Lassonde Industries : MDNA – Q4 2023

Annual Management's Discussion & Analysis

Year ended December 31, 2023

Table of Contents
1	BASIS OF PRESENTATION	3
2	FORWARD-LOOKING STATEMENTS	3
3	CORPORATE PROFILE	4
4	MULTI-YEAR STRATEGY	5
5	SELECTED ANNUAL INFORMATION	6
6	FINANCIAL HIGHLIGHTS	6
7	OUTLOOK	8
8	FOURTH QUARTER	10
9	SUMMARY OF QUARTERLY RESULTS	14
10	ANNUAL FINANCIAL INFORMATION	15
11	ANALYSIS OF THE CONSOLIDATED FINANCIAL POSITION	19
12	ANALYSIS OF SELECTED ANNUAL INFORMATION	21
13	FINANCING AND CASH	22
14	OFF-CONSOLIDATED-STATEMENT-OF-FINANCIAL-POSITION ARRANGEMENTS	22
15	SHARE INFORMATION	23
16	DIVIDENDS	23
17	SUBSEQUENT EVENT	23
18	FINANCIAL MEASURES NOT IN ACCORDANCE WITH IFRS	23
19	UNCERTAINTIES AND PRINCIPAL RISK FACTORS	30
20	FINANCIAL INSTRUMENTS AND FINANCIAL RISK EXPOSURE	40
21	SIGNIFICANT ACCOUNTING ESTIMATES AND ASSUMPTIONS	42
22	ADOPTION OF IFRS STANDARDS	43
23	FUTURE ACCOUNTING CHANGES	43
24	RELATED PARTY TRANSACTIONS	44
25	DISCLOSURE CONTROLS AND PROCEDURES ("DC&P")	44
26	INTERNAL CONTROL OVER FINANCIAL REPORTING ("ICFR")	44

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1 Basis of Presentation

The following Management's Discussion and Analysis ("MD&A") presents the factors that had a significant impact on the results, financial position, and cash flows of Lassonde Industries Inc. ("Lassonde" or the "Corporation"). This MD&A should be read in conjunction with the Corporation's audited consolidated financial statements ("consolidated financial statements") and accompanying notes. In addition to containing an analysis of the fourth quarter and year ended December 31, 2023, this MD&A reports on items deemed significant that have taken place from December 31, 2023 up to and including March 21, 2024, which is the date on which this MD&A was approved by the Corporation's Board of Directors. The financial information in this MD&Ahas been prepared in accordance with International Financial Reporting Standards ("IFRS"). Unless otherwise indicated, the reporting currency for figures in this document is the Canadian dollar and all dollar amounts are expressed in millions, which may cause some calculation discrepancies due to rounding.

The MD&A is available on the Lassonde Industries Inc. website at www.lassonde.com. Readers will also find this MD&A, the Annual Information Form for the fiscal year ended December 31, 2023, additional documents, press releases, certifications of filings, and more information about the Corporation on the SEDAR+ website at www.sedarplus.ca. Printed copies of such documents may be obtained by contacting Lassonde's Corporate Secretary's Office. The Class A subordinate voting shares of Lassonde Industries Inc. are listed for trading on the Toronto Stock Exchange under the ticker symbol LAS.A.

This document contains financial measures not in accordance with IFRS. Lassonde reports its financial results in accordance with IFRS and generally assesses its financial performance using financial measures or ratios that are prepared using IFRS. However, this MD&A also refers to certain measures or ratios that are not in accordance with IFRS, including the following: Adjusted operating profit; Earnings before interest, taxes, depreciation, and amortization ("EBITDA"); Adjusted EBITDA; Adjusted profit attributable to Corporation's shareholders; Adjusted basic and diluted earnings per share; Operating working capital; Days operating working capital; Capital employed and sources of capital; Return on capital employed; and Net debt to adjusted EBITDA. These measures may not be comparable to similar measures presented by other issuers. Please refer to Section 18 - "Financial Measures Not in Accordance With IFRS" of this MD&A for more information, including the definition and composition of the measure or ratio as well as the reconciliation to the most comparable measure in the financial statements, as applicable. The Corporation uses measures and ratios that are not in accordance with IFRS to provide investors with supplemental metrics to assess and measure its operating performance and financial position from one period to the next. These metrics are presented as a complement to enhance the understanding of Lassonde's financial performance but not in substitution of IFRS results. In addition, measures that are not in accordance with IFRS should not be viewed as a substitute to the related financial information prepared in accordance with IFRS.

2 Forward-Looking Statements

This report contains "forward-looking information" and the Corporation's oral and written public communications that do not constitute historical fact may be deemed to be "forward-looking information" within the meaning of applicable Canadian securities law. These forward-looking statements include, but are not limited to, statements on the Corporation's objectives and goals and are based on current expectations, projections, beliefs, judgments, and assumptions based on information available at the time the applicable forward-looking statement was made and considering the Corporation's experience combined with its perception of historical trends.

Forward-looking statements are typically identified by words such as "anticipate", "continue", "estimate", "expect", "may", "will", "project", "should", "could", "would", "believe", "plan", "intend", "design", "target", "objective", "strategy", "likely", "potential", "outlook", "aim", "goal", and similar expressions suggesting future events or future performance in addition to the negative forms of these terms or any variations thereof. All statements other than statements of historical fact included in this report may constitute a forward-looking statement.

In this report, forward-looking statements include, but are not limited to, those set forth in Section7 -"Outlook" hereafter, which also presents some (but not all) of the key assumptions used in determining the forward-looking statements. Some of the forward-looking statements in this report, such as statements concerning volume and sales growth rate, key commodity and input costs, expenses, including items impacting the comparability between the periods, effective tax rate, working capital, and capital expenditures may be considered financial outlooks for the purposes of applicable Canadian securities regulation. These financial outlooks are presented to evaluate potential future earnings and anticipated future uses of cash flows and may not be appropriate for other purposes.

Various factors or assumptions are applied by the Corporation in elaborating the forward-looking statements. These factors and assumptions are based on information currently available to the Corporation, including information obtained by the Corporation from third-party sources. Readers are cautioned that the assumptions considered by the Corporation to support these forward- looking statements may prove to be incorrect in whole or in part.

The significant factors that could cause actual results to differ materially from the conclusions, forecasts or projections reflected in the forward-looking statements contained herein include, among other things, risks associated with the following: deterioration of general macroeconomic conditions, including international conflicts, which can lead to negative impacts on the Corporation's suppliers, customers and operating costs; the availability of raw materials and packaging and related price variations (including the prices of orange juice and orange concentrates, key commodities for the Corporation, which have continued to trade above historical highs for the past several months and show no sign of favourable change); loss of key suppliers or supplier concentration; disruptions in or failures of the Corporation's information technology systems, as well as the development and performance of technology; cyber threats and other

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information-technology-related risks relating to business disruptions, confidentiality, data integrity, and business email compromise- related fraud; the successful deployment of the Corporation's multi-year strategy (the "Strategy", defined in Section 4 - "Multi-YearStrategy" of this MD&A); the Corporation's ability to maintain strong sourcing and manufacturing platforms and efficient distribution channels; fluctuations in the prices of inbound and outbound freight, the impact of oil prices (and derivatives thereof) on the Corporation's direct and indirect costs along with the Corporation's ability to transfer those increases through higher prices or other means, if any, to its customers in competitive market conditions and considering demand elasticity; climate change and disasters causing higher operating costs and capital expenditures and reduced production output, and impacting the availability, quality or price volatility of key commodities sourced by the Corporation; the scarcity of labour and the related impact on the hiring, training, developing, retaining and reliance of personnel together with their productivity, employment matters, compliance with employment laws across multiple jurisdictions, and the potential for work stoppages due to non-renewal of collective bargaining agreements or other reasons; the successful deployment of the Corporation's health and safety programs in compliance with applicable laws and regulations; serious injuries or fatalities, which could have a material impact on the Corporation's business continuity and reputation and lead to compliance-related costs; disputes with significant suppliers; the increasing concentration of customers in the food industry, providing them with significant bargaining power, particularly on the Corporation's selling prices; the implementation, cost and impact of environmental sustainability initiatives, as well as the cost of remediating environmental liabilities; changes made to laws and rules that affect the Corporation's activities, particularly in matters of tax and customs duties, as well as the interpretation thereof, and new positions adopted by relevant authorities; the ability to adapt to changes and developments affecting the Corporation's industry, including customer preferences, tastes, and buying patterns, market conditions and the activities of competitors and customers; failure to maintain the quality and safety of the Corporation's products, which could result in product recalls and product liability claims for misbranded, adulterated, contaminated, or spoiled food products, along with reputational damage; risks related to fluctuations in interest rates, currency exchange rates, liquidity and credit, stock price and pension obligations; the incurrence of restructuring, disposal, or other related charges together with the recognition of impairment charges on goodwill or long-lived assets; the sufficiency of insurance coverage; and the implications and outcome of potential legal actions, litigation or regulatory proceedings to which the Corporation may be a party. The Corporation cautions readers that the foregoing list of factors is not exhaustive.

The Corporation's ability to achieve its sustainability targets and goals is further subject to, among other factors, its ability to access and implement all technology necessary to achieve them as well as the development, deployment and performance of technology, and environmental regulation. The Corporation's ability to achieve its environmental, social and governance ("ESG") risk commitments is further subject to, among other factors, its ability to leverage its supplier relationships.

The assumptions, expectations, and estimates involved in preparing forward-looking statements and risks and uncertainties that could cause actual results to differ materially from forward-looking statements are discussed in the Corporation's materials filed with the Canadian securities regulatory authorities from time to time, including information about risk factors that can be found in Section 19 - "Uncertainties and Principal Risk Factors" of this MD&A. Readers should review this section in detail.

All forward-lookingstatements included herein speak only as of the date hereof. Unless required by law, the Corporation does not undertake any obligation to publicly update or revise forward-lookingstatements, whether as a result of new information, future events or otherwise. All forward-looking statements contained herein are wholly and expressly qualified by this cautionary statement.

3 Corporate Profile

Lassonde Industries Inc. is a leader in the food and beverages industry in North America. The Corporation develops, manufactures, and markets a wide range of private label and national brand products, including ready-to-drink beverages, fruit-based snacks as well as frozen juice concentrates. It is also a leading producer of cranberry sauces and specialty food products such as pasta sauces, soups and fondue broths and sauces. The Corporation also produces, imports and markets selected wines from several countries of origin and produces and markets apple cider and cider-based drinks.

Lassonde is committed to its vision of putting more of its great tasting products in more consumers' hands, that serve more needs, across more occasions, every day, and by continuing its focus on crafting quality food and beverages that consumers love, customers value, employees are proud of, and that demonstrate care for our planet.

The Corporation operates 16 plants located in Canada and the United States ("U.S.") and produces its superior quality products through the expertise of over 2,700 full-time equivalent employees. To learn more, visit www.lassonde.com.

The Corporation is active in two market segments:

• Retail sales consist of sales to food retailers and wholesalers such as supermarket chains, independent grocers, superstores, warehouse clubs, major pharmacy chains; and
• Food service sales consist of sales to restaurants, hotels, hospitals, schools, and wholesalers serving these institutions.

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Sales Breakdown (2023)

Main National Brands

The Corporation's national brands are sold in various packages under several proprietary trademarks as well as under trademarks for which the Corporation is a licensed user. The Corporation also manufactures private label products for the vast majority of major retailers and wholesalers in North America.

4 Multi-Year Strategy

To provide clarity and orientation on the opportunities to pursue and optimize capital allocation decisions, in early 2022, the Corporation developed a multi-year strategy. This Strategy aims to accelerate sales growth, improve overall profitability, and drive long-term value by focusing on three strategic pillars.

• The first pillar, Building a growth-orientedportfolio, reinforces the Corporation's commitment to becoming a more diversified food and beverage leader in North America by accelerating the growth of its specialty foods business, strengthening its leadership position in the Canadian beverages sector, and fortifying its competitive position in the U.S.
• The second pillar focuses on Driving sustainable performance by increasing investments in its manufacturing network, strengthening its supply chain activities, modernizing its revenue growth management practices, and driving efficiency across all areas of the organization. Moreover, the Corporation's ESG roadmap is a key driver of its sustainability agenda and serves as a guide for important investments decisions for the future.
• The third pillar, Improving its capacity to act, focuses on modernizing its operating model to accelerate innovation, improve costs and increase productivity, on simplifying its operations, and on investing in new tools and technologies, including the upgrade of its ERP systems. It also focuses on fortifying capabilities in key areas of the business to enable the execution of its growth strategy.

While the Corporation is actively pursuing every aspect of its Strategy, its initial objective was to revitalize the performance of its U.S. operations through Project Eagle, which identified and addressed key issues impacting performance within the supply chain and manufacturing facilities, through portfolio simplification, process realignment, talent acquisition, employee training, and capital deployment. Another component of Project Eagle was the implementation of new management systems including those aimed at generating greater efficiency in transportation management, demand and supply planning as well as production scheduling. Benefits from these initiatives began materializing in 2023.

The Corporation expects further benefits in 2024 and beyond as it gradually builds back its U.S. sales volume following the portfolio simplification process. Furthermore, the commissioning of a new single-serve line in the North Carolina plant in the second half of the year will play a key role in providing growth opportunities in new markets across both branded and private label businesses. Lastly, a new high-speedsingle-serve juice box line was commissioned in January 2024 in Rougemont, Quebec, to bring in-house some of the U.S. volume historically produced by a co-packer, and will enable to better serve customers, fuel future growth and increase profitability. Lassonde will continue to monitor the performance of its U.S. operations and will seek to leverage the improvements achieved to date by further investing to optimize its cost structure.

In parallel to the efforts to revitalize the U.S. business, the Corporation also continues to consider various options to take advantage of market opportunities in the specialty food business, including through production capacity expansion and/or business acquisition. The Corporation is also focused on strengthening its leadership position in the Canadian beverage sector through increased focus on

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innovation, channel expansion and productivity initiatives. After an initial rollout in the U.S., the deployment of new management systems in Canada, including the transportation management system, will be important to generating productivity gains.

To anchor its growth plan and Strategy on tangible goals, the Corporation presented certain financial objectives during its first Investor Day held in September 2023. Lassonde aims to achieve a sales run rate of $3 billion by the end of 2026 supported by a combination of organic growth and investment-driven growth. Organic growth reflects sales increase based on existing assets and capacity. Investment-driven growth is comprised of two sources: additional sales coming from currently known projects, and new growth investments related to capacity expansion and/or acquisitions. The Corporation anticipates a contribution from each of these sources, allowing for a range of possibilities depending on inflation and exchange rate assumptions, market conditions, timing and available opportunities. The Corporation has also stated that profitability growth will take precedence over its sales growth objective.

5	Selected Annual Information
				Years ended
	(in millions of dollars, unless otherwise indicated)	Dec. 31, 2023	Dec. 31, 2022	Dec. 31, 2021
	Related to operations	$	$	$
	2,314.9
	Sales		2,151.0	1,892.9
	Operating profit	135.4	81.3	118.4
	Adjusted operating profit1	144.5	97.5	121.1
	Adjusted EBITDA1	207.1	157.1	180.6
	Profit attributable to the Corporation's shareholders	87.5	53.9	77.5
	Basic and diluted earnings per share ("EPS") (in $)	12.83	7.85	11.18
	Dividends declared per share for Class A and B shares (in $)	2.20	2.98	3.29
	Cash flows from operating activities	224.9	24.0	93.7
	Related to financial position	1,665.7
	Total assets	1,604.7	1,419.6
	Operating working capital1	293.5	303.9	235.3
	Days operating working capital1 (in days)	44.2	49.7	43.9
	Long-term debt, including the current portion	210.5	249.4	175.4
	Net debt to adjusted EBITDA ratio1	0.92:1	1.57:1	0.97:1
	Return on capital employed1 (in %)	12.1	8.4	11.8

Refer to Section 12 - "Analysis of Selected Annual Information" of this MD&A for summary explanations on changes, between fiscal years 2022 and 2021, in sales, operating profit, profit attributable to the Corporation's shareholders, cash flows from operating activities, and total assets.

6 Financial Highlights

Fourth quarter ended December 31, 2023:

• Sales of $604.8 million. Excluding a $1.1 million favourable foreign exchange impact, sales were up $47.7 million (8.6%) from the same quarter last year, mainly due to selling price adjustments and to an increase in U.S. sales volume, partly offset by a decrease in the Canadian sales volume of national brand products.
• Gross profit of $152.5 million (25.2% of sales). Excluding a $3.7 million unfavourable foreign exchange impact, gross profit was up $32.6 million from the same quarter last year. This net increase, coming from all of the Corporation's divisions, results mainly from the following items:
  o Favourable impact of selling price adjustments to offset cost increases, including the higher cost for certain inputs, especially apple and orange concentrates;

1. This measure does not constitute a standardized financial measure in accordance with the financial reporting framework used to prepare the Corporation's financial statements. Comparing it to a similar financial measure presented by other issuers may not be possible. Refer to Section

1. - "Financial Measures Not in Accordance With IFRS" of this MD&A for more information, including the definition and composition of the measure or ratio as well as the reconciliation to the most comparable measure in the financial statements, as applicable.

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1. Gross profit loss of $3.7 million in 2022 following a production interruption of the cranberry sauce line at the Corporation's New Jersey plant; and

• 1. $2.0 million in expenses related to business optimization.
• Operating profit of $32.1 million, up $15.4 million from the same quarter last year. This net increase results mainly from the following items:
• 1. Higher gross profit;

1. $6.0 million increase in selling and marketing expenses, essentially in Canada;

1. $6.0 million increase in performance-related compensation expenses;

1. $4.2 million decrease in transportation costs incurred to deliver products to customers, resulting (i) from decreases in fuel surcharges and in base transportation rates, and (ii) from savings related to the use of new processes and the transportation management system ("TMS") in the U.S.;

1. $1.9 million increase in certain administrative expenses; and

• o $1.5 million in expenses related to business optimization.

• Excluding items impacting comparability, adjusted EBITDA2 was $52.6 million (8.7% of sales), up $14.3 million from the same quarter last year.
• Profit attributable to the Corporation's shareholders of $21.0 million, resulting in EPS of $3.08, up $10.6 million and $1.55, respectively, from the same quarter in 2022. Excluding items impacting comparability, adjusted EPS2 was $3.14 compared to $2.09 in the same quarter last year.
• Operating activities generated $77.8 million in cash compared to $51.8 million generated in the same quarter last year. This increase in cash inflows was essentially due to a higher operating profit and to a change in non-cash operating working capital items, which generated $8.6 million more cash than in the same quarter of 2022.
• Dividend of $0.50 per share, paid on December 15, 2023.

Year ended December 31, 2023:

• Sales of $2,314.9 million. Excluding a $43.8 million favourable foreign exchange impact, sales were up $120.1 million (5.6%) from last year, mainly due to the favourable impact of selling price adjustments and to a favourable change in the sales mix of private label products, partly offset by a decrease in sales volume, essentially in the U.S.
• Gross profit of $587.7 million (25.4% of sales). Excluding a $5.1 million unfavourable foreign exchange impact, gross profit was up $69.4 million from last year. This net increase, coming from all of the Corporation's divisions, results mainly from the following items:
  o Favourable impact of selling price adjustments to offset cost increases, including the higher cost for all inputs, especially apple and orange concentrates and the increase in the Corporation's conversion costs;
  o Gross profit loss of $5.2 million in 2022 following a production interruption on the cranberry sauce line at the Corporation's New Jersey plant.; and
  o $2.0 million in expenses related to business optimization.
• Operating profit of $135.4 million, up $54.1 million from last year. This net increase results mainly from the following items: o Higher gross profit;

2 This measure does not constitute a standardized financial measure in accordance with the financial reporting framework used to prepare the Corporation's financial statements. Comparing it to a similar financial measure presented by other issuers may not be possible. Refer to Section 18 - "Financial Measures Not in Accordance With IFRS" of this MD&A for more information, including the definition and composition of the measure or ratio as well as the reconciliation to the most comparable measure in the financial statements, as applicable.

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1. $38.9 million decrease in transportation costs incurred to deliver products to customers, resulting (i) from decreases in fuel surcharges and in base transportation rates, (ii) from savings related to the use of new processes and the TMS in the U.S. and (iii) from a decrease in sales volume;

1. $28.9 million increase in performance-related compensation expenses;

1. $8.1 million increase in certain administrative expenses;

1. $6.5 million unfavourable foreign exchange impact that affected the conversion of the selling and administrative expenses of the U.S. entities into Canadian dollars;

1. $6.4 million increase in selling and marketing expenses, essentially in Canada;

1. $5.7 million decrease in expenses related to the Strategy and its deployment; and

• o $1.9 million in expenses related to business optimization.

• Excluding items impacting comparability, adjusted EBITDA3 was $207.1 million (8.9% of sales), up $50.0 million from last year.
• Profit attributable to the Corporation's shareholders of $87.5 million, resulting in EPS of $12.83, up $33.6 million and $4.99, respectively, from 2022. Excluding items impacting comparability, adjusted EPS3 was $13.18 compared to $9.37 last year.
• As at December 31, 2023, the Corporation had total assets of $1,665.7 million versus $1,604.7 million as at December 31, 2022, a 3.8% increase arising mainly from the assets of Diamond Estates Wines & Spirits Inc. of $62.4 million, and from an increase in property, plant and equipment, partly offset by lower inventories as well as a lower foreign exchange conversion rate as at December 31, 2023.
• As at December 31, 2023, long-term debt, including the current portion, stood at $210.5 million, representing a net debt to adjusted EBITDA3 ratio of 0.92:1. This is down $38.9 million from December 31, 2022.
• Operating activities generated $224.9 million in cash compared to $24.0 million generated last year. This increase in cash inflows was essentially due to a change in non-cash operating working capital items, which generated $134.8 million more than in 2022, and to a higher operating profit.
• Dividends totalling $2.20 per share, for a total amount of $15.0 million paid in 2023.

7 Outlook

Lassonde continues to expect the largest factors impacting its performance in fiscal 2024 will be the financial health of consumers and the inflationary environment. As a result, the Corporation is currently retaining the following assumptions for its fiscal year 2024:

Sales growth rate

• For 2024, barring any significant external shocks and excluding foreign exchange impacts, Lassonde expects:

1. a sales growth rate in the mid-single-digit range, mainly driven by the run rate effect of its selling price adjustments together with the volume growth expected in the second half of the year; and

• 1. a slight decrease in sales volume in the first half of the year with sequential improvement in the second half resulting from the combined impact of the following items: (i) the pace of the U.S. demand build back strategy for the Corporation's products; (ii) additional volumes available following the deployment of its single serve line in North Carolina; and (iii) the overall stabilization of demand.
• Lassonde will also consider further pricing action to be implemented over the course of 2024 if inflation persists. However, the Corporation is closely monitoring the evolution of consumer food habits and demand elasticity in a context of price increases.

1. This measure does not constitute a standardized financial measure in accordance with the financial reporting framework used to prepare the Corporation's financial statements. Comparing it to a similar financial measure presented by other issuers may not be possible. Refer to Section

1. - "Financial Measures Not in Accordance With IFRS" of this MD&A for more information, including the definition and composition of the measure or ratio as well as the reconciliation to the most comparable measure in the financial statements, as applicable.

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Key commodity and input costs

• Lassonde's input costs have increased significantly since 2021. More recently, the prices for orange juice and orange concentrates remain an area of focus.
• Given that a large portion of the raw material purchases made by Lassonde's Canadian operations are in U.S. dollars, a strengthening of this currency against the Canadian dollar results in a higher cost for products sold in the Canadian market. Furthermore, the Corporation is expecting an unfavourable foreign exchange impact for 2024 when considering its hedged positions.

Expenses, including items impacting the comparability between the periods

• The Corporation's performance-related compensation expenses are expected to return in 2024 to levels below those observed in 2023.
• During 2024, Lassonde plans to continue deploying its Strategy, optimizing its business and upgrading its key systems and technology infrastructures to improve its efficiency. Planned spending in support of these elements is expected to reach up to $5.0 million in 2024.

Effective tax rate

• Effective tax rate should be about 26.5% for fiscal 2024.

Working capital

• The Corporation's Days Operating Working Capital4 is now closer to its historical levels and only incremental improvements are expected for this ratio over the course of 2024. However, this outlook might be impacted by (i) opportunistic decisions to secure inventory cost ahead of potential additional price increases from suppliers, (ii) the objective of ensuring an adequate service level, or (iii) the decisions to counter new potential supply chain disruptions.

Capital Expenditures

• The Corporation's overall capital expenditures program for 2024 is estimated to reach up to 5.0% of its sales as it continues to deploy capital in support of its Strategy. This estimate depends on the rate of progress of certain large capital projects and on the evolution of the macroeconomic environment.
• The Corporation has not yet finalized the determination of its buy versus build path in relation to supporting the growth of its specialty foods division and it is studying additional avenues to better support its U.S. beverage divisions. Accordingly, there are no capital expenditures associated with these elements in the current Outlook.
• The new capital assets will be financed, to the extent possible, using the Corporation's operating cash flows, although the Corporation may also turn to borrowing if interest rates and conditions prove advantageous.

The above forward-looking statements exclude items related to Diamond Estates Wines & Spirits Inc. and have been prepared using the following key assumptions: currently observed geopolitical situation and macroeconomic trends, including employment, inflation and interest rates; a stable exchange rate between the U.S. dollar and the Canadian dollar; the continuity of recently observed consumer behaviours and market trends for the Corporation's products; no material disruption to the Corporation's operations (including workforce availability) or to its supply chain; the effectiveness of the Corporation's selling price adjustment initiatives; the limited impact of the Corporation's selling price adjustment initiatives on product demand; the continuity of observed trends in the competitive environment and the effectiveness of the Corporation's strategy to position itself competitively in the markets in which it operates; limited additional cost increases from suppliers; adequate availability of key inputs; the continuity of recently observed normalized trends in the throughput capacity of key U.S. plants; expected lead time for new manufacturing equipment; and adequate contractor or consultant availability to progress the Corporation's capital expenditures. The Corporation cautions readers that the foregoing list of factors is not exhaustive. It should be noted that some of these key assumptions, including those related to the geopolitical situation and macroeconomic trends, are volatile and rapidly evolving. In preparing its outlook, the Corporation made assumptions that do not consider extraordinary events or circumstances beyond its control. The Corporation believes the expectations reflected in these forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward-looking statements should not be unduly relied upon. For additional information, refer to Section2 - "Forward-LookingStatements" of this MD&A.

1. This measure does not constitute a standardized financial measure in accordance with the financial reporting framework used to prepare the Corporation's financial statements. Comparing it to a similar financial measure presented by other issuers may not be possible. Refer to Section

1. - "Financial Measures Not in Accordance With IFRS" of this MD&A for more information, including the definition and composition of the measure or ratio as well as the reconciliation to the most comparable measure in the financial statements, as applicable.

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8 Fourth Quarter

8.1 Analysis of the Consolidated Results

	Fourth quarters ended
	Dec. 31,	Dec. 31,	∆
(in millions of dollars, unless otherwise indicated)	2023	2022
	$	$	$
Sales	604.8	556.0	48.8
Cost of sales	452.3	432.3	19.9
Gross profit	152.5	123.6	28.9
Selling and administrative expenses	120.4	106.9	13.5
Operating profit	32.1	16.7	15.4
Share in the profit or (loss) of an associate	(1.2)	(0.3)	(1.0)
Financial expenses	3.8	3.1	0.7
Other (gains) losses	(1.7)	1.5	(3.2)
Profit before income taxes	28.7	11.8	16.9
Income tax expense	8.1	1.7	6.4
Profit	20.5	10.1	10.4
Attributable to:	21.0
Corporation's shareholders	10.5	10.5
Non-controlling interests	(0.5)	(0.4)	(0.1)
	20.5	10.1	10.4
EPS (in $)	3.08	1.53	1.55
Weighted average number of shares
outstanding (in thousands)	6,822	6,849	(27)
Adjusted operating profit5	36.0	23.2	12.8
Adjusted EBITDA5	52.6	38.3	14.3
Adjusted EPS5 (in $)	3.14	2.09	1.05

On November 14, 2023, the Corporation acquired an additional economic interest of 20,000,000 newly issued common shares in Diamond Estates Wines & Spirits Inc. ("Diamond") for total consideration of $9.0 million. The acquisition was paid using the Corporation's cash flows from operating activities. As a result of this transaction, the Corporation has an economic interest of 52.9% in Diamond, and has the right to appoint four of the seven directors to Diamond's board of directors. The Corporation has concluded consequently that it exercises control over this entity and has been consolidating it since that date. The Corporation has recognized this business combination using the acquisition method in accordance with the provisions of IFRS 3. Therefore, the 2023 consolidated financial statements include the results of Diamond from November 14, 2023. Note 6 to the 2023 consolidated financial statements contains additional information about the acquisition, notably including information about the related purchase price allocation.

An overview of the key themes affecting 2023, including its fourth quarter, is provided in Section 10 - "Annual Financial Information".

1. This measure does not constitute a standardized financial measure in accordance with the financial reporting framework used to prepare the Corporation's financial statements. Comparing it to a similar financial measure presented by other issuers may not be possible. Refer to Section

1. - "Financial Measures Not in Accordance With IFRS" of this MD&A for more information, including the definition and composition of the measure or ratio as well as the reconciliation to the most comparable measure in the financial statements, as applicable.

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