BNPP Exane View
All elements of the organic outlook remain unchanged (for FY25, FY26 and the FY30 margin targets). From a depletions perspective the update is mixed. On the positive side, US Cognac value depletions have sequentially improved (-HSD in Q4 from -mid-teens in Q3) and US wholesaler inventors are now close to 4 months. On the negative side China Cognac value depletions appear to have significantly weakened from mid-Feb driving a -HSD decline (ex. calendar effects) in Q4. As to the shares, we find them very tough to call, we expect a broadly neutral reaction.
Q425: Headline metrics
. Group LFL: -19.0% (co. cons: -18.2%)
. Group sales: EUR196.8m (in-line vs. co. cons.)
. Remy Martin LFL: -32.8% (co. cons: -30.6%)
. Liqueurs and Spirits LFL: +16.1% (co. cons: +11.6%)
Top-line drivers
Scanning the top-line trends by division, the modest Q425 organic sales miss was driven by Cognac (-32.8% vs. co. cons. -30.6%), led by a steep decline in China offsetting sales growth in the us, partially offset by better-than-expected growth from the Liqueurs and Spirits division (+16.1% vs. co. cons. +11.6%), supported by strong growth in the US.
Bottom-line drivers
N/A - only a sales update.
Other metrics
. FY25 Group LFL: vols -11.8%, price / mix -6.3%;
. FY25 Cognac LFL: vols -15.6%, price / mix -6.3%;
. FY25 LandS LFL: vols -9.0%, price / mix -0.6%;
. FY25 value depletions: US down mid-teens YoY (vols -HSD%); China down c.-10% vs. flat at the end of Dec following significant growth depletions in December for CNY (amplified by calendar effect), trends reversed sharply from mid-February onwards; EMEA down HSD%.
. US Cognac: Remy Martin US volume depletions declined -2.3% in Q4 (cf. Q3 -11.5%, Q2 -11.9%, Q1 -32.3%) and were below Q420 by -38.9% (cf. Q3 -34.3%, Q2 -42.8%, Q1 -27.4%). Value depletions declined by -HSD in Q4 (cf. -mid-teens in Q3), narrowing the gap with peers (VSOP flat vols). Control states outperformed while open states were more volatile with...
