Saputo Announces Capital Investments and Optimization Initiatives as Part of Its Global Strategic Plan

Saputo Inc. (we, Saputo or the Company) announces capital investments and consolidation initiatives intended to further streamline its manufacturing footprint in its USA Sector. This announcement marks the continuation of the Company’s network optimization program that plays an integral role in its Global Strategic Plan designed to enhance operations and accelerate organic growth across its platforms.

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The Company plans to invest CDN$45 million to convert its long-standing mozzarella cheese manufacturing facility in Reedsburg, Wisconsin, to a goat cheese manufacturing plant to increase capacity, expand our position in growing specialty cheese categories, and improve productivity. In line with the Company’s strategy to modernize its mozzarella operations, current cheese manufacturing from this facility will be transferred to other existing Saputo facilities in the USA Sector, increasing capacity utilization, improving operational efficiencies and reducing costs. Complementing these network optimization activities, Saputo plans to close its existing goat cheese manufacturing facility in Belmont, Wisconsin. Approximately 200 impacted employees from this facility will be provided with financial support including severance. These initiatives will begin in the second quarter of fiscal 2023 and are expected to take up to 18 months to implement.

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“The latest series of investments and consolidation activities will strengthen the competitiveness and long-term performance of our cheese operations in our USA Sector, while increasing efficiency and productivity,” said Lino A. Saputo, Chair of the Board, President and Chief Executive Officer. “The initiatives we are announcing today will allow us to enhance our manufacturing footprint and drive organic growth. We have been increasingly focused on accelerating our Global Strategic Plan initiatives, identifying new opportunities to streamline the operating model and further improve our cost structure.”

The capital investments and consolidation initiatives outlined above are expected to result in annual savings and benefits gradually, beginning in fiscal 2024, and reaching approximately CDN$9 million (CDN$6 million after taxes) by fiscal 2025. Costs related with the capital investments and consolidation initiatives outlined above will be approximately CDN$15 million after taxes, which include a non-cash fixed assets write-down of approximately CDN$10 million after taxes. These costs will start to be recorded in the second quarter of fiscal 2023.

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