The headline: Growth in liqueurs, emerging markets and a significant recovery in Champagne as recovery takes hold in final quarter.
Key figures: Consolidated turnover for the 12 months ended 31 March 2003 was € 1,000.3 million (US$1,096.9 million) an increase of +5.1% on a constant exchange rate basis. Cognac sales value up +3.0%, liqueurs up +5.7%, Champagne up +20.8%, third party products up +3.6% and spirits down -2.6%.
Comment: Rémy Cointreau said in a statement that this sustained organic growth reflects the effectiveness of marketing expenditure as well as the group’s resilience in a difficult economic and business environment.
Cognac sales for the 4th quarter were marked by a business recovery (+8.6% increase at constant exchange rates and +8.1% in volume terms), mainly in the US and China, following a highly satisfactory year end due to consumer demand. Cognac sales rose by +3% in value terms and +4.6% in volume for the full year. The establishment of a new distribution organisation in China, which affected prices, resulted in an encouraging performance during the year with a +9% increase in volumes. But conditions were difficult in Europe, particularly in Germany, with an overall -5% decline in volumes. Rémy Martin enjoyed sustained growth in the US and in emerging countries such as Russia, South Korea and Mexico.
In liqueurs, sales were temporarily slowed down by a deliberate policy of destocking by certain markets such as Europe and Puerto Rico during the second half of the year. But growth of the category was confirmed by a +5.7% growth in value terms and a +5.6% increase by Cointreau in all its traditional markets. In the US, Cointreau recorded growth in value and volume terms in excess of +10%. Cointreau C, launched last year, confirmed its success by expanding its distribution in France. Passoa experienced remarkable growth in its domestic market and extended its “Diablo” range in Benelux. It ended a good year with a +20% increase in value terms.
Spirits, excluding vodkas, recorded a +3.6% growth in sales for the group. Following a sharp recovery in vodka sales during the 3rd quarter, the commercial environment and the competition stiffened at the beginning of 2003. Rémy Cointreau said it adopted an approach based on value creation in the medium-term, to the detriment of volumes in the short-term, sustained by targeted marketing and promotional activity. The other spirits brands continued to experience sales growth in value terms: St Rémy brandy increased by +16% while Metaxa grew by +7.9% in its traditional markets as well as in developing markets such as Russia, Czech Republic and Slovakia.
St James rum increased by +8% in France while Mount Gay Rum grew by +13% in the US.
A rebound in consumption of Champagne was confirmed throughout the year with a +7.7% growth in the 4th quarter in all major champagne markets, in the US, France and UK as well as in Japan. Sales of Piper-Heidsieck and Charles Heidsieck increased by +31% in volume terms during the period, mainly based on the recent launches of Piper-Heidsieck Rosé Sauvage and Charles Heidsieck Mis en Cave 1998.
The +3.6% increase in third party products came mainly from Scotch whiskies in the US.
