Saputo merging US divisions
As a part of the statement, the company announced it was merging its US divisions.
Saputo said it was merging its Cheese Division (USA) and Dairy Foods Division (USA) into a single division, now known as the Dairy Division (USA). The company said the new structure will allow it to have a more agile US platform, aligned under a common strategy, and to be in a position to more efficiently serve its markets, given consumer habits and customer expectations can evolve at a rapid pace. The merger of its two US divisions is expected to reveal synergies in all facets of the business and operations.
The company revealed revenues dropped 7.6% to C$3.391bn (US$2.55bn), adjusted EBITDA was C$366.5m (US$275.5m), up 2.4%, while net earnings rose 16.9% to C$141.9m (US$106.7m). Adjusted net earnings dropped 2.4% to C$160.9m (US$121m).
Saputo said the shift in consumer demand due to the COVID-19 pandemic impacted all the company’s sectors to varying degrees. Overall, sales volumes in the retail market segment increased, while foodservice and industrial market segments sales volumes decreased.
The Canada sector benefited from higher sales volumes, mainly in the fluid milk category. In the USA sector, lower sales volumes affected efficiencies and the absorption of fixed costs, whereas USA market factors and the fluctuation of the Canadian dollar versus the US dollar had a favorable impact on results.
In the international sector, increased milk availability in Australia and the specialty cheese business of Lion Dairy & Drinks Pty Ltd (Specialty Cheese Business Acquisition) in Australia, acquired on October 28, 2019, contributed positively to results.
The Europe sector benefited from the surge in retail market segment sales volumes.
As part of its commitment to share in the responsibility to eliminate racism in all its forms, Saputo has decided to retire the COON cheese brand name from its Australian brand portfolio and recorded an impairment on intangible assets charge of C$19.0m (US$14.3m).
The board of directors reviewed the dividend policy and increased the quarterly dividend from C$0.17 (US$0.128) per share to C$0.175 (US$0.132) per share.
