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

Hello, and welcome to the Annual Meeting of Shareholders of Corby Spirit and Wine Limited. Please note that today's meeting is being recorded. If you participate in today's meeting and disclosed personal information, you will be deemed to consent to the recording transfer and use of the same. If you disclose personal information of another person in today's meeting, you will be deemed to represent a warrant to Computershare and the corporation that you first obtain all required consents for the disclosure recording transfer and use of such, personal information from all appropriate persons before your disclosure. During the meeting, we'll have a question-and-answer session. You can submit questions or comments at any time by clicking on the Q&A tab. It is now my pleasure to turn today's meeting over to George McCarthy, Chairman of the Board. Mr. McCarthy, the floor is yours.

Good morning, ladies and gentlemen, and welcome. My name is George McCarthy. I'm Chairman of the 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; and Juan Alonso, our Vice President and Chief Financial Officer; and Marc Valencia, our General Counsel, Corporate Secretary and Vice President of Public Affairs. Thankfully, the unprecedented situation created by the pandemic now appears to be improving. However, at the time that we were required to decide upon the meeting format out of precaution, we decided to again conduct a meeting virtually this year for everyone's safety and health. We really hope you understand. Since this meeting is held virtually via live webcast, I will set out a few rules for its orderly conduct. Questions in respect of the formal part of this meeting can be submitted by any registered shareholder or duly appointed proxy holder using the instant messaging service of the virtual interface. When asking a question in respect of the formal part of the meeting, please indicate your name, which entity you represent, if any, and confirm that you are a registered shareholder or a duly appointed proxy holder. Questions may be submitted by shareholders and/or proxy holders at any time during the meeting but will only be addressed during the question period at the end of the meeting. However, questions regarding procedural matters or directly related to the motions before the meeting may be addressed during the formal part of the meeting. I will now call the meeting to order. As a reminder, our presentation today may look -- contain forward-looking statements. I draw your attention to the description of forward-looking statements and I ask that you take a moment to review this before we begin the official business of today's meeting. The Annual and Special Meeting of Shareholders of Corby Spirit and Wine Limited will now come to order. In accordance with the bylaws of the corporation, I shall preside as Chair of the meeting. With the consent of the meeting, Marc Valencia will act as Secretary of the meeting. Before commencing the formal business of this meeting, I'd like to introduce the rest of the Board members in attendance virtually today. Claude Boulay, Helga Reidel, Lani Montoya, Kate Thompson and Patricia Nielsen. Before beginning the business of the meeting, I'd like to comment on the voting procedure. We will conduct the votes on the matters before us by a poll. On a poll, every shareholder and proxy holder entitled to vote on the matter has one vote in respect to each share entitled to be voted on the matter and held by that 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 conclusion of discussion on each resolution prior to casting your votes. The polls are now open. To make the best use of our time, Valerie Brive-Turtle and Marc Valencia have been asked to move the resolutions, which we will consider. I'll call on them at the appropriate time. With the consent of the meeting, I now appoint Pina Pacifico of Computershare to act as 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 notion properly brought before the meeting. The notice calling this meeting and the accompanying proxy materials were mailed out on October 3, 2022, to all shareholders of record of September 16, 2022. Who requested them, together with the consolidated financial statements of the corporation and the independent auditor's report thereon. Accordingly, with the consent of the meeting, will dispense with the reading of the notice of the meeting. The secretary has received proof of mailing to the shareholders of the notice of the meeting and the proxy materials. I direct that proof of the mailing be annex to the minutes of this meeting. I'm advised 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 Shareholders held on November 10, 2021, we will be -- they will be taken as read.

There is no requests to read the minutes at this time.

As there's no request to read the minutes, I take the minutes as read. The 2022 annual report with the consolidated financial statements of the corporation for the year ending June 30, 2022, together with the independent auditor's reports were mailed on October 3, 2022, to all shareholders who requested to receive these documents. It's not required to ask shareholders to approve the financial statements. However, we'd be pleased to deal with any relevant questions concerning the financial statements during the general period which follows the termination of this meeting. The next item on the agenda is the election of the 9 directors to the Board of the corporation. Shareholders will have seen the composition of the Board evolved recently. These changes help ensure that the Board is comprised of the proper mix of records to meet both current and long-term needs of the Board the company and shareholders and provide the necessary oversight of Corby's corporate strategy and risk. The meeting is now open for nominations. I would ask Valerie Brive-Turtle to kindly read the nominee's name.

Mr. Chairman, I nominate the following individuals for election of the directors of the Board to hold office during the ensuing year: George McCarthy, Claude Boulay, Helga Reidel, Juan Alonso, Kate Thompson, Lani Montoya, Lucio Di Clemente, Nicolas Krantz and Patricia Nielsen.

Are there any further nominations?

There are no further nominations at this time.

If not, I declare the nominations closed. I would ask Valerie Brive-Turtle 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.

Mr. Chairman, I second the motion.

Thank you. You've 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 meeting. Would all those eligible to vote, please enter your votes online now. [Voting]

I'd like to inform you that the corporation's independent auditors, Deloitte LLP, are eligible for reelection. I would ask Valerie Brive-Turtle 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 auditor's 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.

May I have a second?

Mr. Chairman, I second the motion.

You have heard the motion. Are there any discussions?

There is no discussion at this time.

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

We will now proceed with the resolution regarding the amendment to the articles of incorporation of the company, decreasing the minimum number of directors from 8 to 5. The text of the resolution is set out in the management proxy circular of the corporation dated September 23, 2022. It's available on SEDAR. I would ask Valerie Brive-Turtle to propose a motion for the amendment of the articles of the corporation.

Mr. Chairman, I move that the resolution with respect to the amendment of articles set out in the management proxy circular of the company dated September 23, 2022, to be approved.

May I have a motion seconded?

Mr. Chairman, I second the motion.

Thank you. You've heard the motion. Are there any discussions?

There is no discussions at this time.

As there's no discussion, I now call for a vote on the motion before the meeting. Would all those eligible to vote, please enter your votes online now. We will provide registered shareholders and duly appointed proxy holders approximately 30 more seconds to complete the electronic ballots. Once the electronic ballot closed and message will appear on the vote tab indicating that the polls are closed. Computershare, please close the polls. [Voting]

I have been advised by the scrutineer that based on the preliminary results received of the -- all of the revolution -- resolutions have been approved. Final results will be posted online at SEDAR. I would now call upon the corporation's President and CEO, Nicolas Krantz, to present a report on the corporation's activities. As part of this presentation, Juan Alonso, the Vice President and CFO, will report on the corporation's financial performance. Nicolas?

Thank you, George, and good morning, everyone. Thank you for joining us today. I am delighted to have the opportunity to speak to our shareholders again. It has been indeed another eventful year, full of changes and positive transitions. As we all know, the world has started to reopen, and I'm very pleased to see people once again gathering and celebrating at home in restaurants and in bars with friends, family and colleagues. And Corby has been there promoting the joy and magic of being together again. This is why we chose the theme of together again for annual reports. However, it has also been a year with its own challenges, marked by supply chain volatility and high inflation around the world, as we all know, in addition to geopolitical events. But I'm very satisfied that Corby reported some solid results due to the continued resilience of our brands and the passion of our people. And speaking of our people, I'd like to take a moment to thank our employees, customers and consumers without home Corby would not be what it is today. Thank you as well to our Board of Directors for its ongoing guidance and collaboration. And thank you to you all, our shareholders, for your trust and support during another unprecedented year as well as for inviting us to be part of your moments of community. Now I would like to share with you, first, an overview of the environment within which we have been operating in the past year and then some key highlights to illustrate our focus and key achievements. So moving on to the environment. In terms of category trends here in Canada, the spirits in one market has remained resilient and continued to show solid value growth ahead of volume growth. Spirits category expand growth in volume of plus 1.6% and in value, 5.2%. The one expense decline in volume of 2.4%, but an increase in value of plus 3.3%. Now in terms of channels, and you will not be surprised, the lifting of COVID-19 restriction and lockdown led to a strong recovery of the on-premise channel during the past fiscal year, almost back to pre-COVID level and that also led to almost stripping the business during the year, which, of course, has impacted for the pre-pandemic level. Conversely, as consumers began on going out more to bars and restaurants. The Canadian market experienced an anticipated slowdown of what we call the off-premise channel with retail sales remaining almost flat compared to the very high base of the prior year. It is worth noting as well that supply chains globally have been, of course, a challenge. Suppliers and liquor boards have faced increased volatility, which resulted from time to time in logistic delays and some products out of stock. Now if we zoom in briefly on the top spirits category in the Canadian market, we can see that the core staples enjoyed during the early stage of the pandemic like Canadian Whiskey, Vodka and Rum remain relatively flat. While smaller categories such as coffee and cream liqueurs and single malt Scotch truly drawn the spirits growth. Gin continued to grow, while Tequila was extremely hot, driving over half of the sprits category growth for fiscal '22. And Corby continued to lead the market in Canadian Whiskey, owning almost 27% of the market while also participating in the growth in Gin and single-malt Scotch. Now in terms of consumer trends, I would like to mention 3 current and key features. First, innovation has continued to be a key growth levers in Canada, driving significant dynamism in all categories. In FY '22, effectively, newly launched innovation accounted for approximately 30% of retail sales value. The second key trend is what we call the convenience trend. That started during the pandemic and continue to develop and even started to premiumize. There is a strong growth of the ready-to-drink category and what we call as well ready-to-serve offering, which is more and more a premium one in the market. And lastly, I want to call out the better-for-you trend with a no or low ABV that continue to grow and represent interest for the consumers. So in response of these emerging trends, Corby adapted accordingly to turn them into opportunities. We have launched some key innovation in the marketplace, included, for example, Havana Club Cuban Smoky or Ungava and Monkey, but also the Glenlivet Captain's Reserve, all adding a strong success in the marketplace. We are also proud to launch on the one side, Jacob's Creek Dots in cupcakes like hearted on the lower range side. And finally, we are also very active in the RTD category with the launch of Ungava Gin & Tonic, Absolut Grapefruit Paloma and other RTDs in the marketplace. Now moving on the key highlights of the year. We have organized this next short section around 3 strategic pillars. First, brand and consumer engagement, then channels and customers and then organization effectiveness and people. As these are really driving our performance. So starting with brand and consumer engagement. Our goal here is connecting consumers to our diverse portfolio of brands. Meeting the needs of our consumers based on various moments of community and consumption. And our brands did exactly that during the year. Starting with our flagship brand, J.P. Wiser's. Indeed, we continue to invest to support this very important brand for Corby. We have launched a new campaign for J.P. Wiser's, Wisely Rum and specifically generated significant lift in consideration with key messages of authenticity and confidence considered a strong key differentiator versus competitors. Great to report that 92% of people who sold and link the ad to J.P. Wiser will consider purchasing the brand. J.P Wiser launch as well the brand your own with ticket, which won the prestigious LCR for the innovation from the LCBO. Our brands continue as well to be recognized on the domestic and international scene, winning several categories as the Canadian Whiskey Award and the 2022 World Whiskey Award. Finally, we launched our latest innovation, and we are very proud of that. J.P. Wiser's 10-year-old Canadian Whiskey, which is a scalable proposition. And will allow us to compete head-to-head even more with our main competitors. Very excited about this one for the year ahead. And as a result, J.P. Wiser has outperformed the category in the fiscal year 2022, setting over 0.5 million cases. Now regarding Polar Ice Vodka, very important brand as well for Corby, very pleased to see the brand back to growth, fueled by the on-premise rebound and partnerships. In FY '22 was a kickoff of a new campaign with Polar Ice Vodka and the brand became the official Canadian Vodka of the Toronto Blue Chase, including sponsorship free ride on the TTC's King streetcars, getting fund safely to and on for the opening day. It generated excitement for the return of the baseball season and in-person events. We also had a limited edition bottle of Polar Ice Vodka offered through the Blue Jays newsletter, which was sold under 3 hours. Very exciting as well to see this successful partnership with the Jay to return the brand in volume and value growth this year. As well on the on-premise, we benefit from a strong rebound. And as a result all of this price would cater from better than the category as well and grew by plus 2% in value in FY '22. Moving to another important brand for Corby, Lamb's Rum. It's all about reutilizing the brand with new packaging and innovation. Our mature economy Rum brand in the domestic market continued to be impacted by changing consumer trends for standard Rum, particularly in the regional strongholds. But despite the domestic decline in volume and value, Lamb's is still the third largest brand in Canada. And we have invested to reutilize the brand on an international level. The international growth now balanced a slow domestic decline which is very nice to see. On the innovation side, Lamb's Social was voted the #1 cocktail innovation by volume in Newfoundland and great to see the result of this new format. Of course, with the return of in-person event, it was nice also to be part of the George Street Festival in St. John's, which is an iconic festival in which the brand has a very strong presence. Regarding the other Corby brands overall, we continue to leverage our portfolio to deliver a good result. I will mention a few, the Northern Border collection of Canadian Whiskey benefited from new launches and increased distribution. In Quebec, the new Ungava campaign helped secure its position as Quebec, number one, super premium gin and strong growth. And also the -- out of the Ungava Spirit Distillery, excellent performance of the Cabot Trail cream liqueur, now the #4 cream liqueur in Canada outperforming all major competitors in these categories. If I move on to the Pernod Ricard represented portfolio. And in parallel of all the highlights I've mentioned the Corby brands, we also saw amazing results on the Pernod Ricard strategic brands, supported by some very strong communication platforms and big innovation. We had the first summer campaign for Jameson and the brand is now in the top 4 value gaming family in the spirit across Canada. We also launched the Absolut Born to Mix campaign, which was the first global campaign in 4 years. Resonating extremely well and capturing a strong share of conversation among our consumers. And the Glenlivet was the #1 single malt Scotch in Canada, with also a strong innovation with Caribbean Reserve that became the #2 single malt innovation in just 6 months, driving strong media-to-shelf actuation. Big momentum as well for Malibu Rum, which we launched a largest summer campaign in 5 years, and Kahlúa also launch this new packaging to help recruit consumers into the brand. We also had officially launched our new Rabbit Hole Bourbon in Canada with a very promising start. Now we mentioned the ready-to-drink and ready-to-serve category as being a very dynamic category in Canada. Well, here again, because we had identified this as an opportunity for growth a couple of years ago. We had, of course, organized ourself to tap into this convenience trend. And we ramped up our ambition and delivered many successful launches. We know that our J.P. Wiser's, old fashion ready-to-serve continue to succeed very well. It was a top innovation in the marketplace. Malibu ready-to-drink was the #2 rum-based innovation in Canada, outfarming the competition. And we continue to make great progress with Malibu Mango Mule and Absolut Grapefruit Paloma and Ungava Gin & Tonic that was also launched to capture new consumers a new moment of consumption. So overall, our market share more than doubled in FY '22 in this category and we will continue to be working and building a strong pipeline of innovation. Turning to capture growth opportunity. Working shorter in order. Take a look at channels and customers, it's all about activating and executing at outlet level and point of sales. I will start with the on-premise because, of course, after 2 years of difficult years with our partner in the restaurant, the on-time sector, now fully reopen with a solid rebound and very strong growth. So we are, of course, very pleased to see that. Corby to the opportunity to strengthen the existing partnership we had with key national accounts and to secure new ones we maintain our leadership in Canada, and we raise visibility of our brands, taking over patios and also activating with creative and digital campaign. I will mention just a few elements. So for Polar Ice Vodka, we own the nationals as day that was featured at more than 380 icons allocation and great also to be back with Jameson with a strong Jameson programming over St. Patrick Day across Canada after 2 years of pause. Now the retail, of course, a very important sector and channel in Canada. As we know, it's 90% of the market. But as expected, the channel slowdown with all the bars and the restaurants reopening. The prior year in FY '21 was indeed an exceptional unusual year for the retail channel as consumer demand shifted during the lockdown. So we had anticipated a shift and manage the transition. We protected the high base and focus on value strategy, which allow us to maintain strong level, almost on par with those pre-pandemic levels. We strengthened the relationship with liquor board customers across the whole country. I have to say very proud to be recognized by our largest customer, the LCBO to receive a 3 LC awards including The Prestigious Partner Of The Year, which goes to the company that demonstrates innovation, creativity and commitment to customer service and responsibilities. But in all provinces, we focus on increasing visibility in stores, and we're also able to accelerate our product sampling program across the country. Now I would like to mention a smaller but emerging channel, the e-commerce because, of course, e-commerce divert in Canada is small, but is estimated at $300 million retail sales and is growing double digits. So this channel, therefore, is an opportunity for us to capture growth. So we established a new team in charge of e-commerce. We developed a strong partnership with the Beer Guy and the Runner. AV sales going up by 48% year-on-year on this delivery app. It's a fantastic opportunity to connect with consumers directly and to take share versus the competitors. The example as well was, for example, the J.P. Wiser's as the #1 selling whiskey on the Beer Guy for the full year. Also Absolut Mango Mule RTD was the #1 selling vodka on the Runner, the fastest crewing brand on that app. And of course, we increased our online effort out of our wineries and distillery. So for example, the Foreign Affair Winery was reaching $1.6 million in sales and growing is wine club member by 66%. All that is a result of the strong effort on this emerging channel. Now, I need, of course, to mention an area of opportunity for us, which I mentioned on a regular basis, the export. It is, of course, a growth opportunity for Corby. It represents roughly 10% of our volume and continue to accelerate with double-digit growth during FY '22. J.P. Wiser's is starting to win the visibility war with a sharp focus on its most in market such as Detroit and Austin in the U.S., delivering a strong growth with revenue growing by nearly 20% in FY '22. Another focus of our export team was around growing Lamb's in the U.K. I mentioned that the export for Lamb was very important. And Lamb's Spice Rum continue to win share against our key competitors in the U.K. market. It is now the #3 Spice Rum selling in that market. And based on that we said, we decided to expand and open new market for Lamb's throughout Eastern Europe, Australia, Ireland, where we see early sign of a great result. Now last but not least, I wanted also to mention organization effectiveness and people because this is definitely a pillar for performance. Of course, to support all of these initiatives I just mentioned, from innovation to explore from brand creative campaigns to on-premise activation and more, we need a strong organization. That is why we continue to invest in the organization to create a competitive advantage. So a few words on this organization effectiveness to support the performance of the company. Over the last few years, we have invested in a full digital transformation to become more data-driven leveraging this data rich environment we have in Canada. And this is very much articulated around 3 principles: marketing effectiveness to have a better return on our spend, revenue growth management to ensure that we are growing our value ahead of volume and sales force and outlet management to make sure we can activate our brands successfully at point of sales. So these new digital tools help us to gather business decision and to realize efficiencies. Of course, in addition to these 2 tools, we also focus on managing the engagement and developing and the performance of our teams. And I'm proud to report that our employee engagement rate is now at 79% which shows an amazing commitment of our team towards the business. Now I want to finish with short section with something which is really at the core of our business model, our commitment to ESG. You see that at Corby, we are, of course, deeply relying on the healthy ecosystem so we can produce the finest product. And therefore, we need to nurture and care for lands and our communities. And this is why we put what we call our sustainability, responsible strategy that really encompass all assets of our business. We like to call it from grain to glass. And that's really something which is now embedded in everything we do in our business. So I will just give a few examples, starting with our people. Of course, the health and safety of our team continue to be crucial for our future. Both the physical health and safety with a 0 accident target at a manufacturing in site, but also it has been, of course, a growing topic. The model health, which is something we want to make sure that we bring the right environment for people so we introduced a digital platform called Better Up to support our teams. And we have introduced as well some wellness days to give our employees the ability to recharge batteries when needed. We've also been focusing very much our efforts on diversity and inclusion to transform our company to be more inclusive than ever. And at the end of the day to reflect the diversity of our consumers in the world we live in. On an environmental lens, we have eliminated all single-use point-of-sale plastic, which is a key commitment for us. And also, Ungava Distillery in Quebec is proud to report to Zero Waste now. It was also a strong effort from the team, and we are there. Of course, you know that 90% of our Corby product comes Hiram Walker. So we were particularly proud that Hiram Walker has achieved in reduction carbon emission by 20% due to the upgrade of the evaporators and also a project that we call the Wet Cake project, which reduces steam consumption for drained grains. Finally, and just to celebrate that, we were very happy to celebrate the game with all Canadian employees in what we call responsible day, a day where we give back to our communities throughout the whole country. And we wanted this year to support diversity, biodiversity so we built 70 bee hive that will lead the -- basically and have the pollenization of more than 60 acres of flower, fruits and vegetables, just to make sure that we protect biodiversity, very fun team building activity, but also giving back to communities. Now I just want to wrap up and before giving the mic to Juan. I just want to mention was attributed the fact that we had multiple awards that we've seen across our portfolio and I want to mention that because at the end of the day, these are the true testament of the hard work from our team and the successful that we encounter with our consumers. Now at this point, I would like, of course, to introduce you to our new CFO, Juan Alonso. I've had the pleasure of knowing Juan for many years, and I'm delighted to be working closely with him now and to us of our AGM together. So Juan, over to you to present a bit more detail on financial results of the FY '22.

Thank you very much, Nicolas. And good morning, everyone. I'm very pleased to be here today to discuss our fiscal year '22 full year financial results and our first quarter of fiscal year '23. I will begin with FY '22, as Nicolas mentioned before, despite all the challenges coming from big supply chain volatility and high inflation around the world, in addition to all geopolitical events, we have reported very solid results. But before we talk about our financial performance, I must introduce our adjusted revenue and earnings definitions, which are non-GAAP financial measures that help understanding our underlying core business performance. Whenever mentioned, adjusted figures exclude 2 noncash accounting impacts which are the increase in amortization of the representation agreement fees of $3.2 million versus last year; and the second, the impairment charge of the foreign of affair winery trademarks of $2.1 million. For context, the Foreign Affair Winery brands contributed approximately only to 1% to Corby's reported revenue last year. That being said, let's have a quick look at our key financial metrics before going into more details for each one. Shipment volumes decreased by 1% to 2.1 million cases with a decline of 1% on Corby owned domestic brands and a growth of 2% on export sales amid unprecedented supply chain volatility. Corby delivered resilient adjusted revenue growth of plus 2% compared to last year and this was driven by our core business activities with domestic case goods and commission income growing, as you see later, being partially offset by declining in noncore business activities. Our reported revenue remained flat as a result of a 44% increase in the amortization of the Pernod Ricard representation rights. Marketing, sales and administration expenses increased 8%, cycling a low cost base during the pandemic last year. And as a result, our adjusted net earnings per share declined by 8% for the full fiscal year 2022. Reported net earnings declined 24% as a result of the aforementioned factors combined with the impairment charge of the Foreign Affair Winery trademarks. Cash generated from operating activities was strong at $45.5 million, growing by $4.8 million, driven by favorable working capital changes offset by a decline in net earnings. And finally, Corby maintained its general dividend policy with dividends declared at 90% of prior year earnings at $0.90 per share for FY '22. Now if we move to the breakdown of our revenue growth, we see that total adjusted revenue reached $169.8 million up plus 2% or plus $2.8 million, while reported revenue was $159.4 million or flat versus last year. Overall, the market continued to see value ahead of volume, with pricing and premiumization of the product mix. So despite the volume reduction, domestic case goods revenue was up plus 2% to $114.5 million as the domestic portfolio grew boosted by the on-premise recovery and innovation in markets. Gross commission income for represented brands increased by 4% and to $36.9 million, driven by price optimization and premiumization on Pernod Ricard spirits brands. And then we see that export revenue grew by 3% and to $13.5 million, thanks to the solid performance of Lamb's in the U.K. and J.P. Wiser's innovation launched in the U.S. Nonetheless, our revenue growth was partially offset by noncore business activities declining minus 22% and lapping a one-off book sales of aged whiskey in fiscal year 2021. Now let's have a look at our performance by brand. We enjoyed continued growth on J.P. Wiser's a strong growth on Ungava Spirits brand and solid performance on Polar Ice Vodka. However, challenging category trends continue to impact Lamb's Rum. On the brand performance, Corby's flagship brand J.P. Wiser's Canadian Whiskey delivered value growth of plus 2% ahead of flat volume through consistent pricing strategy and outperformed the Canadian Whiskey category, which remained flat in value. Ungava Spirits brand grew 15% in volume and 14% in value with Cabot Trail cream liqueur like continuing to enjoy a strong performance driven by pandemic-driven trends for home cocktail making. And with new RTD innovations introduced to the Quebec market under our Ungava Gin and Chic Choc Rum brands. Polar Ice Vodka grew 3% in value ahead of volume declined 1% and boosted by the performance of the on-premise sector rebound and promotions optimization. Polar Ice also outperformed the Vodka category that grew 2% in retail value while declining 1% in volume. Mixable liqueur declined 1% in volume and remained stable in value and favorably impacted by raw material supply constraints. Lamb's brand declined 2% in volume and 3% in value as growth in export markets was offset by a decline in the challenging domestic markets. And lastly, we see in the next slide that our gross commission income was up plus 4% before amortization led by strong momentum of Jameson and Glenlivet. So now to summarize our P&L results. We see that we enjoyed a resilient adjusted revenue growth of plus 2%, driven by robust performance of our core business activities and enhanced by pricing strategy and premiumization. Our marketing sales and administration expenses increased by 8% this year cycling a low cost base during the pandemic last year and returning to fiscal year '19 prepandemic levels due to the reopening of the on-premise channel and increased meeting investments on key brands. Overhead expenditure was also reinforced to support sales growth and transformation momentum as we resume the more normal ways of working. Our income tax decreased by 14%. And as a result, our adjusted net earnings declined minus 8% to $33.1 million and our reported net earnings per share declining by minus 24% when considering the noncash accounting impact of the increase in amortization of the representation agreement fees versus prior year and the impairment charge of the Foreign Affair Winery trademark. However, if you look at the right side of this slide, you can see those results show solid growth versus FY '19 pre-pandemic levels. In the last 3 years, our adjusted revenue grew an average of 3%. Marketing sales and administration grew on average plus 1% and as a result, our net earnings grew an average of plus 3% in the last 3 years. As you know, a strong positive cash generation is a feature of Corby's financial model with a consistent favorable conversion of net earnings to cash. As you can see across the years, that we closed at $1.9 million in fiscal year '22. You see that cash from operating activities significantly grew by $4.8 million to $45.5 million in fiscal year '22, benefiting from favorable working capital changes offsetting decreased earnings. On a full year basis, working capital balances were favorable driven by the timing of group payables and the phasing of promotional spend. Investing activities were impacted in fiscal year '22 by the $54.4 million payment to renew the representation rights with Pernod Ricard paid on September 28 and of 2021. Lastly, our financial activity reflects our dividends paid to shareholders by $26.5 million, in line with our dividend policy. Despite the payment of the representation right agreement fee, we still closed FY '22 with a strong cash position of $52.5 million. With this resilient cash generation during fiscal year '22, the Board of Directors decided to maintain dividend declaration in line with the general dividend policy to target an annual payment of the higher of $0.60 per share or 90% of prior year earnings. So that was a recap of fiscal year '22. Now let's turn to the start of fiscal year '23. I would like to begin with some context on the first quarter environment of fiscal year '23. We had a strong start to the year off a low basis in Q1 fiscal year '22, with shipments exceeding retail depletion in Q1 but expected to normalize throughout the year. On the spirit market performance, some highlights. The on-premise sector showed growth as consumers continued to return to restaurants and bars. The total domestic spirit retail market declined by 1% in volume but grew in value of plus 2%. Corby enjoyed share gains on some of its owned and represented key brands and categories such as J.P. Wiser's, Polar Ice, Jameson and Glenlivet. Then last year's Q1 faced certain supply chain challenges providing a favorable comparison basis to this year's Q1 performance, which saw shipments of imported products recover after delayed orders from the past months. Despite the recovery in supply chain from Q4, we still see some ongoing uncertainty in our supply chain. Lastly, we continue to invest in our business with media and activation spend on key brands and also investing in our people and business transformation amid a higher inflationary context. So let's look at our brand performance over the last 3 months. Here, we see value growth for key Corby owned brands, notably solid first quarter performance on J.P. Wiser's delivering volume growth by 5% and value growth by 8% while gaining share in its category. Strong momentum on Cabot Trail cream liqueur, delivering double-digit growth with the Ungava spirit brands portfolio and mixable liqueurs and Polar Ice Vodka also grew value ahead of volume. However, we also faced softer performance on some brands with Lamb's Rum declining. The represented portfolio, we see that net commission income strongly grew by 27% in the first quarter. Recovering delayed shipments from previous months as well as cycling a low comparison basis since last year. Absolut and Jacobs Creek notably benefited from such a development. We can also note the strong momentum of the Glenlivet and Jameson, enjoying market share gains. We were pleased with the market performance of both of our Corby and represented brands in a market that has continued to be resilient. Now turning to our Q1 financial results. In the next 2 slides, I want to show you an overview of our Q1 results and to compare them against previous years as it is helpful to assess our performance against the pre-COVID period, giving the uncertainty of the past 2 years. Overall, the first quarter delivered strong operating revenue growth of plus 7%, driven by its in the previous one. Robust domestic brand performance with domestic case goods revenue at plus 6% and led by Cabot Trail, Lamb's, Corby Liquor's and J.P Wiser's, enhanced by Pernod Ricard commission, benefiting from pricing strategy, delayed shipment catch-up from previous months and a favorable comparison basis. Indeed, last year's performance saw revenue declining by 11%, due to the supply chain challenges combined with lapping a high level of selling to the liquor boards in fiscal year '21. I Important to say that compared to the pre-COVID period, we delivered a solid operating revenue growth of plus 2% in the last 4 years. Now let's see how revenue translates to net earnings. The next one. As mentioned, operating revenue grew solid by 7% in the first quarter to achieve $41.1 million. Marketing sales and administrative expenses were up 7% for the first quarter or a total of $14.6 million marketing and promotional investment focused on increased media and brand equity investments, while overhead expenditures were impacted by high inflation and reinforced to support sales growth and transformation momentum. As a result, net earnings for the quarter grew strongly by 12% to reach $7.8 million and earnings per share of $0.28. This overall level of expenditure is catching up with Q1 fiscal year '19 levels prior to the pandemic, as you can see in this slide. Underlying net earnings appeared very favorable at plus 12% of a low comparison basis of last year. Compared to the pre-COVID period, we delivered promising net earnings growth of plus 5% in the last 4 years. And now to conclude this presentation, I would like to turn the mic back to Nicolas, and thank you, everyone, for your attention.

Thank you very much, Juan. Very clear. So not just to conclude briefly, I just want to highlight a few messaging. So what we can say is that in FY '22, despite all the global challenges we face such as supply chain delays or high inflation, really retrusted in the resilience of our business and our capacity to deliver solid financials and to create top line growth with the levers we have identified such as innovation, value strategy and export. So indeed, confident, therefore, in our decision to invest in our brands and organization to sustain future growth. And we continue to pursue our strategy to connect consumers to our best-in-class portfolio of brands to win market share in key categories and to build strong relationships with our customers and partners while our digital transformation is on track to build a competitive advantage in the midterm. And all this allows us to continue to create value for all stakeholders, and of course, for our shareholders. So to illustrate and to translate that, of course, a few words now a declaration on the dividend despite the high inflationary context and an uncertain economic outlook. The Board of Directors decided to exercise a discretion to declare a quarterly dividend in excess of the dividend policy of 90% of net earnings of the preceding fiscal year ended June 30, 2022. And normalizing the dividends to the pre-pandemic levels. Therefore, the Board declared a dividend payment of $0.22 per share for the first quarter to be paid on December 9, 2022, on both classes of Corby shares to shareholders of record as at the close of business on November 25, 2022. Again, thank you very much for joining us today and for your attention. George will now close formal proceeding, after which, we will be happy to take any questions.

Thank you, Nicolas and Juan. Excellent presentations. Thank you. Is there any further reasons to bring before the meeting? I also wish to extend the gratitude of the Board to our former Board members, Edward Mayle, for his time and dedication and to Donald Lussier, Corby has benefited from Mr. Lussier's experience and industry knowledge and thank him for his partnership. Best wishes for the future Don. Also thank you to all Corby employees for their passion and perseverance over the past year. Finally, to my fellow directors, I want to express my appreciation for your advice and support. Ladies and gentlemen, the meeting is now concluded. The floor is now open for questions on any matters raised in the report of the corporation's activities. If any shareholder or proxy holder has a question, please type it into the online platform. We may direct your questions to our CEO, CFO or the Corporate Secretary, whomever can best answer it.

So we do have one question, George. The question is 4 of the 8 Board members do not hold any shares in Corby. My question is directly to these members of the Board who do not have any holdings. How can you represent your shareholders when you yourself do not have any invested interest in the company and is the reason you do not hold any shares in the company because you have no faith in the direction of the company?

Well, I'll answer the last part of that first. I think -- it has nothing to do with face in the company. They're very hard workers. They've dedicated a lot of time and effort to the company. So I wouldn't assume they have no faith or are not interested in the company. The truth of the matter, and I answered this last year, I believe, is that all of the executives hold shares of Corby and Nicolas and Alonso and so forth. The representatives from Pernod Ricard as a tradition, don't hold shares in the company because they are there to represent Pernod Ricard's interest.

At this time, we do not have any other questions.

Okay. Thank you. If there are no further questions, I'd like to thank you for joining us today. We wish you all good health and a continued return to normalcy in the coming weeks and months. We will endeavor to do the same at Corby and look forward to when we can next raise a glass with you. Thank you.

This concludes the meeting. You may now disconnect.