annual report i - rémy cointreau · old vineyards and the aroma of the eaux-de-vie; that which...

ANNUAL REPORT2011 I 2012

ContentsChairman and Chief Executive’s Statement

StrategyDistribution

The House of Rémy MartinLiqueurs and Spirits

Corporate and environmental responsibilityCorporate governance

Finance

246

1018263840

Bernadette LanglaisCointreau Master Distiller

1Rémy Cointreau Annual Report 2011-2012

We seeknothing butPerfection.

€1.026billion turnover

+13.0%

20.2%operating profit margin

1,560employees

€207.7million current operating profit

+24.4%

€110.8million net profit Group share

+57.2%

2 Rémy Cointreau Annual Report 2011-2012

Validity ofupmarket positioning

Dominique Hériard DubreuilChairman

Jean-Marie LabordeChief Executive Officer

Last year was an excellent financial yearconfirming the course of action followedfor many years: that of a long-term valuestrategy, by focusing our brands on upmarket segments, a motivateddistribution network and innovationinspired by an in-depth knowledge of our markets. The results are evident.Rémy Cointreau achieved consolidatedsales of €1.026.1 billion, an increase of 13%, and a 24.4% growth in operatingprofit. These performances are a repeat,albeit of a greater magnitude, of thoserecorded in the two previous years.

Maintaining the spirit of a

challengerChairman and Chief Executive’s Statement


Geographicbalance

Understandingthe passage of time

The results are evident and, combinedwith a debt reduction policy and a sharebuyback programme, they haveenhanced our options and enable us toplan for an even more ambitious future.New markets are opening up to us. Weare also monitoring acquisition

opportunities, as we deem appropriate.We will not, however, compromise onquality. Our roots as winemakerscontinually remind us that we are stillcraftsmen who must understand therelentless passage of time: that whichshapes the authenticity of the centuries-old vineyards and the aroma of theeaux-de-vie; that which allows our cellarmasters, with their collective expertise,to create the most valuable blends andthat which is also needed to graduallyteach those who love our products toappreciate their subtlety. Time is ourgreatest ally. In the search for perfection,it forces us to be vigilant at all times andto remain constantly alert. Particularly inour most glorious moments, we mustmaintain the spirit of a challenger.

In Asia, America and also in Europewhere the economic climate differedfrom one market to another, our brandshave seen solid growth. At the forefrontof buoyant markets, Asia continues tobe a growth driver. The appetite thatChinese consumers have shown forupmarket and premiumcognacs explains the successof Rémy Martin FinesChampagnes and Louis XIIIGrande Champagne, whichrepresent a significant portionof sales in this country. Similarly,Vietnam, Indonesia and othercountries in South-East Asiaare emerging as significant newsources of growth in which wewill continue to invest. TheJapanese market remaineddifficult; however, we regardthis as a strategic market andwe will be persistent inmaintaining a presence there.

One of the highlights of the year was the US market’ssubstantial recovery, paving the way for a very optimistic outlook forgrowth, for the performance of ourliqueurs and for the success of one ofour bold creations, Rémy Martin V,which should benefit from the Americanpeople’s appetite for novel flavours incocktails. Another point of greatsatisfaction was the continued stronggrowth in Travel Retail and theremarkable increase in sales in Russia:this market is breaking all records,boosted by the younger generation’staste for luxury products.

Alongside cognac, which makes up 60%of sales, our liqueurs and spirits haveenjoyed renewed momentum: Cointreauand Cointreau Black, launched recentlyin North and South America, MountGay Rum, the rum of choice foryachtsmen, Metaxa in Central Europeancountries, etc. Again, this momentumwas achieved by means of an aggressivestrategy of moving our productsupmarket and the vitality of our brandsin the field.


2011 was a remarkable year in view ofthe number of records broken and wecan now reap the rewards of thedecisive choices made in previousyears: to refocus the brand portfolio ona limited number of leading brands, orpotential leaders in their respectivemarkets; control over the distributionnetwork which is now 85%-owned;major investment to stimulate the on-trade and duty-free markets andpriority for upmarket innovation. Allthis was achieved whilst remaining oncourse in the search for perfection. Inthe same manner as the results whichhave been achieved, the emergingoutlook unequivocally demonstratesthat the search for perfection is themost promising of strategies.

Christian LiabastreExecutive Vice President Brands Strategy and Development

The search for perfection

Strategy


The recovery in the US, the boom inAsia, and the growth in Europe, despitean uncertain economic climate, has meantthat all the brands in RémyCointreau’smarkets recorded growth, at timesremarkable. The figures demonstratethe validity of consistently pursuingan upmarket strategy, bothupstream and downst ream: thenobility of ingre dients whichRémy Martin is determinedshould remain the symbol ofFine Champagne;the selectionof orange peel which underliesthe aromatic intensity ofCointreau; loyalty to the Muscatgrapes of the Aegean Seaislands which spark Metaxa’sbouquet; the unequalledcraftsmanship of the cellarmasters and the determinationof the teams who, step-by-step,introduce prescribers to thesubtle complexity of Louis XIIIin the world’s most prestigiousvenues and a relentless searchfor pride of place in every bar.

Nothing is left to chance in the search for superiority based on whichRémy Cointreau determines its course. This explains the remarkableposition of Rémy Martin VSOP in the Chinese market, Cointreau’sstrength of character in the US, St-Rémy’sleadership in countries favouringbrandy, the ground gained by MountGay Rums in new regions, etc. Theextensive innovation implementedthroughout the year was all in the nameof this superiority: the launch ofRémy Martin Centaure, the deploymentof Rémy Martin V, the move upmarketfor Metaxa with Metaxa 12 Stars and theaggressive strategy for St-Rémy Cream.

The epitome of this search forinnovation through perfection wasclearly expressed at the ceremony whichaccompanied the emergence of the firstLouis XIII Jeroboams: this was a superbtribute to the generations that haveprotected the heritage of eaux-de-vie,which are unique throughout the world.

Rémy Cointreau’s strength, representedby its brands, is its ability to reinventitself whilst retaining the patiencerequired for the eaux-de-vie ageingprocess. Hence the importance of theRémy Cointreau Brand Academy. Thisinternal mobile university has been

established to share this culture ofperfection, embodied by the cellarmasters and master distillers. All 1,560employees who are part of branddevelopment can embrace the values onwhich their success is based. Thenumber of sessions increased rapidly in2011, with high demand from our teamsthroughout the world.

At the edge of China, all the youngdragons of South-East Asia are marketswith strong purchasing power forcognac. Cointreau has its eye on India aswell as Japan. Russia has proved to be agrowth driver for all luxury brands, ashas Brazil, South Africa and Australia.Each of these markets naturally requiresa specific approach and awareness,however “nothing but perfection”,Rémy Cointreau’s new signature, willremain the common inspiration.

Tradition andinnovation

The strength of our values


Orchestrating thecall of desire

Perfectly in tune with Rémy Cointreau’supmarket strategy, the distributionnetwork performed extremely well in itscontribution to managing the exposureof Group brands and their premium andultra-premium positioning. Bolstered bynew talent, this structure allowed for astrong acceleration in sales in Asia, theGroup’s No. 1 market, and considerablystrengthened its position in all keymarkets. The deployment of specialisedultra-premium teams contributed toconsolidating the dominance ofLouis XIII in all major countries and tobuilding its reputation in the most elitecircles of Brazil and India. Meanwhile,the drive to innovate has meant that thedistribution network has been calledupon to launch several new creationssuch as Cointreau Noir in the US, Mount Gay Black in the Caribbean,Rémy Martin Centaure in China andMetaxa 12 Stars in Europe.

Distribution

This has been an excellent year for theGroup. The figures highlight thevalidity of our upmarket positioningand the excellence of our distributionnetwork. Also, we are reaping therewards of our investment in the salesforce, either by strengthening ourpresence in strategic, mature oremerging markets or recruitingspecialised competencies. Never hassuch imagination been put into thepromotion of our brands.

Damien Lafaurie Executive Vice President Global Markets


Rémy Cointreau has had another recordyear in Asia. At the pinnacle of thissuccess is China, where the growth ofultra-premium cognacs from the Houseof Rémy Martin has gained momentum.Systematic investment in the on-trade,both modern and traditional, proved

particularly astute. The Group’s brandsare now essential to the most renownedestablishments in the 70 largest cities in China. In trendy bars, Graffiti Partiesorganised to attract young affluenturban people have strengthened theaffinity with prestigious names.

A spectacular performance was alsoregistered in South-East Asia. Not onlyis the dominance of Louis XIII nowfirmly rooted, but the entire rangerecorded growth. In India, where theGroup now has a subsidiary, in Vietnamand, more recently, in Indonesia, ourportfolio of brands appeals to ageneration of new entrepreneurs seekingpoints of reference. Japan remains amarket in transition where RémyCointreauhas established its own distributionstructure and consolidated the foundationswhich will enable it to leverage itspresence when the market recovers.

Asia-Pacific, unequalledgrowth

Far from abandoning the US marketduring the crisis, the Group invested inthis market in anticipation of a recovery.The decision to maintain premiumpositioning in the US proved to be theright one. The upmarket segment hasweathered the economic downturnmuch better than cheaper spirits. The recovery was clear from 2011onwards and all Rémy Cointreau brandshave fully benefited from it. Numerousmobile consumer educationalprogrammes have been deployed,contributing to a better appreciation ofthe excellence of Rémy Martin cognacs.Cointreau continued to develop funevents, introducing people to the manyways in which this liqueur can be usedin preparing cocktails.

In emerging markets, such as Mexico, a major increase in prices did notprevent Rémy Martin’s strongperformance, particularly for VSOPcognac. Cointreau continued itsoutstanding growth in Brazil.

The Americas, a developmenttaking full advan-tage of recovery


With teams mobilised and motivated inall key countries in Europe, the Groupachieved the feat of recording growthdespite an economic climate which didnothing to boost consumer confidence,particularly in Southern Europe. InRussia, the combination of our resourceswith those of our exclusive distributorsuccessfully supported the entire portfolioof brands, in particular RémyMartin andMetaxa. Metaxa honourably withstoodthe tumult that shook Greece by makingthe most of its roots. It also stood out inthe Czech Republic and in Slovakia withgood off-trade results. In the UK andGermany, the Group achievedoutstanding double-digit growth formost of its brands. Louis XIII’s profilewas raised in the most exclusive areas of London, promoting its splendour,and Cœur de Cognac proved to be the undisputed leader in its category.

Europe, profitablemarkets in theWest and Russia

For Rémy Cointreau, the Travel Retailmarket fulfils two strategic objectives, byproviding exposure to its brands inareas frequented by affluent people andthrough the remarkable growth in itscontribution to sales. This year, thebrands recorded strong growth in thismarket, an encouraging sign of aneconomic recovery and the result of thesynergies developed by the teamsbetween duty-free points of sale anddomestic markets. Whilst all the luxurybrands seek the most prominent spotsin upmarket airports, Rémy Cointreauhas managed to strengthen its presencein the world’s most coveted windows.Louis XIII has succeeded in recreating a world apart around the majesticdecanter, evoking magnificence andexception. Duty-free shops are anirreplaceable window for luxury brandsand, once again this year, have proven to be the ideal area for testing andlaunching new products.

Global TravelRetail, the windowson the world


Amongst the brands for whichRémyCointreau manages distribution,two names are particularly familiar:Piper-Heidsieck and CharlesHeidsieckchampagnes, now owned by the EPIGroup. The transition has beencompleted in the best possible mannerand the Rémy Cointreau teams arepleased to continue to provide these twogreat brands with their expertise.

In the US, the teams have strengthenedthe leadership of The Macallan Scotchwhisky, a prestigious single malt, andsuccessfully repositioned Brugal rum.Finally, we should highlight theexceptional results from the listing inTravel Retail of Russian Standard vodka,one of the flagship brands in Russia, forwhich we have great aspirations andwhich is now available everywhere induty-free.

Major name partnerships37.8%

Asia-Pacific

31.3%Americas

30.9%Europe/Middle-East and Africa

Sales by region


The House of Rémy Martin

€592.5million turnover

+21.9%€173.0million current operating profit

+23.1%29.2%operating profit margin

The pursuit of excellenceas a driver ofstrong growth



For the third consecutive year, theHouse of Rémy Martin has achieved aremarkable performance with strongincreases in sales and profits in allgeographic regions. This growth hasbeen coupled with a continuedincrease in the appeal of itsRémy Martin and Louis XIII brandsamong consumers throughout theworld, whose desire for excellence,luxury and rarity continues to grow.Everywhere, the House of Rémy Martinhas accelerated the development of itswonderful Petite and GrandeChampagne eaux-de-vie, whichguarantee the superiority of itscognacs. Through its upmarket andinnovative strategy, the House ofRémy Martin is in a good position tocontinue to grow in value and seizeevery opportunity for development inthe coming years, capitalising on theexceptional refinement of its productsand their ability to appeal to newgenerations of consumers.

Patrick PianaCEO of the House of Rémy Martin

The saga unfolds

Several factors combined to explain thisincreased momentum: firstly, acontinued strategy of moving upmarketand sustained price increases on everycontinent. This strategy has helpedpromote the exceptional quality of thevarious eaux-de-vie from whichRémy Martin cognacs are made. Wehave had a succession of successfulinnovative projects, with the aim ofadjusting the range of flavours to adaptas closely as possible to changing tastesand consumption patterns, whilstmaintaining a regular dialogue with ourtarget consumers. Finally, the activationof our brands, supported by significantmarketing and commercial investment,contributed to enhancing recruitmentand to ensuring the retention ofconsumers worldwide.

The dynamism of the House ofRémy Martin has been remarkablyvisible on the three most buoyantcontinents. Asia is still at the forefront of the major markets contributing togrowth: not only China, but also thecountries of South-East Asia, where the taste for upmarket cognacscontinues to grow. The success of 1898and Rémy Martin Club is obvious proofof this.

Another major market that experiencedrenewed vitality during the year was theUS market. All the premium productsfrom the House of Rémy Martin recordedgrowth in that market. Rémy Martin 1738Accord Royal stood out, in particular,with an excellent performance, provingconsumers’ appeal for high qualitycognacs. In a very different style, theclear bottle of Rémy Martin V is nowdisplayed in a growing number of barswith the aim of competing with otherpremium white spirits in making cocktails.


No.1Fine Champagne Cognac

A meeting and a symbolNearly 1,000 winemakers, all members of the Fine Champagne Alliance,met in the House of Rémy Martin in July 2011 for a comprehensive reviewof activities and ongoing projects. Discussions focused on the consistentquality of supply and cooperation between the Alliance and Rémy Martin.This partnership with the Petite and Grande Champagne winemakersenables the Cellar Master to further her search for quality and perfection innew blends, by focusing exclusively on the two most prestigious vineyardsof the Appellation Region.


In Europe, despite the austeritymeasures introduced in southerncountries, performances have been verysatisfactory. Cœur de Cognac continueson a trend of double-digit growth,notably in Germany and the UK, wherelovers of full-bodied and fruity cognacs,served over ice, are on the rise. Russiaremains a market whose vitality fullyjustified the investment in the firsttelevised campaign.

Beyond national borders, the TravelRetail market confirmed its importanceand the strategy of moving upmarketcontinues to be implemented. RémyMartin is working to create dedicated,promotional areas offering travellersmagnificent displays and a uniqueexperience.

Rémy Martin VSOP Fine Champagnecontinued to increase in value andvolume thanks to its ability to innovate,through daring and dynamic limitededitions and also through continuouslyupdated displays in sales outlets, andon-trade premises. Thus, in the US, in2011, Rémy Martin VSOP increased itsexposure and desirability at nightthrough Ring Leader, a programme thataims to identify and celebrate the mostcharismatic personalities, in line withRémy Martin VSOP’s image, where they can win and spend an eveningliving as a star.

In Vietnam, thousands of consumerstook part in the Centaur Dance Programthrough social networks, night clubevents and on television. At the end of2011, the Urban Lights limited editionfrom Rémy Martin VSOP celebrated thenight and its unique energy in majorcities throughout the world.


Marked by both traditional and moderntastes, in the spring of 2012, RémyMartinlaunched its new Rémy Martin VSOPedition destined for the Europeanmarket. VSOP Mature Cask Finish has aslightly woodier, softer and fruitier finishthanks to a year of blending performedexclusively in old oak barrels. For the third consecutive year, Rémy MartinVSOP designed a stunning limitededition bottle for the 2012 Cannes FilmFestival, packaged in gold and metal,exclusively for Global Travel Retail.

Rémy Martin VSOP’s ability to reinventitself has thus resulted in veryrobust growth in all key marketsand a host of opportunities to create a buzz on the internet,particularly among youngconsumers.

The attractionof excellence

In the Chinese market, the highlight hasbeen the launch of RémyMartin Centaure,an extra old cognac created to appeal toa new generation of young businessmenwho are more concerned aboutauthenticity and less inclined toformality than previous generations.Pierrette Trichet, the Cellar Master,selected fruit and honey flavours to accompany special moments.

Conscientiousabout authenticity

Pierrette TrichetHouse of Rémy Martin Cellar Master



The decanter, simply adorned by theraised seal of the centaur, magnifies thesensuality of this cognac, presented inthe heart of summer on the volcanicisland of Hainan. The product requiredan ambassador who could match itsambition: Anthony Wong, the famousHong Kong actor with beguiling charmand a direct and frank personality,accepted this role. This was the perfectcombination of talents. As before with

Rémy Martin Clubin Asia, 1738 in the US, and Cœurde Cognac inEurope, this newcombinationlooks set to fulfilgreat ambitions.

Distributed worldwide, XO Excellence,with an intensely velvety texture,experienced sustained growth, both in volume and value.

Higher up in the range of exceptionalcognacs, Centaure de Diamant,exclusively launched in duty-free lastyear, is now starting to be consumed indomestic markets, particularly in China.Centaure de Diamant consists of manyhundreds of carefully selected andblended eaux-de-vie and represents theepitome of the House of Rémy Martin’sexpertise. Modern ways

steeped in tradition


A symbol of rarity, Louis XIII has aglobal status which surpasses that ofall other cognacs. Its incomparableeaux-de-vie, legendary history and thesilhouette of the bottle have made it anicon. The House of Rémy Martin isextremely careful in managing thejewel of its heritage and does itsutmost to turn this supremelyluxurious cognac, the product of acombination of 1,200 GrandeChampagne eaux-de vie-aged frombetween 40 and over 100 years, into aunique experience: in Japan, aLouis XIII room has been created in anexclusive hotel in Tokyo, the setting fora tasting session and a museum all inone place, which can be reserved forspecial occasions. The classification ofthe product as a rarity has inspired anew approach in the US: a closepartnership with "Certified Retailers"and deployment of "Fortresses", whichare genuine showcases among themost prestigious establishments in theworld, and special links withconnoisseur clubs that favourexceptional goods. In Shanghai,Singapore and London, regular tastingdinners for local celebrities maintainthe legend. As a wonderful crowningtribute to its legend, Louis XIII wasrichly talked about at the launch of aJeroboam bottle, consisting of threelitres of the precious elixir in five kilosof crystal. The first 100 units werereserved immediately and the waitinglist for the next batch continues to expand.

The supremacy of absolute luxury


Creativityand refinement

Liqueurs and Spirits

€215.8million turnover

+3.7%€52.6million current operating profit

+23.5%24.4%operating profit margin

Rémy Cointreau Annual Report 2011-2012


20

2011 was marked both by the growthand innovation of our Liqueurs andSpirits brands. Each brand excelled inmaking the most of the recovery,showing renewed momentum in thesearch for new consumers, whilstrespecting the tradition of excellencewhich characterises all of them.

Justin WestonManaging Director Liqueurs

Cutting edge andrefined, Cointreau

is captivating

Rémy Cointreau Annual Report 2011-2012 21

Three major countries stood out this year,each registering double-digit growth: theUS, Brazil and Russia. In an Americanmarket that shows a great deal ofpotential, the brand invested carefully tobenefit from the recovery. Consumptionof legendary cocktails such as theCosmopolitan, the Side Car and theMargarita has recovered and is now asstrong as ever. The latter was adapted byDita Von Teese, the brand’s Ambassador,whose Margadita, created as a tribute to Margarita Sames, was a great success.

In Brazil, the country which gave usCaïpirinha, another piece of history isbeing created: the Caïpi-Cointreau isenjoying great success in the Copacabanaand Sao Paulo bars. In Russia, similargrowth has also been seen. Russia’s youngadults now choose more sophisticatedcocktails, with Cointreau enjoying pride of place.

In Northern Europe, growth continued at a steady pace. Cointreaupolitan, the brand’s flagship cocktail, continued to gather momentum and is attractingmore and more European women. France,in particular, remains the core market for liqueurs. Cointreau Privé, a temporarycocktail bar which gained fame after justtwo events in Montmartre, Paris, and inLondon, was established in the heart of Paris’s golden triangle at the beginningof 2012. For this third event, Cointreauasked Alexis Mabille, a talented fashiondesigner, to create a truly luxurious setting.Cointreau is also venturing into thecurrently thriving world of cookery with an original and bold creation: a Cointreauconcentrate which can be sprayed to your taste on either sweet or savoury dishes.Cointreau Cuisine is available in someluxury delicatessens and direct salesoutlets and has already attracted a large

audience of gourmets and amateurs alike.Beyond its traditional markets, Cointreauis laying the foundations for fame inSouth-East Asia, again with the efficientcollaboration of Dita Von Teese. Her tourof Singapore and the surroundingcountries contributed in a spectacular wayto conveying the glamour of Cointreau.

Finally, Travel Retail distinguished itself with an excellent performance,establishing its place as an increasinglyimportant market. This is confirmationof the outlook for the coming years:more than ever, Cointreau’s refinementfascinates people beyond all borders.


St-Rémy, the world’s No. 1brandy, continues to beindispensable in the marketswhere it has its aficionados: inNigeria, its home ground,where it experienced aparticularly exceptional year,

and also in Australia, New Zealand andCanada. The brand intends to furtherbroaden its reach. It has continued toincrease investment in its distributionnetwork, focusing mainly on SouthAfrica, and has renewed marketingefforts in South-East Asia and Russia.

Always at the forefront of innovation, St-Rémy launched a cream-based brandyin Canada that stands out from itscompetitors. St-Rémy Cream is anelegant combination of authenticity andthe smoothness of cream. It is the latestcreation from Martine Pain, St-Rémy’sCellar Master. Once you have taken a sip,it releases a range of the subtle aromas of hazelnuts and caramel, with a hint ofchocolate. It can be drunk neat on ice, or as a long drink with coffee, as favouredby the Canadians. In every bar thatdisplays St-Rémy Cream, the white bottle,with a picture of a pretty cow surroundedby green pastures, has proved irresistible.The next step is the Russian market. The leader of French brandies will rely on its excellence and its reputation to introduce a new tasting etiquette.

St-Rémy: The art of being No.1


Martine PainSt-Rémy Cellar Master

Izarra, which means“Star”, is a symbolicbrand for the Basquecountry and is, onceagain, becoming verypopular in its home region. Its sumptuous green edition, inparticular, lends itself to all kinds ofcombinations. Izarra is enjoyed overcrushed ice, but is particularly popularas a long drink with bitter lemon, oreven as a cocktail. A number of tastingsessions and events have been arrangedin bars and restaurants, supported byincreased listing in local supermarkets.Extolling its Basque identity, the brandhas also enjoyed great exposure at theferias. The welcome it has received hascertainly matched the investment madein it, to the point at which sales havetripled in the French Basque Country.


Izarra, a celebration of green

With a great deal ofdetermination, Passoa’s exoticflavour has braved the gloom ofEuropean countries affected bythe economic crisis. This youngbrand relies on the attraction of

its exclusive ingredient: passion fruit, atrue symbol. In order to cope with veryaggressive competition, the strategy hasbeen to increase the potential forpromoting the brand through organisedevents and to increase the buzz on socialnetworks. Through limited editions,activations around the Rio carnival,displays at concerts and other musicfestivals and associations with artists,Passoa has maximised these greatopportunities to establish its influencein the trade and in the blogosphere.Indeed, at the end of 2011, an exclusivepartnership with star DJ, Laurent Wolf,led to the production of a limited editionbottle bearing his signature. The Passoabottle displayed a code which enabledthe customer to download an exclusivemusic mix, and was a great success.Another promising partnership wasagreed with pop rock group Pony PonyRun Run, who are currently on a worldtour. The Passoa Party Pump Fountain,an invitation to measure the quantity ofvarious cocktails, continues to attractnew fans in bars and at home. Finally,the brand launched its first “ready toserve” drink, a major innovation: acocktail made from orange, cranberryand passion fruit juice served overcrushed ice. Its success paves the wayfor other innovations.

Passoã, passionin motion


Mount Gay is a brand for connoisseurs,and its rays shine well beyond theshores of the Caribbean. The US is stillits largest market. Barbados’s Britishheritage has made it easier to establishMount Gay in the UK, Canada,Australia and New Zealand. It brings a breath of sea air to Travel Retailthrough lively, colourful promotionalevents. The same applies in Russia and in many other countries in Europe,including France, where it wasintroduced in 2011.Thanks to the talent of the MasterBlender, Allen Smith, Mount Gay Rumis marketed in a variety of ways,elegant and refined, that seduce bothlovers of cocktails and those rumaficionados who prefer it neat, or onice. In 2011, Mount Gay Eclipse Blackwas successfully launched, a deep andintense rum with rich aromas of ripebanana and dry fruit, supported bynotes of exotic spices. Its robust flavourmakes it particularly popular with maleconsumers. Finally, the brand dared torelease limited edition bottles decoratedin the colours of the nautical flagalphabet, which were warmly welcomedby sailors. M and G for Mount Gay were the first in the series. “The rum thatinvented rum” continues to reinvent itself.

Raphael GrisoniCEO Mount Gay Rum

Mount Gay, the oldestrum in the world sails in downwind conditions



Metaxa returned to growth, in bothvolume and value, after threeconsecutive years of decline due to theeconomic crisis in Greece. The newMetaxa management team hasimplemented the "New Ambitions"plan: the House has returned to itsroots to inspire its creations and itscommunications. Since 1888, Metaxahas been delivering a unique, smoothflavour, a tradition which isperpetuated to this day by the CellarMaster, Costas Raptis. The MetaxaAcademy was created to enable tradeprescribers to discover all the beauty of this unique art. Everything beginsunder the sun which shines on thevineyards and its Muscat grapes by the Aegean Sea and continues into the Metaxa cellars near Athens, wherethe secrets of the ageing and maturityprocess are unveiled to experts.In 2011, Metaxa’s presence in duty-freewas boosted in order to increase itsexposure and its image of quality.Metaxa 12 Stars, the pinnacle of theprestigious star-studded range, wasdebuted at Roissy Charles de Gaulleairport. This success led to it beingdisplayed in major airports inNewYork, Chicago, London, Melbourne,Moscow and Dubai. Metaxa polishedits lifestyle image with Metaxa Bay,which was launched in Berlin duringthe summer of 2011: a beach scene wascreated on the banks of the Spree usingthe brand’s colours as a theme. It provedpopular with trendy young people.Now back on track, the brand benefitsenormously from the power of theGroup’s distribution network. A goodexample of this has been Metaxa‘sstrong growth in Russia this year.Metaxa is improving its outlook basedon the groundwork carried out in 2011.

Panos SarantopoulosCEO Metaxa

Metaxa, a trend inspired

by the sun

Costas RaptisMetaxa Cellar Master


A Corporate andEnvironmentalResponsibilitypolicy integral

to our value strategy

Sustainable Development

Corporate and environmental responsibility

Economic strategy and a CER policyare closely linked in all aspects of ouroperations. We apply the same rigourand the same creativity to oureconomic development as we do to the preservation of natural resources and the promotion of talent.Our CER strategy is supportedeveryday by a policy which has beenimplemented both locally andinternationally. We implement ourcommitments at our production sitesand in our commercial practices:progressing in a resolute manner andconstantly improving our practices.This state of mind is shared by all ourstakeholders, employees, suppliers,shareholders and other members of thepublic. Lessons learned from previousinitiatives helped us to structure ourCER 2015 plan, a three-yearprogramme for responsible growth.

Patrick MarchandOperations Senior Vice President

27Rémy Cointreau Annual Rveport 2011-2012

The transparency of the information wecommunicate is undoubtedly the bestpossible proof of our commitment to atangible and realistic CER policy. For thefirst year, a voluntary assessment of anenvironmental indicators panel wascarried out by an external third-party,Ernst & Young’s teams who specialise inthe Environment and SustainableDevelopment. The environmentalindicators traditionally used aresupplemented by ratios based onproduction (value per standard case).

Starting in the 2012/13 financial year, ourpriority will be to meet the requirementsof Article 225 of the GrenelleEnvironmental Forum on companies’obligations for transparency in corporateand environmental matters.

We are already preparing for thislegislation: in respect of greenhouse gas emissions (GHG), we started to assess our sites some years ago, whichmeant we had begun to reduce ourcarbon footprint before the GrenelleEnvironmental Forum texts werepublished. We are preparing our teamsand making them aware of the next planto reduce GHG while promoting ourgrowth. The preparation for implementingthe order regarding CER reporting,which applies as from 31 December 2012,has gone smoothly.

A major item in CER governance duringthe year was the preparation of our Codeof Business Ethics. This means theGroup now has a single referencedocument which combines codes ofconduct enacted by all Rémy CointreauDepartments, the CER commitmentsand the international guidelines weadhere to, including the Global CompactCharter and OECD recommendations.

As from next year, the six pillars of ourstrategy will be restructured inaccordance with the new ISO 26000standard.

There is, therefore, total consistencybetween our policy and our adaptationto the new challenges relating to CER,in terms of developments in laws andstandards, climate change and reportson working conditions. Thus, in themedium-term, our commitments andinitiatives will be part of an ISO 26000assessment, thereby adding to thecertifications already granted andwhich are regularly renewed, inparticular those relating to the ISO9001, ISO 14001, OHSAS 18001 andISO 22000 standards.

Christian Lafage Sustainable Development Director

A voluntaryand transparent CER policy

Bringing ourcommitmentsinto line with ISO 26000

The Code of Business Ethics covers the Group’scommitments in six major chapters:• behavioural principles (notably matters relating to aconflict of interest or corruption),

• compliance with environmental and labour standardsintegrating the standards in force,

• protection of privacy,• self-regulation of practices in terms of responsiblecommunication and consumption and commitmentsto our consumers and suppliers,

• compliance with laws and, finally,• protection of assets.“This project, launched at the request of the Board of Directors, is aimed at all employees across the threecontinents on which the Group operates: Europe,America and Asia. The document will be translatedinto English, French and Chinese. In order for the Codeof Ethics to be adopted by everyone, a control and alert system is in place should there be a breach, togetherwith a monitoring process and possible sanctions”,explains Patrice Guyenne, Head of Internal Audit.


Best practices for winemakers and recognition of theirexpertiseRémy Cointreau is at the forefront of the best practices it promotes and it helps Fine Champagne Alliancewinemakers to become aware of themany standards and regulations on environmental issues. The Groupinitiated a self-assessment project of practices with the help of a traininginstitute. Once the assessment was completed, the winemakers wereinvited to review the results, receiveadvice and attend a demonstration of wastewater treatment at one of theRémy Martin vineyard sites. Almost 170 people took part in this trainingprogramme during April 2011.

In the same way, HACCP assessmentaudits on food safety are always followedby practical advice sessions, commondiscussions on the implementation of alternative solutions and assistancewith administrative formalities.

“In parallel, the Group is looking at the feasibility of a collective AHVEcertification for Fine ChampagneAlliance winemakers. A pilot group hasalready been established”, explainsLaura Mornet, Agronomist.

The Group not only encourage bestpractices in winemaking, but alsorewards the expertise of its suppliers.Each year, the Centaures de laDistillation ceremony, a recognisedaccolade in the profession, is anopportunity for the Group to acknowledgethe quality of the work carried out by its most deserving distillers.

WinemakingOur commitments

To implement economicallycompetitive and

environmentally-friendlygrowing methods combinedwith traditional expertise inour vineyards and promote

them to our suppliers.

An exemplary certification processEnvironmental certification is the bestway to reassure our customers that strictprocesses govern our winemakingpractices. In 2007, Rémy Martin’sCognac vineyards obtained “AgricultureRaisonnée” (Integrated Agriculture)certification. Cognac employees alsotook advantage of 22 days trainingwhich enabled them to continue to learnabout the applications of integratedagriculture. (Corresponding GRIindicator: LA 10).

The Grenelle Environmental Forum hasestablished a new certification entitled“Agriculture à Haute ValeurEnvironnementale (AHVE)” or HighEnvironmental Value Agriculture, whichincludes and reinforces the IntegratedAgriculture criteria.

“Since it came into force in June 2011, we have taken the necessary measuresto turn our vineyards’ IntegratedAgriculture certification into level 2AHVE certification. The changeover issubject to a successful audit, with theaim of achieving level 3 certification(level of excellence) between now andthe end of the 2012/13 financial year”,says Denis Fougère, Manager of Rémy Martin vineyards.



Environmentally-friendly growingmethodsThe Rémy Martin vineyards arecontinuing their programme to reducethe use of pesticides. Since 2011, the sitehas been committed to the Ecophyto2018 plan as a member of the network of DEPHY Ecophyto farms. The aim is to reduce the use of pesticides by 50%by 2018 as required by the GrenelleEnvironmental Forum.

This year, the use of these products in the vineyards was 30% lower thanapproved levels and none of thepesticides used are harmful to nature.Eventually, the Group wants todemonstrate that it is possible to createsustainable cropping systems that saveon pesticides and perform economically.

The Group is making a particular effortto train its teams on the best ways to use pesticides. Regulations in forceprovide that everyone who uses theseproducts must have received anindividual training certificate betweennow and 2014: all RémyMartin vineyard

employees (about 20 staff) have already completed this training. True to its principle of exemplary behavior,RémyMartin encourages winemakers to actively seek training and the thoughtprocess was begun by setting up a “crop-spraying” forum at the vineyards,organised by the Charente Chamber of Agriculture. This training day led to the publication of a video which wasposted online.

In order to preserve biodiversity andpractise balanced growing methods, 31%of the vineyards are covered by naturalgrass, a healthy alternative to weedingand tillage. Chemical weed killers havenot been used in those areas for five years.Fertiliser levels are monitored throughregular soil analysis, which was carriedout eight times this year in Cognac.

Finally, 100% of the vineyards use naturalpredators to prevent the proliferation of pests on the vines.


A certification policythat is determined to reduce the impact of our business on the environment Quality, safety and the environment aremajor issues for Rémy Cointreau. This isevidenced by the renewal of ISO 9001and ISO 22000 certification in Angersand ISO 14001 certification in Cognac.This policy drives the Group toimplement training programmes. Thiswas the case in Angers, where packagingoperators have been trained on qualityassurance. More generally, 2,519 hours ofQSE training have been devoted toquality, safety and the environment, with359 people participating in trainingsessions (Corresponding GRI indicator:LA 10). Personal safety and security ofproperty also remained important issues.

In respect of prevention, the sites havecreated risk sheets in order to helpidentify potentially dangerous situationsand to put the necessary preventativemeasures in place. The rate of workaccidents remained low: Frequency: 13 -Severity: 0.25 (Corresponding GRIindicator: LA 7).

In line with ISO 22000, additionalconsideration was given to suppliers whoare in direct contact with products. Fromnext year, Cognac will implementintegrated certification which will coverthe three standards - ISO 9001, ISO 14001and ISO 22000.

Energy ConsumptionRémy Cointreau’s total energyconsumption declined by 3.6%, dueprimarily to lower direct energyconsumption (gas and oil) at the sites.Electricity consumption remainedstable, which confirms the reductionnoted over the last five years.(Corresponding GRI indicator: EN 3/ EN 4/ EN 5).

Efforts to reduce energy consumptioncontinue with visible results: reducingthe heat settings has led to an energysaving of 7-11%, depending on the site.The restoration of the cellars was an opportunity to install energy savinglight bulbs, an initiative which wasawarded an EDF energy saving certificate.

Alongside these technicalimplementations, employees are madeaware of simple actions such as payingattention to the use of lights inworkshops and offices, shutting downmachines and conveyer belts duringbreaks and using heating control unitscorrectly. Overall, the figures havedecreased and bear out the Group’sefforts. The reduction in energyconsumption is also bolstered by theGreen IT initiative which has changedthe IT system and the way people work.80% of workstations have been replaced,which has meant a saving on electricityof almost 40%, thanks to the eco-friendlysupplier who was chosen.

“This is a continuous effort and we areclosely monitoring technologicaldevelopments to implement themwithin the Group. In addition, we arecontinuing our internal awarenessprogrammes, which focus on energysaving and the well-being of ouremployees”, says Mickael Boluen,Director of Operational IT.

Quality, safety and the environment

€1.6 million dedicated

to safety

349people trained in

safety this year (Corresponding GRI

indicator: LA 10)

€4 million

invested in QSE

+12%increase compared

with 2010/11 (corresponding

GRI indicator: EN30)


Our commitments

To guarantee the premiumnature of our products

through ongoinginvestment in research, a

constant demand for quality,food safety and industrial

safety, and continuedactions to protect the

environment.


Eco-design and preservation of natural resourcesRémy Cointreau strives to reduce its impact on the environment with new products. It uses BEE software to measure the environmental impact of its packaging. One of the steps taken by the Group has been to reduce theweight of the glass used to make its bottles.

The Group still relies on the bottlelibrary which was created to comparethe products, to see where they standand to find tangible and measurableways to reduce their environmental impact.

The work on the eco-design of productsis continuing unremittingly and some of the packaging has been changed. An example of this is the Club Cognacbottle which is sold in Asia. The aim of reducing the environmental impact of the packaging drives the Group tooptimise products sold in France. Theiraverage weight continues to fall and alltoday’s initiatives represent a reductionof 84 tonnes in the weight of the glass used.

In respect of the preservation of naturalresources, Rémy Cointreau hasundertaken different tasks to reducewater and paper consumption. Totalwater consumption (Corresponding GRI indicator: EN 8) has increased by 9.8% primarily due to the creation of the new green area in Angers.

Internally, campaigns to promoteawareness of eco-friendly actionscontinue to be widely adopted. Throughthe implementation of a new water-saving procedure, Cognac has reducedthe amount of water it uses for cleaning.

In terms of paper consumption, thereduction that has been recorded for thepast five years was sustained this year,despite a slight increase with 3.1 millionsheets of paper used (CorrespondingGRI indicator: EN 1).

12%reduction in the

weight of a Rémy Martin 1738 bottle

70tonnes of glass saved

(Corresponding GRIindicator: EN 26)

Waste and effluents The Group continues its efforts toreduce effluents and waste. To that end,awareness of how to sort waste isregularly promoted by visits to wastetreatment centres. The volume of waste,mainly comprising ordinary industrialwaste, was stable overall. (CorrespondingGRI indicator: EN 22). The sorting andrecycling rates were also stable (93%).

The volume of effluents increased by7.2%. Conversely, pollution levels fellsubstantially by 35%. (CorrespondingGRI indicator: EN 21).

10/11

80,01572,899

11/12

Water consumption, France(m3)i.e. 18.62 litres/standard case

10/11

15,31515,884

11/12

Energy consumption, France(MWh)i.e. 3.56 kWh/standard case

10/11

3,123

4,814

11/12

Pollution levels of e�uents, France(per capita equivalents)

10/11

19,28417,986

11/12

Quantity of e�uents, France(m3)i.e. 4.49 litres/standard case

10/11

1,9561,965

11/12

Quantity of waste (kg)i.e. 0.455 kg/standard case


Beyond the regulatory scope of the carbonfootprint, Rémy Cointreau continued itsown initiatives to reduce carbon emissions.The total saving was 1,385 Teq CO2(Corresponding GRI indicator: EN 18) dueprimarily to the increased use of videoconferencing, eco-design projects and areduction in energy consumption.

The Group has also prioritised theacquisition of electric vehicles when renewing company cars in Cognac and Angers.

BiodiversityIn the Rémy Martin vineyards inCognac, beekeeping set-asides for thepreservation of bees combine economicefficiency and participation in theproper functioning of the ecosystem.

Afforestation projects on theGroup’s land continue. Theproject involves poplar treeswhich help to increase theprofitability of the fields whilsthelping to develop ecologicalfauna and flora.

Last year, a 3-hectare experimentalfloodplain forest was created on the banks of the Charente withthe aim of preserving the qualityof the soil and water.

For the third consecutive year,Rémy Cointreau has renewed its financial support for anafforestation project in partnershipwith the Office National des Forêts.The Group finances a 40-hectareoak tree plantation programme inthe state-owned Senonches forestin France.

Greenhouse GasEmissionsThe carbon footprint system, whichassesses the level of greenhouse gasemissions for business activities, is anessential process for Rémy Cointreau.This helps to create a carbon footprint inaccordance with Grenelle regulations(Scopes 1 and 2).

The Group voluntarily meets therequirements of Decree No. 2011-829 ofJuly 2011 of the Grenelle EnvironmentalForum, by referring to version 6 of theAdeme Carbon Footprint tool and reportsfrom the Ademe database.

Scopes 1 and 2 include emissions fromindirect energy consumption (electricity)and direct energy consumption (gas, oil),refrigerant gasses and company-ownedvehicles.

The Group’s overall emissions were 2,366 Teq CO2 (0.551 kg eqCO2 perstandard case) which are divided intoScope 1 (1,692 Teq CO2 ) and Scope 2 (674Teq CO2 ). (Corresponding GRI indicator:EN 16). These emissions are mainly due to direct and indirect energy consumption,representing 91% of total emissions.



SuppliersOur commitments

To involve our suppliers in our corporate

and environmentalcommitments, to monitor

their genuine involvementand support them in their

approach to improvement.

Mindful of the actual commitment of its suppliers to a process of corporateand environmental responsibility,RémyCointreau is committed to ensuring that everyone respects theprinciples laid down by internationalcharters. In particular, compliance withthe Global Compact Charter is assessedthrough audits carried out on suppliersby the firm, SGS. The audit coversworking conditions and labour relations,as well as safety and the environment.This also ensures that suppliers’ practicescomply with the Group’s qualityrequirements. In order to share thestringency of its culture with its partners

Human resources

Our commitments

To guarantee social fairness and the personal

development of all ouremployees, encourage their

adherence to the Company’sbusiness strategy and

involve them in the Group’ssocially responsible actions,

within the framework ofRémyCointreau’s

fundamental values oflistening and dialogue.

A training policyfocused on excellenceThe creation of the “RémyCointreauAcademy” this year marked a new stagein Rémy Cointreau’s Human Resourcespolicy. This internal university is perfectlytailored to train all 300 managers andintroduce them to a Group-specificculture.

• The “Brand Academy” covers themarketing and commercial specificitiesof the Group’s brands and the luxurygoods sector from a strategic perspective.

• The “Sales Academy” trainsparticipants in negotiation andmarketing skills through a practicaland innovative approach, which can beemployed in the markets to support thebrands and create value for bothpartners and customers, in line with theGroup’s strategy. Initially, the courseshave mainly been rolled out in Asia.

11,773hours of training provided(Corresponding GRI indicator: LA 10)

and involve them in a continuousimprovement process, RémyCointreauhelps them implement concrete short-and medium-term progress plans.During this year alone, three progressplans were identified. Of the initiativesrequired by these plans, 60% have alreadybeen effectively implemented by therelevant suppliers.

The Code of Business Ethics is anextension of the Purchasing Code ofConduct. It also confirms that the Group’srequirements in respect of its suppliersdemand an irreproachable conduct on itspart and great respect for their work.

• The “Finance Academy” ensures thatparticipants understand all the Group’sefficiency criteria, through a morewidely shared financial culture.

HR management training willconcentrate on aspects more exclusivelylinked to leadership and oversight of themanagement function.

In parallel, the training plan supportsthe professional development of employees, in particular through e-learning to teach languages, with free-access to a development library to encourage voluntary learning.


Seizing every opportunity to promote employees The Human Resources policy notablystrives to make employees jointlyresponsible and accountable for theirprofessional future. This includes the formalisation of a proactive processfor managing positions and skills to enable the Company to adapt itsresources and anticipate its needs.

In Cognac, the creation of specific rolesto optimise production is part of aninvestment and industrial overhaul plan.Around 10 experienced employees havebeen offered an interface role betweenthe production and management teams.

Rémy Cointreau implements arecruitment policy that aims to attractstrong profiles and develop theirpotential. The courses are takenindividually to help identify internaltalent and encourage employees todevelop their skills.

Learning is another preferred way of recruiting and training tomorrow’stalent. At the French sites, around 10 interns, ranging from secondaryschool students to students at post-graduate level, are learning theirjob in an environment where rigour and creativity are encouraged. Some of the trainees are offered voluntaryinternational experience contracts.

Calm, corporate dialogue to facilitate the integration and well-being of employeesRémy Cointreau is keen to work in alabour relations climate conducive tothe Group’s performance and employeefulfilment and has signed severalagreements with social partners: one regarding a salary policy, one onemployee profit-sharing and finally, one on the proactive management of positions and skills. Furthermore, an agreement on gender equality covers aspects such as recruitment,remuneration, career development, etc.

In addition, the Angers and Cognacsites are running psycho-socialdiagnostics with the regional associationfor the improvement of workingconditions. While considering thefavourable results, the Group hasimplemented concrete measures toencourage the recognition of everyone’swork, the development of skills, betterworking conditions and morestraightforward and efficient labourrelations.

Seeing opportunities in diversityThe Group wants to offer everyone thepossibility to feel fulfilled professionally.In terms of diversity, following two yearswhich have helped establish a strongpolicy, the Group has striven to promotediversity amongst its new recruits, with abalance of men and women, theinclusion of disabled workers and local-level reintegration initiatives. Inpartnership with Pôle Emploi (JobCentres), Cognac is recruitingindividuals who are coming back to theworkplace, which has resulted in someof them being hired on permanentcontracts.

46%of employees are women (Corresponding GRI indicator: LA 13)

€1.09million devoted to improving working conditions

4%absenteeism



Maintaining the courseof responsible communication withclear commitmentsThe promotion of responsibleconsumption and communication iscentral to the CER commitments madeby the Group within the framework of theGlobal Compact Charter. For the past fewyears, attentive to society’s and publicauthorities’ expectations concerning theimpact of its communications, RémyCointreau has implemented prerequisitesfor all communication campaigns and aninternal monitoring process.

The Ethics Charter designed by theGroup in 2004 serves as a guideline forall the marketing teams. The documentlays down fundamental principles inaddition to the strict legal frameworkgoverning the promotion of spirits.

Its contents were reviewed andimproved this year. All campaigns mustconform to these commitments.

At the end of 2011, the Group signed theUnion des Annonceurs’ (Union ofAdvertisers) ResponsibleCommunication Charter. Membershipcommits the Group more widely to a setof communication best practicescovering, for example, the eco-design ofcommunication materials and media.

The ResponsibleCommunicationCommittee, an essential guarantee of self-regulation practicesThe Responsible CommunicationCommittee (RCC), a key forum in the operation of Rémy Cointreau, ensuresthe proper implementation of the Group’scommitments. The protection of minorsand the use of internet and digital mediaare matters about which the committee is particularly vigilant. Procedures werereviewed this year and the marketingteams have been made aware of newapproval procedures. The RCC is made upof the relevant functions, namely legal,marketing, sales and advertising andanalyses and checks that all campaignscomply with the Charters signed by RémyCointreau. (Corresponding GRI indicator: PR 6).

“This campaign assessment phase iscrucial; all our teams worldwide mustcomply with it and the committee iscommitted to being highly responsive. This is why the procedure for thesubmission of documents relating tocampaigns is completely paperless. Thisyear, six campaigns and promotionalprojects were submitted, primarily inrelation to the RémyMartin, Cointreau and Metaxa brands”, says Alain Rouchard,Director of External Affairs.To support the RCC, the “Alcohol and Society” monitoring unit studies the state of public opinion, the practicesof other players and the latest scientificstudies on risks relating to alcoholconsumption. This is an essential tool in helping to self-regulate practices.

Our commitments

To support the internationaldevelopment of our brands by

promoting responsibleconsumption, based on transparent

principles shared with all ourstakeholders, while supporting

scientific research into alcohology.

Communication and responsible

drinking

RémyCointreau providesfinancial support to the IREB

(the French Institute forScientific Research on

Beverages), founded in 1971 byproducers and distributors of

alcoholic beverages. The IREBcarries out and subsidises

projects that develop scientificknowledge of alcohol. It has an

independent scientificcommittee. Christian Lafage,

the Group’s SustainableDevelopment Director, is

currently Chairman of the IREB.



Sharing our experienceswith stakeholders, inFrance and abroadRémy Cointreau is fully transparent incommunicating its policy and its CERaction plan in response to requests fromits stakeholders. This is particularly truein terms of its distribution networks inEurope, where its efforts regarding CERhave been acknowledged. Thiseducation of stakeholders is also valuedby ratings agencies and SRI Fundmanagers. The Group is keen to explainand demonstrate that CER and luxuryare not contradictory approaches. Onthe contrary, there is a strong linkbetween the demand for excellencewhich makes the reputation of its products,and CER practices. RémyCointreau has been asked to comment on thisemerging theme and the Group is increasingly vocal about its overallCER approach.

“We are committed to bringing ourconvictions to life outside Francethrough philanthropic initiatives. This

year, the Louis XIII brandgave its support to TheFilm Foundationinitiative which acts toprotect the legacy ofcinema by restoring oldfilms. Founded in 1990 byMartin Scorsese, thefoundation shares thesame commitment asRémy Cointreau andLouis XIII to thepreservation of a legacy.“In each of our fields, webring to life, with thesame passion, aknowledge which is over100 years old”, saysAugustin Depardon,Director of Marketing for Louis XIII.

Acting in the name of sustainable regional developmentThe Group pays particular attention to CER best practices in local areaswhere it operates. For this reason, itcontinues to be involved with Revico,the company which processesdistillation stillage from the Cognacvineyard to produce green energy.

Acting locally also involves meetingstudents in surrounding schools anduniversities that provide specialisedtraining on sustainable development.Apart from classes and employeecontributions in these schools, it is worthnoting that these institutions are alsointerested in making their ownoperations more sustainable. Aside fromthese aspects, the Group continues itslocal social initiatives. It supports the2nd Chance foundation which helpsthose who are experiencing difficultiesto set up realistic and sustainableprofessional projects, includingrecognised training and businesscreation. In partnership with a localassociation, the EGEE, Rémy Cointreaupresented the foundation’s initiatives ata forum in Angoulême, an initiativewhich facilitated dialogue with localassociations and authorities. Finally, in line with activities with Pôle Emploi,some employees took the initiative of mentoring people in theirreintegration by providing them with advice and putting their socialnetwork at their disposal.

Stakeholders andsustainable regional

developmentOur commitments

To share the experience we have acquired on

sustainable developmentwith all our stakeholders

and take specific action atregional level where the

Group operates to make thissustainable development

a reality at local level.


2010 -2011 2011 -20 12Total energy consumption (MWh)Total for France 15,884 15,315Cointreau 7,452 7,913E. Rémy Martin & Co. 8,432 7,402

Direct energy consumption (gas, fioul, MWh)(GRI indicator: EN3)Total for France 7,912 7,384Cointreau 5,060 5,367E. Rémy Martin & Co. 2,852 2,017

Indirect energy consumption (electricity MWh)(GRI indicator: EN4)Total for France 7,973 7,931Cointreau 2,393 2,546E. Rémy Martin & Co. 5,580 5,384

Water consumption ( m3) (GRI indicator: EN8)Total for France 72,899 80,015Cointreau 27,800 32,048E. Rémy Martin & Co. 45,099 47,967

Paper consumption (millions of sheets) (GRI indicator: EN1)Total for France 3.08 3.12Cointreau 0.75 0.66E. Rémy Martin & Co. 1.44 1.78Administration offices in Paris 0.89 0.68

Quantity of waste (tonnes) (GRI indicator: EN22)Total for France 1,965 1,956Cointreau 1,136 1,062E. Rémy Martin & Co. 829 894

Waste sorting rate (%)Total for France 93.9 92.9Cointreau 96.5 96.5E. Rémy Martin & Co. 90.4 88.8

Waste recycling rate (%)Total for France 93.5 92.6Cointreau 96.1 96.0E. Rémy Martin & Co. 90.0 88.6

Volume of effluents (m3)(GRI indicator: EN21)Total for France 17,986 19,284Cointreau 10,407 10,749E. Rémy Martin & Co. 7,579 8,535

Effluent pollution level (equiv. per capita) (GRI indicator: EN21)Total for France 4,814 3,123Cointreau 1,045 859E. Rémy Martin & Co. 3,769 2,264

GHG emissions (Scopes 1 and 2 – teqCO2 )(GRI indicator: EN16)Total for France - 2,366Cointreau - 1,348E. Rémy Martin & Co. - 1,018

GHG emissions (Scope 1 – teqCO2 )Total for France - 1,692Cointreau - 1,131E. Rémy Martin & Co. - 560

GHG Emissions (Scope 2 – teqCO2 )Total for France - 674Cointreau - 216E. Rémy Martin & Co. - 458

Environ -mentalIndicatorsA methodological note on environmentalindicator reporting is available in the 2011/12 Reference Document.


Corporate governance

Corporate governance

Board of Directorsand management

(a)

(f)(g) (h) (i) ( j)

(k)

(b) (c) (d)(e)


Board ofDirectors

ExecutiveCommittee

Committees Statutory Auditors

Mrs. Dominique Hériard Dubreuil (c)

Chairman

Mr. François Hériard Dubreuil (d)

Mr. Marc Hériard Dubreuil (b)

Sir Brian Ivory (j)

Mr. Jean Burelle* (f)

Mr. Jacques Etienne de T’Serclaes* (k)

Mr. Gabriel Hawawini* (a)

Mr. Timothy JonesMr. Patrick Thomas* (h)

Mr. Didier Alix* (e)

Mrs. Caroline Bois (g)

Mrs. Laure Hériard Dubreuil (i)

*Independent Directors.

Mr. Jean-Marie Laborde Chief Executive Officer

Mr. Jean-François Boueil Human Resources Director

Mr. Damien LafaurieExecutive Vice President Global Markets

Mr. Christian LiabastreExecutive Vice President Brands Strategy and Development

Mr. Patrick MarchandOperations Senior Vice President

Mr. Frédéric PflanzChief Financial Officer

Audit and Finance CommitteeChaired by Mr. Jacques-Etienne de T’Serclaes

Nomination and Remuneration CommitteeChaired by Sir Brian Ivory

Development and Marketing Strategy CommitteeChaired by Mrs. Dominique Hériard Dubreuil

Each committee comprises at least one Independent Director

Ernst & Young & AutresRepresented by Mrs. Marie-Laure Delarue

Auditeurs & Conseils AssociésRepresented by Mr. Olivier Juramie


Finance

A year of solidgrowth,

a strength enedfinancial position

This year, with net sales of €1.026 billion,Rémy Cointreau has crossed thesymbolic threshold of one billion eurosand has achieved growth in currentoperating profit of 24.4% – exceedingthe announced target. The Groupenjoyed a very strong year. Growth in profitability was achieved without compromising on building our brands, as we continued tostrengthen investment across all of them.This financial performance wasaccompanied by significant debtreduction during 2011, having sold the Piper-Heidsieck andCharlesHeidsieck brands to the EPIGroup in July 2011, whilst retainingworldwide distribution. RémyCointreau’sdebt is now at its lowest since its IPO.The bank ratio of net debt/EBITDAdecreased from 2.6 to 0.67 in one year.The Company has thus regained asubstantial amount of leeway whichenables optimal management and,potentially, carefully-chosen acquisitions.

Frédéric PflanzChief Financial Officer

Finance


In addition to financial discipline, theeffective takeover of distribution and therelevance of a value-driven strategy,which is now independently controlled,should also be mentioned. In recognitionof the confidence demonstrated by itsshareholders, the Group will pay adividend of €1.30 and an exceptionaldividend of €1.00 per share.

The Group benefited from thegrowth driver that emergingcountries, particularly in Asia,have been, and also from therecovery of the North Americanmarket and Western Europeanmarkets. RémyMartin was thebest performing brand andgreatly contributed to theGroup's profitability.

The Group’s strong interna -tional profile means it needsto closely monitor develop -ments in foreign exchangerisks and the risks inherent inthe countries in which itoperates. In this respect,the Group has put the appropriate tools in place and improves themthrough constant vigilance. 70% of Rémy Cointreau’s business is exposedto the US dollar. During the 2011/12financial year, the US dollar gained someground against the euro (1.34 versus1.37) and foreign exchange had a slightly favourable impact on currentoperating profit.

Shareholders’ calendar

19 July 2012Q1 sales to 30 June 2012

26 July 2012Annual General Meeting

18 October 2012H1 sales to 30 September 2012

27 November 2012Interim results at 30 September 2012

A further source of satisfaction was the growth in the share price, whichincreased by 17% over the 2011 financialyear, while the CAC 40 and SBF 120indices lost 17% and 16%, respectively,during the same period. Since thebeginning of 2012, the share price has continued to rise, recording anincrease of 33%.

Rémy Cointreau’s confirmed creditfacilities are solid and highlycompetitive: they include a privateplacement of €140 million, maturingin June 2015 and bearing interest at 3.67%, a €205 million bond issuematuring in December 2016 and bearing interest at 5.17%, and a syndicated revolving credit line of €255 million, renewed on 5 June 2012,maturing in 2017.

The relentless pursuit of excellence andthe innovative capacity of each Groupbrand have enabled it to achieve or to consolidate its leadership in everymarket, justifying the confidence theGroup has in facing the coming years,whilst remaining highly vigilantregarding its costs and the allocation of its resources.

A tried andtested model

Stock market performance

30

40

50

60

70

€80

06/10 09/10 01/11 03/11 06/11 01/12 06/12

+17%+33%

Rémy Cointreau’s share price performance from 1 June 2011 to 1 June 2012


Finance

Statement of financial position(at 31 March, in € millions) 2012 2011 2010

Brands and other intangible assets 443.2 447.1 629.9Property, plant and equipment 146.4 141.0 208.6Investments in associates 68.4 64.9 64.3Other financial assets 86.9 10.9 71.2Deferred tax assets 44.0 30.3 27.1Non-current assets 788.9 694.2 1,001.1

Inventories 792.6 699.2 969.8Trade and other receivables 207.9 213.6 248.1Income tax receivables 3.9 1.6 8.3Derivative financial instruments 5.6 16.4 3.2Cash and cash equivalents 190.1 80.6 86.3Assets held for sale 0.2 485.3 -Current assets 1,200.3 1,496.7 1,315.7

Total assets 1,989.2 2,190.9 2,316.8

Share capital 79.4 79.1 77.6Share premium 738.2 735.7 708.2Treasury shares (95.8) (0.6) (0.4)Consolidated reserves and profit of the year 244.4 256.4 232.4Translation reserve 8.6 (7.7) (0.2)Equity - attributable to the owners of the parent 974.8 1,062.9 1,017.6

Non-controlling interests 1.2 0.9 0.9Equity 976.0 1,063.8 1,018.5

Long-term financial debt 340.0 377.7 537.7Provision for employee benefits 21.8 20.5 23.8Long-term provisions for liabilities and charges 6.9 6.5 5.1Deferred tax liabilities 98.4 121.8 199.8Non-current liabilities 467.1 526.5 766.4

Short-term financial debt and accrued interest 38.7 31.8 50.0Trade and other payables 467.5 406.6 439.3Income tax payables 13.0 39.2 11.9Short-term provisions for liabilities and charges 1.5 9.5 19.8Derivative financial instruments 25.4 4.5 10.9Liabilities held for sale - 109.0 -Current liabilities 546.1 600.6 531.9

Total equity and liabilities 1,989.2 2,190.9 2,316.8


Consolidated income statement(at 31 March, in € millions, exc. earnings per share) 2012 2011 2010

Net sales 1,026.1 907.8 807.6 Cost of sales (396.1) (389.5) (361.7)Gross margin 630.0 518.3 445.9

Distribution costs (344.8) (284.4) (238.8)Administrative expenses (79.0) (72.8) (70.3)Other income/(expense) 1.5 5.9 5.2 Current operating profit 207.7 167.0 142.0

Other operating income/(expense) (3.0) (46.5) (2.2)Operating profit 204.7 120.5 139.8

Net finance costs (26.9) (27.3) (22.0)Other financial income/(expense) (8.4) (2.4) 2.7 Net financial income/(expense) (35.3) (29.7) (19.3)

Profit before tax 169.4 90.8 120.5

Income tax (47.3) (21.7) (32.5)Share in profit of associates (0.4) 4.3 4.9 Profit from continuing operations 121.7 73.4 92.9

Net profit/(loss) from discontinued operations (10.6) (2.8) (3.9)Net profit/(loss) for the year 111.1 70.6 89.0 Attributable to: – non-controlling interests 0.3 0.1 2.7 – owners of the parent 110.8 70.5 86.3

Net earnings per share - from continuing operations (€) – basic 2.47 1.50 1.94 – diluted 2.46 1.49 1.93

Net earnings per share - attributable to owners of the parent (€) – basic 2.25 1.44 1.80 – diluted 2.24 1.43 1.79

Number of shares used for the calculation – basic 49,324,332 48,991,452 47,989,124 – diluted 49,473,230 49,248,856 48,191,494

OutlookThe momentum recorded throughout the2011/12 financial year, despite an uncertaineconomic and monetary environment inEurope, demonstrates that Rémy Cointreauis in a good position to continue to grow itsbrands. The Group will therefore remaintrue to its value strategy whilst consideringpotential growth opportunities. Rémy Cointreau focuses on creating valuewith its brands and continues to rely on apolicy of constant product innovation,whilst strengthening the efficiency of itsdistribution network. Thanks to thisstrategy, Rémy Cointreau will continue togenerate steady and profitable growth.


Finance

Comments and OutlookRémy Cointreau’s turnover for the year ended 31 March2012 increased by 13% to €1,026.1 million. Currentoperating profit rose by 24.4% to €207.7 million, anoutstanding performance as it was achieved on theback of the previous year, which had already shownstrong growth. The current operating margin, whichincluded a further increase in marketing investment,was 20.2%.

This performance reflects the Group’s buoyant businessactivities worldwide. All regions reported growth, withdouble-digit growth in Asia-Pacific and the US. Europewas driven by Western Europe and Russia.

Net profit, excluding non-recurring items, was €123.9 million, an increase of 15.3% compared with the previous year.

The Group’s net debt is at an all-time low of €188.6million (€328.9 million in 2010). The net debt/EBITDAratio was 0.67.

The 2011/12 financial year was marked by:• a double-digit increase in current operating profit,• an excellent performance by Rémy Martin, whosesales growth went hand-in-hand with strongprofitability,

• continued rapid growth in Asia,• the disposal of the Champagne division, and• a sound financial position.

Turnover was €1,026.1 million, an increase of 13%(15.6% organic).

Current operating profit rose by 24.4% to €207.7million (up 20.2% organically), with an increase in theoperating margin to 20.2% compared with theprevious year. This performance was achieved thanksto a significant improvement in gross profit,accompanied by increased advertising andmarketing investment to support the brands.

Operating profit was €204.7 million after taking intoaccount a €3.8 million impairment charge on two secondary brands. In 2010, the Metaxa brand was subject to a €45 million impairment charge (€33 million after tax).

Net financial expenses amounted to €35.3 million,an increase of €5.6 million which included a €7 million reduction in the cost of financial debtthanks to a significant reduction in Group debt and a €7 million negative movement in interest ratehedging instruments.

The income tax charge of €47.3 million reflected aneffective tax rate of 27.9%. The share in the loss ofassociates was €0.4 million, originating primarilyfrom Dynasty, a Group joint-venture established in1980 and a major player in the Chinese wine market.

The Group’s share of net profit, excluding non-recurring items, was €123.9 million, an increaseof 15.3% compared with the previous year.

The Group’s share of net profit increased by €40.3 million to €110.8 million.

Net financial debt was €188.6 million, a significantreduction of 43% compared with €328.9 million at 31 March 2011. This improvement was primarily dueto the disposal of the Champagne division. The netdebt to EBITDA ratio was 0.67.

Shareholders’ equity was €976 million with astronger balance sheet.

In December 2011, a share buyback programme wasimplemented. At 31 March 2012, 1,421,003 RémyCointreau shares had been purchased by the Group ata cost of €95.6 million. This programme wasterminated on 23 May 2012.

During the 2011/12 financial year, the Euro/US Dollarrate improved slightly compared with the previousyear, from USD 1.37/€1 to USD 1.34.

An ordinary cash dividend of €1.30 as well as a specialdividend of €1 will be put to a shareholders’ vote at theAnnual General Meeting to be held on 26 July 2012,with an option of a full payment in cash or in shares.

This document is printed on 100% recyclable and biodegradable coated paper,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).

PEFC/10-31-2043

Allen SmithMount Gay Rum Cellar Master

RÉMY COINTREAU

21 boulevard Haussmann 75009 Paris

Telephone +33 1 44 13 45 15

The French version of this document is availableon request or via the remy-cointreau.com website

All the regulatory information required by the AMF is available on the Company’s website www.remy-cointreau.fr

Photo credits: Rémy Cointreau, Alexis Blondel and Éric LegouhyDesign and production: Agence Marc Praquin

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annual report i - rémy cointreau · old vineyards and the aroma of the eaux-de-vie; that which...

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