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Rémy Cointreau reports 15% net sales drop
Rémy Cointreau has reported a 15.5% drop in net sales for the first six months of the year, a decline blamed on the “evolving consumption patterns” and de-stocking in China.
Overall the group achieved total sales of €471.8 million for the first six months to 30 September 2014, down from €558m during the same period last year, resulting in an organic decline of 5.6%.
Nevertheless, this was an improvement on last year which saw total net sales decline by 10.7%.
Net profit meanwhile slumped by 25.1% to €64m, which follows an overall drop in net profits of 46.9% reported by the group in its end of year results.
The group’s operating profIt fell to €102.1m, again attributed to the “continued de-stocking effort in Greater China and a rise in commercial costs to strengthen the distribution network.”
Despite this, the group’s liqueurs and spirits, and partner brands divisions put in strong performances, with the former achieving a rise in sales of 23.3% to €129.5 million.
While sales of partner brands increased by 6.8% to €65.5 million, bolstered by the “performance of brands distributed by the group in the Europe, Middle East & Africa region and in Travel Retail,” the group said in a statement released today.
Rémy Martin Cognac continued to be adversely affected by the downturn in China, however the group asserted that the brand was strong in “most of its other markets.”
Sales of Rémy Martin dropped by 13.4% to €276.8 million, “primarily due to the continued de-stocking in Greater China” and its “strategic withdrawal from the VS (Very Special) category in the US.”
This however was a slight improvement on the group’s first quarter results, which saw sales of the brand shrink by 15%.
It added: “The brand’s fundamentals remain sound, as suggested by the strong momentum of the brand’s superior qualities in the US, Central and Eastern Europe, South-East Asia and Africa.”
The group’s results for 2013/14, which it announced in June, saw net profits slump by 46.9%, accompanied by a sale decline of 13.5%.