PARIS (Reuters) – Rémy Cointreau said on Thursday that it expects a gradual organic improvement in its current operating margin for 2024-2025 after a fall during the previous financial year, marked by significant difficulties in the United States and China, its two key markets.
The spirits group is also targeting average annual revenue growth of between 6% and 9% (“high single digit”) organically.
During the 2023-2024 financial year, ended at the end of March, Rémy Cointreau saw its current operating profit fall by 27.8% organically to 304.4 million euros and its turnover decline by 19.2%.
Its current operating margin thus fell by three basis points organically, to 25.5%.
The group is facing a sluggish post-COVID recovery in China and a significant destocking in the United States in a context marked by inflation, a more promotional market and a strong normalization of consumption after the pandemic.
“The year 2024-2025 is a year of transition which will notably make it possible to finalize the adjustment of stocks in the Americas region,” commented Rémy Cointreau in a press release.
The group, which refers to a “complex environment marked by limited visibility in its main markets”, aims for a gradual resumption of its activity during the financial year.
The first half will still be affected by inventory adjustments in the United States, a high basis of comparison for the Asia-Pacific region (APAC) and “subdued” consumption for the Europe-Middle East region (EMEA), he warns.
Rémy Cointreau also reiterated its financial objectives for 2029-2030, saying it is banking on a current operating margin of 33% by this horizon.
On the Paris Stock Exchange, Rémy Cointreau shares gained 4.5564% to 87.2 euros at 8:15 a.m. GMT, its biggest daily increase in a month.
“The post-2025 forecasts provide a certain degree of assurance on the group’s confidence in long-term trends,” underline Jefferies analysts in a note, who add that a lot of bad news is already priced into the stock.
“With a somewhat long investment horizon, the price seems to us to be a good entry point, especially since the stock is trading, based on consensus estimates, at a price-to-earnings (PE) ratio. of 23.3, or more than 30% below the 5-year history,” they indicate.
(Written by Blandine Hénault, edited by Kate Entringer)
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