year thanks to its ‘robust performance’ in the US – its main market – plus its new growth-driver markets of Greater China and Russia. The group added: “The strong momentum of the House of Metaxa continued in the first quarter, thanks to the success of the ’12 Stars’ in Central Europe and improved trends in travel retail.
“Mount Gay and St-Rémy returned to growth in the period, led by positive trends for both brands in the Americas. Lastly, the Progressive Hebridean Distillers (Bruichladdich/Port Charlotte/ Octomore/The Botanist) confirmed their positive momentum in the first quarter, boosted by the success of The Botanist gin.”
Last, but not least, Rémy’s partner brands division suffered a minus -18.5% organic sales decrease due to the end of the cessation of Rémy’s distribution agreement for the Champagne brands (Piper-Heidsieck and Charles Heidsieck) in the EMEA region and in travel retail on the one hand, and the aforementioned consolidation of Passoã sales, now distributed by the Rémy Cointreau network on behalf of the joint venture, on the other.