Saputo Inc. (TSX: SAP) (we, Saputo or the Company) reported today
its financial results for the second quarter of fiscal 2022, which
ended on September 30, 2021. All amounts in this news release are
in Canadian dollars (CDN), unless otherwise indicated, and are
presented according to International Financial Reporting Standards
(IFRS).
Fiscal 2022
Second Quarter
Financial Highlights
- Revenues were
stable at $3.7 billion.
- Adjusted EBITDA*
amounted to $283 million, down $87 million or 23.5%.
- Net earnings
totalled $98 million and EPS** (basic and diluted) were $0.24, down
from $171 million and EPS (basic and diluted) of $0.42.
- Adjusted net
earnings excluding amortization of intangible assets related to
business acquisitions* totalled $116 million, down from $184
million, and the corresponding EPS** (basic and diluted) were
$0.28, down from $0.45.
“This latest phase of the pandemic has brought
its share of difficulties, and our second-quarter results reflect
this challenging environment. As economies reopen, our business,
like many others, has faced labour shortages, supply chain
disruptions, and inflationary pressures, significantly hampering
our profitability in the first half of fiscal 2022. In response, we
are staying true to our disciplined approach, with a relentless
focus on controlling the controllables and progressing our Global
Strategic Plan. By combining our asset base and the strategic
initiatives that underpin our Plan, many of which are currently
underway, we firmly believe we can deliver on our Adjusted EBITDA*
target of $2.125 billion by the end of fiscal 2025 and build solid
foundations for generations to come.”—Lino A. Saputo, Chair of the
Board and Chief Executive Officer
Selected Fiscal 2022 Second Quarter Global Strategic
Plan Highlights
Strengthen core
business
In the USA, we made progress on our
simplification and SKU rationalization projects as we work to
increase productivity while decreasing the complexity of our
commercial and supply chain activities.
Accelerate product
innovation
We continued to secure new co-packing business
across North America to manufacture dairy alternative beverages,
with our two facilities in the USA taking on additional volume.
Increase the
value of
ingredients portfolio
We have begun materializing on our ingredients
strategy to enhance our portfolio in the USA and internationally
and move up the value chain. Since the Reedsburg Facility
Acquisition, we have made great strides towards taking a leadership
role in manufacturing goat whey and other niche value-added
ingredients.
Optimize and
enhance operations
In Canada, we initiated several automation
projects, which were originally slated to begin in fiscal 2023. And
our new state-of-the-art fluid milk and dairy alternative beverage
facility in Port Coquitlam, BC, is now open.
Create enablers
to fuel
investments
Under "One USA", we are making good progress as
we continue to work on harmonizing our processes and procedures, to
maximize synergies and support our Dairy Division (USA)'s future
growth.
Board of
DirectorsOn November 4, 2021, Ms. Olu
Fajemirokun-Beck joined the Company’s Board of Directors. Ms. Beck
has more than 30 years of experience in the consumer goods industry
and held several executive roles in the United States, the United
Kingdom, and the European Union. Previously, she was the Chief
Executive Officer and a Board Member of Wholesome Sweeteners Inc.
Prior to that, she held senior executive positions at Mars,
Incorporated, including as the Chief Financial Officer of Uncle
Ben's, and at Johnson & Johnson. Ms. Beck has been
consecutively named one of the Top 25 Most Influential Women CEO’s
of the Mid-Market in the USA by CEO Connection in 2017 and 2018.
Ms. Beck is the founder and Chief Executive Officer of boutique
management consulting firm, The Beck Group NJ LLC. She will sit on
the Company’s Audit Committee.
* See the “Non-IFRS Financial Measures” section of the
Management’s Discussion and Analysis for the reconciliations to
IFRS measures.
"I am sincerely delighted to welcome Olu to our
Board of Directors. Her successful track record of transformational
growth in the consumer goods sector and her proven leadership
experience in key operational regions for Saputo, namely the USA,
the UK, and the EU, will bring tremendous value to our Board. And
as we pursue our strategic growth plans, we will also benefit from
Olu’s expertise in the areas of branding and innovation."—Lino A.
Saputo, Chair of the Board and Chief Executive Officer
Appointments
in Senior
ManagementFollowing a successful transition
period, the Company is pleased to announce the appointment of Ms.
Lyne Castonguay as President and Chief Operating Officer, Dairy
Division (USA), effective November 4, 2021. Ms. Castonguay joined
Saputo in February 2021 as Deputy President and Chief Operating
Officer, Dairy Division (USA). She will continue to report to Mr.
Carl Colizza, President and Chief Operating Officer (North
America).
Further, the appointment of Ms. Leanne Cutts as
President and Chief Operating Officer (International and Europe),
which was announced previously, became effective on September 20,
2021.
FINANCIAL
RESULTS FOR
FISCAL 2022
SECOND QUARTER
ENDED SEPTEMBER
30, 2021
Revenues at $3.7 billion, down
0.4% Adjusted
EBITDA* at
$283 million,
down 23.5%Net
earnings at $98
million, down
42.7%Adjusted net earnings excluding
amortization of intangible assets related
to business
acquisitions* at
$116 million,
down 37.0%
(in millions of Canadian (CDN) dollars, except per share
amounts)
|
For the
three-month
periods ended
September
30 |
For the
six-month periods
ended September
30 |
|
2021 |
2020 |
2021 |
2020 |
Revenues |
3,689 |
3,702 |
7,177 |
7,093 |
Adjusted EBITDA* |
283 |
370 |
573 |
737 |
Net earnings |
98 |
171 |
151 |
313 |
Adjusted net earnings excluding amortization of intangible assets
related to business acquisitions* |
116 |
184 |
238 |
363 |
Net earnings per share |
|
|
|
|
Basic |
0.24 |
0.42 |
0.37 |
0.76 |
Diluted |
0.24 |
0.42 |
0.36 |
0.76 |
Adjusted net earnings per share excluding amortization of
intangible assets related to business acquisitions* |
|
|
|
|
Basic |
0.28 |
0.45 |
0.58 |
0.89 |
Diluted |
0.28 |
0.45 |
0.57 |
0.88 |
* See the “Non-IFRS Financial Measures” section of the
Management’s Discussion and Analysis for the reconciliations to
IFRS measures.
HIGHLIGHTS
- Challenging market conditions,
including labour shortages, supply chain disruptions and
inflationary pressures, continued to impact our sectors to varying
degrees, with the USA Sector being the most impacted.
- The Canada
Sector, our most balanced platform from a market segmentation
standpoint, continued to show improved results.
- Inflation
continued to create upward pressure on input costs, including an
impact of $33 million on adjusted EBITDA* related to freight and
logistical costs, mainly in North America, and USA Market Factors**
negatively impacted adjusted EBITDA by $17 million.
- In the
International Sector, lower export sales volumes due to supply
chain challenges, including container shortages and port
inefficiencies, continued to negatively impact results.
- In the Europe
Sector, the contribution of the acquisitions of Bute Island Foods
Ltd. (Bute Island Acquisition) and the business of Wensleydale
Dairy Products Limited (Wensleydale Dairy Products Acquisition),
completed on May 25, 2021, and July 30, 2021, respectively, was
positive.
- Consolidated
sales volumes were stable, with sales volumes from our foodservice
and retail market segments progressively rebalancing.
- The fluctuation
of the Canadian dollar versus foreign currencies negatively
impacted revenues and adjusted EBITDA by $143 million and $21
million, respectively.
- On August 31,
2021, we completed the acquisition of the Carolina Aseptic and
Carolina Dairy businesses formerly operated by AmeriQual Group
Holdings, LLC (Carolina Acquisition), increasing the USA Sector's
capacity to manufacture and distribute products in the aseptic
beverage and food categories, as well as the nutritional snacks
space.
- The Board of
Directors approved a dividend of $0.18 per share payable on
December 17, 2021, to common shareholders of record on December 7,
2021.
*See the “Non-IFRS Financial Measures” section of the
Management’s Discussion and Analysis for the reconciliations to
IFRS measures.** Refer to the ‘‘Glossary’’ section of the
Management’s Discussion and Analysis.
Additional
Information
For more information, reference is made to the
condensed interim consolidated financial statements, the notes
thereto and to the Management’s Discussion and Analysis for the
second quarter of fiscal 2022. These documents can be obtained on
SEDAR under the Company’s profile at www.sedar.com and in the
“Investors” section of the Company’s website, at
www.saputo.com.
Webcast and
Conference Call
A webcast and conference call to discuss the
fiscal 2022 second quarter results will be held on Thursday,
November 4, 2021, at 2:30 p.m. Eastern Time.
- Webcast
(recommended): https://www.gowebcasting.com/11526Please note, there
will be a visual element to the speakers’ presentation.
Participants are encouraged to join the webcast for full access to
the content.
- Conference line
(audio only): 1-888-221-1894 Please dial-in five minutes prior to
the start time.
For those unable to join, the webcast
presentation will be archived on Saputo’s website (www.saputo.com)
in the “Investors” section, under “Calendar of Events”. A replay of
the conference call will also be available until Thursday, November
11, 2021, 11:59 p.m. (ET) by dialing 1-800-558-5253 (ID number:
21998496).
About
Saputo
Saputo produces, markets, and distributes a wide
array of dairy products of the utmost quality, including cheese,
fluid milk, extended shelf-life milk and cream products, cultured
products, and dairy ingredients. Saputo is one of the top ten dairy
processors in the world, a leading cheese manufacturer and fluid
milk and cream processor in Canada, the top dairy processor in
Australia, and the second largest in Argentina. In the USA, Saputo
ranks among the top three cheese producers and is one of the
largest producers of extended shelf-life and cultured dairy
products. In the United Kingdom, Saputo is the largest manufacturer
of branded cheese and a top manufacturer of dairy spreads. Saputo
products are sold in several countries under market-leading brands,
as well as private label brands. Saputo Inc. is a publicly traded
company and its shares are listed on the Toronto Stock Exchange
under the symbol “SAP”. Follow Saputo’s activities at saputo.com or
via Facebook, LinkedIn and Twitter.
Media Inquiries1-514-328-3141 /
1-866-648-5902media@saputo.com
CAUTION REGARDING FORWARD-LOOKING STATEMENTSThis
news release contains statements which are forward-looking
statements within the meaning of applicable securities laws. These
forward-looking statements include, among others, statements with
respect to our objectives, outlook, business projects, strategies,
beliefs, expectations, targets, commitments, goals, ambitions and
strategic plans including our ability to achieve these targets,
commitments, goals, ambitions and strategic plans, and statements
other than historical facts. The words “may”, “could”, “should”,
“will”, “would”, “believe”, “plan”, “expect”, “intend”,
“anticipate”, “estimate”, “foresee”, “objective”, “continue”,
“propose”, “aim”, “commit”, “assume”, “forecast”, “predict”,
“seek”, “project”, “potential”, “goal”, “target” or “pledge” or the
negative of these terms or variations of them, the use of
conditional or future tense or words and expressions of similar
nature, are intended to identify forward- looking statements. All
statements other than statements of historical fact included in
this news release may constitute forward-looking statements within
the meaning of applicable securities laws.
By their nature, forward-looking statements are
subject to a number of inherent risks and uncertainties. Actual
results could differ materially from those stated, implied or
projected in such forward-looking statements. As a result, we
cannot guarantee that any forward-looking statements will
materialize, and we warn readers that these forward- looking
statements are not statements of historical fact or guarantees of
future performance in any way. Assumptions, expectations and
estimates made in the preparation of forward-looking statements and
risks and uncertainties that could cause actual results to differ
materially from current expectations are discussed in our materials
filed with the Canadian securities regulatory authorities from time
to time, including the "Risks and Uncertainties" section of the
Management’s Discussion and Analysis dated June 3, 2021, available
on SEDAR under Saputo's profile at www.sedar.com.
Such risks and uncertainties include the
following: product liability; the COVID-19 pandemic; the
availability of raw materials (including as a result of climate
change or extreme weather) and related price variations, along with
our ability to transfer those increases, if any, to our customers
in competitive market conditions; the price fluctuation of our
products in the countries in which we operate, as well as in
international markets, which are based on supply and demand levels
for dairy products; cyber threats and other information
technology-related risks relating to business disruptions,
confidentiality, data integrity business and email
compromise-related fraud; the increased competitive environment in
the dairy industry; consolidation of clientele; supplier
concentration; unanticipated business disruption; the economic
environment; changes in environmental laws and regulations; the
potential effects of climate change; increased focus on
environmental sustainability matters; our ability to identify,
attract and retain qualified individuals; the failure to adequately
integrate acquired businesses in a timely and efficient manner; the
failure to execute our global strategic plan as expected; the
failure to complete capital expenditures as planned; changes in
consumer trends; changes in interest rates and access to capital
markets. Our ability to achieve our environmental targets,
commitments and goals is further subject to, among others, our
ability to access and implement all technology necessary to achieve
our targets, commitments and goals, as well as the development and
performance of technology, innovation and the future use and
deployment of technology and associated expected future results,
and environmental regulation. Our ability to achieve our 2025
Supply Chain Pledges is further subject to, among others, our
ability to leverage our supplier relationships.
Forward-looking statements are based on
Management’s current estimates, expectations and assumptions
regarding, among other things; the projected revenues and expenses;
the economic, industry, competitive and regulatory environments in
which we operate or which could affect our activities; our ability
to attract and retain customers and consumers; our environmental
performance; our sustainability efforts; the effectiveness of our
environmental and sustainability initiatives; the availability and
cost of milk and other raw materials and energy supplies; our
operating costs; the pricing of our finished products on the
various markets in which we carry on business; the effects of the
COVID-19 pandemic; the successful execution of our global strategic
plan; our ability to deploy capital expenditure projects as
planned; our ability to correctly predict, identify, and interpret
changes in consumer preferences and demand, to offer new products
to meet those changes, and to respond to competitive innovation;
our ability to leverage our brand value; our ability to drive
revenue growth in our key product categories or platforms or add
products that are in faster-growing and more profitable categories;
the contribution of recent acquisitions; the anticipated market
supply and demand levels for dairy products; the anticipated
warehousing, logistical and transportation costs; our effective
income tax rate; the exchange rate of the Canadian dollar to the
currencies of cheese and dairy ingredients.
Management believes that these estimates,
expectations and assumptions are reasonable as of the date hereof,
and are inherently subject to significant business, economic,
competitive and other uncertainties and contingencies regarding
future events, including the duration and severity of the COVID-19
pandemic, and are accordingly subject to changes after such date.
Forward-looking statements are intended to provide shareholders
with information regarding Saputo, including our assessment of
future financial plans, and may not be appropriate for other
purposes. Undue importance should not be placed on forward-looking
statements, and the information contained in such forward-looking
statements should not be relied upon as of any other date.
All forward-looking statements included herein
speak only as of the date hereof or as of the specific date of such
forward-looking statements. Except as required under applicable
securities legislation, Saputo does not undertake to update or
revise forward-looking statements, whether written or verbal, that
may be made from time to time by itself or on our behalf, whether
as a result of new information, future events or otherwise. All
forward-looking statements contained herein are expressly qualified
by this cautionary statement.
CONSOLIDATED RESULTS
FOR THE SECOND
QUARTER AND
FISCAL PERIOD
ENDED SEPTEMBER 30,
2021
We report our business under four sectors:
Canada, USA, International, and Europe. The Canada Sector consists
of the Dairy Division (Canada), the USA Sector consists of the
Dairy Division (USA), the International Sector consists of the
Dairy Division (Australia) and the Dairy Division (Argentina), and
the Europe Sector consists of the Dairy Division (UK). We sell our
products in three different market segments: retail, foodservice,
and industrial.
Revenues
Revenues for the second
quarter of
fiscal 2022 totalled $3.689
billion, down $13 million or 0.4%, as compared to $3.702 billion
for the same quarter last fiscal year.
Sales volumes were stable compared to those of
the second quarter of fiscal 2021. Foodservice market segment sales
volumes increased as COVID-19 restrictions continued to be
gradually lifted by governments and vaccination rates rose. This
was offset by lower retail market segment sales volumes as they
returned to historical levels. Retail market segment sales in the
second quarter of fiscal 2021 had benefited from increased levels
in connection with the shift in consumer demand caused by the
COVID-19 pandemic. Supply chain challenges, due to container
shortages and port inefficiencies, negatively impacted export sales
volumes in our International Sector, although the situation
improved compared to the previous quarter.
The combined effect of the lower average block
market price** and a higher average butter market price** had a
negative impact of $119 million. Pricing initiatives implemented
during the quarter to mitigate increasing input costs began to
contribute positively in North America and in our Europe Sector.
Also, revenues were positively impacted by higher domestic selling
prices in the Canada Sector, which increased due to the higher cost
of milk as raw material. Higher international cheese and dairy
ingredient market prices had a positive impact. On the other hand,
fulfilling most of the remainder of the export sales contracts that
had been entered into in previous quarters at depressed commodity
prices in the International Sector continued to negatively impact
revenues, although to a lesser extent than in the first quarter of
fiscal 2022. The combined effect of the fluctuation of the
Argentine peso and the Australian dollar on export sales
denominated in US dollars was favourable.
The contributions of the Bute Island Acquisition
and the Reedsburg facility of Wisconsin Specialty Protein, LLC (the
Reedsburg Facility Acquisition) as well as the partial
contributions of the Wensleydale Dairy Products Acquisition and the
Carolina Acquisition (collectively, the Recent Acquisitions)
totalled $26 million.
Finally, the fluctuation of foreign currencies,
most particularly the US dollar, versus the Canadian dollar had an
unfavourable impact of $143 million.
Revenues for the first six
months of fiscal
2022 totalled $7.177 billion, up $84 million or
1.2%, as compared to $7.093 billion for the same period last fiscal
year.
Overall, sales volumes were higher than those of
the first six months of fiscal 2021, mainly due to an increase in
the foodservice market segment and, to a lesser extent, in the
industrial market segment, as governments continued to lift
restrictions and vaccination levels continued to rise. However,
sales volumes decreased in the retail market segment when compared
to the surge that occurred in the first quarter of fiscal 2021,
although this surge began to level off during the second quarter of
fiscal 2021. Supply chain challenges, due to container shortages
and port inefficiencies, negatively impacted export sales volumes
in our International Sector.
Pricing initiatives implemented during the
second quarter to mitigate increasing input costs began to
contribute positively in North America and in our Europe Sector.
Revenues were positively impacted by higher domestic selling prices
in the Canada Sector, which increased due to the higher cost of
milk as raw material. Higher international cheese and dairy
ingredient market prices had a positive impact. However, fulfilling
the export sales contracts that had been entered into during
previous quarters at depressed commodity prices in the
International Sector had an unfavourable impact. The combined
effect of the fluctuation of the Argentine peso and the Australian
dollar on export sales denominated in US dollars was favourable.
The combined effect of the lower average block market price** and a
higher average butter market price** had a negative impact of $73
million.
The contributions of the Recent Acquisitions
totalled $28 million.
Finally, the fluctuation of foreign currencies,
most particularly the US dollar, versus the Canadian dollar had an
unfavourable impact of $322 million.
Adjusted
EBITDA*
Adjusted EBITDA for the second quarter
of fiscal 2022 totalled $283 million, down $87 million or
23.5%, as compared to $370 million for the same quarter last fiscal
year.
As described above, overall sales volumes were
stable compared to the same quarter last fiscal year. Both the
labour shortages in some of our facilities and supply chain
disruptions negatively impacted efficiencies and the absorption of
fixed costs.
We continued to face rising inflation where
pricing initiatives lagged cost surges, more so than historically.
Input costs, such as transportation, fuel, consumables and
packaging, increased in all our divisions due to inflationary
pressures. This included an increase of $33 million related to
freight and logistical costs, mainly in North America, which more
than offset the positive effect of pricing initiatives undertaken
during the quarter.
USA Market Factors** had a negative effect of
$17 million. The relation between international cheese and dairy
ingredient market prices and the cost of milk as raw material in
the International Sector had a positive impact. On the other hand,
the effect of fulfilling most of the remainder of the export sales
contracts entered into at depressed commodity prices in previous
quarters was unfavourable.
The contributions of the Recent Acquisitions
described above were positive.
The fluctuation of foreign currencies versus the
Canadian dollar had an unfavourable impact of $21 million.
Adjusted EBITDA for the first six months
of fiscal 2022 totalled $573 million, down $164 million or
22.3%, as compared to $737 million for the same period last fiscal
year.
Input costs, such as transportation, fuel,
consumables and packaging, increased in all our divisions due to
inflationary pressures. This included an increase of $56 million
related to freight and logistical costs, mainly in North America,
which more than offset the positive effect of the pricing
initiatives discussed above.
In a volatile dairy commodity market, USA Market
Factors** had a negative effect of $59 million. However. the
favourable relation between international cheese and dairy
ingredient market prices and the cost of milk as raw material in
the International Sector had a positive impact. On the other hand,
the effect of fulfilling export sales contracted in previous
periods at depressed commodity prices was unfavourable.
Overall higher sales volumes had a favourable
impact on efficiencies and the absorption of fixed costs, while
both the labour shortages and supply chain disruptions continued to
put pressure on our ability to supply demand.
The contributions of the Recent Acquisitions
were positive.
The fluctuation of foreign currencies versus the
Canadian dollar had an unfavourable impact of $42 million.
* See the “Non-IFRS Financial Measures” section of the
Management’s Discussion and Analysis for the reconciliations to
IFRS measures.
Operating costs
excluding depreciation,
amortization, and
restructuring costs
Operating costs excluding depreciation,
amortization, and restructuring costs for the second
quarter of fiscal 2022 totalled $3.406 billion, up $74
million or 2.2%, as compared to $3.332 billion for the same quarter
last fiscal year. The increase was due to higher input costs in all
our divisions caused by inflationary pressures. The increase in the
cost of raw material and consumables used was negligible reflecting
the combined effect of stable revenues, dairy commodity market
volatility and higher input costs. Employee salary and benefit
expenses increased due to inflation and wage increases.
Operating costs excluding depreciation,
amortization, and restructuring costs for the first six
months of fiscal 2022 totalled $6.604 billion, up $248
million or 3.9%, as compared to $6.356 billion for the same period
last fiscal year. The increase was due to higher input costs in all
our divisions caused by inflationary pressures. Higher revenues,
dairy commodity market volatility and higher input costs
contributed to the higher cost of raw materials and consumables
used. Employee salary and benefit expenses increased due to
inflation and wage increases.
Depreciation and
amortization
Depreciation and amortization for the
second quarter of fiscal 2022 totalled $137
million, up $11 million, as compared to $126 million for the same
quarter last fiscal year. In the first six months of fiscal
2022, depreciation and amortization totalled $268 million,
up $16 million, as compared to $252 million for the same period
last fiscal year. These increases were mainly attributable to
additional depreciation and amortization related to the Recent
Acquisitions, as well as additions to property, plant and
equipment, which increased the depreciable base.
Impairment of
intangible assets
Impairment of intangible assets was nil, as
compared to fiscal 2021 when an impairment of intangible assets
charge of $19 million was incurred in relation to our decision to
retire the COON cheese brand name from our Dairy Division
(Australia) portfolio as part of our commitment to share in the
responsibility to eliminate racism in all its forms.
Acquisition and
restructuring costs
Acquisition and restructuring costs for the
second quarter of fiscal 2022 amounted to a net
gain of $2 million, which included a favourable $6 million ($4
million after tax) purchase price adjustment for a prior
acquisition and costs incurred for the Recent Acquisitions in the
second quarter of fiscal 2022. During the same quarter last fiscal
year, a gain on disposal of assets was recorded in the amount of $6
million ($5 million after tax) related to the sale of a closed
facility in the Canada Sector.
Acquisition and restructuring costs for the
first six months of fiscal 2022 amounted to nil,
which included a favourable $6 million ($4 million after tax)
purchase price adjustment described above and costs incurred for
the Recent Acquisitions. During the same period last fiscal year, a
gain on disposal of assets was recorded in the amount of $6 million
($5 million after tax), as described above.
Financial charges
In the second quarter and first six
months of fiscal 2022, financial charges totalled $19
million and $37 million, respectively, down $3 million and $10
million, respectively, mainly due to an increased gain on
hyperinflation derived from the indexation of non-monetary assets
and liabilities in Argentina.
Income tax
expense
Income tax expense for the second
quarter of fiscal 2022 totalled $31 million, reflecting an
effective tax rate of 24.0% as compared to 25.0% for the same
quarter last fiscal year.
Income tax expense for the first six
months of fiscal 2022 totalled $117 million, reflecting an
effective tax rate of 43.7% as compared to 26.4% for the same
period last fiscal year. Deferred income tax liability balances
were adjusted to reflect the enactment in June 2021 of an increase
from 19% to 25% of the corporate income tax rate in the United
Kingdom which will be effective as of April 1, 2023. As a result,
we incurred a one-time non-cash income tax expense of $50 million.
The effective rate also reflected the increase in the corporate
income tax rate in Argentina from 25% to 35%, enacted in June 2021.
During the same period last fiscal year, income tax expense
reflected the tax treatment of an impairment of intangible assets
charge of $19 million. Excluding the effects of these factors, the
effective tax rates for the six-month periods ended September 30,
2021, and 2020, would have been 24.1% and 25.1%, respectively.
The effective tax rate varies and could increase
or decrease based on the geographic mix of quarterly and year-to-
date earnings across the various jurisdictions in which we operate,
the amount and source of taxable income, amendments to tax
legislations and income tax rates, changes in assumptions, as well
as estimates for tax assets and liabilities we use.
Net earnings
Net earnings for the second
quarter of
fiscal 2022 totalled $98 million,
down $73 million or 42.7%, as compared to $171 million for the same
quarter last fiscal year. In the first
six months of
fiscal 2022, net earnings
totalled $151 million, down $162 million or 51.8%, as compared to
$313 million for the same period last fiscal year. These decreases
were mainly due to the aforementioned factors.
Adjusted net
earnings excluding
amortization of
intangible assets
related to
business acquisitions*
Adjusted net earnings excluding amortization of
intangible assets related to business acquisitions for the
second quarter of fiscal 2022
totalled $116 million, down $68 million or 37.0%, as compared to
$184 million for the same quarter last fiscal year. In the
first six months of fiscal 2022, adjusted net
earnings excluding amortization of intangible assets related to
business acquisitions totalled $238 million, down $125 million or
34.4%, as compared to $363 million for the same period last fiscal
year. These decreases were due to the aforementioned factors.
* See the “Non-IFRS Financial Measures” section of the
Management’s Discussion and Analysis for the reconciliations to
IFRS measures.
SELECTED QUARTERLY FINANCIAL INFORMATION
(in millions of CDN dollars, except per share amounts)
Fiscal years |
2022 |
2021 |
2020 |
|
Q2 |
|
Q1 |
|
Q4 |
|
Q3 |
|
Q2 |
|
Q1 |
|
Q4 |
|
Q3 |
|
Revenues |
3,689 |
|
3,488 |
|
3,438 |
|
3,763 |
|
3,702 |
|
3,391 |
|
3,719 |
|
3,891 |
|
Adjusted EBITDA* |
283 |
|
290 |
|
303 |
|
431 |
|
370 |
|
367 |
|
299 |
|
417 |
|
Adjusted EBITDA margin** |
7.7 |
% |
8.3 |
% |
8.8 |
% |
11.5 |
% |
10.0 |
% |
10.8 |
% |
8.0 |
% |
10.7 |
% |
Net earnings |
98 |
|
53 |
|
103 |
|
210 |
|
171 |
|
142 |
|
89 |
|
198 |
|
Impairment of intangible
assets1 |
— |
|
— |
|
— |
|
— |
|
— |
|
19 |
|
— |
|
— |
|
UK tax rate change2 |
— |
|
50 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
Acquisition and restructuring
costs1 |
(1 |
) |
1 |
|
2 |
|
— |
|
(5 |
) |
— |
|
10 |
|
6 |
|
Amortization of intangible assets related to business
acquisitions1 |
19 |
|
18 |
|
19 |
|
18 |
|
18 |
|
18 |
|
18 |
|
25 |
|
Adjusted net earnings excluding amortization of intangible assets
related to business acquisitions* |
116 |
|
122 |
|
124 |
|
228 |
|
184 |
|
179 |
|
117 |
|
229 |
|
Per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
0.24 |
|
0.13 |
|
0.25 |
|
0.51 |
|
0.42 |
|
0.35 |
|
0.22 |
|
0.49 |
|
Diluted |
0.24 |
|
0.13 |
|
0.25 |
|
0.51 |
|
0.42 |
|
0.35 |
|
0.22 |
|
0.48 |
|
Adjusted net earnings per share excluding amortization of
intangible assets related to business acquisitions* |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
0.28 |
|
0.30 |
|
0.30 |
|
0.56 |
|
0.45 |
|
0.44 |
|
0.29 |
|
0.56 |
|
Diluted |
0.28 |
|
0.29 |
|
0.30 |
|
0.55 |
|
0.45 |
|
0.44 |
|
0.28 |
|
0.56 |
|
* See the “Non-IFRS Financial Measures” section of the
Management’s Discussion and Analysis for the reconciliations to
IFRS measures.** Refer to the ‘‘Glossary’’ section of the
Management’s Discussion and Analysis.1 Net of income
taxes.2 The UK Finance Act 2021 was enacted, increasing
the UK corporate income tax rate from 19% to 25%, effective April
1, 2023. Refer to Note 9 to the consolidated financial statements
for further information.
Selected factors
positively (negatively)
affecting financial
performance
(in millions of CDN dollars)
Fiscal years |
2022 |
2021 |
|
Q2 |
Q1 |
Q4 |
Q3 |
Q2 |
Q1 |
USA Market Factors*,1 |
(17) |
(42) |
(4) |
34 |
4 |
23 |
Foreign
currency exchange1,2 |
(21) |
(21) |
(2) |
— |
4 |
(4) |
*Refer to the ‘‘Glossary’’ section of the Management’s
Discussion and Analysis.1 As compared to same quarter last
fiscal year.2 Foreign currency exchange includes effect on
adjusted EBITDA of conversion of US dollars, Australian dollars,
British pounds sterling and Argentine pesos to Canadian
dollars.
OUTLOOK
BUSINESS
UPDATE
COVID-19
pandemicAs an essential provider, we will continue
to navigate through the COVID-19 pandemic challenges by focusing on
our key priorities:
- safeguarding the health, safety, and
well-being of our employees;
- mitigating the impacts of the current
landscape on our production and supply chain activities;
- adapting commercial
initiatives and supporting customers with insights to adapt their
offerings and address changing needs.
Factors currently
impacting our
performanceWe continue to feel the lingering
disruptions of the COVID-19 pandemic on global economic conditions,
commodity pricing, consumer demand, access to labour, supply
chains, and business productivity.
- The global
economy recovery
remains uneven. And as economies
re-open, we are faced with labour
challenges, supply
chain bottlenecks, and
inflationary pressures.
- While we had expected the
availability of labour to improve with the
back-to-school transition and the expiration of pandemic stimulus
measures, particularly in the USA, this recovery has yet to
materialize and we anticipate it could take at least
another 12 months before this situation normalizes.
Moreover, filling open positions will remain a challenge in
selected regions. In response, we continue to deploy and test
several initiatives, including wage adjustments, bonus referrals,
and increased advertising. These efforts have yet to yield any
tangible benefits as we continue to run certain facilities well
below optimal staffing levels in the USA. Labour challenges are
compounded by the fact that many of the rural areas where we
operate have lower vaccination rates as compared to the general
population, which can lead to higher infection rates in the
community and therefore higher absenteeism. This situation will
improve should the USA government's anticipated vaccine mandate for
companies with more than 100 employees come into effect, a process
that involves the Occupational Safety and Health Administration
(OSHA) issuing an Emergency Temporary Standard (ETS) to implement
this requirement.Addressing labour availability issues is
top-of-mind as we continue to deploy our Global Strategic
Plan:
|
- We are currently prioritizing network optimization initiatives
in those facilities where we see a more stable and sustained talent
pool for the long-term.
- Focusing on a "less is more" approach, we have begun
rationalizing the number of SKUs we produce, thereby reducing
complexity in our commercial, manufacturing, and supply chain
operations.
- As our Plan progresses, we intend to increase automation in
selected facilities.
|
- Labour
challenges are also impacting our third-party transport and
logistics partners in the USA, leading to reduced service
levels and higher costs.
- Input costs,
including overtime wages, transportation, fuel, consumables, and
packaging, are expected to remain at sustained high levels due to
inflationary pressures. As a mitigating measure,
we implemented multiple phases of pricing initiatives in the USA.
Cost recovery initiatives have also been successfully implemented
in Canada, Australia, and the UK. These measures can take up to 90
days to take effect and should be fully reflected in the third
quarter. We are reserving the right to pass through future
increases, as required, in response to rising inflation and cost
surges.
- Overall, the retail market
segment continues to perform well, and we expect our sales
will keep exceeding pre-pandemic levels. However, in the USA, the
internal labour challenges and supply
chain difficulties described above are impacting our
ability to maintain order fill rates at historical levels.
- Ongoing (but varied) public
health-driven restrictions globally continue to depress
demand levels in the foodservice
market segment. Should
vaccination levels continue to progress, and vaccines remain
effective against different variants, it is expected that consumer
mobility, and therefore foodservice demand will continue to
recover, as compared to pre-pandemic levels. The timing and
magnitude of recovery will vary by geography. The situation
continues to be volatile and remains in flux.
- The COVID-related
oversupply (large
quantities in
frozen storage)
and ongoing
overcapacity of
mozzarella destined for the foodservice market
segment in the USA has further increased competition. We remain
committed to profitable sales volumes, and we continue to focus on
diversifying into more value- added categories in both the retail
and foodservice market segments.
- We are exposed
to fluctuations in dairy commodity prices, which remain
volatile. Following a record negative impact of USA Market
Factors in the first quarter of fiscal 2022, led by an unfavourable
Spread, we started seeing signs of improvement in the second
quarter. USA Market Factors will continue to fluctuate from quarter
to quarter based on market conditions, but we expect this more
favourable trend to carry on as we move into the back half of
fiscal 2022. Although we adjust our pricing to reflect commodity
prices, there may be a lag which may cause swings in operating
income and cash flow from one quarter to another.
- Despite the
volatile nature of international
cheese and dairy
ingredient markets, we expect
export prices to be
more stable over the next few
quarters.
- In the industrial market
segment, volumes destined for export markets continue to
recover, however, the pace and timing of the recovery to
pre-pandemic levels will be variable and depend on the export
market and improvements within the supply chain.
Although access to containers is slowly improving, it remains
difficult to find vessels to get our products to market, due to
COVID-related port closures and inefficiencies. In our
International Sector, we have worked through the tail end of the
unfavourable export contract pricing we locked in last year, but
the team continues to mitigate transport delays and constraints
where possible. As COVID-impacted ports slowly began reopening late
in the second quarter, the situation should improve over the coming
months.
- In Australia, the increased
competition for raw material remains high, pressuring both
milk intake and pricing. Accordingly, we are continuing to leverage
our diversified approach, which combines milk purchases from our
patron farmers and third-party brokers as well as toll
manufacturing agreements.
Magnitude of
the impact on
our fiscal 2022
financial performanceThe
magnitude of the impact of these factors on our financial
performance in fiscal 2022 remains difficult to estimate. With the
slower than anticipated recovery and the difficulties we faced in
the first half, we expect overall
performance in fiscal 2022
to be below that of fiscal
2021.
Looking at the remainder of fiscal 2022, we
expect the third quarter to be our strongest, but still below the
same period in fiscal 2021, which included highly favourable USA
Market Factors that are unlikely to reach similar levels in fiscal
2022. We do not expect to see year-over-year improvement before the
fourth quarter of fiscal 2022. As we move into the back half of
fiscal 2022, we expect to see benefits from our labour-focused
efforts, price increases, and strategic initiatives.
We are
focused on
“controlling the
controllables” and
moving our
business forwardMany of the
issues outlined above, most of which are transitory in nature, are
not unique to Saputo or our industry, and we are focused on
managing those that are within our control. We will stay agile and
flexible, both commercially and operationally, to proactively
respond to further changes and disruptions. We believe we have a
strong foundation to build on as we remain steadfast in the
execution of our growth strategy.
GROWTH
STRATEGY
We have a well-defined strategy based on a
three-pronged approach comprised of organic growth,
strategic acquisitions, and our
Saputo Promise.
Organic
GrowthOur four-year Global Strategic Plan (the
Plan), based on five key pillars, is designed to deliver
accelerated organic growth across all our platforms.
Growth target
and progression:
We are targeting high single-digit
Adjusted EBITDA* CAGR1 over the four-year
period to reach $2.125 billion by the end
of fiscal 2025. This represents a total increase of $650
million over the four-year period, or approximately 44%, compared
to our fiscal 2021 performance. The three main areas which are
expected to deliver this growth over the next four years are as
follows:
- We plan to grow
our sales volumes at more than double the annual growth rate of
global per capita dairy consumption in all regions, except for
Australia, where we do not expect the milk pool to grow. We expect
this increase in our revenues to deliver incremental Adjusted
EBITDA* growth of roughly $200 million.
- We anticipate an
additional $200 million of Adjusted EBITDA* growth will be
generated by initiatives centred on optimizing and enhancing
operations.
- The remaining
$250 million is expected to come from our other four pillars:
Strengthen core business, Accelerate product innovation, Increase
the value of our ingredients portfolio, and Create enablers to fuel
investments, with the latter having the smallest contribution.
The anticipated cost efficiencies derived from
optimizing and enhancing our operations are expected to be realized
in the back half of our Plan. Therefore, Adjusted EBITDA* growth is
not expected to be linear. Moreover, while our goal continues to be
to pursue Adjusted EBITDA* growth in every year of our Plan, the
challenging market conditions in the first two quarters and our
outlook for the remainder of fiscal 2022, as described above, are
impeding our ability to meet our goal in year one.
Looking ahead:
- We remain very
bullish about our organic Global Strategic
Plan.
- We believe in
the initiatives
we are
implementing to
deliver $650
million in
Adjusted EBITDA*
growth by the end of fiscal 2025.
- We stand firm in maintaining
our Adjusted
EBITDA* target
of $2.125
billion by the end of fiscal 2025 as this is
what we believe we
can achieve with
the asset base at
our disposal.
Detailed below are selected initiatives by
pillar that were either completed or in progress during the first
half of fiscal 2022:
Strengthen our core business -
we are leveraging the power of our brands, both domestically and
across geographies, and optimizing our existing product portfolio
with a focus on core categories.
In the first quarter, we entered into a
long-term exclusive partnership with Hochland to expand
distribution of our market-leading Cathedral City brand into
Germany, starting in the fourth quarter of fiscal 2022, and we
continued to pursue opportunities to increase distribution to North
America.
Our new filling production line in the USA has
been up and running since the end of August, as planned. It enables
us to manufacture aseptic nutritional products sold in the retail
market segment under a partner’s well-known brand name.
Also in the USA, we made progress on our
simplification and SKU rationalization projects as we work to
reduce the number of formats we manufacture in order to increase
productivity while decreasing the complexity of our commercial and
supply chain activities.
As part of our e-commerce strategy, our Dairy
Division (Canada) launched Nibbl, an innovative B2C platform, in
September. A first in the Canadian marketplace, Nibbl delivers
curated specialty cheese boxes direct to consumers in Ontario and
Québec, and we are actively working on expanding our distribution
across Canada.
* See the “Non-IFRS Financial Measures” section of the
Management’s Discussion and Analysis for the reconciliations to
IFRS measures.1 CAGR, Compound Annual Growth Rate is defined as the
year-over-year growth rate over a specified amount of time.
Accelerate product innovation –
we are expanding our presence in dairy alternatives as a strategic
priority while enhancing our dairy portfolio with new formats,
flavours, and packaging.
We are well on our way in both the dairy
alternative cheese category, where we intend to take a leadership
position, and in the dairy alternative beverage category.
For dairy alternative cheese, we now have the
manufacturing capabilities in-house following the acquisition of
UK-based Bute Island Foods, and we have a product with the right
sensory attributes that was well-received by North American
foodservice partners during the trial phase. We are working on
converting this success into sales on a global scale, including in
North America and Australia.
For dairy alternative beverages, we are focused
on supporting existing players through co- packing arrangements,
and we continued to secure new business across North America. Our
two facilities in the USA took on additional volume in the second
quarter, and we are adding more capacity with our Port Coquitlam,
BC, facility.
Increase the
value of our
ingredients portfolio - we will
drive initiatives to maximize the value of our whey, optimize key
recipes to differentiate our offering to the market, and solidify
and establish commercial relationships.
Since the acquisition of the Reedsburg facility
of Wisconsin Specialty Protein, LLC, we have begun materializing on
our ingredients strategy to enhance our portfolio in the USA and
internationally and move up the value chain. This facility provides
our Dairy Division (USA) with new manufacturing capabilities for
value-added ingredients such as goat whey, organic lactose, and
other dairy powders. As a leading goat cheese manufacturer in North
America, we are now in a position to take a leadership role in
manufacturing goat whey and other niche value-added products. We
made great strides towards that goal during the first half of the
fiscal year, as we evaluate our ingredients portfolio and develop
specialized whey products to bring to market.
Across the pond, our Dairy Division (UK) worked
diligently on diversifying our dairy ingredient customer base and
reaching a more flexible arrangement in relation to an exclusive
arrangement that hampered our ability to diversify our customer and
market mix. We expect the benefits to come through in the second
half of fiscal 2022.
Optimize and enhance operations
- we are undertaking specific operations-focused initiatives in our
manufacturing, supply chain and logistics activities.
The execution of our USA cheese network
optimization plan has begun, and the initial phase and the related
capital expenditures are progressing according to our timeline. We
have already made investments aimed at enhancing the production of
our market-leading string cheese portfolio. Due to the sequential
nature of these optimization efforts, we will be taking a multi-
phase approach over the next three fiscal years and deploying
capital accordingly.
In Canada, we initiated several automation
projects during the second quarter, which were originally slated to
begin in fiscal 2023, as part of our global focus to accelerate our
operational plans where possible. Also, our new state-of-the-art
fluid milk and dairy alternative beverage facility in Port
Coquitlam, BC, is now open. Fluid dairy production started at the
end of August and plant-based beverage production is still slated
to begin later this fall. Following a transition period, we
completed the transfer of production and staff from certain
neighbouring facilities over to the Port Coquitlam plant. This will
reduce the duplication of costs, and we expect the benefit to be
reflected during the second half of the fiscal year.
In Australia, we are accelerating continuous
improvement projects aimed at maximizing our yield per litre of
milk we process. In particular, we are looking to drive
efficiencies to improve the recovery of by-products, leveraging the
agility of our network to redirect or repurpose by- products to
benefit further processing and extract the highest value at the
lowest cost.
Create enablers to fuel
investments – this pillar comprises initiatives, some of
which are ongoing, that will allow us to materialize synergies and
reduce overhead costs.
One such initiative is our global Enterprise
Resource Planning (ERP) implementation (known as our Harmoni
project), the rollout within the remainder of our Dairy Division
(Australia) and the subsequent phases of the implementation within
the Dairy Division (USA) are expected to be completed by the end of
fiscal 2022, with current deployments progressing as planned and on
schedule. In the Dairy Division (Canada), the planning for our ERP
rollout is currently underway, although we may re-plan deployment
activities based on the evolution of the COVID-19 pandemic and
imperatives relative to our Global Strategic Plan.
As for the merge of our two USA divisions into
“One USA”, we are making good progress as we continue to work on
harmonizing our processes and procedures, to maximize synergies and
support our Division’s future growth.
Capital
expenditures:
Underpinning our Global Strategic Plan is the deployment
of $2.3 billion in capital investments. Approximately 50%
of this amount will be allocated to base capital expenditures,
including those related to our ERP initiative, which are the
stay-in-business investments we make as part of our maintenance
program. The balance will be supporting the Plan initiatives, with
a larger portion of investments expected to be deployed in the
first two years with a focus on advancing our Optimize and enhance
operations strategic pillar. The expected return, mainly in the
form of increased margins derived from operating cost savings, is
expected to be the most significant contributor to our Adjusted
EBITDA* growth over the four-year period. Deploying the necessary
capital in the front half of the Plan period should allow us to
capture savings in the back half.
Although the planned capital expenditures are above the
historical trend of the last four years, we have not changed our
level of investments in capital projects. Additionally, we intend
to continue to invest annually to a level which is similar to our
depreciation and amortization expense. We also intend to maintain
strong financial flexibility throughout the Plan period, allowing
us to continue to make strategic acquisitions and prioritize our
capital management strategy. We will continue to deploy cash in a
responsible manner for capital expenditures, dividends, debt
repayments, acquisitions, and share repurchases, when
appropriate.
Strategic
AcquisitionsRecent acquisitions will serve as
accelerators to our Global Strategic Plan. The acquisitions of Bute
Island Foods Ltd and of the Reedsburg facility of Wisconsin
Specialty Protein LLC were identified and considered in the
development of our Global Strategic Plan. Therefore, the expected
growth derived from those acquired businesses is embedded in the
respective pillars outlined above.
In July, we completed the acquisition of the
business of Wensleydale Dairy Products Limited, which complements
and broadens our existing range of British cheeses. Then, on August
31, 2021, we completed the Carolina Acquisition. Carolina Aseptic
develops, manufactures, packages, and distributes aseptic
shelf-stable food products and beverages, while Carolina Dairy
manufactures, packages, and distributes refrigerated yogurt in
spouted pouches. By complementing our network in the USA and
bringing new, innovative capacity and capabilities in-house, the
Carolina Acquisition expands our presence in attractive and growing
market segments, including aseptic formats, nutritional beverages,
and dairy snacking through long-term strategic customer
partnerships.
The incremental post-acquisition Adjusted
EBITDA* we expect to derive over time through organic growth will
contribute to strengthening our core business in value-added
categories.
We remain very bullish about dairy products and
acquisition prospects in this space, and we intend to further
accelerate our growth through strategic, accretive acquisitions
based on our disciplined approach.
* See the “Non-IFRS Financial Measures” section of the
Management’s Discussion and Analysis for the reconciliations to
IFRS measures.
The Saputo
PromiseThe Saputo Promise, our approach to social,
environmental, and economic performance, supports our strategic
plans and allows us to pursue growth and create shared value for
all stakeholders, ensuring the long-term sustainability of our
business.
We recognize the importance of being accountable
to our stakeholders, and we aim to communicate in a transparent and
responsible manner about our progress to achieve our Promise.
Accordingly, in August we published our 2021
Saputo Promise
Report, which was expanded to provide additional
disclosure on the core environmental, social, and governance (ESG)
matters impacting our business.
In August, we unveiled our new 2025
Supply Chain Pledges as part of our planned efforts to
help address sustainability considerations beyond the scope of our
operations. We are currently allocating the right expertise and
resources towards our Supply Chain Pledges and defining the
practices which will form part of our sustainability standards.
Reinforcing and aligning with these efforts, in September, we
announced our support for Pathways to
Dairy Net Zero, an initiative to accelerate
climate change action in the global dairy sector. We are committed
to doing our part to help transition to a net zero food system by
2050 by helping create a sustainable and equitable food system,
working in partnership with our farmers, suppliers and industry
partners.
Within the scope of our operations, we continue
to make strides towards our environmental targets
as part of our formal commitment to make significant and
sustainable progress by 2025. We completed the capital allocation
for the 24 new projects we are undertaking in fiscal 2022, which
are currently in the execution stage, to help accelerate our
climate, water and waste performance.
Fiscal 2022 marks the final year of our Saputo
Promise three-year plan, and we have begun preparations for the
next phase as we remain steadfast in our commitment to delivering
on our ESG objectives.
Striking the
Right Balance
Between Operating
Responsibly and
Pursuing GrowthProfitability
enhancement and stakeholder value creation remain the cornerstones
of Saputo’s objectives, supported by our robust three-pronged
approach to growth. Moving forward, we are focused on effectively
managing through the current challenges and delivering on our
strategic growth plans to emerge an even bigger, better, and
stronger Saputo for our shareholders, employees, customers,
consumers, business partners, and the communities we serve.
INFORMATION BY
SECTOR
CANADA SECTOR(in millions of
CDN dollars)
Fiscal years |
2022 |
2021 |
|
Q2 |
|
Q1 |
|
Q4 |
|
Q3 |
|
Q2 |
|
Q1 |
|
Revenues |
1,081 |
|
1,033 |
|
1,001 |
|
1,089 |
|
1,063 |
|
982 |
|
Adjusted EBITDA |
124 |
|
113 |
|
108 |
|
118 |
|
117 |
|
104 |
|
Adjusted EBITDA margin |
11.5 |
% |
10.9 |
% |
10.8 |
% |
10.8 |
% |
11.0 |
% |
10.6 |
% |
The Canada Sector consists of the Dairy Division (Canada).
USA SECTOR(in millions of CDN
dollars)
Fiscal years |
2022 |
2021 |
|
Q2 |
|
Q1 |
|
Q4 |
|
Q3 |
|
Q2 |
|
Q1 |
|
Revenues |
1,533 |
|
1,506 |
|
1,399 |
|
1,657 |
|
1,649 |
|
1,417 |
|
Adjusted EBITDA |
67 |
|
96 |
|
93 |
|
171 |
|
140 |
|
163 |
|
Adjusted EBITDA margin |
4.4 |
% |
6.4 |
% |
6.6 |
% |
10.3 |
% |
8.5 |
% |
11.5 |
% |
Selected factors
positively (negatively)
affecting financial
performance(in millions of CDN dollars)
Fiscal years |
2022 |
2021 |
|
Q2 |
|
Q1 |
|
Q4 |
|
Q3 |
|
Q2 |
|
Q1 |
|
USA Market Factors*,1 |
(17 |
) |
(42 |
) |
(4 |
) |
34 |
|
4 |
|
23 |
|
US
currency exchange1 |
(8 |
) |
(18 |
) |
(5 |
) |
(2 |
) |
2 |
|
5 |
|
* Refer to the ‘‘Glossary’’ section of the Management’s
Discussion and Analysis.1 As compared to same quarter last fiscal
year.
Other pertinent
information(in US dollars, except for average
exchange rate)
Fiscal years |
2022 |
2021 |
|
Q2 |
|
Q1 |
|
Q4 |
Q3 |
Q2 |
Q1 |
Block market
price* |
|
|
|
|
|
|
|
|
Opening |
1.553 |
|
1.738 |
|
1.650 |
2.573 |
2.640 |
1.330 |
Closing |
1.873 |
|
1.553 |
|
1.738 |
1.650 |
2.573 |
2.640 |
Average |
1.706 |
|
1.657 |
|
1.687 |
2.129 |
2.249 |
1.778 |
|
|
|
|
|
|
|
|
|
Butter
market price* |
|
|
|
|
|
|
|
|
Opening |
1.740 |
|
1.818 |
|
1.420 |
1.510 |
1.765 |
1.335 |
Closing |
1.760 |
|
1.740 |
|
1.818 |
1.420 |
1.510 |
1.765 |
Average |
1.716 |
|
1.805 |
|
1.480 |
1.444 |
1.571 |
1.500 |
|
|
|
|
|
|
|
|
|
Average whey market
price* |
0.522 |
|
0.626 |
|
0.517 |
0.388 |
0.311 |
0.356 |
Spread* |
(0.034 |
) |
(0.164 |
) |
0.001 |
0.168 |
0.141 |
0.047 |
|
|
|
|
|
|
|
|
|
US
average exchange rate to Canadian dollar1 |
1.259 |
|
1.231 |
|
1.268 |
1.306 |
1.333 |
1.378 |
* Refer to the ‘‘Glossary’’ section of the Management’s
Discussion and Analysis1 Based on Bank of Canada published
information.
The USA Sector consists of the Dairy Division (USA).
INTERNATIONAL SECTOR(in
millions of CDN dollars)
Fiscal years |
2022 |
2021 |
|
Q2 |
|
Q1 |
|
Q4 |
|
Q3 |
|
Q2 |
|
Q1 |
|
Revenues |
858 |
|
754 |
|
827 |
|
807 |
|
806 |
|
781 |
|
Adjusted EBITDA |
56 |
|
45 |
|
62 |
|
105 |
|
78 |
|
60 |
|
Adjusted EBITDA margin |
6.5 |
% |
6.0 |
% |
7.5 |
% |
13.0 |
% |
9.7 |
% |
7.7 |
% |
Selected factors
positively (negatively)
affecting financial
performance(in millions of CDN dollars)
Fiscal years |
2022 |
2021 |
|
Q2 |
|
Q1 |
|
Q4 |
|
Q3 |
|
Q2 |
|
Q1 |
|
Foreign currency exchange1 |
(14 |
) |
(4 |
) |
3 |
|
4 |
|
(1 |
) |
(9 |
) |
1 As compared to same quarter last fiscal
year.
The International Sector consists of the Dairy Division
(Australia) and the Dairy Division (Argentina).
EUROPE SECTOR(in millions of
CDN dollars)
Fiscal years |
2022 |
2021 |
|
Q2 |
|
Q1 |
|
Q4 |
|
Q3 |
|
Q2 |
|
Q1 |
|
Revenues |
217 |
|
195 |
|
211 |
|
210 |
|
184 |
|
211 |
|
Adjusted EBITDA |
36 |
|
36 |
|
40 |
|
37 |
|
35 |
|
40 |
|
Adjusted EBITDA margin |
16.6 |
% |
18.5 |
% |
19.0 |
% |
17.6 |
% |
19.0 |
% |
19.0 |
% |
The Europe Sector consists of the Dairy Division (UK).
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