Rémy Cointreau (RMC) H2 23/24 earnings summary

Executive summary

• 2023-2024 was a challenging year with headwinds including inflation, US destocking, normalization of consumption, and slow recovery in China, but the group maintained its long-term vision and strategic investments.

• Sales declined 19.2% organically year-over-year to €1,194.1m, with net profit group share down 37.1% to €184.8m; EPS at €3.64, down 37.1%.

• Cost-saving measures exceeded targets, achieving €145m in savings (45% structural), and significant investments continued in brand equity, innovation, and sustainability.

• The group advanced sustainability initiatives, reducing carbon footprint by 15% and water consumption by 19%, and invested 20% of sales in marketing and sustainability.

• Strategic plan milestones remain ahead of schedule, with continued organizational changes in key markets.

Financial highlights

• Net sales: €1,194.1m, down 22.9% reported and 19.2% organic year-over-year; currency effect -3.7%.

• Gross margin: 71.2% of sales, down 1.3 pts organically; COP: €304.4m, down 27.8% organic; COP margin at 25.5%, down 3 pts.

• Net profit group share: €184.8m, down 37.1% reported; net margin 15.5%.

• EPS: €3.64, down 37.1%; clean EPS: €3.84.

• Free cash flow at €13.8m, down from €48.6m last year, mainly due to lower EBITDA.

• Net financial debt at €649.7m, up from €536.6m; net debt/EBITDA ratio at 1.68.

Outlook and guidance

• 2024-2025 is a transition year; gradual sales recovery expected, with H1 negatively affected by continued inventory adjustments in Americas and high comps in APAC.

• High single-digit annual sales growth and gradual COP margin improvement targeted from 2025-2026 onward.

• Tight cost controls and value-driven strategy to protect profitability; selective price increases amid moderate inflation.

• FX impact for 2024-25 expected at -€5m to -€10m on sales and +€3m to +€7m on COP.

• 2029-30 targets confirmed: gross margin 72%, COP margin 33%, 50% carbon reduction per bottle by 2030.