Hello, and welcome to the Rémy Cointreau 2021 full year results conference call. My name is Val, and I will be your coordinator for today's event. Please know that this conference is being recorded, and for the duration of the call, your lines will be on listen-only. However, you will have the opportunity to ask questions at the end of the presentation. This can be done by pressing star one on your telephone keypad to register your question at any time. If at any point you require assistance, press star zero and you will be connected to an operator. I will now hand you over to your host, Mr. Marc Hériard Dubreuil, Chairman, to begin today's conference. Thank you. Good morning to you all. We are here to review the result of last year of our group, the Rémy Cointreau Group. I'm going to make a small introduction, our CEO Eric Vallat will review the operation. Our Chief Financial Officer Luca Marotta, as he did many times in the past, will make the financial review for you. Eric Vallat will come back to give you the outlook now after the beginning of the year. We have just released this morning the results. I hope you had time to review them. They are very good results. We did very well. Our growth was significant compared to last year. Even we could say, we could even have had better results. This is not what is important. What is important is the context in which we were last year. I will mention two topics on that introduction. The first topic, of course, is the financial performance. You must put yourself in the position in which we were at the beginning of last fiscal year. As for many companies around the world, we were really living difficult times. We even had to close all our operations worldwide for nearly three weeks. When we started again, it was very complicated. It was very complicated for our operations. It was becoming more and more difficult for our customers, which were disappearing one after the other, and we didn't know for how long. The situation, of course, was difficult on the production side, but the most difficult situation was really on the logistics side. The supply chain was extremely difficult during the year. What we had to realize is that we had to change the ways we were doing things. The important thing of last year is that we worked out the change. We have been able to adapt ourselves to the new environment, and our group became stronger after that crisis. This is the important point. As I said, the context was very challenging, but we have been able to be very agile and to adapt ourselves to many, extremely different conditions. Those very strong results we are having today confirm once more the strength of our Rémy Cointreau brands. I say brands because it's not only Rémy Martin Cognac. Last year, you remember, Eric Vallat launched the 10-year plan. Now, I can say it's a nine-year plan because we are fully on track to achieve that 10-year plan. On those results, you can see that we have made solid progress toward that long-term strategic objective. Very important for us, our gross margin has reached the all-time highs. This is the best performance we ever had, which is of course in line with our long-term plan. Our current operating profit, in spite of all the difficulties I mentioned, went back to historic levels. In one phrase, I can summarize what happened. The new paradigm, post-COVID, confirms our long-term strategy. This was my first topic. Now, for the second topic. For us, long-term sustainability is as important as good financial results. This is really the dedication of our group to provide as much as we can, that sustainability for all the stakeholders which are around us. You know very well, I hope, that the three words which summarize our group, the three words on which we leave our signature are terroir, people, and time. On those three fields, we have made and are making and will make strong progress. If I speak of terroir, you know that our objective is to be 100% sustainable everywhere in agriculture. This is already done in Cognac, but the news of this year is that we have made strong progress in our liquor and spirit division, led by Cointreau, St-Rémy, Metaxa, Boutique distilleries, and even also for our newcomer, Telmont Champagne. Concerning people, there was a lot to do. We try as much as possible to help all those with whom we were working. We launched quite a large series of solidarity actions against the pandemic, because a priority was given to health for all stakeholders. Concerning our employees, we protected all salaries around the world without any government support. As I said, our clients, our customers, were in a very distressing situation very often. We tried to help them, and especially the on-trade communities, which suffered a lot this year, with financial donations and proper communication. Concerning time, the journey had started already many years ago. We went on this year. You will see when you see our reports that we had a lot of initiatives. It would take too much time to review them all. I will only give you two examples. We are discontinuing gift box in many of our brands. For our two main distilleries, which are Angers and Cognac, starting from April 1st this year, we are switching to biogas, so more sustainable. Because this is our commitment, and we will go on for the years to come towards trying to help to sustain the planet. Thank you, Marc. Good morning, everyone. Very pleased to e-meet you again, even though I hope we can remove the e soon. I have the feeling it's coming soon. I'm very pleased now to take you through, as Marc said, the operational and the business outputs of last year. I will start just by telling you about the trends emerging from COVID. It's too early to draw final conclusions, but we can highlight some trends emerging from the pandemic, which we believe are structural because they preexisted COVID, and they accelerated with COVID. The first trend is the up-trading trend. Of course, people had less to spend on travel. Of course, government subsidies, particularly in the U.S., have helped. Of course, buying in the off-trade is cheaper than buying in the on-trade, which is boosting volumes. The trend of drinking less but better preexisted COVID. It has accelerated, and it will keep strengthening with people paying more attention to what they drink. Also, a lot more clients had more time last year to be educated on high-end brands. These brands have gained in familiarity. Plus, we tried digital tasting sessions, and they proved to work. They will help us increase the reach of people we educate. We are well-positioned to take advantage of this trend with our portfolio of exceptional brands, which is displaying a value per case which is two times higher than market average. The second trend is the rise of at-home consumption, and including mixology at home. It will slow down with the reopening of on-trade, but it will remain way more than pre-COVID. We are well positioned as well here, again, with our liquors and spirits portfolio, and more particularly with Cointreau, which was in the original recipe of the margarita and which is present in more than 400 cocktails. The third trend that you can see on the screen is the acceleration of e-commerce. I don't think I need to elaborate here. Just to say, maybe, that in the U.S., it is more than an acceleration. COVID has kicked off e-commerce, and all the stakeholders are now invested full speed behind it, which is clearly unleashing its potential up to the U.S. becoming probably the number 1 e-com market for wine and spirits in 2021 above China. Here again, we are in a good position. Being smaller than big players, e-com is an even bigger opportunity for us, as our coverage of the Tier 3 and Tier 4 areas worldwide is less than that of our competitors who have more commercial people in the field. E-com is B2C and B2B indeed. It gives us the opportunity to target qualitative accounts in remote cities in China, for instance. This is probably why we were a pioneer in China, where it now accounts for more than 20% of our business. The last trend I would like to highlight here is the heightened environmental and social consciousness. Here as well, I don't think I need to elaborate, but terroir at the heart of what we do and transmission of our vineyards, of our know-how to the next generation in the best conditions possible, has always been an obsession for us in the past 350 years. Here again, I believe we are by culture, it's our DNA, well-positioned. Moving to the next slide. As I said last year, our ambition remains to become the leader of exceptional spirits. As explained, entering a mature phase of the value strategy, we removed the above $50 sales target for a more inclusive approach. Retail price remains key, but we look at gross margin also beyond retail price as a way to create even more value. This strategy translated into four priorities that were shared last year. We believe that these priorities are spot on as they embrace the consumer trends I just referred to, as showed here on the slide. This gives me an opportunity to update you quickly on these priorities as they are key for us to deliver our long-term vision and as we made material progress despite the pandemic. These priorities are numbered in the following slides, but the numbers do not reflect any kind of hierarchy among the priorities. Four priorities is not a lot, but this is on purpose as each priority is equally important and instrumental to the plan. We need to make sure we allocate enough resources. Moving to the next slide. Priority number 1, increase value per case, or put in a nicer way, generating more value than volume. As I said, we want to keep a focus on retail price through price increases, but also through product mix management. We managed to leverage our trading trends, with a positive price mix effect of 5.5% in 2021, particularly thanks to the continued very positive growth of Club, 1738 and Bruichladdich Whiskies, to name them. This is the second part of the slide, we also look beyond retail price now, as I explained, with a clear focus on gross margin, which gained 1.3 points thanks to the investments behind our accretive brands. A good example here is Cointreau, which enjoyed a stellar growth in the U.S., where we over-invested to fuel growth and where the gross margin is the highest while retail price is not the highest in our portfolio. The second priority is enhancing portfolio management. What have we done since we last shared the strategy in June 2020? First, we have assigned clear roles to each brand, and we have split them into three groups with a clear set of priorities for each. This is how we will grow our portfolio beyond cognacs. Second, we implemented a new global markets organization with the appointment of Laurent Venot as CEO Global Markets. His mission with his team is, among others, to work on implementing this portfolio vision in the field. Third, we launched a commercial excellence project, which is instrumental. Here, we are talking about a transformation project. Over the past six years, we invested on upstream topics, terroir, products. This was key to claim for exceptional spirits. If the product is not great, there's not much we can do. Now, time has come to invest on downstream activities as well, notably on commercial capabilities. We appointed at the beginning of the year, of the civil year, a senior executive to pilot the project. She joined in January this year. We are making good progress now, as showed with the timeline you can see at the bottom of the chart. It's now a project which is live and which is going to deliver in the coming months. Moving to the next slide and the next priority, implementing a client-centric model. With Louis XIII, we have a fantastic weapon to implement a real client-centric model and to replicate whatever is relevant for the other brands. We are very ambitious for the brand as we target to know and to dialogue directly with 80% of our end clients by 2030. This makes sense for three reasons. One, buying a decanter of EUR 3,000 is like buying a watch of EUR 25,000. This deserves a level of service unique in the industry, which can only happen with a tailor-made approach addressing clients' needs and specific aspiration. Second reason why it makes sense, the unit price allows for investing on a client-centric model. The third one is, as we all know, it takes generation to craft the liquid for Louis XIII. We know the volumes we have in hand and creating value will come also thanks to a more integrated value chain. The more we sell direct, the more gross margin we secure. A classic for a luxury brand, but a disruptive statement in our industry. This is why I like to say that Louis XIII is unique and is what makes us as a group so special. As I just explained, Louis XIII is the spearhead of our client strategy. The game changer is also at group level, clearly e-commerce. Our 20% target of sales generated with e-commerce in 2030 was ambitious pre-COVID, I believe, and we can maybe debate this later, but I believe that we should do more since we've gained years with the pandemic. Moving to the next slide and the last priority, achieve responsible growth. This is not a new priority, as I said, and as Marc said as well. Transmission and caring for the future of our terroir has been a priority for generations at Rémy Cointreau. We are not starting from scratch at all. We believe more in doing things than in communicating on this matter, even though the numerous recognitions and awards we get, and it's more than the three which are listed in the slides here actually, are self-explanatory. Now, we are not there yet, and there's a lot to do. It is our duty to accelerate, leveraging a new paradigm. Why a new paradigm? Because 55% of consumers report sustainability is very important to them when choosing a brand now. They were only 33% pre-COVID. We should take advantage of the tailwinds to accelerate. We are indeed now that everyone in the organization is and feels committed. To list a few examples, I'm not going to elaborate on the 64% that Marc already told about, just so you know, we're talking here of 15,000 hectares in total, if you include all our products and indirect sourcing. Today, 45% also of our managers are women. We obtain good scores on two indicators, gender pay gap and pay rise gap. There's still a lot to do on diversity, of course. We made it a priority for the coming years. We have also removed the gift box, as Marc said, in the U.S. and almost worldwide for VSOP, for instance. It's interesting to see that VSOP is growing the fastest. The clientele is ready now for such kind of move, and by the way, it is an accretive move in terms of gross margin. It's a very interesting way of combining gross margin as well as sustainability. To conclude this slide, it's interesting to note that our net margin, including CO2 costs, would be 14.2% versus 14.7%. It's showing a very limited impact, showing that our CO2 cost is limited today. Moving to the next slide, just to say that I am done with the strategy and the four transversal priority. Just a quick update before we move to the high-level results of last year, just to say that if we have a look at where we stand versus the 10-year plan, as Marc said, after one year, the good news is that we are well on track, even ahead our internal roadmap, which should give us the opportunity to invest even more this year on our brands to grow them in the future. The investment of today is the growth of tomorrow. One last slide with the global overall picture. As you've seen from the first release, our full year results were very strong, proving our resilience in the context of the pandemic. Back in April, you saw our sales numbers. We talked about the 1.8% organic growth. Business bounced back strongly in the second half with a 20.9% organic growth. In terms of profitability, the current operating profit stood at EUR 236 million, up 12.8% on an organic basis, representing 23.4% margin. As mentioned by Marc, this is close to our highest ever level, 23.5% in 2018/2019. This performance reflects an increase of the gross margin, which has been partly invested in A&P to fuel the future growth of our brands and an excellent control of our overhead costs. In other words, we have evolved our cost structure towards more activation and less fixed costs. The net income stood at EUR 144.5 million, up 30.2% on an organic basis, and the free cash flow came at EUR 123 million, up EUR 107 million. Luca will elaborate here. Finally, the net financial debt stood at EUR 314.3 million, representing a very healthy A ratio of 1.3, down from 1.9 a year ago. Let us now switch to the business review in a few slides. I'm going to go quick on these slides because they were shared by Luca, if not in the same format, but back in April. Cognac, which represented 73% of our sales, grew 3.7% organically in the full year, with a +27% in H2. Liquors and spirits, which contributed to 24% of our sales, recorded a decline of 3.2%, but a 7.2% increase in H2. Lastly, Partner Brands, which accounts for only 3% of the group now, the sales were down 1.5% in the full year. Moving to the next slide, you can see our sales by region, which shows an outstanding growth in the U.S. and a strong recovery in China in H2. Americas was the growth engine with a remarkable 18.6% increase, boosted by a 38.7% rebound in H2. Asia Pacific was down -4.5% during the full year, despite a +20% rebound in the second half. Focusing on Greater China, the growth was 17%, -7% on H1, +39% on H2. Lastly, EMEA displayed a -20.17% decline impacted by on-trade closure in many markets, as well as weak travel retail, obviously. While still down, H2 sales recorded a sequential improvement at -11.5%. Moving to slide 18, I'm not going to elaborate on the figures here. You can have a look. Just to say that at the end of March 2021, Rémy Martin volume market share is up 1.6%, according to BNIC. If you look at superior quality, so VSOP and above, our market share actually grew 4%- 28%, thanks to VSOP Club and 1738. A very good year in absolute value, relatively speaking as well. Moving to slide 19, these are figures you know already. I'm not going to elaborate either, just giving me the opportunity to highlight again the acceleration of the second semester for our cognacs, which appears on the left part of the slide. Moving to slide 20, let's focus on our operational performance for the cognac division. This is an important slide. I'm going to spend a bit more time on this one. Current operating margin increased by 2.9 points to 30.1% over the full year. This breaks down into an organic increase of two points, positive currency effects of 0.9 and an almost neutral scope effect linked to the consolidation of Brillet since April. This organic improvement reflects a stable growth margin, sorry. We also got a stable growth margin, which is made of first an adverse mix. Our growth was driven by VSOP 1738 and Club, while the top end was under pressure for a large part of the year because of the closure of on-trade, and we see them bouncing back, with the progressive reopening of on-trade now. Two, a smaller pricing effect. You may recall that during the March lockdown, we decided to postpone our usual price increase from April to October 2020 for ethical reasons, so that the price increase was effective only for half a year last year. An increase of our A&P that you can see here by EUR 12.9 million, so material, in particular in the U.S. and in China. To continue to grow the awareness of our brands and to fuel their future growth. This was possible thanks to the increase and the better sales than expected, thanks also to very good control of our costs, distribution, and structure costs. Thanks to cost-cutting measures that we put in place during the pandemic, some of which will last beyond COVID. Salary and hiring freeze. This will not necessarily last. No traveling expenses and temporary costs in distribution costs and in the on-trade, among others. Meanwhile, we have accelerated investment on our strategic priorities, as said. In other words, our cost structure has evolved towards more activation and support to the business. Let us now switch to the slide 21. I already talked about retail, just to say quickly, we are very proud to have opened a pop-up boutique in Plaza 66 in Shanghai. I worked for 20 years in luxury and in fashion, I can tell you that with a presence in SKP in Beijing and one in Plaza 66 in Shanghai, we are clearly making a strong statement for the brands in the two most prestigious malls in China and in Asia. As a reminder, we have boutiques in China, in Singapore, in the U.K., and in the U.S. We now have six boutiques in total for retail. Of course, we have our Private Client Directors who proved to secure very resilient business while a lot of on-trade accounts were closed worldwide. Well, on Rémy Martin, the growth of our sales has allowed us to invest even more than budgeted to increase the awareness and the relevance of the brand in the U.S. The relevance is important as well. We launched the next iteration of our Team Up for Excellence campaign, featuring Rémy Martin 1738 and the legendary music artist, Usher. Team Up for Excellence, the film, and we have up to a six minutes film with a very specific distribution, brings to life the history of the harmony between two cultures of excellence in the U.S., music and cognac. The film celebrates the harmonious blending of two cultures of timeless excellence. Again, music and cognac. It highlights the cultural connection between cognac and American artists since 1917, back to the First World War in France, and how the two have been influencing each other ever since. We are going to echo this campaign as well with the 100 years anniversary of the sidecar, coming soon as well. Just to say that, we've moved from a maybe more very important product-centric communication on Team Up for Excellence to a very engaging, compelling campaign that is clearly addressing the heart of our clientele. Moving to the next slide. We also launched Maison Rémy Martin something like five years ago. This year, we brought cognac to Guangzhou and we celebrated Fine Champagne. As you know, our relationship to terroir is very specific, and we source only from the two most sought-after cru of the region, Petite Champagne and Grande Champagne. I launched the Maison Rémy Martin five years ago. I must say I was impressed by what it has become. If you move to the next slide, this is not clearly a film from Hollywood. It's made by our team. It's first time we saw such a queuing to enter Maison Rémy Martin. This was very exciting for us, as at that time, we were confined. It was great to see such affluence in China when we launched it. Not only when we launched it, by the way, but every single day. Moving to the Liquors & Spirits division. I'm not going to elaborate either on the figures here, just like I did not for Cognac. Moving to the next slide. Americas, as you can see, enjoy a mid to high single-digit sales growth. U.S. enjoyed excellent performance supported by booming at-home mixology. Canada showed a good resilience, and LATAM was strongly impacted by lockdown measures and weak tourism. In EMEA, we enjoyed a double-digit sales decline. Enjoy is maybe not the appropriate word. Sequentially improving in H2. Most markets were impacted by on-trade closures and travel retail. We also saw and witnessed the very strong resilience of the U.K., Benelux, and to a lesser extent, Russia. In APAC, we saw a slight sales decline despite very strong recovery in H2. Greater China was a bit penalized by a slow cocktail bar recovery, but Southeast Asia witnessed a solid performance driven by Australia and New Zealand. Lastly, travel retail obviously has been very weak, affected by the collapse in tourism everywhere in the world. Moving to slide 27, so the last one I'm going to spend a bit time on before I give the mic to Luca in a few slides. Let's focus on Liquors & Spirits' current operating profit. We've been able to protect our margin at 13.3%. This performance reflects an organic improvement of 0.8 points, offset by some negative effects in currency, -1.1, and the scope, -0.8, with the consolidation of Belle de Brillet since May 2020 and of Telmont since October 2020. This good organic performance was driven by the combination of a strong improvement of the gross margin, +2.3 points, led by a very positive mix on the back of the outstanding performance of Cointreau in the U.S., which I referred to, which is strongly margin accretive and behind which we strongly invest. Hence, a continued increase of our A&P, 0.6 points, the investments versus last year, +0.6. We have notably reinforced our marketing investments behind Cointreau to leverage the booming at-home mixology trends while preparing the on-trade reopening. In parallel, we slightly reduced our distribution and structure costs. Now moving to slide 28, where the stellar growth of Cointreau enabled us to invest even more in the ground to increase awareness. We displayed an ad for the first time ever in the group during Super Bowl. The audience has been amazing, and Cointreau ad ranked number eight overall and number one among wine spirits brands. We're very proud, of course, it gave us the opportunity as well to show our support to the on-trade. We have been very active on e-commerce as well, where all our brands increased sales. It's interesting to know that Cointreau even achieved the number two position among the liquor brands in 2020 on Drizly, which is an amazing improvement versus the year before in the context of growing Drizly sales. It's a great achievement we're very proud of as well. Moving to my next slide, just a picture on the whiskies that also did great. They grew over 40% in 2021. It was very interesting beyond the strong growth in the U.S. to witness the acceleration in China, more particularly. This image, by the way, gives you a feel of the beautiful Bruichladdich boutique that we opened in Xiamen and that is doing very well. I am done, and I give you the mic, Luca, for a more in-depth financial outlook. Thank you, Eric. Good morning, everyone. Now let's move on detailed analysis of the financial statement, let's begin with the classical income statement, simplified one. As already mentioned, organic sales were up +1.8%, on that basis, gross profits increased by 2.9% in organic terms, implying a 0.8 points organic improvement in gross margin, reaching an all-time high. This very good performance was driven by the combination of some effects. First of all, a positive volume effect led by strong recovery in the H2 in our key markets, U.S. and China, on top of that, and a positive in terms of gross margin, mix price effect, mostly driven by a favorable brands mix benefit. This reflects faster growth from the cognac business and Cointreau, which are gross margin accretive compared to the weighted average of the group. The positive price mix effect was, the other side, mitigated by a smaller, compared to the usual habits of the group, pure pricing effect. We have to recall that pricing benefits only took place in H2, while they impacted the full 12 months in the previous fiscal year and was done for ethical reason. Sales and marketing expenses were down 0.7% in organic terms, reflecting some clear cuts in H1, in particular in the on-trade channel in the context of the pandemic. Within this big, huge, and aggregate total, we have to say something about A&P, Advertising & Promotion expenses, that grew around 7% year-over-year. In accordance with our long-term plan, we have decided to partly reinvest the gross margin gains in advertising investment to fuel the huge rebound in H2. A&P grew in the H2 +27% and continue to grow our brands awareness and desirability. Around 50%, five zero, of that in terms of weight, was dedicated to digital media spend to engage new generation, new type of clients. In contrast, distribution costs declined around -10 organically as we put in place several cost control measure, including very selective hiring, massive cut in travel and expenses, entertaining expenses, and consultancy fees. Administrative expenses, as an aggregate, declined by 5% on an organic basis, again, thanks to cost control measure implemented, as you remember, since the very beginning of the crisis. Overall, we reached our 20 million target savings in OpEx that we guided one year ago, while we finally decided to overspend in A&P to fuel the rebound. Looking forward, we still expect around 10 million OpEx saving of this 20 to remain structured for the future. All in all, the current operating profit came in at EUR 236.1 million, up 12.8% on organic basis, better than guided, better than expected, and by 9.7% on a reported basis, i.e., after taking into account negative currency effect, EUR -4.8 million, and negative scope effect, EUR -1.7 million. Let's move to the analysis of the group current operating margin, so another way to analyze our performance. It was up on a reported basis 2.4 percentage point to reach 23.4% over the full year compared to 21%, close to our all-time high reached in 2018/2019, it was 23.5%. Once again, also in terms of operating profit, reaching a very, very important score. This breaks down into an organic increase which is almost the same, 230 basis points, a positive currency effect of 0.3 points, and a slight negative scope effect linked to the consolidation of Brillet since May and Telmont since October 2020. The organic improvement of the current operating margin, 230 basis points, so it's quite important, basically reflects the increase of the gross margin as well as the strong control in our distribution and structure cost ratio during the pandemic, partly reinvested, as already said, in more A&P activities. In more detail, gross margin was up plus 0.8 points as a result of positive volume growth and favorable mix price. The A&P ratio increased by 0.9 points as A&P spend was up plus 7%, as said, while sales were up organically only plus 1.8%. Mathematically makes an increase for the weight. The acceleration in A&P was particularly focused in our key market, U.S. and China, and mostly supported the relevance of our main major brands, including the new Rémy Martin campaign in the U.S., the communication around the Chinese New Year, and the Cointreau advertising during the Super Bowl, and other important and unique, [inaudible], initiatives. The ratio of distribution structural cost decreased sharply, 240 basis points, reflecting a strong control over cost during pandemic and the implementation of new ways of working that also will last for the future. Let's take a look at the remaining part of the income statements. Other non-recurring operating expenses were not meaningful at negative EUR 0.2 million, while finance costs improved very strongly to reach EUR 14.6 million in 2021, down from EUR 28 million last year. I'll come back later on this very specific point during the presentation. The reported tax rate decreased to reach 35.1% in 2021, to be compared to 36.3% last year. The drop in tax rates in certain countries, such as France and the U.S., was partially offset by a deterioration of the geographical mix, i.e., the weakness of the travel retail business and Asia-Pacific in the first half, which both tends to enjoy lower tax rates than the rest of the world. Excluding non-recurring elements and items, the effective tax rate for the 2021 was 33.5%, to be compared to 33.9% last year, so minus 40 basis point. At this point in time, given the uncertain global tax environment, we think it is reasonable to expect the recurring tax rate to remain stable, so between 33.5%-34% for 2021/2022. Net profit from discontinued operation was nil in the full year 2021, while we recorded EUR 6.4 million net profit gain last year on the disposal of our Czech and Slovakian distribution subsidiary. As a net result, net profit came in at EUR 144.5 million, up 27.5% year-over-year on a reported basis. Excluding some non-recurring items, quite marginal, net profit came in at EUR 148.2 million, up 19.4% on a reported basis. The net margin stood at a very strong level at 14.7%, up 2.6 percentage points on a reported basis, second highest score ever at group level. A simple spreadsheet with the non-recurring items disclosure. The reconciliation this year is quite simple. Mainly this year integrates EUR 3.5 million of deferred tax asset reduction linked to the decrease of the legal tax rate in France, switching from 32.02% in 2021 to 28.41% in 2022. Now let's take an analysis of the most important analysis spreadsheet, in my opinion, or presentation, financially speaking, which is the cash flow generation and net debt. As Eric Vallat already mentioned, free cash flow generation improved very sharply from EUR 15.7 million of inflow last year to EUR 123 million this year. This strong performance reflects many different specific elements. First of all, EUR 20 million increase of the EBITDA on the back of the operating profit progression. Second, a significant reduction of the total working capital outflow that need to be split between different components. First of all, the working cap outflow related to eaux-de-vie and Spirits in aging process amounted to EUR 58.7 million this year, to be compared to EUR 118.9 last year. This is the consequence of the very strong momentum that we experienced in H2, leading to a very low level of inventories at year ends. This despite the fact that we had the same level of purchases in Cognac eaux-de-vie as last year to prepare, feed, and secure the future. Second, the other working capital items out of eaux-de-vie and spirits aging process inflows were flat year-over-year if you compare 2021 and 2019/2020. This reflects a positive cash variation of receivable linked to a lower level of sales this year at the end of the fiscal year, and that despite a strong sharper reduction of factoring, only EUR 55 million this year, to be compared to EUR 98 million last year as balance sheet items. On top, we enjoyed an increase in payables, more or less EUR 50 million, mostly in A&P and strategic OpEx that were expanded and accounted in the Q4 to fuel the rebound. Costs in profit and loss, no cash out. Third element, a tight grip, as you can see, on capital expenditure investment, as we decide to postpone some projects with the pandemic, and sometimes we were obliged also for sanitary reasons to postpone some of them. Lastly, a decrease of EUR 13.3 million of the tax of flow reflecting last year fall in profit. All that elements explain the positive variation of free cash flow. In parallel, other cash flow items improved substantially versus last year. We recorded an inflow of EUR 13.6 million for the year versus an outflow of EUR 123.3 million last year. This was largely driven by the dividend payment this year in 2021, 80% of our shareholder opted for a dividend payment in share, while last year, 2019/2020, 100% of the dividend were paid in cash, and there was also an exceptional dividend top. Another non-recurring or quite a little bit extraordinary element in terms of global cash flow in 2021, proceeds from the net between asset acquisition and disposal increased from EUR 11.7 million- EUR 29.9 million, EUR 30 million, reflecting essentially EUR 68.6 million proceeds coming from the Passoã disposal, so the cash in, partially offset by the cash out linked to the acquisition of Brillet and Telmont. All in all, a very positive situation, but we have to acknowledge and to say and to prepare what I said, because this cash flow generation of this year reflects a perfect alignment of stars with some element that next year will clearly reverse. As a result, at the end of March 2021, our net financial debt stood at EUR 314.3 million, down from EUR 450.9 last year in March 2020, leading to a sharp decrease of the A ratio to 1.33 in March, to be compared to 1.86 one year ago. As promised, a few comments on the net financial expenses, which were a charge of, globally speaking, EUR 14.6 million this year, down EUR 13.4 million as a variance compared last year at EUR 28. What happened? First line, gross debt servicing cost was slightly low, showing a continued optimization of our cost of debt, now at the lowest level ever, reaching 1.01 in term of cost of debt used. Net currency losses also improved to a EUR 0.4 million loss this year, to be compared to EUR 4.7 million loss last year. As you know, this is a volatile non-cash items related to the hedging of group non-euro debts and future flows. The main driver of the financial charges improvement and net result improvement as well, was in the other financial expenses, where, as already said during our [off year] result, we experienced a strong reduction this year amounted to EUR 2.2 million versus EUR 10.6 million expenses last year. As mentioned, the EUR 8.4 million reduction reflects a change in contractual term with our wine growers since the start of the financial years. Less other financial expenses. Now, a very important chart for 2021 and to prepare the future and to adjust your estimation. Let's talk about currency conversion and hedges in terms of rates, impact on sales, impact on bottom line. Let's start with this year, 2021. The Group reported in 2021 a negative translation conversion and also translation impact of respectively EUR 36.3 million on sales, slightly better than guided since November and January, and EUR 4.8 million on operating profit, as well slightly better. This mainly reflects a deterioration of the average euro-dollar translation rate over the period, which, as you can see, came out at $1.17 per euro compared to $1.11. Meanwhile, our average hedge rate, because we have very cautious policy and we take in advance 18-24 months in advance position of coverage, of hedging, was slightly up at around $1.17 per euro in 2021, to be compared to $1.16. Now looking at our forecast for the full year 2021/2022, which is also important for you. Assuming an average euro-U.S. dollar budget rate and hedge rate at the same level at $1.20, knowing that today at spot rate, we are slightly higher than that. We anticipate, considering our flows for the 2021/2022, a negative impact in sales between EUR 20 million-EUR 25 million, which most of the effect, which is a translation conversion rate, in the H1. Overall, between EUR 20 million and EUR 25 million, of which the biggest part between 2022 and the first semester. On the opposite side, on operating profit, we have a decrease between EUR 16 million and EUR 20 million on operating profit on a yearly basis. On the opposite side, most of the negative impact should be recorded in H2, where we expect a limited loss between EUR 4 million and EUR 6 million in H1. I repeat, EUR 20 million-EUR 25 million in sales at yearly level, EUR 16 million- EUR 20 million loss on COP on a yearly level, with a reversed opposite phasing between sales, sharp decline in the H1 and not so big in the second part of the year, and in the operating profit. A limited loss in the first part of the year and more important in the second part because of the game of the average hedged rate by month and by semester. As the evolution of the euro/U.S. dollar, which has been very important for our coverage, not the only currency, but it is very, very important, remains very volatile, we will share with you an update on top and bottom line every quarter as usual. As a reminder, the sensitivity, and which is very important because you have really to understand what we are writing and seeing here, is the following: $0.01 increase in the U.S. dollar versus the euro equal to EUR 5 million-EUR 6 million gain in sales and around EUR 4 million gain on operating COP, all things alike. Here you have a decrease of EUR 0.03, and then there are other currencies. At this stage, we already covered 75% of our expected flows for our net U.S. dollar exposure for 2021/2022, of which around 60%, six, zero, of option. We are quite flexible. 75% of the needs are covered. After this long technical but important element to try to focus ourselves globally on the published consequence on the next year, which is not the way we manage the company, we manage the company on organic views, let's talk a review on the balance sheet. We total asset liabilities of EUR 2.78 billion, roughly stable compared to last year. On the asset side, the global inventory increased, this is very important, by EUR 129 million to reach EUR 1.49 billion, EUR 1.5 billion due to purchases of young eaux-de-vie. Inventories account for 54% of total asset, up five points versus last year, which is an all-time high. Of this EUR 1.5 billion, around EUR 1.3 billion is cognac, so more than 80%. This is the treasure of our future and the basis of our valorization. On the liability side, the shareholder equity is up EUR 145 million, reaching another historical level, the biggest ever for the Group, mainly driven by the strong progression of the net income as well as the dividend payment, which was made in share. Net gearing, the Group's net debt to equity ratio, decreased over the period from 32%-20% thanks to a lower net debt, but also was a little bit alignment of stars on the global cash flow, and a higher equity. A word on return on employed capital. Our ratio came in at 17.1% in 2021, up 0.6 points on a reported basis and up 150 base points in organic terms. This was driven by a 0.2 point increase in the ROCE of the Group brands and a swing, a negative one in Partner Brands, ROCE switching from 21.9% to -14.6%. The organic improvement was driven by the strong performance of our operating profit, the numerator, up 12.8%, while employed capital on organic basis grew but at a slower pace at 3.3%. Our recent acquisition, La Briquette d'Or, largely explaining the difference between the report and the organic improvement. Looking a little bit more deeply inside the performance by division, Cognac's ROCE rose by 1.1 points, 110 basis points, to reach 19.7% on a reported basis and up 130 basis points on organic terms. Clearly, the strong organic operating profit growth division, plus 11.3%, more than offsets the 3.8% organic increase in employed capital. For what concerns Liqueurs & Spirits division, ROCE declined 3.7 points to reach 13%, but was broadly flat in organic terms as operating profits and employed capital both grew by about 3% in organic terms. Clearly, the delta, the difference between report and organic ROCE for this division for Liqueurs & Spirits, can be explained by unfavorable currency effect and the acquisition of the period. This slide is looking at the employed capital more closely. The overall amount increased by EUR 71.2 million, mainly split between an organic increase of EUR 42.8 million and EUR 30.1 million increase from Brillet and Telmont acquisition, and a slightly negative currency impact, which is minus EUR 1.8 million. On the organic side, 3.3, as you can see, year-on-year increase in employed capital reflected a further increase in aging inventories and to a lower extent, in our production storage capacities, partially offset by a reduction in other working capital items, receivables and payables as already explained. Let's move to the yearly dividends. Given our strong annual result and the solidity, the robustness of the shareholder global position in terms of shareholder equity, and our confidence for the coming year, an ordinary dividend of EUR 1.85 per share in cash will be put to a shareholder vote in the general assembly on the 22nd of July 2021, representing an increase of 85% versus last year and plus 12.1% compared to 2018/2019 for the ordinary dividend. In terms of ordinary dividend, EUR 1.85 per share is another all-time high in terms of group level and group indicators. For your technical information, shares will trade ex-dividend on September 29, and dividend will be made payable starting from October the 1st. Overall, total dividend equates to a payout of 63% of the recurring EPS and a yield of 1.3% of the 16. Compare the dividend to the average share price over the financial year. This average was EUR 138.43 a year. In addition to the dividend, the board of directors of Rémy Cointreau decided yesterday, June the 2nd, to authorize the company to launch a share buyback program pursuant to Resolution 19 and 20. In this context, an investment service provider will be instructed very soon to purchase up to a maximum of 1 million share of Rémy Cointreau for the next six months. This share buyback program is intended to facilitate the following transaction in decreasing order of priority. First, to decrease the share capital by canceling treasury share. Second, to meet the obligation arising from free share incentive program for employees and corporate officers of the company and/or its affiliates. Third, to meet obligation arising from security giving assets to share capital. Thank you for your attention to this little bit long technical and financial point, and now I will hand it over to Eric Vallat for the 2021/2022 outlook. Thank you, Luca. I'm gonna be quick here to allow time for questions, plus I think the slide I am going to share is quite explicit. Just to reiterate first, as was stressed several times, our strong confidence in our ability to continue gaining shares in the exceptional spirit market. As we said also, we believe in 2021 to be a strong year of growth, but also a year of two halves, with each one benefiting from a favorable basis of comparison and also the reopening of on-trade in many markets, which is generating some sell-in inflow, and also the restocking effects. As you know, last year, we ended with rather low stocks. The second half of the year will compare to higher comps, obviously, and will also reflect a normalizing trend of consumption. Third point, being ahead of our 2030 financial objectives, and given the favorable environment and our strong confidence in our ability to develop the top line, to deliver the top line, the Group has decided to revise up its 21/22 strategic investment to fuel the rebound and to fuel our brands' awareness and desirability. This is probably the weakness of some of our brands. Once you try them, you are engaged. The question is to have more people trying our brands as well. It's all about awareness and desirability, and we can afford to invest more behind them, and this will be the growth of tomorrow. By strategic investment, we mean A&Ps, but not only, we mean also investments behind e-commerce, investments behind commercial excellence, and investments behind sustainability. The expected good growth of COP in absolute value should be also tempered by the currency effects, which we expect between EUR 60 million and EUR 20 million and by a small scope effect of EUR 2 million, though, following the acquisition of Brillet and of Telmont. There we are. There's one more slide, actually. Thank you, Luca f or reminding me, just I shared it already. The last very important message, which was also in the introduction speech of Marc, is that we confirm clearly our 2030 objectives. The fact of being able to allocate more means behind our brands today comforts us even more in our ability to grow our brands in the long term and to achieve the targets that we shared already last year in June, and that you have again here listed on the slide. This is the last slide. We are now open to questions. Feel free. As a reminder, if you'd like to ask a question or make a contribution on today's call, please press star one on your telephone keypad. To withdraw your question, please press star two. You'll be advised when to ask your question. Again, press star one on your keypad. The first question comes from the line of Mitch Collett from Deutsche Bank. Please go ahead. Morning. I have two questions. Yes, please. Firstly, can you perhaps comment on the level of organic operating profit growth you think is reasonable for FY22? I think current consensus is for 22% organic operating profit growth. My second question is on the components of EBIT margin. You've obviously flagged that you need increased investment. How should we think about margins in FY22 and the components behind that? Clearly, for growth margin, you've got several very positive drivers with price increases and favorable channel mix dynamics, but you've also obviously got the increase in investment. Can you comment on EBIT margins and the components behind EBIT margin, please? Good morning. Thank you for your question. Starting from the first one. We expect '21-'22 as a strong year, top line and operating profit as well. In strong year, when you accelerate top line and bottom line at the same speed, the result in term of margin is not a growth, is more muted. You have to understand globally that if you consider the long term journey of 10 years, switching from 23.5 and reaching 33% will not be, as I always said, a straight line journey. This year, profitable, very strong result and a top line which is more modest than it could have been because of the pandemic, the accretive impact was very strong, 240 basis points on reported basis. You have to consider 2021 and '21-'22 in terms of profitability compared to the top line as a combination of two year. Given the fact that we are ahead in 2021, given the fact that the new paradigm has been installed, given the fact that we have pricing power and positively that increase top line, we profit of that for a year to increase, thanks, and this is your second question, to a growth of the gross margin, which will be very strong once again, very strong. We will come to have another all-time high in gross margin next year to increase our footprint in A&P and strategic OpEx to be able to feed the future journey. I repeat, strong growth of top line, strong growth on the bottom line, mid-teens in terms of organic terms, and increase the gross margin, very strong one, far better than this year, will be another all-time high. Strong increase in A&P, entering a new step game in terms of A&P, increase of strategic OpEx while we will continue to control the running OpEx. As a result, a muted operating margin because we have to look at that on a two-year basis. Last but not least, 2021-2022 will be a year of two halves because top line acceleration to also the replenishment and the restocking and the strategic mastering we have done at the inventory in the end of the year will reflect in acceleration Q1 and Q2. Expenses will follow. As a result, top line and bottom line will grow much faster in the H1 and will be more moderate in the H2 with a consequence in terms also of the operating profit in absolute value. As a top margin, 2021-2022 will be, organically speaking, a muted year while the absolute value will grow, let's say, in bottom line strongly and quite in a symmetric way. On top to analyze what is the publish, you have to add the negative Forex and the negative scope. Here on a two-year basis, it will be an increase which is quite substantial and more than in line with the 10-year journey. We are preparing the future. We are stepping up. Without that, 2022-2023, 2023-2024 could be more difficult. We have to profit of the strong expansion of top line to increase our footprint, change gear, and switch from the fourth to fifth gear, accelerate and speed up. I hope to have been very clear on that. Yeah, that's very helpful. Thank you. Thank you. The next question comes from the line of Laurence Whyatt from Barclays. Please go ahead. Morning, Eric and Luca. Thanks very much for the questions. There's three from me, if that's okay. You mentioned in your statement that you've got confidence in the consumption trends in the U.S., and you believe that they are structural. I suppose we're still quite early in the recovery of the pandemic, and we're just wondering what's the reason why you can say that these trends are structural at this stage. Secondly, there's been a number of U.S. states that have opened the on-trade relatively fully. Just wondering what impact that has had on the off-trade consumption and any data you can share with us from those states in particular. Finally, one for Luca. Historically, Rémy has given cash back to shareholders largely through dividends and special dividends, and today you've moved towards doing a share buyback. I'm just wondering what the reasons behind that were. Thank you very much. Okay, I'll take the first two ones. Thank you for the questions, by the way. Can I start by the second one, to then illustrate with the rest of the questions. You were asking us about on-trade progressive recovery, do we already get some insights, and what is the potential impact also on off-trade. On-trade is indeed recovering in the U.S. It's now already a fact, and it does have an impact on off-trade. Now what we see is clearly that the new normal is off-trade being much stronger than what it was before. First, we do not anticipate 100% recovery of on-trade before maybe one or two years. There might be 20%-30% of on-trade accounts that will not reopen immediately. There have been bankruptcies, unfortunately, and the landscape has changed. Second, the off-trade consumption remains very high and much higher than pre-COVID, even though we see on-trade reopening, and in the states where on-trade has clearly reopened, we see off-trade resisting very well. If you take a brand like Cointreau, which is very interesting because it's very on-trade, it's the most on-trade brand in our portfolio, 55% of the business pre-COVID. You see Cointreau decreasing week after week between 15%-20% in off-trade. This is what the Nielsen figures give us. But it's still three-digit percent higher than pre-COVID. We're quite confident, and this leads to the answer to your first question, that the off-trade consumption being more than pre-COVID is a long-lasting trend. Why is that? First, we believe that people have discovered the pleasure and the beauty of welcoming at home, having events at home, probably more than in the past. We believe that this is going to last in many countries where it was not at all a habit. This consumption at home, on top of that, is clearly more driven than it was towards mixology as well. Mixology was probably seen as complicated. The familiarity has grown with COVID, where people had more time to be educated and more time to spend on mixology. This is the first point. The second trend is up-trading trend. As I said, this is a trend that was pre-existing COVID. Drinking less but better is clearly, we believe, a very in-depth trend that is going to last, and that is even reinforced and accelerated with COVID, where people care more about the quality of what they drink and about their health. This is why we strongly believe in our value strategy, of course. Up-trading will last. Of course, there have been some temporary push to the up-trading with the subsidies I mentioned and I referred to, for instance, but it's also linked to very strong insights that we believe are long lasting. Don't forget that thanks to COVID, I don't like to put it this way, but with COVID, we have managed to grow the familiarity of our brands as well, of the up-trading brands, of the brands of the uptrade, and cognac is the perfect uptrade in the spirits. We discovered the beauty of digital training, for instance, which we never did before. When you train and when you do tasting sessions, they were done for 20, 30, 40 people. Now we can enlarge the number of people we train on our brands, and we can gain in familiarity. Same with the growth of e-commerce, which is clearly a long-lasting one as well. I would even say that e-commerce was not a topic before COVID. It has now become a priority for all stakeholders. This by itself is going to make e-commerce a long-lasting trend because everybody is investing behind it. E-commerce is a fantastic opportunity for the high-end brands because the visibility is equal to the volume brands, while if you go to the physical stores, of course, we are present in less stores. It increases our relative visibility. This also is going to keep the trends up. The last trend is the trends towards, as we said, CSR concern, health. I don't think I need to elaborate here, but clearly COVID has accelerated a trend which was also pre-existing COVID, and we see it ourselves. Again, myself, I was not 100% self-assured when we decided to remove the gift box of the VSOP last year. In fact, it's a very fast-growing SKU the year we remove the box. I don't think this could have happened five years ago. I think it's opening opportunities in the coming years for the planet, of course, but also for us, if you look at our gross margin, for instance. Regarding your other question, dividend versus share buyback. Let me say that dividend this year is historically high, because the dividend for the Rémy Cointreau Group is before all, something that need to last. We're talking more about the ordinary dividend. Last year it was decreased to EUR 1. Historically it was between at the highest EUR 1.65. This year, there is an increase of EUR 0.20 per share to reach a payout which is more than 60%. It is built inside a continuity and increase, so giving a liquid and a cash return to shareholders. In terms of share buyback, historically, since I was named in July 2013, this is the fourth one. We have done before in end of 2015, August 2017, and August 2018, and always between 1%, 2%, 2.5%. It is not something very new technically. What is new, that now it is not a defensive act. It is an act of confidence. We believe in our future. We think there's a great deal for all the shareholder to buy our share now that our A ratio is underestimated, because 20% is not strong enough with the cost of debt at 1.01. In terms of weighted average cost of capital of the company, our ADA needs to increase because we have to increase a bit the leverage. This opportunity, apart from increasing the organic capabilities, strategic ODV and strategic CapEx for the continued group, this is a strong one. At the price of today, the share, we do not think that we are overvalued. We think that there is a large amount of increase of our share. We believe we can improve the return to our global shareholders buying our shares at EUR 117. Yes. We believe firmly that it is not the end. It can be higher. The low AIA ratio as explained, so the balance sheet is very, very sound. As we said, this 1 million share, if you consider the amount today, the estimated impact, everything equal. Next year it's an increase of 0.4 of the A ratio. Still remains quite low, very low, I can say. In terms of the three reason, the most important, the first two that I like. The first one, buying cancellation share to increase also the earning per share. Clearly, it will be EUR 0.06, EUR 0.07, EUR 0.08 accretive impact on a whole year basis, because then when you start something, you have to consider there's a pro rata temporis for the number of share, but this is something which is accretive for everybody, and it is giving back value to all shareholders. Last but not least, we have also to buy share to fuel our long-term incentive plan programs for the key managers and key employees of the group because this long-term journey and tenure needs also to be considered something which we are measured for. Eric and myself or the executive member are also measured about the realization of this plan. There's a tangible impact of our long-term incentive plan. We need to prepare to have the share to face that, because we are very confident to be able to deliver that, in following and not a straight line journey, but achieving the target we promised. Once again, we firmly believe it's a good deal. Thank you very much. Just to follow up on a few of the things you said in accumulation to the first question with the focus on increasing gross margin, the focus on consumers caring a lot more about their health and what they drink, and your focus on ESG metrics. Is there a place in the Rémy Cointreau portfolio for a non-alcoholic spirit? We would assume that some of the gross margins that your competitors achieve on those products are fairly high. Would that be something you'd consider? No, at least not yet. The way we look at drinking less but better and less alcohol is really for us, drinking less but better, less volumes, better quality. We are not looking for volumes as such, and we don't look at replacing, let's say, a volume by non-alcohol volumes. Plus, we believe that for our existing brands, for instance, would not make sense. We're not looking at it, but low ABV is clearly an area that we're looking at, especially for some of our brands. No alcohol is not a topic today. Excellent. Thank you very much. Thank you. Before moving to the next question, I would like to kindly ask to the participant to limit their questions to a maximum of two per person. Thank you. The next question comes from the line of Trevor Stirling from Bernstein. Please go ahead. Good morning, Eric and Luca. Two questions on my side. The first one, returning to the U.S., you've had an exceptional increase in the cognac category and the bubble for Rémy Martin brands in the U.S. Going forward from here, is there maybe anything about I think we've had that gain and now we grow from a new base or, is there more gain to come? I suppose that links into, you mentioned that, off-trade news from down about 15%, 20% for Cointreau, but Cointreau is benefiting from the on-trade reopening. Should we think about net positives over the next few months because of underlying demand, I guess for both Cointreau and for Rémy Martin? The second question, because I think through about supply, again, we've had a massive increase in demand in the U.S. Is supply there to keep that going forward? Do we need more pricing in order to manage supply to protect those inventories? Thank you. I could reply in two hours. I tried to make it short. It's good questions indeed. On the number one question in the U.S., so yes, you can expect, so there is sell- out and there is sell- in. You can expect the net positive growth. When it comes to sell- out, we believe that the new normal still allows for growth, probably, in the low single digits when I'm talking depletions here, low single digit growth overall. We believe that, with our positioning, we can achieve more than this, low single digit growth in the coming years. Don't forget that the cognac category only grew from 5%-6% of the total volumes in the U.S. compared to 12% for tequila, for instance. There is still room for growth, definitely. The growth will come also with the means we put behind our brands as well. We have never invested that much in the U.S. behind the awareness and the desirability of our brands. We are confident in our ability to keep growing the brand in the U.S. for sure. Same applies clearly to Cointreau, especially with the growth of mixology and at-home consumption. Don't forget also, we have some opportunities with the reopening of on-trade. 1738, for instance, pre-COVID, was only 10% on-trade. Its awareness has grown, and we are heavily investing behind it, which will open opportunities also in on-trade, for 1738. In other words, we are quite confident in the prospects in the U.S., whether it's short-term or medium-term. If you look at sell-in, we are even more confident if you look at short-term. We ended the year at very low stock levels. The comparables of last year are very small. We strongly believe in a very strong sell-in, in the first six months, catching up also. As to your second question, which is about pricing and management of the supply, if my understanding is correct, particularly relevant for the U.S. indeed as a question. First, we're happy not to rely on VS volumes today, clearly. As we said, over the past six or seven years, I recall when I was the head of the house of Rémy Martin, I kept repeating that cognac is a value game. We are lucky to be in a business where the offer is potentially less than demand. This is, for me, I believe, a fact in the long run. Now, I believe we are well positioned in this context of tension in the sourcing with our value strategy, which aims at doing more value than volume, which does not mean no volume as you saw this year. I believe that we still, with the levels of stocks we have, we can afford the strategy and the vision we have shared. Which is for cognacs, I remind you, a 2%-3% volume growth overall, but a 6%-8% value growth. Which leads to me to answer to you on the pricing topic. Clearly, we have gained pricing power and we've gained also mix power. For me, the improvement of the sales beyond volumes will come from an improvement of the mix. The growth of 1738 Club in China, which are the intermediate XO, which is a spearhead of the strategy as well in the future, will help us grow the value. VSOP will grow less, but we can afford this growth on the intermediates, we can afford maintaining the volumes of VSOP, which is very important for us to fuel the growth with means to support our brands. Lastly, the name of the game, sometimes I'm asked whether we can finance our stocks and our BFR, for me, the main challenge is not there. With our results, yes, we can. The question is more, can we afford the sourcing of our strategy? The answer is yes. Because of our strategy, which is driven by value, and also because of our leadership positioning in Petite and Grande Champagne and our long-lasting, very long-lasting, we are pioneer there, relationship with the winegrowers. Thank you very much, Eric. Thank you. The next question comes from the line of Simon Hales from Citi. Please go ahead. Thank you. Morning, Marc, Eric, and Luca. Two as well for me, please. Eric, can you just talk a little bit more about the scale of step-up in strategic investment we should be thinking about in FY 2022, and maybe share with more of where that step of investment will be going, how it will be split between specific brand investments and maybe how much of it is the pull forward, perhaps for investments in boutiques and route to market initiatives, which perhaps you had planned initially for later years. Secondly, just coming back to your comments around the strong start to the new year and your sell-ins commentary in the U.S. Are you able to share with us where you are now in terms of wholesaler levels in the U.S.? I think at the end of March, we were talking about one month's worth of inventory, broadly, in the trade channel. Where are we now? Okay. I'll take the first one, and let's see who takes the second one. Anyway, the first one, strategic investments, we are not going to disclose the figures, of course. As you have understood, we are determined to accelerate because we can afford it, and this is why we speak of a muted COP margin for the year to come. I will answer more on the what does it consist of, which I believe is very important indeed to understand. Before I say what it consists of, I think I will more insist on indeed on which brands are we going to invest. I said, we have created three groups of brands with a clear set of priorities. One group is the global priority brands. These global priority brands are our priority in terms of investment because they are accretive and because they have a great growth potential. We are going to spend more than before, and we are going to be more focused on our spending on top of that, which will increase even more sharply the support and the investment behind our global priority brands. To name a few of them, obviously, Rémy Martin and Louis XIII for sure. A brand like Cointreau, which is below $50, is now a global priority brand, thanks to its very accretive margin and its potential growth. Same for the brand The Botanist or the Bruichladdich Whiskies, for instance. This is it for the brands. The global priority brands will be the number one priority. What are we going to invest behind? The big share will be on A&P this year. Why is that? Because we have a challenge, which is an opportunity, in fact, on awareness and desirability. Many of our brands are jewels, but they lack awareness in many of their key markets. This is partially because with this portfolio management we are implementing, we strongly believe now in the growth potential of those global priority brands, and we know that first we need to unlock the awareness. This is basic, but we know it works. Second is we are going also to spend on OpEx to a lesser extent than on A&P behind our four priorities. This is why they have been highlighted, this is why they have been shared at group level, and this is why they are, for every single business unit, the central piece of their strategy. These four priorities will drive us to spend more, particularly this year behind two topics, three topics. Number one topic is commercial excellence. As you've seen, we are launching a project. The idea is really to have an experience in the field that is aligned with the quality of the products and also to go from a cognac, almost solely a portfolio management to a broader portfolio management, which requires skills. There is a way of selling the Rémy Cointreau portfolio. Something we're working very proactively on. Why am I saying it's investment? It's also about upgrading teams, reinforcing commercial teams, which is now probably more than before a focus as much as the upstream has been in the past and is still, but now it's more balanced. The number two topic we are going to invest heavily behind is, as you said, direct to client. Direct to client is three things. One is e-commerce. You will see soon some mono brand e-boutiques openings. We're very proud of it. It's a breakthrough in the industry. It's something that is going to scale up in the coming months and years at Rémy Cointreau. It's only the visible part of the iceberg because e-commerce is a full ecosystem that we are addressing, tailor-made by brand. Clearly, e-commerce, CRM, we are going to scale up there. As you said as well, retail and direct to client sales through our PCDs. We're not crazy either. The latter part, retail and PCDs or [PCX] is very relevant for Louis XIII, much less for a brand like Cointreau. Again, don't take it at group level. It is tailor-made by brand, depending on where they stand and what their business model is. The third topic we are going to invest behind is obviously CSR. I'm not going to disclose. In the 10-year plan, we have tens of millions of investments planned behind CSR topics, some of it being accretive, by the way, as we just said. It's accretive anyway, more and more, because it is now a criteria of choice for our clients. It is not only something that we have in our genes, but it's also something that matters to our clients. Guys, you want some comments? Yes, I leave the mic on two, three points. First of all, to avoid any ambiguity, to follow up at the end of the question of Trevor, that is important for everybody. To avoid any ambiguity, we increased prices in 2021, 2022. In every we increased prices. We delayed for ethical reason in first of October 2021. The pricing power is there, has been a factor. When I said we have great expectation of gross margin accretive journey, also in 2021, 2022, will be fed by the mix, geographical, brands. On top, compared to 2021, an additional pricing effect because you compound the second half of the year, October 2020 price increase, and what we have just factored everywhere in the world. Higher for cognac, a little bit lower, low single digit, low to mid for the rest of the business. In terms of level of stock now as far as we speak, when we talk end of April, we said something has not changed dramatically because the result in terms of final sell- out in some countries, like U.S., has been even better than expected. Clearly, if you consider U.S., you can say that one week or two week you are starting to be negative because we have the huge mountains in terms of comp. You compare to two years ago and this expectation, we are running better. What does it mean? In the U.S., level of inventory at this stage, as far as we speak, is still low. Will normalize, as I said, between Q1 and Q2, more at the end of September. We are around one month for instant for VSOP, a few days for 1738. Only a few days. If you dig in the Nielsen and the 1738, which is decreasing, if you do that out of that, it is different. As expected, the level is down compared to December and will regain to be back two months of the new normal, which is higher, also compared to the expectation, between end of Q1 and the Q2, all along the summer. In China, as said, sell-in and sell- out are pretty much aligned already, so our level inventories remains very healthy, no major switch to be estimated. In the rest of the world, travel retail, apart from Hainan, still very complicated, it's not solved. It's something that they will be back, will be really accretive in term of geographical impact to our figures, but today it's still quite sleeping. Europe, the brand and the teams have done on the field a good job to try to normalize the stock considering the huge pandemic effect on Europe, in which the on-trade, most in the southern part or in Africa, it's very strong. Now in terms of sell-in, being the stock level very low, can be only some positive surprise. I repeat, stock level still low in the U.S. as far as we speak. Correct, right one in China. Europe, we might have some positive impact on sell-in because the stock was very low. Rest of the world, travel retail, rest of Asia that I forgot before, still very complicated. Another year of huge positive news and some also still negative performance. In terms of scale of A&P, it was also your question. First lever to 2021, 2022 to reach this mid-teen organic operating profit increase, I say operating profit organically. Top line being X, the A&P will grow much faster than top line. OpEx will grow lower to be split between some program for the strategic part that will increase, commercial excellence, e-com, CRM and CSR initiatives. Overall, being the other part of the remaining running cost growing very low and gaining the EUR 10 million forever of the economy, as already said, makes that the aggregate of OpEx in 2022 will grow lower than top line. If top line is X, you have gross margin will be much faster than X of the top line, A&P faster than top line, the OpEx lower than top line, and as I said organically, quite a symmetry between the absolute value evolution between organic COP and operating profit and organic sales. I hope this is very clear, with a year of two halves. Perfect. Thank you. Thank you. The next question from the line of Olivier Nicolai from Goldman Sachs. Please go ahead. Hi, good morning. Just two questions please. First of all, on China this time, not on the U.S., but on slide 29, you mentioned a strong demand for single malt Scotch in Greater China led by younger generation. I was just wondering if you think it's the same drinking occasion plan for cognac. You should see this as a threat for cognac in the long term, or is it actually potentially complementary? Secondly, you talk about, especially Marc actually talked about terroir earlier during the presentation, then I've seen and read that the weather has not been great at the moment in Cognac, including some period of frost. I was just wondering if it could lead to a lower supply of Young eaux-de-vie in the short term, and also what kind of measures do you take to support your wine goals? Thank you. Thank you. Question 1 on China. Indeed, single malts are booming, and we take our share with Bruichladdich Whiskies, and by the way, this is accelerated also by e-commerce, which is accelerating the trend. Is it a threat for cognacs? It's early to say. I don't believe so. I think that we shall never forget that the international spirits account for only 1.5% of the total spirits consumed in China, so the opportunity remains massive, including for cognac, as again, we're talking only of 1.5%. I think the rise of the whiskies can also contribute to increase the share of the international spirits in China. Second, I think with the COVID, there's a trend that emerged, and it was also pre-COVID, driven by a lot of government incentives, but Chinese to spend more in China than abroad. I think it's an opportunity for us being a [inaudible] as well. Clearly, we see also an opportunity there to do more in China, including for our Cognacs. I don't see it as a threat. I see a complementarity, an opportunity to increase the share of the international spirits. As to the terroir, and notably the vineyards in Cognac and the frost. First, Cognac was less hit than some other regions in France, particularly. There has been an impact, which if you take, our domain has been quite limited to 15% still, though, of the total production. In fact, the quality is very good, and the productivity per hectare also has been very good or is expected to be very good. The impact should not be so material. Plus, we have the climate reserve that we can use, and that will compensate for it, and here, I'm speaking for the region. Now, of course, the impact varies a lot from one cru to another, so it's difficult to tell you at a regional level, but the impact is less than the climate difficulties we had in 2017, for instance. Again, we have the climate reserve now, so we are not so much worried there. As to your question, how do we support our wine growers? I wouldn't say that any way it is linked purely and only to one season or one yearly happening. It's really a long-term partnership. I think we support them in many ways. We support them in accompanying them on the route to sustainability, of course, and we really support them, not only financially but also with the means we can put at their disposal. We also support them with long-term contracts, long-term commitments. We support them in many ways in the field as well, especially when the frost happened, by the way. Our teams were with our wine growers. We are wine growers ourselves. I would say that it's not purely linked to what happened this year. It's something that is more in-depth, that probably, by the way, dates back to 53 years ago when we started the partnership with the wine growers. Thank you. The next question comes from the line of Richard Withagen from Kepler Cheuvreux. Please go ahead. Yes, good morning, all. Thanks for the questions. I have two, please. First of all, Eric, I just wanted to ask you a bit more on the commercial excellence program that you're launching. Can you talk a bit, where you are now in terms of providing the right tools for the sales force, and what are some of the key initiatives you are putting through in that commercial excellence improvement? The second question I have is, Cointreau is available in glass bottles. Do you have any plans to introduce other packaging types that are more suitable for other occasions? For example, a ready-to-drink margarita cocktail, would that be a possibility? Okay. As to question one, as you may recall, we shared the plan a year ago, and we hired our Commercial Excellence Project Director only at the beginning of the year in January. Once we had designed the project, its scope, and she spent the past five months now working on who to partner with, what our top priorities are, and where do we want to implement them by priority. What we've done over the past five years is we have designed the roadmap, we have chosen the partners, we have hired the right teams in the markets. For instance, we have a new Chief Commercial Officer in the U.S., which is obviously a strategic market for us to succeed this Portfolio Management and Commercial Excellence. Everything, whether it's organization, whether it's dedicated team, we kicked off officially the project one and a half months ago, everything is in place now. We are in the first phase, which is the diagnostic phase, which is going to take us to end of June, which is going to help us benchmark first our activities worldwide, but also highlight the 4-5 priorities we need to work on. Of course, we are not going to disclose more, but we already have a view on this. We are in the process now of refining them. It can go up to improving the compensation of the sales staff to make it more aligned with the portfolio management we want to implement to, as you said, providing the right tools to the team, knowing that until not so long ago, we had no real portfolio management. This is going to be implemented with quick wins, starting in August and September with some key markets which have been prioritized and which are used as the, I forgot how you say in English, but the POC, proof of concept, which are the U.S. and the U.K. more particularly. It will start being very tangible in terms of actions and implementation with starting with the quick wins in August and September. There was a second question, sorry, which is Cointreau. We have a glass bottle and do we consider other formats and other ways? You mentioned more particularly ready-to-drink margarita. First thank you to list margarita. By the way, we have an interesting campaign going on margarita, not campaign by the way, but it's something that is spreading, is what tequila do you need for your Cointreau margarita? Because the original margarita was made with Cointreau. Clearly this is a very interesting for us, cocktail that we are going to keep pushing. Is ready-to-drink an opportunity for Cointreau? I don't want to say no today. I just don't want to isolate it as a topic. We have launched an overview of, let's say, a project and product innovation at Cointreau. I'm not going to disclose, but we have a view on this and other potential actually innovation drivers that could help us leverage the brand. This will be on air. When it will be on air, and at that time, I'd be happy to tell more. All right. Great, Eric. Thank you. Thank you. The next question comes from the line of Edward Mundy from Jefferies. Please go ahead. Morning, everyone. Thanks for the presentation. Two questions, please. The first is coming back to Mitch's question, just around the sort of shape of fiscal 2022. I think you're talking about mid-teens organic sales, better gross margins, strong increase in A&P, but a muted COP margin. Does that muted COP margin take into account the EUR 16 million-EUR 20 million of adverse FX that you're guiding to, i.e., your organic growth would probably be quite a bit ahead of your organic EBITDA growth to probably be quite a bit ahead of your organic revenue growth? That's the first question. The second question was really around Cognac in the U.S., it's done incredibly well, gone from 5%-6% of overall spirits consumption. Have you noticed any seismic shifts in how people are consuming it between either sipping or long drinks or cocktails? Any color you can share with us on that? Start with the first one. Thank you for your question. Operating margin. It's considered without taking into account the scope and the FX impact. We didn't guide it in terms of top line. We are saying that the COP margin on an organic view will be muted because this absolute value evolution will be in the mid-teens. On top, if you want estimate the published level of the operating profit, you have to include the Forex impact, the scope impact that incidentally for 2021, 2022 are negative, could have been positive. The muted COP is an organic level, meaning that at this stage, considering the assumption in terms of organic profile, in terms of FX and scope will be negative. The published margin in terms of operating profit in published way will be decreasing next year. That is not the way we manage the company. We manage the company in terms of organic evolution. The organic will be fed by the gross margin evolution, strong growth to top line, a very strong increase of this gross margin accretive in A&P, an increase in strategic OpEx. Overall OpEx will be lower than the growth in the top line. There is the leverage, will be positive. As a result, the operating profit margin organically splitting before any Forex and scope will be muted, will be more or less flattish. It's not in absolute value. In absolute value will be a strong EUR growth. In the same year, you grow the same fast, more or less, even if very, very strong top line or bottom line, your marginality, your profitability is not moving in a year base. If you take into account two years together, and you'll say that a 10-year plan can be divided by 10, t his year, EUR 240, e ven if you consider next year, it is zero plus 10, the 10 basis minus 10, it is more than 100 achieved per year in the first two years of the plan. It is clear. I switch to the second question, which is about the way people drink our cognac. It's a question that is not too easy to answer at once. What I can say is first, as you have understood, cognac increased its penetration from, I said from 5%- 6% of total spirits, but it's from 22%- 27% of the high-end spirits. It's quite an interesting gain of market share. What we see is that we are recruiting. We are recruiting from high-end spirits, and we are recruiting from on-trade. This clearly leads and drives towards more ways of drinking our cognacs, all the more so as cognac is gaining familiarity, people had more time to be educated on our cognacs. I would say that we see more cocktails than we used to, especially for VSOP and 1738. Of course, not at the expense of the neat or on ice drinks or even long drinks, but we see some more cocktails, which is very interesting for us because it's aspirational as a drink, and it's a potential driver also for on-trade recovery. Thank you. Thank you. The next question comes from the line of Chris Pitcher from Redburn. Please go ahead. Thank you very much. Apologies if this has been asked, my phone went cut out briefly. In terms of lead players, could you give us a feel for where volumes or sales are versus pre-COVID levels in the U.S. and China? Just in terms of how the cost structure of that business is evolving as you take on a more sort of luxury goods model with the Private Client Directors, when would you expect to get back to sort of previous levels? Second question on travel retail, have you done the work to try and work out how much of your demand has shifted from the travel retail to the domestic channel, particularly in the U.S. and China? On a like-to-like basis, is that good or bad for profitability? Thanks. [Foreign language] Yes. Okay. [Foreign language] I will start with the second one, Chris. Hi. Let's talk a bit about profit and loss theoretical model pre-COVID, and what you can expect for the next two, three years at least. If not, even longer maybe. The profit and loss of the strategic journey, which is accelerated by the pandemic, but it was already designed that way, will never be at the same level what it used to be, will be clearly accretive in gross margin, as you know, 72%, and in bottom line 33%. What between these, with 72% and 33%, these 39 points will be compared to the pre-COVID levels, more A&P, because one of the key words is to improve, increase absolute value and also profitability, like spirits division, giving size because, the first issue of these brands, not cognac brands, is the size. We have to invest in the short term and then to stabilize. Overall, in the next future year, we have to mobilize more A&P. I will not disclose the exact figure, we have it will be more A&P, also more than today. Given the fact that this strategy will be highly accretive in gross margin because of the pricing power, also because of the brand mix, because every time you switch from a given brand on a weighted average of the group, if you increase Cointreau or cognac, you are giving back to the shareholders in terms of gross margin, positive investor, much more than the weight average of the group. This part will be invested to improve our performance in terms of scale, so top line, and will automatically translate in the reduction of the OpEx. Because apart from the strategic levels, commercial excellence, e-commerce, CSR, new way of working, IT, retail, which are important, but the main part of our OpEx is already designed in terms of those system to support much more turnover. We will deliver synergies on the running cost, feeding the bottom line. If you compare to pre-COVID, much more gross margin, much more profit, increase of A&P, and a drastic progressive reduction of global OpEx. More specific question on the model for the new trends. It isn't driven by A&P per se. It's much more of a fixed cost-driven business, driven by people costs, store costs, and the like. It's whether how that impacts Louis XIII unit profitability. I get the A&P point, it's more about Louis XIII profitability. There is an impact for sure. It's more fixed costs with the business model we aim at for Louis XIII. Having said that, we will get the benefit of the gross margin as well. The more we integrate the business, the less layers. Overall, it's profitable and for Louis XIII, if you look at it, let's say medium-term. For sure, it starts with some fixed costs that we believe Louis XIII can clearly afford given its gross margin levels and the fact that it is going to improve the gross margin. Already today, in gross margin of the XO plus product, including Louis XIII, is far higher than 72%, which is the target for the group level at 10 years. Commercial excellence, direct to client, will improve this figure even more. Even if you need more cost in term of A&P or fixed cost or CapEx to open new operations, gross margin is really, really, really accretive. You had a question on travel retail, whether the business transfer to domestic. First, if travel retail had done the same business than pre-COVID, we would have grown 10%. Have we recovered this 10%? No, and I believe it's an opportunity in the future. It doesn't mean we have not recovered at all any part of this business. I think we should distinguish here the very high-end and the gifting business and the more commodity business. Clearly Club 1738 and VSOP, which are more commodity, where we could take over some of the business, a good share of it in domestic, much more than for the high-end gifting, occasional business. You also asked about the profitability, the net profitability after tax of e-commerce of GTR is of course, very good. There is one big change, big driver of what happened in travel retail this year is Hainan. We cannot ignore Hainan, especially in a context where we know that more and more business is going to be made in China. Clearly, we have recovered some of the business in Hainan as well for the Chinese clients, where, as you know, from July 2020 onwards, the tax-free business has been extended to Wine & Spirits. It's still quite new, quite recent, but it's definitely an opportunity for us. That is, in fact, at the same time, travel retail and domestic Hainan is also an island where you have 5 million people living and where you have duty free and duty paid, which is why pricing is a critical matter, but which is also why GTR is an opportunity that resonates with domestic market. Okay. Just sorry to clarify once more. The other question was, how much is Louis XIII down on pre-COVID levels to try and understand how much of your growth margin recovery is a Louis XIII recovery as the on-trade and travel picks up? I'm not going to share, but I'm going to repeat what I said. In fact, a year ago, just when we started entering in the pandemic, I was at that time convinced that Louis XIII would be more hit than the entry price brands because it is also driven by a very high-end on-trade that closed. I am also convinced, and this is what we witnessed, that Louis XIII will be also a brand that would recover quickly once on-trade reopens. Thank you very much. Thank you. Thank you. There are still a few questions in the queue, but unfortunately, we are now at the end of this conference. We apologize for not taking all of them. I will now hand the call back to our speakers for any closing remarks. Thank you. Yes. Well, just three points to conclude. First, thank you very much. Thank you for your attention. Sorry for the questions we couldn't take. I hope next time we'll be able to travel to London, for instance, also to meet some of you and to have a proper discussion, which is always fruitful. I would like to reiterate three messages, which I believe are clearly the expression of where we stand today. First, we reiterate our confidence for 2021-2022. We are very confident in our ability to grow sales and to grow them quickly. Second, 2021-2022 will be a stronger year of growth, but as you have understood, also a very strong year of investment. Third, we are well on track to achieve 2030 vision, and we even believe that the accelerated investments of this year comfort our ability to achieve the 2030 vision. Thank you very much in the name of the team. Looking forward to speaking to you soon. Thank you. Thank you. Bye-bye. Bye.