A MESSAGE FROM GEORGE H. CROFT, PRESIDENT & CHIEF EXECUTIVE OFFICER

A Standout in the Brewing Crowd

When I wrote to you a little over a year ago the pandemic had just begun to upend our ways of living, and our ways of doing business. In our lifetimes, we have not witnessed or had to endure any event or circumstance as daunting as that of the past year. It has taken a toll on individuals and organizations alike and tested our resolve daily. And it’s allowed all who own and operate businesses to appreciate the broader value of a company.

A few weeks ago we announced a relief program to help pubs and restaurants by offering a selection of our beer portfolio essentially at cost. Pub owners and workers have been among the hardest hit and this industry leading initiative stands to provide significant relief without any material cost to our business. In this and a number of other community contributions, we reinforce ourselves as a pillar of the regional economy with all its benefits and responsibilities.

It is with extreme gratitude that I acknowledge the tenacity and ingenuity of the team of extraordinary individuals I have the privilege of working with at Waterloo Brewing. Thanks to them not only did our company continue to operate without interruption, working together we added to our growth momentum in the market and we used this time to forge new advantages for our business and a deeper connection to our community.

We installed a new can line that increases our canning capacity by 144% and overall liquid capacity by 40%. And we’re going to need it. Our owner brands volume is growing at double-digits, our co-manufacturing of high-value global beverage brands more than doubled, we are growing in all sales channels and we are significantly outpacing the industry in the grocery channel which has only become more essential over the past year.

Our EBITDA performance in fiscal 2021 experienced an impressive 31% increase to $15.2 million, compared to $11.6 million in the prior year. Net revenue increased 44% to $86.7 million, up from $60.3 million in the prior year.

These results were achieved through outstanding growth in our owner brand sales volumes with total volume growth of +18% over the previous fiscal year. Our Laker family, which is the unwavering pillar of our business, experienced +19% growth which is remarkable for a mature brand and testament to our consistent sales and marketing approach on Laker. Our Waterloo family of craft beers showed tremendous growth of +20% in the highly competitive craft beer segment. Landshark® grew +23%, driven by another year of successful promotions and increased popularity.

Another important driver to our growth is the success of our strategic co-manufacturing business. While this business holds great value in increasing capacity utilization and boosting the relative profitability of everything we produce, we focus on global beverage companies who are looking for production stewards of their valuable brands. Revenue generated from this business increased by 125% in fiscal 2021. Our expertise in this high margin, strategic co-pack business has established us the reliable and trusted partner for renowned brewers and distilleries.

Fortified and emboldened by these arduous times, we bring great ambition and the determination of a winning mindset to make this brewery the very best business, place to work and contributor to Ontario that it can possibly be. Anything that once needed to be fixed in this business has been, and we are all systems grow! We are set up for transformational success.

Cheers!,

George H. Croft
President and CEO, Waterloo Brewing Ltd.