Saputo (SAP) Q2 2025 earnings summary

Executive summary

• Revenues rose 8.9% year-over-year to $4.708 billion, with growth in all sectors and steady cash flow generation despite commodity and macroeconomic volatility.

• Adjusted EBITDA was $389 million, down 2.3% year-over-year, impacted by negative U.S. market factors and hyperinflation in Argentina.

• Net earnings were $126 million, down 19.2% due to lower adjusted EBITDA, higher depreciation, restructuring, and financial charges.

• Announced intention to launch a Normal Course Issuer Bid (NCIB) to repurchase up to 2% of shares, reflecting confidence in long-term value creation.

• Board approved a dividend of $0.19 per share, payable December 20, 2024.

Financial highlights

• Consolidated revenue reached $4.708 billion, up 8.9% year-over-year; Adjusted EBITDA was $389 million.

• Net earnings were $126 million; adjusted net earnings were $157 million, or $0.37 per share.

• Adjusted EBITDA margin was 8.3%, down from 9.2% in the prior year.

• Operating cash flow was $162 million; CapEx totaled $90 million.

• Dividend of $0.19 per share declared, payable December 20, 2024.

Outlook and guidance

• Fiscal 2025 outlook remains unchanged, with expectations for further improvements across all divisions in the second half.

• Inflationary pressures anticipated to moderate, but labor and marketing costs may remain elevated.

• USA dairy markets expected to improve, though volatility persists; global dairy demand to remain moderate.

• Gradual ramp-up in optimization and capacity expansion, especially in the USA and Europe, with improved cash flow and leverage ratio targeted below 2.25x net debt to adjusted EBITDA.

• Anticipate continued stability in Canada, sequential improvement in the U.S. and Europe, and strong performance in Australia; Argentina outlook remains uncertain due to currency volatility.