In the food and beverage industry, SunOpta is experiencing volume-driven growth, positioning itself for potential mergers and acquisitions as it nears its debt leverage target. CEO Brian Kocher, who took over from Joe Ennen, expects to meet the debt ratio goal by the end of the year, paving the way for strategic decisions such as acquisitions.
During a discussion of first-quarter results, Kocher mentioned that the company would consider attractive projects with a strong ROI, share buybacks based on stock prices, or M&A deals once the target is reached.
With a focus on revenue growth, SunOpta reduced its debt levels in the first quarter, allowing the company to explore various expansion avenues. Additionally, Kocher outlined three priorities under his leadership, with revenue growth as the primary objective.
Revenue for the first quarter increased by 18%, driven by a volume surge of 23.5%, showcasing significant growth acceleration. Kocher emphasized the need to optimize production and expand gross margins to sustain this momentum.
To enhance efficiency, SunOpta recently inaugurated a new plant-based milks and creamers facility in Texas, expected to boost production capacity. Kocher anticipates mid-single-digit growth in the shelf-stable plant-based milks category for the year.
Furthermore, SunOpta’s fruit snacks segment witnessed remarkable growth rates, recording a 31% increase in the first quarter. This consistent growth has been a key driver for the company’s financial performance.
As part of its strategic realignment, SunOpta divested its frozen açaà and smoothie bowls business to Sambazon. Kocher’s disciplined approach to capital allocation aims to maintain a focus on deleveraging in the near term.
On the financial front, SunOpta reported a net profit from continuing operations in the first quarter, a significant turnaround from previous losses. Adjusted EBITDA rose by 21%, prompting an upward revision of growth guidance for both EBITDA and revenue.
Looking ahead, SunOpta anticipates EBITDA in the range of $88-92m, with revenue expected to fall between $685-715m, indicating healthy growth prospects for the company.
