Saputo (SAP) investor relations material

Executive summary

• Achieved record profitability and strong close to fiscal 2026, driven by mix-led growth, disciplined pricing, and improved channel positioning, despite a dynamic environment.

• Broad-based volume growth and operating leverage contributed to margin expansion, especially in Canada and the US.

• Network modernization and automation programs are largely complete, shifting focus from investment to earnings delivery and capital redeployment.

• Portfolio sharpened to focus on higher-return opportunities, with investments in network and cost structure now driving better margins and execution.

• Robust cash generation supported reinvestment, M&A, and balance sheet strength.

Financial highlights

• Fiscal 2026 revenues from continuing operations were $17.551 billion, down 1.5% year-over-year, mainly due to lower US dairy commodity prices, but offset by higher sales volumes and selling prices.

• Q4 revenues were $4.173 billion (CAD 4.2 billion), down 5.5–6% year-over-year, mainly due to lower U.S. dairy commodity prices.

• Adjusted EBITDA from continuing operations rose 10.4% to $1.659 billion, with Q4 adjusted EBITDA up 5.2% to $386 million and margin expanding to 9.2%.

• Net earnings from continuing operations were $690 million for FY26 and $157 million in Q4; adjusted net earnings up 16.6% to $751 million for FY26 and $169 million in Q4.

• Net cash from operating activities was $1.508 billion, up 26.3% year-over-year; operating cash from continuing operations exceeded CAD 500 million in Q4.

Outlook and guidance

• FY27 outlook anticipates continued macroeconomic and geopolitical uncertainty, with inflation, volatile consumer sentiment, and supply chain pressures.

• CapEx expected to rise to approximately CAD 550 million, targeting high-return investments in fastest-growing dairy segments and network efficiency.

• Most revenue benefits from new CapEx expected in fiscal 2028 and 2029, with ongoing growth in core categories in the interim.

• Continued focus on organic growth, targeted M&A, and category-led strategy, especially in cultured products, value-added beverages, and ingredients.

• SG&A expenses expected to rise due to higher labor and promotional spending, partially offset by cost optimization.