Andrew Peller Limited

Good morning, ladies and gentlemen, and welcome to the Andrew Peller Limited Q4 2025 Financial Results Conference Call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you need assistance, please press star zero for the operator. This call is being recorded on Thursday, June 12, 2025. I would now like to turn the conference over to Jen Smith, Investor Relations. Please go ahead.

Thank you, and good morning. Before we begin, this is a reminder that during the conference call, management may make statements containing forward-looking information. This forward-looking information is based on a number of assumptions and is subject to a number of known and unknown risks and uncertainties that could cause actual results to differ materially from those disclosed or implied. Please refer to the company's earnings release, MD&A, and other securities filings for additional information about these assumptions, risks, and uncertainties. With that, I'll turn things over to Paul Pipkowski, Chief Executive Officer of Andrew Peller Limited. Paul?

Thanks, Jen, and good morning, everyone. And I'd like to thank everybody for joining us today. I'm pleased to be joined by Rene Kauke, our Chief Financial Officer, and Patrick O'Brien, our President and Chief Commercial Officer. As usual, I'll begin with a review of our operational and strategic highlights from the fourth quarter and fiscal year, and then Rene will walk us through the financial results. As we kick off today, and I know we're all happy, it's the official start to summer is fast approaching here as we move through June. And I know everyone in the East has been long awaiting some warmer weather. There is a real energy across our company and the industry as we're seeing more guests visiting our beautiful estates in Ontario and BC. Patios are getting busier across the country. There's growth in life in our vineyards and preparations are well underway for the upcoming harvest. And while it's early in the growing season, early indications are that there will be a very good harvest in Ontario and a strong start to the recovery in the Okanagan after the challenging winter events from two winters ago. We will provide a further harvest update during our Q1 conference call. Focusing on our results, it was a strong fiscal 2025 for Andrew Peller. We continued to outperform the category and expanded important new channels and growth categories with revenue ending the year at an all-time high outside of the first year of COVID, which we all know was an anomaly. At the same time, we delivered meaningful improvement in gross margin, EBITDA, and free cash flow, while continuing to reduce debt levels and create capacity for future growth. This performance reflects the great work of the team as we drove growth and improved both operational and financial metrics across the core business. Looking more closely at our performance, I'm pleased to report that we grew share in fiscal 2025 across all major markets and continue to be one of the fastest growing domestic wine suppliers. While overall wine consumption was down modestly across the industry, we are outperforming the category by meeting consumer needs through both popular and innovative product offerings and by adapting quickly to the changing distribution landscape in Ontario. While it's early days, we also saw an overall pickup on domestic wine volume late in the year as consumers turned to made-in-Canada offering. Given our national presence and product breadth across approximately 50 brands, from value-priced to premium BQA, we are well-positioned to benefit from any sustained change in consumer behavior and ongoing growth in domestic consumption. And we are not being a passive beneficiary of these changes. you will see us investing in promoting the great wines in great wine regions Canada has to offer. We truly believe there is incredible opportunity in front of us as an industry to drive sustained growth share for domestic wines, which will have a significant economic impact across the regions, provinces, and all of Canada. We at Andrew Peller will take a leadership role in driving this. Looking at our portfolio more specifically, Recent highlights include strong demand for our Trias portfolio, continued momentum of the Peller Family Vineyards brand, ongoing growth in our better-for-you offerings with On A Slot, and strong performance in new formats like our 200 ml recyclable plastic bottle, which is an on-the-go, easy-to-transport offering. During the past year, I'm proud of how quickly we adapted to capitalize on the huge change in Ontario's distribution landscape, which saw 4,000 new distribution points come online across the province. We evolved our commercial structure to ensure we are set up to meet the changing needs of grocery, big box, and our gas convenience partners, as we expect to see ongoing channel shift, share shift, as consumers adjust their buying patterns. You see the early returns of our success in how we quickly and smartly adapted to the changing landscape in our fiscal 2025 results. Our sales growth was led by our success in big box retail. Initial demand in the channel has exceeded our expectations, and we continue to evolve our product lineup based on consumer preferences and our supply chain. Consumers have responded well to our offerings in big box led by our Gretzky, Trius, and PJ's portfolios. Several of the company's other well-established trade channels also perform well during the year, particularly sales to third-party restaurants and hospitality locations. We did see some softness in estate sales due to tightening consumer economic conditions, and as expected, a moderate decrease in the company's retail start network after the new expanded distribution came into effect in Ontario. In addition to our revenue growth, we were able to deliver meaningful improvement in gross margin during the quarter and the year. Margins for the year rose above 40%, which is a meaningful achievement in light of the inflationary environment that existed over the last several years. The margin improvement was supported by execution on our $20 million cost savings program, which we completed in fiscal 2025, with a focus on reducing costs and driving efficiencies in bulk wine, concentrates, packaging, and other raw materials. In addition to the improved performance and growth in our base margins year over year, which is a testament to the health of our core business, As you will see in our disclosures, our margins and profitability for fiscal 2025 also reflect the initial benefit of the Ontario government's recently announced Ontario Grape Support Program. This program is intended to increase the amount of Ontario grapes in every bottle of locally produced blended wine. It shows the Ontario government's leadership and continued support of our industry by promoting strong competitive policies that are aligned with global best practices and by focusing on local grape growers and wine producers, the government is reinforcing the vital role our sector plays as a key driver of economic growth in the province. We believe these programs will drive investment, increase domestic grape demand, and help grow the economic impact of the domestic wine industry. Our team is currently making investments in line with the program's intention with millions of dollars in investments planned over the coming years including adding a million liters of storage this year at our facility in grimsby to handle the increased domestic content we are planning for as i mentioned in my opening we are incredibly proud of the strong performance of our business in fiscal 2025 we delivered revenue growth margin expansion improved profitability and increased free cash flow In addition to this core year-over-year business improvement, the recent announcement of the Ontario Grape Support Program positions us for further investment and growth moving forward. Looking ahead, we remain focused on continuing to innovate, build industry-leading brands, strengthening our partnerships across all key trade channels, and investing in the capabilities that will support sustainable, profitable growth. We're proud of the progress we've made and we're energized for the opportunities ahead. With that, I'll pass it over to Renee to take you through the financial results in more detail.