At one point, the market had assigned a valuation multiple worthy of the luxury sector to Rémy Cointreau; it has since reversed this exaltation. In the same vein, MarketScreener once held the group's shares in its Europe portfolio, before our management team finally changed its mind.

The reason for this was that the cognac fad - which, in a stunning marketing coup, is as popular in America as it is with wealthy Chinese businessmen - was likely to dissipate at any moment, at least in part.

The result would certainly be unfortunate for a group whose two-thirds of consolidated sales depend on sales of the precious eau-de-vie, with Asia and North America together still accounting for nine-tenths of the segment's sales.

A long-term perspective - in this case, the last ten-year cycle 2015-2024 - also proves that Rémy Cointreau's sales are struggling to break through a glass ceiling, and that growth remains anemic overall. Adjusted for inflation, it would even be negative, notwithstanding the brief distortion observed during the pandemic.

Rather than shooting the ambulance, MarketScreener acknowledges that cost control has remained rigorous and that the Group has skillfully managed to pass on price increases. This is evidenced by a gross margin that has improved over the cycle, a performance that contrasts sharply with the stagnation observed among comparables such as Campari or Pernod Ricard. 

Our perennial stumbling block with Rémy Cointreau stems from the difficulty of reconciling its accounting results with its cash flows. Over the cycle, the Group generates a total book profit of EUR1.6 billion, but a cumulative free cash flow of only EUR640 million; this is because a large part of the profit is derived from inventory appreciation.

As Rémy Cointreau returned EUR1.1 billion to its shareholders over the period - two-thirds distributed in dividends, the remaining third in share buy-backs at not always attractive valuations - it was necessary in the meantime to take on additional debt and dip into cash. Nothing dramatic, of course, but one would have wished for a more virtuous business model.

Be that as it may, and to conclude on a positive note, the "premiumization" strategy, while often limited to empty invocations, has been an undeniable stabilizing factor here - dare we say success. In any case, it has enabled the Group to limit its losses.

As for its valuation, it is currently evolving just below the threshold of fifteen times operating profit, i.e. around its historic low; below its long-term average of twenty times operating profit; and far from the multiples of thirty times operating profit exceeded during the speculative euphoria of the pandemic.

In this respect, cognac lovers ready to bet on a comeback and ignore both the economic situation and current events will undoubtedly find this an ideal first point of entry.