Rémy Cointreau: Margin Decline, Dividend Halved in 2025-26
Rémy Cointreau announced its 2025-26 results on Thursday, meeting its revenue targets with an organic growth of 0.2%. However, profitability significantly weakened: operating margin fell organically by 2.6 points to 17.7%, while the debt-to-EBITDA ratio rose to 3.22x from 2.40x a year earlier. The group is now focusing on an ambitious transformation (RC Forward) to generate €100 million in value by 2028-29, but acknowledges limited visibility for 2026-27.
Stagnant Sales, Operating Margin Down by 260 Basis Points
Rémy Cointreau recorded revenues of €935.3 million, down 5.0% in reported terms but up 0.2% organically (i.e., excluding currency effects). This halt in organic growth masks contrasting dynamics by division. The cognac, core of the group, floundered with an organic decline of 0.5% despite a volume increase of 7.8%, crushed by a price mix decline of 8.3%. The Liqueurs and Spirits division, on the other hand, accelerated by 2.8% organically, driven by Cointreau, The Botanist, and Bruichladdich. The current operating income was set at €165.4 million, down organically by 11.5%: the margin eroded by 2.6 points to 17.7%. The three pressures are visible. First, the gross margin fell organically by 3.7 points (to 65.8%), a consequence of additional customs duties, pressure on the price mix, and rising production costs. Next, marketing expenses remained at 19.7% of sales despite efforts to control them (a decrease of 0.7 point). Finally, general expenses decreased by 0.4 point, but this lever is exhausting.
Increased Debt, Sudden Cash Conversion Improvement
The balance sheet position has tightened. Net debt increased by €15 million to €690.4 million, bringing the debt/EBITDA ratio to 3.22x, an increase of 0.82x in one year. This deterioration reflects a compression of EBITDA (€211.6 million versus €267.8 million), partially offset by an improvement in free cash flow which was established at €53.8 million compared to €19.2 million the previous year. This rebound stems from a marked optimization of working capital needs, particularly aging spirit stocks, and a decrease in investments. The cash conversion (Free Cash Flow/EBITDA) increased from 10% to 27%, a mechanical progress that does not mask the erosion of the EBITDA base itself. The net result plummeted by 35.1% in reported terms to €78.7 million, with an EPS of €1.51 (against €2.36 a year before). Organically, the decline is less severe (21.1%), but remains substantial. The group recommends a dividend of €0.75 per share (including €0.50 in cash and €0.25 payable in cash or shares), down 50% from the €1.50 of the previous fiscal year.
RC Forward: €100 Million in Value Creation Over Three Years
Faced with a 'persistently complex' macroeconomic and geopolitical environment, Rémy Cointreau announced on Thursday RC Forward, a three-year transformation plan aimed at generating approximately €100 million in additional operational value by 2028-29. This plan includes three components: growth initiatives (reinvigoration of cognac, acceleration of non-cognac brands, expansion of Travel Retail, and breakthrough innovation for Rémy Martin in the United States in Q1 2027-28), an improvement in commercial execution (optimization of distribution networks, Revenue Growth Management program), and a strengthening of the business model (centralization of purchasing, internal reorganization). For 2026-27, the management anticipates a return to organic sales growth and a slight improvement in operating margin, without however unveiling specific targets. Rémy Cointreau now aims to maintain a debt/EBITDA ratio under 3.5x by March 2027, and medium-term objectives will be presented in November 2026.
