The end of the lean years for Agropur

After being rocked hard by two lean years in 2018-2019 and a reorganization in order to reduce its debt and refocus its dairy activities, agricultural cooperative Agropur once again during its past fiscal year found a path to profitability and resumed paying dividends to its members, a practice it had suspended during the past two years.


On Friday, Agropur revealed the results of the last financial year, which show a certain recovery compared to the situation two years ago, when the group’s debt peaked at 2.4 billion, in April 2020.

Summarizes Emile Courdo, CEO of Agropur, in his position, since October 2019, when he replaced Robert Kollier who campaigned extensively, but is costly to expand into the United States.

To fund US acquisitions and complement its network of Canadian factories, Agropur had to issue in 2016 for 770 million preferred shares of large institutional investors such as Caisse de dépôt, Solidarity Fund, Desjardins Group and National Bank.

Last year, due to lack of liquidity, Agropur was forced to suspend the payment of dividends to its premium shareholders as well as, for the second year in a row, cash dividends to its 3000 members of agricultural producers.

We have significantly reduced our debt by fully paying our preferred shareholders $770 million and paying $100 million in arrears of dividends. In total, we have reduced our total debt to 1.3 billion,” says the CEO.

In addition to repaying 1.1 billion debts over the past year and a half, Agropur has also been able to renegotiate its remaining debt on more favorable terms,

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Agropur has used the results of the disposal of some activities considered non-strategic, such as its Aliments Ultima yogurt division in Lactalis, its factory in Grand Rapids, Michigan, and its milk transport business in Quebec, to reduce the size of its debt.

These asset allocations made it possible to repay 500 million while another tranche of 500 million was created through increased profitability, better management of investments and non-payment of dividends to its members who subsequently contributed to the reorganization of the balance sheet of their collaboration.

This year Agropur is announcing a 30 million discount to its members as well as a share buyback that will total up to 25 million. “It’s a gradual recovery that represents the return of stability,” says Emile Cordo.

low income

Last spring, Agropur members voted to make better use of cash flow to ensure the co-op’s sustainability while reducing debt to a level between 2 and 3 times EBITDA. The ratio was lowered to 3.3 following the latest payment.

Agropur finished its fiscal year with revenue of 7.3 billion, down from 7.7 billion a year earlier. This situation can be attributed in part to the end of some activities, particularly in yogurt, but it also reflects the weak prices of cheese in the United States.

In 2020, we set record prices at $3 a pound, and this year prices are over $1.50 and $1.75 a pound. There has also been a tightening in the exchange rate,” the CEO notes.

Agropur ended the year with a surplus before dividends and taxes of 338 million, which is an increase of 269 million compared to 2020.

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“We are now in a position to reinvest in our growth, especially in Canada where we need to be more efficient. We will invest in automation in many of our plants.

“We invested 150 million this year in the United States in a new cheese stick factory in Wisconsin. We will continue to develop private brands, food services and industrial sales, and this is where we are strong and where there is growth and that is three-quarters of our total sales,” explains Emile Cordo .

In Canada, Agropur’s activities in the manufacture and sale of white milk are still significant, but they are in decline which is why the group wants to develop organic or lactose-free products.

Emile Courdo believes that a large part of the reorganization work has just been done, but there is still a lot to be done. “We will always have to review our product range. I am very happy with what has been accomplished and I owe it to our employees and members who have supported us through difficult times.”

Other crises will arise, but with an improved and lighter balance sheet, the dairy cooperative will be able to handle better, the CEO notes.

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