REGISTRATION DOCUMENT 2016/2017 and Annual Financial Report
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2017 REGISTRATION DOCUMENT INCLUDING THE ANNUAL FINANCIAL REPORT 2016/2017 CONTENTS 15OVERVIEW OF THE GROUP 3 CONSOLIDATED 1.1 Key figures 4 FINANCIAL STATEMENTS 1.2 History 5 AT 31 MARCH 2017 123 1.3 Shareholding structure 6 5.1 Consolidated income statement 124 1.4 The Group’s activities 7 5.2 Consolidated statement of comprehensive 1.5 Related-party transactions and material income 125 contracts 10 5.3 Consolidated statement of financial position 126 1.6 Risk factors and insurance policy 12 5.4 Change in consolidated shareholders’ equity 127 5.5 Consolidated statement of cash flows 128 5.6 Notes to the consolidated financial 2 CORPORATE SOCIAL statements 129 RESPONSIBILITY (CSR) 19 5.7 Statutory auditors’ report on the consolidated financial statements 173 Introduction: Chairman’s Commitment 20 2.1 The Group’s policy and commitments 21 2.2 Employee-related information 25 6 COMPANY FINANCIAL 2.3 Environmental information 31 STATEMENTS 2.4 Societal information 45 AT 31 MARCH 2017 175 2.5 Table of environmental indicators by site 50 6.1 Balance sheet 176 2.6 2020 targets 53 6.2 Income statement 177 2.7 Note on methodology for reporting environmental and employee-related 6.3 Cash flow statement 178 indicators 54 6.4 Financial results for the last five years 179 2.8 Cross-reference tables 57 6.5 Notes to the financial statements 180 2.9 Independent verifier’s report 6.6 Statutory auditors’ report on the financial on consolidated social, environmental statements 190 and societal information presented in the management report 61 7 INFORMATION 3 CORPORATE GOVERNANCE ON THE COMPANY AND INTERNAL CONTROL 65 AND THE CAPITAL 191 7.1 General information about the Company 192 3.1 Composition of administrative and management bodies 66 7.2 Memorandums and Articles of Association 192 3.2 Report of the Chairman of the Board 7.3 General information about the share capital 194 of Directors 77 7.4 Shareholding and stock market information 202 3.3 Statutory Auditors’ report, prepared in 7.5 Items liable to have an impact in the event accordance with Article L. 225-235 of of a public takeover offer 208 the French Commercial Code, on the report prepared by the Chairman of the Board of Directors of Rémy Cointreau 92 8 COMBINED SHAREHOLDERS’ 3.4 Remuneration and benefits 93 MEETING 209 8.1 Comments on the draft resolutions 210 4 COMMENTS ON THE RESULTS 8.2 Draft resolutions 217 FOR THE YEAR 111 8.3 Statutory Auditors’ special reports 225 4.1 Analysis of the business and consolidated results 112 9 ADDITIONAL INFORMATION 229 4.2 Financial and cash positions 117 4.3 Parent company results 120 9.1 Documents on display 230 4.4 Recent events and outlook 121 9.2 Information incorporated by reference 230 9.3 Statement by the person responsible for the registration document and annual financial report 230 9.4 Persons responsible for the audit and fees 231 9.5 Cross-reference tables 232 REGISTRATION DOCUMENT 2016/2017 and annual financial report The Rémy Cointreau Group is one of the major operators in the global Wines and Spirits market, with a portfolio of exceptional brands that includes the Rémy Martin and Louis XIII cognacs and Cointreau liqueur. The brands are mainly distributed via a network of subsidiaries located in the Group’s various strategic markets. Rémy Cointreau is listed on Euronext Paris. The free fl oat comprises approximately 44% of the share capital. The majority of the Rémy Cointreau Group is held by a family holding company, Andromède. This is a free translation into English of the original report issued in the French language and it is provided solely for the convenience of English speaking users. This report should be read in conjunction with and construed in accordance with French law and professional standards. This registration document was filed with the French Financial Markets Authority (AMF) on 23 June 2017, in accordance with Article 212-13 of its General Regulation. It may be used in support of a financial transaction if accompanied by a memorandum approved by the AMF. It was prepared by the issuer under the responsibility of its signatories. REGISTRATION DOCUMENT 2016/2017 RÉMY COINTREAU 1 2 RÉMY COINTREAU REGISTRATION DOCUMENT 2016/2017 1 OVERVIEW OF THE GROUP 1.1 Key figures 4 1.2 History 5 1.3 Shareholding structure 6 1.4 The Group’s activities 7 1.4.1 Brands 7 1.4.2 The Group’s principal entities 9 1.4.3 Purchase of intangible assets, property, plant and equipment 10 1.5 Related-party transactions and material contracts 10 1.6 Risk factors and insurance policy 12 1.6.1 Strategic risks 12 1.6.2 Brand and product-related risks 13 1.6.3 Financial, legal and IT risks 14 1.6.4 External risks 16 1.6.5 Insurance 16 REGISTRATION DOCUMENT 2016/2017 RÉMY COINTREAU 3 OVERVIEW OF THE GROUP 1 Key figures 1.1 Key figures Data in € millions, for the period 1 April to 31 March 2017 2016 Net sales 1,094.9 1,050.7 Operating profit current 226.1 178.4 Current operating margin 20.7% 17.0% Net profit – Group share 190.3 102.4 Net profit excluding non-recurring items 135.0 110.4 Capital expenditure and administrative investments 36.9 30.8 Equity – Group share 1,302.5 1,111.9 Net financial debt 390.1 458.2 Dividends paid during the financial year (per share in €): 1.60 1.53 Earnings per share (basic, in €): On net profit excluding non-recurring items – attributable to the owners of the parent 2.75 2.27 On net profit – Group share 3.87 2.11 NET SALES BY CATEGORY 2017 2016 The House of Rémy Martin 707.5 647.8 Liqueurs & Spirits 276.3 273.7 Sub-total Group brands 983.8 921.5 Partner Brands 111.0 129.2 TOTAL 1,094.9 1,050.7 OPERATING PROFIT CURRENT 2017 2016 The House of Rémy Martin 185.2 139.7 Liqueurs & Spirits 57.5 48.1 Sub-total Group brands 242.7 187.8 Partner Brands 2.0 6.0 Holding (18.6) (15.4) TOTAL 226.1 178.4 NET SALES BY GEOGRAPHIC AREA % total 2017 2016 Europe-Middle/East-Africa 31.5% 345.3 359.6 Americas 39.7% 434.2 394.6 Asia-Pacific 28.8% 315.4 296.5 TOTAL 100.0% 1,094.9 1,050.7 NET SALES BY CURRENCY % total 2017 2016 Euro 22.8% 249.1 264.2 US dollar, HK dollar, Chinese yuan, Barbadian dollar 60.8% 665.9 607.5 Other currencies 16.4% 179.8 179.0 TOTAL 100.0% 1,094.9 1,050.7 4 RÉMY COINTREAU REGISTRATION DOCUMENT 2016/2017 OVERVIEW OF THE GROUP History 1.2 History 1 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 1703 Creation of Mount Gay Rum in Barbados 2006 Disposal of the Dutch and Italian Liqueurs & Spirits operations 1724 Establishment of The House of Rémy Martin Cognac Decision by Rémy Cointreau to resume full control over 1849 Creation of Cointreau & Cie by the Cointreau brothers its distribution by March 2009 1881 Creation of the Bruichladdich Distillery in Islay 2008 Transition year in view of the Maxxium exit 1888 Creation of the Metaxa brand Creation of a proprietary distribution structure 1924 Acquisition by André Renaud 2009 30 March: Rémy Cointreau exits the Maxxium of E. Rémy Martin & C°SA distribution joint venture 1965 André Hériard Dubreuil takes over from 1 April: Rémy Cointreau controls 80% of its distribution his-father-in-law, André Renaud 2011 8 July: Rémy Cointreau sells its Champagne division 1966 Creation of Rémy Martin’s international distribution to EPI network Rémy Cointreau continues as the sole distributor of 1980 Creation by Rémy Martin of the French-Chinese joint Piper-Heidsieck and Charles Heidsieck, as well as venture Dynasty Winery in partnership with the city Piper Sonoma (the US sparkling wine brand) of Tianjin (China) 2012 3 September: acquisition of the Bruichladdich Distillery, 1985 Acquisition by the Rémy Martin Group of Charles which produces single malt whiskies on the isle of Islay Heidsieck Champagne in Scotland 1986 Creation of the Passoã brand 20 November: François Hériard Dubreuil becomes Chairman of the Rémy Cointreau Group 1988 Acquisition by the Rémy Martin Group of Piper-Heidsieck Champagne 18 December: acquisition of the cognac company Larsen 1989 Acquisition by the Rémy Martin Group of Mount Gay Rum 2013 30 August: disposal of Larsen to the Finnish Altia Group 1990 Transfer by Pavis SA of Rémy Martin shares to Cointreau & Cie SA 2015 27 October: disposal of Izarra to Spirited Brands 1991 Adoption by the Group of the corporate name 2016 1st December: set-up of a joint-venture for the activities of Rémy Cointreau of Passoã 1998 Dominique Hériard Dubreuil becomes Chairman 2017 5 January: acquisition of the of Rémy Cointreau Domaine des Hautes Glaces distillery, which produces single malt whiskies in the French Alps 1999 Establishment of the Maxxium distribution joint-venture with three partners, the Rémy Cointreau Group, 6 January: acquisition of the Westland distillery, the Edrington Group and Jim Beam Brands Worldwide which produces single malt whiskies in the state of (Fortune Brands) Washington, US 2000 Acquisition of Bols Royal Distilleries including, in particular, the Bols and Metaxa brands 2001 Vin & Sprit joins the Maxxium network as its fourth partner 2005 Initial public offering of Dynasty Fine Wines Group on the Hong Kong Stock Exchange Disposal of Bols’ Polish operations to CEDC Maxxium reinforced by taking over the distribution of a number of Allied Domecq brands acquired by Fortune Brands REGISTRATION DOCUMENT 2016/2017 RÉMY COINTREAU 5 OVERVIEW OF THE GROUP 1 Shareholding structure 1.3 Shareholding structure AT 31 MARCH 2017 Hériard Dubreuil Family (% equity interest) 100% Andromède (1) P.