(AOF) – Building on the success of its first employee shareholding plan, launched in France in 2021, Rémy Cointreau (+0.31% to 192 euros) is launching its first capital increase reserved for its employees internationally “My Remy Cointreau 2022”.
In accordance with the decision of Rémy Cointreau’s Board of Directors on March 31, 2022, the envelope dedicated to the operation may not exceed 40,000 shares, i.e. 0.07% of the capital to date.
In accordance with the timetable determined for the operation, and subject to the decision of the Chief Executive Officer, eligible employees will be able to subscribe between September 12 and 30, 2022. The capital increase will be recorded on October 27.
The offer made to employees will allow them to subscribe to a reference price discounted by 20%, which will be set on September 9 by the Chief Executive Officer, and will allow them to benefit from a matching contribution equivalent to their personal contribution within the limit of 400 gross euro.
Settlement-delivery of the shares is scheduled for October 27 at the latest.
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Key points
– Spirits group born in 1703, with 12 global brands -Remy Martin, Brillet and Louis XIII for cognacs, diversified in liqueurs and spirits with Cointreau and Metaxa for spirits, Mount Gay for rum, The Botanist for gin and, for whiskies, Bruichladdich, Port Charlotte, Ocformore, Westlan and Hautes Glaces;
– Sales of €1.3 billion split between 3 divisions – cognac for 72%, liqueurs and spirits for 25% and partner brands for 3%;
– International positioning, the United States being the group’s leading market (55% of sales in the Americas), ahead of Europe-Middle East-Africa (17%) and Asia-Pacific (28%) );
– Business model: become world number 1 in exceptional spirits and control the distribution circuit (85% of sales), in order to control the sale prices of exceptional spirits, at a unit price above $50;
– Capital controlled by the founding families (nearly 57% of the shares and more than 70% of the voting rights), Eric Vallat being managing director and Marcel Hérard-Dubreuil chairman of the 12-member board of directors;
– Solid balance sheet reinforced by the payment of the dividend in shares, with net debt rated A and leverage reduced to 0.77.
Challenges
– Ambition to become the world leader in spirits with, for 2030 objectives, a gross margin of 72% by increasing their unit value and an operating margin of 33%;
– Innovation strategy focused on the growth of e-commerce, accelerated by partnerships, such as the one with Alibaba (1/5 of digital sales in China);
– “Sustainable Exception 2025” environmental strategy: aiming for carbon neutrality by 2050, 100% responsible purchasing, 62% of surface areas with responsible agricultural practices, 82% renewable electricity;
– Reinforcement of the whiskey division: launch of a product made in France, the 2nd country that consumes the beverage the most, and 2 Bruichladdich sales campaigns in China and the United Kingdom;
– After the integration of the JR Brillet cognac house and the J. de Talmont champagne house and the sale of the shares in the joint venture Pesso, further upscaling of the portfolio;
– Support for market valuation by controlling strategic stocks, estimated at more than €50 per share, and facilitating customer acceptance of sales price increases.
Challenges
– High seasonality of sales, hence a financial year ended on March 31;
– Lack of critical size compared to competitors and strong dependence on Maison Rémy Martin (+ 80% of operating profit) for cognac with better margins than liqueurs and spirits;
– 54% growth in sales and doubling of net profit in the first half of the fiscal year ended March 31;
– 2021/22 expectations: despite the confinements in China and the heavy marketing and communication investments in the 2nd half, towards a sharp increase in sales and operating margin.
Development of the Chinese dairy industry
The Chinese government encourages the consumption of dairy products to improve the nutrition and immune defenses of the population, while seeking to reduce the country’s dependence on imports. Wishing to turn the page on the melamine infant milk scandal, which affected 300,000 babies in 2008, milk production is picking up again in the country, after ten years of stagnation. The major industrial groups (Mengniu, Yili, Youran or Modern Dairy) do not export and concentrate on the domestic market, which is growing by 4 to 5% per year. They develop very large farms and rely heavily on innovation, investing four times more than all their competitors in the world.