SNDL reports Q4 and full year 2024 financial and operational results – MEDCAN24

[PRESS RELEASE] – CALGARY, Alberta, March 18, 2025 – SNDL Inc. published its full-year financial results and operating results ending December 31, 2024. This document contains all financial data. Press Release All figures are reported in Canadian dollars, unless specified otherwise.

SNDL’s website also contains a supplemental Investor Presentation and Shareholder Letter. https://sndl.com.

The company will hold a conference call and webcast presentation at 10 a.m. EDT on March 18, 2025. You can find all the information below about the conference.

Management Highlights

• Earnings The total revenue for 2024’s fourth quarter was $920.4 millions, while the entire year revenue for 2024 reached $257.7 billion. This represents a growth rate of 3.7% and 1.3% respectively, compared with the same period of last year. This quarter, as well the entire year of 2024 represent records new for the company. Our combined cannabis business has grown by +16.5% over the last quarter and +10.6% in total.
• Gross Profit Also, the total revenue for 2024 reached new heights, reaching $68.8 in the 4th quarter and $240.3 during the entire year. This represents a growth rate of +20.0% compared with the same period of last year.
• Gross Margin ⁽¹⁾ The new record of 26,7% for the 4th quarter and 26,1% for the entire year is also a first, and represents improvements of +3.6 percentage points and +5.2 percent respectively when compared with the same periods in the prior year.
• Operating loss For the fourth quarter in 2024 the net income for Spiritleaf was $(15.1) million. Restructuring charges were $(0.6). If these $(81.3)million in exceptional charges were excluded, the underlying income for this quarter would have been positive. This exceptional item largely contributed towards the reported full-year operating losses of $(103.8)million.
• Cash flow In the fourth quarter, 2024, the cash flow was negative (44.6) millions, primarily due to Nova’s acquisition of a minority equity stake and the repurchased SNDL shares. The cash flow of the year ended up being positive by $23.3million.
• Cash flow ⁽¹⁾ The fourth quarter 2024 was positive at both $11.6 and $8.9 millions.

Zach George, CEO at SNDL, said that he was pleased by the results of the company’s fourth-quarter 2024 and its full-year 2020. “We have set new records in both quarters and we exceeded our target to achieve break-even-free cash flow during the entire year.” This was achieved while we continued to transform our company by investing in new growth opportunities and improving organizational capabilities. “The SNDL Team is committed to raising the bar beyond 2025.”

In the final quarter of the year 2024 as well as the first month of the following 2025, several strategic decisions were made to strengthen the foundation of the business for success on a long-term basis and to increase shareholder value.

• Nova Cannabis Inc. completed its privatization through the purchase of the remaining minority interest.
• SNDL acquired Indiva Inc.’s business assets, allowing it to position itself as Canada’s leading manufacturer of infused edibles.
• 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
• Purchased 10,764,107 SNDL Common Shares for Cancellation at a price of US$1.81 each share
• High Tide Inc. acquired 4,350,000 shares, or 5.4% of the company.

The company, in addition to its achievements, has also applied to list its shares at the Canadian Securities Exchange. It anticipates that the CSE listing will go live by April 2025. This listing gives its shareholders greater flexibility and options.

Unquestionably, the progress that has been made in the last 12 months is a testament to the financial discipline of the business and its operational performance. This company remains optimistic about the opportunities ahead. Its solid balance sheet, which included $218.4m in unrestricted funds as of December 31, 2024 provides not only the competitive advantage but also flexibility for intelligently investing capital into both organic and non-organic investments that offer attractive returns. As it looks to grow momentum in 2025 and generate $100 million of positive free cash flows annually, the company intends to keep building on its solid fundamentals.

George stated, “We would like to thank all of our employees who have worked so hard and with such passion over the past year in order to achieve the great progress that we’ve made. We also want our shareholders to know how much they trust us and are supportive.”

Highlights of Total Company

Highlights of the Business Segment

SNDL operates and reports its business in four segments, including Liquor Retail and Cannabis Retail. Cannabis Operations and Investments are also included. The “corporate” category includes corporate and shared services expenses as well as revenue eliminations associated with cannabis operations sales to provincial boards, which are then expected to be purchased by licensed retail subsidiaries of the company for resale.

Liquor Retail 

SNDL is Canada’s largest private sector liquor retailer, operating on March 17, 2025, in 165 locations, predominantly in Alberta, under its three retail banners: “Wine and Beyond” (13), “Liquor Depot“, and “Ace Liquor” (133). 

• The fourth quarter 2024 saw a continued decline in net revenue from the retail of liquor, but at a slower rate than previous quarters. This is due to softer market demand. Similar-store sales⁽²⁾ In the fourth quarter of the year, the number of people who were employed decreased by 3.5%.
• Operating income increased in the 4th quarter of the year and for the whole year despite the decline in revenue. The increase was driven by our new proprietary data-licensing program and enhanced strategies in pricing and mix, which included private label expansion with accretive margins as well cost optimization and improvements in in-store productivity.

Cannabis Retail

SNDL is one of Canada’s largest private-sector cannabis retailers, operating on March 17, 2025, in 185 locations under its three retail banners: “The Value Buds” (117), “SpiritleafThe number of stores is 67 (of which 8 are corporate and 59 franchises).Superette” (1). Cannabis retail is the company’s strategy, which relies on several factors, such as the location of the stores, the products they offer, and their unique customer experiences. SNDL uses data insights and a huge volume of monthly sales to help inform and improve their retail strategy.

• The net revenue of cannabis retail has grown dramatically over the past year and in particular in the 4th quarter. This is due to the fact that our value buds banner continues gaining market share. We also ran additional promotions in the 4th quarter. The same store sales rose by +6.3% during the fourth quarter and +3.5% for the entire 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. The conversions increase revenue, cash flow and profitability, which create value for shareholders. When the Spiritleaf asset’s profit pool was decreased, the non-cash, one-time impairment occurred.
• 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.

Cannabis Operations

SNDL offers a wide range of products from premium to value, with a particular focus on inhalables and 2.0. The cannabis operations segment, with its enhanced procurement abilities and plan to evolve towards a cost-effective manufacturing and cultivation operation, is a major enabler in SNDL’s vertical integration.

• Cannabis Operations saw a notable increase in profits and revenues throughout the year.
• Increased distribution by provincial boards, business-to-business and continued attention to consumer innovation, efficiency and quality are driving net revenue increases. Indiva reported revenue of $7.5million between November 4 and December 31, 2024.
• Efficiency improvements and productivity initiatives drive improvements in operating income, gross profit, and net profits.

Investing in the Future

• The company had invested capital in a portfolio of cannabis investments that carried a value of $449.1 millions as of December 31, 2024. This included $413.1 to SunStream Bancorp Inc. The carrying value of this portfolio was decreased by $51.3m in the fourth quarter 2024. This reduction is primarily due to a downward adjustment on the SunStream Portfolio.
• Investment portfolios generated negative operating income in the 4th quarter of 2024 of $(63.7)million, which included $(65.7)million of negative valuation adjustments of equity-accounted investments (SunStream). This valuation adjustment, which is not cash, was triggered by multiple factors. These include increased industry volatility and risk following the Florida adult use vote in November last year, and the poorer performance of Parallel and Skymint due to the delays of the restructuring process.
• Investors and industry alike view the Florida negative vote for adult-use cannabis as a bad development. This is evident by the dramatic decline in valuations of Cannabis operators in different states. SNDL sees this as a positive for its investment in SunStream’s assets. It gives Parallel the time it needs to finish their restructuring without being under additional pressure from a shifting market.
• After the completion of the 4th quarter on the Florida Department of Health, approved the license transfer of Parallel, Feb. 4, 2020. This is an important step in the restructuring of Parallel.
• The company purchased 4,350,000 shares, or 5.4% of High Tide at an average cost of US$2.46 each, on March 17, 2025.

Equity Position

• On Dec. 31, 2020, there will be $667.6 millions of cash and marketable investments including equity-accounted investments and no debt outstanding.
• In an announcement made on Nov. 14, the company said that it had been approved by its board to renew the program of share purchase upon expiration of Nov. 20th, 2024. Share repurchase programs are still available for the company to reduce its outstanding shares. SNDL is continuing to examine the use of the share repurchase program, to the extent the management thinks it’s in the interest of SNDL shareholders. The company purchased 5,002,372 shares of common stock for cancellation during the quarter ending December 31, 2024 at an average cost per share of US$1.84. In January and February of 2025, the company purchased an additional 5,761,735 shares at an average cost of US$1.79 each. The total number of shares purchased during the past six months is 10,764,107, at an average of US$1.81 each.

The company’s website is also available for further information. Notes to the consolidated financial statements Thereto for the years ending Dec. 31, 2020, 2023 and 2024 and the management’s analysis and discussion that accompany it. The documents can be found under the profile of the company on SEDAR+. www.sedarplus.ca EDGAR www.sec.gov/edgar.shtml.

Non-IFRS Measures

Certain financial measures specified in this press release are not IFRS-based measures. The terms used in this news release are not defined under IFRS, and may therefore not be comparable with similar measures reported elsewhere. This non-IFRS measure should not be viewed in isolation, as a replacement for or better than measures prepared according to IFRS. The purpose of presenting and describing these measures is to give shareholders and investors an additional measure for understanding operating results, in the same way as management.