Saputo Reports Financial Results for the First Quarter of Fiscal 2026 Ended June 30, 2025

Executive Summary

• Saputo Inc. reported first-quarter fiscal 2026 financial results ending June 30, 2025, delivering record adjusted EBITDA and strong earnings growth driven by operational efficiencies, favorable product mix, and higher selling prices across its global sectors.
• The company announced a 5.3% increase in its quarterly dividend to $0.20 per share, payable September 12, 2025, while continuing to return capital to shareholders through share repurchases.
• Management provided FY26 outlook highlighting expected organic sales growth in the USA, margin expansion from optimization initiatives, and capital expenditures of approximately $360 million for the fiscal year.

Key Details

• Consolidated Financials (Q1 FY26 vs Q1 FY25):
  • Revenues: $4,631 million (up 0.5% from $4,606 million).
  • Adjusted EBITDA: $426 million (up 11.2% from $383 million); Margin: 9.2% (up from 8.3%).
  • Net Earnings: $165 million ($0.40 EPS) vs. $142 million ($0.33 EPS).
  • Adjusted Net Earnings: $184 million ($0.44 EPS) vs. $167 million ($0.39 EPS).
  • Net Cash from Operating Activities: $317 million (up 66% from $191 million).
  • Capital Expenditures: $65 million (down from $98 million).
• Sector Performance:
  • Canada Sector: Revenues $1,321 million (up 5.4%); Adjusted EBITDA $170 million (up 11.1%, margin 12.9%). Driven by higher volumes in milk, cheese, and dairy foods, and favorable product mix.
  • USA Sector: Revenues $2,128 million (up 2.1%); Adjusted EBITDA $171 million (up 5.6%, margin 8.0%). Supported by volume growth and efficiency initiatives, partially offset by lower US dairy commodity pricing.
  • International Sector: Revenues $865 million (down 13.8%); Adjusted EBITDA $55 million (up 22.2%, margin 6.4%). Volume declines due to divestitures in Australia were offset by favorable cheese/ingredient pricing and lower milk costs.
  • Europe Sector: Revenues $317 million (up 20.1%); Adjusted EBITDA $30 million (up 30.4%, margin 9.5%). Driven by higher selling prices and volumes in bulk cheese and dairy ingredients.
• Capital Return & Dividends:
  • Share repurchases: ~4.7 million common shares purchased for $123 million.
  • Dividends paid: $79 million.
  • New Quarterly Dividend: Increased to $0.20 per share (from $0.19), payable Sept 12, 2025, to shareholders of record on Sept 2, 2025.
• Operational & Strategic Updates:
  • US Milk Pricing: New milk pricing formula for federal milk marketing orders became effective June 1, 2025; no material impact in Q1.
  • Sustainability: Published Climate Roadmap on August 7, 2025, with science-based targets validated by SBTi.
  • Restructuring: $6 million in restructuring costs incurred, including severance for the closure of functional dairy ingredient manufacturing by mid-FY26.
  • Argentina Hyperinflation: Non-cash negative impact on revenues of $17 million and $5 million on results due to hyperinflation accounting.
• FY26 Outlook:
  • Capital Expenditures: Expected to total approximately $360 million.
  • USA Sector: Expect organic sales growth with balanced volume/price contribution; phased ramp-up of Franklin, Wisconsin facility; closure of Green Bay, Wisconsin facility expected by end of Q3.
  • Canada Sector: Expect continued strong performance supported by efficiencies and commercial initiatives.
  • International Sector: Expect benefit from product mix optimization in Australia and increased milk availability/lower costs in Argentina.
  • Europe Sector: Expect improved performance from margin recovery initiatives and cost efficiency.
  • SG&A: Expect higher labor costs and advertising spend, partially mitigated by ongoing optimization.

Notable Quotes

• “We’re pleased to begin fiscal 2026 with solid momentum. Our first quarter performance reflected the strength of our global operations and the effectiveness of our strategy... Our disciplined execution, operational efficiencies, and capital deployment efforts are driving both earnings growth and returns.” — Carl Colizza, President and CEO