Latest news with #LucaMarotta
Reuters
25-07-2025
- Business
- Reuters
Remy Cointreau sales rise, profit view lifted on China tariff deal
LONDON, July 25 (Reuters) - French spirits maker Remy Cointreau ( opens new tab reported its first quarter of sales growth since early 2023 and raised its full-year profit guidance on Friday after damaging Chinese tariffs were reduced. Sales have slumped in Remy's key U.S. and Chinese markets in recent years, forcing the company into multiple guidance downgrades and to scrap medium-term sales targets. But it said in June that the worst was over. The maker of Remy Martin cognac and Cointreau liqueur said its first-quarter organic sales rose 5.7% year-on-year, beating analyst forecasts and returning to growth soon after new CEO Franck Marilly took the helm in June. Shares rose over 5.5%, even as Chief Financial Officer Luca Marotta warned that Remy's sales would decline in the second quarter before rebounding later in the year, and that trends in the U.S. remained below expectations. "It was a positive quarter, so I'm very eight negative (quarters)," Marotta told analysts on a call. Remy said the quarterly rise was driven by a low base of comparison a year ago in the United States. Sales in China continued to fall, but Remy described the decline as "limited". "After two years of declining growth, I think it's the beginning of good news," said Charles de Riedmatten, fund manager at Myria AM, a Remy investor. Questions remained about underlying demand for cognac and how the new CEO, who has a background in luxury goods but not spirits, will perform, he said. High U.S. inflation and downbeat Chinese consumers had already knocked Remy's business even before tariffs - actual or threatened - emerged in both markets. In July, the cognac industry agreed a deal with China that would ease steep duties imposed since October 2024. As a result, Remy now expects the annual blow from tariffs to fall to 45 million euros from 65 million euros previously, driven by a reduction in the impact from Chinese duties from 40 million euros to 10 million euros. However, it hiked the hit expected from U.S. tariffs on European goods by 10 million euros, to 35 million euros, to reflect U.S. President Donald Trump's threat to impose a 30% tariff on EU imports from August 1. Remy expects its full-year operating profit to decline by mid- to high-single digits percentage, an improvement on the mid- to high-teen decline it previously anticipated. The company makes around 70% of its sales from cognac, mostly in the U.S. and China, leaving it more exposed to tariffs and economic downturns than more diversified peers. ($1 = 0.8518 euros)
Yahoo
05-06-2025
- Business
- Yahoo
Remy Cointreau (REMYF) Full Year 2025 Earnings Call Highlights: Navigating Challenges with ...
Revenue: EUR984.6 million, representing an 18% organic decline. Current Operating Profit (COP): EUR217 million, down 13.5% organically. Organic COP Margin: 21.6%, a deterioration of 3.9 points organically. Gross Margin: 70.6%, declined by 1 point due to cost production inflation and negative price/mix effect. A&P Expenses: Reduced by 1.1 points, now 20.3% of sales. Cost Savings: EUR85 million in '24/'25, totaling EUR230 million over two years. Net Financial Debt: EUR675.4 million, up EUR25.7 million from March '24. Net Profit Group Share: EUR121.2 million, net margin of 12.3%. Earnings Per Share (EPS): EUR2.36, down 35.3% year-on-year. Free Cash Flow: EUR19.2 million in '24/'25. Dividend Proposal: EUR1.5 per share, with EUR1 in cash and EUR0.5 in cash or shares. ROCE: 10.3%, down 5.2 points on a reported basis. Warning! GuruFocus has detected 7 Warning Signs with REMYF. Release Date: June 04, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Remy Cointreau (REMYF) maintained a strong gross margin of 70.6% despite challenging macroeconomic conditions. The company achieved significant cost savings, totaling EUR230 million over two years, with a focus on structural savings. Cointreau gained market share by leveraging the growth of cocktails, particularly in the US, and is exploring new consumption occasions. The Botanist brand has become accretive for the group, benefiting from the portfolio strategy beyond Cognac. Remy Cointreau (REMYF) made substantial progress in sustainability, achieving a 12% reduction in carbon emissions and a 53% reduction in net water consumption. Group sales declined by 18% organically, reflecting broader macroeconomic challenges. The US market remains challenging, with no clear signs of a rebound in sell-out trends. Potential tariff increases in China and the US could have a significant negative impact on financial performance. The company withdrew its '29/'30 objectives due to persistent macroeconomic uncertainties and tariff risks. The Cognac category, particularly in the US, faces challenges in recruiting new consumers beyond its existing core clientele. Q: In the US, are depletion trends close to flat, and how does this relate to sell-out trends for Remy Cointreau and the Cognac category? A: Eric Vallat, CEO, explained that depletions are close to flat but still slightly negative, showing sequential improvement. Actions on pricing, particularly for VSOP, have had a positive impact, though not fully implemented. It's too early to confirm if sell-out is back to growth, but stock levels are healthy, and the company is confident in sell-in recovery. The challenges are seen as cyclical, with a focus on recruiting beyond the existing clientele. Q: What are the sensitivities around potential tariffs on EU imports, and how much of the impact can be mitigated? A: Luca Marotta, CFO, stated that theoretically, a 20% gross impact from tariffs is possible, but the actual impact will depend on various factors, including phasing and volumes. The company aims to mitigate the net impact through strategic actions, projecting to offset more than 35% of the total effects, potentially reaching EUR50-60 million in savings. Q: What is needed to drive a spark in the Cognac category in the US, and how does pricing play a role? A: Eric Vallat, CEO, believes the issue is not solely price-related, as depletions are negative across the board except for tequila and cocktails. Psychological pricing is important, but the main challenge is recruiting beyond the existing clientele. The company plans to invest in communication and activations to rebuild desirability and expand its consumer base. Q: Can you provide insights into the long-term outlook for top-line growth and cash flow, considering the withdrawal of midterm targets? A: Eric Vallat, CEO, emphasized that the withdrawal of targets is due to tariff uncertainties rather than top-line potential. He believes there is significant growth potential in China and the US, with a focus on expanding geographical footprint and non-Cognac brands. Luca Marotta, CFO, added that strategic ODV investments and CapEx are being optimized, with a focus on maintaining a strong cash flow position. Q: How are stock levels across different regions, and what is the focus of marketing spend? A: Eric Vallat, CEO, reported that stock levels are healthy worldwide, with four months in the US and stable in China and Europe. Marketing spend is prioritized based on brand and market potential, with a focus on digital and below-the-line activities. The company aims to maintain a 20% A&P ratio, with adjustments based on market dynamics and brand needs. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Sign in to access your portfolio
