Saputo Inc. (TSX: SAP) (we, Saputo or the Company) reported today
its financial results for the fourth quarter and fiscal year ended
on March 31, 2023. All amounts in this news release are in millions
of Canadian dollars (CDN), except per share amounts, unless
otherwise indicated, and are presented according to International
Financial Reporting Standards (IFRS).
“We delivered a solid performance in the fourth
quarter, notably through pricing initiatives, strong international
markets, and favourable commodity prices. We also made progress
across our supply chain which allowed us to further improve our
ability to supply our customers, notably in our USA Sector,” said
Lino A. Saputo, Chair of the Board, President and CEO.
Commenting on full-year results, Mr. Saputo
added, “During fiscal 2023, we stepped up the quality of our
execution by taking decisive action to counter inflation and
improving our supply chain performance, while continuing to lay the
groundwork to support our long-term strategy. Although the current
macro backdrop remains challenging, we expect a year of organic
growth in fiscal 2024, with a focus on expanding our adjusted
EBITDA1 margins, maximizing our cash flow, and driving operating
leverage. Our solid foundation will serve us well as we continue to
make progress on unlocking the full earnings potential of our
Global Strategic Plan.”
Fiscal 2023
Fourth Quarter
Financial Highlights
- Revenues amounted to $4.468 billion, up $511 million or
12.9%.
- Net earnings totalled $159 million and EPS (basic and diluted)
were $0.38, up from $37 million and $0.09.
- Adjusted EBITDA1 amounted to $392 million, up $132 million or
50.8%.
- Adjusted net earnings1 totalled $196 million, up from $108
million, and adjusted EPS1 (basic and diluted) were $0.47, up from
$0.26.
- Net cash generated from operations amounted to $421 million, up
$237 million or 128.8%.
For the three-month periodsended March 31 |
For the yearsended March 31 |
|
2023 |
2022 |
2023 |
2022 |
Revenues |
4,468 |
3,957 |
17,843 |
15,035 |
Adjusted EBITDA1 |
392 |
260 |
1,553 |
1,155 |
Net earnings |
159 |
37 |
622 |
274 |
Adjusted net earnings1 |
196 |
108 |
755 |
485 |
Net earnings per share (EPS) |
|
|
|
|
Basic |
0.38 |
0.09 |
1.49 |
0.66 |
Diluted |
0.38 |
0.09 |
1.48 |
0.66 |
Adjusted EPS1 |
|
|
|
|
Basic |
0.47 |
0.26 |
1.80 |
1.17 |
Diluted |
0.47 |
0.26 |
1.80 |
1.17 |
1 This is a total of segments measure, a
non-GAAP financial measure, or a non-GAAP ratio. See the “Non-GAAP
Measures” section of this news release 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
primary financial statements, as applicable.
- Increased revenues reflected pricing initiatives implemented in
all our sectors, the favourable combined effect of fluctuations of
the average block market price2 and of the average butter market
price2 in the USA Sector, as well as higher international cheese
and dairy ingredient market prices.
- Increased adjusted EBITDA1 was led by significant improvement
in the USA Sector and solid performances in the Canada Sector and
International Sector, consistent with those of the prior quarters
this fiscal year.
- USA Market Factors2 had a favourable impact of $29 million
mainly driven by the fluctuations of the average butter market
price2 and their impact on pricing protocols for our dairy food
products.
- Restructuring costs of $21 million after tax, which included
non-cash fixed assets write-downs totalling $9 million, negatively
impacted net earnings. These costs were incurred in connection with
previously announced consolidation initiatives intended to further
streamline and enhance our manufacturing footprint in our USA
Sector as part of our Global Strategic Plan.
- On April 2, 2023, we announced that we entered into a
definitive agreement to sell two fresh milk processing facilities
in Australia in a transaction valued at approximately $95
million.
- The Board of Directors approved a dividend of $0.18 per share
payable on June 27, 2023, to shareholders of record on June 20,
2023.
2 Refer to the ‘‘Glossary’’ section of the Management’s
Discussion and Analysis.
FY24 OUTLOOK
- We expect the carry over impact of
price increases, additional capacity and capabilities, cost
containment and efficiency initiatives, new product innovations,
investments in our brands, and advertising to drive organic
growth.
- We expect
inflation on our overall input costs to moderate but to remain at
elevated levels. We will continue to manage the current
inflationary environment through our pricing protocols and cost
containment measures.
- Global demand for dairy products is
expected to grow but we foresee the impact of pricing elasticity
will continue to increase.
- Competitive market dynamics and
softening demand in the U.S. are expected to negatively impact our
volumes as well as operational efficiencies and the absorption of
fixed costs in the USA Sector.
- A more stabilized workforce, fewer
supply chain constraints, and the acceleration of our productivity
and operational improvement projects are expected to further
enhance our ability to service customers, particularly in the USA
Sector.
- The outlook for USA Market Factors2
remains mixed. Management believes that the long-term environment
is likely to be relatively supportive for commodity prices but with
continued volatility in the short to medium-term.
- We expect the International Sector to
be negatively impacted by lower cheese and dairy ingredient
prices.
- Capital expenditures are expected
to remain at similar levels versus last fiscal year, driven by
Global Strategic Plan optimization and capacity expansion
initiatives, and continued investments in automation.
- We expect strong operating cash
flow to continue to support a balanced capital allocation strategy
and provide the financial flexibility to consider value enhancing
opportunities, with priority given to: (i) organic growth
initiatives through capital expenditures, (ii) shareholder
dividends, and (iii) debt repayments.
2 Refer to the ‘‘Glossary’’ section of the Management’s
Discussion and Analysis.
GLOBAL STRATEGIC
PLAN HIGHLIGHTS
We are reaffirming our $2.125 billion adjusted EBITDA1 target by
the end of fiscal 2025 and updating our areas of focus. This
represents an increase of $650 million in adjusted EBITDA1 to our
fiscal 2021 baseline. Since the announcement of our Global
Strategic Plan in the fourth quarter of fiscal 2021, we witnessed a
changing macroeconomic environment which uncovered additional
network optimization opportunities. As a result, we now anticipate
the network optimization initiatives to represent approximately
$350 million of the projected adjusted EBITDA1 growth, strategic
initiatives to represent approximately $200 million, and $100
million to come from strengthening our core business.
- Network Optimization &
Capital Investments: Streamline and optimize our asset
footprint, capital and operational investments, enhance
manufacturing network to improve output, margin, utilization rates,
and service levels, leveraging asset flexibility and
automation;
-
Strategic Initiatives: New products and
innovation, growth in dairy alternative products, process
improvements, enhance value of ingredients through sales growth and
cost containment initiatives; and
-
Strengthen Core
Business: Base business growth, pricing execution,
improved reliability and growth of volume, channel and mix
management, shift to higher-margin product mix.
On April 1, 2023, we completed the combination
of our former Cheese Division (USA) and Dairy Foods Division (USA)
by aligning our business processes, system applications, and IT
infrastructure, and reaching a significant milestone in our One USA
project. These initiatives are expected to maximize synergies,
support growth, and improve our customers’ experience when
conducting business with our Dairy Division (USA).
On April 2, 2023, we announced that we entered
into a definitive agreement to sell two fresh milk processing
facilities located in Laverton North, Victoria, and Erskine Park,
New South Wales, to Coles Group Limited, an Australian-based
supermarket, retail, and consumer services chain, in a transaction
valued at approximately $95 million (AU$105 million). In line with
our Global Strategic Plan, this intended divestiture will enable us
to further streamline our operating model, adjust our manufacturing
network to strengthen market competitiveness, and allow us to
reinvest in areas of the business that will result in more value
creation opportunities.
The transaction is subject to customary
conditions, including the clearance from the Australian Competition
and Consumer Commission, and is expected to close in the second
half of calendar 2023.
1 This is a total of segments measure, a
non-GAAP financial measure, or a non-GAAP ratio. See the “Non-GAAP
Measures” section of this news release 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
primary financial statements, as applicable.
THE SAPUTO
PROMISE
The Saputo Promise is our approach to social,
environmental, and economic performance based on seven Pillars:
Food Quality and Safety, Our People, Business Ethics, Responsible
Sourcing, Environment, Nutrition, and Community. It is an integral
part of our business and a key component of our growth. As we seek
to create shared value for all our stakeholders, it provides a
framework that ensures we manage environmental, social, and
governance (ESG) risks and opportunities successfully across our
operations globally.
Anchored in the most pressing ESG issues for our
business, our current three-year plan (FY23-FY25) builds on the
momentum of the past few years, so our Saputo Promise continues to
drive, enable, and sustain our growth.
During the fourth quarter of fiscal 2023,
we:
- Approved an additional 19 projects for
FY24 with the potential to save an estimated:
- 12,800t of CO2e
- 226,000 GJ of energy
- 709,000m3 of water
- Launched our Advancing Gender Balance
initiative and set our goal to increase the representation of women
to 30% by fiscal 2025 globally at the senior levels (Vice President
and above).
- Celebrated the 10th anniversary of
our Saputo Legacy Program which supports our local communities and
promotes a healthy lifestyle by investing in the construction or
improvement of sports and health facilities. Over 10 years, we
funded 66 projects in five countries representing a $3 million
investment.
Additional Information
For more information on the fourth quarter and
year-end results for fiscal 2023, reference is made to the audited
consolidated financial statements, the notes thereto and to the
Management’s Discussion and Analysis for the fiscal year ended
March 31, 2023. 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.
Webcast and
Conference Call
A webcast and conference call will be held on Friday, June 9,
2023, at 8:30 a.m. (Eastern Time)
The webcast will begin with a short presentation
followed by a question and answer period. The speakers will be Lino
A. Saputo, Chair of the Board, President and Chief Executive
Officer, and Maxime Therrien, Chief Financial Officer and
Secretary.
To participate:
- Webcast:
https://www.gowebcasting.com/12571Presentation slides will be
included in the webcast and can also be accessed in the “Investors”
section of Saputo's website (www.saputo.com), under “Calendar of
Events”.
- Conference line
(audio only): 1-800-757-7641Please dial-in five minutes prior to
the start time.
Replay of
the conference
call and webcast
presentationFor 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 Friday, June 16,
2023, 11:59 p.m. (ET) by dialling 1-800-558-5253 (ID number:
22027049).
About Saputo
Saputo, one of the top ten dairy processors in
the world, 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 a leading cheese manufacturer and
fluid milk and cream processor in Canada, a leading dairy processor
in Australia and the top dairy processor in Argentina. In the USA,
Saputo ranks among the top three cheese producers and is one of the
top producers of extended shelf-life and cultured dairy products.
In the United Kingdom, Saputo is the leading manufacturer of
branded cheese and dairy spreads. In addition to its dairy
portfolio, Saputo produces, markets, and distributes a range of
dairy alternative cheeses and beverages. 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 www.saputo.com or via
Facebook, Instagram, LinkedIn and Twitter.
Investor InquiriesNicholas
EstrelaDirector, Investor Relations 1-514-328-3117
Media Inquiries1-514-328-3141
/ 1-866-648-5902media@saputo.com
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 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 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 8, 2023, available on SEDAR under Saputo's profile at
www.sedar.com.
Such risks and uncertainties include the
following: product liability; the availability and price variations
of milk and other inputs, our ability to transfer input costs
increases, if any, to our customers in competitive market
conditions; supply chain strain and supplier concentration; the
price fluctuation of dairy products in the countries in which we
operate, as well as in international markets; our ability to
identify, attract, and retain qualified individuals; the increased
competitive environment in our industry; consolidation of
clientele; cyber threats and other information technology-related
risks relating to business disruptions, confidentiality, data
integrity business and email compromise-related fraud;
unanticipated business disruption; continuing economic and
political uncertainties, resulting from actual or perceived changes
in the condition of the economy or economic slowdowns or
recessions; the ongoing military conflict in Ukraine; public health
threats, such as the recent global COVID -19 pandemic, changes in
consumer trends; changes in environmental laws and regulations; the
potential effects of climate change; increased focus on
environmental sustainability matters; the failure to execute our
Global Strategic Plan as expected or to adequately integrate
acquired businesses in a timely and efficient manner; the failure
to complete capital expenditures as planned; changes in interest
rates and access to capital and credit markets. There may be other
risks and uncertainties that we are not aware of at present, or
that we consider to be insignificant, that could still have a
harmful impact on our business, financial state, liquidity,
results, or reputation.
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 identify, attract, and retain qualified and diverse individuals;
our ability to attract and retain customers and consumers; our
environmental performance; the results of our sustainability
efforts; the effectiveness of our environmental and sustainability
initiatives; our operating costs; the pricing of our finished
products on the various markets in which we carry on business; the
successful execution of our Global Strategic Plan; our ability to
deploy capital expenditure projects as planned; reliance on third
parties; our ability to gain efficiencies and cost optimization
from strategic initiatives; 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 successful execution of our M&A
strategy; the market supply and demand levels for our products; our
warehousing, logistics, and transportation costs; our effective
income tax rate; the exchange rate of the Canadian dollar to the
currencies of cheese and dairy ingredients. To set our financial
performance targets, we have made assumptions regarding, among
others: the absence of significant deterioration in macroeconomic
conditions; our ability to mitigate inflationary cost pressure; the
USA commodity market conditions; labour market conditions and
staffing levels in our facilities; the impact of price elasticity;
our ability to increase the production capacity and productivity in
our facilities; and the demand growth for our products. 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; the development and performance of
technology, innovation and the future use and deployment of
technology and associated expected future results; the
accessibility of carbon and renewable energy instruments for which
a market is still developing and which are subject to risk of
invalidation or reversal; 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.
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, 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.
Unless otherwise indicated by Saputo,
forward-looking statements in this report describe our estimates,
expectations and assumptions as of the date hereof, and,
accordingly, are subject to change after that date. 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 FOURTH
QUARTER AND
FISCAL YEAR ENDED MARCH 31,
2023
Revenues
Revenues for the fourth
quarter of
fiscal 2023 totalled $4.468
billion, up $511 million or 12.9%, as compared to $3.957 billion
for the same quarter last fiscal year. In fiscal
2023, revenues totalled $17.843 billion, up $2.808 billion
or 18.7%, as compared to $15.035 billion for last fiscal year.
Revenues increased due to higher domestic
selling prices in line with the higher cost of milk as raw
material, together with previously announced pricing initiatives
implemented to mitigate increasing input costs.
In the USA Sector, the combined effect of the
fluctuations of the average block market price2 and of the average
butter market price2 had a favourable impact of $69 million and
$987 million, in the fourth quarter of fiscal 2023 and for fiscal
2023, respectively. Higher international cheese and dairy
ingredient market prices, as well as the effect of the fluctuation
of the Argentine peso and the Australian dollar on export sales
denominated in US dollars were favourable.
Overall sales volumes were stable. Sales volumes
mainly increased in the USA Sector while export sales volumes
decreased due to reduced milk availability in Australia.
The fluctuation of foreign currencies versus the
Canadian dollar had an unfavourable impact of $10 million and$62
million, in the fourth quarter of fiscal 2023 and for fiscal 2023,
respectively.
Operating costs
excluding depreciation,
amortization, and
restructuring costs
Operating costs excluding depreciation,
amortization, and restructuring costs for the fourth
quarter of fiscal 2023 totalled $4.076 billion, up $379
million or 10.3%, as compared to $3.697 billion for the same
quarter last fiscal year. In fiscal 2023,
operating costs excluding depreciation, amortization, and
restructuring costs totalled $16.290 billion, up $2.410 billion or
17.4%, as compared to $13.880 billion last fiscal year. These
increases were due to higher input costs in all our sectors in line
with inflation and dairy commodity market volatility, which
contributed to the higher cost of raw materials and consumables
used. Employee salary and benefit expenses increased due to
inflation and wage increases.
Net earnings
Net earnings for the fourth
quarter of
fiscal 2023 totalled $159
million, up $122 million or 329.7%, as compared to $37 million for
the same quarter last fiscal year. The increase is primarily due to
higher adjusted EBITDA1, as described below, lower depreciation and
amortization and acquisition and restructuring costs, partially
offset by higher financial charges, and income tax expense.
In fiscal 2023, net earnings
totalled $622 million, up $348 million or 127.0%, as compared to
$274 million for last fiscal year. The increase is primarily due to
higher adjusted EBITDA1, as described below, impairment of
intangible assets, and the gain on disposal of assets recorded in
the third quarter of last fiscal year, partially offset by higher
depreciation and amortization, acquisition and restructuring costs,
financial charges, and income tax expense.
1 This is a total of segments measure, a
non-GAAP financial measure, or a non-GAAP ratio. See the “Non-GAAP
Measures” section of this news release 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
primary financial statements, as applicable.2 Refer to the
"Glossary" section of the Management's Discussion and Analysis.
Adjusted
EBITDA1
Adjusted EBITDA1 for the fourth quarter
of fiscal 2023 totalled $392 million, up $132 million or
50.8%, as compared to $260 million for the same quarter last fiscal
year.
Increased adjusted EBITDA1 was led by
significant improvement in the USA Sector and solid performances in
the Canada Sector and International Sector.
We continued to benefit from the effect of
higher average selling prices. Increases in average selling prices
were driven by previously announced pricing initiatives implemented
to mitigate higher input costs, such as consumables, packaging,
transportation, and fuel, in line with pressures from ongoing
inflation and volatile commodity markets.
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.
USA Market Factors2 had a favourable impact of
$29 million, as compared to the same quarter last fiscal year,
mainly due to the favourable impact of fluctuations of the average
butter market price2 on pricing protocols for our dairy food
products. Despite a positive Spread2, realization of inventories
for our cheese products was negative due to the unfavourable impact
of fluctuations of the average block market price2.
Despite the challenging labour environment,
sales volumes increased and order fill rates have improved in the
USA Sector. Reduced milk availability in Australia continued to
negatively impact efficiencies and the absorption of fixed
costs.
We continued to benefit from our cost
containment measures aimed at minimizing the effect of inflation
and our efforts to prioritize efficiency and productivity
initiatives.
The fluctuation of foreign currencies versus the
Canadian dollar had an unfavourable impact of $12 million.
Adjusted EBITDA1 in fiscal 2023
totalled $1.553 billion, up $398 million or 34.5%, as compared to
$1.155 billion for last fiscal year.
Improved results reflected solid performances in
the International Sector and Canada Sector and recovery in the USA
Sector.
We benefited from pricing initiatives
implemented to mitigate higher input costs, such as consumables,
packaging, transportation, and fuel in line with ongoing
inflationary pressures and commodity market volatility.
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. Last fiscal
year, fulfilling sales contracted at depressed commodity prices in
our International Sector had an unfavourable impact.
USA Market Factors2 had an unfavourable impact
of $11 million, as compared to last fiscal year, mainly due to the
negative Spread2 more particularly during the first half of the
fiscal year. On the other hand, fluctuations of the average butter
market price2 had a favourable impact on pricing protocols for our
dairy food products mostly during the fourth quarter of the fiscal
year.
Labour shortages in some of our facilities and
supply chain disruptions put pressure on our ability to supply
ongoing demand. However, throughout the fiscal year, we
consistently focused on overcoming these challenges and have been
recovering sales volumes and increasing fill rates in our USA
Sector. Furthermore, reduced milk availability in Australia
negatively impacted efficiencies and the absorption of fixed costs.
We actively managed these challenging market conditions throughout
the fiscal year.
We benefited from our cost containment measures
aimed at minimizing the effect of inflation and our efforts to
prioritize efficiency and productivity initiatives.
The fluctuation of foreign currencies versus the
Canadian dollar had an unfavourable impact of $38 million.
1 This is a total of segments measure, a
non-GAAP financial measure, or a non-GAAP ratio. See the “Non-GAAP
Measures” section of this news release 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
primary financial statements, as applicable.2 Refer to the
"Glossary" section of the Management's Discussion and Analysis.
Depreciation and
amortization
Depreciation and amortization for the fourth quarter of
fiscal 2023 totalled $144 million, down $4 million, as
compared to $148 million for the same quarter last fiscal year. In
fiscal 2023, depreciation and
amortization totalled $582 million, up $22 million, as compared to
$560 million for last fiscal year. This increase was mainly
attributable to additional depreciation and amortization related to
the Recent Acquisitions2, as well as additions to property, plant,
and equipment, which increased the depreciable base.
Acquisition and
restructuring costs
Acquisition and restructuring costs for the
fourth quarter of fiscal 2023 totalled $28 million
and included a non-cash fixed assets write-down of $12 million, and
employee-related costs of $14 million in connection with
consolidation initiatives in the USA Sector being undertaken as
part of our Global Strategic Plan.
Acquisition and restructuring costs in
fiscal 2023 totalled $95 million related to
initiatives undertaken in Australia, the USA Sector, and the Europe
Sector as part of our Global Strategic Plan. These costs included a
total non-cash fixed assets write-down of $62 million,
employee-related costs of $28 million, accelerated depreciation,
and other site closure costs. Restructuring costs also include a $2
million gain on disposal of assets related to the sale of a closed
facility in the Canada Sector.
In fiscal 2022, acquisition and
restructuring costs totalled $71 million and were recorded during
the fourth quarter. These costs related to the announcement of
several major capital investments and consolidation initiatives
intended to enhance and streamline our manufacturing footprint in
our USA Sector and International Sector as well as plans to
outsource warehouse and distribution activities, creating
opportunities for network consolidation within our Europe Sector.
Restructuring costs included a non-cash impairment charge of
property, plant, and equipment of $60 million and severance costs
of $8 million.
Gain on
disposal of
assets
In fiscal 2022, the Company
recorded a gain on disposal of assets of $9 million mainly from the
sale of a facility in the Canada Sector.
Impairment of
intangible assets
In fiscal
2022, an impairment of intangible assets charge of
$58 million was recorded. The charge includes $50 million related
to software assets following our decision to pause the ERP
implementation within the Dairy Division (Canada) for a minimum of
three years and $8 million as a result of the application of an
agenda decision of the International Financial Reporting
Interpretations Committee (IFRIC) related to the capitalization of
cloud-based software costs.
Financial charges
Financial charges for the fourth quarter
of fiscal 2023 totalled $39 million, up $23 million,
compared to the same quarter last fiscal year. This increase
reflected higher interest rates, and included a decreased gain on
hyperinflation of $15 million derived from the indexation to
inflation of non-monetary assets and liabilities in Argentina.
Financial charges in fiscal
2023 totalled $101 million, up $31 million, compared to
the same period last fiscal year. This increase reflected higher
interest rates, and included a decreased gain on hyperinflation of
$4 million derived from the indexation to inflation of non-monetary
assets and liabilities in Argentina.
For the fourth quarter of fiscal
2023, the net effect of the hyperinflation in Argentina,
which increased the value of net non-monetary assets on the
consolidated statement of financial position, and of the
devaluation of the Argentina peso, which decreased the value of the
net non-monetary assets, resulted in a minimal gain on
hyperinflation ($15 million gain in the fourth quarter of fiscal
2022). In fiscal 2023, the net effect of these two
elements resulted in a gain on hyperinflation of $44 million ($48
million gain in fiscal 2022).
2 Refer to the "Glossary" section of the Management's Discussion
and Analysis.
Income tax
expense
Income tax expense for the
fourth quarter
of fiscal 2023
totalled $22 million, compared to an income tax recovery of $12
million for the same quarter last fiscal year. The increase in
income tax expense is mainly due to higher taxable earnings and
their geographic mix.
Income tax expense in fiscal
2023 totaled $153 million, reflecting an effective tax
rate of 19.7% as compared to 32.3% last fiscal year.
The effective income tax rate for fiscal 2022
included a one-time non-cash $50 million income tax expense
incurred to adjust deferred income tax liability balances due to
the enactment on June 10, 2021, of an increase from 19% to 25% of
the corporate income tax rate in the United Kingdom, which became
effective on April 1, 2023. Excluding the effect of this one-time
non-cash expense, the effective income tax rate for fiscal 2022
would have been 20.0%.
The tax and accounting treatments of inflation
in Argentina had a favourable effect of approximately 6% on both
the fiscal 2023 and fiscal 2022 effective income tax rates.
The effective income 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 tax and accounting treatments of inflation in
Argentina, the amount and source of taxable income, amendments to
tax legislations and income tax rates, changes in assumptions, as
well as estimates we use for tax assets and liabilities.
Adjusted net
earnings1
Adjusted net earnings for the fourth
quarter of
fiscal 2023 totalled $196
million, up $88 million or 81.5%, as compared to $108 million for
the same quarter last fiscal year. This is mainly due to an
increase in net earnings, as described above, excluding lower
acquisition and restructuring costs after tax.
In fiscal 2023, adjusted net
earnings totalled $755 million, up $270 million or 55.7%, as
compared to $485 million for last fiscal year. This is mainly due
to an increase in net earnings, as described above, excluding
higher acquisition and restructuring costs after tax, the one-time
non-cash expense to adjust deferred income tax liability balances
to reflect the increase in the corporate income tax rate in the
United Kingdom, the non-recurring impairment on intangible assets
after tax and gain on sale of assets after tax that were recorded
last fiscal year.
1 This is a total of segments measure, a
non-GAAP financial measure, or a non-GAAP ratio. See the “Non-GAAP
Measures” section of this news release 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
primary financial statements, as applicable.
INFORMATION BY
SECTOR
CANADA SECTOR
For the three-month periodsended March 31 |
|
For the years
endedMarch 31 |
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
Revenues |
1,156 |
|
1,055 |
|
4,696 |
|
4,281 |
|
Adjusted EBITDA |
134 |
|
117 |
|
551 |
|
475 |
|
Adjusted EBITDA margin |
11.6 |
% |
11.1 |
% |
11.7 |
% |
11.1 |
% |
USA SECTOR
|
For the three-month periodsended March 31 |
|
For the yearsended March 31 |
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
Revenues |
2,062 |
|
1,743 |
|
8,339 |
|
6,409 |
|
Adjusted EBITDA |
143 |
|
42 |
|
488 |
|
288 |
|
Adjusted EBITDA margin |
6.9 |
% |
2.4 |
% |
5.9 |
% |
4.5 |
% |
Selected factor(s)
positively (negatively)
impacting Adjusted
EBITDA
|
For the three-month periodsended March 31 |
|
For the yearsended March 31 |
|
|
2023 |
2022 |
|
2023 |
|
2022 |
|
USA Market Factors1,2 |
29 |
(19 |
) |
(11 |
) |
(118 |
) |
US currency exchange2 |
5 |
— |
|
19 |
|
(32 |
) |
1 Refer to the ‘‘Glossary’’ section of the Management’s
Discussion and Analysis.2 As compared to same quarter last
fiscal year for the three-month periods; as compared to last fiscal
year for the years ended March 31.
Other pertinent
information(in US dollars, except for average
exchange rate)
For the three-month
periodsended
March 31 |
|
|
|
For the years ended
March 31 |
|
|
2023 |
2022 |
|
2023 |
|
2022 |
|
Block market
price1 |
|
|
|
|
Opening |
2.135 |
1.980 |
|
2.250 |
|
1.738 |
|
Closing |
1.850 |
2.250 |
|
1.850 |
|
2.250 |
|
Average |
1.943 |
2.005 |
|
2.058 |
|
1.793 |
|
|
|
|
|
|
|
|
|
Butter market
price1 |
|
|
|
|
Opening |
2.380 |
2.453 |
|
2.700 |
|
1.818 |
|
Closing |
2.398 |
2.700 |
|
2.398 |
|
2.700 |
|
Average |
2.375 |
2.692 |
|
2.781 |
|
2.047 |
|
|
|
|
|
|
|
|
|
Average whey powder market price1 |
0.397 |
0.759 |
|
0.473 |
|
0.630 |
|
Spread1 |
0.040 |
(0.253 |
) |
(0.143 |
) |
(0.137 |
) |
US average exchange rate to Canadian dollar2 |
1.353 |
1.266 |
|
1.328 |
|
1.251 |
|
1 Refer to the ‘‘Glossary’’ section of the Management’s
Discussion and Analysis.2 Based on Bank of Canada published
information.
INTERNATIONAL SECTOR
For the three-month
periodsended
March 31 |
|
For the years
ended March
31 |
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
Revenues |
963 |
|
922 |
|
3,785 |
|
3,453 |
|
Adjusted EBITDA |
84 |
|
62 |
|
374 |
|
248 |
|
Adjusted EBITDA margin |
8.7 |
% |
6.7 |
% |
9.9 |
% |
7.2 |
% |
Selected factor(s)
positively (negatively)
impacting Adjusted
EBITDA
For the three-month
periodsended
March 31 |
|
For the years
ended March
31 |
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
Foreign currency exchange1 |
(15 |
) |
(12 |
) |
(43 |
) |
(43 |
) |
1 As compared to same quarter last fiscal year for the
three-month periods; as compared to last fiscal year for the years
ended March 31.
EUROPE SECTOR
For the three-month
periodsended
March 31 |
|
For the years
ended March
31 |
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
Revenues |
287 |
|
237 |
|
1,023 |
|
892 |
|
Adjusted EBITDA |
31 |
|
39 |
|
140 |
|
144 |
|
Adjusted EBITDA margin |
10.8 |
% |
16.5 |
% |
13.7 |
% |
16.1 |
% |
QUARTERLY FINANCIAL
INFORMATION
Fiscal years |
2023 |
2022 |
|
Q4 |
|
Q3 |
|
Q2 |
|
Q1 |
|
Q4 |
|
Q3 |
|
Q2 |
|
Q1 |
|
Revenues |
4,468 |
|
4,587 |
|
4,461 |
|
4,327 |
|
3,957 |
|
3,901 |
|
3,689 |
|
3,488 |
|
Operating costs excluding depreciation, |
|
|
|
|
|
|
|
|
amortization, and restructuring costs |
4,076 |
|
4,142 |
|
4,092 |
|
3,980 |
|
3,697 |
|
3,579 |
|
3,406 |
|
3,198 |
|
Adjusted EBITDA1 |
392 |
|
445 |
|
369 |
|
347 |
|
260 |
|
322 |
|
283 |
|
290 |
|
Adjusted EBITDA margin1 |
8.8% |
|
9.7% |
|
8.3% |
|
8.0% |
|
6.6% |
|
8.3% |
|
7.7% |
|
8.3% |
|
Depreciation and amortization |
144 |
|
147 |
|
146 |
|
145 |
|
148 |
|
144 |
|
137 |
|
131 |
|
Impairment of intangible assets |
— |
|
— |
|
— |
|
— |
|
— |
|
58 |
|
— |
|
— |
|
Gain on disposal of assets |
— |
|
— |
|
— |
|
— |
|
— |
|
(9 |
) |
— |
|
— |
|
Acquisition and restructuring costs |
28 |
|
38 |
|
22 |
|
7 |
|
71 |
|
— |
|
(2 |
) |
2 |
|
Financial charges |
39 |
|
37 |
|
13 |
|
12 |
|
16 |
|
17 |
|
19 |
|
18 |
|
Earnings before income taxes |
181 |
|
223 |
|
188 |
|
183 |
|
25 |
|
112 |
|
129 |
|
139 |
|
Income taxes |
22 |
|
44 |
|
43 |
|
44 |
|
(12 |
) |
26 |
|
31 |
|
86 |
|
Net earnings |
159 |
|
179 |
|
145 |
|
139 |
|
37 |
|
86 |
|
98 |
|
53 |
|
Net earnings margin |
3.6% |
|
3.9% |
|
3.3% |
|
3.2% |
|
0.9% |
|
2.2% |
|
2.7% |
|
1.5% |
|
Adjusted net earnings1 |
196 |
|
221 |
|
177 |
|
161 |
|
108 |
|
139 |
|
116 |
|
122 |
|
Adjusted net earnings margin1 |
4.4% |
|
4.8% |
|
4.0% |
|
3.7% |
|
2.9% |
|
3.9% |
|
3.4% |
|
3.8% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EPS basic |
0.38 |
|
0.43 |
|
0.35 |
|
0.33 |
|
0.09 |
|
0.21 |
|
0.24 |
|
0.13 |
|
EPS diluted |
0.38 |
|
0.43 |
|
0.35 |
|
0.33 |
|
0.09 |
|
0.21 |
|
0.24 |
|
0.13 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EPS Basic1 |
0.47 |
|
0.53 |
|
0.42 |
|
0.39 |
|
0.26 |
|
0.34 |
|
0.28 |
|
0.30 |
|
Adjusted EPS diluted1 |
0.47 |
|
0.53 |
|
0.42 |
|
0.39 |
|
0.26 |
|
0.33 |
|
0.28 |
|
0.29 |
|
1 This is a total of segments measure, a
non-GAAP financial measure, or a non-GAAP ratio. See the “Non-GAAP
Measures” section below of this news release 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
primary financial statements, as applicable.
Quarterly financial
information by
sector
Fiscal years |
2023 |
2022 |
|
Q4 |
Q3 |
Q2 |
Q1 |
Q4 |
Q3 |
Q2 |
Q1 |
Revenues |
|
|
|
|
|
|
|
|
Canada |
1,156 |
1,213 |
1,185 |
1,142 |
1,055 |
1,112 |
1,081 |
1,033 |
USA |
2,062 |
2,172 |
2,062 |
2,043 |
1,743 |
1,627 |
1,533 |
1,506 |
International |
963 |
917 |
989 |
916 |
922 |
919 |
858 |
754 |
Europe |
287 |
285 |
225 |
226 |
237 |
243 |
217 |
195 |
Total |
4,468 |
4,587 |
4,461 |
4,327 |
3,957 |
3,901 |
3,689 |
3,488 |
Net earnings
(consolidated) |
159 |
179 |
145 |
139 |
37 |
86 |
98 |
53 |
Q4 |
Q3 |
Q2 |
Q1 |
Q4 |
Q3 |
Q2 |
Q1 |
Adjusted EBITDA |
|
|
|
|
|
|
|
|
Canada |
134 |
149 |
136 |
132 |
117 |
121 |
124 |
113 |
USA |
143 |
146 |
102 |
97 |
42 |
83 |
67 |
96 |
International |
84 |
111 |
97 |
82 |
62 |
85 |
56 |
45 |
Europe |
31 |
39 |
34 |
36 |
39 |
33 |
36 |
36 |
Total1 |
392 |
445 |
369 |
347 |
260 |
322 |
283 |
290 |
1 This is a total of segments measure, a
non-GAAP financial measure, or a non-GAAP ratio. See the “Non-GAAP
Measures” section of this news release 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
primary financial statements, as applicable.
NON-GAAP
MEASURES
We report our financial results in accordance
with GAAP and generally assess our financial performance using
financial measures that are prepared using GAAP. However, this news
release also refers to certain non-GAAP and other financial
measures which do not have a standardized meaning under GAAP,
including the following.
Term
Used |
Definition |
Adjusted
EBITDA |
Net earnings
before income taxes, financial charges, acquisition and
restructuring costs, gain on disposal of assets, impairment of
intangible assets, and depreciation and amortization. |
Adjusted net earnings |
Net earnings before acquisition and restructuring costs,
amortization of intangible assets related to business acquisitions,
gain on disposal of assets, and impairment of intangible assets,
net of applicable income taxes and the UK tax rate change. |
Adjusted EBITDA margin |
Adjusted EBITDA expressed as a percentage of revenues. |
Adjusted net earnings margin |
Adjusted net earnings expressed as a percentage of
revenues. |
Adjusted EPS basic |
Adjusted net earnings per basic common share. |
Adjusted EPS
diluted |
Adjusted net earnings
per diluted common share. |
We use non-GAAP measures and ratios to provide
investors with supplemental metrics to assess and measure our
operating performance and financial position from one period to the
next. We believe that those measures are important supplemental
metrics because they eliminate items that are less indicative of
our core business performance and could potentially distort the
analysis of trends in our operating performance and financial
position. We also use non-GAAP measures to facilitate operating and
financial performance comparisons from period to period, to prepare
annual budgets and forecasts, and to determine components of
management compensation. We believe these non-GAAP measures, in
addition to the financial measures prepared in accordance with
IFRS, enable investors to evaluate the Company's operating results,
underlying performance, and future prospects in a manner similar to
management. These metrics are presented as a complement to enhance
the understanding of operating results but not in substitution of
GAAP results.
These non-GAAP measures have no standardized
meaning under GAAP and are unlikely to be comparable to similar
measures presented by other issuers. Our method of calculating
these measures may differ from the methods used by others, and,
accordingly, our definition of these non-GAAP financial measures
may not be comparable to similar measures presented by other
issuers. In addition, non-GAAP financial measures should not be
viewed as a substitute for the related financial information
prepared in accordance with GAAP. This section provides a
description of the components of each non-GAAP measure used in this
news release and the classification thereof.
NON-GAAP
FINANCIAL MEASURES
AND RATIOS
A non-GAAP financial measure is a financial
measure that depicts the Company's financial performance, financial
position, or cash flow and either excludes an amount that is
included in or includes an amount that is excluded from the
composition of the most directly comparable financial measures
disclosed in the Company's financial statements. A non-GAAP ratio
is a financial measure disclosed in the form of a ratio, fraction,
percentage, or similar representation and that has a non-GAAP
financial measure as one or more of its components.
Below are descriptions of the non-GAAP financial
measures and ratios that we use as well as reconciliations to the
most comparable GAAP financial measures, as applicable.
Adjusted net
earnings and
adjusted net
earnings margin
We believe that adjusted net earnings and
adjusted net earnings margin provide useful information to
investors because this financial measure and this ratio provide
precision with regards to our ongoing operations by eliminating the
impact of non-operational or non-cash items. We believe that in the
context of highly acquisitive companies, adjusted net earnings
provides a more effective measure to assess performance against the
Company's peer group, including due to the application of various
accounting policies in relation to the amortization of acquired
intangible assets.
We also believe adjusted net earnings and
adjusted net earnings margin are useful to investors because they
help identify underlying trends in our business that could
otherwise be masked by certain write-offs, charges, income, or
recoveries that can vary from period to period. We believe that
securities analysts, investors, and other interested parties also
use adjusted net earnings to evaluate the performance of issuers.
Excluding these items does not imply they are non-recurring. These
measures do not have any standardized meanings under GAAP and are
therefore unlikely to be comparable to similar measures presented
by other companies.
The following table provides a reconciliation of
net earnings to adjusted net earnings.
|
For the
three-month
periodsended
March 31 |
For the years
ended March
31 |
2023 |
|
2022 |
|
2023 |
|
2022 |
|
Net earnings |
159 |
|
37 |
|
622 |
|
274 |
|
Acquisition and restructuring costs1 |
21 |
|
51 |
|
70 |
|
51 |
|
Amortization of intangible assets related to |
|
|
|
|
business acquisitions1 |
16 |
|
20 |
|
63 |
|
75 |
|
Gain on disposal of assets1 |
— |
|
— |
|
— |
|
(8 |
) |
Impairment of intangible assets1 |
— |
|
— |
|
— |
|
43 |
|
UK tax rate change2 |
— |
|
— |
|
— |
|
50 |
|
Adjusted net earnings |
196 |
|
108 |
|
755 |
|
485 |
|
Revenues |
4,468 |
|
3,957 |
|
17,843 |
|
15,035 |
|
Margin |
4.4 |
% |
2.7 |
% |
4.2 |
% |
3.2 |
% |
1 Net of applicable income taxes.2 On June 10, 2021,
the UK Finance Act 2021 was enacted, increasing the UK tax rate
from 19% to 25%, which became effective as of April 1, 2023. Refer
to Note 16 to the consolidated financial statements for further
information.
Adjusted EPS
basic and
adjusted EPS
diluted
Adjusted EPS basic and adjusted EPS diluted are
non-GAAP ratios and do not have any standardized meaning under
GAAP. Therefore, these measures are unlikely to be comparable to
similar measures presented by other issuers. We define adjusted EPS
basic and adjusted EPS diluted as adjusted net earnings divided by
the basic and diluted weighted average number of common shares
outstanding for the period. Adjusted net earnings is a non-GAAP
financial measure. For more details on adjusted net earnings, refer
to the discussion above in the adjusted net earnings and adjusted
net earnings margin section.
We use adjusted EPS basic and adjusted EPS
diluted, and we believe that certain securities analysts,
investors, and other interested parties use these measures, among
other ones, to assess the performance of our business without the
effect of the acquisition and restructuring costs, amortization of
intangible assets related to business acquisitions, gain on
disposal of assets, impairment of intangible assets, and UK tax
rate change. We exclude these items because they affect the
comparability of our financial results and could potentially
distort the analysis of trends in business performance. Adjusted
EPS is also a component in the determination of long-term incentive
compensation for management.
TOTAL OF
SEGMENTS MEASURES
A total of segments measure is a financial
measure that is a subtotal or total of two or more reportable
segments and is disclosed within the notes to Saputo's consolidated
financial statements, but not in its primary financial statements.
Consolidated adjusted EBITDA is a total of segments measure.
Consolidated adjusted EBITDA is the total of the
adjusted EBITDA of our four geographic sectors. 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.
Adjusted EBITDA
and adjusted
EBITDA margin
We believe that adjusted EBITDA and adjusted
EBITDA margin provide investors with useful information because
they are common industry measures. These measures are also key
metrics of the Company's operational and financial performance
without the variation caused by the impacts of the elements
itemized below and provide an indication of the Company's ability
to seize growth opportunities in a cost-effective manner, finance
its ongoing operations, and service its long-term debt. Adjusted
EBITDA is the key measure of profit used by management for the
purpose of assessing the performance of each sector and of the
Company as a whole, and to make decisions about the allocation of
resources. We believe that securities analysts, investors, and
other interested parties also use adjusted EBITDA to evaluate the
performance of issuers. Adjusted EBITDA is also a component in the
determination of short-term incentive compensation for
management.
The following table provides a reconciliation of net earnings to
adjusted EBITDA on a consolidated basis.
|
For the three-month
periodsended
March 31 |
|
For the years
ended March
31 |
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
Net earnings |
159 |
|
37 |
|
622 |
|
274 |
|
Income taxes |
22 |
|
(12 |
) |
153 |
|
131 |
|
Financial charges |
39 |
|
16 |
|
101 |
|
70 |
|
Acquisition and restructuring costs |
28 |
|
71 |
|
95 |
|
71 |
|
Gain on disposal of assets |
— |
|
— |
|
— |
|
(9 |
) |
Impairment of intangible assets |
— |
|
— |
|
— |
|
58 |
|
Depreciation and amortization |
144 |
|
148 |
|
582 |
|
560 |
|
Adjusted EBITDA |
392 |
|
260 |
|
1,553 |
|
1,155 |
|
Revenues |
4,468 |
|
3,957 |
|
17,843 |
|
15,035 |
|
Margin |
8.8 |
% |
6.6 |
% |
8.7 |
% |
7.7 |
% |
CONSOLIDATED
INCOME STATEMENTS(in millions of
CDN dollars, except per share amounts)
|
For the three-month
periodsended March
31(unaudited) |
|
For the years
ended
March
31 (audited) |
|
|
2023 |
2022 |
|
2023 |
2022 |
|
Revenues |
$ |
4,468 |
$ |
3,957 |
|
$ |
17,843 |
$ |
15,035 |
|
Operating costs excluding depreciation, amortization and |
|
|
|
|
restructuring costs |
|
4,076 |
|
3,697 |
|
|
16,290 |
|
13,880 |
|
Earnings before
income taxes,
financial charges, |
|
|
|
|
acquisition and
restructuring costs,
gain on
disposal |
|
|
|
|
of assets,
impairment of
intangible assets,
and |
|
|
|
|
depreciation and
amortization |
|
392 |
|
260 |
|
|
1,553 |
|
1,155 |
|
Depreciation and amortization |
|
144 |
|
148 |
|
|
582 |
|
560 |
|
Impairment of intangible assets |
|
— |
|
— |
|
|
— |
|
58 |
|
Gain on disposal of assets |
|
— |
|
— |
|
|
— |
|
(9 |
) |
Acquisition and restructuring costs |
|
28 |
|
71 |
|
|
95 |
|
71 |
|
Financial charges |
|
39 |
|
16 |
|
|
101 |
|
70 |
|
Earnings before
income taxes |
|
181 |
|
25 |
|
|
775 |
|
405 |
|
Income taxes |
|
22 |
|
(12 |
) |
|
153 |
|
131 |
|
Net earnings |
$ |
159 |
$ |
37 |
|
$ |
622 |
$ |
274 |
|
Net earnings per
share |
|
|
|
|
Basic |
$ |
0.38 |
$ |
0.09 |
|
$ |
1.49 |
$ |
0.66 |
|
Diluted |
$ |
0.38 |
$ |
0.09 |
|
$ |
1.48 |
$ |
0.66 |
|
Note: These financial statements should be read
in conjunction with the Company’s audited consolidated financial
statements, the notes thereto, and with the Management’s Discussion
and Analysis for the fiscal year ended March 31, 2023, included in
the Company’s 2023 Annual Report. 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.
CONSOLIDATED STATEMENTS
OF FINANCIAL
POSITION(in millions of CDN dollars)
As at |
March 31,
2023 |
March 31, 2022 |
ASSETS |
|
|
Current assets |
|
|
Cash and cash equivalents |
$ |
263 |
$ |
165 |
Receivables |
|
1,621 |
|
1,500 |
Inventories |
|
2,872 |
|
2,503 |
Income taxes receivable |
|
16 |
|
52 |
Prepaid expenses and other assets |
|
79 |
|
75 |
|
|
4,851 |
|
4,295 |
Property, plant
and equipment |
|
4,286 |
|
3,962 |
Right-of-use assets |
|
446 |
|
475 |
Goodwill |
|
3,338 |
|
3,188 |
Intangible assets |
|
1,283 |
|
1,371 |
Other assets |
|
158 |
|
362 |
Deferred tax
assets |
|
63 |
|
30 |
Total assets |
$ |
14,425 |
$ |
13,683 |
LIABILITIES |
|
|
Current liabilities |
|
|
Bank loans |
$ |
356 |
$ |
419 |
Accounts payable and accrued liabilities |
|
2,149 |
|
1,952 |
Income taxes payable |
|
99 |
|
44 |
Current portion of long-term debt |
|
307 |
|
300 |
Current portion of lease liabilities |
|
91 |
|
65 |
|
|
3,002 |
|
2,780 |
Long-term debt |
|
2,944 |
|
3,075 |
Lease liabilities |
|
342 |
|
386 |
Other liabilities |
|
137 |
|
101 |
Deferred tax
liabilities |
|
860 |
|
836 |
Total liabilities |
$ |
7,285 |
$ |
7,178 |
EQUITY |
|
|
Share capital |
|
2,102 |
|
1,945 |
Reserves |
|
532 |
|
259 |
Retained earnings |
|
4,506 |
|
4,301 |
Total equity |
$ |
7,140 |
$ |
6,505 |
Total liabilities
and equity |
$ |
14,425 |
$ |
13,683 |
CONSOLIDATED STATEMENTS
OF CASH FLOWS(in
millions of CDN dollars)
|
For the
three-month periodsended
March 31 |
|
For the yearsended
March 31 |
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
Cash flows related
to the following
activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Operating |
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings |
$ |
159 |
|
$ |
37 |
|
$ |
622 |
|
$ |
274 |
|
Adjustments for: |
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
22 |
|
|
— |
|
|
67 |
|
|
37 |
|
Financial charges |
|
39 |
|
|
16 |
|
|
101 |
|
|
70 |
|
Income tax expense |
|
22 |
|
|
(12 |
) |
|
153 |
|
|
131 |
|
Depreciation and amortization |
|
144 |
|
|
148 |
|
|
582 |
|
|
560 |
|
Impairment of intangible assets |
|
— |
|
|
— |
|
|
— |
|
|
58 |
|
Restructuring charges related to optimization initiatives |
|
28 |
|
|
68 |
|
|
95 |
|
|
68 |
|
Gain on disposal of property, plant and equipment |
|
(1 |
) |
|
— |
|
|
(4 |
) |
|
(12 |
) |
Foreign exchange gain on debt |
|
(3 |
) |
|
(3 |
) |
|
(20 |
) |
|
(21 |
) |
Share of joint venture earnings, net of dividends received and
other |
|
(1 |
) |
|
(1 |
) |
|
(3 |
) |
|
3 |
|
Changes in non-cash operating working capital items |
|
62 |
|
|
(28 |
) |
|
(367 |
) |
|
(252 |
) |
Cash generated from operating activities |
|
471 |
|
|
225 |
|
|
1,226 |
|
|
916 |
|
Interest and financial charges paid |
|
(29 |
) |
|
(22 |
) |
|
(143 |
) |
|
(117 |
) |
Income taxes paid |
|
(21 |
) |
|
(19 |
) |
|
(58 |
) |
|
(106 |
) |
Net cash generated from operating activities |
$ |
421 |
|
$ |
184 |
|
$ |
1,025 |
|
$ |
693 |
|
Investing |
|
|
|
|
Business acquisitions, net of cash acquired |
|
— |
|
|
2 |
|
|
— |
|
|
(371 |
) |
Additions to property, plant and equipment |
|
(305 |
) |
|
(207 |
) |
|
(617 |
) |
|
(453 |
) |
Additions to intangible assets |
|
(7 |
) |
|
(7 |
) |
|
(24 |
) |
|
(45 |
) |
Proceeds from disposal of property, plant and equipment |
|
1 |
|
|
51 |
|
|
9 |
|
|
70 |
|
Net cash used for investing activities |
$ |
(311 |
) |
$ |
(161 |
) |
$ |
(632 |
) |
$ |
(799 |
) |
Financing |
|
|
|
|
Bank loans |
|
20 |
|
|
21 |
|
|
(54 |
) |
|
356 |
|
Proceeds from issuance of long-term debt |
|
— |
|
|
— |
|
|
313 |
|
|
306 |
|
Repayment of long-term debt |
|
(24 |
) |
|
(1 |
) |
|
(406 |
) |
|
(487 |
) |
Repayment of lease liabilities |
|
(18 |
) |
|
(18 |
) |
|
(68 |
) |
|
(80 |
) |
Net proceeds from issuance of share capital |
|
26 |
|
|
16 |
|
|
45 |
|
|
42 |
|
Payment of dividends |
|
(49 |
) |
|
(50 |
) |
|
(199 |
) |
|
(209 |
) |
Net cash used in financing activities |
$ |
(45 |
) |
$ |
(32 |
) |
$ |
(369 |
) |
$ |
(72 |
) |
Increase (decrease)
in cash and
cash equivalents |
|
65 |
|
|
(9 |
) |
|
24 |
|
|
(178 |
) |
Cash and cash
equivalents, beginning
of year |
|
185 |
|
|
163 |
|
|
165 |
|
|
309 |
|
Effect of
Argentina hyperinflation |
|
15 |
|
|
12 |
|
|
75 |
|
|
39 |
|
Effect of
exchange rate
changes |
|
(2 |
) |
|
(1 |
) |
|
(1 |
) |
|
(5 |
) |
Cash and cash
equivalents, end
of year |
$ |
263 |
|
$ |
165 |
|
$ |
263 |
|
$ |
165 |
|
A photo accompanying this announcement is available
at https://www.globenewswire.com/NewsRoom/AttachmentNg/8736c135-35a3-422c-8b65-a83333678fd3
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