Hello and welcome to the Rémy Cointreau Quarterly Sales 2024. My name is Caroline, and I'll be your coordinator for today's event. Please note this call is being recorded, and for the duration of the call, your lines will be on listen-only mode. However, you will have an opportunity to ask questions at the end of the call. This can be done by pressing star one on your telephone keypad to register your questions. We kindly request you to limit the number of questions to two per person. If you require assistance at any point, please press star zero, and you'll be connected to an operator. I will now hand over the call to your host, Luca Marotta, the CFO, to begin today's conference. Thank you.
Good morning, everyone. Thank you for joining us today. As highlighted in our press release, Q3 sales declined by 21.5% organically. This performance reflects several key factors. First, high comparison and ongoing destocking in the U.S., despite a slight sequential improvement in volume depletion from Q2 to Q3. Second, challenging market condition in China in APAC travel retail. Third, a significant sequential improvement in the rest of the world, including Europe and the rest of Asia, which returned to growth in Q3. And fourth, last but not least, a positive calendar effect linked to Chinese New Year, which is earlier this year, more or less 1.5 points in Q3 at group level, representing in absolute value around EUR 5 million. So far, trends for Chinese New Year are soft but slightly better than our initial expectation.
Q3 sales decline is broken down as follows: volume decreased of - 13.8% and - 7.7% of price mix effects, largely driven by the underperformance of high-end brands. Lastly, the cost-cutting plan is progressing well in line and in line clearly with our roadmap highlighted some months ago. Looking at the overall sales performance by region, America has recorded a very strong double-digit decline over the nine-month period, primarily due to, first of all, high base of comparison. As you remember, most of the H2 U.S. shipment occurred in Q3 last year. Second point, a continued destocking, although volume depletion showed slight sequential improvement, but still in negative lands. APAC sales decreased by high single digit over the nine months due to tougher market condition in China. Conversely, the rest of Asia showed strong improvement and returned to growth in Q3, led by Liqueurs & Spirits .
Overall regionally speaking, EMEA declined by low double-digit in nine months but showed a sharp recovery in the last quarter in Q3. This was driven by Liqueurs and Spirits returning to positive territory and a reduced decline in Cognac division. This was sell-in shipment. In terms of the best approximation of sell-out, so value depletion at group level over the past nine months in the U.S., value depletion declined by mid-teens year-on-year in nine months, including a high single-digit volume drop. Compared to pre-COVID, nine-month value depletion is down low single digit, but out of the VSOP, excluding the VSOP, increased by around 40% in value. In China, value depletion was flat year-on-year in nine months but grew, so it's been increasing by mid-single digit in Q3. On a five-year basis, nine-month value depletion in China increased by over 20%.
In EMEA, value depletion decreased by mid-single digit year-on-year but grew, increased by mid-single digit in the last quarter, excluding Russia, to be a bit comparable geographically speaking. Nine-month value depletion is up mid-single digit in Europe compared to pre-COVID levels. What we can say, making the global analysis, is that overall, group value depletion fell by high single digit year-on-year, more or less - 8 over the nine months, outperforming clearly sell-in trends with - 17.8. On a five-year basis, value depletion grew by low single digit, a little bit less than 2%, exceeding sell-in trends that are overall negative over five years, of around - 4, - 3.9.
So the message is that thanks also to what's happening in the last quarter, the last months, we are performing better in the last part of the chain, the more we are near to the consumer compared to the sell-in. So still the destocking, but if there is no spark in a clear way visible, we are starting to bear some fruits in terms of value depletion dynamics. To conclude on this very first slide, we reconfirm our full-year guidance for both top line and bottom line. Based on our nine-month sales performance, we expect to reach the lower end of the sales guidance range, i.e., close to -18% in organic terms. On slide three to five, I'd like to, as usual, briefly highlight some of the key marketing initiatives undertaken during the quarter. Slide three, let's look at what happened in November in Vegas.
We relaunched our Louis XIII pop-up store during the Formula 1 Ultimate Race at Wynn Las Vegas. This retail activation showcased a wide range of Louis XIII offerings, including the Iconic Collection, DROP Collection, and Rare Cask. We also provided exclusive accessories and personalization services, which resonated well with our target audience. These initiatives delivered impressive results with double-digit sales growth, exceeding our initial projection expectation. While the financial contribution to overall U.S. sales is modest in absolute value, this activation remains a very powerful tool to strengthen Louis XIII brand equity and reinforce its premium positioning in this very important market. Turning to page number four, let's discuss China with a focus on e-commerce, one of our most strategic direct channels. Despite the challenging market environment, e-commerce continued in China to perform strongly with sales growth of + 10%, more or less, during this quarter.
This was driven by key activation during Double 11, November Festival, and Super Brand Day held on December 18. Both campaigns were hosted on our flagship platforms in Tmall and JD.com, leveraging innovative live streaming from the Rémy Martin House pop-up store in Shenzhen. This pop-up, strategically located at the Shenzhen Bay Opera House, celebrated our 300-year heritage and bridged the gap between our roots in Cognac and our ever-growing presence in China. The fourth boosted our e-commerce performance. And both special occasions, Super Brand Day, Double 11, recorded a double-digit growth compared to the previous year. So once again, I repeat every time and clearly, in China, we are in direct touch with the final consumer. We continue to perform in a very positive way.
Lastly, on slide number 5, I'd like to touch base on Metaxa, which is our Greek brand, which achieved outstanding results in the quarter, in the last quarter, particularly in the EMEA region, which is a very important region for this brand, where sales grew by over 20% organic. This success reflects the team's effort to rejuvenate the brands, attracting a younger demographic while at the same time elevating the portfolio of these specific brands. An example is the launch of 12 Stars Zeus, the first-ever limited edition of the 12 Stars range. Released in September, these exclusive products saw more or less 50,000 bottles distributed across key markets such as Poland, the U.K., Greece, and Czech Republic. Now, let's turn to slide number 6, back to figures.
Nine-month sales amounted to EUR 787.8 million, representing a year-on-year decline of more or less 170 million, 168.9 to be precise, or - 17.7% on a reported basis. This performance was shaped by the following factors. First of all, strong organic decline of EUR 117.1 million, i.e., - 17.8% of organic sales decrease. Performance is split between - 13.6% negative volume effects and - 4.2% of price mix. The price mix is negative in nine months. Why? Result from a slight negative pricing effect and more substantially by low to mid-single-digit negative mix effect. Why? Linked to the underperformance of high-end product and, to a lesser extent, but clearly important, the Cognac division. We still are mainly a Cognac company. So if we are growing more liqueurs and spirits for the dynamics of valorization at the end specifically is bad compared to the Cognac growth.
Second, we recorded a slight positive currency translation impact of EUR 1.3 million, so positive one, or 0.1% gain for the nine months, the first since a while in terms of conversion. This gain was mainly driven by the improvement of the British pound, more or less EUR 1 million, and U.S. dollar for the same amount. However, this gain was partially offset by negative impact from the Japanese yen, minus half a million euro, and Chinese RMB for the same magnitude in terms of absolute value. Slide number seven, an important slide, we provide a breakdown of performance by division, as usual, compared to the nine months of pre-pandemic, so 2019, 2020, and you can read the spreadsheet, but I'll summarize the key triggering points, the key highlights. In a nutshell, Cognac volumes declined significantly in the current U.S. environment, clearly, although price-mix effects remained very strong over 5%.
Overall, total Cognac sales were down 16.3% versus pre-COVID, while value depletion was slightly better, declining by low double digit. At the same time, we have the opposite effect. Liqueurs & Spirits division sales showed a significant growth of 34.7% compared to pre-COVID, driven, it is very interesting, both by volume and price mix. Sales are below the value depletion trends, which grew by over 40% over the same period. The trends we highlighted for the short term are also visible and accountable for the comparison to five years. So, and we'll be back to that in the Q&A, I'm sure. When we talk about stock, don't forget absolute value of stock are lower than five years ago, are lower.
At group level, these figures reveal a divergence, a difference between sell-in -3.9% and value depletion are slightly up, more or less 2%, emphasizing, so I restate this concept, I admit, the better resilience of the end market demand compared to nine months cumulative end of 2020, five years ago. Now, digging more analytically on the organic trend by region at group level. Let's start with APAC. APAC, nine-month organic sales declined by high single-digit year-on-year, but increased by around 20% to zero on a five-year basis. In terms of volume value equation dynamics, year-on-year performance was only impacted by the value component driven by the underperformance of high-end brands and ranges. In China, sales were down low double-digit in Q3 amid challenging market condition, tougher market condition, particularly for the high-end segment.
However, as already highlighted, direct channels were more than 45% of sales in the last quarter, and if you consider the nine months, more than one-third, more than 30%. This channel proved to be resilient, rising by strong double-digit e-commerce percent in the quarter, supported by Double 11 and Super Brand Day events, and as a consequence, e-commerce penetration for China reached nearly 30%, 30% of sales by the end of December, nine months. Considering only the quarter, the overperformance is clearly visible, + 10% on a negative. It was around 40%. Beyond the decline, so in a relative way, of the indirect channels, overall performance was also affected, negatively speaking, by the continued weakness of the Hong Kong market and softer trends in APAC Travel Retail where travelers have returned but are spending less. This was sell-in.
On a more positive note, value depletion in China showed encouraging and the other way around trends, up mid-single-digit in the last quarter, bringing the nine-month performance to almost flat value. On a five-year basis, nine-month value depletion increased by more than 20%. Given the stronger resilience of depletion compared to sell-in, inventory levels remained in China and APAC generally healthy at the end of December. Elsewhere in the region, so out of China and Travel Retail APAC, the rest of Asia returned to growth in the last quarter, increasing by low-single-digit, primarily driven by Australia and New Zealand, with strong performance in Liqueurs & Spirits . Admittedly, it was time to do that. They were not responding positively since a while, so they are more than welcome.
By the end of December 2024, the APAC region accounted for 42% of our group sales, four points more than the previous year. Second region by importance, the group level is the Americas, in which nine-month organic sales declined by a very strong double-digit. And compared to five years ago, it's the opposite of APAC. It's more or less - 20%. Year-on-year performance included very strong double-digit negative volume effect and mid-single-digit negative price-mix impact. Why? It's more reflecting an unfavorable mix of products, U.S. states, and formats. In the U.S., inside the Americas, sales declined by very strong double-digit in Q3, driven by two factors. First, extremely high comparables. The majority of the H2 shipment in the U.S. last year were concentrated in Q3.
The second point, another round of destocking due to continued weakness in value depletion, not in terms of dynamics or sequential improvement, in terms of absolute value. Down mid-teens year-on-year for nine months, equivalent to a low single-digit decline on a five-year basis, but + 40% when we exclude the VSOP. This performance, the quarter, the partial catch-up and sequential improvement, was clearly driven by the non-cognac brands. In this context, inventory levels in the U.S. stood slightly below, if we want to shoot a number, of five months by the end of Q3. But as I said, not the same absolute value as five years ago. In Canada, sales experienced a sharp decline in Q3, while Latin America, the opposite, recorded strong double-digit sales growth supported by Cognac and liqueurs and spirits. There, again, were two bad quarters before, so they were more than welcome.
By the end of December 2024, Americas accounted for 35% of our group sales, down five points year-on-year. Finally, in a big Europe region, EMEA, nine-month organic sales were down by low double digit and around 5% versus five years ago, reflecting primarily a negative volume effect. But EMEA is a big region, so we have to dig in a bit more on sub-clusters. So third-party distributor cluster achieved mid-single-digit sales growth in the quarter, led by Germany, Czech Republic, and Poland. At the same time, sell-out trends turned positive, driven, as already highlighted, by Metaxa. U.K. and Nordics sales rose by low double digit in the quarter, benefiting from favorable comparables and market share gains due to a robust solid activation plan during OND October, November, December.
Benelux and France, the opposite. Q3 sales declined mid-teens, impacted by competitive promotional pressure in Cognac and persistently soft trends in Liqueurs & Spirits . Last but not least, in EMEA and CIS, not Russia, clearly, we don't sell in Russia, sales fell by low single digit in the quarter, reflecting continued destocking and very intense promotional activity, particularly in South Africa, where the market remains, as you know, heavily focused on VS, the category in which we are not playing. Over the nine-month period, value depletion in the region, so not sell-in, but the best approximate sell-out, declined by mid-single digit, but improved by mid-single digit in the quarter. So a change of rhythm. On a five-year basis, excluding Russia, nine-month value depletion would increase by mid-single digit, boosted by Liqueurs & Spirits . Overall, inventory levels remain healthy across most areas.
End of December, the EMEA region accounted for 23% of group sales, up one point compared to the previous year. So plus four APAC, plus one EMEA, minus five point Americas. Let's now turn to slide nine and the analysis by division, starting with Cognac. Cognac division posted nine-month organic sales decline of - 19%, driven by a - 14.7% drop in volume and a negative price mix of 4.3%. End of December 2024, Cognac accounted for 63%, so a little bit less than two-thirds of our sales, down one point compared to the previous year. Let's start with APAC. APAC, inside APAC, mainland China, sales declined by low double digit in Q3, impacted by challenging market condition, the domestic market, and softer trends in travel retail APAC.
As already said, announced indirect wholesalers and not directly in touch with consumer channels were the most affected due to continued cash flow pressure, weighing on wholesaler confidence and their ability to place orders and carry stock. This was further influenced by the transition to our team business model. As a reminder, we are significantly reducing, and we had already, the number of wholesalers a few months ago, more or less one year, to retain only those meeting specific requirements, increasing the direct touch with the consumer. On the other end, direct channels performed robustly, including e-commerce, Louis XIII direct freestanding stores, e-boutiques, and PCDs. Talking about ranges and brands, Club, Rémy Club, demonstrated greater resilience with value depletion up 20% in value in the quarter, at almost 100%, so doubled on a five-year basis, while at the same time, high-end brands remained impacted by a bit of luxury shaming.
Elsewhere, as said, Hong Kong underperformed. Taiwan and Macau delivered growth. We are happy with that. A strong growth in both sell-in and depletion in the quarter. Overall, despite very challenging, tough context, value depletions for Cognac in APAC and Q3 rose by mid-single digit year-on-year, bringing the nine-month performance in China to almost flat in value. On a five-year basis, I repeat, this is equivalent to more or less 20% both in the quarter and the year-to-date nine months in China for Cognac. Rest of Asia, Cognac sales declined by mid -to-high single digit in Q3, with Japan, Malaysia, and Singapore facing strong competitive pressure from promotion, from the promotional environment, and softer trends in China's tourism, as already highlighted. Second region in terms of weight, considering Cognac, is Americas. Let's start with North America, so U.S. combined with Canada.
Cognac sales fell by very strong double digit in Q3, affected by high comparables and continued destocking due to depletion that are improving sequentially, but still in negative land, considering a softer comparison. So the absolute value are not yet meeting the expectation. It's going better, but not yet to the expectation. Q3 U.S. value depletion declining by mid-teens year-on-year with contrasting trends across states. Control states outperformed with volumes almost flat, and the VSOP returned to positive growth. It's important. Control states are always considering the low stock, a first indicator of what's really happening in the market. So we consider that good news. Open states, conversely, were more significantly impacted and more by negative, clearly, and clearly mostly by Illinois and New York. Given these factors, cognac inventory coverage was likely below five months at the end of the quarter.
If we consider the 12-month rolling value depletion, we have two points of negative price mix effect end of December, but on a five-year basis, price mix remains up 13 points on Cognac in terms of value depletion. In Latin America, sales rose but very strong double digit in Q1 in the quarter, driven by strong performance in Mexico, Central America, Caribbean, and particularly for Rémy VSOP and XO. So more than welcome. Third region by weight, Cognac is EMEA, where Cognac sales declined by low single digit in Q3, mainly due to intense promotional competition across most markets. U.K. returned to growth, up strong double digit, supported clearly by favorable comparables and the success of new activation plan implemented a few months ago.
Sub-cluster European third-party distributor performance was negatively impacted by Germany, destock in Czech Republic following a distributor change at the beginning of the year, and weakness in Austria. In Africa, Metaxa, sales declined by mid-single-digit in the market, essentially driven, as said, by VS, a category in the campaign in which we are not playing. Lastly, EMEA value depletion, so best approximate sell-out, outperformed sell-in for Cognac and returned to growth, up low- to mid-single-digit year-on-year in the quarter, but still very negative on a five-year basis. It was the analysis, the cross-analysis, Cognac division digging through the three regions. Let's do the same thing on Liqueurs & Spirits , which was clearly more dynamic in the quarter.
Liqueurs and Spirits division reported a -14.9% organic sales decline in nine months, driven by a strong volume decrease of -12.2% and the negative price-mix effect of only -2.7%. At the end of December, Liqueurs and Spirits division accounted for 35% of our sales, up one point compared to the previous year. What happens by region? Let's start with the first one in terms of weight. They are the Americas. North America sales were down very strong double-digit in the quarter, primarily due to a very challenging base of comparison and increased caution from wholesalers aiming to optimize inventory levels in a slowing market. Despite these challenges, underlying trends showed strong resilience with sequential acceleration. Q1 to Q3, U.S. value depletion were up by single-digit year-on-year and more or less 80% more than Q3 2020, almost the double.
The Botanist and Bruichladdich delivered strong growth year-on-year at +10%, +20%, respectively. So on a five-year basis, we are talking of +90% first case, +50%. And on top, price mix was flat compared to last year for the 12-month period ending December 24, but increased in terms of value depletion by around 20 points, 19 on a five-year basis. In Latin America, sales rose by very strong double digit in Q3, driven by Cointreau's strong performance in Puerto Rico, Mexico, and Brazil. Second region by weight is EMEA for Liqueurs & Spirits , where sales increased by mid-single digit in quarter, showing a strong sequential improvement from Q2, driven by growth in U.K., Germany, Poland, Italy. Value depletion were in line with sell-in, so growing, accelerating to mid-single digit year-on-year in Q3, more or less +30 compared to five years ago.
Breaking sales down further, U.K. posted a strong sequential acceleration, low double digit in Q3. Same reason for the Cognac, comp, easy comps, a strong success of OND, October, November, December activation plan across three brands for Liqueurs & Spirits as well, but mainly Cointreau, St-Rémy, The Botanist, Mount Gay, and Telmont. And in parallel, Europe third-party sub-cluster sales increased by mid-teens in sales, so very strong growth for Liqueurs & Spirits , boosted by strong performance from Metaxa, Germany and Poland, Cointreau and St-Rémy. Third region by weight for the Liqueurs & Spirits , APAC. Inside APAC, let's start with China. Well, sales grew by mid-teens in the Q3, driven by Cointreau and some positive phasing effects on Bruichladdich.
Overall, Q3 value depletion was strongly positive year-on-year on Cointreau and on The Botanist, but still under pressure on Bruichladdich, which is in line with the whisky category dynamics in China. Most prestigious qualities of whisky. Overall, Q3, Liqueurs & Spirits China, value depletion were down mid-single digit year-on-year, but up more than 40% on a five-year basis, bringing the nine-month performance to flat year-on-year and run + 30 compared to five years ago. Rest of Asia for Liqueurs & Spirits were up mid-teens in the Q3, led, as said, by recoveries in key markets like Australia, partially New Zealand. In Japan, sales were more impacted by negative phasing effects related to whisky, but Telmont showed a solid momentum on Telmont Champagne. So we are missing 2% of the group sales. There are no group brands. They're representing 2%, as said, of the group sales, stable year-on-year.
They recorded a decline of - 26.5% in nine months and - 26.7% compared to five years ago at the same period. To conclude on slide number 11, and then I'll give you the mic for the Q&A, I would like to confirm the guidance. Slide number 11. Basically, for this year, we expect sales, shipment, top line of our P&L to decline organically between 15% and 18%. Given our sales performance over the first nine months of the year, the group expects its full-year performance to be at the lower end of the range, so closer to - 18% on an organic basis, and what about the bottom line? We expect to land between 21% and 22% of operating profit margin in organic terms.
Based on recent evolution of our main currencies, the group now expects FX rates to have a positive impact for the full year, both in sales and operating profit, so we are changing. We are updating the guidance in absolute value. In terms of top line, we will be positive between EUR 2 million and EUR 5 million, thanks to the H2, as you witness in the Q3; it's visible, and positive between EUR 5 million and EUR 10 million on operating profit, primarily accounted in H1. As already said, these 2024, 2025 guidance, top and bottom line, takes into account the recent MOFCOM decision based on the information that we had as per today.
The impact for P&L is marginal for this fiscal year, and last but not least, we reconfirm our 2029, 2030 midterm guidance. Thank you for your attention. Now, I'll be very happy to answer your question.
Thank you. If you would like to ask a question, please signal by pressing star one on your telephone keypad. We kindly request you to limit the number of questions to two per person. We will take the first question from line Edward Mundy from Jefferies. The line is open now. Please go ahead.
Morning, Luca. Thanks for taking the question. I've got two questions, both around Sparks. So I know we can see that the sell-out trends are better than the sell-in trends, and you're talking to inventories being healthy across EMEA and Asia and getting on the right track within the U.S. But if we take both China and the U.S. and talk about Sparks, you saw value depletion up mid-single digits in the third quarter. Could you perhaps talk about what's behind that, and to what extent do you think that's sustainable? That's the first question.
Then the second question is on the U.S., where you're talking about some improved performance in certain states, but the open states are still being quite tricky. Do you think that also constitutes a spark, and are you seeing any green shoots in the U.S. on Cognac?
Thanks for your question. I will use your question to explain a bit wider way what's happening in terms of current trading in China and the U.S. Maybe it would be helpful for everybody more globally. What's happening in this moment in China? In Q3, the sales were down low double digit.
At the same time, depletion were up mid-single, clearly with a very strong performance in terms of channel by e-commerce and in terms of product by the club, while the indirect channel was suffering because there is less confidence in terms of cash, and the XO part of the portfolio was also suffering as well. Liqueurs & Spirits , mainly Cointreau and partially some specific SKUs of Bruichladdich, it's more a phasing effect, outperformed. It is an interesting point of diversification, but in terms of absolute value, as you highlighted, China global performance and China Cognac performance gives the same figures. So China is still all about Cognac. Value depletion in China outperforms sell-in. So the question is, why? Consumers are more active than intermediate layers. Consumers, so far, are still liking our products. Consumers are more dynamic than our direct partners. Why that? Because they are sleeping?
No, because there's cash pressure, and there is a foggy environment with a lot of also macroeconomic, macro-political elements that are weighing on that. So to be a bit more precise, so by channel, I repeat, we showed the performance in the quarter that we never achieved before: 45% of sales. Think also to the weakness of the global denominator, but 45% is more than 50%. And we are not supposed to be a direct brand. So it's something which is very positive for our relation with the consumer, also for the P&L, because we can have a more reasonable fixed cost, and we increase the brand awareness. Clearly, e-commerce continues to hammer that, and e-boutique, our freestanding store, accelerating, generating strong growth. PCD also, where more complicated, are catching up. And what does it mean?
PCD are there to sell the highest brand, the highest ranking, which is something they're suffering globally. So inside the global negative figures, there is some positive element. I will not call it a spark in terms of dynamics on the quantitative footprint, but they're positive. On the negative side, indirect channels underperform, impacted by cash flow pressures and the global environment. They are wavering more on the enthusiasm and the dynamics compared to the figures. If we remain true to strict figures, we should have better performance in the Q4. And as you will see, and I will highlight later, Q4 will be a very negative quarter for China. Off-trade was impacted by soft start in banquets due to the IPO's promotion on XO. And at the same time, on-trade was better than the past, more dynamic, but still very small base. We were 5%, and we are 10%.
And important things that we need to highlight on a quantitative basis is that give also the sense of what's happening that's wavering in terms of confidence. Softer sell-in is due also to some collateral anti-dumping investigation effects, not only irrational. Difficult to understand the rationale behind that, but this is the way it is. So Cognac category, for instance, in duty-free, so now, is not allowed to restock duty-free channels. So it is, I don't know why it is totally legal. I don't think so. That's the way it is. It is something that it is linked as a collateral impact of the investigation, anti-dumping investigation effects. This wasn't clearly manageable for us in the Q3, also for peers that I led, have a lot of stocks, more than us. But we should see a catch-up in Q4 if the situation normalizes. But nobody knows.
My message is that the anti-dumping investigation has also some hidden impact on the dynamics of the near future. I cannot measure this potential negative effects if this is lasting Q4. I only wanted to share with you this point because it was not clearly highlighted so far in the market. There are some collateral impacts of the anti-dumping investigation effect that are starting to weigh on the duty-free. It is important to say it. Coming back to brands in China as well, Club was hammering, +20% in Q3 and almost 100% on year-earlier basis, more complicated on the higher end, and very good performance of liqueurs and spirits. To end this very long and articulate answer on China, giving also some additional hints that I think you don't have, let's talk a bit about Chinese New Year today.
It's today, the year of the snake of wood, which is my year. I was born in 1965, the same year. Chinese New Year is earlier, 29th of January, compared to 10th of February. This way, in technical calendar, increasing the Q3 for EUR 5 million. Last year was negative for 8. So this is part of the answer to the Q4. You have a reverse effect. Last year, we had a positive impact on the Q4 for China, EUR 8 million. This year will be a negative for 5. So it's EUR 13 million. I know that I'm talking small figures for our peers, but we are a more small company. So EUR 13 million at our scale, it's waves. This technical calendar effect of EUR 5 million will impact a group level 1.5 on the quarter in Q3, 4.5 points for APAC, and 2.5 for the Cognac.
We can qualify the Chinese New Year so far as correct, a bit soft overall, but better than expected. And up, so growing compared to last year in depletion, sell-out so far. So if we are breaking down, analyzing the performance of the Chinese New Year refurbishment and selling scores, the more we are going to tier two and retailer, the more the performance is positive compared to last year, witnessing the fact that the first layer, the tier one, are more concerned by global situation and have cash pressure limiting the stock. But it's clearly the situation, which is far better than what we've experienced in the U.S. in the last two years. In China, what we are saying is we are performing better on a constant basis in depletion and sell-out compared to the sell-in. So the restocking or selling dynamics will be facilitated by that.
This is, I think, a nice transition to the second question. What is the current trading? What's happening now in the U.S.? In the U.S., Q3 sales were down very strong double digit, while value depletion were down more or less - 10 year -on -year and down mid-single digit of five years. This was also an improvement. The nine-month sales were down very strong double digit, value depletion down mid-tens because there is a catch-up, but still negative. Let's look at the positive thing before the negative one. Value depletion outperformed was better than sell-in. Why? High comps in sell-in. Last year, we invoiced more or less the big part of the H2 and Q3 and continued the destocking. On a sub-channel point of view before states, retail chains are now overperforming the independent store.
This can show that big chains retailers seem to finalize their destocking, while it is still ongoing for independent store, where we are the most exposed, so that's negative for us. At the same time, it's positive because the final dynamics here retail chain more than independents, but for independent, we were always treasured for Rémy Cointreau, and we always said that we were not witnessing anything that in a correct way. We are a bit late in terms of performance, so the destocking is still weighing on them, then switching the analysis by state in terms of depletion, more than sell-in, we have, let's start with the positive, some positive signs. Control states outperformed with volumes almost flat, driven by Michigan and Pennsylvania, so big states, top five. The VSOP returned to growth in volume in Q3. Positive.
So okay, still very far from five years ago, but it's part of the strategy. On the negative side, Open States were more negative, impacted by two important states, Illinois and New York. While slightly positive, Florida and California returned to growth in Q3 in volume, not at the same time in value, but in volume. So different performance that are contributing to the sequential improvement, even if this positive element is not yet qualifying for a spark. There is an improvement. There is no fire. It's still cold. Focus Cognac. Like what happens specifically for the Cognac, because now we need to split in the U.S. because the category of Liqueurs & Spirits and Cointreau is going faster than the Cognac. So we need to be more analytical, I think. Let's talk about Cognac in the U.S.
Sell-in was down strong double digit in the quarter, affected clearly by COVID and the destocking. But Q3 value depletion declined by mid-tens year -on -year with contrasting trends across states. So the -10% is more driven by Liqueurs & Spirits overperformance than Cognac. And it is something which is a touch more negative than positive, also for the P&L in the future. So given this factor, Cognac inventory coverage is more or less slightly below, slightly bigger than five months, has not moved, but in absolute value, it's far lower than five years ago. On a positive side, sorry for this long answer, but it's important to give you the whole picture because otherwise you will not understand why we are saying that we are beating in sell-out our sell-in, and we are now at the bottom of the range.
We are sending, if we do not explain, counterintuitive messages to you. We need to explain why we are more cautious for the Q4. For Liqueurs & Spirits , sell-in were down very strong double-digit in Q3, probably due to very challenging base of comparison and increased caution from wholesalers aiming to optimize inventory in a slowing market. I repeat what I said two calls ago. The Cognac is so important in the U.S., it's overshadowing a bit also the mechanics of Liqueurs & Spirits , sometimes also Cointreau. The wholesaler footprint sometimes is a little bit too massified, and they do not enter in the analytics details of the reordering pattern they should be. Despite this challenging, underlying trends showed stronger resilience with sequential acceleration, starting with Cointreau.
Cointreau Q3 U.S. depletion were up by single digit, up by single, and + 80 compared to five years ago. The Botanist and Bruichladdich as well, very strong. Clearly helped also by some new points of sale compared to five years ago, but the velocity also is positive as well. In a nutshell, to answer in a very long way to your question, there was no spark yet, but there's a slight sequential improvement of the overall macroeconomic situation. Is this enough? No. Less than our expectation. So that's the reason why we are cautiously guiding for the end of the year, remaining in the range. So we are still in the same guidance, but we precise that in terms of sell-in, we are more at - 18 on top line.
And bottom line, if there will be a question of consensus or we answer, it is between 21 and 22.
We will see during the quarter, which is crucial to determine the final balance of the profitability as well. That's the reason why you have this answer. Q4 will be important. Sorry, Ed, I was more than long, more than Mediterranean and Latin in my answer. I'm clearly not straight to the point in the Anglo-Saxon way, but if you analyze the call, you will find a lot of useful information.
Thank you. I appreciate the color.
Thank you. We will take the next question from the line of Laurence Whyatt from Barclays. If the line is open now, please go ahead. Morning, Luca. Thanks very much for the opportunity to ask questions. A couple for me, please. On your guidance around Americas, you're talking around no recovery before Q4 2024, 2025, which presumably is the quarter we are in.
Just on that, have you seen much change in January with regards to being able to hit that recovery in this quarter? But also in context of the comments coming in from LVMH last night, they're not really expecting much of an improvement in the Wines & Spirits division for the next couple of years, or they're giving it two years to see a recovery. It seems to us that the impact that you're facing is a lot due to the promotional activity coming in from Hennessy in the U.S. in particular. I'm just wondering if you think that recovery could be happening in this quarter, given what they seem to be doing on their pricing. And then secondly, similarly on the promotional environment, are you seeing any change in promotional environment in China, whether that's from different brands, different companies, or different price points?
Are some areas of the Cognac business in China being promoted more heavily or less heavily than others? Thank you very much.
Thank you so much for your question. So for the U.S. specifically, for the full year in sales, we are expecting in top line in sales a strong double-digit. So the worst regional performance, showing a slight sequential improvement in H2 versus H1. Q4, sell-in should be back to growth, driven by very easy comps and dynamics of Liqueurs & Spirits . In terms of depletion, we should see a continued improvement yearly and to be at best flat in Q4 in volume at least. In terms of run rate, what's happening in January, we are fitting with the hypothesis. So far, we are more or less flattish in volume, but it is only a situation we had some days ago.
We see the final off channel and clear influence by control states. It will be the same at the end of quarter. We hope so. It will be enough to change our guidance? No, because as explained, there is sequential improvement, more in volumes than in value, and some big states underperforming are weighting in the math for the guidance, which is precisely - 18, so Q4 will be positive in sell-in and improving sequentially with the aim to be at best as flat in volumes and depletion in Q4 for U.S. I will answer to the third question, if you allow me, China, so yes, China, it is also slightly touched by promotional intensity.
When there is no promotional intensity, I'm talking globally, not talking about us, because in terms of pricing power and control, I think that I don't want to benchmark, I would say, with our peers, but we are quite proud of what we are doing on that point. There is promotional intensity, and there is also a point that we'll be back on that. Also, maybe sometimes for some of our peers, a bit overstock on the field. So the promotional intensity is there. Considering, let's just imagine that the MOFCOM additional duties will be eventually confirmed by the latest the 5th of July, now with the new deadline the 5th of April, clearly it will drive to increase of prices.
Clearly, if you have a lot of stock for some brands for the Cognac, it will be a promotional intensity to try to speed up the sell-out because we have to get rid of the stock. I'm talking category. I'm not talking about us. Our stock are very, very healthy. So yes, there is a bit of more promotional intensity. In terms of category, yes, the fact that Liqueurs & Spirits also have performed for us means that there will be more diversification. It is something that will be negative in terms of compounded growth rate, both for demographics on habits of consumption. For Cognac in the long term, we don't think so. As you know, we totally respect your opinion, but we are not aligned on that on the long term.
The promotional intensity could have an impact on value dynamics in the short term, but not in the long run. Now, your second question, which is linked to the LVMH and trying to compare what they said to our situation, so let me answer in a different way. We can say that there is a strong optimism of Mr. Arnault in the U.S. directly, which is good news for us because our strong, very strong exposure is bigger than them comparatively, and I hope he's right, so this is in terms of long term. So this is an important statement. For China, for what we're concerned, which we are performing, I think, not bad, quite better than our peers with demonstrated greater resilience, so without putting any medals on our shirt, but I think that is a comparative difference between our performance and theirs.
In terms of time frame, two years, three years, I don't know what does it mean, frankly speaking, because we don't need two years to clean our inventories in China, for instance, if we want to put it that way. The fact that we stick to our pricing power and strategy has been, and it is, painful in the U.S., is weighing on our performance, is weighing on every indicator, is weighing on our market cap, clearly, but that digestion is already there, and third point, we don't have management change that allows to give a time frame or some period of adaptation to help the figures improve by themselves. For them, it's only a division. It is not listed separately. It is not visible. Okay, you have some indicators. For us, we have only our brands.
So everything we are doing with our size, one billion on top line, is very visible. Every single wave is waving. So I don't know what two years means. What I know is that two years, considering the actual point of the actual situation, end of December of Rémy Cointreau and Cognac more than that, we cannot afford two years to solve that. We have to move to speed quickly and continue to arm around fundamentals and improve performance. We don't have the chance to have many billions additional ancillary business covering losses of the wine and spirits division.
Understood. Thanks very much for the color.
Thank you. We will take the last question from line Simon Hales from Citi. The line is open now. Please go ahead.
Thanks. Morning, Luca. A couple of things left for me.
Obviously, you've given a lot of detail, but I'm going to have to go over the transcript to fully understand everything you've said this morning, but just so I make sure I understand now what's driven you to now guide towards the bottom end of the organic sales growth range. It sounds like perhaps versus your expectation, the indirect channels in China are a little bit worse. We've clearly got a Chinese New Year timing affecting Q4, and maybe some of the major open states in the U.S. are underperforming slightly versus your expectations. Is that right? Are they the main things I should take away from your comments?
Then secondly, maybe related to those open state comments you made, particularly around New York and Illinois, can you give a bit more color as to why those states are underperforming so much and what you're perhaps doing there to try to improve performance? Thank you.
Good morning, Simon, and thank you for your question. Illinois is a very important state. It is a fighting state for everybody. For instance, you consider the price of one of our new competitors, so we can name it, in the last five years, the lowest one. So Illinois has always been a fighting territory. And it is one of the big states in which price war, price positioning, big volume deals has always weighed on the performance since always, since 50 years. And it is very important. So it is a clear important state.
In this moment, our integrity in terms of pricing power waned a bit on that. And it's also a strong VS state as well in which category we are not playing. So we are not playing with the same cards. It is the way it is. To try to answer to your question, let me give you what we expect for the Q4, okay, at group level. So I think you have some color by region and by division. We expect the Q4 in terms of sales to be slightly better than Q3. Q3 was -21.5%, but marginally, not so much in sell-in. That's the reason why we are guiding more towards -18%. Inside that, U.S., I repeat, in top line, we return to double-digit growth, led by Liqueurs & Spirits .
While at the same time, Cognac will be more complicated, probably in top line, will still remain negative. Why? There is a spark in sell-out, depletion, more Liqueurs & Spirits , but it's not to the same extent we expected. So the absolute value of the recovery, the restocking, is delayed. China, which is the most important sector, that's driving the guidance more to the - 18. China will be in a double-digit decline Q4, impacted by mainly three factors. Negative calendar effect, - 5 this year, + 8 last year. It's EUR 13 million that are weighing on us. So we have reverse Q3, Q4, Chinese New Year's effect. High comps, you remember Q4 last year, massive restocking effect last year in China that were not reproducing themselves automatically this year, and more in the indirect channel.
And third, indirect channels, softer market conditions, a bit of cloudy environment driven by the anti-dumping investigation. So you have this gray cloud that is waving on the atmosphere and cash pressure on the wholesaler. We are not giving additional discount to place additional stock or giving, I don't know, 90, 120, 180 days more. I don't know what the peers are doing, but I know that they are more stocked than us. EMEA, EMEA Q4 should be down, impacted by Cognac. So by division, you understand that the Q4, which will be globally slightly better than Q3 but not so much, will be up strong double-digit in Liqueurs & Spirits , and down strong double-digit in Cognac. So a very diversified footprint.
If you want regionally to try to summarize that in terms of H2 deviance compared to the previous guidance, if you want, if you want to consider - 18% compared to - 15%, who would we say, a key part, I think, in French, who is doing what? 40%-50% is China's softer trends. 30%-35% is U.S., and the remaining part is the rest of the world. By division, it is almost 90% Cognac. So combining China, which is a Cognac country, and delay in timing of improvement in the U.S. for Cognac. Everything is better than before, but not meeting expectation on lower comp. So math count, figures count, global dollars and volumes at the end are not there. Brilliant. Thank you, Luca. Okay. If there's no further question at this time, I'll hand it back over to your host for closing remarks.
So no more question, I guess. So one time, we will try to do another exercise. I will ask you a question or two questions. Let's do this game, a new one. I would be interested in doing that. Maybe more face-to-face than on a conference call by phone. So thank you for your attention. Have a beautiful year. So this is the first call of the year. And clearly, let's keep in touch. And next meeting, official one for everybody, end of April for full year top line, and even more important, beginning of June with our CEO, Éric Vallat, to comment on the result of the year, sell-in, it's even more important, sell-out, guidance for next year, and what's next until 2030. So a very easy finger in the nose meeting. Thank you so much. Have a nice day.