At its 77th annual general meeting, Agropur also announced a new three-year cost reduction target.
The cost-reduction target of $53.6m (C$75m) over three years, set in 2012, was exceeded at $60m (C$84m). In 2016, Agropur is launching a new three-year $71.5m (C$100m) cost-reduction program.
Revenues for the financial year ended November 1, 2015 totalled $4.2bn (C$5.9bn), a 26% year-over-year increase, and adjusted earnings from operations or adjusted EBITDA (excluding the impact of the accounting treatment of Davisco’s inventory and certain one-time expenses) amounted to $218.7m (C$306m), a 10.2% increase. Agropur declared $29m (C$40.6m) in patronage dividends. Equity stood at $1.29bn (C$1.8bn).
Pleased with results
“We are satisfied with our growth and our results, which reflect a solid operational performance,” said Serge Riendeau, president of Agropur.
“The growth was driven by our strategic choices of recent years, which have positioned us more effectively than ever for long-term development.”
Robert Coallier, Agropur CEO, added, “In 2015, we pressed ahead with our development efforts to position ourselves for the future while maintaining our growth. Our clear strategy, our investments in our plants, our brands and our new organizational structure are assets that give us confidence and optimism going forward.”
Integration of acquisitions
Agropur said that 2015 was largely devoted to significant investment in manufacturing infrastructure totalling $200m (C$280m), and to consolidation and integration of the merger and acquisitions made in 2014 and 2015.
The acquisitions of the dairy assets of Northumberland in New Brunswick and Sobeys in Western Canada were completed. The company noted that the addition of the five acquired plants gives the Cooperative a national footprint.
US operations accounted for total revenues at 44%, compared with 36% in 2014.
Major investor contribution
In December 2015, the company says, its current institutional investors put in $214.5m (C$300m) in Agropur in the form of preferred shares, in addition to the $226m ($470m) invested in 2014. The new financing enabled Agropur to reduce its bank debt and gave it more flexibility to continue acting as an industry consolidator.
“We are very pleased that these investors are contributing to Agropur’s growth,” said Coallier. “Agropur intends to continue developing its business as a major player in the North American marketplace in the years to come.”
Founded in 1938, Agropur Cooperative has 3,367 members and 8,000 employees. Agropur processes more than 5.6bn liters of milk per year at its 39 plants across North America with brands and products including Natrel, Québon, OKA, Farmers, Agropur Signature, Agropur Grand Cheddar, Island Farms, BiPro, and the Ultima Foods joint venture’s iögo and Olympic brands.