FRANCE: S&P downgrades Remy Cointreau

By | 29 January 2009

Falling revenue at Rémy Cointreau has led Standard & Poor's to downgrade the French Cognac and Champagne group from stable to negative.

Standard & Poor's (S&P) lowered its rating on Rémy Cointreau yesterday (28 January), citing a "weaker than expected operating performance in the important year-end quarter 2008".

S&P warned that a "prolonged weakening" of Rémy's performance could put the group's finances under pressure.

Rémy said last week that net revenue fell by 4% to EUR604.5m (US$789m) for the nine-months to the end of December, reflecting a 6.5% decline in Champagne sales. Organic revenue rose by 0.9%.

S&P said that its negative rating "reflects its high exposure to the slowing US market and to US dollar foreign exchange risk.

"The rating also reflects the group's limited diversification compared with leading peers, despite Rémy's leading position in Cognac and its presence in other high-margin drink categories."

The drinks firm, which will leave the Maxxium Worldwide distribution venture at the end of March, has labelled its current financial year a "transition period". It plans to raise prices further this year in order to position itself higher in the market.

Shares in the group were down 2.7% for the day at 13:00 today, at EUR21.50.

Sectors: Spirits, Wine

Companies: Cointreau, Maxxium

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