Owner of Scotch whisky giant Bruichladdich scraps target

The Herald Scotland

a day ago

However, shares in the Paris-listed closed up more than 5%, after Remy signalled the 'excellent execution' of cost-cutting plans, with €85 million achieved compared with €50m expected. Remy said it has now saved €230m over the last two years.
The savings partially offset a sharp decline in sales at the company, which fell by 4.8% last year to €984.6m. Operating profit tumbled by 30.5% to €217m.
The decision to withdraw a long-term growth target set in 2020 underlines the continuing turbulence in the global spirits market that has arisen from a slowdown in major markets such as the US and China and the ongoing uncertainty sparked by President Donald Trump's trade tariffs. That took a further turn this week when the President doubled US tariffs on foreign aluminium and steel to 50%, although the UK has so far secured an exemption.
Remy Cointreau, which is perhaps best known for its Cognac and brandy, is the latest big-name Scotch whisky distiller to highlight the impact of tariffs on business, following Diageo and Pernod Ricard. Diageo reported last month that US tariffs may hit profits by up to $150m per year, having withdrawn its guidance earlier in the year amid tariff uncertainty, although that was before it was ruled by the US Court of International Trade that the Trump administration did not have the authority to impose sweeping tariffs on other countries. The ruling, which covered the 10% global baseline tariff and the 50% tariff threatened against the European Union, has been appealed.
Remy Cointreau said yesterday: 'Given the continued lack of macroeconomic visibility, the geopolitical uncertainties surrounding US-China tariff policies, and the absence to date of a recovery in the US market based on improving underlying trends… Remy Cointreau believes the conditions requited to maintain its 2029-2030 targets are no longer in place.
'As a result, the group has opted to withdraw its objectives for 2029/30 originally issued in June 2020.
'This decision also reflects the arrival of a new chief executive officer, who will establish his own strategic roadmap while remaining aligned with the value strategy implemented by the group for decades.'
The removal of the long-term target was announced as Remy, which has appointed Franck Marilly as its new chief executive, replacing Eric Vallat, reported that sales and profits tumbled in its 2024/2025 financial year. However, it expects to return to growth in the current year. Excluding any increase in customs duties in China and the US, it expects operating profit to increase in the high single-digit to low double-digit [percentage] range.
The company estimates that potential increases in duties will have a maximum gross impact of €100m on operating profit (€60m in China and €40m in the US) but said it could offset this by 35% through its own action plan, reducing the maximum net impact to €65m.
These estimates are based on additional anti-dumping duties of 38.1% on Cognac imports arriving in China, and custom duties of 20% on imports from the EU and 10% from the UK and Barbados on goods entering the US. Remy said it factored in 10% custom duties on all imports to the US for the April-June 2025, corresponding to the 90-day grace period.
Shares in Remy Cointreau, which trade on the Paris stock market, were trading up 4% at €48.8 around 5.30pm last night.