Release Date: August 22, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Corby Spirit and Wine Ltd (CBYDF, Financial) reported significant revenue growth of 41% for FY24, breaking the $200 million milestone for the first time.
- The company achieved a robust 37% increase in adjusted earnings from operations for the full year.
- Corby Spirit and Wine Ltd (CBYDF) successfully integrated recent acquisitions, contributing to the strong financial performance.
- The company declared an increased dividend of $0.22 per share for Q4 FY24, reflecting a 5% increase from the previous quarter.
- Corby Spirit and Wine Ltd (CBYDF) managed to outperform the market in value for the second consecutive year, showing positive results in the spirits segment.
Negative Points
- Organic revenue saw a modest decline of 1% in Q4, excluding contributions from recent acquisitions.
- The company faced a customer pricing dispute, negatively impacting domestic case goods revenue.
- International case goods revenue declined by 27% in Q4 due to shipment phasing impacts.
- Total commissions decreased by 4% in Q4, affected by the lapping of some wine brands no longer represented by Corby Spirit and Wine Ltd (CBYDF).
- Higher interest charges related to the loan contracted to acquire ABG impacted net earnings per share growth.
Q & A Highlights
Q: Can you provide more details on the financial performance for Q4 and the full year?
A: Juan Alonso, CFO, explained that Q4 revenue was $66.5 million, reflecting a 60% growth primarily driven by the inclusion of ABG sales and 1.5 months of performance from new brands. Organic revenue saw a modest decline of 1%. Adjusted earnings from operations increased by 56% to $9.2 million, and adjusted net earnings per share grew by 10% to $0.19. For the full year, total revenue was nearly $230 million, a 41% increase, with adjusted earnings from operations growing by 37% to $44.6 million and adjusted net earnings per share increasing by 13% to $1.
Q: What were the main drivers behind the revenue growth?
A: Juan Alonso, CFO, highlighted that the revenue growth was driven by the inclusion of ABG and new brands, strong performance in the domestic case goods business, and pre-buying effects at the LCBO ahead of a labor strike. Despite a slight decline in organic revenue due to shipment phasing impacts in the export business, the overall performance was robust.
Q: How did the company's key brands perform during the year?
A: Juan Alonso, CFO, noted that JP Wiser's family saw a 2% revenue growth, Polar Ice vodka recorded a 9% growth, and Ungava Spirits brands grew by 6%. The newly added Cottage Springs brand remained the top-selling RTD brand in Ontario, with successful new innovations.
Q: What strategic initiatives are planned for the next fiscal year?
A: Nicolas Krantz, CEO, mentioned that the focus will be on driving portfolio growth, leveraging brand activation, and delivering successful innovations. The company aims to scale up the RTD portfolio, particularly outside of Ontario, and target market share gains in growing categories. Export opportunities will also be pursued with a targeted approach.
Q: How does the company plan to manage costs and protect margins?
A: Nicolas Krantz, CEO, emphasized the importance of revenue growth management and disciplined investment to protect margins. The company will continue to leverage digital and AI tools to optimize promotional efficiency and target price increases strategically.
Q: What is the outlook for dividend payments?
A: Nicolas Krantz, CEO, stated that the company aims to increase dividend payments, subject to Board approval, while maintaining a progressive improvement in the net debt to EBITDA ratio. The focus will be on balancing shareholder returns with managing the balance sheet.
Q: Can you elaborate on the company's market position and competitive advantages?
A: Nicolas Krantz, CEO, highlighted that Corby Spirit and Wine Ltd is the largest beverage alcohol company in Canada with a comprehensive portfolio. The company leverages its close partnership with Pernod Ricard, a global industry leader, and focuses on operational excellence and digital transformation to maintain its competitive edge.
Q: What are the key growth areas for the company?
A: Nicolas Krantz, CEO, identified the ready-to-drink (RTD) segment as a key growth area, with plans to expand the Cottage Springs brand and other RTD offerings. The company also aims to grow its presence in premium and super-premium categories and capitalize on export opportunities.
Q: How is the company addressing market challenges?
A: Nicolas Krantz, CEO, acknowledged that the market is relatively flat with some headwinds. The company is focusing on gaining market share, unlocking the potential of the RTD portfolio, and driving operational synergies from recent acquisitions to navigate these challenges.
Q: What is the company's approach to portfolio management?
A: Nicolas Krantz, CEO, explained that the company is actively managing its portfolio by acquiring brands with strong market potential and divesting less attractive brands. This dynamic portfolio management approach aims to drive fast growth and enhance overall performance.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
