H1 sales fell 8.3%, gross profit by 13.9% - a sign that price increases cannot offset the decline in volumes - operating profit was down 25.8%, with EPS sliding almost a third (-32.6%).
As usual, these accounting results remain highly theoretical, since the company's long-standing stumbling block and structural constraint - the voracious appetite of its WCR - keeps cash flow in negative territory.
As a result, with cognac sales slumping and revenue growth in its liqueurs and spirits segment running below inflation, net debt rose by a further 6.6%, from €644m to €687m.
The situation is critical in Europe and Asia - where sales posted a double-digit fall - but is fortunately mitigated by the resilience of the North American market, which still represents 39% of consolidated revenue, exactly the same share as the Asia-Pacific region.
The only thing the group can really control is its spending, particularly its marketing and commercial budgets, which it has cut by 8.1% in an effort to limit the damage. The trend here is similar to what we described at Pernod Ricard last August.
Remy Cointreau's strategy for a rebound, while still couched in codes and jargon, is actually quite clear: diversify its offering beyond cognac, which still represents 61% of revenue; and above all, expand into more mass-market categories. So out goes the formerly targeted, purely exclusive "luxury" positioning.
Gone too are the top-of-the-class valuation multiples the group could boast throughout the last cycle. Remy Cointreau is now trading on the stock market at around its book value and ten times its earnings before interest, tax, depreciation and amortisation, or EBITDA. These are levels it had not seen since March 2009 and the subprime crisis.
Even though its solvency ratios are stretched - and it is regrettable that the company took on debt to pay generous dividends just as its business was showing worrying signs of decline - the group should provide a significant token of confidence to investors by launching a share buyback program.
