THE HOUSE OF RÉMY MARTIN AND THE SOURCING OF EAUX-DE-VIE

All House of Rémy Martin cognacs are produced in and around the town of Cognac, on a site that includes ageing and fermentation cellars, laboratories, a packaging complex, offices and a visitor and reception centre.

The House also owns wine estates (238hectares of vines eligible for the Cognac appellation), as well as a new distillery in Juillac, which opened in November2018. However, the stock of Cognac eaux-de-vie has been built up largely as a result of exclusive partnerships with Grande and Petite Champagne producers. This partnership policy, introduced in 1966, has enabled the Group to manage its long-term supplies and meet the quality standards required by the House of Rémy Martin.

The partnership mainly consists of a cooperative, Alliance Fine Champagne (AFC), whose members manage around 60% of the Grande Champagne and Petite Champagne vineyards, via different types of collective and individual long-term agreements.

From an accounting point of view, the commitments made by the House of Rémy Martin through the AFC are fully recognised in the consolidated statement of financial position of the Rémy Cointreau Group, once the eaux-de-vie covered by these agreements have been produced and have passed quality control. Any contractual commitments not yet produced are disclosed in off-balance sheet commitments.

HOUSE OF RÉMY MARTIN KEY FIGURES

In 2018/2019, the House of Rémy Martin accounted for 70% of the Group’s total net sales and 99% of its international sales.

Net sales (in €m) and breakdown by geographic area (in %)

• 2018 (Asia / Pacific : 42%, Americas : 42%, Europe / Middle-East / Africa : 16%)
  Net sales : 760.0 M€
• 2019 proforma (Proforma figures (pre-IFRS 15, 16 and 9)) (Asia / Pacific : 44%, Americas : 42%, Europe / Middle-East / Africa : 14%)
  Net sales : 851.9 M€
• 2019 (Figures post-IFRS 15, 16 and 9) (Asia / Pacific : 42%, Americas : 46%, Europe / Middle-East / Africa : 14%)
  Net sales : 774.4 M€

Current operating profit/(loss) (in €m) and current operating margin (in €m)

• 2018 : 26.9% (Current operating profit/(loss) : 204.4 M€)
• 2019 proforma (Proforma figures (pre-IFRS 15, 16 and 9)) : 27.7% (Current operating profit/(loss) : 235.6 M€)
• 2019 (Figures post-IFRS 15, 16 and 9) : 30.4% (Current operating profit/(loss) : 235.6 M€