Rémy Cointreau S.A.

H1 organic sales were EUR 489.6 million, down 4.2% year over year. Current operating profit was EUR 108.7 million, down 13.6% organically, with a current operating margin of 22.2%, down 2.7 points organically. Gross margin was 70.1% organically, down 2.4 points, with tariffs, unfavorable price/mix, and some cost pressure cited as the main drivers. Net profit group share was EUR 63.1 million, down 31.3% reported, and EPS was EUR 1.22, down 32.6% reported. Free cash flow was negative EUR 16.5 million, and net financial debt was EUR 686.7 million, with net debt/EBITDA at 2.96x. For the full year, management confirmed organic sales growth of flat to low-single-digit and organic COP decline of low double digits to mid-teens, including around EUR 25 million of tariff impact and EUR 50 million to EUR 60 million of negative FX impact on sales.

Franck Marilly framed the period as a reset and transformation phase, saying the group must rethink priorities while still pushing near-term growth. He emphasized two priorities: revitalizing Cognac and accelerating Liqueurs & Spirits, while becoming more pragmatic on price, mix, A&P allocation, and portfolio complexity. His tone was candid and urgent, with repeated references to being less dogmatic, improving agility, and focusing on volume, cash, and return on investment.

Luca Marotta focused on the margin bridge and cash, saying gross margin fell 2.4 points because of incremental customs duties, unfavorable price/mix, and some manufacturing/logistics pressure, while A&P rose to 19.4% of sales, up 0.9 points. He highlighted cost discipline in OpEx, noting distribution and structural costs were down 9 million euros in absolute terms, and said financial charges should be less than EUR 50 million for the full year. On cash, he said H1 free cash flow improved on a comparable basis despite remaining negative, and net debt rose to EUR 686.7 million, lifting leverage to 2.96x; he also noted inventories increased to EUR 2.1 billion and represent 61% of total assets.

Analysts pressed management on what “quick wins” meant, whether pricing in the U.S. could move lower, and whether the balance sheet at nearly 3x leverage constrained strategy. Management said quick wins could include selective extra A&P with proven ROI, geographic expansion, trade promotions, depletion incentives, and more pricing flexibility, while stressing that the goal is to grow volume and top line. On leverage, Luca said the higher ratio is forcing the company to focus more on cash generation and balance sheet discipline rather than seeing it as a hard constraint. Analysts also asked about China, inventory, and portfolio complexity; management said China showed better sell-out on Mid-Autumn Festival and Double 11, inventories are healthy, and no portfolio disposals have been decided but nothing is taboo.