REMYF - Rémy Cointreau SA (REMYF) Q4 2024 Earnings Call Transcript

2024-06-06 13:40:21 ET

Rémy Cointreau SA (REMYF)

Q4 2024 Results Conference Call

June 6, 2024 03:00 AM ET

Company Participants

Marie-Amelie Jacquet - Chairman

Eric Vallat - CEO

Luca Marotta - CFO

Conference Call Participants

Edward Mundy - Jefferies

Olivier Nicolai - Goldman Sachs

Laurence Whyatt - Barclays

Trevor Stirling - Bernstein

Sanjeet Aujla - UBS

Celine Pannuti - JPMorgan

Jeremy Fialko - HSBC

Presentation

Marie-Amelie Jacquet

Good morning, everyone, and thank you for being with us this morning for Remy Cointreau's Full Year Results. I'm here with Eric Vallat, our CEO; and Luca Marotta, our CFO. '23-'24 was definitely a challenging year. We are operating in a complex environment as well as facing several headwinds at the same time. After a period of erratic stop-and-go in shipments due to restrictions on logistics and the constrained demand in the U.S. during COVID, we have been facing a sharp normalization of consumption coupled with inflation and its consequences, notably a fiercely promotional market. More generally, we believe the world is entering in a new economic phase with a global slowdown in consumption while China has not yet fully recovered post COVID contrary to general expectations. But this is not the first time in our long history that we are facing challenges and we are well armed to navigate periods of uncertainty such as now.

We are fully focused on managing this volatility. '23-'24 highlighted our forceful efforts to deal with destocking in absolute value. This is not over yet as underlying demand has not yet recovered. '24-'25 is a year of transition that will allow these adjustments to be completed. More importantly, these difficulties have not changed our long-term vision. On the contrary, by challenging us every day, they push us to demonstrate even greater agility and innovation as showcased by our large portfolio of innovations and the changes we have made in our commercial structures both in the U.S. and in Europe. Our corporate culture, our strategic vision, our team's passion and dedication are our best assets. We have every confidence in the ability of our teams all around the world to constantly innovate and renew themselves and to carry our values of excellence even further and we thank them very much.

I will now let Eric take you through the full year business review. Eric, the floor is yours.

Eric Vallat

Thank you, Marie-Amelie, and good morning, everyone. Thank you for joining us today. It's now my privilege indeed to take the mic and to share with you our progress on our strategic journey and our overall results. Luca will then go further into detail as usual. Before sharing with you our results for '23-'24, I would like to provide a quick overview of the year. There is no argument that '23-'24 was a very challenging year, but a year that also saw some positive achievements and progress. Starting with China on Slide 5 now where our Chinese teams have done a tremendous job as evidenced by our resilient results in a complex market. With value depletions growing at low single digits representing an increase of more than 75% compared to '19-'20, Remy Martin won market shares plus 0.5 points, which means plus 2.1 points versus 2019 and also reached an important milestone by gaining market share in XO, 0.3 points, for the first time in a good while.

These results crowns a year of in-depth work to revitalize Remy Martin XO, a crucial driver of profitability which offers huge potential over the medium term despite current headwinds on the high end. Remy XO market share remains very low especially when compared to its awareness. So together, these results reflect the solid execution of our teams in China throughout a year full of initiatives including, for instance, meaningful and numerous innovations as you can see on the slide and an efficient communications and activations plan. I am now moving to Slide 6. In the U.S. the group is facing strong headwinds including destocking, inflation, increased promotional activity and last, but not least, a sharp normalization in consumption. Impacted by VSOP, this has led to a loss of market share from last year for Cognac while Cointreau and the Botanist continued to grow their market shares....

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