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Real-time Euronext Paris  -  11:35 2022-06-24 am EDT
169.00 EUR   +4.77%
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Remy Cointreau gives upbeat outlook, weathering China COVID woes

04/29/2022 | 02:06am EDT
FILE PHOTO: The logo of Remy Cointreau SA is pictured in the Cointreau distillery in Saint-Barthelemy-d'Anjou near Angers

* FY 2021/22 sales 1.313 bln euros, up 27.3% organic

* Keeps for "very strong" growth f'cast in 021/22 profit

* CFO eyes double-digit organic sales growth in Q1 2022/23

* Shares up 3%, accelerating gains

PARIS, April 29 (Reuters) - French spirits group Remy Cointreau said on Friday it was confident over prospects for this year, predicting a strong start to business in its first quarter to June amid COVID-linked restrictions in key market China.

For its fiscal year ended March 31, the maker of Remy Martin cognac and Cointreau liquor kept a forecast for "very strong" organic growth in operating profit as it reported a sales rise of 27.3%, in line with expectations.

Due to higher marketing and communication spending and a tougher comparison base in the second half, year to March 2022 profits - which Remy will unveil in June - would be driven solely by first-half growth, the group reiterated.

The market consensus is for organic operating profit growth of 38%.

Finance Chief Luca Marotta told analysts that fiscal year 2022/23 would be "a strong year of pricing power at group level," with cognac price increases in a high single to double-digit range in the United States.

The company was also targeting double-digit organic sales growth in the first quarter, notably driven by U.S. revenues, he said.

The pandemic has helped Remy's drive towards higher-priced spirits to boost profit margins long term, accelerating a shift towards premium drinks, at-home consumption, cocktails and e-commerce.

"Its high-end positioning, the strong level of desirability of its brands and the rarity of its eaux-de-vie and aging spirits give it excellent pricing power," the group said in a statement.

"Q4 sales broadly in line, confident tone on outlook despite China lockdown should re-assure," Credit Suisse analysts wrote in a note.

Group sales for the year were 1.313 billion euros ($1.38 billion), an organic rise of 27.3% in line with a company-compiled consensus, thanks to strong demand for premium cognac in China, the United States and Europe.

Full-year sales at the Remy Martin division, which makes the bulk of group profit, rose 26.3%. In China, cognac sales grew at a double-digit rate.

In the fourth quarter alone, organic cognac sales fell 16.7%, compared with expectations of a 15.9% decline.

This reflected a previously flagged voluntary management by the group of its strategic inventory ahead of sharp April 1 price increases, as well as the impact of COVID-related lockdown measures in China in March. In mainland China alone, cognac sales showed a double-digit fall in the fourth quarter.

Larger spirits rival Pernod Ricard said on Thursday that COVID-19 restrictions in China, the war in Ukraine, and a normalization of its U.S. business could mean softer sales in its April-June fourth quarter.

($1 = 0.9505 euros) (Reporting by Dominique Vidalon; Editing by Sudip Kar-Gupta, Subhranshu Sahu, Bradley Perrett and John Stonestreet)

© Reuters 2022
Stocks mentioned in the article
ChangeLast1st jan.
CREDIT SUISSE GROUP AG 5.15% 5.72 Delayed Quote.-35.53%
PERNOD RICARD 4.81% 179.9 Real-time Quote.-14.94%
RÉMY COINTREAU 4.77% 169 Real-time Quote.-21.03%
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Sales 2022 1 294 M 1 365 M 1 365 M
Net income 2022 201 M 213 M 213 M
Net Debt 2022 382 M 403 M 403 M
P/E ratio 2022 43,1x
Yield 2022 1,15%
Capitalization 8 575 M 9 045 M 9 045 M
EV / Sales 2022 6,92x
EV / Sales 2023 5,71x
Nbr of Employees -
Free-Float 39,7%
Duration : Period :
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Technical analysis trends RÉMY COINTREAU
Short TermMid-TermLong Term
Income Statement Evolution
Mean consensus HOLD
Number of Analysts 21
Last Close Price 169,00 €
Average target price 209,63 €
Spread / Average Target 24,0%
EPS Revisions
Managers and Directors
Eric Vallat Chief Executive Officer
Luca Calogero Pietro Marotta Chief Financial Officer
Marc Hériard-Dubreuil Chairman
Patrick Marchand Operations Director
Jacques-Étienne de T'Serclaes Independent Director
Sector and Competitors
1st jan.Capi. (M$)
RÉMY COINTREAU-21.03%9 045
DIAGEO PLC-9.04%102 508
PERNOD RICARD-14.94%49 257
EMPERADOR INC.-5.29%5 646