Rémy Cointreau (RMC) H1 24/25 TU earnings summary

Executive summary

• Q2 2024-25 organic sales declined 16.1%, with H1 sales at €533.7M, down 15.9% year-on-year, driven by US destocking, weak depletions, high comps in China, and soft global consumption.

• Americas sales fell 22.8% in H1, APAC down 8%, and EMEA down 18.8%, all impacted by challenging market conditions and consumer trends.

• Q2 sales performance reflected an 8.0% volume effect and an 8.1% price-mix effect.

• Value depletions improved sequentially but remained negative; group value depletions down low double digits year-on-year.

Financial highlights

• H1 organic sales decrease of 15.9%, with a strong negative volume effect (-13.5%) and a smaller negative price/mix (-2.4%).

• Cognac division H1 organic sales declined 17.5% (volume -14.2%, price/mix -3.3%), now 64% of group sales; Liqueurs & Spirits down 12% (volume -12.6%, price/mix +0.6%), now 34% of group sales.

• Partner Brands H1 organic sales down 25.0%.

• Currency translation had a minor negative impact of €1.6M, mainly from the Chinese yuan and Japanese yen.

Outlook and guidance

• Full-year 2024-25 guidance expects a double-digit organic sales decline and operating profit margin deterioration, partially offset by a €50M+ cost-cutting plan.

• No sales recovery in Americas expected before Q4 2024-25; APAC to see further sequential deterioration in H2; EMEA to remain sluggish.

• 2024-25 is a transition year; high single-digit annual organic sales growth expected to resume from 2025-26, with gradual margin improvement through 2029-30.

• Exchange rates expected to impact sales by -€5M to -€10M and COP by +€3M to +€7M.