Rémy Cointreau takes 12.9% profits hit

Rémy Cointreau today confirmed its full-year operating profits for 2008/09 fell 12.9% to €137m as the company endured the fallout from its decision to leave the Maxxium distribution venture and suffered from substantial destocking and falling sales across the globe.

Net income dropped from €98.4m to €86.1m as the French wines and spirits group, which sells Rémy Martin Cognac, Cointreau liqueur and Champagne’s such as Piper-Heidsieck and Charles Heidsieck, saw a marked decline in its US and Russian markets.

The decision to quit the Maxxium distribution joint venture from 30 March this year led to a compensation payment of €224m and to the disposal of its investment in the joint venture for €60.4m.

The results are in line with predictions given by the company in January that full-year profit was set for a 15% drop, and a company statement said: “In this context, Rémy Cointreau achieved a good performance in the current crisis owing to a well-executed transition, the dynamics of its brand and the quality of its products.”

Total earnings from Cognac, Rémy’s primary source of revenue, fell 20% to €75.1m, while the liqueurs division remained steady. Champagne revenues fell 13% owing to reduced demand.

The company refused to offer any forecast for the year 2009/10, merely saying: “Rémy Cointreau remains confident in its ability to successfully weather this period of unfavourable conditions, owing to the strength of its brands, the dynamics provided by its new commercial resources and the quality of the financing at its disposal.”

Alan Lodge, 10.06.2009