Revenues at
Adjusted EBITDA at
Net earnings at
Adjusted net earnings at
- Revenues amounted to
$3.891 billion , an increase of$313.6 million or 8.8%. - Adjusted EBITDA* amounted to
$417 .0 million, an increase of$95 .8 million or 29.8%. - Net earnings totalled
$197.8 million and EPS** (basic and diluted) were$0.49 and$0.48 , as compared to$342.0 million and EPS (basic and diluted) of$0.88 and$0.87 that included a gain on disposal of assets. - Adjusted net earnings* totalled
$204.2 million and adjusted EPS* (basic and diluted) were$0.50 , as compared to$174 .4 million and adjusted EPS (basic and diluted) of$0.45 and$0.44 .
(in millions of Canadian (CDN) dollars, except per share amounts) | ||||
(unaudited) | For the three-month periods ended | For the nine-month periods ended | ||
2019 | 2018 | 2019 | 2018 | |
Revenues | 3,890.8 | 3,577.2 | 11,224.8 | 10,265.4 |
Adjusted EBITDA* | 417.0 | 321.2 | 1,169.4 | 946.2 |
Net earnings | 197.8 | 342.0 | 494.1 | 631.1 |
Adjusted net earnings* | 204.2 | 174.4 | 554.9 | 497.8 |
Net earnings per share | ||||
Basic | 0.49 | 0.88 | 1.24 | 1.62 |
Diluted | 0.48 | 0.87 | 1.23 | 1.61 |
Adjusted net earnings per share* | ||||
Basic | 0.50 | 0.45 | 1.40 | 1.28 |
Diluted | 0.50 | 0.44 | 1.39 | 1.27 |
HIGHLIGHTS
USA Sector revenues increased by$170.2 million and adjusted EBITDA by$49.7 million , including approximately $14 million attributable to the positive impact ofUSA Market Factors**.- The Europe Sector, consisting of the activities of
Dairy Crest Group plc acquired onApril 15, 2019 (Dairy Crest Acquisition), increased revenues and adjusted EBITDA by approximately$196 million and$35 million , respectively. - Higher international selling prices of cheese and dairy ingredients positively impacted adjusted EBITDA.
- The adoption of IFRS 16, Leases positively impacted adjusted EBITDA by approximately
$16 million . The impact on net earnings was minimal. - The fluctuation of foreign currencies versus the Canadian dollar had a negative impact on adjusted EBITDA of approximately $15 million.
- The specialty cheese business of
Lion Dairy & Drinks Pty Ltd (Specialty Cheese Business Acquisition) inAustralia , acquired onOctober 28, 2019 , contributed positively to revenues and adjusted EBITDA for nine weeks in the quarter. - The Board of Directors approved a dividend of
$0.17 per share payable onMarch 13, 2020 , to common shareholders of record onMarch 3, 2020 .
* Non-IFRS measures are described in the ‘‘Glossary’’ section on page 24 of the Management’s Discussion and Analysis for the third quarter of fiscal 2020.
** Refer to the ‘‘Glossary’’ section on page 24 of the Management’s Discussion and Analysis for the third quarter of fiscal 2020.
Plant Closures in
Saputo announces today measures aimed at improving its operational efficiency and right-sizing both its manufacturing footprint and sales force in
Over recent years, Saputo has maintained efforts to pursue additional efficiencies and decrease costs while strengthening its market presence. This decision is part of the Company’s continual analysis of its overall activities.
Appointments in Senior Management
The Company is pleased to announce that Mr.
The Company also announces that Mr.
Additional Information
For more information on the third quarter results of fiscal 2020, reference is made to the condensed interim consolidated financial statements, the notes thereto and to the Management’s Discussion and Analysis for the third quarter of fiscal 2020. These documents can be obtained on SEDAR at www.sedar.com and in the “Investors” section of the Company’s website, at www.saputo.com.
Conference Call
A conference call to discuss the fiscal 2020 third quarter results will be held on
To listen to this call on the Web, please enter http://www.gowebcasting.com/10478 in your Web browser.
For those unable to participate, a replay of the conference will be available until
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
*Trademark used under licence.
Media Inquiries
1-514-328-3141 / 1-866-648-5902
CAUTION REGARDING FORWARD-LOOKING STATEMENTS
This 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 the Company’s objectives, outlook, business projects and strategies to achieve those objectives, statements with respect to the Company's beliefs, plans and expectations, and statements other than historical facts. Specific forward-looking statements in this news release include statements with respect to the Company's expected financial performance for fiscal 2020. The words “may”, “should”, “will”, “would”, “believe”, “plan”, “expect”, “intend”, “anticipate”, “estimate”, “foresee”, “objective”, “continue”, “propose”, “aim”, “commit’’ or “target”, 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 facts included in this news release may constitute forward-looking statements within the meaning of applicable securities laws.
These statements are based, among other things, on Saputo’s assumptions, expectations, estimates, objectives, plans, business strategy and intentions as of the date hereof regarding the projected revenues and expenses, the economic, industry, competitive and regulatory environments in which the Company operates or which could affect its activities, its ability to attract and retain customers and consumers, as well as the availability and cost of milk and other raw materials and energy supplies, its operating costs and the pricing of its finished products on the various markets in which it carries on business. The Company's expected financial performance for fiscal 2020 is specifically based on assumptions about the successful execution of its business plan, the contribution of recent acquisitions, the capacity of the Company to generate operational efficiencies and revenues, the general economic conditions and the competitive environment within the dairy industry, the anticipated market supply and demand levels for dairy products, the availability and cost of milk as raw material, the anticipated warehousing, logistical and transportation costs, the anticipated cost of the enterprise resource planning (ERP) program, the exchange rate of the Canadian dollar to the currencies of the other countries where the Company is operating, and the anticipated international and domestic selling prices of cheese and dairy ingredients. Such forward-looking statements, including the Company's expected financial performance for fiscal 2020, are intended to provide shareholders with information regarding the Company, including its assessment of future financial plans, and may not be appropriate for other purposes.
By their nature, forward-looking statements are subject to a number of inherent risks and uncertainties. Actual results could differ materially from the conclusion, forecast or projection stated in such forward-looking statements. As a result, the Company cannot guarantee that any forward-looking statements will materialize, and the Company warns readers that these forward-looking statements are not fact or guarantees of future performance in any way. Assumptions, expectations and estimates made in the preparation of forward-looking statements and risks that could cause actual results to differ materially from current expectations are discussed in the Company’s 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
Forward-looking statements are based on Management’s current estimates, expectations and assumptions, which Management believes are reasonable as of the date hereof, and, accordingly, are subject to changes after such date. 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.
Except as required under applicable securities legislation, Saputo does not undertake to update or revise these forward-looking statements, whether written or verbal, that may be made from time to time by itself or on its behalf, whether as a result of new information, future events or otherwise.
CONSOLIDATED RESULTS
The Company reports its business under the Canada Sector, the
Consolidated revenues for the three-month period ended
For the nine-month period ended
Consolidated adjusted EBITDA* for the three-month period ended
* Non-IFRS measures are described in the ‘‘Glossary’’ section on page 24 of the Management’s Discussion and Analysis for the third quarter of fiscal 2020.
** Refer to the ‘‘Glossary’’ section on page 24 of the Management’s Discussion and Analysis for the third quarter of fiscal 2020.
For the nine-month period ended
Depreciation and amortization for the three-month period ended
Inventory revaluation resulting from a business acquisition for the three and nine-month periods ended
Acquisition costs for the three and nine-month periods ended
Net interest expense for the three and nine-month periods ended
In accordance with IAS 29, Financial Reporting in Hyperinflationary Economies,
Income tax expense for the three-month period ended
Net earnings for the three-month period ended
Adjusted net earnings* for the three-month period ended
* Non-IFRS measures are described in the ‘‘Glossary’’ section on page 24 of the Management’s Discussion and Analysis for the third quarter of fiscal 2020.
SELECTED QUARTERLY FINANCIAL INFORMATION
(in millions of CDN dollars, except per share amounts) | ||||||||
Fiscal years | 2020 | 2019 | 2018 | |||||
Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | Q4 | |
Revenues | 3,890.8 | 3,665.6 | 3,668.4 | 3,236.5 | 3,577.2 | 3,420.4 | 3,267.8 | 2,744.4 |
Adjusted EBITDA* | 417.0 | 394.4 | 358.0 | 275.1 | 321.2 | 317.5 | 307.5 | 261.7 |
Net earnings | 197.8 | 174.9 | 121.4 | 124.2 | 342.0 | 163.1 | 126.0 | 130.0 |
Gain on disposal of assets1 | - | - | - | - | (167.8) | - | - | - |
Inventory revaluation resulting from a business acquisition1 | - | 10.5 | 22.0 | - | - | - | - | - |
Acquisition and restructuring costs1 | 6.4 | 0.4 | 21.5 | 1.6 | 0.2 | - | 34.3 | 5.3 |
Adjusted net earnings* | 204.2 | 185.8 | 164.9 | 125.8 | 174.4 | 163.1 | 160.3 | 135.3 |
Per share | ||||||||
Net earnings | ||||||||
Basic | 0.49 | 0.44 | 0.31 | 0.32 | 0.88 | 0.42 | 0.32 | 0.34 |
Diluted | 0.48 | 0.44 | 0.31 | 0.32 | 0.87 | 0.42 | 0.32 | 0.33 |
Adjusted net earnings* | ||||||||
Basic | 0.50 | 0.47 | 0.42 | 0.32 | 0.45 | 0.42 | 0.41 | 0.35 |
Diluted | 0.50 | 0.47 | 0.42 | 0.32 | 0.44 | 0.42 | 0.41 | 0.35 |
Earnings coverage ratio** | 7.53 | 9.77 | 10.76 | 12.69 | 14.20 | 12.57 | 15.37 | 20.83 |
* Non-IFRS measures are described in the ‘‘Glossary’’ section on page 24 of the Management’s Discussion and Analysis for the third quarter of fiscal 2020.
** Refer to the ‘‘Glossary’’ section on page 24 of the Management’s Discussion and Analysis for the third quarter of fiscal 2020.
1 Net of income taxes.
Selected factors positively (negatively) affecting financial performance | |||||||
(in millions of CDN dollars) | |||||||
Fiscal years | 2020 | 2019 | |||||
Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |
14 | 10 | (8) | 4 | (19) | (7) | 2 | |
Inventory write-down | - | - | - | (2) | (1) | - | - |
Foreign currency exchange1, 2 | (15) | (14) | (4) | 2 | 1 | 5 | (13) |
* Refer to the ‘‘Glossary’’ section on page 24 of the Management’s Discussion and Analysis for the third quarter of fiscal 2020.
1 As compared to the 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
Saputo benefits from a solid financial position and capital structure, supplemented by a high level of cash generated by operations, allowing the Company to continue to grow through targeted acquisitions and organically through strategic capital investments, innovation and product portfolio diversification. Profitability enhancement and shareholder value creation remain the cornerstones of the Company’s objectives. Saputo has a long-standing commitment to manufacture quality products and will remain focused on operational efficiencies.
The Company is committed to living up to the values on which its business was founded in 1954. It is these values that led to the development of the Saputo Promise – its 7-Pillar approach to social, environmental, and economic performance. With a strong foundation in place and clear strategic direction, the Company is continually looking for opportunities to improve its performance across each of the 7 Pillars: Food Quality and Safety, Our People, Business Ethics, Responsible Sourcing, Environment, Nutrition and Healthy Living, and Community. For Saputo, pursuing growth as a global dairy processor includes building a healthier future for its employees, consumers, customers, and those living in the communities where it operates.
In fiscal 2020, the Company continues to focus on the execution of the Saputo Promise three-year plan launched earlier this year. As part of its efforts, Saputo intends to ramp up its commitment to responsible environmental practices with a key focus on climate, water and waste.
Going forward, Saputo is committed to diversifying its product portfolio by pursuing more plant-based opportunities. The Company aims to capitalize on the growing consumer demand, and to leverage a common customer base, technology, manufacturing expertise, assets and supply chain. Saputo will look to increase its presence in this category through a series of investments in manufacturing, sales and distribution. To lead its plans, the Company has appointed a Senior Vice-President, Business Development, Plant-Based Food.
For fiscal 2020, the Company continues to expect its business operations to deliver slightly higher adjusted EBITDA when compared to fiscal 2019. This excludes the positive contributions of the Dairy Crest Acquisition and the Specialty Cheese Business Acquisition, as well as the adoption of IFRS 16, Leases in fiscal 2020. While benefiting from the contribution of other recent acquisitions, the Company expects to continue facing competitive market conditions in the
Canada Sector
While the competitive Canadian landscape continues to exercise downward pressure on financial performance, market conditions continue to show signs of easing, providing the Dairy Division (
USA Sector
Although improving, domestic market conditions remain challenging, resulting in an excess supply of commodity products. The
The Company expects cheese markets to remain firm while the dairy ingredient market is expected to remain volatile until the first half of fiscal 2021.
The Cheese Division (
The Dairy Foods Division (
International Sector
The International Sector will keep pursuing sales volume growth in existing markets, as well as the development of additional international markets. The Sector will continue to focus on controlling costs, evaluating overall activities to improve efficiencies and aim to maximize its operational flexibility to mitigate the effects of fluctuations in market conditions and their impact on financial performance. The Sector will also continue to focus on innovation, and the optimization of its product mix and customer portfolios, both domestically and internationally.
Despite the devaluation of the Argentine peso, the Dairy Division (
The Dairy Division (
As a result of the decrease in milk production in
At this time, the impact of the Australian bushfires on the Company’s operations has been limited and its facilities are operating as usual. Saputo has been able to collect close to all the milk from farmers and continues to work on a variety of ongoing practical support initiatives for those suppliers that are affected. The Company has confirmed its support to disaster relief efforts through financial and product donations, and has supported employee initiatives to raise additional funds and volunteer.
For the first half of fiscal 2021, the Company expects prices to remain relatively stable in the cheese and dairy ingredient markets as there is a better equilibrium between supply and demand in the international market.
Europe Sector
For the remainder of fiscal 2020, the Company will continue its integration of the Dairy Division (
At present, the Dairy Division (
Enterprise Resource Planning (ERP) Program
The Company will continue planning, designing and implementing activities for the migration to the new ERP system. In the first half of calendar 2020, the Company will start the deployment of the ERP program in the remainder of the Dairy Division (
Trade Agreements
The Company expects to continue making an effective use of its interim quota allocation under the Comprehensive and Progressive Agreement for
The North American Free Trade Agreement will remain in force until the new
Finally, the goal remains to continue to improve overall efficiencies in all sectors, pursue growth organically and through acquisitions, and always strive to be a stronger and better operator.
INFORMATION BY SECTOR
(in millions of CDN dollars) | |||||||
Fiscal years | 2020 | 2019 | |||||
Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |
Revenues | 1,049.0 | 1,029.4 | 968.8 | 924.8 | 1,059.6 | 1,047.7 | 1,011.0 |
Adjusted EBITDA* | 111.7 | 103.2 | 98.5 | 90.0 | 113.8 | 104.4 | 105.5 |
* Non-IFRS measures are described in the ‘‘Glossary’’ section on page 24 of the Management’s Discussion and Analysis for the third quarter of fiscal 2020.
The Canada Sector consists of the Dairy Division (
(in millions of CDN dollars) | |||||||
Fiscal years | 2020 | 2019 | |||||
Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |
Revenues | 1,848.7 | 1,792.4 | 1,757.7 | 1,616.6 | 1,678.5 | 1,618.0 | 1,594.6 |
Adjusted EBITDA* | 172.1 | 175.4 | 173.6 | 134.2 | 122.4 | 133.8 | 154.3 |
* Non-IFRS measures are described in the ‘‘Glossary’’ section on page 24 of the Management’s Discussion and Analysis for the third quarter of fiscal 2020.
Selected factors positively (negatively) affecting financial performance | |||||||
(in millions of CDN dollars) | |||||||
Fiscal years | 2020 | 2019 | |||||
Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |
14 | 10 | (8) | 4 | (19) | (7) | 2 | |
US currency exchange1 | - | 1 | 6 | 7 | 6 | 7 | (8) |
* Refer to the ‘‘Glossary’’ section on page 24 of the Management’s Discussion and Analysis for the third quarter of fiscal 2020.
1 As compared to same quarter last fiscal year.
Other pertinent information | |||||||
(in US dollars, except for average exchange rate) | |||||||
Fiscal years | 2020 | 2019 | |||||
Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |
Block market* price | |||||||
Opening | 1.958 | 1.858 | 1.645 | 1.430 | 1.690 | 1.555 | 1.530 |
Closing | 1.910 | 1.958 | 1.858 | 1.645 | 1.430 | 1.690 | 1.555 |
Average | 1.971 | 1.912 | 1.711 | 1.520 | 1.453 | 1.605 | 1.603 |
Butter market* price | |||||||
Opening | 2.128 | 2.410 | 2.255 | 2.218 | 2.320 | 2.268 | 2.215 |
Closing | 1.950 | 2.128 | 2.410 | 2.255 | 2.218 | 2.320 | 2.268 |
Average | 2.043 | 2.284 | 2.330 | 2.264 | 2.238 | 2.264 | 2.339 |
Average whey market price per pound* | 0.326 | 0.352 | 0.370 | 0.443 | 0.452 | 0.387 | 0.279 |
Spread* | (0.018) | 0.029 | 0.061 | 0.054 | 0.021 | 0.095 | 0.135 |
US average exchange rate to Canadian dollar1 | 1.320 | 1.320 | 1.337 | 1.330 | 1.321 | 1.307 | 1.290 |
* Refer to the ‘‘Glossary’’ section on page 24 of the Management’s Discussion and Analysis for the third quarter of fiscal 2020.
1 Based on Bloomberg published information.
The
INTERNATIONAL SECTOR | |||||||
(in millions of CDN dollars) | |||||||
Fiscal years | 2020 | 2019 | |||||
Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |
Revenues | 797.0 | 657.0 | 790.3 | 695.1 | 839.1 | 754.7 | 662.2 |
Adjusted EBITDA* | 98.5 | 80.2 | 59.7 | 50.9 | 85.0 | 79.3 | 47.7 |
* Non-IFRS measures are described in the ‘‘Glossary’’ section on page 24 of the Management’s Discussion and Analysis for the third quarter of fiscal 2020.
Selected factors positively (negatively) affecting financial performance | |||||||
(in millions of CDN dollars) | |||||||
Fiscal years | 2020 | 2019 | |||||
Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |
Inventory write-down | - | - | - | (2) | (1) | - | - |
Foreign currency exchange1 | (14) | (16) | (10) | (3) | (5) | - | (7) |
1 As compared to same quarter last fiscal year.
The International Sector consists of the Dairy Division (
(in millions of CDN dollars) | |||||||
Fiscal years | 2020 | 2019 | |||||
Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |
Revenues | 196.1 | 186.8 | 151.6 | - | - | - | - |
Adjusted EBITDA* | 34.7 | 35.6 | 26.2 | - | - | - | - |
* Non-IFRS measures are described in the ‘‘Glossary’’ section on page 24 of the Management’s Discussion and Analysis for the third quarter of fiscal 2020.
The Europe Sector consists of the Dairy Division (
Source:
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