CA - Saputo Inc. (SAPIF) Q3 2024 Earnings Call Transcript

2024-02-09 19:25:26 ET

Saputo Inc. (SAPIF)

Q3 2024 Earnings Conference Call

February 9, 2024 08:30 ET

Company Participants

Nicholas Estrela - Director of Investor Relations

Lino Saputo - Chairman, President & Chief Executive Officer

Maxime Therrien - Chief Financial Officer & Secretary

Carl Colizza - President & Chief Operating Officer, North America

Leanne Cutts - President & Chief Operating Officer, International and Europe

Conference Call Participants

Irene Nattel - RBC Capital Markets

George Doumet - Scotia Capital

Mark Petrie - CIBC

Tamy Chen - BMO Capital Markets

Vishal Shreedhar - National Bank Financial

Chris Li - Desjardins

Rob Dickerson - Jefferies

Presentation

Operator

Greeting and welcome to the Saputo Incorporated Third Quarter Fiscal 2024 Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded on Friday, February 9, 2024.

I would now like to turn the conference over to Nic. Please go ahead.

Nicholas Estrela

Thank you, Frank. Good morning and welcome to our third quarter fiscal 2024 earnings call. Our speakers today will be Lino Saputo, Chair of the Board, President and Chief Executive Officer; and Maxime Therrien, Chief Financial Officer and Secretary. For the question-and-answer session, Lino and Maxime will be supported by Carl Colizza, President and Chief Operating Officer, North America; and Leanne Cutts, President and Chief Operating Officer, International and Europe.

Before we begin, I'd like to remind you that this webcast and conference call are being recorded, and the webcast will be posted on our website along with the second -- along with the third quarter investor presentation. Please also note that some of the statements provided during this call are forward-looking. Such statements are based on assumptions and are subject to risks and uncertainties. We refer to our cautionary statements regarding forward-looking information in our annual report, press releases and filings. Please treat any forward-looking information with caution as our actual results could differ materially. We do not accept any obligation to update this information except as required under securities legislation.

I'll now hand it over to Lino.

Lino Saputo

Thank you, Nic. And good morning, everyone. In the third quarter, we continue to execute with discipline and advanced a long-term strategy in a dynamic macroeconomic environment. We reported adjusted EBITDA of $370 million on revenues of $4.3 billion. Our Canadian sector continued to show its enduring strength, while our US sector also made good progress, notably supported by our capital projects. Higher sales volumes, coupled with the operational benefits of our capital spending programs, as well as our emphasis on cost management and continuous improvement had a favorable impact on our results. Importantly, operating cash flow during the third quarter was strong, volatile global dairy commodity markets and a challenge to consumer were persistent themes in the third quarter, much like in a fiscal year to date. But while the consumer is still shopping with value seeking behavior, we are seeing clear progress in volume recovery across our business segments.

As macroeconomic drivers impact the global economy and continue to drive commodity price volatility, we remain focused on managing the factors within our control and stabilizing the business. Our priority areas include operational excellence, successfully executing the major capital projects underway, cost containment, and cash flow generation. We are making material progress and advancing the key initiatives of our strategic plan and continue to build confidence in the next stage of our growth. We reached a critical juncture in the implementation of our global strategic plan during this quarter. I'm delighted with how projects are advancing and the impact of the actions completed to date. I expect these investments to contribute to our results starting in early fiscal 2025. With most of the heavy lifting behind us, I remain very confident in our long-term strategy. And I'm optimistic about the future. Our focus on execution will position as well to enter fiscal ‘25 with much momentum.

I will now turn the call over to Max for the financial review before providing my concluding remarks. Max?...

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