ANNUAL REPORT 2010 I 2011 Rémy Cointreau

Authentic, high quality products with a gradually increasing reputation worldwide

2010/11 was marked by a return to growth. All regions worldwide contributed to this trend, particularly Asia and Travel Retail where demand remained strong. This performance reflects the strength of the Group’s premium and international brands and the expertise of its commercial network.

In November 2010, the Group announced that it intended to dispose of its Champagne Turnover division. On 31 May 2011, Rémy Cointreau and EPI signed an agreement for the sale 907.8 million of this division. Rémy Cointreau will continue organically as sole distributor of the Piper-Heidsieck +6.4% and Charles Heidsieck brands as well as Piper Sonoma (the US sparkling wine brand). Operating profit margin

A strategy focusing on high value-added products, sustained by a policy of strong 18.4% product innovation and supported by Current operating profit a high performance network will provide the Group with the necessary resources 167.0 million Chairman and Chief Executive’s Statement 2 to ensure steady, profitable growth. Distribution 4 +8.0% organically Strategy 6 Operations and brands 8 Net profit - Group share (excluding recurring items) Corporate and environmental responsibility 26 Corporate governance 38 107.5 million Stock market and shareholders 40 Financial information 42 +16.7% Outlook 44 Employees 1,621

Rémy Cointreau Annual Report 2010-2011 1 Chairman & Chief Executive’s Statement A year that confirmed the effectiveness of our value strategy

In an economic climate which remains uncertain, Proudly asserting the excellence Asia, top-selling region A long-term commitment our activities have delivered a strong performance of our brands Once again this year, Asia delivered a great performance, We recognise that the perfection we seek in our brands with growth in turnover of 12.4% (6.4% organic) The position of our international brands was consolidated becoming our top-selling region. The Rémy Martin takes time to achieve. That commitment to long-term and a notable improvement in operating profit, which thanks to a strategy of moving upmarket and the strong Fines Champagnes and Grande Champagne Cognacs development is at the heart of what we do. This goal increased by 17.6% (8% organic), while marketing marketing dynamics of our sales teams in their major were the principal growth drivers. This was affirmed is shared with all our stakeholders and is the bedrock investment was increased to support the brands. markets. In Asia, America and Europe, our customers by the success of 1898 in China and the positive of our social and environmental responsibilities. A further highlight last November was the announcement and the changes in consumption patterns are our priorities. commercial dynamics of Vietnam and Singapore. Primarily, it concerns employees and shareholders of our intention to dispose of the Champagne division. The essential ingredients of our commercial success Equally spirits, particularly Cointreau, view these but also our suppliers, our distributors and our partners, On 31 May, we reached an agreement to transfer are to respond, accompany, anticipate and fulfil countries as a favourable environment for growth. who respect our commitments. Year after year, this division to the EPI Group. Rémy Cointreau will retain consumer demand, focusing on quality rather than quantity. In this respect, the creation of a new distribution all of them demonstrate their confidence in our strategy. all the distribution rights for Piper-Heidsieck and Charles The need to move the brands upmarket, together subsidiary in Japan is an important strategic step in the Rémy Cointreau will firmly maintain its focus on its Heidsieck, as well as for Piper Sonoma (the US sparkling with developing creative innovations and using a wider Group’s development within this region of the world. strategy and long-term commitments. The transfer wine brand). variety of communication media, enabled us to continue In America, mainly in the US, there was growth in the of the Champagne division is entirely consistent with to successfully implement our policy of price increases. Finally, in the first half of the year, we restructured second half of the year. Due to their premium products, the acceleration of this strategy. In particular, it will the Group’s debt under favourable conditions, with strong consumer appeal and suited to cocktails allow us to finance growth in both traditional markets thereby increasing its maturity to 2016. and new consumption patterns, Rémy Martin and and the Group’s future markets, while continuing Cointreau delivered a number of promotional drives to keep a close eye on any growth opportunities in the US. This was also the case for Mount Gay Rum that may present themselves. with the success of Silver in the Caribbean, and for A strategy focusing on high value-added products, St-Rémy, which experienced a genuine revival in Mexico. sustained by a policy of strong product innovation Europe has also seen growth despite the current and supported by a high performance network, situation in Greece, which weighed heavily on Metaxa. will provide the Group with the necessary resources Eastern European countries confirmed their potential, to ensure steady, profitable growth. with a renewed strength in the Russian market. In the West, as the on-trade recovery of Cointreau and champagne demonstrated, so-called “mature” countries have shown that they are open to new creative challenges.

Several innovations have marked the year with, unusually for Rémy Martin, the creation of a VSOP graffiti limited edition in China, the launch of Centaure de Diamant in Travel Retail, as well as genuine advances such as Rémy Martin V. The coming year will be equally as dynamic, particularly in the support and development of our brands in new regions of growth, namely Asia, Dominique Hériard Dubreuil Jean-Marie Laborde Australia and Brazil. Chairman Chief Executive Officer

2 Rémy Cointreau Annual Report 2010-2011 Rémy Cointreau Annual Report 2010-2011 3 Distribution Asia- Strong annual Pacific performance Sustained growth for all brands

In Asia, Rémy Cointreau continues to experience Control of markets and moving upmarket a sustained rhythm of growth. In China, "A year after the complete restructuring of our worldwide the strengthening of our sales teams has distribution network, this new financial year was characterised encouraged the development of Rémy Martin’s by an acceleration in growth, particularly in Asia and in Travel Retail, premium cognacs. Two years after its launch, the consolidation of the distribution network and the continued 1898 has become the cognac of choice for all greater inclusion of the consumer at the heart of our organisation. consumers in search of exceptional taste sensations. Our Chinese teams won over the most well-known “In this climate of economic recovery, particularly in our historic establishments, city by city. Now available in over markets, our strategy has been an important asset in supporting 60 major cities, our brands, and Rémy Martin growth. The appropriate distribution of our activities, between in particular, benefit from optimum exposure. traditional and emerging markets, has enabled us to achieve satisfactory and profitable growth, with a perceptible acceleration In conquering new countries, the Group successfully in China, Vietnam, Russia and also throughout Travel Retail. increased its presence in the main regions of South-East Asia. In Vietnam, Singapore “At the same time, we continued to roll out our sales teams and Taiwan, magnificent hotel complexes are dedicated to the prestigious on-trade in our strategic markets, showcases of choice where Rémy Martin, Cointreau particularly in the US, Singapore and France. Our organisation and Piper-Heidsieck have strong exposure. was strengthened in Russia by a reinforced business partnership with our distributor and in Japan through the creation of a new In Japan, the creation of a new distribution distribution subsidiary. In addition, we continued to invest in new subsidiary, dedicated to marketing the Group’s emerging markets, such as Brazil and India, where we have brands, means that the Group can respond increased our exposure considerably. to the unique challenges of the Japanese market, which has suffered greatly in the past months, “Our drive to always be closer to the field, in direct contact but which remains strategic in the long-term: with each market and as close as possible to ever more Louis XIII dominates the ultra-premium segment, demanding consumers, motivates our teams to act and respond Cointreau and Passoã feature among the leading to their expectations. All these developments open up very posi- imported liqueurs and Piper-Heidsieck is one tive prospects in the long-term for our high-end products and of the undisputed leaders in its category. our international brands.” Across all these major markets, the sales and Damien Lafaurie marketing teams, on which the performance Executive Vice President Global Markets of the Group depends, demonstrated their effectiveness in responding to changes in the markets and new consumption patterns. 2010/11 turnover by region

Asia & Others Americas Europe 33.8% 33.8% 32.4%

4 Rémy Cointreau Annual Report 2010-2011 Rémy Cointreau Annual Report 2010-2011 5 United States Europe Travel Retail & Americas

A valuation stance that delivers A profitable recovery A window on the world

Rémy Martin’s determined and ambitious value strategy This year, Europe was supported by Russia and also The travel retail market, the largest showcase has enabled the brands to benefit from the slow by Western Europe. in the world, has again seen a spectacular comeback but certain economic recovery. The desire to maintain this year. Demand remained very strong, driven In Russia, groundwork was initiated with our Russian high prices, despite the crisis, is consistent with by the increase in tourism and business travel. partner Roust: to integrate the Rémy Cointreau the promise of authenticity and the unique character teams within local and traditional teams, particularly The Travel Retail team, based in Singapore, covers of our brands. Significant innovation and promotional in the on-trade. This strong partnership originated the entire world with local teams for each market. investment have been established to support this value in Moscow and St Petersburg, where Rémy Martin strategy. Despite the still fragile economic climate, and Cointreau gained market share and exposure. this choice has proved appropriate and successful, In Eastern Europe, recovery was confirmed by as the premium sector has seen the strongest the end of the year in the Czech Republic and growth. The superior qualities of Rémy Martin in Slovakia, where the Group has its own distribution and Cointreau have been sustained by the important network, including that of Metaxa for which these valuation work carried out in the on-trade. This part countries are strategic. In Poland and in the Baltic of the market, which has the ability to develop countries, communications targeting on-trade high-end brands, is undisputed in the US drinks consumers generated growth once again. Greece sector. In this vital market, Rémy Martin ended the continued to experience a difficult economic situation year very optimistically, having ridden out the crisis for the second consecutive year. without sacrificing its future. Rémy Martin, Cointreau and Piper-Heidsieck again In Western Europe, in a flat market overall, the Group’s In the Caribbean, particularly Barbados, the launch saw growth this year with gains in market share. brands performed strongly, particularly in the UK and of the new Silver quality Mount Gay Rum was a This was a sign of how appropriate the brand strategy Germany as well as in France. The work on brand formidable success. This spectacular recovery bears is in meeting the expectations of the very demanding valuation and innovation bore fruit with renewed testimony to the new marketing dynamics of Mount consumers who pass through major airports all over success in the on-trade for Cointreau, Rémy Martin Gay in its local market. the world, such as Hong Kong, Singapore, London and Champagne, as well as in the off-trade for In Mexico, the St-Rémy brandy packaging, which and Paris. These consumers find high-quality products Piper-Heidsieck, which took the lead once again creates an image of the superior quality of French in specific environments: Louis XIII has pride of place in Belgium. brandy, made up for the increase in its retail price. in luxurious areas and lifestyles where the “happy few” In Brazil, Cointreau’s popularity accelerated with gather. Again this year, the quality of the marketing double-digit growth despite its very high price displays was further enhanced and provided even in that country. Distribution agreements signed with greater exposure to all Rémy Cointreau’s international La Negrita in Mexico and Campari in Brazil enabled brands. With these efforts, Rémy Martin has become the Group’s brands to benefit from the existing once again the leader in value in this important market. marketing teams.

6 Rémy Cointreau Annual Report 2010-2011 Rémy Cointreau Annual Report 2010-2011 7 Strategy Nothing but perfection

A culture of perfection Creator of perfection Qualitative innovation

“Our products intimately combine the mastery Consumers are increasingly seeking quality and This culture of perfection inevitably drives the commitment over nature and time of talented men and authenticity and opt overwhelmingly for international of our brands. The current financial year has been women. We are the guardians of this legacy brands, both in traditional markets and in emerging particularly eventful, and one in which innovation has of authenticity, which shapes the superiority countries. Rémy Cointreau has numerous strengths played a key role with the aid of unanticipated creations: of our products. to meet their expectations: strong recognition and solid the first white bottle of Rémy V was tested successfully positioning of its international brands as well as the among American consumers in Atlanta and Oakland. excellence and authenticity of its products. The aromatic Rémy V is created by cold-filtering the autumn grapes intensity of Rémy Martin cognacs is unequalled. The of Petite and Grande Champagne, which exude subtle, judicious blend of carefully selected eaux-de-vie from natural aromas that inspire the imagination of every the exceptional regions of Petite and Grande Champagne barman to create cocktails. Other innovations included is the work of Cellar Master Pierrette Trichet’s patience Cointreau Noir, an exceptional blend of cognac and and expertise. Cointreau’s centuries-old standards in the orange liqueur, St-Rémy Cream, the first cream-based selection of oranges and their distillation are today the brandy, and Metaxa 12*, which expresses the originality responsibility of the master distiller, Bernadette Langlais. of Muscat wines from the Island of Samos. The Its unique character makes it a major element in commercial success of these creations in markets refining the contribution of the famous liqueur to the whose recovery remains fragile demonstrates that most up-to-date cocktails. The rums of Alan Smith they meet the expectations of quality and authenticity. and the champagnes of Régis Camus are also Mount Gay Rum proved this with the combined amongst the most noted by experts, winning awards success of Mount Gay Silver in the Caribbean and on a regular basis. Konstantinos Raptis raises Mount Gay Black in the US. Metaxa to a level of quality never before achieved The Group’s brands distinguish themselves through “Our ambition is to promote this culture in our and Martine Pain preserves the essential flavours their audacious propositions, tailored to the specific strategy of perfection, supported by a visible of St-Rémy Brandy. needs of their markets and always nurtured by policy and a strong capacity for innovation The work of these men and women is supported the demands of the master distillers. For them, as for and reinforced by the intense work of our teams by the expertise of the teams on the ground and by all the Rémy Cointreau teams, perfection is value: on the ground. These are the assets which targeted communication. that of the recognition of their talent, of the ability of enable us to meet the ever more demanding their brands to recover and their long-term development. requirements of consumers and to seize all opportunities for growth. By resolutely reminding everyone of the uniqueness of our brands through the most surprising innovations, we can provide the conditions for their sustainability in every market.” Analysis of 2010/11 turnover by division Christian Liabastre Executive Vice President - Cognac Liqueurs & Spirits Champagne Partner brands Brand Strategy and Development 53.5% 22.9% 11.4 % 12.2%

8 Rémy Cointreau Annual Report 2010-2011 Rémy Cointreau Annual Report 2010-2011 9 Cognac

Creation of appeal and the pursuit of excellence

“The House of Rémy Martin, the embodiment of excellence and rarity for more than three centuries, continues to assert itself as an extraordinary creator of appeal for consumers throughout the world. The superiority of our Cognac eaux-de-vie comes from the magnificent Grande and Petite Champagne regions, the expertise of our Cellar Master and her teams as well as our value-creating innovations - all key elements in the sustainability and success of our House.

“In an improved economic environment where consumers’ demands are greater than ever, the House of Rémy Martin achieved a very good performance on all continents due to increased investment to support its brands.

“The power and the appeal of the Rémy Martin and Louis XIII brands, combined with the talent of our teams, have enabled us to meet today’s challenges and will help us to successfully seize future opportunities.”

Patrick Piana CEO of the House of Rémy Martin

Turnover 486.0 million

Current operating profit 140.5 million

Operating profit margin 28.9%

10 Rémy Cointreau Annual Report 2010-2011 Rémy Cointreau Annual Report 2010-2011 11 Exceptional quality and accelerated growth

Once again this year, Rémy Martin Rémy Martin also confirmed its excellence In an improving business climate, the House recorded remarkable double-digit growth in the “intermediate” categories, which continued its strategy of value creation in value, due to a combination of price create the desire to discover exceptional with the objective of creating appeal. increases, the continued move upmarket qualities. Cœur de Cognac in Europe, By reinforcing an ambitious development and the excellent performance of premium Club in Asia, and 1738 in the US have policy, it asserted its exceptional positioning, cognacs, particularly in Asia. Europe contributed to increasing the desirability at the core of its local roots and expertise. was revitalised by Russia and also THINGS of the brand among consumers seeking The best cognac in the world now has by Western Europe. to move upmarket. its own “Academy” which trains and ARE welcomes colleagues, suppliers, customers and GETTING journalists. Its mission ® is to remind consumers INTERESTING of the exceptional quality of Rémy Martin cognacs, the eaux-de-vie used to make them, a product Furthermore, with the great success of of the best grapes from the two prestigious 1898 in China, where its performance more appellation regions, Petite Champagne than doubled, Rémy Martin today has and Grande Champagne, and the rare a unique potential to appeal that underlines and selective attention from the Cellar the exceptional character of its rarest qualities Master of the House of Rémy Martin. at very high prices.

In the US, the sales growth trend was favourable for very superior quality cognacs. The travel retail market was an important growth driver, supported by the increase in international tourism and high-impact, value-creating merchandising approaches. Rémy Martin strengthened its position in the premium sector of the global market.

12 Rémy Cointreau Annual Report 2010-2011 Rémy Cointreau Annual Report 2010-2011 13 Desire driven by innovation Louis XIII, a policy of rarity

The Rémy Martin brand continued to grow in popularity Louis XIII was created in 1874 with the aspiration with activation programmes among young adults. In the of offering the best and the oldest Cognacs of Grande US, its second largest market, Rémy Martin established Champagne to the most prestigious and influential partnerships with international hip-hop and R’n’B stars connoisseurs in the world. that are consistent with its communication platform Today, thanks to a required policy of rarity for an “Things are getting interesting”. T.I. and Jay Z are exceptional product, supported by an ambitious price already aficionados of the brand, and this year policy, Louis XIII benefits from an exemplary and Rémy Martin VSOP was Usher’s partner whilst touring continued increase in value. in America and Europe, and became the official Louis XIII is the result of a blend of 1,200 aged eaux- sponsor of his exceptional after-parties. In China and de-vie, exclusively from Grande Champagne, some South-East Asian countries, the increasing number of which have been aged for more than 100 years. of Rémy Dance Parties and the creation of the VSOP Rémy Graffiti limited edition parties gave new consumers Served in 1929 on board the Orient Express and in 1935 the opportunity to appreciate the vitality of the brand on the Normandie for its inaugural voyage, it is still and to discover the different ways of enjoying cognac. served in the most prestigious locations on the planet.

The limited edition series of the famous VSOP bottle Its aficionados know each other all over the world. were also noted innovations. Following the success Whether they are travellers, experts or collectors, of the limited edition signed by David La Chapelle a their tastes and their expectations are becoming more few years ago, the launch of the Red Holidays limited and more sophisticated. For Louis XIII, rarity is a measure edition broke sales records at the end of the year of the exceptional. in its major strategic markets. Finally, the new limited Dynamic outlook edition in honour of the Cannes Festival in May was a great success. In a much more serene worldwide economy, Rémy Martin is in an excellent position to continue In terms of its innovation policy, Rémy Martin benefited to profit from the revitalised Asian markets and from from the 2010 launch of Centaure de Diamant the confirmed American recovery, as well as seize in Singapore, for Travel Retail, a new tribute to the opportunities for growth in major traditional markets. excellence and character of Cognac Fine Champagne. With its decanter cut like a diamond, Centaure de The House of Rémy Martin will continue its ambitions Diamant is the contemporary expression of the for growth with its Rémy Martin and Louis XIII brands, ancestral expertise of the House, where time by accelerating its investment policy and by enhancing is at the heart of the excellence of the best its marvellous eaux-de-vie, thereby asserting itself Fine Champagne cognacs. as an extraordinary creator of appeal among consumers throughout the world.

14 Rémy Cointreau Annual Report 2010-2011 Rémy Cointreau Annual Report 2010-2011 15 Liqueurs & Spirits

Authenticity and Innovation

“2010 saw a recovery in strategic markets for our Liqueurs and Spirits brands.

“Their authentic and unique characters, as well as their original communication methods this year, reflected the strong innovative culture shared by our brands. Each one demonstrated powerful, creative energy thanks to an efficient distribution network that was particularly important during this period of economic recovery.

“Our successes in 2010, made possible by our fundamental values of authenticity and innovation, also augur well for future years.”

Justin Weston CEO Liqueurs & Spirits

Turnover 208.0 million

Current operating profit 42.6 million

Operating profit margin 21.1%

16 Rémy Cointreau Annual Report 2010-2011 Rémy Cointreau Annual Report 2010-2011 17 Cointreau, the successful Mount Gay Rum, combination of cocktails the best rum in the world and glamour Mount Gay Rum is supported by a value With a score of 97/100 from the first All of the brand’s markets experienced The opening of the first “Cointreau Privé”, strategy that makes “the Rum which Ultimate Spirits Challenge and an extremely growth, including the US, after two years a temporary cocktail bar, based on the invented Rum” the product of choice rare 5-star rating from Paul Pacult in Spirit of economic crisis. The work carried out 1920s, New York-style “speakeasy” bar, for barmen throughout the world. Journal, Mount Gay 1703 has been over the past few months to re-establish was held in Paris in the heart of Montmartre. rewarded for the quality of its composition, This year, Mount Gay Rum benefited from the authenticity, history and positioning Entirely decorated by Dita Von Teese created by Master Blender Allen Smith. the extraordinary success of the launch of Cointreau in the cocktail world led to and promoted through word-of-mouth, Clearly, it is the best rum in the world. of Silver, an artisanal rum made from the creation of the “Cointreau Academy”, the “Cointreau Privé” shared its Cointreau a rare sugar cane and the purest spring which opened in September 2010. liqueur and its cocktails among a privileged water with all the aromas and the character few in a refined atmosphere. Distributors, bartenders as well as French, of Mount Gay Rum. This year, the brand Dutch, American and Chinese journalists saw double-digit growth in its country have enjoyed the full experience of this of origin, Barbados. unique liqueur, from the fastidious work In other flagship markets, particularly represented by the selection of orange Australia, New Zealand and Great Britain, peel and the distillation right through Mount Gay Rum also had a very good to the sampling of famous cocktails: year. The new range, from Eclipse Margarita, Cosmopolitan, White lady, to the precious 1703, in their new bottles, Sidecar, etc., not forgetting the Cointreau a work of visual identity that began two Teese, created by Dita Von Teese. years ago, is available in all these markets, Dita has been the brand’s ambassador including the North American market. for the last three years and has endorsed high added-value packaging for the Christmas and New Year’s celebrations. The brand has strengthened its presence She also endorsed a “My Private Cointreau in the world of sailing by being a partner coffret” limited edition, a glamorous to famous regattas since 1984, namely and elegant case for cocktail mixing Key West, Cowes Week, Sydney Hobart, equipment, presented and sold in the Beyond its historic markets, Cointreau etc. Mount Gay created an important most prestigious boutiques in the world, strengthened its position in new regions, digital platform for all the regatta-goers, and an object of much envy. Dita also namely Australia and Russia. This year “www.sailingspokenhere.com”. Users can beautifully presented the “Be Cointreauversial the brand conducted its largest tour of share their passion, search for partners, show” in New Orleans and in Sydney and China to date, from Hong Kong to Beijing, comment on the regattas with experts launched the wonderful “Cointreaupolitan via Shanghai, the highpoint of which was and of course exchange ideas on recipes Party” in Greece, Italy, Spain and Sweden. the opening of a “Cointreau Sky Bar” and ways to enjoy rum on this truly social in the capital. This marked the first stage network. of future development in the biggest market in the world.

18 Rémy Cointreau Annual Report 2010-2011 Rémy Cointreau Annual Report 2010-2011 19 Passoã, pump your party! Metaxa, winning over the East ST-Rémy, international recognition for an authentic In highly competitive market conditions, The brand continued to suffer from difficult market conditions French brandy Passoã began an advertising campaign, in Greece. Nevertheless, Metaxa saw renewed growth in Viva Passoã, using social networks, its strategic Eastern European markets, in Germany, Austria St-Rémy brandy, the true essence of such as Facebook, where promotional and in the Czech Republic, followed by emerging markets with French terroir, is the leader in its category events and activities have been particularly strong potential, namely Russia, Poland and the Baltic states in Canada, Australia, New Zealand successful. During summer 2010, where the brand has established itself for the long-term. and Norway. St. Rémy also strengthened the brand capitalised on this campaign its position in Mexico and Nigeria, as well by launching the “Passoa Party Pump” as in South-East Asia. a drinking fountain that makes up to eight St-Rémy has an authentic recognised different Passoa cocktails. This creation quality, and Martine Pain, the first lady of a genuine service ritual established Cellar Master in brandy and Cellar Master itself in bars as well as supermarkets. of St-Rémy for 15 years, has won numerous awards. The latest have been two gold medals for St-Rémy Authentic XO and 91/100 in the last Ultimate Spirits Challenge with the comment “Excellent, St-Rémy highly recommended”.

The brand is continuously seeking excellence The advertising campaign “Touch the sun” increased the brand’s and remains at the height of innovation. reputation and its exposure. This was accompanied by a strong At the end of 2010, St-Rémy VSOP, on-trade activation and the “Sunball”, a symbolic innovation followed by St-Rémy XO, were presented that brings the sun to the cocktail. in simple and prized packaging on which The brand’s move upmarket began with the precious elixir AEN the medals can be seen, as proof of its and continued this year with the launch of Metaxa 12*, created incomparable quality. The brand continues by the Metaxa Cellar Master, Konstantinos Raptis. to grow. St-Rémy is, in fact, the world’s Presented in a refined bottle, finest French Brandy. Metaxa 12* has elegantly positioned itself in key markets, which have The end of the year was marked by the welcomed it warmly. Izarra, the Basque launch of a “Viva Passoã” limited edition. Country’s liqueur A strong digital feed was also rolled out which led to success in key countries At the beginning of 2011, the Group such as France, Belgium, The Netherlands, decided to give Izarra a new lease of life and, Denmark, Puerto Rico, Switzerland and once again, to make it one of the leading Italy. 2010 was a great year for Passoã’s local spirit brands. exposure.

20 Rémy Cointreau Annual Report 2010-2011 Rémy Cointreau Annual Report 2010-2011 21 Champagne

A renewed dynamism

“During the 12 months of the financial year, the champagne division benefited from a recovery in demand. Piper-Heidsieck and Charles Heidsieck achieved strong growth in Europe, particularly in the UK and Russia, as well as in the US.

“Maintaining their premium positioning was the deciding factor and our champagnes benefited from the market recovery, drawing on an innovative dialogue in our communications and promotions. As a result, the House returned to profitability and is well-positioned for the future. Its champagnes have regained their position in historic and strategic markets which are, once again, becoming growth drivers.”

Anne-Charlotte Amory Chairman of Piper and Charles Heidsieck

Turnover 103.6 million

Current operating profit 2.8 million

22 Rémy Cointreau Annual Report 2010-2011 Rémy Cointreau Annual Report 2010-2011 23 Piper-Heidsieck, Recognition Charles Heidsieck, audacious the legacy Distinguishing itself since 1851 in every respect, Since 1785, the history of Piper-Heidsieck has been In 2010, the House’s Cellar Master was voted Charles Heidsieck cultivates the elitism and demanding marked by extravagance and audacity. This champagne “Best Cellar Master in the World” by the International requirements of wine. Remaining loyal to the person was sponsored by Marie-Antoinette, was adorned Wine Challenge in the UK for the 11th time. This was who gave it its name and character, this champagne seeks by Fabergé and enjoyed by Marilyn Monroe, who said, the fifth such award for Regis Camus, the current excellence through refinement. The most sought-after “I go to bed with a few drops of a very famous perfume Cellar Master. The prestigious Fine Champagne restaurants, the most celebrated cellar persons, as well and I get up to a glass of Piper-Heidsieck”. magazine chose three of the cuvées from the top 10 as enlightened consumers do not make mistakes! champagnes during a blindfold tasting of more than The move upmarket and the Group’s value strategy 1,000 bottles: Piper-Heidsieck Rare 1999 won Best continued this year with increased efforts to promote Champagne in the World, with the Charles Blanc des both the excellence of the wines and develop their Millénaires 1995 and Charles Blanc 2000 Vintage audacious and elegant character, which is unique taking third and fourth places, respectively. to Piper-Heidsieck.

After Viktor & Rolf and Louboutin, Jaime Hayon, the famous Spanish designer, endorsed the year end offering of “Piper Crush”: a scarlet mini ice bucket to highlight the Cuvée Brut. Major international stores promoted this offer with excellent initiatives, particularly Costco in the US and Auchan in France.

There was also bold communication, with the new “Rock and Chic” video, whose campaign produced spectacular results, particularly in Benelux. Charles Heidsieck continued to develop in European Piper-Heidsieck also draws its strength from the markets, particularly the French market, as shown excellence of its wines, which was confirmed by by the success of the summer 2010 Garden-party box, the launch of the 2004 Vintage, praised by journalists comprising a bottle of Rosé Réserve, together with and oenologists throughout the world. Its reputation a matching tablecloth, plates and flutes, designed reached as far as Asia, to Singapore, where by the House of Caspari. Presented in the most Piper-Heidsieck was awarded the prestigious title beautiful window displays, this offer also benefited of “Favourite champagne” by the famous Marina Bay from outstanding media coverage. Sands hotel complex. The more traditional “buffalo” blue leather cladding of the Charles Heidsieck champagne bucket brought an air of grandeur to the Cuvée Brute Réserve, encased in a box specially designed for the New Year festivities.

24 Rémy Cointreau Annual Report 2010-2011 Rémy Cointreau Annual Report 2010-2011 25 Corporate and Environmental Responsibility

A 360° rollout Leading by example

“Our environmental and social concerns are entirely consistent “Our CER policy has historically been the result of a thought process regarding the Company’s ethical values. In fact, with our value strategy and economic performance the impact of our operations has always been at the heart objectives. Our CER (Corporate and Environmental of our concerns. Over the last three years, we have noticed an evolution in global sustainable development Responsibility) charter is therefore part of our overall issues. Therefore, our aim has been to adapt our policy policy. The requirements that we value on French soil to these new requirements. Rather than simply adapting, we align ourselves in advance with regulatory guidance, are also important at an international level, ie regardless taking measures that comply with regulations even before of the geographical site on which we operate. Our CER they come into force. policy is thus designed to gain the support of all our “In France, within the framework of the Grenelle Environmental Forum, our objective is to act in accordance stakeholders (our employees, our suppliers and also with future regulations that are in the course of preparation. our customers and partners) in France as well as abroad. We want to comply with them now regardless of future applicable thresholds. Some decrees have priority, and They have rallied behind us and have adopted a rigorous we have identified two that are particularly important for approach in implementing our commitments. Their the Group. The first concerns the certification of CER indicators by an external third party that we are now in involvement and mobilisation today mean they give us the process of identifying. The second, which will apply 100% support. as of 31 December 2012, concerns the carbon footprint. This decree will mandate a carbon footprint every three

“The analysis that we have conducted throughout years, together with a report on reductions in CO2 emissions. In light of this, Rémy Cointreau has begun submitting the year has enabled us to create a new plan for an annual update of its carbon footprint accompanied

the next three years. This plan reaffirms our commitment by its strategy to reduce CO2 emissions, outlined in its 2013 CER plan. to a responsible and environmentally-friendly economy.” “As part of the expected SNDD*, the foundations have been laid for a model of sustainable development, organised Patrick Marchand around a green and fair economy with low greenhouse Operations Senior Vice President gas emissions, and one which also integrates human and social aspects. To achieve this more equitable and co-operative development, nine challenges have been established. We have also included these objectives in the Group’s strategy and CER plan. “The evolution of these regulations and the ratings of agencies and ethical funds are a genuine source of progress, progress that Rémy Cointreau wants to be part of, in order to increase consistency, clarity Global Compact, 6,000 member companies and transparency. Our role as an ambassador of good practices is very important to us because it confirms The Global Compact is an international initiative, practices with their stakeholders. In this our commitment to the Global Compact International launched by the UN in 2000, for business respect, they are required to submit an Charter and involves us in responsible development.” leaders that are committed to complying with annual report detailing their commitments ten universally accepted principles in the areas at www.unglobalcompact.org. This is quite of human rights, labour, the environment important insofar as the Global Compact Christian Lafage and anti-corruption. For the past two years, institutions evaluate the actual commitments Sustainable Development Director beyond these commitments, the Global Compact undertaken each year, under threat of exclusion. has required signatory companies to monitor Rémy Cointreau’s policy is further strengthened guidelines, and recommend those of the Global by the fact that the Company’s initiatives have Reporting Initiative. Rémy Cointreau has applied been carried out with complete transparency, them for the past year. with respect to participants in the Global Furthermore, the Global Compact requires Compact, for the past six years. companies to act as ambassadors of good * The National Sustainable Development Strategy (SNDD) was adopted on 27 July 2010 by the Interdepartmental Committee for sustainable development.

26 Rémy Cointreau Annual Report 2010-2011 Rémy Cointreau Annual Report 2010-2011 27 Winemaking

Our commitment: “Integrated Agriculture”: Winemakers, a core target to implement and promote looking for natural alternatives for our societal concerns economically competitive to using pesticides… Rémy Cointreau is continuing to support, train and promote and environmentally-friendly the wine growers of the Fine Champagne Alliance. This As part of the fight against grape worms, which ravage year, these efforts will centre mainly on the understanding growing methods, combined the vines, Cognac has opted for a natural alternative to and formalisation of standard practices required by the use of pesticides: the mating disruption of butterflies. with traditional expertise, various regulations. This technique can applying the most advanced significantly limit butterfly In partnership with integrated agricultural 39 reproduction and, a training organisation, consequently, the birth 42 the Cognac site educates benchmarks. employees trained in Integrated of predatory caterpillars. wine growers about the Agriculture in 2010/11 (an average It should be noted that winemakers educated on “Integrated regional “environmental In line with its 2013 CER commitments, of 49 employees trained per this non-chemical control Agriculture” and Rémy Cointreau’s self-diagnosis” year over the past five years) is an innovative technique CER commitments in 2010/11 questionnaire. Training Rémy Cointreau continues to progress (corresponding GRI indicator: LA10) for the Charente region. (an average of 430 winemakers began in January 2011. in the area of preserving natural educated per year over the past "CER also means five years). resources. This entails the ongoing …and optimising the use the transfer of skills and expertise. Moreover, it study of practices encouraging of crop protection products means a commitment to a process of information and integrated agriculture, which relies continuing education in respect of our partners in the The Cognac site is also continuing it’s testing of "optidose", Fine Champagne Alliance. This process has historically as much on employees’ training which it began two years ago. This programme sets out been part of our corporate culture,” Baptiste Loiseau, ways of optimising the use of pesticides when their use as on their knowledge of crop protection Assistant Cellar Master, points out. becomes inevitable. In February 2011, it also joined the products. In respect of the latter, network of DEPHY ECOPHYTO farms as part of the As part of the HACCP audit, the EU regulation providing ECOPHYTO 2018 plan. This plan, established following traceability and risk management in respect of consumption, the Rémy Martin vineyards were the Grenelle Environmental Forum, is designed to meet Rémy Martin’s “Eau-de-vie Purchasing” and “Quality awarded the “Agriculture Raisonnée” the ambitious goal of reducing the use of pesticides Assurance” departments have been jointly organising by 50% by 2018. The network of DEPHY ECOPHYTO “food safety” visits for the past two years. (Integrated Agriculture) certification farms should produce quality benchmarks and show in 2007. The relationship between that it is possible to create sustainable cropping systems that save on pesticides and perform economically. Rémy Cointreau and its suppliers In order to preserve biodiversity, the crop protection is also representative of these efforts. products used are safe for both fauna and flora. In This co-operative approach confirms 2010/11, their use was reduced by 22% compared the Group’s commitments with regard with the recommended to corporate and environmental 100 % doses. In addition, the Group continues to carry out green responsibility. of vineyards use natural 2011, the International Year of the Forest covering, a practice that predators as an alternative involves almost 40% of This year, Cognac dedicated three hectares land surface. This enables of its land that is not used for wine-producing, the Group to reduce the use of herbicides. Lastly, over located on the banks of the Charente, to an the last five years, the number of soil and leaf analyses experimental forestation and alluvial forest increased by 71%, thus enabling better management of project. In the interests of preserving soil and soil fertilisation. water quality, together with the League for the Protection of Birds, Rémy Martin has opted for long-term cultivation that encourages the development of environmental fauna and flora. This initiative reflects the International Year of the Forest, which promotes the sustainable management, preservation and development of forests.

28 Rémy Cointreau Annual Report 2010-2011 Rémy Cointreau Annual Report 2010-2011 29 Quality/Security/Environment

CER commitment: QSE certification: Carbon testing and reduction Reduction in carbon emissions: Natural resources and the environment:

to guarantee the premium a major challenge in CO2 emissions: inspiring a proactive plan capital that needs to be preserved nature of our products progress QSE investment this year reached Rémy Cointreau has optimised energy consumption while Rémy Cointreau has reduced its water consumption through ongoing 4 million (corresponding GRI indicator: maintaining the comfort of its employees. The Group has by 36% in five years, from 122,000 m3 to 78,000 m3. In terms of CO emissions, the Group has EN30). The work of the inter-site 2 reduced its CO emissions this year by 6.6%, or 85 tonnes In terms of paper consumption, a one-third reduction has investment in research, annualised its carbon footprint for Scopes 2 safety, environmental and quality of CO . The Green IT enabled us to come down from 5,000,000 printed pages 1 and 2 (energy consumption, kilometres 2 a constant demand committees project has replaced to 3,180,000 pages per year. “As a result, our ink consumption driven in company-owned transportation, continues computers with has also been reduced by one third,” says Michael Boluen, for quality, food safety emissions from refrigerants and commuting). to bear fruit. -6.6% machines that Business Information Manager, in charge of the Green IT and industrial safety, 85 % No non- In respect of updating its 2013 CER plan, consume less energy project. Rémy Cointreau remains committed to its partnership 6.6% reduction in CO emissions compliance Rémy Cointreau has approved its carbon 2 (60% less consumption with the National Forestry Board to support reforestation and actions taken to increase in investment due to the optimisation of energy was detected reduction plan, which includes the following per computer in watts). projects. In this respect, the Group is financing a programme dedicated to QSE consumption (heating and air protect the environment. during follow-up five themes: business travel, eco-design In Angers, a working of planting oaks over one hundred hectares in the forest in the past four years conditioning, lighting, Green IT project) audits or ISO of packaging, reducing consumption group drew up 20 priority of Senonches in the Eure-et-Loire district of France. certification of natural resources, shipping of products actions to optimise "Working from the perspective renewals. Those conducted under and use of renewable energy. In practice, energy consumption, which has led to a 10% reduction in 92% 93% 89% of eco-design is an inspiring ISO 14,001 and OHSAS 18,001 the use of videoconferencing has led electricity consumption. Awareness also continues to grow: in Angers showed very positive to a 35% in Cognac, a workgroup voted in favour of ergonomic seats challenge. It leads us to be more results. Internal communication, reduction that are more than 95% recyclable. 51% 47% resourceful in finding "eco-friendly" staff accountability and participation in CO2 emissions 42% in the carrying out of projects were all 300 by reducing technical products that preserve highly valued. In Reims as well business travel. tonnes of CO saved Recycling rate the image of our brands and (ISO 22,000), audit results were very 2 14,000,000 by the use of video- The eco-design Sorting rate good. Cognac (ISO 9,000 and ISO 13,870,122 13,579,103 12,000,000 the quality of our products." conferencing (corresponding of packaging 12,701,931 12,718,132 2008/2009 2009/2010 2010/2011 22,000) is moving towards an integrated 12,204,794 GRI indicator: EN18) is evaluated 11,479,084 Quality - Food Safety – Environmental 11,263,990 10,000,000 Waste processing Claude Angelier according 10,869,487 policy, which is a major innovation: (corresponding GRI indicator: EN22) Packaging Development Manager to three areas: the greenhouse effect, the quality assurance system is now 2007/2008 2008/2009 2009/2010 2010/2011 (Cognac) water and recyclability. A 2.2% reduction managed globally. Electricity in kWh Gas in kWh in average Safety: a progressive approach in respect of packaging Electricity and gas consumption "Reducing CO emissions is also risk prevention and risk management training 2 weight and (corresponding GRI indicator: EN3/EN4) 4,390 dependent on a cost optimisation 1,000 reductions in 3,800 3,913 3,139 hours were the use of 140,000 approach. Eco-design is closely 3,320 tonnes less of CO2 per year devoted to QSE training cardboard 122,182 due to the eco-design of 120,000 3,139 and 3.1 million was spent linked to the concept of "value (90 tonnes less) packaging (corresponding on safety. and plastic 100,000 QSE training hours, optimisation." Thus, by choosing GRI indicator: EN18) (28 tonnes 80,000 with 472 people trained The Angers site has a matte black sleeve for the Passoa less) have 88,179 (corresponding GRI educated staff on safety, Scope 1 81,231 79,712 reduced CO emissions by 1,000 tonnes. 60,000 indicator: LA10) by means of reports bottle, we achieved 99% Scope 2 2 (corresponding GRI indicator: EN 26). monitoring near-accidents. 2009/2010 2010/2011 40,000 recyclability." 28,288 27,210 Work continues on the Year-on-year change in tonnes 20,000 ergonomics of packaging 5,550 404 4,470 3,340 3,180 Isabelle Dussous of CO emissions for the Group 0 lines as well as on prevention 2 employees in France R & D and Packaging (corresponding GRI indicator: EN16) campaigns centred on 2007/2008 2008/2009 2009/2010 2010/2011 trained in safety (property Development Manager 3 3 road safety. Water consumption (m ) Effluents (waste water) (m ) and people) (corresponding (Angers) Paper consumption (millions of sheets) GRI indicator: LA10) The maintenance staff in Reims have been trained Water and paper consumption The measurement of CO emissions Carbon emissions for Scopes 1 and 2 on new regulatory requirements in respect of electrical 2 (corresponding GRI indicator: EN8/EN21) for Scopes 1 and 2 (according to NF have fallen by 13% and 11% at Group hazards. The administrative staff have been trained on ISO 14064-1) has been verified by an level, representing a reduction of 500 The centralisation of printing stations contributed to a reduction how to reduce the risks of working in front of computers

independent expert. The required safety tonnes of CO2 in 2010/11. "Energy" in paper consumption from 5,000,000 sheets in 2007/2008 (RSI, eye strain, back pain). level was considered reasonable and the contributed savings of 300 tonnes to 3,180,000 sheets in 2010/2011. Frequency: 19.49 - Severity: 0.35

quantification methodology used was of CO2 this year. (corresponding GRI indicator: EN22) (corresponding GRI indicator: LA7) the ADEME Carbon Footprint, version 6.1.

30 Rémy Cointreau Annual Report 2010-2011 Rémy Cointreau Annual Report 2010-2011 31 Suppliers Sales and marketing ethics

CER commitment: Certification Monitoring through CER commitment: Ensuring responsible communication… to involve our suppliers of new suppliers: suppliers and partners: to support the international Promoting responsible communication and consumption is an essential part of in our corporate and towards greater fairness an objective approach development of our brands Rémy Cointreau’s CER policy commitment. Since 2004, the Group has adopted environmental commitments, by promoting responsible a code of ethics defining its fundamental principles. The Responsible Communication This year, the Group has begun To better prepare for its monitoring Committee (RCC), which brings together the legal, marketing, sales and advertising monitor their actual revising its CER charter by improving processes, Rémy Cointreau consumption and areas, then ensures the effective implementation of the Group’s principles. involvement and support the purchasing process, establishing has created a self-diagnostic implementing impeccable The RCC ensures that no marketing communication from Rémy Cointreau a “purchasing code of conduct” questionnaire that it has distributed or its brands is released unless it fully conforms to the principles set out in the Charter. them in their approach applicable to each employee. to all its suppliers. Audits are then marketing and sales ethics Regulatory developments and the emergence of advertising rating agencies to improvement. This document, finalised in late carried out to assess objectively in their principles and encourage us to be vigilant. That is why this year’s operating and monitoring 2010, reaffirms Rémy Cointreau’s the correct implementation of procedures have been updated to encourage increased awareness on the part commitment to the Global Compact their corporate and environmental transparency, relayed of the Company’s staff and partners. The Group’s commitments to social Charter. Principles are set out in commitments. The Purchasing by our distribution partners responsibility are dictated by those this code of conduct, establishing Department or an international … to encourage controlled consumption that the Group will only work with firm conducts these audits and an efficient Consumer linking it to the Global Compact. suppliers who comply with social in-house after an assessment Service Department. True to its ethical values, Rémy Cointreau promotes responsible drinking among Consequently, it is taking steps and environmental standards questionnaire or risk mapping its customers and partners. The quality of its products and the consequences and internationally recognised has been prepared. The audits of their consumption are the Group’s primary concerns. Rémy Cointreau is a member to ensure responsible development commercial practices. It also then result in certification or the of several organisations for alcohol research and analysis. Christian Lafage, with regard to its suppliers, who are addresses issues related to conflicts establishment of an action plan. the Group’s Sustainable Development Director, is currently Chairman of IREB of interest by outlining stricter rules (the French Institute for Scientific Research on Beverages). carrying out rigorous processes regarding fairness in the choice The Group’s CER policy also includes an educational element. The Group encourages to respect these commitments. of suppliers. its brands to promote consumption based on risk management. Breathalysers As Jean Claude Ferreira, Director are offered to consumers, even on tastings and production site tours. of Group Purchasing and Supply Developing rating activities to measure business Chain points out: "The aim of our CER performance and ensure a quality customer service approach is to make it co-operative, The process of evaluating business performance through distributors and participatory and integrated within subsidiaries was strengthened in 2010. New ratings criteria, such as order our purchasing policy.” In fact, management, were added to the evaluation model introduced by Customer Services in 2009. The result has been 90% coverage of the marketing process compared with the commitments of the Global 70% last year. This innovation enables us to better meet customer expectations. Compact Charter are set out in any This year, for example, the most significant initiatives focused on improving the quality of deliveries. new contract between a supplier and Rémy Cointreau.

"The relationship of trust that we have Research on alcoholism. Rémy Cointreau works with the French built up with our suppliers is a source Institute for Scientific Research on Beverages (IREB) of progress. It is long term and thus facilitates the management of our action IREB was created in 1971 by producers sociological and psychological. plans. This relationship evolves naturally and distributors of alcoholic beverages, Its operating principles are set out over time into a partnership. As a result, and contributes to researching the in a code of ethics guaranteeing the the rotation of our partners is low without consumption of alcohol through its own independence of its research and that compromising our ongoing search studies and the work it supports. It has of the scientific committee. Each year, for purchasing performance." an independent scientific committee, the scientific committee assigns, made up of eminent scientists, which independently and as part of a tender Jean-Claude Ferreira determines the major areas of research bid, research grants to teams studying Director of Group Purchasing in a wide variety of fields related to alcohol consumption. and Supply Chain alcohol consumption: medical, biological,

32 Rémy Cointreau Annual Report 2010-2011 Rémy Cointreau Annual Report 2010-2011 33 Human resources

CER commitment: Fairness Developing a socially to guarantee social of human resources responsible approach fairness and In an international environment, one The survey of psychosocial risk completed the personal of the major issues in human resource in Cognac last year will be extended to development management is to ensure social fairness. the Angers site. There was a high turnout Rémy Cointreau’s HR policy takes (70% of employees were interviewed) of all our employees, its international scope into account with the vast majority of them saying encourage their while adapting to local conditions. they were satisfied or very satisfied with their job conditions. According to There are well-defined principles adherence to the Jérôme Charpentier, the Human Resources common to all of the Group’s activities. Manager in Cognac: "The purpose of this Company’s business The first one is skills development process was to provide an opportunity for and training aimed at encouraging strategy and involve those who are happy at work to be heard." employees to grow, making them them in the Group’s the agents of their own progress. One of the areas of improvement identified socially responsible All managers receive a three-year by the survey was workers’ career skills development plan together development. Rémy Cointreau plans actions, within with an action plan. Secondly, the to expand the range of growth for those the framework compensation and benefits package who are most eager to advance. incorporates a comparative analysis Steps have also been taken in terms of Rémy Cointreau’s of local earnings. of diversity. For example, the Group has fundamental In terms of social dialogue, meetings encouraged actions that give disabled commitment to the with employee representatives workers the opportunity to develop. have continued. In respect of the In Cognac, 25 disabled workers were values of listening redundancies that affected Reims integrated; the legal minimum is 20. in April 2010, this dialogue has resulted and dialogue. Initiatives to promote diversity have also in a voluntary redundancy plan to be been undertaken, one of which is recruitment carried out over two simulation. Launched in Cognac in late years instead of the 2010, in partnership with Pôle Emploi restructuring plan for (Job Centre), this initiative is aimed at 40.4% 39 jobs that was initially those who have been out of work for a proposed. of employees are women long time, such as seniors and welfare (France) (corresponding recipients. This recruitment method, focusing GRI indicator: LA13 on ability, is based on a skills test followed by a teamwork aptitude test. This project involved 50 people who will be able to Leveraging training for development and success compete in the hiring for permanent positions. Rémy Cointreau has increased its efforts Training is a source of motivation within the Company. Rémy Cointreau has also intensified its efforts in respect to bring young people into the Company In Cognac, this represented 3.81% of the payroll (or of career development. The widely deployed "Passport through work/study 7,938 training hours) in 2010. These training activities Career Training" is one of the highlights of the year. programmes, by means have strengthened It was created in response to a legal requirement stating of either apprenticeships everyone’s ability that employees must receive concrete information on 4.28% or internships. The trainee to address their career paths. For Céline Bleher, Human Resources experience is outlined in a 2.209 million development Development Manager: "Training is just one aspect absenteeism in France charter that sets out clear issues in the that can be leveraged for development: changes or (corresponding GRI spent on improving work conditions rules on the programme’s Group. The developments in positions, tutelage, coaching or even indicator: LA7) duration, compensation Héraclès reading material are equally as important. In that respect, and tutelage. Work/study programme, begun in 2008 for packaging employees, we have created a new tool this year, ‘The Library for contracts account for between 3% and had an excellent attendance rate with 97% of staff Growth,’ accessible on the Company’s intranet.” 4% of the workforce. The aim of the completing the training programme. Other initiatives Available in English and French, the topics in this library programme is to see the trainees graduate have also been proposed: the “Mulot Project”, launched centre on “business and performance”, “business successfully. In Cognac this year, Jérôme in October 2010 with great success, provides workers excellence”, and “management and development”, Charpentier welcomed another 11 trainees, with computer skills. all of which are entirely consistent with the Company’s whereas none were recorded before 2007. commitments.

34 Rémy Cointreau Annual Report 2010-2011 Rémy Cointreau Annual Report 2010-2011 35 Stakeholders and Objectives sustainable regional development and action plans

CER commitment: Generating support for all stakeholders to respond to the needs To better support associations, and shared its experience. The

of stakeholders and share business clubs and professional Group does the same with requests resources, l our experience in the area organisations in their efforts, it receives from ethical funds. Rémy Cointreau regularly participates The Group continues to support of sustainable development in company visits, workshops and the Second Chance Foundation, seminars designed to present its emissions reduction plan reduction emissions

at a regional level where which assists people in unstable omains CER approach. 2 situations with realistic and Qualification HAVE for Cognac Cognac for HAVE Qualification D vineyard Cognac for awareness CER HAVE (collective distillers certification) products, ecologically-designed use and products of transport energy renewable of Annual carbon footprints (Scopes footprints carbon Annual 2) and 1 CO travel, business including natura of consumption suppliers for ratings CER and Audits environmental of Collection ecological to linked information products of design support and in Participate sustainable for structures working regional, a at development level international and national Validation of communication communication of Validation Responsible the by campaigns Co customer of Development Committee mmunication assessment satisfaction (France) charter UDA the of Signing linked activities of Development and training diversity, equality, to staff of development professional • • • • • • • Rémy Cointreau operates, • • • • In Cognac, for example, we have sustainable professional projects: with specific action for continued to support Revico’s skills training, together with the sustainable development activities, which produce green creation or takeover of companies. energy from recycled local wine- Since 2005, the Group has identified n at a local level. making by-products. We also 94 cases handled in Cognac, take part in the activities of local representing almost €110,000 of The quality approach adopted during associat ions: Altère Entreprises, funding granted by the foundation. the Club for Responsible The number of cases handled is tours of the Company was recognised this year when it was granted the “quality tourism” label. “The quality emissions reduction plan, including plan, reduction emissions 2 Promotion of responsible communication responsible of Promotion consumption and satisfaction” “customer of Development performance (marketing activities rating quality) service and Biodiversity conservation (forest plantations) (forest conservation Biodiversity protection crop of use in Reduction alternatives natural of Use products: Cognac for Training Environmental winemakers factors) stress of CER on activities associate for Support Club, Carbone Loire de Pays themes: Altère Club, Managers’ France Western (Poitou-Charentes organisation Entreprises region) Foundation Chance Second the for Support Cointreau the for label Tourisme Qualité Angers at site Carbon Footprint for France (Scopes 1 & 2) & 1 (Scopes France for Footprint Carbon CO ecologically- energy, travel, business of reduction and products designed packaging training staff and initiatives Awareness natural of consumption in (reduction safety) and prevention resources, conduct of code purchasing of Update self-diagnosis CER a of Creation fo schedule auditors (internal suppliers for audits CER firm) audit external or plan development performance Employee (evaluation assessment risk Psychosocial identificatio and work at well-being of “Diversity” newsletter Company passport training” “career the of Creation library development and tourism certification is very difficult suppliers r • • • • • • • • • • • • • • • • • • to obtain because of its very high standards. What makes us particularly proud is that this label, awarded by the Ministry of Tourism, is very much sought-after by professionals. We talk Awareness-building activities Awareness-building winemakers Cognac for protection Biodiversity: bees of ISO 22000 certification certification 22000 ISO site Reims the of eco-evaluation Product eco-design and lighter a of Introduction bottle champagne Angers in plan Energy Cognac and Validate communication Validate the by campaigns Communication Responsible Committee Survey “measure to satisfaction” customer of awareness the Raise theatre through employees productions savings Group Invest SRIs in plans Select the new CER audit CER new the Select practice progress monitor and Audit plans suppliers key of rating CER with some insight about the quantities Entreprises Altère Support establishing in Participate France Western of Club a Executives Chance Second the Support Foundation • • • • • • • • • • • • • • • • to be consumed , especially during the tasting, where we encourage Executives in Western France, constantly increasing: 33 cas es responsible consumption. In this way, and the Carbon Club Pays de Loire. in 2010 compared with 15 in 2009. Rémy Cointreau contributes to The Group continues its initiatives This sharing of experience is in several schools and training public awareness.” not limited to companies and centres in the west of France. organisations. Rémy Cointreau Corinne Lava Rémy Cointreau also collaborates has long been committed to

Heritage & Special Events Manager with working groups for sustainable quality and certification processes, effects environmental the Road map the follow up of paper of up follow the map Road consumption measure to software Implement packaging of teams Development Product Train Retain the “Integrated Agriculture” “Integrated the Retain Cognac in certification Integrated in training Organise Agriculture campaigns communication Validate Communication Responsible the by Committee and Charter CER the Distribute eco-steps for support dedicated Chance Second the Support Foundation network schools ETIC the Support participation Poitou-Charentes: in development sustainable a in campaign building awareness theatre through Identify key suppliers key Identify detection rapid a use and Create risks of chart plans progress monitor and Audit Sign the agreement on diversity diversity on agreement the Sign publication internal an issue and subject the on • • • • • • • • • development, hosted by various especially with the Carré Cointreau. • • • • professional organisations such This brand showcase is a guided as the National Inter-professional exploration of the history of the Office of Cognac (BNIC) and eponymous liqueur, open to both the Colbert Committee. This VIPs and the general public. ho lders collaborative approach led the The Group’s commitments to CER toring Group to respond to queries from are presented on this occasion. audits and emissions international organisations seeking 2 improvements in the area of Encourage career career Encourage development economic, sales, the Develop luxury and financial goods Group the of culture professionalism Develop stake Integrate Carbon testing and reduction and testing Carbon CO in CER rating of suppliers of rating CER moni CER responsible Implement accordance in consumption, Charter the with stakeholders of Integration Reduction in consumption in Reduction (energy, resources natural of cardboard): paper, water, products of Eco-design Retain the “Integrated “Integrated the Retain in certification Agriculture” winemaking Cognac the for certification and domain domain Reims the sustainable development. This Objectives2008-2009 in 2009-2010 in 2010-2011 in Objectives Plan year the focus is on managing the carbon footprint. Within the framework of the Carbon Disclosure Project 2010, Rémy Cointreau has, of course, responded to their request Themes 2008-2011taken Action taken Action taken Action CER 2013 Winemaking Quality, the and safety environment and Suppliers responsible purchasing and Sales marketing ethics Human resources Stakeholders regional and sustainable development

36 Rémy Cointreau Annual Report 2010-2011 Rémy Cointreau Annual Report 2010-2011 37 Corporate Governance Board of Directors and Management

Board of Directors Executive Committee

Mr. Pierre Cointreau Mr. Jean-Marie Laborde Honorary Chairman Chief Executive Officer

Mrs. Dominique Hériard Dubreuil Mr. Jean-François Boueil Chairman Human Resources Senior Vice President Mr. Marc Hériard Dubreuil Mr. Damien Lafaurie Sir Brian Ivory Executive Vice President Global Markets Mr. Jean Burelle* Mr. Jacques Etienne de T’Serclaes* Mr. Christian Liabastre Mr. Gabriel Hawawini* Executive Vice President Brands, Mr. Timothy Jones Strategy and Development Mr. Patrick Thomas* Mr. Didier Alix* Mr. Patrick Marchand Mrs. Caroline Bois** Operations Senior Vice President Mrs. Laure Hériard Dubreuil** Mr. Frédéric Pflanz Chief Financial Officer

Committees Statutory Auditors

Each committee comprises at least one Ernst & Young & Autres independent director. Represented by Mrs. Marie-Laure Delarue Audit and Finance Committee Auditeurs & Conseils Associés Chaired by Mr. Jacques-Etienne de T’Serclaes Represented by Mr. Olivier Juramie Nomination and Remuneration Committee Chaired by Sir Brian Ivory Development and Marketing Strategy Committee Chaired by Mrs. Dominique Hériard Dubreuil

* Independent Director ** Pending their appointment at the Annual General Meeting on 26 July 2011

38 Rémy Cointreau Annual Report 2010-2011 Rémy Cointreau Annual Report 2010-2011 39 Stock Market and Shareholders Share performance

Rémy Cointreau’s share performance: up 48.7%

In a stock market and economic environment that remains uncertain, Rémy Cointreau’s shares performed very well, recording growth of 48.7% in 2010. Rémy Cointreau’s share price ended the 2010 calendar year at €52.95. At 31 March 2011, the end of the Company’s financial year, the share price was €53.14. At that date, Rémy Cointreau’s market capitalisation was €2,617.502 million. The number of shares in issue at 31 March 2011 was 49,256,716. Rémy Cointreau’s share price performance from 1 June 2010 to 30 June 2011 (in €): 56 54 52 50 48 46 44 42 40 06 07 08 09 10 11 12 01 02 03 04 05 06 2010 2011

Shareholder information Share information

The Financial Communications department is Market: Euronext Paris responsible for the Group’s information policy ISIN Code: FR0000130395 in respect of the financial community, investors Reuters Code: RCOP-PA and shareholders. The department is available to Bloomberg Code: RCO FP respond to any enquiries regarding the Group. Indices: CAC MID100 The e-mail address is: [email protected] All regulatory information required by the AMF Change in dividend is directly available at the following dedicated address: www.remy-cointreau.com At 31 March 2010 2009 2008 Net dividend The Privilège Club is open to all individual per share (€) 1.30 1.30 1.30 shareholders who are particularly interested in the Group. The Club enables members to familiarise Total number themselves with the Group, its operations and its of shares 48,440,001 47,113,389 46,792,120 brands, particularly by providing special offers on certain products. The Club also offers members a VIP welcome at the various production sites that are open to the public, such as Angers and 2011 Shareholders’ Calendar Cognac in France. 21 July Q1 turnover For further information: (April - June 2011) E-mail: [email protected] Tel: +33 (0)1 44 13 45 15 26 July Annual General Meeting Websites: www.remy-cointreau.fr in Cognac and www.remy-cointreau.com 20 October H1 turnover (April - September 2011) 29 November Interim results (at 30 September 2011)

40 Rémy Cointreau Annual Report 2010-2011 Rémy Cointreau Annual Report 2010-2011 41 Financial Statements Statement of Financial Position Consolidated income statement

(At 31 March, in € millions) 2011 2010 2009 (At 31 March, in € millions) 2011 2010 2009

Brands and other intangible assets 447.1 629.9 629.8 Turnover 907.8 807.6 710.4 Property, plant and equipment 141.0 208.6 197.0 Cost of sales (389.5) (361.7) (337.2) Investments in associates 64.9 64.3 62.1 Gross profit 518.3 445.9 373.2 Other financial assets 10.9 71.2 61.1 Distribution costs (284.4) (238.8) (185.2) Deferred tax assets 30.3 27.1 22.4 Administrative expenses (72.8) (70.3) (68.3) Non-current assets 694.2 1,001.1 972.4 Other income from operations 5.9 5.2 4.3 Inventories 699.2 969.8 958.4 Current operating profit 167.0 142.0 124.0 Trade and other receivables 213.6 248.1 282.1 Other operating income/(expenses) (46.5) (2.2) 11.3 Income tax receivables 1.6 8.3 6.0 Operating profit 120.5 139.8 135.3 Derivative financial instruments 16.4 3.2 10.8 Cash and cash equivalents 80.6 86.3 89.4 Finance costs (27.3) (22.0) (16.7) Assets held for sale 485.3 - 0.2 Other financial income/(expenses) (2.4) 2.7 (6.0) Current assets 1,496.7 1,315.7 1,346.9 Financial result (29.7) (19.3) (22.7) Total assets 2,190.9 2,316.8 2,319.3 Profit before tax 90.8 120.5 112.6

Share capital 79.1 77.6 75.8 Income tax (21.7) (32.5) (34.6) Share premium 735.7 708.2 685.5 Share in profits of associates 4.3 4.9 3.0 Treasury shares (0.6) (0.4) (2.3) Profit from continuing operations 73.4 92.9 81.0 Consolidated reserves 177.9 151.5 127.1 Profit/(loss) from discontinued operations (2.8) (3.9) 5.1 Net profit attributable to owners of the parent company 70.6 86.3 86.1 Net profit for the year 70.6 89.0 86.1 Translation reserve (7.7) (0.2) (0.5) Attributable to: non-controlling interests 0.1 2.7 - Profit/(loss) recorded in equity 7.9 (5.4) (1.0) owners of the parent company 70.5 86.3 86.1 Equity - attributable to owners of the parent company 1,062.9 1,017.6 970.7 Non-controlling interests 0.9 0.9 (1.8) Net earnings per share - from continuing operations (€) Equity 1,063.8 1,018.5 968.9 - basic 1.50 1.94 1.73 Long-term financial debt 377.7 537.7 592.4 - diluted 1.49 1.93 1.72 Provision for employee benefits 20.5 23.8 18.7 Net earnings per share - attributable to owners of the parent company ( ) Long-term provisions for liabilities and charges 6.5 5.1 12.4 € - basic 1.44 1.80 1.84 Deferred tax liabilities 121.8 199.8 199.4 - diluted 1.43 1.79 1.83 Non-current liabilities 526.5 766.4 822.9 Number of shares used for the calculation Short-term financial debt and accrued interest 31.8 50.0 28.9 - basic 48,991,452 47,989,124 46,877,143 Trade and other payables 406.6 439.3 452.9 - diluted 49,248,856 48,191,494 47,113,389 Income tax payables 39.2 11.9 32.9 Short-term provisions for liabilities and charges 9.5 19.8 5.9 Derivative financial instruments 4.5 10.9 6.9 Liabilities held for sale 109.0 - - Current liabilities 600.6 531.9 527.5 Total equity and liabilities 2,190.9 2,316.8 2,319.3

42 Rémy Cointreau Annual Report 2010-2011 Rémy Cointreau Annual Report 2010-2011 43 Outlook and Comments

Rémy Cointreau’s turnover for the year ended Operating profit was €120.5 million after taking 31 March 2011 increased by 12.4% (up 6.4% into account other operating expenses, which organically), with a 17.6% growth in current primarily included the €33.5 million after tax operating profit to €167 million* (up 8% organically), impairment charge on the Metaxa brand. underlining an improved operating profit margin Net financial expenses amounted to €29.7 million, of 18.4%, compared with 17.6% the previous year, including €3.7 million in expenses related to the despite an increase in marketing investment during refinancing of the Group’s debt at the start of the year. the year, under very favourable terms, to defer its Excluding the reclassification of the Champagne maturity until 2016, including a private placement division, operating profit would have grown by of €140 million and a bond issue of €205 million. 21.6% in published data and 11.2% organically, The income tax charge was €21.7 million, reflecting the very strong performance of the which was an effective tax rate of 24%, compared Group’s operations worldwide. with 27% in 2010. The share in profit of associates Net profit, excluding non-recurring items was €4.3 million, originating primarily from Dynasty. (principally the impairment of the Metaxa brand) The Group’s share of net profit, excluding was €107.5 million, an increase of 16.7% compared non-recurring items, was €107.5 million, an with the previous year. increase of 16.7% compared with the previous year. The Group’s net debt was €328.9 million at the The Group’s share of net profit was €70.5 million year-end compared with €501.4 million in 2010, after the provision recognised in relation to the a decline of 34%. The net debt/EBITDA ratio Metaxa brand. was 2.19. Net financial debt was €328.9 million, a significant decrease of €172.5 million. The 2010/11 financial year was marked by: Shareholders’ equity was €1,063.8 million, • A substantial increase in Group an increase of €45.3 million compared with the operating profit previous financial year. Strong sales growth, combined with a significant An ordinary cash dividend of €1.30 and an improvement in the Group’s gross profit margin, extraordinary cash dividend of €1 will be put resulted in a 17.6% increase in current operating to a shareholders’ vote at the General Meeting profit. to be held on 26 July 2011. • The disposal of the Champagne division, concluded after the year-end Outlook On 31 May 2011, the Group signed an Rémy Cointreau remains strongly attached to its agreement with EPI for the disposal of the long-term value strategy. Champagne division. Rémy Cointreau will continue as sole distributor of the Piper-Heidsieck, The disposal of the Champagne division is fully Charles Heidsieck and Piper Sonoma brands. consistent with the development of this strategy RÉMY COINTREAU This division is now classified within Partner brands. and, in particular, will fund accelerated growth in major current markets as well as in markets with 21 boulevard Haussmann 75009 Paris • Debt restructured under favourable terms, strong potential for future growth. The Group will with an extended maturity profile, and in Telephone +33 1 44 13 44 13 also look closely at other growth opportunities marked decline should they present themselves. The French version of this document is available Turnover was €907.8 million, an increase An ambitious strategy focused on high value- on request or via the remy-cointreau.com website of 12.4% (6.4% organic). added products, supported by a strong policy Photo credits: Rémy Cointreau, Thomas Gogny and Alexis Blondel of product innovation and served by an efficient Design and production: Agence Marc Praquin Current operating profit was €167.0 million, distribution network, will provide the Group with which represented organic growth of 17.6% the necessary resources to ensure steady, (up 8% organically), whereas the operating margin profitable growth. grew strongly to 18.4% compared with the previous year. This performance was primarily achieved thanks to a robust improvement in gross profit and in spite of increased advertising and marketing PEFC/10-31-2043 investment. The organic operating margin for Group This document is printed on 100% recyclable and biodegradable coated paper, brands was 25.9%. manufactured from ECF (Elemental Chlorine Free) bleached pulp in a European factory is certified ISO 9001 (for its quality management), ISO 14001 (for its environmental management), CoC PEFC (for the use of paper from sustainably managed forests) and is EMAS-accredited (for its environmental performance).

44 Rémy Cointreau Annual Report 2010-2011 WWW.REMY-COINTREAU.COM