Pleased to welcome you here today to the eighteenth annual meeting of Delegat Group Limited. Since listing in April 2006. Do we need the music? Thanks. My name is Graeme Lord, and I have the privilege of chairing your board of directors. I can confirm that we do have a quorum present, and given the time is now 2:00 P.M., I declare the meeting open for business. It's great to be meeting both in person today, as well as the meeting being held online via the Computershare Online Meetings platform. This allows shareholders, proxies, and guests to attend the meeting virtually. For those not present, there is a live webcast of the meeting available, and you'll be able to read the company documents associated with the meeting on the NZX Announcement platform.
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Finally, due to time constraints, we may run out of time to answer all your questions. If this happens, we will answer them in due course by email. Voting today will be conducted by way of a poll on all items of business. In order to provide you with enough time to vote, I will shortly open voting for all resolutions. At that time, if you're eligible to vote at this meeting, you will be able to cast your vote under the Vote tab. Once the voting is open, the resolutions will allow votes to be submitted. To vote, simply select your voting direction from the options shown on the screen. You can vote for all resolutions at once or by each resolution. Your vote has been cast when the tick appears. To change your vote, simply select Change your Vote.
You have the ability to change your vote up until the time I declare voting closed. I now declare voting open on all items of business. The resolutions will now be open in the Vote tab. Please submit your votes at any time. I will give you a warning before I move to close voting. Introduce you to my fellow board members. Today we have Steven Carden, Managing Director, Jim Delegat, Rosemari Delegat, Dr. Alan Jackson, Gordon MacLeod, who's the Chair of the Audit and Risk Committee, and Phillipa Muir, Chair of the People, Culture, and Safety Committee. Also in attendance is Murray Annabell, the Group's Chief Financial Officer, who will act as our minute secretary. I also would like to welcome our audit partner, Andrew Dick, from Deloitte, the meeting, and our legal advisor, David Jones, from Heimsath Alexander.
To open, I'm not aware of any apologies anyone would like to advise the meeting of. If there are, please type in the apology, and Murray Annabell will ensure that these are appropriately recorded in the minutes. The notice of meeting has been sent to all shareholders, together with the annual report, and I propose that together with the agenda, they be taken as read. The minutes of the seventeenth annual meeting, held on the sixth of December, 2022, have been approved by the directors, and Murray Annabell is holding a copy, should any shareholder wish to receive one to view. Firstly, I will address the annual report, incorporating the directors' report, financial statements, and unqualified audit report, covering the year to 30th June, 2023.
I will then comment on Delegat Group's strategic goals and key success factors and board succession planning before handing the meeting to the Managing Director, who will cover the 2023 performance in more detail and the group's future growth plans. Following Mr. Carden's remarks, I will ask if there is any discussion on the annual report and the Chair's and the Managing Director's presentation before moving on to the formal business of the resolutions. The year ended 30th June 2023 was another strong year for the group on our journey to build a leading global super premium wine company. Delegat achieved global case sales of 3,676,000 in the 2023 year, 9% higher than the prior year.
The group generated an operating net profit after tax of NZD 59.3 million, up 2% on the prior year. The improvement relative to the prior year reflects higher global case sales and favorable foreign exchange rates.... Strong cash flows from operations of NZD 59.7 million were delivered. The directors considered that the underlying operational performance and continued strong cash flows justified maintaining the dividend payout in line with last year. Accordingly, the directors approved a fully imputed dividend payout of NZD 0.20 per share. Your board remains cognizant of both dividends to reward shareholders and the need for reinvestment for long-term growth. Our strategic goal is to build a leading global super premium wine company. To do this, our global team strives to excel on four key success factors: Establish and grow leading super premium wine brands that resonate with consumers around the world.
Build global distribution for our brands, establishing enduring, mutually beneficial relationships with our customers and our distributors. Develop vineyard supply in three of the world's great wine regions and optimize supply chain efficiency.
Finally, grow and make the world's most sought-after wine styles, with an uncompromising dedication to Super Premium quality. These key success factors are mutually reinforcing, so to achieve extraordinary results, our global teams strive to excel in all four key success factors simultaneously. Over the last few years, we have undertaken a board renewal process, balancing depth of experience within our business and ensuring that we have a benefit from a broader range of governance, experience, and competencies. The board currently comprises seven directors, including the managing director and six non-executive directors, of whom three are independent directors. As noted during the introductions, the Group's three independent directors are Dr. Alan Jackson, Phillipa Muir, who's chair of People, Culture, and Safety Committee, and Gordon MacLeod, the chair of the Audit and Risk Committee.
Rosemari Delegat, Jim Delegat, and myself are non-executive directors who are not deemed independent. As announced to the market on the thirty-first of August, I will retire from my role as non-executive chair at the close of this annual meeting. It has been a privilege to be part of Delegat's group growth since I first joined the company in 1999. Delegat has a dedicated and talented global team who are well on the way to building a leading global super premium wine company. I wish the company and our global teams all the best. The board has appointed Jim Delegat as non-executive chair, effective from the close of this annual meeting.
Jim, who I'm sure you all know, has been on the board since the company listed in 2006, and has previously held the role of chair, and along with Rose, represents the Delegat family majority shareholding. The group continues to benefit from Jim's expertise and experience. He has been involved in the New Zealand wine industry all of his working life and is thoroughly experienced in every aspect of the business. The results achieved in 2023 are testament to the strength of the Delegat business model and the caliber of our people. Your board would like to take this opportunity to thank our Delegat Great Wine People around the world. Our global team have once again shown great resolve and achieved new performance records on our journey to build a leading global super premium wine company.
We take immense pride in the unique culture our people have cultivated, founded on our values of aim high, mastery, and winning together. The commitment and talent of our global team underpins our success and positions the group well to deliver on its future growth plans. Steven Carden, the Group's Managing Director, will now provide a more fulsome report on the 2023 year and the Group's future growth plans.
Thank you, Graeme. Good afternoon, everyone. It's great to be with you today, and thanks very much for attending. The group's results in 2023 represent another key milestone for in our journey to build a leading global super premium wine company. Thanks to the dedicated efforts of our entire global team, the group delivered a strong operating net profit after tax of NZD 59.3 million, record global case sales, and strong net cash flows from operations. As this slide shows, Delegat is a long-term growth story, sustained over many years, and last year was no exception. As Graeme mentioned, the group achieved global case sales of 3,670,000 cases, a 9% increase over the prior year. This is a strong result in the global wine market, showing largely flat wine sales overall.
The performance is testament to the strength of our brands, the enduring relationships with our distributor partners, and the effectiveness of our entire global team. Our in-market sales teams remain a strength to the business, and they've engaged productively with customers and distributors throughout the year, providing valuable market knowledge and focus.... As you can see from the slide, sales continue to be well-diversified by market, with 48% in North America, 34% in the United Kingdom, Ireland, and Europe, and 18% in Australia, New Zealand, and the Asia Pacific region. The dedication of our global team, we remain committed to sustaining success and driving further growth in coming years. I'll now provide a brief summary of our performance across each of the major markets represented on the graph.
The North American market remains a key focus for growth, and the U.S., in particular, is the bottom color, in the graph. The group again delivered strong growth in North America, increasing sales volumes by 9% to a record 1,747,000 cases. The United States, with over 52 million premium wine consumers, is the group's largest market and our most significant opportunity for future growth. The demand for premium imported wine, particularly Marlborough Sauvignon Blanc, continues to grow in the U.S. Oyster Bay is now a category-leading New Zealand wine brand in the U.S. market, and Oyster Bay Sauvignon Blanc is a top five white wine by value. Our focus will be on expanding our share of the growing Sauvignon Blanc category.
This will involve further investment in improving our rate of sale across our distribution footprint and reaching new consumers with our digital marketing program, which I'll talk about shortly. Further, Oyster Bay Pinot Gris is now the top imported Pinot Gris in the U.S. from New Zealand, and we'll remain committed to growing its profile in that market, along with our Pinot Noir and Chardonnay products. Turning to Canada, which is represented by the purple-y color. Oyster Bay has maintained its position as a leading category wine brand. This success is underpinned by a strong distribution presence across each of Canada's provincial liquor boards, supported by a long-term investment in our consumer communications program. Oyster Bay Sauvignon Blanc remains a leading white wine in the country, growing its share of the category.
Oyster Bay Chardonnay, Pinot Gris, and Pinot Noir are in the top-selling premium wines in their respective varietal categories, regardless of origin. Canada remains an exciting market in the years ahead for Delegat. Turning now to the United Kingdom, Ireland, and Europe. Sales in the United Kingdom, Ireland, and Europe resulted in a standout year, growing 17% to reach 1,237,000 cases. This strong performance reflects the power of the group's brands and distribution platform, alongside the successful promotional program with key national account customers, in a region where there is continued demand for premium New Zealand wine. Oyster Bay has maintained its leadership position in the premium category in the United Kingdom. Chardonnay and Merlot continue to lead their individual varietal categories above GBP 8, regardless of origin.
In Ireland, Oyster Bay continues to achieve success as the number one premium New Zealand wine brand. Closer to home, we have the established markets of New Zealand and Australia. Oyster Bay is again a category-leading premium white wine brand in those markets. Case sales in the region, including Asia Pacific, remained consistent at 692,000 cases. In Australia, Oyster Bay Sauvignon Blanc remains the top-selling wine by value. Oyster Bay Chardonnay remains the top-selling premium Chardonnay, while Oyster Bay Merlot is a category leader. Barossa Valley Estate Grenache Shiraz Mourvèdre maintained its leader position in its premium varietal category also. The New Zealand business, here at home, had a successful year, with sales increasing by 5% over last year. This result is particularly impressive, considering the introduction of a price increase in the market during the year.
Oyster Bay was voted most trusted New Zealand wine brand by New Zealanders in the Reader's Digest 2023 awards. In China, the group experienced very strong growth, up 61% over last year, as wine consumption patterns evolve in that market. China represents a long-term growth opportunity for the group. Turning to the next slide. As this slide shows, Oyster Bay is the flagbearer for premium Sauvignon Blanc globally. This is underpinned by its reputation and acclaim for consistent high quality, and driven by an enduring global trend for lighter, fresher, and elegant wine styles. Across the decade, this is the wine that has transformed the category landscape for premium wine. The strength of the Oyster Bay brand, combined with the group's significant global distribution footprint, are key enablers for the Oyster Bay brand to achieve leadership across its range of Super Premium, cool climate wines.
This performance across a range of varietals and a range of big markets is unprecedented in premium wine and a great testament to the strength of the Oyster Bay brand. Based on sales performance across its major markets, the Oyster Bay brand is now ranked as the number three premium wine brand in the world. This is a clear indicator of the consumer's ongoing enthusiasm for the Oyster Bay brand and range of wines. It is an extraordinary story of success for New Zealand, as the only New Zealand-owned wine brand on that list. Driving the success of our global Super Premium wine brands is investment in our brands, backed by tailored marketing programs specific for each market. Marketing programs are designed to grow awareness, consumer awareness, and affinity, supporting distribution and rate of sale for our brands.
Last year, Oyster Bay engaged online with 64 million wine lovers across the globe through various digital media platforms, delivering over 780 million impressions. We will continue to invest in consumer communications to drive awareness, strengthen brand affinity, and support sales growth. The group also works very closely with its retail partners to develop highly effective in-store activations, like the sort you can see on the screen, that support rate of sale and nurture long-term brand affinity. In today's consumer environment, the group uses a mix of media channels, both online and offline, to attract and engage with premium wine consumers. Turning now to the operations part of our business. The 2023 harvest yielded high-quality fruit across all three of our wine regions.
You can see here the Oyster Bay Vineyard and Winery in Marlborough, an example of the high-quality vineyard assets the company is proud to own. The group harvest of 2023 was 45,340 tons, up 1% from the 2022 harvest. Most notably, the vintage outcome for Hawke's Bay is a testament to the hard work and dedication of our people to overcome the challenges posed by Cyclone Gabrielle. It's pleasing to report that the group has appropriate inventories to achieve the 2024 forecast case sales. Global shipping did remain a challenge in the first half of the year, but began to ease in the second, as global shipping conditions returned to some level of normality following the COVID pandemic. Importantly, the group will continue to make significant investments in vineyard development and winery capacity expansion. Here are two examples.
On the left is Birch Hill Vineyard development in the Wairau Valley, which will, on completion, cover 520 hectares of land. On the right is the addition of a new 160,000-liter storage tanks that are going into the Marlborough Winery as we continue to expand our capacity of that facility. These are two examples of continued investment in securing supply over the long term for our brands. To that end, the group plans to invest an additional NZD 95 million in 2024 to provide earnings growth in the years ahead. This includes significant investment in our wineries in the Hawke's Bay, Marlborough, and vineyard developments in New Zealand. This capital investment supports the group's plans to grow sales to 3.9 million cases by 2026, and will provide for further growth beyond that period.
The group has made progress this year formalizing our sustainability strategy into an integrated ESG (Environmental, Social and Governance) framework. This is built upon the group's long-standing commitment to sustainable wine growing, with Delegat as a founding member of the Sustainable Winegrowing New Zealand program, established in 1995. With increasing customer, consumer, and employee interest in sustainability, this provides an exciting opportunity to extend our sustainability program in a way that is firmly based on our values and resonates with all stakeholders. Our focus, as you can see from the diagram, is in three areas: building an enduring wine business, crafting wine with care, and ensuring that our people and community thrive. Three main pillars you can see in the diagram, and we have a range of initiatives across each of those underway.
It's our people who are at the heart of the company and the key to our success. We're proud of the progress we are making across a range of initiatives relevant to them. Our recently completed culture survey indicates an 83% engagement score, which is very high by global benchmark standards. As we continue to improve company communications with our staff, their connection to our strategy, and their working environments around the world, we expect ongoing positive results on staff culture, which is so critical to our success. Attracting both permanent and seasonal staff remains a very important part of our people program, with competition for talented staff as intense as it's ever been. Delegat remains a sought-after employer, and the caliber of our team continues to improve.
We've undertaken a range of initiatives, from work health and safety programs, diversity and inclusion programs, and expanding leadership and training opportunities, to further enhance our staff's experiences across the company. So turning now to the outlook. The group forecasts to achieve global, global sales of 3,614,000 cases for the year to June 2024. This is 1.7% down on last year and 5.5% below our previously issued guidance. With supply chain stabilizing, distributors and retailers have reduced inventory holdings, resulting in lower replenishment orders for the year to date. Due to that reduction in our outlook for global case sales, the group's guidance range on operating net profit after tax is now between NZD 57 million and NZD 61 million for the year ending June 2024.
This compares to the previous guidance of between NZD 62 million and NZD 67 million. In respect of future years, the group is committed to growing profitability in key markets through price increases to offset cost inflation. This will result in case sales volume growth guidance for 2025 and 2026 of 3,775,000 cases for 2025, and 3,900,000 cases for 2026 respectively, down 4.4% and 5% on previous guidance. As I noted earlier, though, Oyster Bay continues to outperform the industry in the key U.S. market, achieving retail sales growth of 9% versus the category, which is largely flat over the last 12 months. The outlook for the business remains very, very positive.
Finally, to come back to an earlier point, our people are key to the company's performance over the last year and to realizing the group's future plans. We are indebted to their hard work and highly appreciative of the way our people again brought to life our core value of winning together in what was a very challenging year. They've collectively built a high-performance team culture that is respected across the global wine industry. Your company is well positioned to grow sustainable earnings through value and volume growth globally in the years ahead. Lastly, I'd like to thank you, our shareholders, for your ongoing commitment and support. Thank you very much.
Thank you, Steven, for your presentation. At this stage of the meeting, we would ask if there are any questions in respect of the annual report, my chair's presentation or the managing director's presentation. For those online, if you'd like to ask a question, please select the Q&A tab on the right half of your screen. Type your question into the field and press Send. While that is happening, we'll take any questions from the floor. Please note that if there are any questions raised of a similar nature, we may cover these off together. Please go ahead and send us any questions. The floor is open. Yes?
I'm Bruce Marks, I'm a shareholder and proxy for the Shareholder Association.
Welcome, Bruce.
The increase in inventory in the past year seems value to be a drop in sales going forward. What's your plans for harvest for year 2024?
So the plans for harvest are essentially intact. So, you know, we have a range of our company fruit and our sort of contract grower fruit. So given the fact, as you pointed out, that we've lowered our sales guidance for the future year, we'll just need a little bit less of that contract grower fruit from the upcoming vintage.
Second question. You've said your sales are going down. How elastic are your prices? Will you have to go to discounting?
Well, the sales aren't going down. They're still growing, but not as much as we had previously guided to. But, Steve, that's a good question for, I think, for the Managing Director, the price elasticity.
Yeah. Thanks, Graeme.
Do you wanna-
Yeah. Look, there is... I mean, clearly there's a dynamic in the market at the moment where we need to be seeing ongoing growth, both in terms of volume, but also in terms of value. So we have quite a commitment across some of our, what we call, more established markets, to ensure that we are continuing to increase price over time and ensuring that we're keeping up with the growing costs that we are encountering as a business. What we do find whenever we put our price up, is there is some impact on volume, as you'd expect, but it normally has a slight lag effect. And what we're seeing is the underlying consumer interest in Oyster Bay products across our major markets continues to be very, very strong and very resilient to increases in price.
As we continue to increase price over time, we don't expect to see significant impacts on volume as a business.
Thank you.
Michael Powell, I'm a shareholder. Your wine seems to rate, you know, first or second in various Super Premium categories. The question is, who decides, you know, whether a wine sits in a Super Premium category or not?
... Yeah, very good question. So that is, the way that we are defining those categories is in a price band. So it may be, say, a U.S. sort of $10+ category or $12+ category, and there'll be a similar category in New Zealand, say, NZD 15+ average selling price. So we look around the world, and we have sort of comparative bands, and that becomes that premium category, and then we look at how our wines are ranking within that category. Does that answer the question?
So is that a way you decide according to price band?
Yes.
Right. Okay.
Yeah. So in some markets, you know, there are, if you take a much lower price band, say below $10, there could be wines that are selling in greater volumes. So when we're saying premium, it's, we're looking at the relevant universe, I think, for sort of super premium Oyster Bay wines. Do we have any other questions from the floor? Thank you.
John, John Hume, shareholder. My wife and I have been a shareholder since the beginning of this company, and your shares peaked at NZD 15.80 in 2020, and now that's NZD 7.10 and falling. You have one dividend of NZD 0.20 per year. There's been no increase. Everything else has been more cases, more this, more everything else, and once you pay a dividend, there's no incentive for the market to buy your shares till next year when the dividend becomes due again. So why aren't you paying six-monthly dividends so that there's a more level playing field as far as your share price is concerned? And I think we're taken for granted, and we're an inconvenience compared with other share, shares that we have.
We have a lot of money invested in shares, and I've mentioned last year to your CEO, "Why isn't your product celebrated at the share meeting with your shareholders?" And he said, "Oh, that's not the right thing to do at meetings." You're in a wine company. Where are you gonna sell this stuff if you don't have it at meetings? You sell it at celebrations, at home, restaurants, airlines, shipping, air, cruise ships, hotels. And he said, "It's not the right thing to do." I thought, "What rock did he come from under?
Well, I guess if I can answer some of that, there's a few points in there. First, thanks for your support. You know, if you're a founding shareholder, it's been a long journey, and, you know, we've come a long way in that time together. I think just going to your—the first part, Remembering is the first part of your question, is kind of around, the share price and, you know, what has happened there. You're definitely right. Of course, that, you know, the share price has come back significantly from its peak, and it is something that the board thinks about a lot. You know, we're quite focused on, you know, how can we grow shareholder value, and how can that then be recognized by the market?
I think, you know, we focus on the things that are within our control, and in our view, that is, you know, building great brands that are globally successful, get a good price premium with a rate of sale, and if we can do that, we will achieve strong, sustainable earnings growth in the year ahead, you know, years ahead, really. So we're very interested in this year's earnings, interested in next year's earnings, and really focused on what we can deliver over five or 10 years out. So we believe if we do that job really well, and we'll grow those sustainable earnings, and that ultimately will be reflected in the share price. But I definitely hear what you're saying, that at the moment, it's not, you know, it's come back.
The other thing I've got to say is that we used to have the meeting down on the viaduct, and it was... Jim was the CEO, and we had an Australian guy who was the chairman. He was a real character. He was entertaining. It was an enjoyable function, which we looked forward to every year. I said, "The worst meeting that I've been to, to Delegat, was about five years ago. It was held at Sky City. There was a cup of tea." And I said to Jim, "What's the story?" He said, "Oh, we weren't that organized." And you haven't been that organized since. You used COVID as an excuse, and then last year they said, "Oh, it's celebration of 75 years of Delegat." What celebration did we get? Nothing.
Yeah, I mean, as a board, and I think we're very focused on trying to drive shareholder value as well as, you know, build a great company for stakeholders. So, you know, we do appreciate shareholders and, you know, perhaps it hasn't come through to you. We see this meeting, and the purpose of this meeting as, you know, you as shareholders are owners of the business, and it's our job to run the business really well, but also to keep you really informed on as to how we're going, you know, how we're tracking. And what are our plans for the future around performance? So that is what we see as the primary role of the annual shareholders meeting. Rather, it's not. We don't see it as an entertainment meeting, so it's, it's serious business. It's your money invested.
How are we growing shareholder value over the long term, is how we see it. I think, in terms of location, which you mentioned, you know, we had a lot of feedback that we need a better car parking, for the shareholder meeting, which is why it moved away from that sort of central city viaduct location. We do have a mix and mingle, you know, cup of tea, snacks, as you can see over there afterwards, which we're looking forward to. You know, taking on board your point, you know, we would like to share with shareholders a bottle of Oyster Bay sparkling wine at the end of this for take-home consumption.
We don't intend on serving wine at the annual shareholders meeting, which we see as a serious business meeting for people who own the business and wanna know how it's going.
Well, you're saying you don't want to serve it. I could think of three that aren't involved in the liquor industry, but serve wine and beer, and it's a lovely occasion that we have, and one of them is Skellerup, one is Port of Tauranga, and one's Property for Industry. And I said, "You're in the business of it. I can't see why you don't do it.
Well, you know, we want to be responsible hosts here, and as I said earlier, we want to focus on the business. That's what the annual shareholders meeting is for, from our perspective, and engaging the shareholders. So we don't think we need to serve wine to do that, but we would like shareholders to be able to take away some of our wine to enjoy.
Thank you.
Next question. Thank you.
I'd just like to say, what a comparison. This business meeting is quite a comparison to the celebration that some of us will be lucky enough to be part of next week when we have the Christmas, the Delegat's Christmas celebration in Marlborough. And wow, that is a wonderful celebration. So if you're comparing the two events, I can see what you mean by a business meeting compared to a celebration meeting.
Yeah, I think you're referring to the Delegat grower function. Yes, which is a highlight event for, you know, Delegat grower partners here in Marlborough, and something that, you know, is an important part of our... Growers are a huge part of our supply base, very strategic to the business and, you know, genuine partners in the business. They've got a lot of money invested in their vineyards, and those relationships are something that we hold dearly and would seek to continue. Any more questions from the floor? Do we have any questions from online, Murray?
Several questions.
Okay. Okay, great. We have a chance for another questions under general business, so if you've still got something you want to talk about, we'll have another opportunity. So thank you. I'll record that the 2023 annual report has been received and considered. Now, we will proceed to the ordinary business on the agenda. As I mentioned earlier, the resolutions are open in the Vote tab for all items of business. These resolutions were outlined in the voting papers that were mailed to you with a notice of meeting and annual report, and we have four resolutions to discuss and vote on today. To vote, simply select your voting direction from the options shown on the screen. Please select by clicking on the radio button, either For, Against, or Abstain. You can vote for all resolutions at once or by each resolution.
Your vote has been cast when the tick appears. To change your vote, simply select Change Your Vote, and you'll have the ability to change your vote up until I declare voting closed. Once all three resolutions have been voted, Computershare, our registrar, will collate all the votes cast by shareholders, along with the proxy votes, and the company will post the final results onto the NZX platform when available. I can confirm that resolution item one to three are all ordinary resolutions. We're coming to election of directors. Agenda item one, re-election of Jim Delegat as a director. In accordance with the rotation provision of the constitution, Jim Delegat retires from office and, being eligible, offers himself for re-election. Jim will now briefly address the meeting.
Good afternoon, shareholders. We should also say good afternoon, friends. A number of you have been with us since inception, and it's good to see you this afternoon here with us. It's an honor for me to address you as I put myself forward for re-election as a director of Delegat Group Limited.... By way of background, over many years, from small beginnings to present day, I've held numerous positions within Delegat, all of which I believe positions me well to continue serving as a director of Delegat Group Limited. I am very committed to our future. My objective as board member is to contribute decisively to enhancing Delegat's strengths. I intend to work to strategically drive our company to reach its full potential and to create commercial and financial value for shareholders.
As Graeme and Steven have mentioned, our strategic goal is to establish Delegat as a leading global super premium wine company, and our focus is on delivering sustainable quality of earnings through value and volume growth. Many of our markets are established. A number of our markets are in growth phase. Growth markets provide different dynamic opportunities to established markets, where value growth and innovation through Pinot Grigio and such types of wine are the key to sustained position in those established markets. As Steven mentioned, the U.S., North America especially, is a significant growth machine for Delegat, and we are taking significant opportunities to position ourselves well in that market for future sales growth. As Graeme mentioned, we need to deliver on sustainable quality of earnings.
That's based on the fact that consumer trends favor our premium wine styles, and these are among the fastest growing wines in the world today. We're very fortunate that New Zealand has a maritimately influenced climate that provides well for the growing of super premium grapes that are highly flavorful and produce crisp, elegant wines that support aperitif consumption and everyday affordable wine consuming. One of the few wine-producing nations in the world that has such competitive natural advantage. Delegat, as Graham and Steve have mentioned, is well-positioned to continue growing its share of this premium market segment globally. I had in my speech here, written the key success factors that Graham has covered, so I will not repeat those.
But of course, the success of Oyster Bay positions Oyster Bay as one of the world's top three premium wine brands, as Steve mentioned earlier in his presentation, with annual sales of more than 40 million bottles. It's an incredible number. It's more than 200 million wine serves of that single one varietal wine globally, and growing at the rate of about 9% or thereabouts, depending on the market. So we have a significant engine for growth, not only in Sauvignon Blanc, but as Steve mentioned, in Chardonnay, Pinot Noir, et cetera. As has already been reported, Delegat has achieved another year of record sales, and I think it's quite something to be proud of in the sense that we've come through a very difficult period through COVID.
Consumer dynamics have changed away from on-premise consumption to home consumption, and those trends are remaining, as the data would show. Oyster Bay is well-positioned in the off trade, for example, supermarkets, where mostly the wine is sold. And with that strong distribution globally, Oyster Bay has benefited ahead of its competition in other countries of origin by showing positive growth. So this tells us that the company's positive performance positions Delegat well for future sales growth globally. Graeme, Steve, and I, and the board, and our people all share the same values. Forgive me if I'm repeating myself, but I do want to make special mention of our people, who every day aim high, achieve mastery, and make a difference as a global team by winning together.
This is a journey that is made possible by the many Delegat Great Wine people, who have, over the past 75 years, paved this path together and established Delegat as a global leader in super premium wine. As Graeme mentioned in his address earlier, Graeme retires as chair and director at the conclusion of this meeting. I think it's important that we pay tribute to Graeme and take this opportunity to thank him for his commitment and enormous dedication to Delegat over the past 24 years. Graeme has been at the forefront in developing the architecture of our strategic growth plans and has positioned Delegat, where 24 years ago, was a small producer, to today, a recognized global super premium wine brand, number three in its category. We have worked together as a team and delivered enormous results and results that we can all be very proud of....
But more especially, the commitment that Graeme has shown in leading this strategic journey and delivering on these goals as a senior manager in the team. Graeme not only started as a manager of strategy and financial analysis, he progressed to global marketing manager, ultimately and then on to managing director for several years, and now as chairman of the board. So I think we should have a round of applause and appreciation to Graeme Lord. I hear the questions from the floor. We all have a view. There will be more questions that will be answered on the line, and we will listen. But the sentiments in the community don't always allow for us to do what we would like to do socially.
Directors have enormous responsibility for health and safety, and those are all the conditions. Those are conditions also that are taken into consideration, along with the supporting comments that Graeme made. Thank you for your investment in Delegat. Thank you in anticipation of your favorable response in having me at the table again, and I wish you all the best of festive greetings. Thank you.
I move that Jim Delegat be re-elected as a director. I have a seconder. Thank you. Is there any discussion? Please submit any question you may have in relation to the appointment of Jim Delegat as a director. We will pause for a few moments to see if the moderator receives any questions online or whether we have any questions here in the room. Any questions, Rosemari? No. Okay. There are no further questions.
I put the motion that Jim Delegat be elected as a director. Please cast your vote in regard to resolution one, using your computer or device now, and for those in the room, by completing your voting card. Thank you.
Agenda item two: election of Phillipa Muir as director. In accordance with the rotation provision of the Constitution, Phillipa Muir retires from office and, being eligible, offers herself for election. Phillipa will now briefly address the meeting.
Kia ora tatou, and good afternoon, shareholders. My name is Phillipa Muir. I was appointed as a director of the board in August 2020, and then the election was confirmed in the vote of shareholders in December 2020 for a three-year term. I stand for re-election today. By way of background, I'm a lawyer, partner, the senior partner of the Employment Law Group at Simpson Grierson, and I chair our national law firm. I also chair the People, Culture, and Safety Committee of Delegat Group. It was previously known as the Remuneration Committee. We recently changed the name to People, Culture, and Safety to recognize the wider remit that the committee has now taken on, with safety coming under that committee, and with the great focus that businesses like ours need to have from a safety perspective.
I'm also a member of the Audit and Risk Committee, and over the last three years, I've had a privilege of chairing the Committee for People, Culture, and Safety that looked at all the initiatives around our people. You heard from both the chair and our Managing Director about that phrase you will have heard of G reat Wine People, and it is something that all of the people in Delegat live and breathe. It has been a privilege to chair the committee that oversees all of the people, culture, and safety matters, and to see their mastery in action and to see the way they all work and win together. We have rolled out a number of new initiatives in that area and a greater focus on some of the safety initiatives.
You also would have heard from the Managing Director today of the very recent results we've just had on the engagement survey. Coming out the other side of COVID, and with all of those challenges, to have an 83% engagement satisfaction level across the globe, is very satisfying and something that all of the people of Delegat can be very proud of. It's also a privilege for me to be part of a global business such as Delegat, and to see the recognition of the brands, particularly the Oyster Bay brands, and all of the work that goes in behind the scenes in creating that. And how our people and the business is at the forefront of innovation, both in what you heard today about the way those wines are being produced and the way they're being marketed around the globe.
I'm excited to be part of Delegat's growth story. I work closely with Delegat's leadership team on all of the people, culture, and safety matters, and in sitting in the Audit and Risk Committee as well. I would be delighted to stand again for a further term. It would be very much a privilege to do so, and so I am seeking the support of the shareholders today for re-election.
... Thank you.
I move Phillipa Muir be elected as a director. I have a seconder? Thank you. Is there any discussion? Please submit any questions you may have in relation to the appointment of Phillipa Muir as a director. We will pause for a few moments to see if the moderator receives any questions. Any questions from the floor? Okay. Any questions online, Murray? Okay. If there are no further questions, I put the motion that Phillipa Muir be elected as a director. Please cast your vote in regard to Resolution Two using your computer or device now, and for those in the room, by completing your voting card. Thank you. Agenda Item three, Auditors Fees and Expenses.
In regards to this matter, you'll recall from last year's annual meeting, the company advised that Deloitte has been appointed auditor for Delegat Group and subsidiaries, with Andrew Dick being the lead partner. In accordance with the Companies Act 1993, the company's auditor, Deloitte, is automatically reappointed at the annual meeting. I have a seconder. Thank you. Is there any discussion? For those online, please submit any question you may have in relation to the appointment of Deloitte as an auditor and their remuneration. Any questions from the floor? Any questions online, Murray? All right. Very good. If there are no further questions, I put the motion that directors be authorized to fix the auditor's remuneration. Please cast your vote in regards to Resolution 3, using your computer or device now, and for those in the room, by completing your voting card. Thank you.
Agenda Item E, General Business. I now look to the final item on the agenda, General Business. Are there any items of general business? Is there any discussion? Please submit any question that you may have in relation to any other business. We will pause for a few moments to see if the moderator receives any items or questions. Do we have any further questions from the floor, Mr. Sanderson?
Thank you. Thanks very much. Mr. Chairman Graeme, as a long-term or an original investor in Oyster Bay Vineyards, Marlborough Vineyards, I'd like to thank you for your contribution on behalf of the shareholders and wish you well in the future. I would like to take a few minutes just to discuss the question of corporate governance and the written diversity policy. Let us just look at what the word diversity means. It comes from the Latin root diversum, that is, d equaling aside, and vertere, meaning to turn. It was originally a military term used by Roman generals regarding the placing and disposition of troops.
Diversity, that is, you know, when they were going into battle, the general would get to some troops to turn off to the side for a better position to attack. So diversity is the state of being diverse or different. In the sense that it is being used in corporate government policy, it is an example of a change or extension of meaning. That is, the meaning has been captured by the woke, the politically correct, to specifically capture supposedly important percentages of gender, age, culture, race, disability, religious beliefs, and sexual orientation, et cetera, et cetera. Now, Warren Buffett, arguably the world's greatest investor, is on record as stating he has no time for the diversity programs. He is only interested in employing people who will make a meaningful contribution to Berkshire Hathaway.
It is merely a coincidence that Warren Buffett and I share the same Christian name. I can assure you that I don't aspire or can't be compared in any way with his success as an investor. But I am inclined to agree with him that the diversity programs are largely unnecessary twaddle. At worst, they may be classed as affirmative action if appointments are made in order to reach the desired percentage of whatever group. We should always employ on merit, and probably always do. Merit doesn't stop us employing people of different ethnicities or genders, but we shouldn't need a diversity policy to do this. And if a diversity policy is not serving any useful purpose, it should be dispensed with.
Accordingly, I'll move from the floor that the board consider recommendation 2.5 be removed from the corporate governance statement, and that the board report back to shareholders regarding their considerations at the next AGM. I've purposely not canvassed anybody as a potential seconder, and if there is no seconder from the floor, the proposal will lapse. However, the last general election was an indication that increasing sections of the public have become tired of woke nonsense and stupid quotas of this and that. It's a worthy discussion. Thank you.
Well, firstly, thanks for your long-term support. It's much appreciated. I guess where we sit on this is, I think at the core of diversity, we want all people, you know, regardless of the things you mentioned, so, you know, race, religion, sexual orientation, whatever it is, to feel as though they can belong, you know, at Delegat, and I don't think you're arguing against that. But I think that is important 'cause, you know, it is important that people from different backgrounds and different life experiences and just different makeup can feel as though they can belong to something, and that is we're just not fitting, coming from one mold to live and work at Delegat Group. So we do have a diverse workforce.
You know, we have a lot of different races, for example, in our different work sites, and I think we benefit greatly from that. You know, it makes us better. So it makes us more understanding, it gives us more insight into the global markets that we operate in, to be able to understand how different people see things. So we very much support the notion of equality and everyone having the right to belong and to be who they are, and feel comfortable in that, in their work environment and in any other environment. Having said that, coming to one of your other points, that we also agree that people need to be appointed to positions based on merit.
So there's no question about that, you know, people have to be really qualified to do the job they've been appointed to do. So I think you can rest assured that management is operating the business with that in mind. And, you know, whilst we are very much promoters of diversity, like, we do have a set of values that we mentioned before: aim high, mastery, and winning together. And I think wherever people come from, whatever religion, race, sexual orientation, whatever it is, they really... We need people who kind of buy into that aim high, mastery, winning together, because that is the successful DNA of Delegat as an organization. And if people don't buy into that, you know, it doesn't really work.
So I don't think that relates in any way to those things such as religion or race, but that is core to us. So I'm hoping in talking about this, that I'm giving you a sense that we're not having a diversity policy just for the sake of, you know, having a diversity policy. I think we are required to have a diversity policy under NZX guidelines. Am I wrong, Phillipa? And, you know, we support, as I mentioned, you know, progressive diversity, but not at the expense of performance. So that would be my take on it, but I would welcome another take. Phillipa, you as the head of the People, Culture and Safety Committee, and Phillipa, you might have a perspective on this.
I share your views entirely, Graeme. We're a global business, and we've got to be able to reflect the cultures, the consumers, but we also have to be true to your point, Warren, that we are hiring the best people and that we're aiming high, and that they can do their job. And we're here to ensure that happens, and we're very proud of who we have working at Delegat.
Warren, does that address your question, or?
I'm very satisfied with the direction of the company, and but I thought... I'm very satisfied with the direction of the company, but I thought for some of these things, we've gone overboard, and it's being reflected in many, many areas right now. It certainly does not stop us employing a wide range of people, and I wouldn't be... And I'm not against that in any way at all, but I did think that the actual, if you like, when you're having to have report on percentages of, say, even directors, whether you've got a balance of genders and all this sort of thing, I mean, I find that excessive, and I don't see why we can't have-
... genders, different genders, different people, different races employed by the company, without, without having the extra twaddle that goes with it. Thank you. That, that's all.
Yes. No, and I understand that, and I think, you know, one benefit that comes from that reporting is transparency. You know, we can see what exactly where we're at. And, you know, performance and being competent to do the job is a given. You know, we have to have that, as we mentioned before. But on the other hand, we might find that if we're losing, say, women at a certain stage, and they're valuable, you know, so really great employees, you know, maybe we need to adjust our employment proposition. So we are kind of focused on that because it... As was mentioned before, it's increasingly hard to get really talented people, and so we wanna make sure that we give ourselves the best opportunity to recruit them and retain them.
And so I think, you know, some of this reporting and the people on Culture Committee and Safety Committee as well, does reflect on these things. And in doing so, they're really trying to make sure that we are competing really effectively for the talented people we need to take the business to its future. It's a good question. Thank you. Next question?
Yeah, Michael Bowden. I'd just like to second the gentleman's motion. And is that something we could vote on?
What's a-
First it has to be put to the meeting.
Okay.
You can't vote.
Yeah. Well, the business, a motion has to be put to the meeting and go out on the notice of meeting, but, you know, we can have regard to it and consider what's been said. However, so we won't be voting on it at this particular meeting, but we have heard what's been said. But I think we'd have to say, look, we are committed to being a great employer for people from all backgrounds, and that is the essence of where it's at. And I don't think the shareholder questions that have come about this are arguing against that, and maybe it's things unrelated to Delegat that actually are causing the concern. Because I can assure you that as a company, when we're recruiting, we're looking for people that can do a great job.
But as I said earlier, we are also trying to create an employment environment where people from different backgrounds can thrive and have a sense that they belong, because if we don't, we're not going to be able to retain great staff, and your company won't be as successful as it needs to be. So, okay. So I think we've probably covered that one. Next question.
My name's Neil Rains. My question would be, has any of the board actually visited the U.S.A. this year? It's your biggest market, but I'm just wondering whether the board actually gets out and visits. I know, for instance, the Mainfreight board meet overseas at least three times a year at their major markets.
Steve, you might want to talk about your visits to the U.S.
Yeah, absolutely. Yes, I look to get out across our markets at least once a year, if not two. The U.S. is a key market. We spend a lot of time with the leadership team in the U.S. market in particular, making sure that we're across the issues they are certainly confronting. So from my perspective and that of the senior leadership team, it's a regular destination for us as the other major markets are.
The board periodically do visit, or members of the board periodically do visit, overseas markets, including the U.S. I haven't been in the last 12 months, but Jim, you have been, I believe.
I've been to the U.S., and I've been to the U.K., and I've been to Australia. My wife crucifies me when we go on personal holiday. It's usually a tour of the wine shops and supermarkets, but visiting the market is very important to get a real-life view of what's happening.
Yeah, I would say we acknowledge the question. It's a good question, and the U.S. is vitally important to our future growth, and it is a subject of discussion. You know, making sure the board is very aware of what's happening in the U.S. market and also, you know, connected in with key players in that market, such as distributors. So I appreciate that question. Any further questions? At the back there. Thank you.
You didn't answer the question about paying six monthly dividends, to, maybe support the share price from falling so far as it is now.
Yeah, no, you're right. I didn't answer that one. Look, historically, we have, you know, at the end of the financial year, end of June, we know where we are, we know exactly what the cash flow situation is, what profitability has been, and that has led to sort of the dividend after that, being an annual dividend. So that's how we have operated the business for many, many years. But it's something that the board can consider, I guess, in the future. You know, would it be better to move to, instead of paying one dividend, split that in half, more or less, and pay it every six months? It's a matter for the board, I would say. Jim, do you want to talk to that?
That's been asked of me many, many times. The dividend is not in perpetuity. It's not guaranteed, and as Graeme's pointed out, it depends very much on cash flows and the timing of those outflows, given the other commitments of the business, the heavy outgoings with seasonal outgoings on great purchases, the load on finances for harvest. We're very much driven by the availability of flows at a certain time, but it, it's all about once the profit has been produced, then the decision can be made that there will be a dividend paid. So, yeah, I think that Graeme's point is fair, we can consider it, but it has been discussed a lot over the years, and it's not a dividend in perpetuity.
The dividend is NZD 0.20 every year so far. If you made an NZD 0.18 dividend and then that would support the price for the 6 months, and then maybe you top it up to the NZD 0.20, or even better, if things become even better than that. So that way, you would have a more even price of your shares.
Yeah. I think, I think, we'll, we'll definitely consider it. You know, it's one of those items that the board would think about. But we won't make any promises today, but, you know, it's something that can be considered. I think there's another question in the middle of the room here. Thank you.
Thanks. Coralie Van Camp, shareholder. Look, I haven't looked up the dictionary about the word woke, but someone wrote into The Herald. It's used in such a derogatory manner, especially before the election. I understand it also covers kindness and consideration. The word woke.
Right. Okay. Well-
I could be wrong. Someone might like to Google it.
You could be. I mean-
It's not completely a bad thing to be.
Yeah. Well, I'm no literary expert, so I'm gonna take your word for it on that one. So very good. Thank you. Another question over here. Thank you.
Right. Neville Tinsley, shareholder. I haven't really had time to formulate my thinking, but I really do have to speak against this, these suggestions that have just been made. To quote the origins of a word from thousands of years ago, totally overlooks the way that language changes. Samuel Johnson, in I think 1725, set out to, define words, produce the first dictionary, and while it was a great success and achievement, it didn't ultimately prevail because language changes. I would not like to see this taken any further by the board for a number of reasons. I think the main one is something that you alluded to, that the reasons behind this are nothing really to do with the well-being of Delegat's.
I would suggest that if this was taken any further, it would materially affect Delegat in a very, very serious way. There's nothing wrong in having an awareness of diversity and the benefits of it, and I agree 100% with Coralie. I think it was that the word woke is not necessarily a bad thing. It's used in this derogatory way, perhaps by people who are a little bit lazy to actually do thinking through on quite serious and complex matters. Now, why I think this would be a disaster for Delegat would be: you're close to achieving the goals that you've aimed for, for many, many years now. Imagine the public backlash around the world, the ridicule that this company would be subjected to if it put something like this forward.
As I say, I haven't really formulated my thinking, but this would just be a disaster waiting to happen.
Yeah, I think, you know, at Delegat, we can control what we can control. We can be a great employer for people from all backgrounds and, you know, that's, that's probably as far as we go, like, on this topic. Rosemari, do we have any online questions? No questions. Okay. Okay. I'll ask if there's any remaining questions. Okay, excellent. Thanks for your lively participation. That's, it's been very good. So ladies and gentlemen, that concludes our discussion on the items of business. In a minute, I'll close the voting system. Please ensure you have cast your vote on all resolutions. I will now pause to allow you time to finalize those votes. So voting is now closed.
For those in the room, please hand in your voting card to the Computershare team who are coming around now, or as you leave the room, and the results of those, these votes will be released to the stock exchange later today. At the conclusion of the meeting, the board invites you all to mix and mingle with your fellow shareholders, board members, and senior management, where a tea service will be provided. With there being no further items of business, I declare the meeting closed, and thank you for your ongoing interest in Delegat Group. Thanks very much.