Saputo’s operational efficiency programme helped support improved margin and pre-tax earnings, but commodity headwinds impacted its revenue for the fiscal year.
Sales increased in volume and pricing terms thanks to growth in cheese, branded products and value-added dairy.
Net earnings – which last year included a CA$684 million impairment in the UK business – also swung back to positive.
Central to the Canadian major’s strategy for the year ahead will be bolt-on acquisitions and optimising its ingredient streams to capture demand for high-value proteins.
CEO Carl Colizza told investors that mozzarella demand has remained resilient despite softer performance by North American pizza chains. On GLP-1, he said the trend was “continuing to evolve rather rapidly”, adding that dairy is well-positioned to support those consumers throughout their weight management journey.
Saputo's FY2026
Revenue: CA$17.6bn (↓ 1.5%)
Adjusted EBITDA: CA$1.66bn (↑ 10.4%)
EBITDA margin: 9.5% (↑ from 8.4%)
Net earnings: CA$690m (vs loss in FY2025)
Adjusted net earnings: CA$751m (↑ CA$116m)
Operating cash flow: CA$1.51bn (↑ 26.3%)
Capex: CA$339m (↓ from CA$386m)
Share buybacks: ~19.2m shares for CA$679m
Dividends paid: CA$324m
M&A on the horizon
Saputo’s growth strategy will rest on acquisitions in adjacent categories, with a focus on high-growth rather than maturing categories.
Segments such as cottage cheese and beverages are of particular interest, with the company assessing potential deals based on fit rather than scale.
“We’re very focused in what it is we want to acquire – and we’re not looking for a new milkshake,” said Colizza.
“What we are looking for is a real fit. We have some very interesting opportunities that we’re unlocking right now – they are all centred around products. Those would be cultured in nature, or the likes of cottage cheese, or value-added beverages.
“We will continue to look at what is the best route to making that happen – whether that’s an investment in ourselves organically or whether that is through an acquisition. Considering where our balance sheet is at today and the strength of it, we feel quite confident that a mix of those two is on our horizon.
“We’re looking for things that will allow us to keep growing in the protein sector – better-for-you offerings, tailored nutrition – and the criteria must meet things like adding capabilities [and] strengthening our route to markets.”
Switch to high-value whey
Saputo is actively reshaping its ingredients portfolio to capture demand for value-added whey ingredients. In the UK, the company stopped manufacturing demineralised whey due weak demand and is looking to bolster its processing capabilities to unlock higher-value whey streams.
“In the UK, we walked away from a business that we were involved in – that was our demineralised and galacto-oligosaccharide operations – because of the demand turned down in those categories,” said Colizza. “Instead, we decided to move over into some basic whey products, which has improved our margin structure.
“But it’s also an area which is underdeveloped for us, and we are actively looking at how to bring those solids to life and to value through further refinement, and there are active projects in this space at this moment.”
Saputo invested around CA$180 million to upgrade its whey processing plant in Ripon, Wisconsin, expanding WPC80 output by around 35% while improving quality.
“We had some foresight a couple years ago when we decided to invest heavily into our [facility], which added capacity as well as capabilities into higher fractions of whey protein concentrates as well as moving into edible and dry blend lactose,” Colizza said.
Australia is also a key ingredient manufacturing hub for the dairy major, with WPC and lactoferrin among the high-value outputs.
Cheese remains central
Alongside strengthening its whey processing infrastructure, the company is also building up its cheese business.
Maintaining presence in all cheese categories and channels remains key to the business – but branded is where the company is putting in significant resources.
Investment in brands such as Cathedral City, Devondale, Frigo Cheeseheads, and Armstrong is already delivering returns, Colizza said, adding that Saputo is planning to increase marketing and advertising by around 20% to support growth in the next year.
“Our growth in the cheese sector will allow us to fuel that whey business as well,” the CEO said.
Cost discipline is key
Saputo’s desire to improve its product mix doesn’t mean the company is abandoning its efficiency drive. Any strategic choices – whether operational or M&A-related – would need to support lower operating costs.
“We are very focused on remaining a low-cost manufacturer,” Colizza said. “We have continued CAPEX programs that are driving incremental efficiencies and we see that as an ongoing engine for our growth.”
