Rémy Cointreau earnings surge on lockdown
06:49, 3 June 2021
Spirits operator Rémy Cointreau reported a lift in operating profits to €236.1m ($287.7m) for the year ending 31 March 2021, thanks to a cognac sales surge in China and the US plus tighter cost controls. Rémy had previously anticipated 10% growth.
The result has left the Rémy Martin cognac maker proposing a €1.85 dividend a share for 2020/21 and it has announced plans to buy back as much as 1.98% of share capital.
This comes in contrast to last year when it saw operating profits for 2019/20 slip 22% due to the COVID-19 pandemic.
Group sales surge
Cognac sales of €735m – which were up 27% in the second half of the year – led Rémy’s divisional sales. Overall group sales, including liqueurs and spirits, inched up 1.8% on an organic basis.While the EMEA region saw a 11.5% sales dip in the second half, sales for the Americas lifted 38.7% in the same period.
The gross margin was 66.8%, up slightly from 66% the previous year and Rémy claims it’s on track to hit a 72% gross margin by 2030. And the total operating margin was 2.4 percentage points up on a reported basis to 23.4% for the full year.
Trading up from home
In terms of outlook for 2021-22, Rémy Cointreau says it’s upping strategic investment “to fuel the rebound and its brands’ awareness” but warns on currency risk of between €16m-€20m.
Like other drinks businesses, Rémy has benefited from an increase in home drinking due to COVID-19 though at the expense of bars and restaurants sales. Many consumers have traded up to the brands, including Louis XIII and The Botanist, as well as the sectors that Rémy Cointreau operate in.
Rémy Cointreau shares were trading at €169.00 this morning, 35% higher than 12 months ago.