Corby Spirit and Wine Limited (CSWA) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and welcome. My name is George McCarthy. I'm Chairman of the directors -- Board of Directors of Corby Spirit and Wine Limited, and it's my pleasure to welcome you to our Annual and Special Meeting of Shareholders. Joining me are Nicolas Krantz, our President and Chief Executive Officer; Edward Mayle, our Vice President and Chief Financial Officer; and Marc Valencia, our General Counsel, Corporate Secretary and Vice President of Public Affairs. Although we're disappointed we can't see all of you today, our thoughts are with you and your families and the communities in which you live. We want to thank you for your patience as we navigated through this unprecedented situation and hope you understand we had no choice but to conduct a virtual meeting again this year in light of the circumstances. Instructions on how to ask questions and voting procedures will appear on your screens. Should you have any issues, our platform service provider, Lumi, is very experienced at running this type of meeting and will help resolve them. I will now call the meeting to order. As a reminder, our president today may -- our presentation today may contain forward-looking statements. And I draw your attention to the description of forward-looking statements, and I ask you to take a moment to review before we begin the official business of today's meeting. The Annual Meeting of the Shareholders of Corby Spirit and Wine Limited will now come to order. In accordance with the bylaws of the corporation, I shall preside as chairman of the meeting. With the consent of the meeting, Marc Valencia will act as secretary of the meeting. But before commencing the formal business of the meeting, I would like to introduce the rest of the Board members in attendance virtually today: Helga Reidel; Lani Montoya; Donald Lussier; Kate Thompson; Patricia Nielsen; and Claude Boulay. Before commencing the business of the meeting, I would like to comment on the voting procedure. We will conduct the votes on matters before us out by a poll. On a poll, every shareholder and proxyholder entitled to vote on the matter has one vote in respect to each share entitled to be voted on the matter and held by the shareholder. The poll will be open for all resolutions at the same time. This will allow you to choose to vote on each resolution immediately or wait until the conclusion of the discussions on each resolution prior to casting your vote. The polls are now open. To make the best use of our time, Katrina Maheu and Marc Valencia have been asked to move the resolutions, which we will consider. I will call on them at the appropriate time. With the consent of the meeting, I now appoint Pina Pacifico of Computershare to act as the scrutineer. I would ask the scrutineer to prepare the report showing the number of shareholders present at the meeting, the number of shares held by those present, the number of shares represented by proxy and the aggregate amount of shares represented and to register any vote given in poll taken on any motion properly brought before the meeting. The notice calling this meeting and the accompanying proxy materials were mailed on September 24, 2021 to all shareholders of record on September 16, 2021 who requested them. They were mailed together with the consolidated financial statements of the corporation and the independent auditor's report thereon. Accordingly, with the consent of the meeting, we'll dispense with the reading of the notice of the meeting. The secretary has received proof of mailing to the shareholders, the notice of the meeting and the proxy materials. I direct that proof of mailing be annexed to the minutes of this meeting. I may advise there is a quorum present. I now declare that the meeting is regularly called and properly constituted for the transaction of business. Unless there is a request to read the minutes of the last Annual Meeting of the Shareholders, held on November 12, 2020, they will be taken as read.

There is no request to read the minutes at this time, Mr. Chair.

As there is no request to read the minutes, I take the meetings -- the minutes as read. The 2021 Annual Report with the consolidated financial statements of your corporation for the year ended June 30, 2021, together with the independent auditor's report, were mailed on September 24, 2021 to all shareholders who requested to receive these documents. It's not required to ask the shareholders to approve the financial statements. However, I would be pleased to deal with any questions in the question-and-answer period of the meeting. The next item on the agenda is the election of the directors of the Board of the corporation. And the meeting is now open for nominations. I would ask Katrina Maheu to kindly read the nominees' names.

Mr. Chairman, I nominate the following individuals for election to the Board, to hold office during the ensuing year: George F. McCarthy, Helga Reidel, Nicolas Krantz, Lani Montoya, Donald Lussier, Kate Thompson, Edward Mayle, Patricia Nielsen and Claude Boulay.

Are there any further nominations?

There are no further nominations at this time.

If not, I declare the nominations closed. I would ask Katrina Maheu to propose a motion for the election of the directors nominated.

Mr. Chairman, I move that the directors nominated be elected to the Board of Directors.

May I have the nominations seconded?

I second the motion, Mr. Chairman.

You heard the motion. Are there any discussions?

There is no discussion at this time.

As there is no discussion, I will now call for a vote on the motion before the meetings. Would all those eligible to vote, please enter your votes in Lumi now? [Voting]

I would like to inform you that your corporation's independent auditors, Deloitte LLP, are eligible for reelection. I would ask Katrina Maheu to propose a motion for the appointment of the auditors for the ensuing year and for the Board of Directors to be authorized to fix the auditors' remuneration.

Mr. Chairman, I move that Deloitte LLP be appointed auditors for the ensuing year and that their remuneration be as determined by the Board of Directors.

You heard the motion. Are there any discussions?

There is no discussion at this time.

As there is no discussion, I will call for a vote on the motion before the meeting. Would all those eligible to vote, please enter your votes in Lumi now? [Voting]

Sorry, Mr. Chairman. We just did get a point of discussion in. And I don't believe it relates to the vote, but we can have a discussion in the Q&A, if that's okay, about why many Board members do not hold shares in Corby.

Yes. We'll have that discussion in the Q&A. The polls are now closed. Based on preliminary voting results, I can confirm that all resolutions have been approved. Final results will be posted online at SEDAR. I will now call upon the corporation's President and CEO, Nicolas Krantz, to present a report on the corporation's activities. As part of his presentation, Edward Mayle, the Vice President and CFO, will report on the corporation's financial performance. Nicolas?

Thank you, George. Thank you very much. Good morning, everyone, and thank you for joining us. I am absolutely delighted to be here with you today. And yes, we are still in the virtual setup of this AGM. But the situation of the COVID-19 pandemic is fortunately starting to look better, and I'm pleased to say that I have been able to progressively connect with many stakeholders in person. First, I would like to thank and praise our customers and our consumers with the adaptability and determination to make the best of the difficult circumstances. I really feel COVID is [ now down ] this year. And of course, I am also grateful for the trust and support from all our shareholders during this unprecedented time. So now, to immerse ourselves in the right mood, let's take a quick look at a short video that celebrates some of the remarkable accomplishments during FY '21. Video please. [Presentation]

So cheers to you all. And as you saw in the video, during this year, like no other, our team delivered exceptional results through their creativity, commitment and resilience. Now I would like to give you an overview on the environment within which we had been operating and how we see our landscape. FY '21, of course, was dominated by the volatility caused by the COVID-19 pandemic. And while FY '20 saw the start of the pandemic with on-premise closures and consumer panic-buying, the pandemic continued in FY '21 with several lockdowns, the vaccine rollout and finally, the beginning of the phased reopening across the country and in our key export markets. So in terms of trends here in Canada, the spirit and wine market has been very resilient. The domestic spirit market grew by 3.8% in volume, with an exceptionally strong first quarter. Naturally, the pandemic restriction led to major disruption in the on-premise channel throughout most of the year. However, the channel started to recover in Q4, and we are delighted to now see doors open to consumers again. Conversely, the off-premise retail channel enjoyed strong growth in the first half, but moderated in Q3 and then declined in Q4 due to the high basis of comparison and shift of activity as the on-premise began to reopen. So overall, while the on-premise, which represents broadly 10% of the market pre-pandemic, declined by minus 33%, the off-premise grew very strongly by nearly plus 80%. Now looking at the various categories within the spirits market, you can see that vodka, Canadian whiskey and rum are the 3 largest, close by -- 3 largest categories and closely followed by liquors, and that all the categories in the market enjoyed swift growth, some with a double-digit increase actually. And in a number of categories, Corby has a significant market share, particularly in whiskeys, where Corby is #1 overall. Now beyond the strong volatility, new trends have emerged across almost every industry during the pandemic. And our industry has been no exception. Canadian tastes and preferences are diverse. They've explored in drinks. They've adjusted how they shop and where they consume. So let me highlight a few key trends. Increase in innovation has been a key feature of the market, which is driving significant dynamism within categories. We have also seen a positive value realization with value ahead of volume due to what we call premiumization as consumers are willing to pay a little bit more, but also as they look to treat themselves with more premium products. Another trend to highlight is the increase of what we call at-home consumption. Many consumers experimented with drinks at home and found a creative outlet in cocktail-making, trying a little mixology on their own, or getting cocktail-to-go from their favorite restaurants, [ and now, we're seeing ritual drinks as ] cocktails. Convenience also in the way a consumer wants to shop has been a key trend with the emergence and strong growth of alterative channels like grocery and e-commerce. So in response to the pandemic and emerging trends, we adapted accordingly to turn challenges into opportunities. We stayed agile and responded with many purposeful initiatives, such as launching new products to meet emerging consumer trends, partnering with on-premise customers on previously the [ wine visit route ] or takeout or delivery offerings and advancing our e-commerce capabilities, to name just a few examples. But more fundamentally, despite all the challenges of last year, the pandemic has been, for us, a strong catalyst, accelerating many trends that we had already identified before. And in a way, this has given us the push to sharpen further our strategy. So indeed, we have been doing a lot of work to evolve our strategy to make it not only more connected to our consumers and our customers, but also to our employees so they understand how their roles contribute to our collective ambition. In parallel, this past year has also been a unique opportunity to reflect on our culture and understand our criticalities to our success and how our amazing heritage can lead us to our vision. So before talking about our strategy and execution, I have the great pleasure to share with you what we have called the Corby [ time and story ], that inspire our mission and ambition and our strategic priorities for FY '22 and beyond. And as shareholders, I hope you will also relate to our story. Video please. [Presentation]

So our Corby [ time and story ] really inspire our mission, the mission that we have now clearly articulated. Our mission is to win with our portfolio of brands across consumer occasions by creating memorable moments. And to enable us to deliver on our mission, we have evolved our strategy and defined 4 strategic pillars to guide our priorities and actions. And these are connect consumers to our brands; execute from media to shelf; digitize our enterprise; and build the future responsibly. And I'm going to give you some more color on each further down. So first pillar, connect consumers to our brand. It is about being consumer-centric. It means putting consumers at the heart of everything we do. So we are focusing on what I would call the art of precision-targeting, offering the right brand for the right consumer at the right moment of consumption. And Corby's competitive advantage is its diverse portfolio of amazing brands, the portfolio that covers all major product categories, but more importantly, that covers all key consumer occasions. Each brand has a role as we try to win consumer occasions. And we must customize our approach to be effective. So this work will enable us to make clear choices in terms of investment and marketing and commercial activity to drive our overall portfolio. Consumer insight-led innovations are also essential to Corby's strategy to capture growth in the ever-changing environment. So work on understanding consumer occasion will also allow us to develop innovations with the highest potential, and we'll do it in consumer-centric opportunities. So knowing that innovation was a key growth driver in FY '21, we launched many new products. This included ready-to-pour cocktail from the J.P. Wiser's franchise as well as 2 innovations from Ungava, Ungava Ginger and Ungava Gin and Tonic [ in Gin ]. Next slide, please. On the represented portfolio from Pernod Ricard, many innovations were launched successfully, with Absolut Watermelon and [ Jameson Cooler ]. So as a result, we have seen our share of innovation increasing, and our portfolio is well positioned for the next fiscal year. We continue naturally to be in the pipeline of purposeful innovation, and all of which are launched through strong collaboration and planning with our customers and liquor boards, sharing relevant consumer insights and trends. Now our second pillar is about execution, execute from media to shelf. Because we have the best brand and the best portfolio, but to maximize our success, we must execute in a coordinated manner throughout the consumer journey, from the time you see first mention of our brands, to the point of purchase. This is what we call from media to shelf. So a way to bring brands to life, both on-premise and off-premise, includes not only a national strategy, but professional strategies tailored to local markets because every province, every customer and every consumer is unique. So today, from FY '21 gains in off-premise, we continue to leverage revenue growth management to drive value and volume and we continue to deliver brand activation of excellence, with impactful displays and shelf presence. Meanwhile, we prepared for rebound in the on-premise channel. We partnered with customers to offer unique takeout and delivery solutions. We also created immersive and engaging consumer experiences. And of course, we maintained our important relationships with national key accounts, where we hold the #1 position in the market. There are [ people pursuing and also ] exploring new channel opportunities. And e-commerce was big for us in fiscal '21, both direct-to-consumer from our brand homes, but also through our customer's online platform. E-commerce is, in fact, the fastest-growing channel in the beverage alcohol industry and therefore a place to gain share. So we have established a dedicated team to capitalize on this trend in order to become the digital partner of choice for our key customers to develop their [ own ] consumer direction and strategies. Channel opportunities for Corby also include export, where we saw exciting results and double-digit growth in FY '21. In the U.K., the new packaging and listing of Lamb's rum spiced rum helped drive the brand to the #1 -- #3 position in retail in this category. And in the U.S., J.P. Wiser's enjoyed strong performance as we have accelerated growth and distribution in the States. We also introduced new packaging as well as ready-to-pour, Old-Fashioned and Manhattan, cocktails and activated [ media targeted to the cities ]. Our next pillar is really the key efficiency enabler, digitizing our enterprise. This is about choosing technology to capture and leverage data to improve decision-making and to get us closer to our consumers and customers, but also to improve internal collaboration. For example, we are leveraging machine learning and AI to precisely target independent accounts to support our brand-building strategy or to [ measure shelf menu of a bar ]. But in fact, digitalization is an enabler to improve our media-to-shelf execution. That's why we have an ambitious and [ concurrency ] digital transformation program related to all parts of our business. So our key digital program will focus on 4 key areas. And this will enable us to: first, segment and activate our customer base to improve sales force effectiveness; second, to drive value optimization in our promotions and pricing management; third, target more effectively our marketing activity to the right consumer touch points; and fourth, deepen relationships with key customers as together, we enhance our e-commerce capabilities. And we strongly believe that this ambition of digitizing our enterprise will prove to be a competitive advantage and improve our value creation. Last, but not least, we want to build the future responsively. This pillar is about our people and our commitment to environmental, social and government initiatives or ESG. And through its relationship with Pernod Ricard, Corby is committed to supporting an ambitious set of objectives, along with a mission to create a more convivial world and a world without excess. So key achievements towards our sustainable goals this year, waste elimination, for example, of all single-use point-of-sale plastic. We are working also with our suppliers to make sure they meet our sustainability standards. We are also looking into partnership to increase the quantity and efficiencies of glass recycling. Another great initiative is our The Bar World of Tomorrow program. This is a program that is designed to train brand ambassadors and work with the bartender's community to provide education on sustainable practices, such as smart reuse to minimize waste. And building the future responsibly is also about leveraging our culture of congeniality, making our workplace and the [ work communities ] safe and more inclusive and diverse. So it is about investing in the development of our people and creating an environment that nurture and celebrate diversity and inclusion. It is really by enriching our people's potential that we will succeed sustainably. And in FY '21, we had our first diversity and inclusion week. We increased our gender diversity to 51% women, including the appointment of 2 new members to our Board of Directors, and refined our policies to create an environment more representative of our consumer base. So these 4 pillars are the foundation of our strategic framework. These are guiding our focus and efforts every day and with a strong conviction that they create value, both in the short term, but for the long term. Let me take a few minutes now to share with you a few highlights and show how this translated into successes in FY '21. So overall, in FY '21, Corby generated a solid top line growth of plus 4%. And many of our key strategic brands enjoyed strong performance, winning share versus competitors, and particularly, in the dynamic retail market. In FY '21, clearly, it was a great year for our flagship brand, J.P. Wiser's, with strong performance, gaining share of the Canadian whiskey category and hitting the 500,000-cases milestone with J.P. Wiser's Deluxe. The brand remained more-than-ever relevant through cultural relevant advertising, such as the Second Shot Campaign. So let's quickly have a look at the ad together. [Presentation]

I'm sure we'll all have a second shot to celebrate something. Okay. So also, the cocktail and liquor renaissance has led to a great momentum for many of our brands. So we enjoyed the strong performance of our McGuinness liqueurs, which returned to growth in fiscal '21, as well as J.P. Wiser's ready-to-serve cocktails, Manhattan and Old-Fashioned, which was the #3 Canadian whiskey innovation. Also, our Cabot Trail Cream Liqueur, out of Quebec, accelerated its growth beyond expectation, and thanks in part to a rebranded new packaging that improved shelf standout. On the whiskey side, I mean, our whiskey earned almost too many accolades to mention from the Canadian and World Whiskies Awards. And I want to mention Lot 40, which was named the World's Best Rye, which, of course, for us was a very big achievement, so kudos to the team. Notable results as well, we also delivered for our represented brands from the American portfolio, many of which reached key milestones in Canada, such as The Glenlivet, which was the #1 single malt brand; and Jacob's Creek, which was the #1 Australian wine brand in Canada. Other represented brands reached new heights, too. Like ABSOLUT surpassed 600,000 cases, outgunning the competition. So all told, in FY '21, we held 2 of the top 10 spirits brands in Canada by value with ABSOLUT vodka and J.P. Wiser's Canadian whiskey. We hold the #2 position in the Canadian spirits market and #7 in the fragmented wine market by value. And in the mean time, suffice to say that with strong performance of both Corby and Pernod Ricard represented brands, it is not surprising that we have been able to enter into the early renewal of our representation agreement with Pernod Ricard. So this is great news as the commission income we earn on the Pernod Ricard brand is an important [ commission ] for Corby. The new contract extends our exclusive rights to represent the Pernod Ricard brand in Canada until the end of September 2026 and with the potential for automatic renewal for a further 3 years thereafter. Over the past 15 years now, Corby has consistently delivered solid performance and growth for Pernod Ricard brands in Canada, which is of strategic importance because Canada is one of the global top 10 markets for international spirits. So that's the landscape. That summarized where we are and last year's performance. And at this point, I would like to hand over to Edward Mayle to present our financial results. Ed, over to you.

Well, thank you, Nicolas. Good morning, everyone. I'll begin with fiscal '21. Now travel retail and hospitality sectors were heavily restricted for most of the year, so our prime commercial effort was focused in the off-premise channel. Our brands had a mixed commercial performance, corby-owned brands or Canadian over-the-counter volume decline of 3% and declined 1% in market value. We enjoyed strong performance in J.P. Wiser's, our mixable liqueurs, and Ungava Spirits brands. Also a strong growth in export markets, but the on-premise closures negatively impacted Polar Ice Vodka and Lamb's rum in particular. So Corby's shipment volumes grew 1% to 2.2 million cases, declining 2% in domestic market and growing 35% in exports. Corresponding revenue grew 1% on domestic sales and 31% in export sales, while gross commission income grew 7% before amortization of representation rights. And together, these drive our revenue to growth of 4%. Gross margin improved from 52% to 53%, a result of multiple factors, including product and market mix, revenue growth management and promotions optimization initiatives, alongside ongoing cost optimization efforts. Cash generated from operating activities was strong at $40.9 million, albeit reduced by $8.6 million as the growth in net earnings was offset by working capital effects. Our net earnings grew strongly at 15% as revenue growth of 4% combined with reduced expenses of 1%. And finally, Corby maintained its generous dividend policy, with dividends declared at 90% of prior year earnings. So total revenue growth was 4% to $159.8 million. Our Case Goods revenue increased 3% as the domestic portfolio faced mixed results with value growth of 1% and export revenue and Case Goods growth of 31%, thanks to that strong performance of Lamb's spiced in the U.K. and J.P. Wiser's in the U.S. Gross commission income for represented brands increased by 7% to $35.6 million, while commissions net of amortization of representation rights increased by 3% to $28.4 million. The residual amortization from the historical 2006 representation agreement was accelerated ahead of the start of the new agreement, which began on 1st of July 2021. Amortization was increased last year by 26% to $7.2 million. Corby's owned brands enjoyed a mixed performance, with some notable highlights, flagship J.P. Wiser's Deluxe enjoyed category-beating results, delivering value ahead of volume, with plus 4% in shipment volume and 7% in value. Ungava Spirits brand grew 6% volume and 7% value. Cabot Trail Cream Liqueur enjoyed a particularly strong performance and with vibrant new packaging, improving shelf standout, while Ungava Gin, also introduced in fresh new packaging, faced a more challenging year. Mixable liqueurs grew 6% in volume and 8% in value, enjoying changing trends as more consumers experimented with home cocktail-making. And Lamb's rum grew 8% in volume, 14% in value, as Lamb's spiced enjoyed very strong performance in the U.K. market. Polar Ice Vodka declined 5% in volume and 4% in value, particularly impacted by closure of the on-premise. Our represented portfolio performed strongly, with gross commission plus 7% and with notable performance on premium brands, such as The Glenlivet single malt scotch, Jameson Irish Whiskey, ABSOLUT vodka and Jacob's Creek wine. Now primarily driven by volume, as discussed, revenue is supported with our efforts in revenue growth management and trade spend optimization, areas which are helping support overall value creation. Building from revenue, cost optimization improved gross margin, while marketing, sales and administration expenses declined by 1% to $56.4 million. Marketing expenses accelerated in Q4 as the country emerged from lockdown and began lifting restrictions. And we provided strong consumer media engagement for the summer, while at the start of the fiscal year, we were more cautious in our approach as consumer engagement opportunities were more restricted. Overhead expenses were particularly low throughout the year due to the pandemic-driven restrictions on business travel and other cost-saving measures. And this leads to the overall decline in expenses. So the low cost base converted to dynamic revenue growth, to an unusually strong net earnings growth of plus 15%, delivering $30.6 million. Cash from operating activities decreased by $8.6 million to $40.9 million as the improved net earnings were offset by working capital deterioration and increased tax cash outflows. In Q4 fiscal '20, working capital benefited from unusual sales phasing due to the COVID-19 pantry-loading, which accelerated sales earlier in the year, enabling them to convert to cash before the year-end. Investing activities were maintained in line with prior year, representing, in large part, cost purchases for new-fill whiskey. Investments were also made for capacity expansion at the Ungava facility and IT investments in support of our digital and data transformation. Strong positive cash generation is a feature of Corby's financial model, with a consistent favorable conversion of net earnings to cash. And the illustration here shows our history, not only of strong free cash flow generation, but also that consistent favorable conversion of net earnings to cash. And with this resilient cash generation during fiscal '21, the Board of Directors maintained dividend declarations in line with a generous policy to target an annual payment of the higher of $0.60 per share or 90% of prior year earnings. So that's a recap of fiscal '21. Now let's turn to the start of fiscal '22. I would like to begin with some context on the environment we find ourselves in during the first quarter of this fiscal year. The market experienced a positive consumer environment, with growth in volume and value of the spirits market, with a rebounding on-premise, a resilient off-premise and dynamism in our key international markets of the U.S. and the U.K. Total domestic spirits retail market grew by a little under 1% in volume, with a stronger growth in value. Corby has enjoyed share gains on some of its owned and represented key brands and categories. Within that positive underlying environment, our financial performance this quarter is negatively impacted by some specific effects. First, last year's Q1 provides an exceptionally high comparison base. Second, this quarter, we have experienced some supply chain interruptions. And thirdly, marketing sales and administration expenses were low last year in Q1 as we cut costs significantly in response to pandemic closures and travel restrictions. This year, we're pleased to be investing in our business, with media spend on key brands supporting the on-premise rebound and resuming business travel to reconnect with our people and consumers. The start of this first quarter was also the start of the new representation agreement with Pernod Ricard. An upfront fee of $54.4 million was paid in September 2021. This fee is amortized straight-line over the life of the agreement, and annual amortization will increase by 44%, from $7.2 million in fiscal '21 to $10.4 million in fiscal '22. To provide clarity to the underlying business performance for this quarter and for the duration of this fiscal year, we will provide a performance narrative that separates the impact of the representation agreement amortization from our results discussion. We are introducing non-GAAP P&L measures described as adjusted, for example, adjusted revenue and adjusted net earnings. So now, to look at our brand performance in market. Here, we see retail market value growth and market share change for key Corby-owned brands. Notably strong first quarter performance on J.P. Wiser's, Cabot Trail Cream Liqueur, McGuinness liqueurs and a recovery in Polar Ice Vodka. We also faced softer performance in some brands with Lamb's rum and also on Ungava Gin. On the represented portfolio, we also have a strong performance on key brands, notably Jameson, The Glenlivet and Havana Club, to name a few. And we're pleased with the market performance of both our Corby and our represented brands from Pernod Ricard and The Wine Group in a market that has continued to be resilient. So now, turning to our Q1 financial results. Over these next 2 slides, I want to show you our Q1 results and compare it against both last year and the year before. It's helpful to assess our performance against the pre-COVID period given the unusual volatility, which was positive last year and negative this year. So Case Goods revenue are minus 8%; gross commissions, minus 13%; leading to adjusted revenue, minus 9%; and reported revenue, minus 11%. Last year's strong growth saw adjusted revenue, plus 13%, with a high level of sell-in to the liquor boards. This year's revenue is compared against that high base and is further compounded by delayed shipments. While fiscal '21 was largely unaffected by supply chain issues, this first quarter, we have experienced delayed shipments of both finished goods and for some raw materials, which have impacted production scheduling. These supply chain issues may represent a timing effect, with the delayed shipments recovered in future periods. This issue is closely monitored. When the result is compared to the pre-COVID period, so Q1 fiscal '20, we can remove the volatility and we see a more stable picture in which total Corby Case Goods revenue is flat over the 2-year and commission income before amortization has increased 6% CAGR. Adjusted revenue has increased 1% per annum, and reported revenue was maintained in line with Q1 fiscal '20. Now to see how revenue translates to earning, we cycle a low comparison cost base for marketing, sales and admin expenses. And with a resilient underlying market, robust on-premise reopening, we increased investments to activate our brands. We engaged in business travel at levels more consistent with pre-COVID as well as increasing other overhead costs, including wages and salaries. So the softer shipments, cycling a high comparison base, supply chain delays and increased costs, combined to deliver adjusted earnings minus 27% and reported earnings minus 35%. But the underlying earnings, when compared to fiscal '20, is positive as we have an annual growth of 9% on an adjusted basis and 4% per annum on a reported basis. So to recap our first quarter financial results, adjusted revenue declined 9% in first quarter to achieve $41.1 million. Advertising and promotional expenditures increased along with overhead costs. And together, these lead to total marketing sales and administrative expenses increasing by 6% to $13.6 million. Adjusted net earnings for the quarter are $8.9 million, and this equates to a reported EPS of $0.25 per share. So in conclusion, we've enjoyed a strong financial result in fiscal '21, while fiscal '22 first quarter is set within a resilient underlying market performance, although the financial result is negatively impacted by reduced shipments and increased costs. So thank you for your attention, and now back to Nicolas.

Thank you, Ed, for this comprehensive presentation and analysis. So before I return the conversation to George to wrap things up, I would like to conclude with 3 important messages. So first, regarding our business performance and outlook, following the excellent [ quarter ] result, I am encouraged by the underlying consumer demand in our first quarter performance. And with the return of the on-premise channel, this enable us to increase our brand-building efforts, which is really critical for future success and growth. And as explained by Ed, our quarterly reported results are adversely impacted when compared to last year's exceptionally high comparison period and are not indicative of the anticipated full year trend. We therefore expect the phasing versus last year of our shipment revenues and costs to normalize over time. Second, regarding our dividend payment. Well, I'm pleased to announce that the underlying business fundamentals enable our Board of Directors to approve today the dividend payment of $0.24 per share for the first quarter, which is an increase of plus 14%, and this is in line with our generous policy and enable us to share the success of our strong results we delivered in FY '21. This will be paid on December 10, 2021 on both classes of Corby shares to shareholders of record as of the close of business on November 26, 2021. And finally, I would like to give you these 3 key takeaways from these [ small team winnings ]. First, Corby is a solid investment with strong financials that provide consistency and visibility. While I believe Corby delivered a strong financial performance in extraordinary circumstances during fiscal '21, our diverse and appealing brand portfolio drove profitable growth with robust cash flow even in the most uncertain and challenging of times. We have a track record of delivering consistent returns to shareholders through decades of regular dividend payments. And the recent renewal of our representation agreement with Pernod Ricard will provide continuity and even greater assurance with respect to the company's revenue. Secondly, Corby has a robust business model with a successful track record. Corby has shown resilience throughout the pandemic, evolving ways of working and inspiring our consumers to choose from our portfolio of brands. We focused on winning share in key categories and maintaining strong relationships with our partners to deliver solid earnings while keeping our people safe. And we also continue to pursue efficiencies and effectiveness through a digital transformation for now and the future. And thirdly, we have talented and passionate people, led by a strong and diverse management team. And our team have demonstrated remarkable commitment and resilience. So thank you again for joining us today. I look forward very much to the day when we can meet in person and toast to new beginnings. George will now close formal proceeding, after which, we'll be happy to take some questions with you. Thank you very much.