UPDATE 1-Remy Cointreau names finance chief as new CEO

Thu Jun 20, 2013 7:14am EDT

* Pflanz to succeed Laborde as CEO from Oct 1

* Nomination comes as Remy faces slowdown in China

By Dominique Vidalon

PARIS, June 20 (Reuters) - Remy Cointreau on Thursday picked chief financial officer Frederic Pflanz as its next chief executive, who will take over at a time when Chinese demand for premium drink brands is showing signs of weakening.

Remy Cointreau, along with other luxury firms and drinks rivals Pernod Ricard and Diageo, is experiencing weaker demand from China - until now a major sales driver - as Beijing cracks down on gift-giving and also from slowing economic growth.

Pflanz, 44, will succeed Jean-Marie Laborde, 65, who led Remy Cointreau for nine years and was the main architect of the group's focus on high-end brands such as Remy Martin cognac, popular with wealthy Chinese.

Pflanz's appointment had been expected after he added the chief operating officer post to his CFO role in December, seen as a first step towards the top job, which he will take on from October 1.

One sector analyst, who asked to remain anonymous, described Pflanz as "extremely smart. A good and rigorous manager".

Nevertheless it will not be easy for the quiet Pflanz to replace the charismatic Laborde.

"Jean Marie Laborde did a fantastic job (disposal of champagne, exit of Maxxium) and Frederic Pflanz has very big shoes to fill. But Pflanz has been working with Laborde for a long time and has a very good knowledge of the industry," Exane BNP Paribas analyst Javier Gonzalez-Lastra said.

By 1059 GMT, Remy Cointreau shares were off 1.89 percent at 82.90 euros, in line with the European sector, which was off 2 percent.

BIG SHOES TO FILL

Laborde had joined Remy as CEO in 2004, after spending most of his working life in the drinks industry at rival Pernod Ricard followed by a spell running LVMH's wine and champagne business Moet & Chandon.

When Laborde took the helm at Remy Cointreau the company's holdings were more diverse than they are now and it had less control over its core business as its global distribution was in the hands of Maxxium, a venture overseeing several products.

Laborde streamlined Remy's operations, selling the champagne division, and exiting Maxxium to have greater control over its brand portfolio.

Investors have rewarded that strategy and Remy has largely outperformed its rivals.

Remy Cointreau trades at 22.66 times estimated 2013 earnings against 16.67 times for Pernod and 16.88 times for Diageo.

The cognac division, which accounts for the bulk of the group's sales and profits, achieved like-for-like operating profit growth of 18.6 percent in the fiscal year 2012/13 ended March 31 while like-for-like sales grew 8.8 percent to 1.193 billion euros.

"In the short term, Remy's growth may not be as strong as in the past few years due to the anti-extravaganza campaign in China, but the fundamentals remain very solid and growth prospects in China are still extremely robust in the long term" said Gonzalez-Lastra.

Last year Remy, which had been looking for a premium whisky brand to complement its portfolio, acquired single malt Scotch Bruichladdich.

Analysts expect Pflanz to continue that strategy and seek other acquisitions, notably in premium whiskies.

Pflanz has been Remy's CFO since July 2010 and before that he was finance director at the consumer products unit of cosmetics giant L'Oreal, a group he joined in 1992.

His nomination will be approved by a board meeting on September 24. Laborde's mandate was expiring in July and was extended to September 30 to coincide with the group's September 24 annual shareholders' meeting.

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