Integrated Annual Report 2020-21
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2021 INTEGRATED ANNUAL REPORT 2020/2021 INTEGRATED ANNUAL REPORT 2020/2021 "Blue like the colour of our planet, our oceans and the sky, which we strive to protect over time, as they nurture our terroirs and our people." The Earth is blue like an orange Never an error the words don't lie They don't give you any more to sing In the turn of kisses to understand The crazy and the loves She her kiss of alliance All the secrets all the smiles And what clothing of indulgence To believe her completely naked. The wasps bloom green The dawn passes round the neck A necklace of windows Of wings covering the leaves You have all the solar joys All the Sun above the Earth Above the paths of your beauty. Paul Eluard Translated by O.A. Ramos FOREWORD The challenging health situation of the 2020/2021 financial year has not dampened the Corporate Social Responsibility (CSR) ambitions of Rémy Cointreau – quite the contrary. CSR is a long-standing priority for the Group and its exceptional brands, which pushed ahead with initiatives to promote biodiversity, the preservation of terroirs, the circular economy, and partner communities. The Group’s brands also played their part in managing the health crisis, notably by actively participating in the production of hand sanitizer. As in the previous year, the Group demonstrated its structural strength. Resilient to the unforeseen collapse in demand, it proved to be highly adaptable when the Chinese and US markets recovered. Despite the impact of the pandemic, it ended the year with positive organic growth in sales and significant growth in earnings. This performance would not have been possible without the exceptional commitment of the teams, which demonstrated their agility and imagination to start inventing the world of tomorrow with a head start. 01_ STRATEGIC 03_ CORPORATE PRESENTATION SOCIAL OF THE GROUP RESPONSIBILITY 08 84 A WORD FROM TIME THE CHAIRMAN 92 10 TERROIRS INTERVIEW WITH THE CHIEF EXECUTIVE OFFICER 104 PEOPLE 12 KEY FIGURES 16 ABOUT THE GROUP 04_FINANCE 18 GOVERNANCE 122 30 CONSOLIDATED ANNUAL STRATEGY RESULTS 2020/2021 AND OBJECTIVES 126 44 FINANCIAL TABLES COMPANY OWNERSHIP 46 RÉMY COINTREAU FOUNDATION 02_ THE YEAR OF THE BRANDS IN 2020/2021 52 THE HOUSE OF RÉMY MARTIN 58 LIQUEURS & SPIRITS CONTENTS 70 WHISKIES 76 THE MARKETS STRATEGIC PRESENTATION OF THE GROUP All around the world, there are clients seeking exceptional experiences; clients for whom a wide range of terroirs means a variety of flavours. Their exacting standards are proportional to our expertise – the finely-honed skills that we pass down from generation to generation. The time these clients devote to drinking our products is a tribute to all those who have worked to develop them. It is for these men and women that Rémy Cointreau, a family-owned French Group, protects its terroirs, cultivates exceptional multi-centenary wine and spirits, and undertakes to preserve their eternal modernity. The Group’s portfolio includes 14 singular brands, such as the Rémy Martin and Louis XIII cognacs, and Cointreau liqueur. Rémy Cointreau has a single ambition: becoming the world leader in exceptional spirits. To this end, it relies on the commitment and creativity of its 1830 employees and on its distribution subsidiaries established in the Group’s strategic markets. Rémy Cointreau is listed on Euronext Paris. A WORD FROM THE CHAIRMAN The Rémy Cointreau Group has proved extremely resilient despite the public health crisis of 2020/2021, reflecting its clients' loyalty to its wine and spirit brands, the relevance of its strategy, and the agility of its teams.Rémy Cointreau most definitely came through this crisis even stronger, which confirms our ambition to become the leader in exceptional spirits. As evidenced by its financial and non-financial as much as possible from the virus through MY COINTREAU _ ANNUAL REPORT results, 2020/2021 was a year marked by various concrete actions, but also by É resilience and a source of genuine satisfaction ensuring full pay, without using state aid. R for the Rémy Cointreau Group. After Rémy Cointreau then played an active role in a challenging start to the year ― a sharp the collective effort to make hand sanitizer, drop in sales due to the collapse of air traffic driven by the generosity and enthusiasm of and on-trade consumption ― the second the teams at the various production sites. half of the year posted a spectacular A number of sponsorship initiatives aimed recovery, which enabled us to end the at helping and supporting the bartender year with positive organic sales growth community and hospitality industry were and a return to the record profitability also set up in the various global markets. 09 of the 2018/2019 financial year. Lastly, from an environmental perspective, This rebound was mainly driven by the the Group continued its actions to promote rapid business recovery in China from sustainable agriculture and implemented new the summer of 2020, and by the US, its initiatives to reduce its carbon footprint. core market, which benefited from an These efforts were rewarded on several acceleration of underlying trends on the occasions in 2020/2021. In May 2020, back of the pandemic. The year was shaped our Bruichladdich distillery obtained around the rise in off-trade mixology and "B-Corp" certification, which recognizes consumption, outstanding performance its social and environmental performance. of the high-end ranges, strong development in online sales, and the growing interest In December 2020, Rémy Cointreau was in corporate social responsibility. These ranked as the most "responsible" French trends, which are central to the Group's company in the agri-food sector in the strategy, enabled it to effectively address study published by Le Point ma ga zi ne, the upheaval caused by the pandemic. They and the Carbon Disclosure Project (CDP) also enabled us to emerge from this crisis granted it "Leadership" status (rating A-) even stronger and look toward the future in the area of climate change. While these with confidence. results reflect the merit of the Group’s MARC HÉRIARD DUBREUIL commitment, above all they encourage us It was also important for Rémy Cointreau, to continue and expand our actions. "The spectacular recovery in the second half-year has enabled us to emerge stronger from the pandemic crisis whatever the circumstances, to continue and to look towards the future with confidence." to fulfil its social obligations with regard I would like to thank our shareholders for the to its employees, its stakeholders and trust they have placed in Rémy Cointreau, the planet, in line with its commitments to which for some, was established many the Global Compact. years ago. In addition to financial performance, the Group At the end of 2020/2021, our 2030 targets continued to take action in accordance with for achieving profitable and responsible its values and resources. First and foremost, growth are confirmed and resolutely ambitious it took care of its teams, protecting them for the years to come. INTERVIEW WITH THE CHIEF EXECUTIVE OFFICER ÉRIC VALLAT "The pandemic has accelerated the development of pre-existing trends, allowing us to gain years in terms of investments and education." sanitizer or by providing financial an improvement from the very low levels aid to those most affected, starting with currently. In that more positive context, our on-trade partners. we will strongly invest in our brands to further strengthen their desirability What lessons can you draw from these and leverage consumption trends, which in at-home consumption and mixology, past 12 months? we believe are increasingly favourable combined with favourable uptrading First, I think we live in a world that to us. trends. This was particularly true in the will become increasingly unpredictable. MY COINTREAU _ ANNUAL REPORT United States and in the United Kingdom, As an organisation, we need to be To what extent did the pandemic alter É but also in Australia. Moreover, the as flexible and agile as possible. Second, your 2030 strategic plan and its targets? R Chinese market recovered in the summer in terms of the pandemic, I think It did not alter our strategic plan at all. of 2020 and enjoyed strong consumption it accelerated the development of pre- In fact, it strengthened our confidence trends during its two key events: the existing trends, which allowed us in our strategic decisions, such as Mid-Autumn Festival and the Chinese to gain years in terms of investments the value strategy of our brown spirits, New Year. On the whole, I would never and education: at-home consumption, the development of a direct-to-consumer have imagined at the beginning of the mixology, uptrading, e-commerce and and e-commerce strategy, and the Group’s fiscal year that our business would a direct-to-consumer strategy, together transformation to ensure more responsible prove to be so resilient: organic growth with sustainability values. As a result, growth. We are confident that we will 11 of nearly 2% in our revenues and 13% we have been gaining market share achieve a 72% gross margin and a 33% in our current operating profit is a great with our cognacs (as a category and current operating margin by 2030, achievement. We owe it to the strength within the category) as well as with while obtaining 100% responsible of our brands and the loyalty of our Cointreau, while our single malt whiskies and sustainable farming certifications clients, but also to the passion and energy also performed strongly. across all our terroirs and agricultural of our teams, which have been incredibly ingredients. We also believe that we will agile in this challenging context. In other words, while the pandemic significantly reduce our carbon footprint, is clearly a dramatic situation at a human with the goal of being carbon neutral Talking about your teams, what protective scale, as a Group we have been propelled by 2050.