Rémy upbeat despite ongoing sales slide

Rémy Cointreau has stood by its prediction of a return to growth this year as the drinks group reported a -5.6% organic sales decline in its first half results.

Reporting on a six month period from April to September 2014 that saw the group achieve sales of €471.8 million, Rémy noted the “very high comparables” of the same period last year as it highlighted growth in Europe, the Middle East and Africa.

In particular the group pointed to the success at the top end of its portfolio, noting: “Generally, the decrease in our shipments over the first half masks the strong sell-out momentum of our upmarket brands in most of our major markets, such as the US, Asia-Pacific (excluding China), and Central and Eastern Europe.”

Despite these positive reports, Rémy’s exposure to the Chinese slowdown, together with unfavourable exchange rate movements and the end of its contract with Edrington in the US all dragged down its headline performance.

Flagship Cognac brand Rémy Martin saw sales slide by 13.4%, although the group pointed to “strong” demand in Central and Eastern Europe, South-East Asia and Africa.

There was better news from other corners of the portfolio, with its liqueurs and spirits division reporting 9.1% growth. Within this, Metaxa achieved double digit growth thanks to central and eastern European markets, while Bruichladdich sales doubled as a result of “strong momentum” in the US, Taiwan, UK and travel retail.

Looking ahead, the company stated: “Rémy Cointreau confirms its 2014/15 targets of delivering positive organic growth in both sales and current operating profit.

“These targets should be calculated based on a 2013/14 pro forma (i.e. excluding the contribution of the Edrington distribution contract in the US) and at constant exchange rates.”