Full Press Release Details
SNDL Reports Fourth Quarter
and Full Year 2024 Financial and Operational Results
The Company reports Record
Full Year Net Revenue, Gross Profit and Gross Margin, as well as positive Cash Flow and Free Cash Flow
CALGARY, AB, March 18, 2025 /CNW/ - SNDL Inc.
(NASDAQ: SNDL) ("SNDL" or the "Company") reported its financial and operational results for the full
year and fourth quarter ended December 31, 2024. All financial information in this press release is reported in millions of Canadian dollars
unless otherwise indicated.
SNDL has also posted a supplemental investor presentation
and shareholder letter on its website, found at https://sndl.com.
The Company will hold a conference call and webcast
presentation at 10:00 a.m. EDT (8:00 a.m. MDT) on Tuesday, March 18, 2025. The conference call details can be found below.
MANAGEMENT HIGHLIGHTS
Net revenue for the fourth
quarter of 2024 was $257.7 million, and $920.4 million for the full year of 2024, representing growth of +3.7% and +1.3%, respectively,
when compared to the same periods of the previous year. Both the quarter and the full year represent new records for the corporation,
driven by strong growth from our combined Cannabis business of +16.5% in the fourth quarter and +10.6% over the full year.
Gross profit also reached
new records, with $68.8 million in the fourth quarter of 2024, and $240.3 million for the full year, representing growth of +20.0% and
+26.2%, respectively, when compared to the same periods of the previous year.
of 26.7% in the fourth quarter of 2024 and 26.1% for the full year are also new records, representing improvements of +3.6 and +5.2 percentage
points, respectively, when compared to the same periods of the previous year.
Operating loss was $(76.1)
million for the fourth quarter of 2024, driven by a negative valuation adjustment of the SunStream portfolio of $(65.7) million, a Spiritleaf
intangible write-off of $(15.0) million, and restructuring charges of $(0.6) million. Excluding these exceptional items adding up to
$(81.3) million, our underlying Operating Income would have been positive for the quarter. These exceptional items largely contributed
to the full year reported Operating loss of $(103.8) million.
Cash flow was negative
by $(44.6) million in the fourth quarter of 2024, driven by the acquisition of Nova's minority equity interest, as well as the repurchase
of SNDL's common shares. Full-year cash flow was positive by $23.3 million.
was positive both in the fourth quarter of 2024, at $11.6 million, and for the full year, at $8.9 million.
"We are pleased with the continued progress reflected
in our fourth-quarter and full-year 2024 results, as we set new records and exceeded our commitment to achieving break-even free cash
flow for the year. We have accomplished this while continuing to transform our business by investing in growth opportunities and strengthening
our organizational capabilities. The SNDL team remains dedicated to raising the bar in 2025 and beyond," said Zach George, Chief
Executive Officer of SNDL.
"During the fourth quarter of 2024 and the first
months of 2025 up to this date, we took several strategic steps to enhance our foundation for long-term success and shareholder value:
Completed the privatization of
Nova Cannabis Inc. through the acquisition of the remaining minority equity interest
Acquired business and assets
of Indiva Inc. ("Indiva"), positioning SNDL as the largest manufacturer of infused edibles in Canada
Received approval from the Florida
Department of Health for the transfer of the Parallel (Surterra Holdings, Inc.) license - an important milestone and prerequisite for
completing the Parallel restructuring process
Repurchased 10,764,107 SNDL common
shares for cancellation at an average price of US$1.81 per share
Acquired 4,350,000 common shares
of High Tide Inc. ("High Tide"), equivalent to 5.4% ownership
In addition to these achievements, the Company has
applied for listing of its common shares on the Canadian Securities Exchange ("CSE") and anticipate the CSE listing to go live
in April 2025, providing our shareholders with increased flexibility and optionality.
The progress made during the last year in operational
performance and financial discipline is undeniable, and we are encouraged by the many opportunities we still have ahead of us. Our strong
balance sheet, including $218.4 million of unrestricted cash as of December 31, 2024, is not only a competitive differentiator but also
gives us the flexibility to thoughtfully deploy capital into organic and inorganic investments with attractive returns. Our plan is to
continue building strong fundamentals, as we expect to build momentum through 2025 with the goal of generating $100 million in positive
annual free cash flow within the next three years.
We want to thank our employees for their dedication
and passion in delivering the progress we made during the last year, as well as our shareholders for their continued trust and support,"
concluded Zach George.
TOTAL COMPANY HIGHLIGHTS
| Three months ended December 31 | Year ended December 31 | |||||||||||||||||
| ($000s) | 2024 | 2023 | % Change | 2024 | 2023 | % Change | ||||||||||||
| IFRS Financial Measures | ||||||||||||||||||
| Net revenue | 257,679 | 248,450 | 3.7 | % | 920,448 | 909,006 | 1.3 | % | ||||||||||
| Gross profit | 68,799 | 57,336 | 20.0 | % | 240,331 | 190,415 | 26.2 | % | ||||||||||
| Operating loss | (76,089) | (85,017) | 10.5 | % | (103,811) | (163,171) | 36.4 | % | ||||||||||
| Change in cash and cash equivalents | (44,617) | (6,942) | -543 | % | 23,318 | (84,545) | 128 | % | ||||||||||
| Non-IFRS Financial Measures (1) | ||||||||||||||||||
| Gross margin | 26.7 | % | 23.1 | % | 3.6 | pp | 26.1 | % | 20.9 | % | 5.2 | pp | ||||||
| Adjusted operating loss | (60,472) | (27,094) | -123 | % | (86,144) | (98,028) | 12 | % | ||||||||||
| Free cash flow | 11,625 | 1,383 | 741 | % | 8,872 | (60,883) | 115 | % |
BUSINESS SEGMENT HIGHLIGHTS
SNDL's business is operated and reported in four segments:
Liquor Retail, Cannabis Retail, Cannabis Operations and Investments. Corporate and Shared Service expenses, as well as the revenue elimination
associated with the Cannabis Operations sales to the provincial boards that are expected to be subsequently repurchased by the Company's
licensed retail subsidiaries for resale, are reported as "Corporate".
| Three months ended December 31 | Year ended December 31 | |||||||||||||||||
| ($000s) | 2024 | 2023 | % Change | 2024 | 2023 | % Change | ||||||||||||
| Net Revenue | ||||||||||||||||||
| Liquor Retail | 154,080 | 159,493 | -3.4 | % | 555,259 | 578,895 | -4.1 | % | ||||||||||
| Cannabis Retail | 83,170 | 75,152 | 10.7 | % | 311,689 | 289,980 | 7.5 | % | ||||||||||
| Cannabis Operations | 37,092 | 26,044 | 42.4 | % | 109,470 | 87,071 | 25.7 | % | ||||||||||
| Investments | - | - | 0 | % | - | - | 0 | % | ||||||||||
| Corporate | (16,663) | (12,239) | -36.1 | % | (55,970) | (46,940) | -19.2 | % | ||||||||||
| Total | 257,679 | 248,450 | 3.7 | % | 920,448 | 909,006 | 1.3 | % | ||||||||||
| Operating Income | ||||||||||||||||||
| Liquor Retail | 12,325 | 10,120 | 21.8 | % | 34,781 | 24,655 | 41.1 | % | ||||||||||
| Cannabis Retail | (8,997) | (849) | -959.7 | % | (1,742) | 4,840 | -136.0 | % | ||||||||||
| Cannabis Operations | 4,391 | (65,749) | 106.7 | % | 2,663 | (112,744) | 102.4 | % | ||||||||||
| Investments | (63,724) | (5,217) | -1121.5 | % | (50,013) | 11,746 | -525.8 | % | ||||||||||
| Corporate | (20,084) | (23,322) | 13.9 | % | (89,500) | (91,668) | 2.4 | % | ||||||||||
| Total | (76,089) | (85,017) | -10.5 | % | (103,811) | (163,171) | 400.2 | % | ||||||||||
| Adjusted Operating Income | ||||||||||||||||||
| Liquor Retail | 12,325 | 10,120 | 21.8 | % | 34,781 | 24,655 | 41.1 | % | ||||||||||
| Cannabis Retail | 6,003 | (849) | 807.1 | % | 13,258 | 4,840 | 173.9 | % | ||||||||||
| Cannabis Operations | 4,439 | (7,715) | 157.5 | % | 3,091 | (52,728) | 105.9 | % | ||||||||||
| Investments | (63,724) | (5,217) | -1121.5 | % | (50,013) | 11,746 | -525.8 | % | ||||||||||
| Corporate | (19,515) | (23,433) | 16.7 | % | (87,261) | (86,541) | -0.8 | % | ||||||||||
| Total | (60,472) | (27,094) | -1355.1 | % | (86,144) | (98,028) | 133.4 | % |
SNDL is Canada's largest private sector liquor
retailer, operating at March 17, 2025 in 165 locations, predominantly in Alberta, under its three retail banners: "Wine
and Beyond" (13), "Liquor Depot" (19), and "Ace Liquor" (133).
| Three months ended December 31 | Year ended December 31 | |||||||||||||||||
| ($000s) | 2024 | 2023 | % Change | 2024 | 2023 | % Change | ||||||||||||
| Net Revenue | 154,080 | 159,493 | -3.4 | % | 555,259 | 578,895 | -4.1 | % | ||||||||||
| Gross Profit | 38,236 | 38,396 | -0.4 | % | 139,706 | 137,286 | 1.8 | % | ||||||||||
| Gross margin | 24.8 | % | 24.1 | % | 0.7 | pp | 25.2 | % | 23.7 | % | 1.4 | pp | ||||||
| Operating Income | 12,325 | 10,120 | 21.8 | % | 34,781 | 24,655 | 41.1 | % | ||||||||||
| Adjusted Operating Income | 12,325 | 10,120 | 21.8 | % | 34,781 | 24,655 | 41.1 | % |
Net revenue for Liquor Retail
continued to decline in the fourth quarter of 2024, although at a slightly slower pace than in previous quarters, as we continue to experience
market demand softness. Same store sales (2) decreased by -3.5% in the fourth quarter, and -4.6% for the full year.
Operating Income expanded significantly
in both the fourth quarter and the full year, despite the revenue declines, driven by the introduction early in the year of our proprietary
data licensing program, enhanced pricing and mix management strategies, including private label expansion at accretive margins, as well
as cost optimization and in-store productivity improvements.
SNDL is one of Canada's largest private-sector
cannabis retailer, operating at March 17, 2025 in 185 locations under its three retail banners: "Value Buds" (117), "Spiritleaf"
(67, of which 8 are corporate stores and 59 are franchise stores), and "Superette" (1). The Company's Cannabis Retail
strategy is based on several pillars, including the quality of its store locations, its range of products, and the unique experiences
provided to customers. Using data and insights from a large volume of monthly transactions enables SNDL to leverage technology and analytics
to inform and improve its retail strategy.
| Three months ended December 31 | Year ended December 31 | |||||||||||||||||
| ($000s) | 2024 | 2023 | % Change | 2024 | 2023 | % Change | ||||||||||||
| Net Revenue | 83,170 | 75,152 | 10.7 | % | 311,689 | 289,980 | 7.5 | % | ||||||||||
| Gross Profit | 20,490 | 20,045 | 2.2 | % | 78,827 | 73,690 | 7.0 | % | ||||||||||
| Gross margin | 24.6 | % | 26.7 | % | -2.0 | pp | 25.3 | % | 25.4 | % | -0.1 | pp | ||||||
| Operating Income | (8,997) | (849) | -959.7 | % | (1,742) | 4,840 | -136.0 | % | ||||||||||
| Adjusted Operating Income | 6,003 | (849) | 807.1 | % | 13,258 | 4,840 | 173.9 | % |
Net revenue for Cannabis Retail
grew dynamically over the full year, and particularly in the fourth quarter, as our Value Buds banner continues to gain market share,
and we also run some additional promotional activities in the fourth quarter. Same store sales increased by +6.3% in the fourth quarter,
and +3.5% over the full year.
Operating Income was impacted
in the fourth quarter by a $15 million Spiritleaf intangible asset impairment, as we have converted several Spiritleaf stores into
Value Buds. These conversions are increasing revenue, profitability and cash flow, and therefore create shareholder value. However, when
the profit pool associated with the Spiritleaf intangible asset was reduced, it triggered the one-time non-cash impairment.
Adjusted Operating Income excludes
the Spiritleaf intangible impairment, showing the underlying operational profitability of the segment, which has seen a material
improvement when compared to the previous year, both in the fourth quarter and the full year.
SNDL has a diverse brand portfolio from value to premium,
emphasizing premium inhalable formats and a full suite of 2.0 products. With enhanced procurement capabilities and plans to continue evolving