Rémy Cointreau: Sales down -15.6% in Organic Terms

2024-25 Guidance Confirmed Strong drop in sales in the Americas as destocking continued Slight decline in APAC1, reflecting tougher markets in Southeast Asia as well as a high basis of comparison and complex conditions in China Contrasted performances in EMEA2, with sales hit by phasing effects, a high basis of comparison and soft consumer trends PARIS, July 24, 2024--(BUSINESS WIRE)--Regulatory News: Rémy Cointreau (Paris:RCO) reported sales of €217.0 million in the first quarter of 2024-25, down -15.6% on an organic basis.3On a reported basis, the decline was -15.7% including a negative currency effect of -0.1%, due primarily to trends in the Chinese renminbi. Sales in the Americas fell sharply once again as a result of continued destocking. The APAC region posted a slight decline, reflecting both the high basis of comparison and sluggish market in China, and worsening consumption in Southeast Asia. By contrast, sales in Japan were upbeat, driven by strong momentum. Lastly, varied performances in EMEA reflected soft consumer trends, amplified by phasing effects and the high basis of comparison.

Breakdown of sales by division: €m (April-June 2024) Q1 2024-25 Q1 2023-24 Change as reported Organic change vs. Q1 23-24 vs. Q1 19-20 Cognac 135.5 155.1 -12.6% -12.2% -17.0% Liqueurs & Spirits 75.8 95.0 -20.1% -20.4% +35.1% Subtotal: Group Brands 211.3 250.0 -15.5% -15.3% -3.7% Partner Brands 5.7 7.5 -24.3% -24.6% -14.0% Total 217.0 257.5 -15.7% -15.6% -4.0% Cognac The Cognac division’s first-quarter sales were down -12.2% on an organic basis, representing a -17.0% decline compared to Q1 2019-20. In the Americas and more particularly in the United States, ongoing destocking in the face of persistently lower depletions4 continued to take a heavy toll on sales in an overall market struggling with a fiercely promotional environment and depressed consumer demand. Within the APAC region, sales in China were almost stable impacted by a high basis of comparison and a complex consumer environment.

E-commerce continued to stand out for its resilience, growing by over +15% thanks to good results during the 6/18 festival. Festival highlights included successful launches of two CLUB limited editions and many activations to celebrate Rémy Martin’s 300th anniversary. Over the same period, sales in Southeast Asia fell sharply, impacted by high-end segments, while momentum in Japan remained strong. Lastly, sales in the EMEA region were down, hit by soft consumer markets and phasing effects in Europe, along with a marked decline in Africa, particularly South Africa. Liqueurs & Spirits First-quarter sales in the Liqueurs & Spirits division were down -20.4% on an organic basis, representing a significant +35.1% rise compared to Q1 2019-20.

This performance includes destocking effects in the Americas, particularly in the United States, despite positive depletions fuelled by Cointreau, which turned in a solid showing for Cinco de Mayo festivities, and The Botanist, which launched a host of activations that boosted visibility. The EMEA region also reported a sharp fall in sales in a market penalized by inflation and grappling with a more active promotional environment. Results also reflected phasing effects and a high basis of comparison, particularly in the United Kingdom. Lastly, the APAC region reported a decline in sales, affected by a slowdown in consumption in Southeast Asia and continued destocking in the whisky category in China. In contrast, Japan continued to experience strong growth driven by Bruichladdich.

Story continues Partner Brands Sales of Partner Brands fell by -24.6% in organic terms in the first quarter due to adverse trends in the Benelux countries and in the United Kingdom. 2024-25 objectives confirmed Despite the sharp fall in its 2023-24 results, Rémy Cointreau continues to exceed milestones set for its 10-year strategic plan. 2024-25 will be a year of transition, with highlights including finalization of destocking in the Americas, and 2025-26 will mark a resumption of the trajectory and targets set for 2029-30: high single-digit annual growth in sales on average and on an organic basis a gradual organic improvement in Current Operating Profit margin In a complex environment with limited visibility in its main markets, Rémy Cointreau anticipates a gradual recovery in sales over the course of 2024-25, with the first half affected by: continued inventory adjustments in the Americas, given the still-negative trend in depletions5 a high basis of comparison in the APAC region (sales up +55% in H1 2023-24 compared with H1 2019-20) mixed consumption levels in the EMEA region. Against this backdrop, Rémy Cointreau is determined to use tight cost controls and its value-driven strategy to protect its profitability, while continuing to make the investments needed for tomorrow’s growth. In 2024-25, the Group will build on: the resilience of its gross margin thanks to a measured, selective rise in prices amid moderate inflation normalization of its marketing & communication/salesratio, at a level much higher than in 2019-20 tight control of overheads to offset most of the rise in costs resulting from the reversal of temporary savings achieved in 2023-24.

Lastly, Group forecasts of the currency effects call for: a negative impact on sales between -€5 million and -€10 million a favorable impact on Current Operating Profit of between +€3 million and +€7 million About Rémy Cointreau All around the world, there are clients seeking exceptional experiences; clients for whom a wide range of terroirs means a variety of flavors. Their exacting standards are proportional to our expertise – the finely-honed skills that we pass down from generation to generation. The time these clients devote to drinking our products is a tribute to all those who have worked to develop them. It is for these men and women that Rémy Cointreau, a family-owned French Group, protects its terroirs, cultivates exceptional multi-centenary spirits and undertakes to preserve their eternal modernity. The Group’s portfolio includes 14 singular brands, such as the Rémy Martin and LOUIS XIII cognacs, and Cointreau liqueur.

Rémy Cointreau has a single ambition: becoming the world leader in exceptional spirits. To this end, it relies on the commitment and creativity of its 1,943 employees and on its distribution subsidiaries established in the Group’s strategic markets. Rémy Cointreau is listed on Euronext Paris. A conference call with investors and analysts will be held today by CFO Luca Marotta, from 9:00 am (Paris time). Related slides will also be available on the website (www.remy-cointreau.com) in the Finance section.

Appendices Q1 2024-25 sales (April-June 2024) €m Reported 24-25 Forex 24-25 Scope 24-25 Organic 24-25 Reported 23-24 Reported change Organic change A B C A/C-1 B/C-1 Cognac 135.5 -0.6 - 136.1 155.1 -12.6% -12.2% Liqueurs & Spirits 75.8 0.3 - 75.6 95.0 -20.1% -20.4% Subtotal: Group Brands 211.3 -0.4 - 211.7 250.0 -15.5% -15.3% Partner Brands 5.7 0.0 - 5.7 7.5 -24.3% -24.6% Total 217.0 -0.4 - 217.4 257.5 -15.7% -15.6% Regulated information in connection with this press release can be found at www.remy-cointreau.com Definitions of alternative performance indicators Rémy Cointreau’s management process is based on the following alternative performance indicators, selected for planning and reporting purposes. The Group’s management considers that these indicators provide users of the financial statements with useful additional information to help them understand its performance. These indicators should be considered as supplementing those including in the consolidated financial statements and resulting movements. Organic sales growth: Organic growth excludes the impact of exchange rate fluctuations, acquisitions and disposals. The impact of exchange rate fluctuations is calculated by converting sales for the current financial year using average exchange rates from the prior financial year.

For current-year acquisitions, sales of acquired entities are not included in organic growth calculations. For prior-year acquisitions, sales of acquired entities are included in the previous financial year but are only included in current-year organic growth with effect from the actual date of acquisition. For significant disposals, data is post-application of IFRS 5 (which reclassifies entities disposed of under "Net earnings from discontinued operations" for the current and prior financial year). It thus focuses on Group performance common to both financial years, over which local management has more direct influence. 1Asia-Pacific 2Europe, Middle East and Africa 3 All references to "on an organic basis" in this press release refer to sales growth at constant currency and consolidation scope 4Wholesalers’ sales to retailers 5 Wholesalers’ sales to retailers View source version on businesswire.com: https://www.businesswire.com/news/home/20240723758016/en/ Contacts Investor relations: Célia d’Everlange / [email protected] Media relations: Mélissa Lévine / [email protected] View comments()