Valérie Chapoulaud-Floquet joined Remy Cointreau as CEO just over three years ago

Valérie Chapoulaud-Floquet joined Remy Cointreau as CEO just over three years ago

Remy Cointreau dropped a solid set of full-year results yesterday - sales for the 12 months were up 7%.

But management at the self-styled luxury alcohol company appear concerned that these gains – fuelled by continuing increases for Cognac as it revives in Asia - may not last the distance.

Airing those concerns yesterday in the wake of the results, CFO Luca Marotta said that ongoing double-digit growth for House of Remy Martin - effectively the company's Cognac business - is not sustainable and that compound annual growth rate for the medium to long term will come in just under 10%.

According to analysts at Liberum, who reported on the CFO's comments in a note yesterday, the claim sparked a correction - shares in Remy Cointreau dropped back about the same time the comments were made. The market had only just got used to Cognac sales rebounding following the fallow years of anti-extravagance in China. The thought that the music would one day stop again clearly hadn't occurred.

Running the numbers on the announcement, Liberum generally agreed with Marotta. The group suggested a solid 10% CAGR increase in sales is more likely, slightly higher than Remy's estimate (for context, FY18 House of Remy sales were up 13.2%). But Liberum added that anything higher was not possible because of limitations on volumes growth cause by inventory constraints and recent poor harvests. 

Elsewhere, Marotta's remarks appeared to pass other analyst groups by, with many focussing instead on Remy Cointreau's impressive full-year performance. Bernstein said that underlying sales results - which strip out the moving of the Passoa brand to a JV with Lucas Bols and termination of Champagne distribution contracts - were "exceptionally strong" at 8% growth. 

Bernstein also highlighted gains in the US, where Remy Martin took share from Moet Hennessy because of supply constraints at Hennessy. Meanwhile, Jefferies ran the rule over the whole Remy Cointreau business, publishing what amounted to a review of the group. The result? A strong thumbs up.

In the plus column was Remy's 80% Cognac exposure as well as its strong position in other brown spirits through Mount Gay rum and the Islay Scotch portfolio. Jefferies also gave a lot of kudos to Remy's CEO, Valérie Chapoulaud-Floquet, who joined the group just over three years ago from a background in luxury goods. This appointment, says Jefferies, has put the company firmly on the luxury path, a move set to return dividends in the future despite Remy's relatively small size.

"Remy does not have the financial superpower to compete head-on with spirits majors," Jefferies said. "Instead, the business will borrow from the CEO's experience in luxury goods, relying more on digital and direct to consumer sales than traditional FMCG marketing."

It may be small, but these days Remy is certainly packing a punch.

Remy Cointreau performance trends 2013-2017 - results data

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