INTEGRATED ANNUAL REPORT 2018/2019 INTEGRATED ANNUAL REPORT 2018/2019
Green, the color of spring, of the botanical kingdom, of the awakening to life. The color of our vines, our barley fields, our bitter oranges, our aromatic herbs. Color of hope, strength and longevity. Color of our commitment to preserve our terroirs and our savoir-faire, from generation to generation. FOREWORD
The year 2018/2019, which is dedicated to the theme of Time in this integrated annual report, has been rewarded with record results. The Group Brands are verging on double-digit growth with nearly all of them contributing to this success. The proper synchronisation between the “long cycle”, specific to our exceptional distiller professions, and the “short cycle”, which must be mastered to adapt to market forces, has demonstrated its relevance.
Respect for the long cycle and respect for the environment go hand-in-hand. This year was marked by the ramping up of our Corporate Social Responsibility (CSR) policy, in order to ensure the sustainability of our terroirs and savoir- faire. Reducing the use of phytosanitary products, reducing water use, lowering the carbon footprint and making progress in the area of eco-design are all priorities to perpetuate the excellence of all our Houses.
Partnership between Rémy Martin XO and chocolate maker Pierre Marcolini 01_INTEGRATED 04_THE YEAR REPORT OF THE BRANDS
56 08 THE HOUSE OF RÉMY MARTIN A WORD FROM THE CHAIRMAN 62 LIQUEURS 20 & SPIRITS STRATEGY
28 70 VALUE CREATION WHISKIES
32 76 GOVERNANCE THE MARKETS 36 OBJECTIVES 05_CORPORATE SOCIAL 02_MANIFESTO RESPONSIBILITY
40 84 TIME TERROIRS
44 92 RÉMY COINTREAU PEOPLE FOUNDATION 102 TIME 03_THE YEAR 2018-2019 06_FINANCE
48 INTERVIEW WITH 114 THE CHIEF EXECUTIVE CONSOLIIDATED ANNUAL OFFICER RESULTS 2018/2019
50 118 KEY HIGHLIGHTS FINANCIAL TABLES 52 ACHIEVEMENTS IN 2018/2019
CONTENTS INTEGRATED REPORT
There are clients all over the world looking for exceptional experiences, clients for whom the diversity of the terroirs is matched with the variety of flavours. Their requirement is aligned with our savoir-faire, the savoir-faire that we ensure is passed on from generation to generation. The time these clients spend savouring our spirits is a tribute to all those who have worked hard to craft them.
It is for these men and women that Rémy Cointreau, a family-owned French group, protects its terroirs, cultivates the exception of multi-century spirits and is committed to preserving their timelessness. The Group's portfolio includes 12 unique brands, including Rémy Martin & Louis XIII cognacs and Cointreau liqueur.
Rémy Cointreau has only one ambition: to become the world leader in exceptional spirits, and relies on the commitment and creativity of its 1900 employees and its distribution subsidiaries located in the Group's strategic markets. Rémy Cointreau is listed on Euronext Paris. A WORD FROM THE CHAIRMAN
It is with great pride that we end this year. In a buoyant high-end spirits market, the uniqueness of our brand portfolio, the quality of our execution, and the creativity and commitment of our teams have enabled the Group to deliver historic results in 2018/2019 across all areas: sales, operating margin and profits. RÉMY COINTREAU _ ANNUAL REPORT
It has taken some time to get to this Rémy Martin are committed to this approach point, but we are confident in remaining and 42% are now High Environmental here in the future, despite the changing Value (HVE) certified. On the isle of environment with which we are faced. Islay, our Bruichladdich distillery has Our performance allows us to look been certified “Biodynamic” by the 09 to the future without fear. European Union, just like that of Domaine des Hautes Glaces in the French Alps. Our brands have taken their time to mature, And at Cointreau, a certification process to thrive and craft these exceptional for oranges has been initiated with our spirits that win over our clients and which suppliers. Our ambition is clear: over the will continue to attract new generations. next five years, 100% of the land used They are the wealth on which we can to grow our ingredients and produce our capitalise as we pave the way forward, eaux-de-vie will be managed responsibly harnessing the momentum provided by and sustainably. This commitment digital technology to accelerate the pace. is essential for preserving our brands And I am even prouder to say that our over the centuries. results have been achieved by respecting our CSR commitments, which are at the The age-old reasoning of the Group’s heart of our strategic ambition. It is brands considers the long term. more important than ever that our CSR The Group’s Houses have survived policy is an active part of the Group’s the test of time, and always with the same value creation, while continuing to build preoccupation: transmitting everything on its annual commitment to the Global they can to ensure the future. Compact. MARC HÉRIARD DUBREUIL Time is our challenge but it is also A key point of our strategic CSR vision, our ally in assisting our ambition: “All our brands have their roots in the earth. The attachment they have to their terroirs helps to build awareness is our environmental commitment to to be the leader in exceptional of the importance of preserving resources.” responsible and sustainable winemaking spirits. that respects our terroirs. All our brands have their roots in the earth. The attachment that they have to their terroirs helps to build awareness of the importance of preserving resources.
Accordingly, in Cognac, 94% of the vineyards supplying the House of HISTORY OF THE GROUP
The Rémy Cointreau Group, whose charentaise origins date back to 1724, is the result of the merger in 1990 of the holding companies of the Hériard Dubreuil and Cointreau families, which controlled E. Rémy Martin & C° SA and Cointreau & Cie SA respectively. It is also the result of successive alliances between companies operating in the same Wines and Spirits business segment.
_KEY DATES AND EVENTS
Acquisition of Bols Royal Distilleries including, 1703 Creation of Mount Gay Rum in Barbados 2000 in particular, the Bols and Metaxa brands
Vin & Sprit joins the Maxxium network Establishment of The House of Rémy Martin Cognac 1724 2001 as its fourth partner
• Initial public offering of Dynasty Fine Wines Group Creation of Cointreau & Cie by the Cointreau brothers 1849 2005 on the Hong Kong Stock Exchange • Disposal of Bols’ Polish operations to CEDC
1881 Creation of the Bruichladdich Distillery in Islay • Disposal of the Dutch and Italian Liqueurs & Spirits operations 2006 • Decision by Rémy Cointreau to resume full control 1888 Creation of the Metaxa brand over its distribution by March 2009
Acquisition by André Renaud 2008 Creation of a proprietary distribution network 1924 of E. Rémy Martin & C° SA
André Hériard Dubreuil takes over from 1965 • 30 March: Rémy Cointreau exits the Maxxium his-father-in-law, André Renaud 2009 distribution joint venture • 1 April: Rémy Cointreau controls 80% of its distribution Creation of Rémy Martin’s international 1966 distribution network 8 July: Rémy Cointreau sells its Champagne 2011 division to EPI Creation by Rémy Martin of the French-Chinese joint venture 1980 Dynasty Winery in partnership with the city of Tianjin (China) • 3 September: acquisition of the Bruichladdich Distillery, which produces single malt whiskies on the isle of Islay Acquisition by the Rémy Martin Group in Scotland 1985 2012 of Charles Heidsieck Champagne • 20 November: François Hériard Dubreuil becomes Chairman of the Rémy Cointreau Group • 18 December: acquisition of the cognac company Larsen 1986 Creation of the Passoã brand
2013 30 August: disposal of Larsen to the Finnish Altia group Acquisition by the Rémy Martin Group 1988 of Piper-Heidsieck Champagne 2015 27 October: disposal of Izarra to Spirited Brands Acquisition by the Rémy Martin Group 1989 of Mount Gay Rum 1 December: set-up of a joint-venture for the activities 2016 Transfer by Pavis SA of Rémy Martin shares of Passoã 1990 to Cointreau & Cie SA • 5 January: acquisition of The Domaine des Hautes Adoption by the Group of the corporate name Glaces distillery, which produces single malt whiskies 1991 of Rémy Cointreau in the French Alps • 6 January: acquisition of the Westland distillery, 2017 which produces single malt whiskies in the state Dominique Hériard Dubreuil becomes chairman of Washington, US 1998 of the Remy Cointreau Group • 1 October: Marc Hériard Dubreuil becomes Chairman of the Rémy Cointreau Group Establishment of the Maxxium distribution joint-venture with three partners, the Rémy Cointreau Group, 1999 1 April: Rémy Cointreau sells its distribution the Edrington Group and Jim Beam Brands Worldwide 2019 (Fortune Brands) subsidiaries in the Czech Republic and Slovakia A PORTFOLIO OF EXCEPTIONAL SPIRITS Net sales by division*
The House of Rémy Martin: Rémy Martin and LOUIS XIII 70% 851.9 M€ Net sales
HOUSE OF RÉMY MARTIN LIQUEURS & SPIRITS
cognac liqueur whisky gin rum brown spirits Liqueurs & Spirits: Cointreau, Metaxa, Mount Gay, St-Rémy, 23% 276.6 M€ the Botanist and single Net sales malt whiskies RÉMY COINTREAU _ ANNUAL REPORT
UPPER LUXURY
Partner Brands: Third-party brands distributed 7% 87.9 M€ by the Group Net sales 13
LUXURY
The French family-controlled Rémy Cointreau The Rémy Cointreau Group’s internal Group boasts a portfolio of exceptional organisation is based on nine brand divisions world-renowned spirits: Rémy Martin and and four sales divisions (Americas, Europe, LOUIS XIII cognacs, Cointreau liqueur, Middle-East, Africa, Asia-Pacific and
ULTRA Greek Metaxa spirit, Mount Gay rum, Global Travel Retail). All these divisions PREMIUM St-Rémy brandy, The Botanist gin, and receive support from the holding company. the single malt whiskies Bruichladdich, Depending on the spirit category, production Port Charlotte, Octomore, Westland and process and geographic sales distribution, Domaine des Hautes Glaces. the Group’s brands are allocated to one of the following two divisions: “The House During the 2018/2019 financial year, of Rémy Martin” or “Liqueurs & Spirits”. the Group set a new record with net sales of €1,216.5 million (proforma*) and organic Brands which Rémy Cointreau distributes growth of 7.8% (with the Group Brands up through its network on behalf of third parties by 9.8%). The Group’s current operating form a separate category, “Partner Brands”.
PREMIUM profit totalled €263.6 million and current operating margin increased to 21.7% (proforma*).
* Proforma figures (pre-IFRS 15, 16 and 9). HOUSE OF RÉMY MARTIN
_THE HOUSE OF RÉMY MARTIN AND THE SOURCING _HOUSE OF RÉMY MARTIN BRANDS OF EAUX-DE-VIE
The House of Rémy Martin produces The House of Rémy Martin is thus positioned All House of Rémy Martin cognacs The partnership mainly consists of a range of cognacs under the Rémy Martin in the high-end segment, with four flagship are produced in and around the town a cooperative, Alliance Fine Champagne and LOUIS XIII brands. These cognacs products: of Cognac, on a site that includes ageing (AFC), whose members manage around are made exclusively from eaux-de-vie and fermentation cellars, laboratories, 60% of the Grande Champagne and Petite sourced in Grande Champagne and Petite - VSOP Fine Champagne; a packaging complex, offices and a visitor Champagne vineyards, via different types Champagne, the two leading crus of the - The “intermediate” quality products 1738 and reception centre. of collective and individual long-term Cognac appellation, which offer the greatest Accord Royal and CLUB; agreements. ageing potential (more than 100 years, - XO Excellence Fine Champagne; The House also owns wine estates for some Grande Champagne eaux-de-vie). - Louis XIII Grande Champagne. (238 hectares of vines eligible for the From an accounting point of view, Cognac appellation), as well as a new the commitments made by the House distillery in Juillac, which opened of Rémy Martin through the AFC are in November 2018. However, the stock fully recognised in the consolidated of Cognac eaux-de-vie has been built up statement of financial position _COMPETITIVE POSITIONING largely as a result of exclusive partnerships of the Rémy Cointreau Group, once RÉMY COINTREAU _ ANNUAL REPORT with Grande and Petite Champagne the eaux-de-vie covered by these agreements Four Cognac brands share around 85% Global cognac shipments by quality producers. This partnership policy, have been produced and have passed quality of the world market by volume and nearly (source: BNIC) introduced in 1966, has enabled the control. Any contractual commitments 90% by value (source: IWSR): Hennessy Group to manage its long-term supplies not yet produced are disclosed in off- (LVMH), Martell (Pernod Ricard), and meet the quality standards required balance sheet commitments. Rémy Martin (Rémy Cointreau), and Courvoisier by the House of Rémy Martin. (Suntory). Rémy Martin’s market share XO 12% of cognac shipments for all qualities combined is 12% by volume (source: BNIC March 2019). 15 Rémy Martin makes 98% of its shipments VS in the QS (Qualité Supérieure) segment, which 47% accounts for 53% of the total cognac market (source: BNIC March 2019). In the superior VSOP _HOUSE OF RÉMY MARTIN KEY FIGURES 41% qualities (QS) segment, Rémy Cointreau has a market share of 23% by volume (source: BNIC). In 2018/2019, the House of Rémy Martin accounted for 70% of the Group’s total net sales and 99% of its international sales.
Net sales (in €m) and breakdown Current operating profit/(loss) (in €m) _COGNAC APPELLATION D’ORIGINE CONTRÔLÉE by geographic area (in %) and current operating margin (in %) AND “FINE CHAMPAGNE” 851.9 M€ Cognac is an appellation d’origine contrôlée (AOC) Cognac is a blend of eaux-de-vie of different 760.0 M€ 774.4 M€ brandy (eau-de-vie distilled from grapes) vintages (after ageing in oak barrels). 235.6 M€ 235.6 M€ that comes from vineyards in the Cognac Accordingly, there are several quality levels 44% 40% 204.4 M€ region (south-west France). The appellation classified in accordance with legal standards 42% covers six crus: Grande Champagne, Petite (BNIC) based on the youngest eau-de-vie used: Champagne, Borderies, Fins Bois, Bons Bois 30.4% and Bois Ordinaires. “Fine Champagne”, - VS (“Very Special”), which by law must be 42% 42% 46% 27.7% which refers to a cognac made exclusively aged for a minimum of two years; 26.9% from the first two crus, Grande Champagne - QS (Qualité Supérieure), covering all the 16% 14% (at least 50%) and Petite Champagne make VSOP and QSS labels; 14% up a separate appellation d’origine contrôlée - VSOP (“Very Superior Old Pale”), which by * * within the Cognac AOC. law must be aged for a minimum of four years; ** ** - QSS (Qualité Supérieure Supérieure), which Rémy Martin only selects its eaux-de-vie from by law must be aged for a minimum of ten 2018 2019 proforma 2019 2018 2019 proforma 2019 the “Fine Champagne” (Grande Champagne and years; Petite Champagne) AOC, whose quality is best - XO (“Extra Old”), which is included in the Asia / Pacific Americas Europe / Middle-East / Africa suited to the production of its superior quality QSS category. cognacs with their longer ageing potential. * Proforma figures (pre-IFRS 15, 16 and 9) ** Figures post-IFRS 15, 16 and 9 LIQUEURS & SPIRITS
_LIQUEURS & SPIRITS BRANDS
The Liqueurs & Spirits division is made - Mount Gay, a rum from Barbados; up of ten spirit brands in categories such - St-Rémy, a French brandy; _LIQUEURS & SPIRITS: SOURCING as liqueurs, brandy, gin, single malt - The Botanist, a gin from Islay (Scotland); AND PRODUCTION SITES whisky and rum. Within each category, - Bruichladdich, Port Charlotte and the spirits have particular characteristics, Octomore, three brands of single malt The Group’s Liqueurs & Spirits brands of Barbados, in the parish of St Lucy. the main one being that all the brands Scotch whisky from the Isle of Islay do not have significant sourcing The storage cellars in which the casks are produced in their country of origin, (Scotland); or production constraints. Consequently, of rum are aged are also located at often with know-how passed down through - Domaine des Hautes Glaces and its the Group purchases the necessary this historic site. Since January 2015, generations: range of single malt whiskies produced ingredients (barley, oranges, aromatics, an additional 134 hectares of agricultural in the heart of the French Alps; sugar cane, etc.) for the eaux-de-vie land at this site have been devoted - Cointreau, an orange-peel liqueur; - Westland and its range of single malt distillation process, utilising the specific to the farming of sugar cane. Mount Gay - Metaxa, a Greek brown spirit, produced whiskies produced in the state of know-how of each brand. The Group’s Distilleries’ head office and bottling from a blend of wine distillates and Washington, US. master distillers and blenders then facilities are located in Brandons, close aged Muscat wine; take care of the ageing and blending to the port of Bridgetown in the south RÉMY COINTREAU _ ANNUAL REPORT of the eaux-de-vie as required. of the island.
The Rémy Cointreau Group also Isle of Islay (Scotland) sub-contracts part of its bottling operations _COMPETITIVE POSITIONING to other companies located abroad, The Bruichladdich distillery is located in particular Greece for the production on the isle of Islay in Scotland, The Liqueurs & Spirits brands operate of Metaxa, for all markets. Sub-contracting one of the world’s most iconic locations in a market characterised by a large represents 15% of the total volume for the production of single malt Scotch 17 number of players (of various sizes), with of Group brands. whiskies. numerous international brands coexisting alongside local brands. Angers (France) The production operation (distilling, ageing, bottling) is carried out on the The production of the Cointreau liqueur island, on a historic site created in 1881. and the St‑Rémy brandy range is located In March 2018, the acquisition of around in St-Barthélémy d’Anjou (on the outskirts 12 hectares of agricultural land was of Angers). This site also carries out signed. This agricultural land adjoins bottling operations for other Group the distillery, and will mainly be devoted brands. It comprises distilling facilities, to growing barley and trialling different fermentation cellars, laboratories, varieties. a packaging complex, offices, a visitor and reception centre. Seattle (USA)
Trièves (France) Westland Distillery (US), located in South Downtown Seattle in the state The Domaine des Hautes Glaces, located of Washington, gets its malt from producers in the heart of the Trièves region of the in the terroirs of the Pacific North-West. Alps, is a mountain farm/distillery which combines French know-how (distilling Samos (Greece) with traditional Charente stills) and ingredients from local producers. As part of its “terroir” policy, the House The supplies of barley, rye and spelt of Metaxa acquired a 1.2 hectare wine (organically grown) come exclusively property on the island of Samos, located from growers in the Alps. at the heart of the island’s muscat vineyards. Muscat wine is an essential component Brandons and St Lucy (Barbados) in Metaxa’s signature taste.
Mount Gay rum is produced at the distillery of the same name, located close to Mount Gay in the north of the island _LIQUEURS & SPIRITS KEY FIGURES
In 2018/2019, the Liqueurs & Spirits division accounted for 23% of the Group’s total net sales.
Net sales (in €m) and breakdown Current operating profit/(loss) (in €m) by geographic area (in %) and current operating margin (in %)
276.6 M€ 266.8 M€ 264.4 M€ 42.8 M€ 11% 13% 13% 38.8 M€ 38.8 M€
40% 40% 40%
16.1% 14.7% 14.0%
49% 47% 47% * * ** ** 2018 2019 proforma 2019 2018 2019 proforma 2019
Asia / Pacific Americas Europe / Middle-East / Africa
Partner Brands In 2018/2019, Partner Brands accounted for 7% (proforma) of the Group’s total net sales. This category includes brands belonging to other operators in the Wines & Spirits sector. These are distributed by Rémy Cointreau under global agreements or agreements limited to a particular country or region. Following the non-renewal of many distribution agreements in recent years (as part of the Group’s move upmarket), the brands still distributed (as of 31 March 2019) are Passoã liqueur, Jägermeister spirits and certain spirits of the William Grant & Sons Group.
* Proforma figures (pre-IFRS 15, 16 and 9) ** Figures post-IFRS 15, 16 and 9 STRATEGIC VISION: _EXCEPTIONAL SPIRITS ENJOY AN ATTRACTIVE DYNAMIC Rémy Cointreau has solid credentials for the spirits market as a whole over HIGH‑END POSITIONING in the exceptional spirits segment: exceptional the last eight years), driven by a move IN A HIGH-GROWTH spirits represent 54% of the Group’s sales, towards the high-end of the market and whereas they comprise just 9% of the global an increasingly discerning clientele in SEGMENT spirits market. These exceptional spirits terms of the quality, production, know-how enjoy an attractive dynamic (+11% growth and history of the spirits they consume. per year on average, compared with +5%
_A SINGLE AMBITION: TO BECOME THE GLOBAL LEADER IN EXCEPTIONAL SPIRITS Spirits > USD50: a fast-growing segment The Spirits market features an extensive Contribution of exceptional spirits number of co-existing local and international (> US$50) to the Group’s net sales market value split cagr 2009-2017 brands in a particularly competitive per price segment (in value) environment. 0.3% upper luxury +6.2% Against this background, Rémy Cointreau >$1,000 has, for many years, implemented a value creation strategy aimed at developing +9% luxury RÉMY COINTREAU _ ANNUAL REPORT 3.3% $100 - $1,000 +11.4% +11.1% its upmarket brands in the high-end €17 billion 45% 49% 51% 53% 54% 60% segments of the global markets, which - 5.1%% ultra premium +11.9% offer high growth and earnings potential. 65% $50 - $100 Over the past 15 years, the implementation of this strategy has led the Group to dispose premium of brands and other assets deemed less 30.1% $20 - $50 +6.3% 55% 51% 49% 47% 46% 35% suited to its value creation strategy - 21 and to resume full control of its distribution 40% mass 61.2% +4.6% in key markets (exit from Maxxium <$20 in April 2009).
Source: IWSR, Rémy Cointreau; international Spirits market estimated at USD200 billion.
With its own distribution network in Asia, 2014 2015 2015 2016 2016 2017 2017 2018 2018 2019 moyen terme the US and in some European countries, Rémy Cointreau controls around 85% > USD50 < USD50 of its net sales. The Group is therefore able The exceptional spirits segment has structurally outperformed to implement a pricing and distribution the global spirits market since 2009. strategy consistent with its high-end positioning.
For the past four years, the Group 238 has accelerated its strategy of moving 216 upmarket so as to differentiate itself and emphasise its uniqueness: ultimately, 197 185 the Group’s ambition is to become the 178 CAGR 2009-2017 : +11.4% world leader in exceptional spirits (which 173 retail at more than $50). In 2018/2019, the Group’s exceptional spirits represented 145 152 54% of the Group’s net sales (compared with 145
index 100 in 2009 141 53% in 2017/2018 and 45% in 2014/2015). 118 132 123 128 CAGR 2009-2017 : +5.3% 100 115 107 The Group’s ambition is for its exceptional 100 spirits to increase gradually so that in the medium term they make up between 60% and 65% of its net sales. 2009 2010 2011 2012 2013 2014 2015 2016 2017
Total international spritits market USD50+ spirits segment
Source : IWSR, Rémy Cointreau, international spirits market estimated at around 200 billion USD. _POSITIONED ON FAST-GROWING CATEGORIES _A NEW GENERATION OF SPIRITS OF CLIENTS
In addition, Rémy Cointreau Group brands belong to categories of spirits (such as Clients of high-end spirits have changed cognac, single malt whisky, dark rum or gin) that have significantly outperformed in recent years. Younger, more connected the market in recent years (+7.2% per year on average during the period 2000-2017, and from affluent backgrounds, these compared with 5.8% for the market) and that retain a strong consumer appeal. globetrotting millennials from generations Y and Z want to know about the origins of the spirits, their history, how they are made and what makes them different. Rémy Cointreau Group categories structurally At the same time, there is a growing outperformed market growth demand for transparency about the quality of the products.
350 CAGR 2000-2017 : +7.2% Our clients are also looking for a more convenient way to buy our spirits (growth of e-commerce), as well as more services, 300 enhanced shopping experiences and tailor- made offerings. 250
200 RÉMY COINTREAU _ ANNUAL REPORT CAGR 2000-2017 : +5.8%
150 performance indices basis 100 New demographic New consumer trends
-Emergence of an affluent -" Drinking less, but better" middle class -Increasingly sophisticated 23 demand 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 -Rise in the number of well- off households -Better knowledge of spirits International spirits market Rémy Cointreau categories -Younger clientele: Millenials -Interest in origins, know- (generations Y and Z) how and authenticity -Demand for transparency in terms of ingredients and Correspondingly, these categories offer very attractive valuation levels (“value respect for the environment per case”): cognac, single malt whisky and liqueurs are the categories of spirits with -Globalisation and digitalisation the highest value per case on the market. of consumption patterns
Value per case by category of spirits (in €)
642
511 Proliferation of distribution channels and new technological challenges Increased mobility
-Proliferation of distribution -Growth in international 235 channels (e-commerce, travel mobility 208 205 retail, direct, etc.) -Development of Travel Retail 128 120 120 -Growing importance of 110 87 70 56 48 30 CRMs -Personalisation of customer
cognac single- liqueurs us tequila white bourbon flavored gin vodka dark rum brandies other cachaca service malt whiskey and and and spirits spirits scotch (excl. mezcal flavored blended whiskies bourbon) rums whiskies
Rémy Cointreau categories
Source : IWSR, Rémy Cointreau. FIVE STRATEGIC LEVERS TO BECOME THE GLOBAL LEADER IN EXCEPTIONAL SPIRITS
_EMPHASISING THE UNIQUE BRAND POSITIONING
Each of the Group’s spirits is linked aromatic profiles and ageing potential. to a particular terroir and know-how: Our Islay single malt whiskeys are made Within the AOC Cognac region, the uniquely from Scottish barley, then House of Rémy Martin’s eaux-de-vie come distilled and aged on the isle of Islay exclusively from Grande Champagne and in accordance with traditional methods. Petite Champagne, which have unrivalled RÉMY COINTREAU _ ANNUAL REPORT
Our distinctive advantage The specific characteristics of each terroir and our know-how make our spirits exceptional
_IMPROVING THE DISTRIBUTION NETWORK 25 _MAXIMISING THE GEOGRAPHIC POTENTIAL OF THE IN ACCORDANCE WITH THE GROUP’S STRATEGY BRANDS AND DIVERSIFYING THE GROWTH DRIVERS The Group’s strategy of moving towards and has opened three stores dedicated Our brands are still under-potentialized The increasing strength of our pioneering the high-end of the market must be based to the brand. from a geographic standpoint: LOUIS XIII brands: single malt whiskies, The Botanist on a distribution network whose expertise in the United States, Rémy Martin in gin or Mount Gay rum provide attractive is consistent with the positioning of our The development of online sales will Africa, as well as Cointreau and Metaxa growth potential. brands: selective retail (wine merchants), also play a role in building a more direct in China. high-end bars, restaurants and hotels, approach to the distribution of our spirits. and even “retail”: for its LOUIS XIII cognac, the Group has a specific sales force Our distinctive advantage Our brands have not yet reached their full potential in any of our markets Our distinctive advantage Recognised expertise at High-end retailers
_BUILDING AN EMOTIONAL RELATIONSHIP WITH OUR CLIENTS _ACCELERATING THE GROUP’S CSR AMBITIONS Increasing the desirability of our spirits: Retaining our clients: a better understanding establishing a direct and personalised of their expectations allows a genuine Rémy Cointreau’s 2020 CSR plan operationally is to achieve 100% responsible purchasing relationship with our clients through media and long-lasting relationship with our focuses on 10 of the United Nation’s 17 (percentage of suppliers having joined and digital investments with targeted brands. Sustainable Development Goals, selected SEDEX), and have all of its winemaking creative content, but also unique and based on relevancy to the Group. partners committed to an environmental unforgettable events. approach (AHVE 1). In particular, by 2020, the Group’s ambition
Our distinctive advantage Our clients are seeking expertise and discernment but above all, emotion Our distinctive advantage and experience, elements consistent with our brand portfolio Expertise and CSR actions for more than 15 years DISTRIBUTION NETWORK A DISTRIBUTION NETWORK: Group administrative sites LOCAL KNOW-HOW, Group production sites AN INTERNATIONAL PRESENCE Travel Retail representative offices
_DISTRIBUTION AND ADMINISTRATION Islay Glasgow Islay Glasgow Moscow The Group has premises and commercial or London Brussels Londres Moscou administrative offices in many countries, BruxellesParis Seattle Paris Prague including the USA (primarily New Seattle AngersAngers PragueGeneva York), China (Shanghai and Hong Kong), CognacCognacSaint-Jean-d’HéransSaint-Jean-d’Hérans New YorkNew York
Singapore, Russia and the United Kingdom Athènes MY COINTREAU _ ANNUAL REPORT AthensSamos (London and Glasgow). The Group does Samos Tokyo É not own any premises in these countries Tokyo R and therefore uses leasing contracts. Shangai Moreover, the headquarters of Rémy Cointreau, Miami Taipei, Taiwan Shanghai which includes most of the Group’s central Hong Kong RÉMY COINTREAU _ ANNUAL REPORT services, is based in rented premises at Miami Taipei, Taiwan 21 boulevard Haussmann, Paris. Hong Kong Bridgetown, Barbados Ho Chi Minh Rémy Cointreau began building its distribution network across all Kuala Lumpur, Malaysia 49 Singapore continents at the end of the 1950s. Bridgetown, Barbados Ho Chi Minh Today, the Group has a dozen directly 27 owned subsidiaries (from the United Kuala Lumpur, Malaysia States to China, including the United Singapore Kingdom, Belgium, Malaysia and Japan). This distribution network allows the Group to implement a price strategy and to be selective about its sales outlets in Johannesburg a manner consistent with its high-end positioning.
2017/2018 REVENUE (AS % OF TOTAL AMOUNT) Johannesburg Europe Middle-East O rganic sales growthEMEA ZONE: 30% of 2017/2018O salesrganic sales growth O rganic sales growth O rganic sales growth Group for the Group Americas for the zone & Africa for the zone Asia Pacific for the zone AMERICAS ZONE: 39% of 2017/2018 sales 9.4% 18.3% 7.8%ASIA-PACIFIC ZONE: 31% of 2017/2018 sales 7.9% -0.9% 17.1% €1,216.5M 7.2% €474.4 M €329.3 M €412.8 M
* * * * in net sales Group inadministrative net sales sites in net sales in net sales 6.5% Group production sites -2.7% Travel Retail representative offices 39% 27% -2.9% 34% 7.5% 4.7% of Group sales of Group sales of Group sales 2017 2018 2019 2017 2018 2019 2017 2018 2019 2017 2018 2019
* Proforma (pre-IFRS 15, 16 and 9) VALUE CREATION
_THE GROUP’S DNA _EXCEPTIONAL SPIRITS _...AND CREATE VALUE _SHARED WITH ITS THAT TASTE LIKE STAKEHOLDERS THEIR TERROIR...
Terroirs High-end positioning in high-growth segments Employees
-Terroirs of exception (Cognac, Islay, Samos, -Average Group salary: score of 107 compared Barbados, etc.) with international benchmark -26,615 hours of training -Supply agreements that advocate sustainable
agriculture RÉMY COINTREAU _ ANNUAL REPORT Government -92% of suppliers are SEDEX members - € 6 8 m paid in corporate income tax in 2018/2019 (tax rate: 29%) A portfolio of 12 exceptional spirits (retail Above-market growth in sales (+9.8% for the People price > $50) Group Brands in 2018/2019) Civil society -Preservation of ancestral know-how (cellar 29 masters) - € 1 m (over a five-year period) invested by the Rémy Cointreau Foundation to promote and -Commitment to employee well-being transfer exemplary skills and know-how
-Shared ethical responsibility Significant increase in gross margin (up 1.2 Stronger pricing power behind our spirits points in 2018/2019) Shareholders (price/mix gains) -Steady increase in dividends over the past 20 Time years (2018/2019: ordinary dividend of €1.65 and extraordinary dividend of €1.00) -Family-owned company since 1724 -Stock market capitalisation up €3 billion over the last five years (at 31 March 2019) -Ageing of certain of our eaux-de-vie for more Sustained investment in: than 100 years Brands (media, digital education) Local communities Reinforcement of brand recognition Distribution network: -Engaged governance to support the Group for and attractiveness - Development of a direct distribution network the long term (boutiques, e-commerce, Private Client -Strong commitment within the communities Directors, etc.) of Cognac (France), Angers (France), Islay - Growing contribution of the on-trade (Scotland) and Barbados (bars, restaurants, clubs, etc.) and selective distribution (wine merchants) Suppliers
-Alliance Fine Champagne: 2.26% shareholder of Rémy Cointreau -Partner training provided by our agronomists (sustainable agriculture) SUSTAINABLE VALUE CREATION GROUP’S MAIN CHALLENGES AND RISKS
_THE GROUP’S MAIN NON-FINANCIAL —THE GROUP’S MAIN STRATEGIC CHALLENGES AND FINANCIAL RISKS
Terroirs, People and Time. The Following a materiality assessment The Group has set up a system to anticipate The main risk factors to which the Group Rémy Cointreau Group’s CSR ambition in 2016/2017, 10 key Sustainable and manage its risks. This system is exposed given its business model are is built around the three key pillars Development Goals were selected (out is constantly updated to take into account presented in this table (more details can of our signature: of the 17 identified by the United Nations). any regulatory, legislative, economic, be found in section 2 of this document). Based on these SDGs, we have now societal, geopolitical and competition -protecting our Terroirs through sustainable identified the 10 major challenges facing changes. agriculture; the Group, the risks associated with these -making a commitment to People to protect challenges and the indicators that will their ancestral know-how, ensure their enable us to monitor their development well-being within the Group and teach in the future. In some cases, the Group them about the ethics that are so vital has already committed itself by setting RÉMY COINTREAU _ ANNUAL REPORT for the Group’s credibility. At the same targets for improvement. time, pledging to protect all stakeholders, The targets cover SDGs 6, 8, 12, 13 and both internal and external, through 15, which are used as CSR performance a policy of responsible consumption; criteria to calculate the Executive -recognising the value of Time, protecting Committee’s variable remuneration. SUBJECT RISKS DESCRIPTION MEASURES TAKEN the atmosphere (through our carbon footprint) and water supply as essential resources for our businesses. Strategic risks Principal contracts Capacity to manage a risk of strong This risk is covered, as regards suppliers, and customers dependence on a supplier or customer by a diversification of the procurement 31 sources and, as regards customers, a diversification of the distribution networks
CHALLENGES LINKED TO RISKS RISK INDICATORS THE REMUNERATION OF Changing tastes Change in consumer trends, for reasons Rémy Cointreau is seeking to diversify (QUANTIFIED TARGETS/ AN EXECUTIVE COMMITTEE ASSOCIATED WITH THE and consumer such as taste, health and prices, which have its brand portfolio and develop its product SDGS CHALLENGES CHALLENGE PROGRESS PLAN) MEMBER preferences a negative impact on the Group’s sales range in order to limit its exposure to a particular brand and price range Clean water Water management Availability of water/ Water consumption Operations Director and sanitation water quality Brand and Reputational risk Reputational risk is any event that could To address these risks and their product-related negatively impact on the image consequences, the Group has expanded and reputation of the Group or its brands its digital marketing teams and set up an Decent work and Employee well-being absenteeism, turnover, Turnover and Human Resources risks in any or all of its markets effective media monitoring strategy, enabling economic growth workplace accidents, absenteeism Director it to respond quickly and effectively occupational health, to potential rumours work-related alcohol consumption Financial, IT and digital risks IT risks consist of data loss To guard against these risks, a data
RESPONSIBLE legal and IT risks (both commercial and financial), protection and backup plan and business CONSUMPTION Responsible Circular economy Company’s reputation EPI (Environmental CEO Liqueurs & Spirits AND PRODUCTION consumption and and reduction of raw among customers Performance Index) the inability to operate effectively due continuity plan have been implemented production material consumption of packaging to a technical fault, system intrusion in each company, allowing the Group or hacking and attacks against the digital to continue operating platforms of the Rémy Cointreau Group in all circumstances
Climate action Contribution to the Changes in regulatory CO2 emissions: CEOs of the Americas, global effort (2°C limit) and fiscal framework significant emissions, EMEA and Asia Pacific and sustainability (carbon tax) by brand, focus on regions of the business transport/reduction Non-compliance The Group’s business is international In order to guarantee compliance, risks and unethical and therefore subject to many laws the Group has implemented relevant action of CO2 emissions conduct and regulations. These include various plans to fight against corruption and protect
LIFE Life on land Sustainable Sustainable Percentage CEO House regulations regarding anti-corruption, data. A whistleblowing line has been set up, ON LAND agriculture: adapting production of sustainably managed of Rémy Martin data protection as well as principles set out as well as ethics training modules, which the terroir and of our agricultural land and CEO Whisky in the Global Compact have been followed by 84% of employees protecting biodiversity raw materials Business Unit
The remaining members of the Executive Committee are also linked to these targets, with their variable “CSR” component corresponding to the average of the achievements of the Executive Committee members directly concerned. GOVERNANCE THAT ENSURES CONTINUITY AND TRANSMISSION
_THE BOARD OF DIRECTORS _EXECUTIVE COMMITTEE WITH AN INTERNATIONAL DIMENSION
The Rémy Cointreau Group is administered Officer. The profiles of the Board members Valérie Chapoulaud-Floquet, Chief Executive from a range of backgrounds: Spirits, by a Board of Directors which, since September reflect the values of family succession, Officer, has gathered a team of directors cosmetics, fashion and accessories, and the art 2004, has adopted a governance structure a clear expertise in the world of luxury that includes eight different nationalities of entertaining. that separates the roles of Chairman of the goods as well as a deep understanding Board of Directors and Chief Executive of international markets. RÉMY COINTREAU _ ANNUAL REPORT
33
42% percentage of women / 58% independence From left to right, back row: David Ennes (CEO Asia-Pacific and Global Travel Retail); Spyridon Ghikas (CEO EMEA); Simon Coughlin (CEO Whisky Business Unit); Ian McLernon (CEO Americas); Marc-Henri Bernard (Human Resources Director); Luca Marotta (CFO); From left to right, back row: Florence Rollet, Emmanuel de Geuser, Olivier Jolivet, Laure Hériard Dubreuil, Marc Hériard Dubreuil, Philippe Farnier (CEO House of Rémy Martin). Dominique Hériard Dubreuil, François Hériard Dubreuil, Gisèle Durand, Bruno Pavlovsky, Elie Hériard Dubreuil (censor), Front row: Valérie Chapoulaud Floquet (CEO), Jean-Denis Voin (CEO Liqueurs & Spirits); Valérie Alexandre (Senior Vice President Strategic Jacques-Étienne de T’Serclaes. Planning); Patrick Marchand (Operations Director). Front row: Yves Guillemot, Guylaine Saucier, Marie-Amélie Jacquet (censor).
BOARD NOMINATION OF DIRECTORS AUDIT-FINANCE AND REMUNERATION CSR
Number of members 12 4 4 3 Composition of remuneration of senior Number of meetings in 2018/2019 8 3 6 3 management (excluding LTIP) Attendance rate 93% 100% 85% 89% Marc Hériard Dubreuil Dominique Hérard Dubreuil François Hériard Dubreuil Laure Hériard Dubreuil Fixed remuneration Variable remuneration Florence Rollet * 64.1% 35.9% Yves Guillemot* Bruno Pavlovsky* Olivier Jolivet* of which CSR bonus Jacques-Etienne de T’Serclaes* 2.8% Guylaine Saucier * Emmanuel de Geuser* Gisèle Durand Marie-Amélie Jacquet (censor) Elie Hériard Dubreuil (censor)
* Independent Board member Board/Committee Chairman SHARE OWNERSHIP SHARE PERFORMANCE STRUCTURE AND DIVIDENDS
_THE GROUP’S STRATEGY HAS BOOSTED THE SHARE PRICE OVER THE PAST FIVE YEARS At 31 March 2019 (% equity interest) Rémy Cointreau shares have risen by 104% the relevance of the strategy put in place over the past five years, reflected in an by the Executive Committee and implemented increase of nearly €3 billion in the market by the Group’s employees. capitalisation. This value creation confirms
140140
Hériard Dubreuil 130130 Family Rémy Cointreau shares 120120 have risen by 104% over the past five years 110110 RÉMY COINTREAU _ ANNUAL REPORT
100100 100% 9090
8080
P.Cointreau 7070 Andromède(1) Family 6060 35 5050
4040 1.19% 100% 30.23% 03/31/201431/03/2014 03/31/201531/03/2015 03/31/201631/03/2016 03/31/201731/03/2017 03/31/201831/03/2018 03/31/201931/03/2019
Alliance Fine Champagne Orpar 69.77% Recopart _REGULAR DIVIDEND POLICY (via FCI) Over the past 20 years, the Group has paid of 2010/2011, 2011/2012 and will also pay an annual dividend which has increased such a dividend in 2018/2019 (subject in stages. In addition, it paid an extraordinary to the approval of the Ordinary Shareholders’ dividend of €1.00 per share in respect Meeting on 24 July 2019). 2.26% 38.97% 14.91%
1.65€ 1.60€ Treasury shares 0.68% Rémy Cointreau 41.99% Free float 1.53€ 1.40€ 1.30€ 1.27€ 1.20€ 1.10€ 1.00€ 0.90€
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
(1) Rémy Cointreau is consolidated within the Andromède Group. (2) Only Rémy Cointreau shares are traded on the stock market. Dividend Extraordinary dividend (€1.00) KEY FIGURES 2018/2019 FINANCIAL TARGETS
DATA IN € MILLIONS, FOR THE PERIOD 2019 2018/2019 was a record year for all the Change in the Group’s current operating 1 APRIL TO 31 MARCH 2019 PROFORMA* 2018 Group’s financial indicators. margin. Net sales 1 125.9 1 216.5 1 127.0 Current operating profit/(loss) 264.1 263.6 236.8 This is due to the strong acceleration in organic Current operating margin 23.5% 21.7% 21.0% sales growth over the past three years, combined Organic gain : +5.0 pts between 2015 and 2019 profit (loss) for the period 159.2 157.1 148.2 with a sharp increase in profitability as a result of the Group’s strategy to move upmarket. 23.5% Net profit/(loss) excluding non-recurring items 169.9 167.8 151.3 0.5% 21.7% Current operating margin stood at 21.7% 1.3% Capital expenditure and administrative investments 44.6 44.6 33.6 1.3% Equity – Group share 1 425.1 1 450.1 1 407.1 in 2018/2019, a cumulative organic increase 1.5% 0.9% Net financial debt 343.3 313.0 282.8 of 5.0 percentage points (at constant currency 16.2% Ratio of net debt/EBITDA 1.19 1.08 1.48 and scope) since the 2014/2015 financial year +2.6 pts in 2 years Dividends paid during the financial year (per share in €): 2.65** 2.65** 1.65 (new senior management team). Over the last Earnings per share (basic, in €): ** ** two years, cumulative organic growth in the On net profit excluding non-recurring items 3.39 3.35 3.04 current operating margin was 2.6 points, thereby 2020 target (+2.4-3.0 pts over 3 years) On net profit – Group share 3.18 3.14 2.98 hitting the 2019/2020 target (+2.4-3.0 points achieved 1 year earlier
over three years) one year early. RÉMY COINTREAU _ ANNUAL REPORT Net sales by division COP MARGIN COP MARGIN COP MARGIN ORGANIC GAIN ORGANIC GAIN ORGANIC GAIN ORGANIC GAIN PERTES/GAINS 2019 2019 House of Rémy Martin 774.4 851.9 760.0 2015-2016 2016-2017 2017-2018 2018-2019 DE CHANGE proforma POST IFRS Liqueurs & Spirits 264.4 276.6 266.8 Sub-total Group brands 1 038.8 1 128.6 1 026.8 _NEW MEDIUM-TERM PROSPECTS Partner Brands 87.2 87.9 100.2 Total 1 125.9 1 216.5 1 127.0 In an uncertain economic and geopolitical context, objective is to build an increasingly sustainable, the Rémy Cointreau Group reiterates its ambition resilient and proftable business model. Current operating profit/(loss) by division to become the world leader in exceptional spirits. 37 House of Rémy Martin 235.6 236.6 204.4 In the medium term, this will result in 60 to 65% In the short term, Rémy Cointreau anticipates Liqueurs & Spirits 38.8 38.8 42.8 of its turnover being generated by exceptional that 2019/20 will unfold within the framework Sub-total Group brands 274.4 274.4 247.2 spirits (retail sales price over USD50). of the Group’s medium-term objectives. It will also Partner Brands 4.9 4.9 5.3 In addition, after a strong increase in profitability include the termination of distribution contracts Holding (15.2) (15.8) (15.7) in recent years, the Group remains ambitious for partner brands (in the Czech Republic, Slovakia Total 264.1 263.6 236.8 regarding the potential of its Current Operating and the United States), which are estimated Margin in the medium term, as it will continue to have an impact of €56 million on sales Net sales by geographic area to benefit from its value strategy, while continuing and €5 million on Current Operating Profts. Europe, Middle-East, Africa 311.9 329.3 342.3 to invest significantly behind its brands Americas 467.8 474.4 435.8 and distribution network. Rémy Cointreau’s Asia Pacific 346.3 412.8 348.9 Total 1 125.9 1 216.5 1 127.0
Net sales by currency % NON-FINANCIAL TARGETS TO 2020 Euro 16% 174.1 182.0 200.0 US dollar, HK dollar, Chinese yuan, Barbadian dollar 65% 735.3 799.4 709.5 VALUES VALUES VALUES TARGETS Other currencies 19% 216.6 235.1 217.4 INDICATORS SCOPE 2016/2017 2017/2018 2018/2019 2019/2020 Total 1 125.9 1 216.5 1 127.0 Decent work and economic growth/Promote sustained, World 83% 89% 92% 100% inclusive and sustainable economic growth, full and Non-financial data 2019 2018 productive employment and decent work for all Responsible purchasing: percentage of suppliers having joined SEDEX Percentage of AFC cooperative members’ land using an environmental approach: High environmental value farming (AHVE) certification level 1 94.0% 64.3% Take action to combat climate change and its impacts France 0 MWh -423 MWh -441 MWh -900 MWh High environmental value farming (AHVE) certification level 3 42.0% 23.0% Potential reduction of direct and indirect energy consumption Number of hours training 26 615 24 243 in order to reduce CO2 emissions. Percentage of women managers 44% 43% Average age of Group employees 40 years 41 years LIFE Sustainable land management/Protect, restore and promote France 37% 64% 94% 100% ON LAND Absenteeism rate (hours of absence per hours worked) 2.0% 2.3% sustainable use of land ecosystems/ Responsible purchasing: percentage of suppliers having joined SEDEX 93.0% 89,0% Sustainably manage forests/Preserve biodiversity Ethifinance rating 3rd out of 230 4th out of 230 Sustainable viticulture: AFC cooperative surface areas committed to an environmental approach (AHVE 1 or the Sustainable Viticulture standards) * Proforma : pre-IFRS 15, 16 and 9 ** Of which an extraordinary dividend of €1.00 THE EXCEPTION: “TERROIRS, PEOPLE AND TIME”
Time, the third pillar of our manifesto.
The Rémy Cointreau Group’s manifesto is based on the values connecting our Houses and guiding our decisions: Terroirs, People, Time, and Exception.
Over the years, we have delved into the heart of each of these values to appreciate their significance or richness. This year, we will explore the third of these pillars in all its dimensions: Time. _TIME
The mastery of time lies at the heart Our Master Distillers excel at capturing of our expertise. But at Rémy Cointreau, the best aromas of our terroirs. Grape, time is a multiple concept. orange, barley, sugar cane, berries or botanicals: they monitor the heat Our brands have been defying time since and know how to find “the heart”. It's they first came into being: Mount Gay the time of distilling. in 1703, Rémy Martin in 1724, Cointreau in 1849, Bruichladdich in 1881, and Metaxa In the cellar at Grollet in Cognac, in 1888. Yesterday, today, tomorrow, the cellars of St. Lucy in Barbados, we strive to respectfully nourish the those of Bruichladdich on Islay, of eternal youth of our brands. It's the era Kifissia in Greece, of Seattle in the United of respecting a precious family heritage. States, or Saint-Jean-d’Hérans in France, we allow time to take its time. 5 years, With great ambitions for our houses, 10 years, 100 years... Time passes we look far into the future for them and peacefully in our cellars. It's the time think long-term. Connected to the world, of maturing. We are proud of taking our time. however, we see it change around us at an The time that is needed. everincreasing speed. So, we adapt, and we know how to act fast when it comes to being first. It's the time of agility.
Spring, summer, autumn, winter. Sun, “The mastery of time lies rain, hail, snow, wind, fog, storm... We at the heart of our expertise. don’t rush the harvest, but work with But at Rémy Cointreau, nature. It's the time of the earth. time is a multiple concept.” At Rémy Cointreau, time is not linear: each brand has its own time...
Cointreau, born in 1849 Our whiskies, born between 1881 and 2010 At Cointreau, it's the golden age of cocktails. As the base At Bruichladdich, for more than 300 cocktails, the Domaine des Hautes Glaces it provides balance and enhances and Westland, it is the time of the the other ingredients to create revolution against the standardization extraordinary cocktails. of taste. It is the time of a conviction: that origin is more important than age.
St-Rémy, born in 1886 RÉMY COINTREAU _ ANNUAL REPORT St-Rémy, it's time for you. These moments of respite, when you reconnect with yourself or with those closest to you. Mount Gay, born in 1703 Time does not flow at the same pace in the tropics. That's why we don't count the years to define 43 the maturity of Mount Gay rums.
JAY DOHERTY CONCEIVED, DISTILLED, MATURED AND BOTTLED WAREHOUSEMAN AT BRUICHLADDICH DISTILLERY, ISLE OF ISLAY, BRUICHLADDICH SINCE 2011 SCOTLAND. LOUIS XIII, born in 1874 BRUICHLADDICH.COM Please drink responsibly For Louis XIII, time is cyclical: today is made out of yesterday and is preparing for tomorrow. Time is its most valuable ingredient. The Botanist, born in 2011 At The Botanist, it's foraging time. That of the 22 herbs it is comprised of, some of which are indigenous to the island of Islay in Scotland.
Rémy Martin, born in 1724 Metaxa, born in 1888 At Rémy Martin, time is generational. At Metaxa, it's time for exploration. Generations of men and women A unique brown spirit... an expert have passed down their savoir-faire blend of Muscat wines from Samos, and eaux-de-vie, the fruits aged eaux-de-vie and Mediterranean of their labour. aromatic plants. The Rémy Cointreau Foundation promotes the transmission of expertise and excellence
With our ambitious* CSR objectives, We Care Day, - Reach (participation in trade shows in France and etc., our commitment is genuine. But Rémy Cointreau abroad aimed at raising awareness of the importance doesn’t stop there, and constantly reviews its of passing on craftsmanship, heritage, etc.), practices, fulfilling its corporate and environmental - Skill-based philanthropy (encouraging the responsibilities. Hence the creation of the Fondation commitment of Group employees to the Foundation’s Rémy Cointreau.
initiatives). RÉMY COINTREAU _ ANNUAL REPORT The result of a broad family consultation approved Philanthropy is the main vehicle used, without by the Group’s Board of Directors in 2016, counterpart, for the exercise of activities in the the Foundation has been endowed with an initial common good. Philanthropy is a major lever for budget of €1 million over five years. On February progress towards a more harmonious, supportive 27th, 2017, the Articles of Association were and fair society. submitted to the Charente district’s administrative headquarters. Eight selection criteria have been choosen to guide the selection process of applications: outstanding Dominique Hériard Dubreuil, Chairman of the craftsmanship, transmission, longevity, passion, Foundation, convened Hervé Dumesny (S.V.P. 45 aesthetics, heritage, innovation and philanthropy CSR and Public Affairs), Valérie Alexandre requirements. (S.V.P. Strategic Planning), Ludovic Legros (Consolidation manager) and Caroline Martin-Rilhac Given that the Fondation Rémy Cointreau was (Secretary General) within its executive committee. recent, the executive committee decided not to Together, they set out its mission based on one key wait for unsolicited applications and immediately value: transmission, the common thread connecting launched our search for exceptional artisans. This all its actions. The Foundation set itself the was an intense, passionate and long journey that mission “to support public interest initiatives, was full of discoveries. After meeting more than in France and abroad, in order to showcase a hundred artisans, to date six have been taken and convey invaluable savoir-faire and expertise. on by the Board of Directors. Their exceptional The Foundation also promotes and protects expertise is part of French cultural heritage. terroir in its cultural, environmental and human Our Foundation will support and guide them expression.” over time (from 1 to 3 years depending on their sponsorship agreement), in the sincere The Board of Directors is composed of the executive hope of securing the long-term future of their committee members and two expert independent studios and helping to pass on their savoir-faire. directors: Stanislas de Quercize (former Chairman Discover their profiles on the following pages and of Richemont) and Agnès Lamoureux (former follow them, as well as our future beneficiaries, Communication Director of the Fondation de on the Fondation Rémy Cointreau's website: France). They met for the first time in June 2018. www.fondationremycointreau.com The first decision was to focus the grants on ensuring the sustainability of outstanding traditional craftsmanship with four key commitment areas: - Promotion of exceptional savoir-faire (investments in the tools and any other components required to practise the craft), - Transmission (supporting apprenticeships and training), THE YEAR 2018-2019
The year 2018/2019 has been another year of acceleration, both in terms of the growth of our brands and our actions to further Corporate, Social and Environmental Responsibility.
Among the many initiatives, half of our brands have implemented new communication campaigns, hundreds of dinners and tastings to initiate and educate our clients in our exceptional spirits have been organised by our ambassadors, our employees have received more than 26,000 hours of training, and more than 4,000 trees have been planted on the Isle of Islay… AN INTERVIEW WITH THE CHIEF EXECUTIVE OFFICER
VALÉRIE CHAPOULAUD-FLOQUET
“It was the year when all energies were released”
In the financial year 2018/2019, Rémy Cointreau's Group Brands recorded growth of 9.8%. RÉMY COINTREAU _ ANNUAL REPORT
As Chief Executive Officer, how do you perceive Overall, 42% of the land cultivated of St-Rémy, which confirms its leadership e-commerce, it has become a speciality Time, the third pillar of the Group’s manifesto? by our winegrower partners is HVE- in Canada. of our Scottish distillery with exclusive In our profession, the relationship with certified. Moreover, our target for sales and limited editions. Last but not time is an unusual one. Although we the Group is to achieve 100% responsible Has the distribution network also changed? least, the Louis XIII Smart Decanter is operate in markets requiring much agility, and sustainable agriculture by 2024. Indeed, the quality of our spirits and the a connected carafe that allows purchasers we must be very patient when it comes In so doing, we hope to perpetuate the strategy to move upmarket require a high to chat with the House, enhancing their 49 to our cellars, as we sell mainly spirits quality of our spirits in the long term. level of expertise regarding the market and tasting experience. A first in the world that need to age. So, we must distinguish We can see that our values of Time and clients. That is the reason for our demanding of spirits! between long cycles upstream and short Terroirs are closely linked. With that standards with respect to our distribution cycles downstream. Upstream, we are in mind, we are also committed to creating partners, and the recent changes that have What inspires your confidence in 2019/2020 exercising one of the last professions a terroir for each of our brands. We have occurred. When the size of our portfolio and the years ahead? where time is incompressible. At the House purchased land in Barbados, Samos and allows it, we would naturally rather The foundations are now solid, the of Rémy Martin, for example, the eaux- even the French Alps, and we are in the set up our own distribution subsidiary, strategy is shared by all teams, and the de-vie take at least 5 years, and sometimes process of purchasing new land. as in Malaysia at the end of 2017. There results are there for all to see: the planets more than 100 years to age. It’s unique is no cause for regret: it was a tremendous are perfectly aligned to tackle the new in the world... Downstream, on the other In terms of short cycles, would you say 2018/2019 success from the first financial year! financial year with strong ambitions. hand, we need to handle the rapid pace is quite a good example? Our Travel Retail business has also seen And we have a great deal of projects! of the markets: we must react quickly, Most definitely! We have broken our sales much development, with “retailtainment” adapt to new requirements, changing and profitability records. We are growing features in all the world’s largest airports. legislations, and developing distribution on the verge of double digits, with organic Lastly, for Louis XIII, we are seeking channels. Resolving this tension between growth of 9.8% for Group Brands implying the most direct relationship possible: with long and short cycles is a daily challenge a further acceleration versus last year the end client in our three stores and that makes our business so exciting. (9.2%). For all teams, these results reward pop-up stores; with palaces and leading It also fascinates our clients, who are used five years of implementing the strategy restaurants, to ensure the Louis XIII to the immediacy of the Internet, when to move upmarket. We have established trust. ritual will be respected and that their they visit our cellars in Cognac or Islay. If I had to describe the past year, I would clients will enjoy a unique experience. say it was the year when all energies Long cycles also have an environmental dimension... were released. On the one hand, the Digital technology is also central to the strategy... For decades, the Group has been a pioneer repositioning of our brands has paid off. We have developed the client relationship in the CSR approach, especially in the That of Rémy Martin and Louis XIII over through our digital brand platforms. As Cognac region. In 2012, the Rémy Martin the last three years, and more recently such, most of our advertising investments Domaines were the first of the AOC to obtain Cointreau, whose new brand platform will now be rolled out online, allowing us HVE certification (High Environmental sent sales skywards, in particular greater proximity to our clients. We have Value level 3). In early April for the in the United States. I could also mention also developed e-retail in partnership with second year, we awarded 88 trophies to the “#BeTheBotanist” campaign, which quality e-retail websites, in China and our HVE-certified winegrower partners gives even greater visibility to our the United Kingdom in particular. As for of the Alliance Fine Champagne Cooperative. exceptional gin, and the new communication 2018/2019 KEY FIGURES
KEY HIGHLIGHTS
Rémy Cointreau achieved a remarkable year 2018/2019, with organic revenue growth (at constant exchange rates and scope of consolidation) of 7.8%, thanks to the positive momentum in the Asia- Pacific and Americas regions, coupled with strong growth in Russia, the United Kingdom and the Middle East. Current operating profit was up 14.2% in organic terms, and the operating margin stood at 22.3%, up 1.3 points. After integrating unfavourable foreign exchange rates and 167.8 scope of consolidation, current operating profit was up 11.3% and the margin M€ RÉMY COINTREAU _ ANNUAL REPORT improved by 0.7 points to 21.7%. Lastly, net profit (excluding non-recurring Net profit items) increased by 10.9% (+16.3% (excluding non- in organic terms). These results confirm recurring items) the relevance of the Group’s value-creating business model. 51 _A RECORD YEAR _THE LOUIS XIII 3.35€ SMART DECANTER Net earnings per In 2018/2019, Rémy Cointreau achieved share (excluding a record year: revenue, current operating In February 2019, Louis XIII launched non-recurring items) profit, current operating margin, net the Smart Decanter, a connected decanter profit (excluding non-recurring items). that integrates NFC technology. Each This performance was driven by further decanter connects clients via their acceleration in organic sales growth, smartphone to the “Louis XIII society”, which reached 9.8% for the Group Brands a private club where members benefit from 1.08 (Cognac and Liqueurs & Spirits). exclusive content, unique experiences and customised services. Net debt/EBITDA ratio _NEW PACKAGING AND COMMUNICATION FOR _LAUNCH OF A GLOBAL 1 216.5 PORT CHARLOTTE SINGLE ECO-DESIGN PROGRAMME MALT SCOTCH WHISKY 7.8% Since March 2018, the Angers and Cognac M€ 1.65€ The rebirth of our Port Charlotte Single sites have been using a tool to measure the Organic Ordinary dividend Malt Scotch Whisky in 2018/2019 was Environmental Performance Index (EPI), Sales sales growth a true success: new taste, new packaging, which takes into account the broadest new positioning and new “We Are Islay” possible life cycle and incorporates 14 campaign. These changes enjoyed excellent indicators to produce an environmental media coverage and were crowned with score. From now on, all new products or three major awards, including a double product developments will be “measured” 263.6 21.7% 1.00€ using this tool. The whisky division will gold medal at the 2018 San Francisco Current operating Exceptional implement this same strategy by 2021. World Spirits Competition. M€ margin dividend Current operating profit * Proforma figures (pre-IFRS 15, 16 and 9) ACHIEVEMENTS IN 2018/2019
Sales (in €M) Current operating margin
1216.5 23.5% 1127.0 1125.9 21.7% 21.0% 1094.9 20.7% proforma proforma Reported Reported 2016 2017 2017 2018 2018 2019 2018 2019 2016 2017 2017 2018 2018 2019 2018 2019
Net profit (excl. non-recurring Net debt (in €M) and net debt/ items) in €M EBITDA ratio
167.8 169.9
151.3 390.1 313.0 343.3 135.0 282.8
1.78 Reported 1.48 proforma
1.08 1.19 proforma Reported 2016 2017 2017 2018 2018 2019 2018 2019 2016 2017 2017 2018 2018 2019 2018 2019
Breakdown of 2018/2019 revenue Breakdown of 2018/2019 revenue by division by region
Liqueurs Americas Europe, & Spirits 39% Middle East & Africa 23% 27%
Partner Brands 7%
Rémy Martin Asia-Pacific 70% 34%
Proforma figures (pre-IFRS 15, 16 and 9) Figures post-IFRS 15, 16 and 9 THE YEAR OF THE BRANDS
With organic growth of 9.8% driven by the Asia-Pacific and Americas zones, Group Brands have enabled Rémy Cointreau to achieve the best year in its history.
The House of Rémy Martin performed especially well (+11.9%), in particular thanks to the XO quality – one of the priorities of the Group and the Cognac division. The initiation of this showpiece has proven its worth: the “Opulence Tables”, the “Maisons Éphémères” (pop-up Houses) and all the events hosted by our brand ambassadors around the world played their part.
The Liqueurs & Spirits division achieved a good year, with 4% growth. The Botanist gin, which continues to gain traction in the world of mixology, together with our Scottish whiskies, were the division’s spearheads. In particular, Port Charlotte benefited from a new presentation and bold communication: #Weareislay.
Cointreau recorded a very good year, especially in the United States in the second half of the year, reaping the rewards of the new “The Art of the Mix” campaign. St-Rémy also showed strong results, consolidating its number-one position among French brandies. THE HOUSE OF RÉMY MARTIN
The House of Rémy Martin confirmed its buoyant momentum in 2018/2019: organic sales growth of 11.9% endorses our value strategy and our high-end positioning.
Fuelled by a client-focused culture and organisation, The House of Rémy Martin our growth is based on solid confirmed its buoyant fundamentals and allows us to look ahead with serenity. momentum in 2018/2019. The opening and first successful operation of our new winemaking and distillation facility in Juillac for the 2018 harvest is an example thereof. Juillac is the first cornerstone of the ambitious investment programme that will cover all Cognac sites by 2024. Key to our strategic vision, our environmental commitment to responsible and sustainable viticulture that respects our terroirs is intensifying. The High Environmental Value (HVE) certification chosen by the House and its Alliance Fine Champagne (AFC) Cooperative in 2012 is now recognised by the entire Cognac division.
As such, 94% of vineyard areas supplying the House have committed to the approach (level 1) and 42% have HVE certification (level 3). The momentum has increased since 88 new winegrowers have been rewarded during the second ceremony of the “Centaurs of the Environment”. Lastly, in the Poitou-Charentes region, more than 94% of HVE-certified farms have partnered with the AFC and the House of Rémy Martin.
851.9M€ 27.7% Revenue of the House Current operating margin of of Rémy Martin the House of Rémy Martin _RÉMY MARTIN RÉMY COINTREAU _ ANNUAL REPORT Rémy Martin has recorded a record year, his style, “vectorfunk”: an extensive thanks to the remarkable performance eco-system combining merchandising, of its superior qualities, in particular, viral operations, an augmented reality Club and XO. Asia, Africa and Travel smatphone app, and participation in Retail were the most dynamic regions, lifestyle events like Art Basel or Shanghai while the brand has continued to grow Design Week. This initiative has breathed in its key markets, such as the United new life into the Rémy Martin brand and States and Europe. continues to rejuvenate its customer base. 59
These strong results support the acceleration The year 2019/2020 will bring many of the value strategy and the increase projects, including the launch of a new in communication investments. The XO communication platform to strengthen quality was the spearhead of this plan the singularity of Rémy Martin cognac to conquer the markets. Several initiatives among exceptional cognacs. have supported this flagship product: the partnership with chocolatier Pierre LIMITED EDITION VSOP Marcolini, the roll-out of the “Opulence WITH THE ARTIST MATT W.MOORE Table” in many channels, and the decanter personalisation initiatives, which are very popular during the Christmas and Chinese New Year celebrations. The 1738 Accord Royal cognac continued to boom in the United States with the “Producer Series” platform focused on music, but also in Western Europe where its fan base is growing. A communication campaign was implemented in the United Kingdom with digital activation and a poster campaign, helping to strengthen brand awareness. In Asia, Club (the “8-faceted product”) continued to expand in Singapore, Malaysia and especially in China, where e-commerce has offered multiple opportunities to reach new clients in the most remote regions Lastly, 2018/2019 was marked by the launch of a limited series around VSOP in collaboration with American artist Matt W. Moore, known for _LOUIS XIII
At Louis XIII, time is essential. It is our key ingredient.
Each moment carries the promise of perpetual movement, concentrated on the heritage of the past, the experience of the present, and the preparation for the future. This timeless icon recorded
With each moment, the Cellar RÉMY COINTREAU _ ANNUAL REPORT remarkable results Master watches over the treasure in 2018/2019, of very old eaux-de-vie transmitted as well as balanced by his predecessors, prepares Louis XIII with a blend that international sales. has achieved a perfect balance, and sets aside exceptional eaux- de-vie for the next generations of Cellar Masters. This projection of time makes 61 Louis XIII unique.
This status of a timeless icon, which has enabled it to record remarkable results in 2018/2019 along with a balanced international distribution, is the fruit of a client-oriented strategy. At Louis XIII, we place the client at the heart of everything we do, striving to provide him or her with the best experiences. Innovation goes hand-in-hand with heritage. the repercussions of global warming. “100 In February 2019, Louis XIII integrated Knowing how to draw inspiration from the YEARS ”, a new song by Pharrell Williams NFC technology into its decanter to give past to innovate. With this in mind, and to be released in 2117 only #ifwecare. clients exclusive access to a privileged as part of the Black Pearl collection, Louis world. XIII has introduced an unprecedented Driven by this long-term vision, Louis XIII limited edition created by Maison Baccarat. strives, above all, to offer its clients First presented in its boutiques, then made Named BLACK PEARL AHD, in tribute increasingly surprising experiences available to all markets, each connected to André Hériard Dubreuil, this 350 ml reflecting its pioneering approach, which decanter will connect clients directly via decanter made of steel-coloured crystal it has embraced since 1874. their smartphone to “LOUIS XIII Society”: is produced in a numbered edition of 1,498 a private club where members will benefit decanters. Its precious liquid is drawn from from exclusive content, unique experiences a single tierçon carefully hidden deep inside and customised services. the André Hériard Dubreuil cellar: cooler, darker and damper than the other cellars. It is also the brand's approach regarding its worldwide retail strategy. The opening Surprising our clients also means continuing of its own boutiques (in China and London) to share the unique history of the artistic enables Louis XIII to inspire and surprise “100 years” project with Pharrell Williams: its clients with increasingly innovative and an original piece of music that will only meaningful experiences, without forgetting be released in 100 years. The project the creation of pop-up stores. is related to environmental challenges and LIQUEURS AND SPIRITS
The brands of the Liqueurs & Spirits division These successes were driven by significant recorded organic sales growth of +4.0% investments in communication to support over the year, with strong acceleration the move upmarket of the different brands in the second half of the year. and to create international brand awareness. As such, Cointreau Bolstered by their diversity, our ten has benefited from The increase brands are continuing their move upmarket the international “The Art in communication and international growth: Cointreau of the Mix” campaign and investments, started two
as a benchmark in its category, Metaxa the campaign celebrating RÉMY COINTREAU _ ANNUAL REPORT with the success of its “12 Stars” campaign, the 70th anniversary of years ago, is beginning Saint-Rémy brandy with its XO quality, the Margarita in the to show results. and Mount Gay rum with its shift away United States. Metaxa from its entry-level qualities. The Botanist launched the second opus of its “Don’t has established itself as a must-have drink it, explore it” campaign for its 130th in cocktail bars around the world, while anniversary, driven by two new explorers. our Scottish single malts have made St-Rémy’s digital communication campaign a prominent entrance on the Asian market, enjoyed notable success in Canada, whereas 63 with Port Charlotte as the spearhead. that of Port Charlotte, “We Are Islay”, As for the young Westland and Domaine was crowned with real commercial success. des Hautes Glaces brands, they have already distinguished themselves by receiving medals at various competitions but are taking their time to prepare for the future.
276.6M€ 14.0% Revenue of the Liqueurs Current operating margin & Spirits division of the Liqueurs & Spirits division _ST-RÉMY
St-Rémy benefited from its new presentation, Depending on the markets, differentiated new products and communication campaigns digital communication campaigns have to consolidate its number-one position been successfully developed: “What Good among French brandies – especially Friends Are Made Of " in Canada, “Friends in North America, Russia and Travel Forever” in Russia and “100 % French Retail. We can also highlight strong results From Grapes To Bottle” in the United in some countries throughout Asia, Africa States. The brand has also strengthened and the Middle East. its presence on social media.
The XO quality recorded double-digit During 2019/2020, St-Rémy XO’s share growth, perfectly in line with the brand's of the brand's overall revenue should strategy to move upmarket. The launch increase even further, whereas the Cask of the first limited edition, St-Rémy French Finish range will offer new discoveries Chardonnay Cask Finish, supports this for connoisseurs interested in limited strategy of excellence. editions. RÉMY COINTREAU _ ANNUAL REPORT
LIMITED EDITION ST-RÉMY FRENCH CHARDONNAY CASK FINISH
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_COINTREAU
The Cointreau brand is continuing its website: the “cocktail matcher” and ambition to become the leader of cocktail the “cocktail finder”. American actress culture. Its organoleptic qualities and its Gwyneth Paltrow also participated ability to enhance other ingredients make in the Margarita’s anniversary. To mark it the essential foundation of mixology. the occasion, she broadcasted a tutorial on preparing the iconic cocktail to her In the second half of 2018/2019, the brand followers. reaped the benefits of the Art of the Mix campaign launched in March 2018 and For its 170th anniversary in 2019/2020, of the 70th anniversary celebration the brand will pay tribute to great classic of the Margarita cocktail. This growth cocktails through “Le Cocktail Show”. This was very strong in its leading market, 360° activation will feature the Cointreau the United States, and in its traditional Fizz, the Margarita, the Cosmopolitan market, the United Kingdom, as well as in and the Sidecar, from cocktail bars emerging markets like Russia and China. to retail outlets, including on social media.
Among the year's highlights was the limited edition, “Orange” bottle, created by the Design Laboratory of Central Saint Martins School in London, as well as two new cocktail creation tools on the cointreau.com _METAXA
2018 has been a crucial year for Metaxa, which The brand has also strengthened its presence celebrated its 130th anniversary. To honour in the world of mixology by establishing its heritage, Cellar Master Constantinos a unique partnership with the world-famous Raptis created 130 limited edition decanters Athens bar, The Clumsies, and by organising of its most precious elixir: Metaxa AEN Cask the Explore Greece event. A team comprised No. 2 - Despina. The word AEN translates of the best international barmen (including to “forever” in Greek, celebrating the essence Vasilis Kyritsis and Nikos Bakoulis of The at the heart of Metaxa in its purest form. Clumsies, and Leo Robitschek of the NoMad Bar in New York) sailed through the Cyclades, In May 2018 in Athens, a press conference stopping at three iconic islands: Mykonos, unveiled the brand’s first global campaign Paros and Antiparos. At each stop, the barmen focused on the subject of exploration, featuring revealed an exclusive cocktail made with Metaxa South African explorer Mike Horn, as well 12 Stars, inspired by the wonders of Greece. as the French free-diving world champion Guillaume Nery and British adventurer Laura To support these initiatives, Metaxa has taken Bingham. They are perfect examples of the a strong digital approach with the launch Metaxa signature: Don’t drink it, explore it. of a new website, coverage of the Explore Greece event, and the roll-out of the new campaign Metaxa continued its global expansion with (embodied by its three explorers) on social media.
the launch of Metaxa 12 Stars in Spain RÉMY COINTREAU _ ANNUAL REPORT and France, as well as in Dubai, in the major In 2019/2020, Metaxa will continue its strategy cities of China and the United States, and by offering new cocktail recipes and organising the best bars of New York, Dallas, Miami the second edition of Explore Greece, which will and San Francisco. sail south towards Crete.
LIMITED EDITION 67 MOUNT GAY XO: THE PEAK SMOKE EXPRESSION METAXA AEN CASK N°2 - DESPINA _MOUNT GAY
Mount Gay is continuing its move upmarket and aims to gain popularity among connoisseurs of exceptional rums.
As expected, the brand's volumes were of tastings has also played an important down in 2018/2019 compared with last role among high-end spirits connoisseurs. year, in line with our forecasts, as the brand’s move upmarket is under way. Among its CSR initiatives, Mount Gay has For example, the decision to withdraw completed the first phase of solar panel Mount Gay Silver rum from all markets – installation at the Saint Lucy distillery except the Caribbean – and to concentrate and has enhanced the estate's biodiversity onhigher-end products has affected by planting trees and installing new global results. However, this strategy beehives. should guarantee the brand's success and profitability in the medium term. 2019/2020 will be a key year for Mount Gay: the brand will undergo repositioning with The launch of the Time Well Spent campaign new packaging and a new communication on social media and in the key markets campaign targeting the increasing number – United States, United Kingdom and of exceptional rum connoisseurs. Barbados –, combined with the launch of the XO The Peat Smoke Expression limited edition, has enabled the brand to increase its visibility and reputation like never before. The organisation RÉMY COINTREAU _ ANNUAL REPORT
_THE BOTANIST
Once again, the Botanist has recorded 69 one of the best performances in the high- end artisanal gin category.
In 2018/2019, the launch of the The Botanist becomes new #BeTheBotanist campaign the benchmark in the world’s major cities was the main driver of the for exceptional gins. brand’s remarkable growth. The campaign encourages clients to “unleash their inner forager” and to develop singular and unique cocktails on their own by combining The Botanist with herbs they have foraged. These initiatives, combined with the development of the brand’s visibility in bars, clubs and restaurants, have boosted brand awareness.
In 2019/2020, The Botanist will continue to surprise us through a series of short films: “Wild – A State of Mind”. WHISKIES
The singularity of our whiskies is increasingly sought after, including by Asian clients.
Created two years ago, the whisky division Although our Scottish whiskies are thriving comprises five single malts that share the in their traditional markets (Americas, same values of provenance and excellence: United Kingdom, France, etc.), they have Bruichladdich, Port Charlotte, Octomore also made important inroads in Asia and (the three brands of the Progressive the northern countries. Hebridean Distillers on the Isle of Islay, Scotland), as well as Domaine des Hautes The young Westland distillery, which Glaces, a farm distillery in the French combines critical and commercial success,
Alps, and Westland, a distillery in Seattle, continues to grow in the United States RÉMY COINTREAU _ ANNUAL REPORT in the United States. and is preparing to export some of its production. Overall, this division recorded another year of double-digit growth, driven Lastly, Domaine des Haute Glaces by the success of the new Port Charlotte is taking the time to prepare for the bottle and the prestigious limited series future by building up stocks. of Octomore, the world's most heavily peated single malt. The former reaped 71 the rewards of a bold viral campaign, “We Are Islay”, while the latter is benefiting from the development of its private online sales policy aimed at well-informed connoisseurs. RÉMY COINTREAU _ ANNUAL REPORT
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NEW PACKAGING FOR PORT CHARLOTTE SINGLE MALT SCOTCH WHISKY
_PROGRESSIVE HEBRIDEAN DISTILLERS
Driven by the “We Are Islay” campaign, Port Charlotte experienced exceptional growth in 2018/2019.
Our portfolio of Progressive Hebridean connoisseurs, also contributed to this at the 2018 San Francisco World Spirits The strong growth target remains intact Distillers (PHD) single malts recorded excellent year. Competition. for 2019/2020. Bruichladdich will focus another year of double-digit growth. on Classic Laddie while tapping into the This performance is due to the continued Although Bruichladdich perfectly achieved Highly involved in safeguarding possibilities of the Barley Exploration success of our core products in our key its targets, they were far exceeded the Islay ecosystem, PHD implemented range and the Rare Cask series in the markets, combined with a winning strategy by Octomore’sprestigious limited editions several environmental initiatives in 2018, luxury segment. Port Charlotte will to move upmarket, in particular through and, above all, by Port Charlotte, whose including: planting 4,000 trees; habitat continue to roll out its new range around exceptional limited editions. Moreover, rebirth was a true success: new flavour, conservation projects with the Islay the “We Are Islay” campaign. Lastly, new growth drivers have been developed new packaging, new positioning and Natural History Trust, local landowners Octomore will maintain its course with in emerging markets in Asia and in other new “We Are Islay” campaign. These and the Islay pollinator project; a study the launch of the 10 series. Scandinavian countries. Additionally, changes enjoyed excellent media coverage to develop green energy solutions, the development of E-Retail, targeting and were crowned with three major and the acquisition of two electric vehicles. a customer base of highly demanding awards, including a double gold medal _DOMAINE DES HAUTES GLACES
Since its creation by Frédéric Revol and time. Relying on a reinterpretation of in 2009, the farm distillery Domaine local savoir-faire to promote the aromatic des Hautes Glaces has produced exceptional distinctiveness of alpine single malt whiskies from the Trièves mountain grains, the The notion of terroir Mountains at an altitude of 900 metres Domaine des Hautes Glaces has never been taken deep within the French Alps. The creation explores its terroir by so far for a single malt of these whiskies adheres to a very offering single malt strict sustainable development approach: whiskies with unrivalled as with Domaine certified organic, they are manufactured flavour. The elegance des Hautes Glaces. in a traditional and authentic way from of the bottle – at once various grains (barley, rye, spelt and minimalist and contemporary – reflects hull-less oats), using mainly renewable the intricate relationship between past, and local energies. present and future; between respect for tradition and boldness of innovation. By using grains grown under different alpine climates and processed on-site in old Charentes stills, the Domaine des Hautes Glaces produces a range of single malt whiskies
with the greatest respect for terroir, people RÉMY COINTREAU _ ANNUAL REPORT
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GARRYANA, NAMED "AMERICAN SINGLE MALT OF THE YEAR 2018"
_THE WESTLAND DISTILLERY
The spearhead of the emerging market In terms of responsible economy, Westland of American single malts, the Westland has also taken a major initiative to limit Distillery has enjoyed a wonderful year 80% of its water consumption by installing of recognition. Backed by rave reviews a cooling tower in the distillery. in the American trade press, it also received several awards, including that Exciting prospects appear to lie ahead of “Master Distiller of the year” for its for 2019/2020. In the United States, the co-founder Matt Hofmann at the 2018 brand is expected to continue its growth Icons of Whiskey Awards. in selective distribution. Above all, Westland will begin to export to other During the year, Westland offered major single malt markets around the high-profile limited editions, in particular world to become the American benchmark the 1083 very peaty bottles of Peat Week among informed connoisseurs. and the extraordinary Garryana. Named “American single malt of the year”, this exceptional whisky is aged in local oak casks, Garry Oak; the distillery is actively involved in replanting new oak saplings. THE MARKETS
_EUROPE, MIDDLE EAST _AMERICAS _ASIE PACIFIQUE AND AFRICA _TRAVEL RETAIL
The positive macroeconomic environment Rémy Cointreau has benefited from strong In 2018/2019, the downturn in the Europe, In 2018, the Travel Retail market continued in the United States was conducive growth in cognac sales across Asia, while Middle East and Africa region was due its strong growth, with a 7% increase to the spirits market, which saw greater winning market share in most countries. primarily to changes in the distribution in the number of travellers. Favourable RÉMY COINTREAU _ ANNUAL REPORT growth in value than in volume, promoting Louis XIII has achieved a remarkable network in several countries (Spain, Italy market conditions and sustained investments high-end brands. In Latin America, year thanks to the growth in private and Germany, to name a few). Most of the led to a new year of healthy growth our key markets are showing high potential: client sales, especially in South-East Asia, other markets recorded a good year, such for the Group. Barbados, Porto Rico and especially which is undergoing rapid development. as Russia, the United Kingdom, France and Mexico, where we have signed a new Rémy Martin has also recorded sharp Switzerland. Africa and the Middle East This short circuit allows us to be in direct distribution agreement. That of Canada, increases in China (especially in restaurants, also confirmed their strong potential in the contact with our clients and thereby a promising market, has been renewed. bars and karaoke bars), Singapore and medium term, in particular with excellent educate them on our exceptional spirits. Indonesia. Rémy Martin Club confirmed results in South Africa, Nigeria and the As such, we have developed various 77 Cognac continues to enjoy very positive the excellent performance already achieved United Arab Emirates during the year. events for each of our brands: tastings, momentum, driven by the selective in previous years. cocktail demonstrations, pop-up stores distribution of Louis XIII and the marketing Rémy Martin has continued its world tour and original features in the largest programmes of Remy Martin VSOP, 1738 Our whiskies are also experiencing with its pop-up Houses to educate clients international airports. and XO. Cointreau has experienced an major growth: in 2018, the Greater China and give them an opportunity to taste our exceptional year, confirming the strategy region became the first global market signature cocktails: in the EMEA region, a In Asia, Travel Retail results reflect implemented through the Art of the Mix for Progressive Hebridean Distillers "Rémy Martin House" was opened in Moscow domestic market trends, particularly campaign. (PHD) single malts, and the launch in October 2018 and in London for the third for cognac, which is experiencing a strong of Port Charlotte 10 Year Old is already time, this time with a permanent address in increase in demand. In the Singapore Our Whisky portfolio continues to grow a success. Lastly, it is worth noting the Bibendum building, in collaboration with and Hong Kong airports, Progressive in selective distribution, with Westland the growth in Cointreau sales across Michelin-star French chef Claude Bosi. Still Hebridean Distillers (PDH) single malt in the lead of American Single Malts the entire China and the launch of Metaxa in London, Louis XIII opened a permanent sales and The Botanist gin sales have and Port Charlotte 10 Year Old ranked in some major Chinese cities, which store in Harrods, its third address after its taken off. In addition, we have noted fourth best whisky by Whiskey Advocate. support the diversification of our spirits two Chinese stores, and Cointreau launched rapid growth in in-flight sales. The Botanist is continuing to grow at in this market long dedicated to cognac. its new "The Art of the Mix" campaign there. a rapid pace and our targets remain high Metaxa introduced the second opus in its In Europe, the environment is more for the development of this exceptional In Malaysia, the opening of a distribution "Don't drink it, Explore it" campaign in its mitigated, whereas in the Americas, gin. Lastly, Metaxa 12 Stars was launched subsidiary since October 2017 has proved main markets in Central Europe, and The the demand for high-end cognacs in four key cities in February 2019 and to be a winning strategy, while in Japan, Botanist launched invitations to forage in is dynamic and the Cointreau activations is already showing its potential in cocktail Rémy Cointreau is resuming double-digit Berlin, Dubai, London and Paris as part have paid off. bars. growth. of its #BeTheBotanist campaign. For 2019/2020, we expect the market In 2019/2020, the prospect of a continued For 2019/2020, investments in communication The distribution network in the EMEA to remain buoyant, driven by the move upmarket supports our optimism and distribution structure, combined with region will continue to evolve in 2019/2020. continuous growth in Chinese tourism for another year of solid growth. structurally promising market trends, Nevertheless, we will strengthen investments and the appreciation of the yuan. should continue to boost the growth in our main markets. of our exceptional spirits. CORPORATE SOCIAL RESPONSIBILITY
Rémy Cointreau's CSR strategy is fully aligned with the United Nations Sustainable Developement Goals (SDG) and grounded in three major commitments: preserving Terroirs, committing to People and respecting the value of Time. Wherever its Houses operate, they work in close collaboration with the Group's partners and suppliers to reduce their environmental impact. CSR GOVERNANCE AND STRATEGY
Responsible Optimal water communication Training Gender and effluent Responsible and consumption of teams equality management sourcing policy
RESPONSIBLE LIFE CONSUMPTION ON LAND AND PRODUCTION
Non-discrimination Reduced GHG Sustainable RÉMY COINTREAU _ ANNUAL REPORT in our teams Eco-design emissions agriculture Anti-corruption around the world of our products (transport) (upstream)
_MATERIALITY MATRIX 81
LIFE ON LAND Water and Sustainable effluent agriculture management
Employee satisfaction / Training Responsible of teams Eco-design consumption To understand the secret behind defined by the United Nations. These RESPONSIBLE CONSUMPTION Rémy Cointreau's excellence, we must 17 goals characterise Rémy Cointreau's AND PRODUCTION Responsible focus on what elevates it: the quality of focus. They reflect its CSR ambitions sourcing its spirits, naturally, but also the values by incorporating challenges such as climate rooted in the Group's DNA. Over the last change and sustainable agriculture. few years, the international environment Anti-corruption has only confirmed and strengthened the A real corporate governance tool in line convictions of Rémy Cointreau, already with Rémy Cointreau's strict standards, highly committed to environmental, corporate a materiality analysis has been conducted. and social responsibility. The Group's Its aim was to prioritise the challenges CO2
CSR policy plays a unifying role and can to identify those with a considerable - Impact on + Value the Group’s reduction be summarised as follows: "To do things impact on growth, value creation Equal employment right, do the right thing". That is why Rémy and the Group's continued existence, opportunities Cointreau has decided to express —with while taking into account the expectations Company even more strength and singularity — the of all stakeholders. agreements values structuring it since its inception. Its signature. "Terroirs, People and Time", denotes the three pillars underpinning its foundation. They echo the Group's major CSR challenges, inspired by the - Stakeholders’ Expectations + Sustainable Development Goals (SDGs) _OF THE 17 SDGS, RÉMY COINTREAU HAS SELECTED THE 10 RELATED TO ITS MAJOR CHALLENGES:
REMY COINTREAU RISKS RELATED CHALLENGES TO THE CHALLENGE INDICATORS
SDG3 Ensure healthy lives Responsible consumption Restrictive Qualitative information and promote well-being for all (in-house and externally) at all ages
SDG4 Ensure inclusive In-house training Loss, deterioration and equitable quality education of certain expertise and promote lifelong learning % of employees completing at least one training course per yea (1) opportunities for all Skills development Lack of staff training Hours of training (2) in some countries
Non-appeal SDG5 Achieve gender equality a Non-discrimination Ratio F/M Managers (1) of the company nd empower all women and girls and in-house social Weighted discrepancy between balance female and male promotions (1) Company's reputation Distribution of F/M training (2)
Water availability SDG6 Ensure availability and Water management Water consumption (1) sustainable management of water (specific case and quality of Barbados site) Pollution related Rate of effluent recovery (2)
to effluent waste RÉMY COINTREAU _ ANNUAL REPORT Absenteeism, turnover, Renewal rate (1), Absenteeism (1) The various challenges selected form the by proving the effective and consistent Quality work and economy / Well-being SDG8 occupational accidents, Rate of frequency and severity Promote sustained economic of employees bedrock of our new CSR charter developed implementation of its CSR strategy at all occupational health, of workplace accidents (2) Average age (2) growth, full and productive this year to support the Group in continuing levels of the company. alcohol consumption due Seniority (2) Workforce by zone, employment, and decent work to work stress activities and businesses (3) its efforts towards excellence. It is based on three major goals: CSR governance at Rémy Cointreau Responsible sourcing Supplier non-compliance relies primarily on the Corporate Social with regulations Rate of suppliers with Sedex Preserving our Terroirs membership (1) - to reveal their Responsibility (CSR) committee, which Company’s reputation with CSR score of suppliers (1)* excellence, by encouraging responsible is mainly responsible for ensuring the 83 clients (boycott) farming methods, maintaining the terroirs’ implementation of the Group’s CSR policy. Non-appeal specific characteristics and innovating The committee’s other duties include Territorial impact of the company to protect them, compliance with commitments (UN Global (Terroirs) Qualitative information Company's reputation - Committing to men and women to assert Compact and internal CSR charters), Non-appeal our singularity by guaranteeing well- assessing the actions implemented (2020 SDG10 Reduce inequality within In-house social balance / % of employment of people with of the company and among countries International homogeneity disabilities (3) being at the workplace, gender equality CSR plan), monitoring the dashboard of Company's reputation % of work-study contracts (3) and non-discrimination, committing indicators, the result of CSR reporting to responsible sourcing, working verification audits, changes in non-financial Circular economy Increase in commodity SDG12 Ensure sustainable consumption and reduced consumption costs Environmental performance hand-in-hand with local communities, ratings, and the outlook in terms of actions and production patterns (1)* of raw materials index for packaging (EPI) and promoting the responsible consumption (updating the 2020 CSR plan). Change in EPI (1)* Client information Company’s reputation of our products by our clients, Rate of waste recovery (2) (labelling, recycling) with clients - Respecting the values of Time to create As players in this CSR governance, exceptional products while leading the senior executives on the Rémy Cointreau Restrictive regulatory (1) fight against global warming, protecting Executive Committee have a portion of SDG13 Combating climate change Contribution to global Significant CO2 emissions (scope 3) and its effects efforts (limit of 2°C) and and tax framework CO emission reduction rate (1) water resources, and taking action their variable compensation index-linked (Carbon tax) 2 company’s sustainability Energy consumption (2) to reduce the environmental impact to CSR goals in line with the main SDGs (2) Company’s reputation % Renewable electricity consumption of our activities. selected (primarily SDG 6, 8, 12, 13 and15). with clients CO emissions related to business travel (3) 2 As such, each Exco member becomes a true Rémy Cointreau’s governance must ambassador, for all the Group’s employees SDG15 Sustainable land use / Protecting, Sustainable agriculture Sustainable production % of sustainably managed agricultural (1) ensure the integration of the Group’s CSR worldwide, regarding a CSR indicator and restoring and promoting the of our agricultural land HVE certification rate of the (1) sustainable use of land ecosystems commodities Cognac winemaking cooperative (AFC) approach into its overall strategy, at all its improvement. / Sustainable forest management / levels of management, from the Board Preserving biodiversity Preserving biodiversity Company’s reputation Qualitative information of Directors to the structures overseeing with clients teams of co-workers.
Restrictive regulatory People trained in the ethical charter (1) SDG16 Peace and justice: effective Business Ethics (2) This is vital to ensure the credibility and accountable institutions and tax framework Number of alerts (prohibition) and reliability of the Group’s CSR policy with respect to its stakeholders – be Governance Effective and consistent Exco remuneration linked to % implementation of achievement of CSR targets (3) they employees or external partners. 1: progress indicators. of the CSR strategy Rémy Cointreau must inspire confidence 1*: progress indicators in the process of creation. 2: vigilance indicators. in the company in the reality of its CSR commitments 3: management indicators. PRESERVING TERROIRS TO REVEAL THEIR EXCELLENCE
Soil, climate, air, biodiversity, production methods: each region is unique, and each of its characteristics contributes to the quality and uniqueness of our liqueurs and spirits. Wherever our “Maisons” are present, they act in a responsible and respectful manner and innovate to ensure the sustainability of the terroirs from which they draw both character and typicity. To preserve our terroirs, we aim to ensure that by 2024, 100% of the land we cultivate is managed in a responsible and sustainable way. RÉMY COINTREAU _ ANNUAL REPORT
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_ENCOURAGING RESPONSIBLE FARMING METHODS
Land-based work lies at the root of Rémy Cointreau’s expertise. Discipline and passion come together with respect for the ecosystems in which the Houses of Rémy Cointreau develop their products. All around the world, they try out new, more responsible farming methods to preserve the specific features of the terroirs and the knowledge of excellence that is transmitted across generations, making the spirits exceptional. Do and inform to engage more and more partners To engage more partners on the road to Thanks to this strong mobilisation, Nouvelle- environmental excellence, the Centaur-emblem Aquitaine has become the leading region brand is going above and beyond, once more in France for responsible and sustainable acting as a pioneer in the region: for two agriculture (figures as at 1 January 2019: years now, the House has been distinguishing French Ministry of Agriculture and Food). newly HVE-certified winemakers for their efforts to further responsible agriculture. Overall, 157 Winegrowers have already been rewarded and 183 have received HVE certification.
A strong momentum has taken hold in the - 94% of HVE-certified farms in Charente regions around this excellence certification. are Rémy Martin partners As at 1 January 2019, more than 90% of the certified farms in Charente are - 42% of the land cultivated by the House’s members of the Alliance Fine Champagne partners are HVE-certified RÉMY COINTREAU _ ANNUAL REPORT Raising the profile of responsible and Training and sensitising the Group’s cooperative. At the end of the Group’s sustainable agriculture requirements partners on sustainable farming 2018/19 financial year, 42% of the land - As at 1 January 2019, Nouvelle-Aquitaine was through excellence certifications methods cultivated by the House’s partners was the leading region in France for sustainable HVE-certified, and 94% had already started and responsible agriculture In Cognac, the House of Rémy Martin has Land-based work only produces valuable the certification process. In 2018, this trend spanned nearly three centuries without rewards over time. The Rémy Martin men picked up speed: more than 200 partners (2019 figures, French Ministry of Agriculture gaining a single wrinkle. To preserve the and women know this all too well. Since joined the certification process. and Food) land and vineyards of Petite and Grande 2014, supported by industry group BNIC 87 Champagne, the Maison established and the Chambers of Agriculture, the House a partnership with the Alliance Fine has been offering AFC Winegrowers trainings Champagne (AFC) cooperative more than 50 on sustainable agriculture to help move the years ago. Nearly 800 partners deliver their region forward and ramp up the number finest eaux-de-vie to the Maison, allowing of partners involved. An HVE-dedicated it to consistently develop exceptional working group trains them to improve products. Deeply rooted in its terroir, the overall impact of the farming activity it is passionately committed to sustainable on the environment and the Charente terroir. agriculture that is more respectful of the Charente terroir. The House disseminates regular reviews Nestled in the heart of the French Alps, of the High Environmental Value Agriculture on the slopes of the Obiou Mountain, Together with the AFC cooperative, approach. These reviews are now shared the Domaine des Hautes Glaces has chosen the Maison has made a strong commitment with all the House’s partners – supplemented to develop products created through a local to the development of responsible agriculture with information dedicated to training development project involving farmers and the joint development of a sustainable and the most recent HVE results – via as committed partners. The organic whisky supply chain in the Charente region. In 2012, the rémysphere letter. The Group’s CSR brand is proud to showcase its relationship the Rémy Martin Domaines were the first report is also shared with all Winegrowers with the land, and encourages for example – and only – farm in the Poitou-Charentes on the remysphere.com website. the rotation of crops for a better soil life region to receive High Environmental Value and new balances based on the agricultural (HVE) certification. It is the highest level of economy. The Domaine des Hautes Glaces this certification, supervised by the French is creating a “climatic range” with local Ministry of Agriculture, that rewards sound farmers to develop new crops of barley, rye, practices carried out on farms,focusing on spelt, oats and organic triticale. The creation 4 topics: biodiversity, phytosanitary strategy of this new rural supply chain for whisky offers fertilisation and water management. a new vision for the land and its development, and long-term prospects for converting farms Since then, the work undertaken by Rémy Martin to organic farming practices. alongside the AFC has enabled the Cognac region to climb to third position nation-wide in number of HVE-certified farms. _INNOVATING TO PRESERVE THE ESSENCE OF TERROIRS
In Scotland’s Isle of Islay or in the heart of the Charente vineyards in France, the Rémy Cointreau teams are constantly working to better understand their terroirs. These terroirs develop in rhythm with the changing seasons and the passage of time. They are the fruit of ancestral practices, and also provide a living laboratory from which the best is extracted with the utmost respect for local ecosystems.
Exploring the terroir of Islay to Testing excellence viticulture that RÉMY COINTREAU _ ANNUAL REPORT guarantee exceptional products Creating sustainable supply chains relies on new technologies In Scotland, Bruichladdich acquired land In Spain, Tunisia, Brazil and Senegal, In the heart of one of the most beautiful on the edges of wild Islay in 2018. The Cointreau has established local partnerships vineyards of the appellation, the teams of the very first malt whisky brand to ensure it is supplied with the best Rémy Martin Domaines are pioneers from the island can thus make a stronger quality oranges. The charm and character in the Charente region. Of the 220 ha commitment to preserving Bere Barley of the famous liqueur from Angers in Grande Champagne alone, 26 ha are and replanting different, “forgotten” is derived directly from the combination dedicated to research. 89 varieties of barley. of sweet and bitter orange peels, the supply of which must naturally meet the strictest The House uses new technologies as At the end of 2018, the House invited standards. a privileged tool to improve its knowledge organic farmers and researchers from of the vineyards. Automation tests are around the world to a Croft Summit, aimed With the “Orange and Terroir” project, under way on its test plots for mechanical at sharing their farming practices and the Cointreau distillery has established in-row weeding, and drones are used reflecting on future farming methods an internal agricultural auditing system to identify vinestocks showing signs with the brand's teams. This international that meets the requirements of French of disease. meeting has led to a large-scale project: the High Environmental Value (HVE) teams are going to plant several varieties certification while adapting it to orange In cooperation with the Station Viticole of barley on test plots, without using tree growing conditions. Cointreau also de Cognac (BNIC), the House’s teams synthetic products, to test those most aims to encourage its partners to develop have also planted a plot of resistant suited to the island's terroir. As such, a best farming practices standard that grape varieties (about 1 ha) to test their they will develop a better understanding is recognised and applicable worldwide: tolerance to the main vine diseases on of local farming conditions and will adapt the GLOBALG.A.P. Audits have already a large scale. farming practices to protect the land. been conducted in Tunisia and Spain. They Ultimately, the aim is to allow the rest have made it possible to sensitise farmers More generally, Rémy Martin is setting of the island's farmers to benefit from on the Group’s sustainable approach up partnerships with local and national this exercise. and support them with certification. research institutes (Chambers of Agriculture, In Ghana, all the Group’s partner orange Inra, IFV) and, with their help, testing Like its cousin, the Westland Distillery plantations have already received organic alternative solutions for use in vineyards located in Seattle is rooted in the Pacific farming (AB - Agriculture Biologique) to assess the environmental, social and Northwest region in the United States. certification. Ultimately, all the oranges economic impact of winemaking practices The Distillery is currently discussing supplied must be sourced sustainably. and further develop such practices in the the best crop rotation for this terroir entire region. that enjoys one of the best climates As for St-Rémy brandy, it organises in the world for growing barley. It reflects meetings to present and sensitise all the distinctive character of this region, the Group’s partners on its CSR approach where Westland Distillery produces single and to strengthen the responsible sourcing malt whiskies with locally produced of its eaux-de-vie and its relations with barley only. said partners. _MAINTAINING THE TERROIRS’ UNIQUE CHARACTERISTICS AND BIODIVERSITY
Each terroir is unique. It draws its distinctive character directly from the elements comprising its ecosystem: the product of an alliance between soil, sub-soil, climate and topography, maintained and shaped at the hands of people. From the forests of Charente to those of the Pacific Northwest region in the United States, Rémy Cointreau pays special attention to its regions and strives to defend biodiversity to guarantee their continued existence and create products of exception.
Guaranteeing the supply of distinctive Rémy Martin, promoting biodiversity products in the long term in Cognac In Poitou-Charentes, the House of In Merpins, the cradle of the House Rémy Martin is working in partnership of Rémy Martin in the Charente region, with the National Forestry Office an extensive environmental project has (ONF) to preserve pedunculate oak, been created to protect biodiversity. vital to the production and ageing of Since 2010, the Rémy Martin Domaines a cognac of excellence. As part of its joint have partnered with the French Bird commitment with the ONF, Rémy Martin Protection League (LPO) to implement is implementing several reforestation a wide-scale reforestation project aimed sponsorship programmes to test at reintroducing fauna and flora into the ability of pedunculate oak to adapt the environment. to climate change. In the national forest of Monnaie, this partnership has enabled The LPO teams have monitored these the ONF teams to start a new research plots from an ecological perspective project to reconsider the place of this to assess the increase in fauna and oak species in the Poitou region’s forest flora and ensure the proper functioning in the short and long term. Over the last of biodiversity. This monitoring has two years, a network of “future plots” has already showed an improvement in the been established. They are experimental diversity of species found in the area. plantation plots enabling us to measure the species’ survival and growth rates At the same time, the Rémy Martin to, ultimately, determine the optimal Domaines teams, in partnership with plantation conditions. the Charente Chamber of Agriculture, are sowing green manure cover crops On the other end of the world, the to naturally fertilise the vineyard soils Westland Distillery also uses an unusual and, thereby, promote biodiversity. Green oak variety, Quercus garryana, to age its corridors have been established on the whiskies. These oak trees form a crucial Domaines' plots and enable fauna and flora part of Westland's unique character: to reclaim the environment. The preservation produced by local forests, they grow in of landscape hedges and the cultivation a temperate, humid climate ideal for the of floral fallow plants also help boost maturing process. The oak used comes the return and activity of bees, vital mainly from trees that have fallen naturally to the proper functioning of the environment. to the ground, whether during storms or on account of old age. Over the last two decades, 600 Quercus garryana have been planted with the goal of reintroducing another 2,000 within the next five years. RÉMY COINTREAU _ ANNUAL REPORT
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COMMITTING TO PEOPLE WHILE ASSERTING OUR SINGULARITY
Collective progress is key to the Group’s success. That of employees, _RESPONSIBLE AND on the one hand: Rémy Cointreau supports and trains its employees COMMITTED GOVERNANCE in the long term as part of a sustainable management approach. AT THE HIGHEST LEVEL The Group supports and encourages them to give practical expression to the Group’s values in their individual behaviour and their attitudes Rémy Cointreau broadcasts its commitments and responsibility define the collective towards clients. and raises awareness of its CSR policy destiny of Rémy Cointreau and its partners. And that of stakeholders, on the other hand: the Group encourages among all its partners to maintain strict By sharing its commitments and working responsible practices by its suppliers and local associations in its standards and keep effective control to ensure they are implemented in practical regions of operation, and promotes responsible consumption by all. over their practices, from the first terms, the Group proves its determination fruit harvested to the last drop poured at the highest level of governance. into its bottles. Transparency, ethics Acting in full transparency for ethical CSR criteria in the variable component corporate governance of Exco compensation: Of the 10 Sustainable Development Since 2018, a portion of senior executives’ _GUARANTEEING WELL-BEING Goals (SDG) identified as priorities for variable compensation is indexed to five AT THE WORKPLACE, GENDER EQUALITY the Group, the establishment of effective criteria defined by the Rémy Cointreau AND NON-DISCRIMINATION and responsible institutions at the highest Management Committee. level of governance is one of the essential Exco members are directly assessed based on The Rémy Cointreau men and women these efforts are reflected daily in terms goals most important to Rémy Cointreau. one of these five objectives and thus become are at the heart of the company's value of recruitment, training, work organisation This year, the Group furthers its action true ambassadors of a CSR indicator and its creation. Their cohesion and diversity, their and internal communication. with stronger procedures to comply with improvement. expertise and their desire to make progress, Upon recruitment, each employee embarks the Code of Business Conduct and fight are their main strengths. Nourishing a on a process of individual and collective corruption. - Water management (SDG 6) and the Chief deeply multicultural identity, fostering progress. In so doing, the Group supports Operating Officer diversity while enhancing the sense of its employees at all steps of their career In this regard, an “ethical course” via - Employee well-being (SDG 8) and the belonging, improving employee commitment through a proactive policy in terms an online training module is now compulsory Director of Human Resources while remaining attentive to their needs: of internal training and work organisation. for all Group employees: with this first - The circular economy and eco-design level of awareness-raising and training, (SDG 12) and the Chief Executive Officer
the Group ensures that the fundamental of Liqueurs and Spirits RÉMY COINTREAU _ ANNUAL REPORT principles of the CSR policy are shared - Action to combat climate change, reducing by all employees. carbon emissions, and the transport of Supporting employees in the long products (SDG 13) and the Chief Executive Convinced that responsibility is a matter Officers of the Asia/Pacific, Americas and term of common concern, the Group’s CSR EMEA regions Rémy Cointreau's multicultural dimension These one-day courses enable employees charter has been completely revised - Sustainable agriculture (SDG 15) and is a major asset in its international to observe one of their colleagues in order and will gradually be circulated internally the Chief Executive Officers of the House development and helps to disseminate to understand their business and adapt to all staff members and externally to all of Rémy Martin and the Whisky division the Group's values and commitments their behaviour towards each other by 95 Rémy Cointreau partners. to a community driven by a shared vision. fostering an understanding of the Group’s The other Exco members are also involved: Rémy Cointreau draws on its various different businesses. a variable portion of their compensation locations and the diversity of individual is indexed to the average achievement backgrounds to enhance the collective This annual initiative also makes it of these goals. savoir-faire of its talent. possible sometimes to identify and support people who express a desire for internal To procure and consolidate a sense redeployment. of belonging and foster the understanding of its different businesses, the Group The well-being and fulfilment of each pays special attention to the training employee are vital to collective success. of its 1,800 employees to help them Supporting employees also means taking Encouraging responsible practices become actors in the transformation care of their health and ensuring their by all our partners of their working environment. Internal daily well-being. This year in France, the training sessions specially tailored Group has implemented a health check, In addition to improving its own practices, encourages them to share these best to the diversity of the Group’s businesses offered to all co-workers once or twice Rémy Cointreau is also attentive to the practices with their stakeholders, with have been set up: the Brand Academy a year. Thanks to this full medical check-up, work performed by its suppliers in France real consequences for all of their supply to better understand the brands, the entirely covered by the Group, employees and abroad. To ensure they adhere to its chains. Art of selling Academy for sales aspects, can assess their physical health and thereby commitments, the Group has published the Finance Academy to learn about finance, better counter health risks. In Cognac, a Code of Conduct for the attention These efforts to disseminate best practices and the Quality Academy o n p r o d uc t s since 2015, a seated massage service of all its supplier partners. It comprises and the discipline with which they and their presentation. Two new academies is offered to Rémy Martin employees. 38 principles covering the key areas are applied by its partners have been will soon follow: the Digital Academy This moment of relaxation reduces of corporate social responsibility, including rewarded: in 2018, the Group received and the Management Academy. the physical and emotional stress felt special attention to the responsibility the 2019 Treasury4Good award for by employees. of players in their supply chain the most ethical supply chain. To foster direct skills transfers and and to compliance with Human Rights strengthen relations between employees and environmental principles. Relying working in different businesses or at on an efficient assessment system, the different sites, the House of Rémy Martin Group monitors the proper implementation offers an immersive discovery programme of these principles by all its suppliers. to employees working at the Cognac It makes them accountable and thereby sites through Vis mon job (Live my job). Helping employees become the actors of their growth Rémy Cointreau hires talented individuals eager top: in Cognac, St. Lucy, Barbados, the Isle to make a long-term commitment. Operating of Islay, Angers or Kifissia, the Group’s Cellar in three continents, the Group offers a great Masters cultivate unique expertise, passed variety of jobs and international mobility enabling on from generation to each person to grow in step according to their generation. This expertise “The Group’s businesses desires and personal life. The Group’s jobs reflect drives each Group employee, reflect its products: highly _ENCOURAGING RESPONSIBLE PRACTICES its products: highly diverse, often complex, motivated by the same diverse, often complex, and and with strong added value. Mobility is strongly goal: continuing to create Whether creating a climate of trust and transparency in sourcing advocated as a way to encourage employees products of exception. with strong added value. practices or supporting employee commitment alongside local to enhance their skills. Like the Group for which communities, Rémy Cointreau demonstrates its commitment they work, talented individuals are encouraged Multiple professions enhance each other and new to People by widely broadcasting and sharing its responsible to show boldness and ambition in their career skills are formed, in particular in the field of digital practices both in-house and externally. choices. To guarantee equal opportunities technology. The Group offers external digital across all regions, an international policy technology training sessions to all employees eager has been introduced. The aim is to multiply to learn about the subject. the origins and cultures of our co-workers, whether in France or abroad. Creating sustainable management means Committed to responsible sourcing planning for changes in the future. In early
In 2018, Rémy Cointreau joined the “World is 2019, the marketing of Louis XIII connected To measure the impact of Rémy Cointreau’s dollars. All of these figures confirm RÉMY COINTREAU _ ANNUAL REPORT a village” platform. This initiative organises decanters required the talent and creativity and its teams’ commitment in each of its Mount Gay’s important contribution to international travel opportunities for our of the iconic brand's employees to implement businesses, a first in-depth study on the the development of the Island of Barbados employees’ children, who can stay with other this innovative technology. Equipped with total social impact of the Group's activities in terms of jobs and wealth creation. Group employees. As such, it provides each NFC (Near Field Communication) electronic in Barbados was conducted in 2018. family with an opportunity to discover new chips, these decanters can identify and connect This study aimed to assess the social Regarding sourcing, the Group has cultures and build relationships with their clients to the Louis XIII Society*, a private footprint of Mount Gay in the region, been a member of the SEDEX (Supplier peers all over the world. club whose members benefit from exclusive based on three major considerations: Ethical Data Exchange) platform since content, unique experiences and customised environmental, economic and social 2016. This international organisation 97 As part of a sustainable, future-oriented services. sustainability. encourages ethical and responsible management approach, Rémy Cointreau corporate practices in global supply develops its relationship with each employee In terms of jobs, the results obtained chains. It provides the Group with an in the long term. The example comes from the allow an assessment of the direct impact overview of supplier practices – in terms (Mount Gay employees), indirect impact of working standards, hygiene, safety, (jobs supported in the supply chain) and and even commercial ethics. induced impact (jobs supported through wages and taxes). It is also possible For Rémy Cointreau, fostering transparency to identify the socio-economic impacts means ensuring excellent practices by of Mount Gay's activity on the local its distributors and suppliers. Thanks economy of Barbados and worldwide. to the work undertaken by the Group As such, in 2017 Mount Gay's activity among suppliers (information kit and use Acting for gender equality supported 760 jobs worldwide, including of the platform) and its employees (in-house 475 in Barbados. More specifically, training), more than 93% of its partners Rémy Cointreau regularly demonstrates the main results concerning the “job” have joined SEDEX. Rémy Cointreau its commitment to social issues through impact are as follows: has continued its responsible sourcing company agreements, in particular efforts to contribute to the goals of the regarding gender equality. In France, - Direct jobs (Mount Gay employees): 145 2020 plan, which determines that 100% human resources teams combat gender - Indirect and induced jobs (Barbados): 330 of suppliers will have joined SEDEX discrimination in a very practical way - Indirect and induced jobs (World): 285 within the next year. with an equality policy applicable to compensation, mobility and recruitment. This means that, for 1 job at Mount Gay, Non-discrimination indicators have been 2.3 jobs are supported on the Island established in France to monitor any pay of Barbados and 5.3 jobs are supported gaps. Rémy Cointreau has always focused in the world. In addition to the jobs on expertise, creativity and intelligence supported, Mount Gay’s activity also as criteria for distinction. The teams boosts wealth creation in the Barbadian responsible for recruitment select the economy by injecting 47 million Barbadian best talent, driven by the passion of the dollars. Not to mention the wealth generated brands’ universe to continue to create in the rest of the global economy, namely products of exception. the equivalent of 35 million Barbadian Committing to solidarity projects together During the 2018/2019 financial year, In light of the employees’ enthusiasm Rémy Cointreau furthered its commitments for the project, the Group has decided and actions alongside local associations to match the full amount of the donation in the Group’s regions of operation. and will transfer the entire sum to the chosen associations. To ensure each employee can contribute (according to their ability) to solidarity Locally, employees are also taking action: actions in support of non-profit associations, in Cognac, for example, the Rémy Martin Rémy Cointreau has established l’arrondi teams participated in a fund-raising event sur salaire (rounded-up salaries) in for AFM-Téléthon to finance research France. This voluntary micro-donation projects primarily on genetic neuromuscular is directly levied on their pay slips diseases, but also on other types of rare and Group employees can also opt to make genetic diseases. Some also took part an additional donation. The employees in a trail run for an association combating have decided to allocate their donations amyotrophic lateral sclerosis (“Charcot to two associations from a pre-selected disease”), while others donated blood
list. These associations are working during a blood collection campaign RÉMY COINTREAU _ ANNUAL REPORT to preserve the terroirs and develop in the House’s premises. a responsible local community: Observatoire Français d’Apidologie (OFA), which acts to protect bees, and the “1001 Fontaines pour demain” association, which works to provide sustainable drinking water solutions to developing countries. 99
Getting involved in the local communities and acting as a responsible player Raising awareness on the preservation of shared heritage Worldwide, Rémy Cointreau employees to renovate the Château de la Mercerie. are thrilled to be working hand-in- In Islay, to foster biodiversity and maintain Rémy Cointreau men and women have an inextricable bond hand with local populations to create local equipment, the Bruichladdich teams with time. They have learned the importance of transmission environments of mutual assistance cleaned up some land to and heritage, and encourage young people to be creative. and exchange of ideas. A powerful bond encourage bee repopulation “Worldwide, Rémy Cointreau They awaken a thirst and desire for the future, raise awareness has developed between the men and women on the island; they also on the preservation of terroirs, and promote local expertise employees are thrilled to of Mount Gay and the region of Barbados; repaired fences and and heritage. between the employees of Bruichladdich repainted the city hall be working hand-in-hand with and the Isle of Islay, and in the Angers to help local communities. local populations to create The House of Rémy Martin, for example, is keenly aware region. Together, they work to preserve Several other actions of the importance of preserving heritage. Founded nearly 300 environments of mutual the terroirs and pass on their knowledge were implemented across years ago, it has joined forces with the Cognac Museum of Arts of excellence. all Rémy Cointreau sites support and discussions.” to create an annual exhibition – Les rendez-vous du design – aiming and they were shared to show the general public how design and expertise have developed In June 2018, the Group’s 1,800 employees on social media under #RCwecareday. with respect to bottle creation for its famous beverages. were invited to take care of the terroirs Held on a yearly basis, this international during the second We Care Day. Across day is also an opportunity to strengthen Named a Living Heritage Company, the House of Rémy Martin all of the Group’s sites, Rémy Cointreau relations between the teams and local opened its doors to Cognac enthusiasts and the curious alike employees led initiatives aimed at preserving communities, and between employees. during the European Days for Professions in the Arts (JEMA), the environment and local heritage. offering tours of its heritage and cultural sites. In Singapore, a day was dedicated to weeding, harvesting and cultivating the land of Bollywood Veggies Organic Farm; in Cognac, 342 employees joined forces Sharing the Group’s vision and practices to further its approaches As in previous years, members of Group management have shared working time with various professional organisations, associations and schools to spread the Group’s Corporate Social Responsibility vision and practices. Attentive to external initiatives, the Group has been a signatory of the United Nations Global Compact since 2003. The Compact gathers together 1,300 companies and RÉMY COINTREAU _ ANNUAL REPORT non-profit organisations. Rémy Cointreau is a member of the GC Advanced Club (maximum level of reporting within the UN Global Compact), which aims to help members to commit and to assess, define, implement, measure and broadcast their social responsibility strategy. The Group Promoting responsible consumption has taken the lead by disseminating to its clients around the world 101 its vision for responsible sourcing and the management of related risks. By consuming in a moderate and appreciative local players and associations. In Asia, manner, we pay tribute to the work of the Rémy Cointreau has helped create the Committed to spreading excellence men and women who develop exceptional regional association APISWA (Asia Pacific practices in inter-professional associations, products with passion and discipline. International Spirits & Wine Producers) the Group participates in the CSR Driven by this conviction, Rémy Cointreau in partnership with the French National management committee of the Bureau promotes responsible consumption through Road Safety Committee and the French National Interprofessionnel du Cognac various actions aimed at a diverse audience. Ministry of Health’s National Centre and in the environmental working group Among its employees, for more than two for Health Communication and Education, of the French Spirits Federation (FFS). years, videos and explanatory panels have in order to support and launch projects In Poitou-Charentes, the Group supports been installed in the Group's premises focusing on responsible consumption. the Altère association, which brings to inform and sensitise employees. In Paris, In Cambodia, the Group has helped develop together the region's key players in 40 ambassadors of all the brands have the “Stay alive – Drink with moderation” sustainable development by organising been trained in responsible consumption. programme to sensitise road users and CSR workshops on the subject change driving behaviour. of equality, co-existence and diversity. Among external stakeholders, in each In the Pays de Loire region, the cradle country where the Group operates, Lastly, in Barbados, where the Mount Gay of Rémy Martin, the Group is very active strong partnerships have been established distillery is a key player in the island’s among local players and coordinates CSR with local and national federations. socio-economic development, many efforts alongside associations like the Club Rémy Cointreau lends its support to the responsible consumption support plans Carbon’At and in training institutions, implementation of communication campaigns have been established, such as the national such as the CNAM Pays de la Loire, and awareness-raising actions around plan to introduce breathalyser testing, Audencia Nantes and ESEO in Angers. moderate alcohol consumption. In France, supported by the House. for example, the Group has committed Lastly, Rémy Cointreau shares to the French Spirits Federation and the its CSR vision with its distributors “Avec Modération” (With Moderation) and answers its clients’ CSR questions association by participating in the “Priorité by communicating its vision and the positive prévention” (Priority to Prevention) actions implemented worldwide by the national public health plan launched Group and its partners for a sustainable by the government. In Asia and the United business model that benefits everyone. States, the Group works hand-in-hand with RESPECTING THE VALUE OF TIME TO CREATE EXCEPTIONAL PRODUCTS
Environment-friendly practices are vital to ensure the continued existence of the Group’s businesses: reducing water use, lowering the carbon footprint and making progress in the area of eco-design will perpetuate the excellence of all its Houses. With this in mind, the Rémy Cointreau men and women are adapting to climate conditions and the water resources of the regions where exceptional products are developed. To them, time creates a sense of wonder and brings the taste of pride. Aware of its environmental role, the Group applies the strictest standards to measuring and reducing its environmental impact and its activities. RÉMY COINTREAU _ ANNUAL REPORT
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_PRESERVING RESOURCES TO SECURE THE FUTURE
The age-old rhythm of Rémy Cointreau brands gives them a long-term perspective. The Group’s Houses have spanned the ages, consistently nurturing the same focus: transmission to secure the future. Their commitment to their terroirs helps to raise awareness of the importance of protecting our resources. Improving the ecological quality Preserving water resources to secure of products the future A CSR management committee focused In its Domaines, the House of Rémy Martin on eco-design was created two years ago. this year opened a wholly new distillery It is responsible for sensitising teams comprising eight pot stills in the on reducing the environmental impact traditional Charente style. The installation of packaging. Employees from the Sourcing, groups several winemaking points on Marketing and Product Development a single site, in order to make the best departments are now all trained in eco- of the grape’s aromatic quality of the design via a dedicated training module that grapes. This unique winemaking point has already generated significant results allows for economies of scale in terms in terms of integrating environmental of energy and water use. The choice
impact considerations into the product of location for this new distillery was RÉMY COINTREAU _ ANNUAL REPORT development process. based on the requirement of naturally sloped land to reduce energy consumption Rémy Cointreau strives to guarantee by limiting pumping actions. The residue sustainable consumption and production recovered at the end of the eaux-de-vie models in its product development with distillation is collected and sent to the great attention paid to the eco-design regional REVICO unit, which turns of its packaging, in an effort to significantly it into biogas. This energy then powers reduce the environmental impact of its the REVICO distillation columns and 105 activities. various facilities in the city of Cognac, such as greenhouses. A research programme on packaging eco- design has been launched to optimise the In Barbados, where the oldest rum in the environmental performance of its packaging. world is made, Rémy Cointreau helps local In 2017, Rémy Cointreau conducted farmers to better manage their effluents the first environmental assessments of and protect the island’s resources. its packaging based on environmental criteria, with a unique score allocated To that end, Mount Gay helps local to each one, thereby making it possible producers to install water management to quickly compare the performance infrastructures in their farms, and of various packaging types. Since March conducts thorough water consumption 2018, the Angers and Cognac sites studies. Some of the residue is spread have been using a tool to measure the across a part of the island of Barbados; Environmental Performance Index (EPI), that aids the natural fertilisation which takes into account the broadest and water intake of agricultural land. possible life cycle and incorporates This action is implemented in partnership 14 indicators, such as the use of materials with local environmental bodies. It forms and energy, waste production, and the part of a circular economy approach. carbon impact of products and their packaging. The result produces a unique environmental score for each item and “Rémy Cointreau strives to guarantee enables the Group to have a more thorough sustainable consumption understanding of its environmental impact across the entire production chain and, and production models in its product ultimately, to optimise the performance development with great attention paid of new packaging. From now on, all new to the eco-design of its packaging.” products or product developments will be “measured” using this tool. The Group’s whisky brands will implement the same approach by 2021. Acting to promote best practices Rémy Cointreau has always trusted collected from selling the caps are used the intelligence of women and men to finance sports equipment for persons and encouraged individual initiatives. with reduced mobility or, more generally, To improve its waste management, to improve living conditions for persons the Group has rolled out several projects suffering from a disability. across its sites to limit the use of plastic _PLAYING AN ACTIVE ROLE IN THE FIGHT bottles. In Cognac, for example, all plastic To limit its energy footprint even further, bottles are now removed from vending the Group has set up a digitised tax AGAINST GLOBAL WARMING WITH machines, and self-service water fountains process for all French suppliers: invoices THE GLOBAL CLIMATE AGREEMENT are also available. In catering areas are now received by email to reduce waste and meeting rooms, water jugs are now while also processing them more quickly. Combating climate change and its impact Rémy Cointreau reiterated to what used. Plastic bottles are only distributed At the Mount Gay site in Barbados, solar is of vital importance to the Group. Its extent climate action is crucial for global in the event of very high temperatures panels have been installed to reduce brands take a longterm view and have agriculture and for the terroirs from which or for work in the cellars. energy expenses in order to cover 25% already seen the effects of global warming the Group’s brands draw their authenticity. of the site’s total electricity consumption. on their terroirs. For several years, Rémy Since then, Rémy Cointreau has thoroughly Cointreau has been fighting climate change reconsidered its CRS policy on the fight Furthermore, this year the Group decided RÉMY COINTREAU _ ANNUAL REPORT by implementing various actions after against global warming by reducing CO to commit to a zero plastic policy in all 2 its activities. To promote best practices, signing the Paris Agreement on climate emissions derived from finished product the Group is still considering solutions change (COP21). As part of ensuring transport and to comply with the targets to replace plastic and to minimise a drastic reduction in greenhouse gas set by this global agreement limiting its ecological footprint. Taking this emissions and the urgent need for climate global warming to 2°C. All partners and commitment even further, Rémy Cointreau action, it seemed necessary to reiterate suppliers are committed to this approach. has partnered with the “Les Bouchons the vital importance of a change in direction. d’Amour” association that collects plastic Alongside 88 French companies and 107 caps to make recycled pallets. The funds in connection with the One Planet Summit launched by the French government,
Accepting its responsibility at the international level Located in several regions, the Group’s brands are witnessing climatic upheavals in their terroirs. In this respect, Rémy Cointreau is implementing a proactive and committed international policy and has signed several international undertakings.
Over the last 15 years, Rémy Cointreau has been a member of the Global Compact. The Group signature, “Terroirs, People and Time” adopted two years ago is inextricably linked to the Corporate Social Responsibility goals of this global pact.
In addition, Rémy Cointreau’s CSR challenges are based on 10 Sustainable Development Goals (SDG) defined by the UN and selected after a materiality analysis. Each action implemented as part of Rémy Cointreau’s 2020 plan echoes one of these ten goals. _ACTING TO REDUCE THE ENVIRONMENTAL IMPACT OF THE GROUP’S ACTIVITIES AND AIMING FOR CARBON NEUTRALITY
Preserving resources, maintaining terroirs and committing to the people who develop exceptional products means having the courage to make exemplary decisions and minimise the environmental impact of each Group brand’s activities.
The Group has established indicators related to a mapping of the associated risks to better manage its actions, in particular regarding carbon emissions.
Reducing the ecological impact Minimising emissions of its activities Controlling greenhouse gas emissions Aware of the environmental impact of its (GHG) is one of the priority ambitions activities, Rémy Cointreau is implementing of the Rémy Cointreau 2024 plan. actions to reduce the greenhouse gas emissions released upstream and In 2019, the Group will continue its downstream of the production process. actions to reduce scope 3 CO2 emissions The Group is especially sensitive to the (activities of all production sites and waste generated during the various stages the related upstream and downstream of the product’s life cycle, in particular impacts). Scope 3 CO2 emissions are during product transport. All over spread across Domaine des Hautes Glaces, the world, transport specifications have and partially at the Islay and Westland been implemented to sensitise transporters sites. Moreover, Rémy Cointreau to the Group’s commitments and set goals is sensitising and encouraging its partners to reduce their carbon emissions. They and suppliers to demonstrate transparency include a requirement regarding their and minimise their emissions. environmental impact and CO2 d a t a . Rémy Cointreau requests that transporters
The Group's carbon footprint is developing provide a review of their CO2 data through to embrace a particularly ambitious monthly reporting. approach that ultimately targets carbon neutrality. This year, for the first time, Moreover, since 2011, the Group has been
CO2 emissions were divided down promoting the increasingly systematic by main brands. use of videoconferencing facilities, and the use of electric vehicles at the Angers As a listed company, Rémy Cointreau and Cognac sites have helped reduce meets the requirements of Article 173- carbon emissions. IV-A of the French Act on Energy Transition and Green Growth. At the Group’s French sites, 100% of the energy used is renewable, mainly derived from hydraulic generation. TABLE OF PROGRESS INDICATORS (1) AND VIGILANCE INDICATORS (2)
_2015 _2016 _2017 _2018 2016 2017 2018 2019
Employee Renewal rate, in % (1) 14.8 13.2 well-being - GRI Standard 401-1 Absenteeism, in % (1) 4.63 3.03 2.30 2.00 - GRI Standard 403-2 Frequency of work-related 8.90 13.31 9.13 8.51 accidents, in % (2) - GRI Standard 403-2 Severity of work-related 0.07 0.13 0.38 0.59 accidents, in % (2) - GRI Standard 403-2 Average age, in years (2) 41 41 41 40 Seniority, in years (2) 9.4 9.1 8.4 7.9 Non-discrimination Ratio of F/M managers, in % (1) 43 44 and internal - GRI Standard 401-1 social equality Weighted gap between -0.14 female and male promotions, in % (1)
Distribution of F/M training, in % (2) 46 RÉMY COINTREAU _ ANNUAL REPORT - GRI Standard 404-1 In-house training / Number of employees completing at least 79.3 Skills one training course per year, in % (1) development Hours of training (2) 15 954 18 463 24 243 26 615 - GRI Standard 404-1
LIFE Sustainable Proportion of sustainably managed 36 52 ON LAND Agriculture agricultural land, in % (1) 111 Rate of HVE certification of the AFC agricultural 23 42 cooperative, in % of agricultural land (1)
Climate GHG emissions (Total Scope 1, 2 & 3), 145 789 135 528 174 842 (a) (1) Change in tCO2 - GRI Standard 305-3 Rate of significant GHG emissions 37.0 46.5 (a) - product packaging, in % (1) Rate of significant GHG emissions - Upstream freight 22.7 19.3 (a) and downstream transport of products, in % (1) Rate of significant GHG emissions - 30.6 14.7 (a) commodities, in %(1) Total energy consumption, in MWh (2) 36 235 41 854 39 656 38 495 - GRI Standard 302-1 Rate of renewable electricity 78.3 76.8 78.9 consumption, in % (2) Water and effluent Water consumption, in m3 (1) 123 729 133 418 174 945 (b) 195 096 (c) management - GRI Standard 303-1 Rate of effluent recovery, in % (2) 8.1 8.1 - GRI Standard 306-1
(2) RESPONSIBLE CONSUMPTION Circular economy / Rate of waste recovery, in % 90.6 89.0 91.6 94.3 AND PRODUCTION Client information - GRI Standard 306-2
Responsible Rate of suppliers with Sedex 54 83 89 92 sourcing membership, in % (1) - GRI Standard 308-1 et 414-1
Business Ethics People trained in the ethical charter, in % (1) 80 (d) Number of alerts (2) 6
(a) Change in the indicator mainly due to the change in emission measurement method (switch from Bilan Carbone tool to the GHG Protocol tool) and to the integration of the Islay, Domaine des Hautes Glaces and Westland sites. - (b) Change in the indicator mainly due to the partial integration, for the first time in CSR reporting, of the consumption of water from the well used at the Barbados site.- (c) Change in the indicator mainly due to the integration, for the first time in CSR reporting, of all water consumption from the well used at the Barbados site. - (d) Lack of indicator due to training frequency (every two years). FINANCE
2018/2019 marked a record year for all the Group’s financial indicators.
This is due to the strong acceleration in organic sales growth over the last three years, combined with a strong increase in profitability driven by the Group’s strategy to move upmarket.
The current operating margin was 21.7% in 2018/2019, representing total organic growth of 5.0 points (at constant scope and exchange rates) since the 2014/2015 financial year (new general management). Over the last two years, total organic growth of the current operating margin was 2.6 points, reaching the 2019/2020 target (+2.4-3.0 points in 3 years) one year ahead of schedule. CONSOLIIDATED ANNUAL RESULTS 2018/2019
A record year for the group Current Operating Profit 2018/19 (+14.2%*) 2019/20 objectives reached one year in advance New medium-term objectives RÉMY COINTREAU _ ANNUAL REPORT
As of 31 March 2019, sales for the Rémy _THE HOUSE OF RÉMY MARTIN _LIQUEURS & SPIRITS Cointreau Group totaled €1,216.5 million 115 (proforma Pre-IFRS 15, 16 & 9), up 7.9% Sales for the House of Rémy Martin saw The organic sales growth of the Liqueurs on a reported basis. In organic terms another year of strong growth (+11.9%*), & Spirits division (+4.0%*) was driven by (at constant exchange rates and scope), driven by the Asia Pacific region, but also strong performance of the Maison Cointreau growth amounted to 7.8%, thanks to the by the United States, the United Kingdom, and St-Rémy brandy, while The Botanist very strong performance of the Group the Middle East, Russia, and Travel gin and Whisky continued their remarkable Brands (+9.8%). Retail. Within our brands, the strong development. performance of intermediate qualities The Current Operating Profit (proforma — particularly CLUB in Asia-Pacific —, Current Operating Profit (proforma) COP) amounted to €263.6 million, up 11.3% the sustained growth of Rémy Martin amounted to €38.8 million, down 6.0% on a reported basis and 14.2% on an organic XO across continents and the continued organic. This trend is explained by the basis. Once again this year, the remarkable international development of LOUIS XIII significant increase in communication momentum of our exceptional spirits once again resulted in remarkable price/ investments, begun last year, focused (> 50USD) resulted in a strong increase mix effects over the year (+6%), while on strengthening awareness and accelerating in gross margin (+1.2 points in organic volume growth remained high (+6%). the internationalization of the division’s terms). This leverage, combined with good brands. The current operating margin cost control, offset a significant increase Current Operating Profit (proforma) was 14.0% at the end of March 2019, in strategic investments in communication reached €235.6 million, w ith organic down 1.5 points organically (-2.0 points and distribution structures. As a result, growth of 17.9% and a current operating reported). the current operating margin (proforma) margin of 27.7%, representing an organic reached 21.7% at the end of March, increase of 1.4 points (+0.8 point as an organic increase of 1.3 points. Thus, reported). The margin evolution is explained _PARTNER BRANDS over the course of the last two years, the by a significant increase in gross margin cumulative organic growth of the current (due to our value strategy and notable Organic sales decreased by 12.7% over operating margin amounted to 2.6 points, price increases over the period), which the period, due to the termination of new reaching the 2019/20 target (+2.4-3.0 points more than offset a sustained increase partner brand distribution contracts. over 3 years), one year early. in investments in communications and The Current Operating Profit (proforma) the continued strengthening of distribution was €4.9 million, down 7.2% organically... Excluding non-recurring items, net profit structures. (proforma) was €167.8 million, a record level for the Group. It was up 10.9% as reported and 16.3% on an organic basis.
* Organic growth is calculated assuming constant exchange rates and consolidation scope (proforma pre-IFRS 15, 16 & 9) _CONSOLIDATED RESULTS
The Current Operating Profit (proforma) Excluding non-recurring items, net profit amounted to €263.6 million, representing Group share (proforma) was €167.8 million, reported growth of 11.3% and organic up 10.9% (+16.3% in organic terms), and growth of 14.2%. net earnings per share (proforma) reached €3.35, up 10.2%. Current Operating Profit was adversely affected by unfavorable exchange rate effects Net debt (proforma) totaled €313.0 million of €6.8 million for the year. The improvement on the 31st of March 2019. Its limited increase in average conversion and collection rates of €30.2 million over the year is mainly recorded in the second half of the year did due to the €103.6 million related to the not fully offset the negative exchange rate share buyback program (executed between effects of the first half of the year. August and December 2018) and the change in working capital requirements, partially Thus, the current operating margin offset by the early repayment of the vendor (proforma) improved by + 0 . 7 p o i n t loan by the EPI Group. to 21.7% for the year and increased by +1.3 points on an organic basis. Therefore, the "net debt/EBITDA" ratio
(proforma) improved significantly to 1.08 RÉMY COINTREAU _ ANNUAL REPORT Operating profit (proforma) amounted (1.19 post IFRS 15, 16 and 9) at the end to €265.2 million, after accounting for net of March 2019 from 1.48 at the end of March operating income of €1.7 million, mainly 2018, thanks to the strong increase in the related to disposals of non-strategic real Group’s EBITDA. estate assets. The proforma return on capital employed Net financial expenses (proforma) amounted (ROCE) was 20.9% at 31 March 2019, down to €35.2 million for the period. This increase 1.0 point (-0.2 points in organic terms). 117 compared to last year is mainly due to two The change in ROCE is explained by both factors: a non-recurring charge of €5.2 million the significant increase in strategic purchases related to the early repayment of the vendor of cognac eaux-de-vie and the decline in the loan by the EPI Group (difference between profitability of Liqueurs & Spirits. the value of this loan on the balance sheet and the amount of the repayment) and a negative A dividend of 1.65 euros per share (stable unrealized foreign exchange gain (valuation compared to last year) will be proposed of the portfolio of hedging instruments to shareholders at the Annual General Meeting _OUTLOOK on future flows) of €7.7 million. On the other on July 24th, 2019. Given the strong growth hand, the cost of gross financial debt fell in annual results — a record level for the In an uncertain economic and geopolitical objectives. It will also include the termination by €1.8 million, thanks to a lower average Group —, the Board of Directors has also context, the Rémy Cointreau Group reiterates of distribution contracts for partner brands debt over the period and a lower average decided to propose an exceptional dividend its ambition to become the world leader (in the Czech Republic, Slovakia and cost of debt. of 1.00 euros per share for 2018/19. in exceptional spirits. In the medium term, the United States), which are estimated this will result in 60 to 65% of its turnover to have an impact of €56 million on sales The income tax charge (proforma) was €66.5 being generated by exceptional spirits (retail and €5 million on Current Operating million, representing an effective tax rate _POST-CLOSING FINANCIAL sales price over USD50). Profits. of 28.9%. Excluding non-recurring items, EVENTS the rate was 28.5%, down from March 2018 In addition, after a strong increase (29.7% excluding non-recurring items), due On April 1st, 2019, the Group announced in profitability in recent years, the Group to the geographical evolution of results. the effective sale of its distribution subsidiaries remains ambitious regarding the potential in the Czech Republic and Slovakia to Mast- of its Current Operating Margin in the The share in profits of associates was Jägermeister SE. medium term, as it will continue to benefit a loss of €6.7 million, due to a €7.0 million from its value strategy, while continuing non-recurring charge related to the exit On May 29th, 2019, the Group entered to invest significantly behind its brands and of the Diversa joint venture in Germany into exclusive negotiations with the Brillet distribution network. Rémy Cointreau’s objective (as part of the evolution of the Group’s family and its partners with the intention is to build an increasingly sustainable, distribution network). of acquiring the Maison de Cognac Brillet resilient and profitable business model. and part of its vineyard estate. Thus, net profit Group share (proforma) In the short term, Rémy Cointreau anticipates was €157.1 million, up 6 . 0% (+11. 5% that 2019/20 will unfold within the in organic terms). framework of the Group's medium-term CONSOLIDATED STATEMENT OF FINANCIAL POSITION CONSOLIDATED INCOME STATEMENT
_18-19 _18-19 _18-19 _18-19 _AS OF 31 MARCH 2018, IN €M PUBLIÉ* PROFORMA** _17-18 _AS OF 31 MARCH 2018, IN €M PUBLIÉ* PROFORMA** _17-18
Brands and other intangible assets 515.4 515.4 509.4 NET SALES 1 125.9 1 216.5 1 127.0 IFRS 16 right of use 27.2 _ _ Cost of sales (415.1) (387.6) (366.3) Property, plant and equipment 269.3 269.3 242.9 Investments in associates 1.1 1.1 20.2 GROSS MARGIN 710.9 828.9 760.7 Other financial assets 93.9 91.3 166.2 Deferred tax assets 17.5 9.2 19.7 Distribution costs (346.3) (464.3) (432.7) Administrative expenses (100.7) (101.3) (91.7) Other income from operations 0.3 0.3 0.4 NON-CURRENT ASSETS 924.4 886.2 958.6
Inventories 1 245.5 1 245.5 1 170.3 CURRENT OPERATING PROFIT 264.1 263.6 236.8 Trade and other receivables 271.1 271.1 209.8 Income tax receivables 3,3 3.3 4.9 Other operating income/(expense) 1.7 1.7 (13.7) Derivative financial instruments 1,8 1.8 10.0 Cash and cash equivalents 178,6 178.6 186.8 Assets held for sale _ _ 1.3 OPERATING PROFIT 265.8 265.2 223.1 RÉMY COINTREAU _ ANNUAL REPORT Finance costs (13.7) (12.6) (14.4) CURRENT ASSETS 1 700.2 1 700.2 1 583.1 Other financial income (18.8) (22.5) (7.6)
TOTAL ASSET 2 624.6 2 586.4 2 541.6 FINANCIAL RESULT (32.5) (35.2) (22.0)
Share capital 80.2 80.2 80.4 Share premium 795.1 795.1 804.9 PROFIT BEFORE TAX 233.3 230.1 201.0 Treasury shares (34.4) (34.4) (20.5) 119 (67.7) (66.5) (53.5) Consolidated reserves and profit for the year 558.0 583.0 518.4 Income tax (6.7) (6.7) 0.5 Translation reserve 26.2 26.2 24.0 Share in profit of associates
PROFIT FROM CONTINUING OPERATIONS EQUITY - ATTRIBUTABLE TO OWNERS 159.0 156.9 148.1 OF THE PARENT COMPANY 1 425.1 1 450.1 1 407.1 Net profit / (loss) from discontinued operations _ _ _ Non-controlling interests 1.0 1.0 1.1
NET PROFIT FOR THE YEAR 159.0 156.9 148.1 EQUITY 1 426.1 1 451.1 1 408.3 ATTRIBUTABLE TO: Long-term financial debt 423.8 401.2 397.1 non-controlling interests (0.2) (0.2) (0.2) Provision for employee benefits 31.5 31.5 32.6 owners of the parent company 159.2 157.1 148.2 Long-term provisions for liabilities and charges 8.1 8.1 6.9 Deferred tax liabilities 62.4 62.4 81.0 NET EARNINGS PER SHARE - FROM CONTI- NUING OPERATIONS NON-CURRENT LIABILITIES 525.8 503.3 517.7 basic 3.17 3.13 2.97 diluted 3.02 2.98 2.83 Short-term financial debt and accrued interest 98.1 90.3 72.5 Trade and other payables 543.8 510.9 517.3 NET EARNINGS PER SHARE Income tax payables 18.4 18.4 9.7 Short-term provisions for liabilities and charges 2.3 2.3 14.2 attributable to owners of the parent company 3.18 3.14 2.98 Derivative financial instruments 10.1 10.1 2.0 diluted 3.03 2.98 2.83 Liabilities held for sale _ _ _
NUMBER OF SHARES USED FOR THE CALCULATION CURRENT LIABILITIES 672.7 632.0 615.7 basic 50 068 992 50 068 992 49 789 269 diluted 52 680 567 52 680 567 52 434 796
TOTAL EQUITY AND LIABILITIES 2 624.6 2 586.4 2 541.6
* Proforma: pre-IFRS 15, 16 & 9 / ** Reported: post-IFRS 15, 16 & 9 Rémy Cointreau
21 boulevard haussmann 75009 paris
www.remy-cointreau.com
The French version of this document is available on request or via the www.remy-cointreau.com website. All the regulatory information required by the AMF is available on the Company’s website www.remy-cointreau.com
Photo credits: Rémy Cointreau, Nathalie Baetens, Alexis Blondel, Alain Costa, Thomas Gogny, Adam Palander, Agitateurs Graphiques. Integrated report content: LABRADOR
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