Saputo vs. Fonterra: who showed stronger margin improvements in Q1 2023?

Mathieu Geuskens & Amandine Dayre
Published on
June 26, 2023

In our latest report on the dairy industry, we provide a comprehensive analysis of the Q1 2023 financial performances of two major system players, Saputo and Fonterra. Our focus is on examining their margins and comparing how they stack up against each other. For a deeper understanding of the Q1 2023 results of other top dairy companies, we invite you to download our report below.

Margin Improvements YoY for both players in Q1 2023

In 2022, both dairy processors seized the opportunity presented by higher prices, leading to important margin improvements. Both Saputo and Fonterra witnessed an increase in their gross margins between Q1 2022 and Q1 2023. By combining this average gross margin increase of 5.2 points with stable operational expenses, these companies achieved significant growth in their operational margins.

Margins – EBIT as % of net sales

Surprisingly, the decrease in prices during Q1 2023 did not have a substantial impact on the margins of these companies. Fonterra continued to improve its margins, while Saputo's margins slightly softened. This can be attributed to the strategic actions taken to manage high costs in 2022, which now contribute to increased profitability without a significant rise in operational expenses.


Saputo experienced a notable rise in profit margins, with an increase from 2.8% in Q1 2022 to 5.6% in Q1 2023. Despite a slight decline in margins during Q1 2023, Saputo's operational profits more than doubled compared to the same quarter in 2022. The company successfully recovered its gross margin, reaching a record level of 31.5% of net sales. However, increased operational expenses resulted in Saputo's EBIT margin decreasing from 6.5% in Q4 2022 to 5.6% in Q1 2023.


Fonterra showcased an even stronger margin improvement during this period. Their margin increased significantly from 3.5% in Q1 2022 to an impressive 10.9% in Q1 2023. With sales also experiencing significant growth, Fonterra achieved remarkable operational profits (EBIT), more than tripling from €130 million in Q1 2022 to €421 million in Q1 2023. It's important to note that these figures exclude the proceeds from the sale of Fonterra's Chilean business, Soprole.

EBIT margins – in € millions


When comparing the margin improvements of Saputo and Fonterra in Q1 2023, Fonterra demonstrates stronger performance. Fonterra's substantial margin increase, coupled with sales growth, resulted in significant operational profit growth. Meanwhile, Saputo, despite experiencing a slight decline in margins, achieved notable operational profit growth compared to the previous year. For a comprehensive understanding of the Q1 2023 performance of these dairy giants and more, we invite you to download our detailed report below.

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