Saputo Inc has withdrawn its long-term adjusted EBITDA aspirations as the company continues to grapple with ‘depressed dairy commodity markets, inflationary pressure, and a challenging consumer spending environment’.
The company previously aimed for a long-term target leverage of around 2.25 times net debt to adjusted EBITDA.
Adjusted EBITDA is defined as net earnings (loss) before income taxes, financial charges, loss (gain) on hyperinflation (Argentina net monetary position), restructuring costs, depreciation and amortization and goodwill and intangible assets impairment charge. Saputo’s leadership review adjusted EBITDA as the key measure of profit.
In the 9 months of fiscal 2025 (FY25 YTD), the company’s adjusted EBITDA improved to CA$1.189bn, up CA$59m or 5.2% on the CA$1.13bn for the same period last fiscal year.
In FY25 YTD, Saputo recorded net earnings loss of CA$250m compared to profit of CA$173m in the same period last year. The net loss is mainly due to a higher non-cash goodwill and intangible assets impairment charge, increased depreciation and amortization, restructuring costs, an increased loss on hyperinflation, and increased income tax expense and financial charges. Earnings per share also took a hit (-$0.59 in FY25-YTD versus +$0.41 FY24-YTD) though revenue improved at CA$14.3bn up 11.8% on the year prior.
In Q3 2025, net earnings loss was CA$518m, widening 10.4% on the same period last year (-CA$124m), for similar reasons as described above. Revenue grew to nearly CA$5bn with adjusted EBITDA at CA$417m.
Saputo’s growth plan nears completion
Saputo is carrying out a growth and efficiency optimization plan to add capacity, adjust its product mix and align its portfolio more closely with customer and consumer needs. The bulk of that plan has been enacted, the company said, and cash flow generation ‘should increase’ going forward.
“The expected benefits from the initiatives that are under our control represent meaningful improvement opportunities,” said Saputo. “With greater cost efficiency and an ability to capture additional growth opportunities, we strongly believe that our initiatives will enable us to execute on our strategic ambitions and ensure our [c]ompany’s long-term success.”
Saputo also intends to press on with its capital allocation strategy on share repurchases, designed to improve shareholder value.
As of February 6, 2025, Saputo had repurchased 1,782,863 common shares at a weighted-average purchase price of CA$25.28, or just over CA$45bn in total.
