Latest news with #Marilly
Yahoo
12 hours ago
- Business
- Yahoo
The challenges facing Rémy Cointreau's new CEO
In under three weeks, former Shiseido and Chanel executive Franck Marilly will take the hot seat at Rémy Cointreau, joining a business where sales and profits have tumbled over the last 12 months. Marilly is also taking the helm at a spirits group where Cognac, a category under significant pressure in recent quarters, accounts for around 70% of sales. It's clear the new Rémy Cointreau CEO will have plenty in his in-tray and, while market watchers have a number of questions about the company's near-term prospects, there are, it's argued, some fundamental questions about the make-up of the business. The group's last financial year, which ran until the end of March, was another tough period for the Rémy Martin Cognac maker. Net profit decreased 34.4% to €121.2m ($138.4m), or by 36.8% organically. Operating profit was down 27.6% at €211m. The Bruichladdich whisky owner posted an 18% decline in full-year sales to €984.6m. It was the second successive year when sales and earnings declined. Rémy Cointreau was hit by falling Cognac sales amid a struggling category in the US – one of the two biggest markets for the spirit – and pressures in China, the other principal destination. The company has sought to point to positive signs for its Cognac business in both markets. In the Americas, fourth-quarter sales 'rebounded sharply', particularly in the US. Rémy Martin, the group added, had gained market share in China despite the 'persistently challenging market conditions' in the country. Marilly will take the reins as CEO as Rémy Cointreau nears the end of the first quarter of its new financial year and the market's eyes this week were on the company's thoughts for its 2025/26 fiscal period. The Cointreau liqueur maker expects sales to return to 'mid-single-digit growth on an organic basis'. It said the recovery would be 'driven primarily by a strong technical rebound in sales to the United States' starting in the first quarter. However, in a sign of the macro uncertainty hanging over Rémy Cointreau's Cognac business, its guidance for its so-called current operating profit came with a caveat. Tensions over tariffs, not just on imports to the US but on EU brandy shipments to China, meant Rémy Cointreau's projection for current operating profit was for growth 'in the high single-digit to low double-digit range' – but 'excluding any increase in customs duties in China and the United States'. At the moment, the company's 'worst-case scenario' is for the potential increase in tariffs to amount to €100m gross. This embedded content is not available in your region. Alongside the publication of Rémy Cointreau's full-year profits yesterday, the company became the latest major distiller to withdraw mid-term guidance. The group pulled its objectives for 2030 – drawn up a decade ago – pointing to 'the continued lack of macroeconomic visibility', tensions over tariffs and uncertainty over when the US market would recover. In February, Diageo pulled its medium-term guidance, citing 'macroeconomic and geopolitical uncertainty'. The same month, Pernod Ricard cut its sales forecasts, saying 'intense geopolitical uncertainties' were hitting the spirits sector. Analysts expected the withdrawal of Rémy Cointreau's guidance and more attention is on the near-term prospects of the company's Cognac portfolio in the US and China and, more broadly, how tariffs could impact the business. 'Management provided a more nuanced view of US depletions, confirming that while volumes remain mid-single-digit negative, the trend is improving sequentially. Notably, VSOP depletions are nearing flat, supported by tactical pricing actions and smaller formats,' Barclays analyst Laurence Whyatt wrote in a note to clients. He added, however, that outgoing CEO Eric Vallat has 'cautioned that it is still too early to declare a full sell-out recovery'. Across the Pacific in China, market conditions for Cognac are challenging for all brands, even if Rémy Cointreau has been able to eke out some market share gains for part of its portfolio, though, as Bernstein's Trevor Stirling says, it's unclear whether that progress has been achieved across the range. 'The Chinese market remains very weak with no near-term upside visible,' Bernstein said yesterday. 'However, Rémy has been consistently gaining share in XO, VSOP and e-commerce, though there was no mention of Louis XIII.' Reflecting on a post-results call between Rémy Cointreau and analysts, Whyatt said the company's management believes it can use the expected improvement in sales to bolster its position against any changes in tariffs. 'It clarified that the assumed €65m net tariff impact could be mitigated more aggressively than previously guided,' Whyatt said. 'Management now believes mitigation could reach 50–60% – up from the 35% initially communicated – if top-line momentum improves. This would reduce the net impact on current operating profit to €25–30m, suggesting a less severe downside scenario than originally feared.' It all adds to the impression that Marilly is walking into a pretty tough job. There are attributes of Rémy Cointreau's business that provide grounds for optimism. Its Cognac portfolio has a more premium bent that a few years ago, while its Liqueurs & Spirits – home to brands like Bruichladdich, Cointreau and The Botanist gin – has seen its organic sales jump by more than a third over the last five years (even if they fell by 9% in 2024/25). However, perhaps Marilly's fundamental task is to make Rémy Cointreau a broader business, one less reliant on Cognac. 'His big challenge is to further de-risk the company, diversify away from Cognac and diversify away from the US and China. Rémy Cointreau is just too dependent on those two countries and on the Cognac category,' one analyst who wished to remain anonymous said. That, of course, will take time – and require the company to be active in the M&A market. Last year, Rémy Cointreau set out plans to find €50m in costs during the fiscal period. Rémy Cointreau said yesterday it had extracted €85m over the last 12 months – and €230m over the last two years. It described more than half over those cuts as 'structural savings'. The group's net debt to EBITDA ratio stands at 2.4 times, providing, the unnamed analyst suggests some room for manoeuvre. 'The balance sheet is not too stretched and doesn't allow for massive acquisitions but there's ways around that if needed,' they said. 'It is important to make a clear step towards a more diversified structure from a category perspective and geographically.' Elsewhere in spirits, the likes of Diageo, Pernod Ricard and Campari have either sold assets in recent months, or have signalled more will follow. Those brands, however, have tended to be away from the more upmarket products Rémy Cointreau has tended to reach for in the past. The conundrum for the new Rémy Cointreau CEO will be finding the right kind of 'premium' asset, which more often than not are either small – so may not immediately help in any attempts to diversify – or be pricey. 'It has to do something with what they call terroir, preferably, with ageing, with a good story behind it,' the analyst says. 'That could be in Tequila, that could be in whisk(e)y, where I also would see probably the best fit with the company, probably the best growth opportunities. 'It would make sense to some extent, to make perhaps a little bit of a bolder move, because if you buy smaller brands, it's going to take a long time before you actually shift the balance a bit towards less Cognac. I know there's probably less opportunities when you think about bolder moves but it's definitely something that I think the board should consider.' "The challenges facing Rémy Cointreau's new CEO" was originally created and published by Just Drinks, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.
Reuters
2 days ago
- Business
- Reuters
Breakingviews - Rémy Cointreau tariff fix will leave long hangover
DUBLIN, June 4 (Reuters Breakingviews) - Rémy Cointreau ( opens new tab requires a stiffer cure for its tariff woes. On Wednesday, the $3 billion cognac maker revealed it had scrapped its 2030 sales guidance, citing trade war uncertainty and weakness in China. The group is cutting costs, but incoming CEO Franck Marilly's best hope will be to spend more to win customers and develop new products, even if it means sacrificing shareholder rewards. Rémy is not alone in ditching its longer-term sales guidance. In February, $60 billion Guinness-maker Diageo (DGE.L), opens new tab scrapped its 5% to 7% annual revenue growth target, citing uncertainty caused by possible tariffs imposed by the U.S. on Canada and Mexico, while $26 billion Pernod Ricard ( opens new tab also recently cut its sales guidance. Rémy had been promising a 'high single-digit' percent annual growth in revenue between 2025/2026 and 2029/2030, but now is not giving investors any steer. On the face of it, these goals may have been too ambitious to begin with. In Diageo and Rémy's cases the punchy sales targets were set during the pandemic when spirits were enjoying an unprecedented boost. But in the past two years, inflation, a continued drop-off in drinking in younger consumers and the spectre of tariffs have dampened that trend. And with the U.S. and China, the two largest drink markets in the world, showing increased signs of weakness, analysts now expect Rémy to grow sales by less than 5% each year between 2025 and 2030, Visible Alpha data shows. That's one reason why the company's valuation has shrunk, even if it still enjoys a premium multiple to Diageo and Pernod Ricard. To recover some of the lost fizz, Marilly needs to make tough choices. The new boss who will take the reins at the end of this month will have to increase spending on marketing to boost new products and gain market share. Back in 2022, the company spent 433 million euros on ad campaigns and promotions, but that figure is expected to be just 286 million euros this year, Visible Alpha data shows. Marilly will also need to cut Rémy's rising debt, which is currently equivalent to 2.4 times trailing EBITDA. To do both, he may need to scrap the company's dividend, expected to be around 80 million euros this year. That might rile shareholders, but if Marilly manages to reverse the rot, they will eventually thank him. Follow Aimee Donnellan on LinkedIn, opens new tab.
Yahoo
7 days ago
- Business
- Yahoo
Remy Cointreau names luxury veteran Marilly as new CEO
(Reuters) - Remy Cointreau on Wednesday named Franck Marilly as its new CEO, tasked with leading the French cognac maker through a period of spiralling sales and tariff threats in its key U.S. and Chinese markets. Marilly, 59, who has worked in luxury and cosmetics groups including Chanel, Unilever and Japan's Shiseido, will take office on June 25, replacing Eric Vallat, who resigned earlier this year after more than five years at the helm. Vallat led Remy through the COVID-19 pandemic and a subsequent boom in luxury spirits that has since gone into reverse, with sales tanking. Remy makes some 70% of its sales from cognac, mostly in the U.S. and China. Marilly now has to turn performance around at a time when drinkers in those nations are not buying the brandy, and when Remy faces tariffs on its exports to both. Vallat will work alongside Marilly to ensure a harmonious transition, Remy's statement said, adding Marilly had successfully navigated "high-stakes" environments in his previous roles. "We are convinced that he will bring a new dynamic and will be able to confidently address the new challenges of the group's growth," Remy Cointreau Chairperson Marie-Amelie de Leusse said in a statement. Remy's shares, which have already fallen substantially since 2022, were down 1.2% at 0721 GMT. VALUE STRATEGY Remy's sales have come under pressure amid a sluggish Chinese economy and tariffs on European brandy. Meanwhile, high interest rates and inflation have led to steep declines in the U.S., where Remy's rivals have also been cutting prices and taking market share. Remy however has maintained its approach of cultivating the value of its high-end brands, a strategy it says would be undermined by price cuts. It said Marilly will continue this value-led approach and build up in new markets. Investors however have warned diversification will take time to show results. The new CEO now also faces the threat of steep tariffs from the U.S. Remy is more exposed to tariffs than peers due to its reliance on Chinese and U.S. cognac sales. Marilly said he was delighted to join the group, and would focus on brand value and sustainable results. "Together we will accelerate the group's development... while meeting the needs of a constantly evolving sector," he said. Previously, Marilly led the Europe, Middle East and Africa and fragrance divisions at Shiseido Group and Chanel, where he spent 17 years. Sign in to access your portfolio
Yahoo
28-05-2025
- Business
- Yahoo
Rémy Cointreau appoints new CEO
French spirits group Rémy Cointreau has appointed Franck Marilly as its new CEO. Marilly, whose appointment is effective 25 June, will succeed Éric Vallat, who stepped down last month to pursue 'a new professional project'. The newly appointed CEO brings over three decades of experience from FMCG companies including Unilever, Chanel and the Japanese group Shiseido. Marie-Amélie de Leusse, chairwoman of the board of directors of Rémy Cointreau said: 'We are convinced that he [Marilly] will bring a new dynamic and will be able to confidently address the new challenges of the group's growth in a complex macroeconomic and geopolitical context.' At Shiseido, which he joined in 2018, Marilly was the president and CEO of the EMEA region and the global fragrance division. Prior to joining the Japanese company, he spent nearly 17 years at Chanel, where held the title of chief executive of the EMEA region for the group's fragrance and beauty unit, and held multiple executive positions at multiple international subsidiaries. Before his time at Chanel, Marilly was president of the fragrance division for Unilever in France and held general management positions in various international subsidiaries. According to the Bruichladdich Scotch whisky owner, Marilly will bring "solid experience in international management, which is crucial for the global success of the group, as well as his deep knowledge of its key markets'. In February, Marilly was appointed Foreign Trade Advisor of France by a decree signed by the Prime Minister. Commenting on his appointment, Marilly said: 'Rémy Cointreau is today recognised for its unique centures-old heritage and its portfolio of exceptional brands. I will levearge my experience to pursue its value strategy and support the teams in a dynamic of sustainable performance. "Together, we will continue to accelerate the Group's development, capitalising in particular on the excellence of its know-how and its capacity for innovation, while meeting the expectations of a constantly evolving sector.' In its most recent financial update, Rémy Cointreau reported an 18% drop in annual sales on an organic basis, totalling €984.6m ($1.12bn). It is in line with the Rémy Martin Cognac manufacturer's prediction in January forecast that its sales would land 'at the lower end of the guidance range (close to 18%)'. Rémy Cointreau will announce its complete yearly results in June, having confirmed on 30 April its 2024-25 'current operating margin' goal of 21% to 22% on an organic basis. The group's Cognac division, which accounts for most of its revenue, experienced a 32.8% sales decline on an organic basis in the fourth quarter that ended in March, affected by an industry-wide halt on sales via China's duty-free channel. In the Americas, Rémy Cointreau's Cognac sales 'rebounded sharply', especially in the US, according to the company. "Rémy Cointreau appoints new CEO " was originally created and published by Just Drinks, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
28-05-2025
- Business
- Yahoo
Factbox-Who is Remy Cointreau's new CEO, Franck Marilly?
(Reuters) -French wines and spirits company Remy Cointreau announced on Wednesday that Franck Marilly will replace CEO Eric Vallat who resigned earlier this year. Marilly will take up his new role on June 25, after a transition period working with Vallat. WHO IS HE? Marilly, 59, is from France and has more than 30 years of experience working in luxury and cosmetics groups. He is a graduate of the EDC Paris Business School. Having lived and worked internationally, he said in a press release he has a deep attachment to the land in south-west France, where he is from and where the Cognac region is located. CAREER Marilly started his career in the luxury industry as a general manager for a division of the fragrance group Chanel in 1991. He worked for consumer goods giant Unilever between 1994 and 2001, first as managing director of the cosmetics export division then managing cosmetics for Spain and Portugal followed by France and Belgium. Marilly came back to Chanel to be managing director of the Italian and then French market before being promoted to senior vice president of U.S. fashion. In 2010, he returned to Europe to become the continent's managing director for Chanel's fragrance and beauty until 2017. Before joining Remy Cointreau, he was working for Japan's Shiseido as President and CEO and Chairman of the EMEA and global fragrance division. In February, he was also appointed as Foreign Trade Adviser of France. WHAT'S THE PLAN? Marilly will have to lead the French cognac maker through a period of sales decline and tariff threats in its key U.S. and Chinese markets. "We are convinced that he will bring a new dynamic and will be able to confidently address the new challenges of the Group's growth in a complex macroeconomic and geopolitical context," Chairwoman of the Board of Directors Marie-Amélie de Leusse said in a press release. Remy makes some 70% of its sales from cognac, mostly in the U.S. and China, but right now, drinkers in those nations are not buying the brandy and sales have fallen.
