Remy Cointreau's FY Cognac jump outpaces liqueurs & spirits slide
- FY net profits up 11% to EUR102.4m (US$116m)
- Net sales in 12 months to end of March increase 9% to EUR1.05bn
- Operating profits jump 14% to EUR178.4m
- Operating margin climbs 0.8 percentage points to 17%
Remy Cointreau's results have confirmed Cognac's turnaround
A strong jump in profits from the Rémy Martin Cognac house delivered a solid bottom line for Rémy Cointreau's full-year, however downturns in Greece and Russia pulled down results for other categories.
Operating profits at the group's Rémy Martin unit jumped in the 12 months to the end of March by 6% on the back of strong growth in the US and a lessening of the impact of decreased demand in China. The results confirm sales figures for fiscal-2016, released in April, that showed Rémy Cointreau's full-year Cognac sales had increased for the first time in two years.
Rémy Cointreau's liqueurs & spirits unit fared less well in the full year, however, with operating profits down 7% (-3% organically). The company blamed the declines on macroeconomic pressure in Greece and Russia as well as "technical factors" in the first half. Liqueurs & spirits includes brands such as Metaxa, Bruichladdich, Cointreau and Mount Gay, and accounts for 18% of total sales.
Overall, operating profits were up 14% to EUR178.4m (US$203m), while net profits attributable to the group were EUR102.4m, an 11% increase.
In April, Rémy said the final quarter of the year was boosted by improving trends in Greater China, where Cognac sales have declined in the past two years because of anti-austerity measures. Other Cognac producers have highlighted improved performances in China, including Hennessy owner LVMH.
Today, Rémy said Asia-Pacific countries saw "significant growth" in the second half of the year.
Looking ahead, the company said it expects to deliver operating profit growth, assuming constant exchange rates and consolidation scope, for fiscal 2017.
Rémy's share price was down 4% as of 1044 this morning on the Paris bourse. However, shares have climbed 44% since September last year.
To read the company's full results, click here.
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