Remy Cointreau CEO jumps ship after three month voyage

Remy Cointreau chair Francois Heriard Dubreuil will temporarily assume the position of CEO after Frederic Pflanz sprang a shock yesterday by stepping down for 'personal reasons'.

Pflanz had only been in the job for three months, but will remain with the company as development director, with (thus runs a company statement) "responsibility for specific assignments that he had already initiated".

Prior to taking on the mantle of CEO, Pflanz had been Remy Martin CFO since July 2012 and also assumed the role of chief operating officer in December 2012.

We asked Joelle Jezequel, Remy Martin spokesperson, when the firm expected to appoint Pflanz' successor.

"The process for replacing him is already underway and we hope to have his replacement within the next few months," she said.

Problem child Remy Martin

The Remy Cointreau board thanked Pflanz for his contribution over the past four years, and noted that the company strategy would remain unchanged under Dubreuil's transitional leadership.

Remy Cointreau's share price fell 2.3% from €60.52 last night to €59.12 at the time of writing as a result, and it also fell sharply (8.3%) on November 26 after the company's disappointing interim results announcement for the six months ending September 30.

Sales for this period of €558m were down 3.6% in organic terms year-over-year, while operating profits fell 7.3% to €132.7m, although the firm was lapping strong growth.

Fine Champagne Cognac brand Remy Martin was the problem child, with a 10.4% sales decline reflecting an unfavorable Chinese market for imported spirits, not offset by growth in the Americas and Europe.

High-end cognac sales suffer

China's government scaled-back significantly on gift giving and sponsored banquets in 2013, which hit high-end cognac sales badly, and on the November 26 conference call with analysts Pflanz admitted that Remy Cointreau did not expect any improvement in the Chinese market in coming months.

"In the context of an uncertain background in Europe and a marked slowdown in China, continuing to be impacted by the level of retail inventories, with poor short-term visibility, the outlook for the second half-year is less favorable," Remy Cointreau said in its half-year business reported, released on November 26.

"This situation will have a downward influence on current operating profit, which is expected to suffer a significant double-digit fall by the end of the financial year, following many years of regular, sustained growth. Nevertheless, the Group remains confident in the medium and long term in Asia, and China in particular, and its development potential remains unchanged," the firm added.

The firm's other brands include Metaxa, Mount Gay, St-Remy and single malt Bruichladdich, as well as eponymous spirit Cointreau.