“Taking back control” – will Rémy Cointreau’s plans pay off?
Key takeaways
- In April, CEO Franck Marilly had launched a “transformation plan” dubbed RC Forward, a bid, he said, “to generate our own value creation and thus become less dependent on macroeconomic cycles”.
- By the close of trading on Thursday, Rémy Cointreau’s shares were up 9%.
- Cognac has been among the spirits categories most affected by weaker consumer confidence and Rémy Cointreau, with a clear of majority of its sales and profits derived from the French spirit, has suffered.
The market seems to think so. Last week, the Rémy Martin Cognac and Bruichladdich whisky maker booked a 35% drop in annual profits but investors, with an eye on what might lie ahead, signalled their support for the French spirits group’s three-year strategy to drive sales and earnings.
In April, CEO Franck Marilly had launched a “transformation plan” dubbed RC Forward, a bid, he said, “to generate our own value creation and thus become less dependent on macroeconomic cycles”. On Thursday (4 June), Marilly provided more detail, providing a target for how much the company is aiming to boost its underlying profits and outlining a series of projects it has drawn up to grow sales.
By the close of trading on Thursday, Rémy Cointreau’s shares were up 9%. Among analysts, however, one could detect a note of caution. The strategy, it’s argued, looks sensible but can the company produce the goods? “The direction is sound,” Barclays analyst Laurence Wyatt says, “but delivery and execution remain key from here.”