Swiss Water Decaffeinated Coffee (SWP) investor relations material

Executive summary

• Achieved a strong quarter with high capacity utilization, robust order book, and improved balance sheet, positioning well for 2027.

• Q2 2026 saw processed volumes rise 17% year-over-year, with revenue at $66.0 million, down 3% due to lower coffee futures prices.

• Net income for Q2 was $1.9 million, up $2.3 million from the prior year, and adjusted EBITDA rose 191% to $5.3 million.

• The company intends to launch a Normal Course Issuer Bid (NCIB) to repurchase up to 9.7% of its public float, viewing shares as undervalued and prioritizing shareholder value alongside debt reduction.

• Order book extends well into Q1 2027, reflecting improved customer confidence as coffee futures prices declined and market inversion eased.

Financial highlights

• Q2 revenue was CAD 66 million, down 3% year-over-year, primarily due to lower NYC coffee futures prices despite higher volumes.

• Q2 gross profit rose to CAD 10.2 million, up 94% year-over-year; six-month gross profit was CAD 18.1 million, up 44%.

• Q2 net income was CAD 1.9 million, reversing a net loss of CAD 400,000 in Q2 2025; six-month net income was CAD 2.3 million, up from CAD 100,000.

• Q2 adjusted EBITDA was CAD 5.3 million, up 191% year-over-year; trailing 12-month adjusted EBITDA reached a record CAD 17.1 million.

• Debt repayments totaled $8.9 million in Q2 and $15.3 million year-to-date, reducing interest expense by 17%.

Outlook and guidance

• Strong forward order book and high capacity utilization expected to continue into the second half of 2026 and into 2027.

• Evaluating targeted capacity investments, potentially increasing instantaneous capacity by 5-10% if executed in Q2 next year.

• The NCIB is expected to enhance shareholder value, reflecting management’s belief in future prospects.

• Inventory levels expected to remain stable to support spot demand; working capital tailwinds may moderate due to recent increases in coffee futures prices.

• Tax loss carryforwards expected to offset cash taxes for three to five years.