Saputo Q1 Earnings Call Highlights

Saputo delivered broad-based Q1 fiscal 2027 growth: Revenue rose 1.5% to CAD 4.4 billion, adjusted EBITDA increased 8% to CAD 427 million, and adjusted EPS climbed 17% to CAD 0.49. Higher high-protein ingredient volumes, operational efficiencies and commercial momentum supported results across all four sectors.

Portfolio actions strengthened capital returns and the balance sheet: Saputo received approximately CAD 710 million from selling an 80% stake in its Argentina dairy business, repaid CAD 350 million of debt, repurchased CAD 300 million of shares and raised its quarterly dividend 5% to CAD 0.21. Net debt stood at 1.47 times adjusted EBITDA, well below its 2.25-times target.

Management is prioritizing protein-rich products and efficiency investments: The company maintained its fiscal 2027 capital expenditure outlook at approximately CAD 515 million, with emphasis on high-return dairy categories, capacity optimization, technology and supply-chain improvements. Saputo also agreed to sell its Australian joint-venture interest for about CAD 253 million, pending regulatory approval.

Saputo TSE: SAP reported first-quarter fiscal 2027 earnings growth across all four operating sectors, supported by higher volumes in high-protein ingredients, commercial momentum and operational efficiencies from prior capital investments. Adjusted EBITDA increased nearly 8% from a year earlier, rising by CAD 30 million to CAD 427 million, while the adjusted EBITDA margin expanded to 9.7% from 9.1%. Revenue rose 1.5% to CAD 4.4 billion.

Adjusted net earnings increased 13% to CAD 199 million, and adjusted earnings per share rose 17% to CAD 0.49, aided by stronger earnings and share repurchases. President and Chief Executive Officer Carl Colizza said the results reflected broad-based execution rather than a single market tailwind. He highlighted demand for whey, lactose and high-protein ingredients, where recent investments in capacity and production capabilities are beginning to contribute more meaningfully.

Portfolio moves and capital returns During the quarter, Saputo completed the sale of an 80% interest in its Dairy Division Argentina to Gloria Foods. Chief Financial Officer and Secretary Maxime Therrien said the company received CAD 710 million of proceeds, or approximately CAD 612 million after tax. Argentina is being reported as a discontinued operation, and prior-period results have been restated accordingly.

The company also announced an agreement to sell its interest in the Danone Saputo Dairy Australia joint venture for approximately CAD 253 million. The transaction remains subject to regulatory approval and is expected to close in the second half of calendar 2026. The related assets were classified as held for sale as of June 30.

Saputo used proceeds from the Argentina transaction to repay CAD 350 million of Series 8 senior unsecured notes. It repurchased 7.2 million common shares for approximately CAD 300 million under its normal course issuer bid and paid CAD 80 million in dividends during the quarter. The board approved a 5% increase in the quarterly dividend to CAD 0.21 per share from CAD 0.20, effective with the September payment. Subject to Toronto Stock Exchange approval, Saputo intends to increase its share repurchase authorization to about 24 million shares, the maximum 10% of public float allowed under TSX rules.

Net debt to adjusted EBITDA ended the quarter at 1.47 times, below the company’s long-term leverage target of 2.25 times. Therrien said Saputo expects to remain active in share repurchases, while continuing to balance buybacks against organic investment, potential acquisitions and other growth opportunities.