Lassonde Industries (LAS-A) Q2 2024 earnings summary

Executive summary

• Achieved 7.8% year-over-year sales growth and 21% improvement in operating profit in Q2 2024, driven by U.S. volume gains, Canadian pricing adjustments, and efficiency gains.

• Completed North Carolina single-serve expansion on time and on budget, enabling further growth in the U.S. beverage market.

• Acquired Summer Garden for $237–241 million, expanding specialty food capabilities and North American growth platform.

• Announced senior management changes, with new CEO and board leadership transitions effective September 2024.

• Specialty Food segment saw strong momentum, with Summer Garden acquisition expected to drive future growth.

Financial highlights

• Q2 2024 sales reached $624.7M (CAD 625M), up 7.8% year-over-year; first half sales rose 6.0%.

• Gross profit was $175.7M (28.1% of sales), up from $152M (26.3%) last year.

• Adjusted EBITDA increased 27% to $74.6M (11.9% of sales); adjusted profit attributable to shareholders was $39.1M, or $5.73 per share, up from $3.89 per share.

• Net debt to adjusted EBITDA ratio improved to 0.86x as of June 29, 2024.

• Operating cash flow for Q2 was $59.4M, down from $76.0M due to higher working capital needs.

Outlook and guidance

• Raised 2024 sales growth guidance to mid- to high-single-digit range, driven by U.S. build-back plan and new single-serve capacity.

• Expects sequential improvement in sales volume in H2, with continued focus on innovation, channel expansion, and productivity.

• Operating expenses to reflect targeted investments in innovation, distribution, and trade spending.

• Monitoring commodity prices, especially orange juice, and external factors like freight and labor.

• Capital expenditures for 2024 estimated at up to 5% of sales, funded mainly by operating cash flows.