Andrew Peller (ADW) investor relations material

Executive summary

• Q3 2026 revenue rose 3.3% year-over-year to $108.8 million, with strong performance in Western Canada and sustained momentum in Ontario, driven by market share gains, retail modernization, and wine club growth, offsetting softness in owned retail stores.

• Gross margin improved by 160bps to 41.8% in Q3 2026, reflecting operational efficiencies, lower input costs, and support from the Ontario Grape Support Program.

• EBITA for Q3 2026 increased to $19.7 million, up 6–16.1% year-over-year, supporting sustained profitability and margin expansion.

• Net earnings for Q3 2026 increased to $7.9 million from $7.7 million in Q3 2025; YTD net earnings grew to $21.4 million from $11.9 million year-over-year.

• Focused on innovation and new product launches, including Laylow, and strategic growth in sparkling and better-for-you wine segments.

Financial highlights

• Q3 2026 revenue: $108.8 million (up from $105.4 million in Q3 2025); YTD revenue: $313.5 million (slightly down from $314.1 million prior year), with normalized growth of 1.5–2% excluding the LCBO strike impact.

• Gross margin improved to 41.8% in Q3 (from 40.2%) and 43.3% YTD (from 40.4%), aided by lower input costs and government support.

• EBITA for Q3 2026 was $19.7 million (up 6–16.1% year-over-year); YTD EBITA reached $57.1 million (up 15.6%).

• Interest expense dropped 25.8% year-over-year; net debt reduced to $164 million from $182 million at year-end.

• Debt to EBITA ratio at 2.3x on a rolling twelve-month basis.

Outlook and guidance

• On track for a strong Fiscal 2026 and ongoing growth into Fiscal 2027, targeting above-category revenue growth and expanded gross margins.

• Margins expected to continue improving, but at a slower rate as cost savings initiatives mature.

• Sustained EBITA growth and maintaining debt between 2.0x–3.0x remain key financial targets.

• Positioned for long-term growth through asset monetization and economic development in wine regions.

• Management is making targeted investments to gain share in core markets and position for success in high-growth segments.