SunOpta (SOY) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue grew 21% year-over-year to $171 million, driven by broad-based volume gains, including 26.9% volume growth, partially offset by price reductions and the exit from the smoothie bowls category.

• Adjusted EBITDA increased 12% to $20.6 million, exceeding guidance, with operating income more than doubling to $2.6 million and losses narrowing to $3.8 million.

• Full-year 2024 revenue outlook was raised to $710–$730 million, representing 13–16% growth, reflecting confidence in continued demand and operational momentum.

• Strategic investments, operational execution, and supply chain improvements are driving value creation and margin improvement.

• Focus remains on plant-based beverages, nutritional beverages, broths, teas, and better-for-you snacks, with 85% of revenue from beverages and broths.

Financial highlights

• Q2 2024 revenue: $171 million (+21% year-over-year); gross profit increased 17% to $21.8 million.

• Adjusted EBITDA for Q2 2024: $20.6 million (+12% year-over-year); operating income: $2.6 million; adjusted earnings from continuing operations: $2.8 million.

• Gross margin was 12.8%; adjusted gross margin was 16.2%, impacted by start-up costs and a $2.1 million product withdrawal charge.

• Total debt at quarter-end was $303.1 million; net leverage at 3.5x, with a target under 3x by year-end.

• Cash provided by operating activities YTD: $2 million; cash used in investing activities YTD: $13.9 million.

Outlook and guidance

• 2024 revenue guidance raised to $710–$730 million, representing 13–16% growth; adjusted EBITDA guidance maintained at $88–$92 million, up 12–17% year-over-year.

• Q3 expected to be similar to Q2, with further improvement in Q4 as supply chain investments drive margin expansion.

• Targeting year-end leverage under 3.0x; medium-term ambition for annual revenue growth of 10%+, gross margin above 20%, and adjusted EBITDA margin above 15%.