TORONTO — Weston Foods is about 85% of the way through its stock-keeping unit rationalization and two years into its three-year transformation program. Progress on both initiatives has allowed the company to focus on top-line growth, executives with the Toronto-based company said.
Operating income in the Weston Foods segment totaled C$72 million ($54.2 million) in fiscal 2019 ended Dec. 31, 2019, down 22% from C$92 million in fiscal 2018. Adjusted EBITDA, meanwhile, fell 4.3% to C$223 million ($167.8 million) from C$233 million. Sales decreased 1.6% to C$2,155 million ($1,622 million) from C$2,122 million.
“We are pleased with the momentum observed at Weston Foods throughout 2019,” Richard Dufresne, president and chief financial officer, said during a Feb. 25 conference call with analysts. “Management’s focus was on stabilizing the business through a return to top-line growth, financial scrutiny and strengthening its organizational capabilities. The business achieved these objectives. By focusing on winning new business from new and existing customers, the business was able to deliver sales growth through cost savings initiatives and process improvements, the business improved its financial metrics. And through the first wave of SAP deployment and improved processes, the business improved its organizational capabilities and delivered improvement in service metrics.
“Weston Foods has stabilized and is now positioned for growth. However, there’s still lots of work to be done. The SAP deployment accelerates in 2020, and we are in the last year of our transformation program.
“Further, new capacity is coming online in donuts and bagels, and we remain focused on the successful start-up of this new capacity, which is well underway.”
Looking ahead to 2020, Mr. Dufresne said Weston Foods remains committed to its strategy with a focus on winning new business in key categories and markets and strengthening its operational processes.
Overall, George Weston posted net earnings of C$1,117 million, up 23% from C$908 million a year ago. Sales increased 3.2% to C$50,109 million from C$48,568 million.