In the first half, organic growth increased in all regions, with Asia Pacific delivering remarkable growth, driven by strong momentum in Greater China and Singapore, as well as improved trends in Japan. The Americas region benefited from solid second-quarter growth in the United States, amid a favorable environment for cognac upscaling. Growth in the Europe, Middle East and Africa (EMEA) region was underpinned by positive performance in Russia, Central Europe and Africa.
House of Rémy Martin
The House of Rémy Martin achieved an excellent performance in the first half, with organic growth of 15.4%, through increased sales in all regions. In Asia Pacific, Greater China confirmed strong momentum, while Singapore is making robust headway, and Japan returned to positive growth. The Americas are benefiting from solid demand for high-end cognac, and the EMEA region is driven by a new phase of expansion in Africa, as well as sustained growth in Russia. Travel Retail started the year strong, notably thanks to clear improvement in high-end cognac trends.
Creativity within the House of Rémy Martin continued in the first half of the year. Following the launch of its limited edition XO Cannes 2017, available exclusively in Travel Retail, Rémy Martin launched the second edition of Carte Blanche à Baptiste Loiseau, an exclusive series of 9,650 bottles. Meanwhile, LOUIS XIII launched the limited edition The Legacy, 500 crystal magnum decanters signed by four generations of cellar masters.
Liqueurs & Spirits
The decline in Liqueurs & Spirits (-4.5% in organic terms) is attributed to the deconsolidation of Passoã sales from December 1, 2016. This development overshadowed strong growth by the division's remaining brands (+5%) in the first half.
The House of Cointreau has continued its progression since the beginning of the year, thanks to good performance in its number-one market, the United States, as well as brisk development in newer markets, such as Greater China and Russia. The House of Metaxaexperienced remarkable growth, driven by the success of "12 Stars" in its main markets (Central Europe, Russia and Germany), and acceleration in Travel Retail trends, thanks to the return of Russian travelers. Mount Gay benefited from positive trends in its long-standing markets, notably Barbados and the UK, while St-Rémy capitalized on solid business in Canada and expansion in Russia. The Progressive Hebridean Distillers (Bruichladdich/Port Charlotte/Octomore/The Botanist) pursued remarkable growth, boosted by the exceptional strength of The Botanist gin.
Partner Brands
Lower sales (-14.3% in organic terms) resulted primarily from the evolution in the partner brands’ portfolio: on one hand, the end of the distribution agreement for champagne brands (Piper-Heidsieck and Charles Heidsieck), and on the other hand, the consolidation of Passoã revenues, now distributed by the Rémy Cointreau network on behalf of the Passoã joint venture.
2017/18 Outlook
With first-half sales fully in line with the Group’s forecasts, Rémy Cointreau confirms its guidance of growth in Current Operating Profit over the financial year 2017/18, assuming constant exchange rates and consolidation scope.
Appendices:
Sales and organic growth by business and by quarter
Definitions of alternative performance indicators
Rémy Cointreau's management process is based on the following alternative performance indicators, chosen for planning and reporting. The Group management considers that these indicators provide financial statement users with useful additional information for understanding the Group's performance. These alternative performance indicators should be considered as supplementing those included in the consolidated financial statements and the resulting movements.
Organic sales growth
Organic growth is calculated excluding the impacts of variations in exchange rates as well as acquisitions and disposals.
The impact of exchange rates is calculated by converting sales for the current financial year into the exchange rate of the previous financial year.
For acquisitions in the current financial year, the sales of the acquired entity are not included in organic growth calculations. For acquisitions in the previous financial year, the sales of the acquired entity are included in the previous financial year but are included in organic growth calculations for the current year only starting from the anniversary date of the acquisition.
For significant disposals, we use data following the application of IFRS 5, which systematically reclassifies the sales of the sold entity in "Net profit from activities sold or to be sold" for the current and previous financial year.
This indicator serves to focus on Group performance common to both financial years, which local management is more directly capable of influencing.
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