Growth International (AFN) Q4 2025 earnings summary

Executive summary

• Fourth quarter revenue rose 4% year-over-year to CAD 396 million, driven by international commercial strength but offset by North American farm weakness, especially in Canada.

• Adjusted EBITDA fell 38% to CAD 48 million, with margin compressing to 12.2%, down 830 basis points year-over-year due to lower farm volumes, cost overruns in Brazil, and North American production inefficiencies.

• Major restructuring underway: executive team reduced from 17 to 8, North American business streamlined, smaller units integrated, and ERP implementation terminated, targeting at least CAD 20 million in annualized SG&A cost savings.

• Dividend suspended and strategic focus on simplification, customer focus, and debt reduction, with renewed emphasis on ROIC metrics.

• Net debt leverage ratio rose to 4.7x at year-end, up from 3.1x year-over-year, reflecting higher debt and lower EBITDA.

Financial highlights

• Farm segment revenue declined 8% year-over-year to CAD 123 million, with Canada down 34% and U.S. up 11%.

• International farm revenue increased 36%, led by Australia.

• Commercial segment revenue grew 10% to CAD 273 million, with international up 18% and U.S. up 9%, but Canada declined.

• Adjusted EBITDA for Farm and Commercial segments both declined 39% year-over-year.

• Full-year 2025 revenue was $1.42 billion, up 1% from 2024, with Farm revenue down 32% and Commercial revenue up 34%.

Outlook and guidance

• Q1 expected to remain challenging, with margin and free cash flow pressure persisting.

• Order book ended at CAD 543 million, down 26% year-over-year, reflecting completed international projects.

• Cautious optimism for improvement in the Farm segment in 2026, but visibility remains limited.

• Commercial segment faces a gap in Brazil as large-scale, financed projects are discontinued; focus shifts to equipment-only sales.

• Management expects up to $20 million in non-recurring restructuring expenses in H1 2026, with at least $20 million in annualized cost savings post-completion.