Agropur posts continued growth
Revenues and earnings from operations increase for the 10th consecutive year
Revenues up 26%, adjusted earnings from operations up 10.2%
Significantly improved results at Natrel USA and Ultima Foods
US accounts for 44% of revenues
Longueuil, February 10, 2016
Agropur Cooperative held its 77th Annual General Meeting today and announced revenue and EBITDA increases for the 10th consecutive year. Revenues for the financial year ended November 1, 2015 totalled $5.9 billion, a 26% year-over-year increase, and adjusted earnings from operations or adjusted EBITDA* (earnings before interest, taxes, depreciation, amortization and joint venture) amounted to $306.0 million, a 10.2% increase. Agropur declared $40.6 million in patronage dividends. Equity stood at $1.8 billion.
“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.”
“In 2015, we pressed ahead with our development efforts to position ourselves for the future while maintaining our growth,” added Robert Coallier, CEO of Agropur. “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.”
Brands that build customer loyalty
In 2015, Agropur continued focusing on powerful brands that garner strong consumer loyalty by investing in its flagship OKA, Natrel and iögo brands. Oka sales volume is growing steadily, while Natrel ranked as Canada’s most trusted dairy brand in a University of Victoria survey and iögo captured a 13% market share in Canada and 19% in Quebec.
Capital expenditures and integration of acquisitions
The year 2015 was largely devoted to significant investment in manufacturing infrastructure – totalling $280 million, a record high for Agropur – 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 addition of the five acquired plants gives the Cooperative a national footprint. US operations accounted for a significantly increased proportion of total revenues at 44%, compared with 36% in 2014.
“In 2015, Agropur acted as a proud ambassador for our industry during the Trans-Pacific Partnership (TPP) negotiations, energetically defending supply management,” Mr. Riendeau noted. “The Canadian dairy system, which has clearly proven its benefits for Canada’s consumers, dairy industry and economy, was preserved.”
Important issues remain however and the federal government must maintain the integrity of the supply management system. At the same time, Agropur is working to establish a national ingredients strategy in Canada that will be a win-win for the industry.
The cost-reduction target of $75 million over 3 years set in 2012 was exceeded; synergies and recurring savings amounting to $84 million were generated. In 2016, Agropur is launching a new 3-year $100-million cost-reduction program.
In December 2015, our current institutional investors put in $300 million in Agropur in the form of preferred shares, in addition to the $470 million invested in 2014. The new financing enabled the Cooperative 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 Robert 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 is a North American dairy industry leader. With sales of $5.9 billion in 2015, the Cooperative is a source of pride for its 3,367 members and 8,000 employees. Agropur processes more than 5.7 billion litres of milk per year at its 39 plants across North America and boasts an impressive roster of 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.
* Adjusted EBITDA excludes the impact of the accounting treatment of Davisco’s inventory and certain one-time expenses.
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