Landmark year for Agropur Cooperative: revenues surge 21.3% to $4.7 billion
Longueuil, February 11, 2015
Agropur Cooperative held its 76th Annual General Meeting today and announced revenues of $4.7 billion and restated* earnings before interest, taxes, depreciation, amortization and joint ventures (EBITDA) of $270.6 million for the financial year ended November 1, 2014. Revenues and EBITDA increased 21.3% and 3.1% respectively. Agropur declared $92.3 million in patronage dividends in 2014. Members’ equity stood at $1.2 billion.“2014 was certainly an historic and strategically important year for our organization,” said Robert Coallier, CEO of Agropur. “For the first time in its history, the Cooperative’s sales passed the $4 billion mark. At a time of fast-paced consolidation in the global dairy industry and a highly competitive Canadian marketplace, we were able to seize opportunities for growth and secure a leading position in North America.”
Focus on growth
From its beginnings as a regional co-op, Agropur has grown into a North American leader. The Cooperative now processes 5.4 billion litres of milk on an annualized basis and is one of the 20 largest dairy processors in the world, one of the top 5 makers of cheese and ingredients in the U.S. and the largest dairy processor in Canada on a volume basis.
During the year, Agropur completed a merger (Dairytown Products) and a number of acquisitions, including the two largest in its history: Davisco Foods International in the U.S. and Sobeys’ dairy processing operations in Western Canada. The transactions diversified the Cooperative’s product portfolio, expanded its dairy processing capacity and extended its geographic reach.“The merger with Dairytown Products in New Brunswick combined the dairy processing assets held by the producer-members and ensured that those legacy assets would remain in the hands of producers. Our cooperative model equips us to meet global challenges,” commented Serge Riendeau, President of Agropur. “The acquisition of Sobeys’ dairy processing assets was accompanied by long-term supply agreements. And the Davisco acquisition has doubled Agropur’s U.S. operations and increased our total milk supply by 50%.“The transformative moves we have made are part of a solid growth strategy aimed at ensuring the organization’s future,” added Mr. Coallier.
The Cooperative now has nearly 8,000 employees and 40 plants in Canada and the U.S.
Flagship brands meet the competition
In 2014, Agropur continued investing successfully in its flagship brands, including OKA, Natrel and iögo. Sales of OKA, the standard for fine cheese in Canada, increased significantly during the year. With a new brand image that highlights its main characteristics (superior quality, freshness, naturalness) Natrel grew its market share in all categories. iögo, made by Ultima Foods, a joint venture owned by Agropur and Agrifoods, continues to make headway with a market share of nearly 12% in Canada after only two years in existence.
Agropur recently invested more than $100 million in developing the Canadian fine cheese market. Quality products such as Frère Alphonse, an Oka aged 110 days, and Le maillon fort, a new double creme Brie, were developed and have met with strongly positive consumer response. “These investments will help us deal with major changes such as the Canada-European Union Economic and Trade Agreement, which will bring an additional 17,700 tonnes of European cheese into Canada. We hope that the allocation of the new import quotas will be made in a way to avoid cannibalizing the domestic products”, said Mr. Coallier.
Building the Agropur of the future
In December 2014, Québec institutional investors and banks – including the Caisse de dépôt et placement du Québec, the Fonds de solidarité FTQ, National Bank, Investissement Québec, Capital régional et coopératif Desjardins and Fondaction CSN – invested $470 million in Agropur in the form of senior preferred shares. The transaction will help support Agropur’s growth strategy and finance its acquisitions. “We thank these investors and all our financial partners for their confidence,” said Mr. Riendeau. “We made some historic moves in 2014 but our growth won’t end there. In the coming years, Agropur plans to continue its development in high-potential Canadian, U.S. and global markets.”
Sustainable development and social responsibility
At the same time, Agropur is pressing ahead with sustainable development initiatives. A number of projects aimed at reducing potable water usage and energy consumption at source are currently in progress. The Ville Saint-Laurent plant has completed a major water reduction project that has yielded annual savings of 121 million litres. With respect to social responsibility, Agropur distributed $2 million in donations and sponsorships to support the health and welfare of children and families and help groom the next generation in the agri-food industry.
Founded in 1938, Agropur Cooperative is a leading player in the North American dairy industry with sales of more than $4.7 billion as of the end of 2014. The Cooperative is a source of pride for its 3,473 dairy producer members and 8,000 employees. Agropur now processes more than 5.4 billion litres of milk per year in its 40 plants across North America and boasts an impressive line of well-known brands and products, including Natrel, Québon, OKA, Farmers, Central Dairies, Sealtest, biPro, Island Farms, Agropur Grand Cheddar, and the Ultima Foods joint venture’s iögo and Olympic brands.
* Restated EBITDA excludes the impact of the accounting treatment of Davisco’s inventory and some one-time expenses.
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