Sollio Agriculture’s net sales for the 2022–2023 fiscal year came in at $2,802 billion, compared to $2,929 billion for 2021–2022. This $127 million decrease is primarily due to lower input prices for most commodities in a volatile market, particularly those of grain and fertilizer, and slightly lower volumes in feed and certain crop inputs. 

The economy remains unstable, with the impact of inflation and high interest rates still important, and new geopolitical challenges added to those that are still ongoing. Despite these many challenges, Sollio Agriculture has managed to stay on course, delivering significantly improved operating results and continuing to pursue its full potential. In particular, we performed well against key indicators such as our targeted debt level and earnings before interest, tax, depreciation and amortization (EBITDA). 

Livestock Production 

Net sales in the livestock production activities were down from last year. In Québec, the commercial volumes declined, particularly in the pork sector, with lower production as a result of reduced processing demand, and in dairy, where cash flow pressure at the farm level led to a tendency to minimize herd feed costs. In the West, however, net sales increased as higher grain ingredient sales outweighed lower revenue from complete feed. In the Atlantic provinces, the slight drop in sales was the result of volume declines in pork and poultry production, which outweighed gains in dairy and other ruminant production. 

Overall, contributions from partnerships in Québec were down from the prior year, mainly due to declining margins, higher freight costs and challenges in pork production activities. Additionally, Couvoir Côté’s results were affected by the impact of avian flu at one of its egg suppliers, which resulted in higher supply costs to the hatchery. 

At the same time, poultry volumes increased through the period. Investment in infrastructure, recruitment of experienced staff and improvements in operational processes led to a substantial improvement in chick quality through the second half of the year, with a corresponding positive impact on results and customer satisfaction. 

Crop Production 

The crop production activities performed well this year, with net sales that exceeded expectations, albeit down from 2021–2022, which itself was a record year. This was mainly due to a sharp fall in fertilizer prices during the procurement period. Overall, the majority of Canadian joint ventures performed extremely well over the past year, even with results below record contributions from the prior year. 

In Eastern Canada, volumes were significantly higher with reductions in crop input prices. In Western Canada, sales revenue was down due to a general decline in commodity prices combined with high market volatility throughout the year. 

Revenues from crop protection product sales were lower in all regions, mainly as a result of a drop in glyphosate pricing from its peak in 2022. Simultaneously, the trend continues where a number of older molecules are being replaced by higher-value products that are safer and more selective. Organic product sales remained stable. 

Among our seed activities, Maizex performed well. The business benefited from higher sales volumes and prices across the country, with strong growth in Western Canada and a breakthrough in soybean and corn in the Atlantic provinces. Volumes of other seed products were generally lower across all regions, particularly in cereals and exclusive and non-exclusive forage products. 

Exit from grain merchandizing 

Net sales in the grain activities were down in 2023, in line with planned initiatives for an orderly exit from this business segment. In addition to the sale of Ontario Grain’s assets, remaining export contracts were finalized in 2022–2023, considerably reducing the volumes merchandized compared with previous years. Results from our shares in Sollio & Grains Québec were down from the prior year, mainly due to higher operating costs and tighter margins. 

Highlights of the year 

Last year saw the completion of a major strategic planning exercise which established a series of initiatives to achieve operational excellence and optimize our product and service offering while improving overall performance of the network. Continuing the work started in recent years, the strategy focuses on our core business of supplying farmers with innovative, relevant and sustainable inputs and solutions that add value to their businesses. The groundwork has now been laid so that we can begin implementing these initiatives in the coming fiscal year. 

Sollio Agriculture’s technological development remains a priority, particularly to ensure that our systems and technological tools are reliable and that data is properly protected. We are also continuing our initiatives to encourage more farmers to adopt our digital tools, which promote more sustainable 

Another highlight has been the rollout of our corporate responsibility action plan, with the launch of many promising projects designed to help us deliver on our commitments. Concrete examples include the commissioning of the CRF AgriTech plant for manufacturing PurYield coated fertilizer; our participation in AgroCarbone Grandes Cultures to support actions to reduce and sequester greenhouse gases on farms; and our adoption of a framework for sustainable agriculture that will guide our selection of projects and investments, particularly those related to innovation and technology. These projects help make our services more relevant amidst efforts to fight and adapt to climate change. Joint consultations of our stakeholders in collaboration with Sollio Cooperative Group also gave us a better understanding of our organization’s environmental impact and helped us identify the issues to prioritize in light of their expectations. 

To achieve our goals, we rely on an essential resource: our people. They have rallied to help us meet our objectives of the past year, and I would like to thank each and every one of them for their efforts. Special mention also goes to the employee experience initiatives we’ve put in place to engage, retain and foster the growth of our valued team—initiatives we’re committed to continuing to deliver. 

In closing, I would like to thank Pascal Houle, Chief Executive Officer of Sollio Cooperative Group, who continues to support us as we implement our strategic plan and improve our financial health. I would also like to thank Sollio Cooperative Group’s Board of Directors for supporting projects that allow us to pursue our strategic objectives while navigating ongoing volatility in the agribusiness environment. We can count on our local presence and expertise to help us reap the full benefits of our business model and contribute to the cooperative’s prosperity. 

BMR Group reported positive results for the past fiscal year with total sales reaching $1.464 billion, shrugging off complicated economic conditions. 

The organization had to deal with headwinds during 2023. Pressure on revenues was significantly increased by unusually high interest and inflation rates, higher household debt levels, a record low number of housing starts, primarily in Québec, and commodity prices that returned to the same levels as in 2020 and 2021. 

Nonetheless, BMR Group delivered solid results, mainly driven by our team’s great agility, the numerous initiatives implemented to streamline operations and the in-depth review of several product categories. In addition, we implemented pricing zones and revised the circular process to improve consumer price perception. All in all, BMR Group’s performance exceeded expectations, despite the economic environment. 

The BMR family continues grow 

BMR Group is constantly strengthening its presence in the construction and renovation industry, and the BMR network grows year after year. Vendors share common values and choose BMR group because they see us as a partner in pursuing growth and ensuring sustainability of their business. Four new vendors from Québec and Ontario joined the BMR network this year, enabling us to increase our sales volumes, expand our footprint in key markets and strengthen our Eastern Canada growth objective. 

2023 - A year highlighted by private brands and the main product category review 

Innovative initiatives were implemented to further bolster customer appreciation for our brand. To offer consumers a wider range of up-to-date products, we continued the review of the outdoor, flooring, tools and finishing plumbing categories. Consumers greatly appreciated this major transformation, and stores are already seeing positive results. 

BMR Group also improved and enhanced its product offering under private brands. With the deployment of these brands, we are in a position to provide our customers with a more competitive offering of comparable quality to national brands. We will continue our efforts on this front over the coming months, when a number of additional products will be launched. 

BMR Group also announced in June 2023 the signing of a strategic partnership with A.R.E.N.A. Alliance to supply renovation products and home equipment. This new partnership will no doubt help strengthen our competitiveness in the market and position ourselves as an undisputed leader in the industry. With a number of offices across the globe, A.R.E.N.A. Alliance is now, following the arrival of BMR Group, the number four in retail sales worldwide, with a combined volume of €16 billion and 4,500 stores across 12 countries.ité de no 

Our team, a driving force 

BMR Group is making significant efforts every day to ensure its team members’ health and well-being. During the year, we established a diversity, equity and inclusion policy and opened an educational daycare at our head office in Boucherville. We continued to focus on the development of our employees and vendors, including a new cohort of the Le Tremplin program, which offers managers the opportunity to acquire and sharpen management skills. We also advanced the project to transform the Marketing team into a matrix structure, which will ultimately enable us to improve the product and service offering to support the growth of BMR and its vendor network. 

Well positioned for the future 

Amid indicators pointing to an economic slowdown in Canada in 2024, we’re kicking off the new year with confidence and enthusiasm. BMR Group is based on solid foundations, a talented team and a network of vendors and partners together with whom we shall face the challenges ahead. We will continue to optimize our operations, improve services offered to our vendors, actively recruit new vendors and strengthen our alliance with A.R.E.N.A. 

We believe that demand will be strong over the next decade, considering the current housing shortage and immigration projections. In this context, BMR must further strengthen its position with the contractor clientele and reaffirm its commitment to being a leader in renovation and construction. Lastly, I would like to thank our vendors, network cooperatives and Sollio Cooperative Group for making possible what we achieved last year. I also extend my warmest thanks to our team members for their dedication to making BMR Group the large and successful organization it is today. 

BMR, welcome home! 

After a difficult year in 2022, decisions made by Olymel had a marked impact, enabling the organization to post financial results for 2023 that exceeded its objectives. In particular, net sales rose to $4.708 billion from $4.598 billion for the previous year. 

A focus on value-added products in the fresh pork sector contributed to a significant improvement in meat margins, and, despite a number of challenges, we delivered solid results for the year. The measures rapidly implemented were effective, limiting impacts on profitability. 

While the poultry sector has generated excellent results over the past three years, 2023 stands out for its remarkable performance. This was partly due to formula-based sales, strong demand for dark meat products and excellent margin management. 

Site restructuring and tight control of operating costs led to improvements in manufacturing overhead costs in 2023. 

In human resources, renegotiation of collective bargaining agreements, the arrival of temporary foreign workers and measures taken to address absenteeism and employee retention enabled Olymel to operate plants at near full capacity at the end of 2023. 

In the fall, we carried out an optimization process for our distribution sector and administrative operations by creating a strategic centre in Boucherville, where Olymel will relocate its head office in 2024. 

Hog production 

As in last year, the results for both the Western and Eastern hog production sectors were negatively affected by high grain prices. 

In the East, following the announcement of the discontinuation of slaughtering at the Vallée-Jonction plant, Olymel temporarily reduced its hog production last fall. This decision made it possible to rebalance production and slaughtering capacity while awaiting provincial decisions on the level of reductions. 

Out West, we had to announce the closure of five farms and breeding facilities in July. The impact will be felt at the Red Deer plant beginning in February 2024. The market conditions that have prevailed for several months have led Olymel to reduce production by around 200,000 hogs per year in the West, to rebalance production and slaughtering capacity. 

Lastly, Olymel has actively continued its work with public authorities and the industry to implement monitoring measures to prevent an outbreak of African swine fever, in addition to collaborating on a plan to reduce production in the event of an outbreak of the disease in Canada. 

Fresh pork – East 

The Eastern fresh pork sector’s results improved significantly in 2023, a year marked by major restructuring, including the closure of our Saint-Hyacinthe, Princeville and Vallée-Jonction plants. In the spring, we also announced a reduction in slaughtering of 855,000 hogs. 

The marketing agreement with Les Éleveurs de porcs du Québec was renewed in April, providing for new pricing formulas for hogs that better reflect the market conditions in which we operate. I would like to commend the quality of the discussions we had and the spirit of good faith in which the negotiations were conducted, as well as the efforts made by all parties involved to reach this agreement. 

Regarding sales, the average number of loads to China continued to decrease due to more value-added production of certain products such as boneless pork legs. Note that all our fresh pork plants were authorized to export to China in 2023. Volumes of chilled products bound for Japan declined slightly compared with the previous year, while the launch of these same products in Canada was a great success. 

The number of hogs slaughtered and the average weight also decreased, affecting the number of kilos sold. Olymel’s market share in Québec also declined due to the decrease in slaughtering. 

Fresh pork – West 

The Western fresh pork sector ended 2023 with results exceeding prior year performance, and as in the East, benefitted from full access to the Chinese market. This partly explains the increase in sales which, combined with lower supply costs, resulted in positive meat margins higher than in the previous year. 

Since the Red Deer plant carries out both slaughtering and cutting in a single shift throughout the year, deboning rates increased significantly, and the level of chilled product sales was maintained. 

Further processed pork 

The further processed pork sector’s results were significant in 2023. The sector had to be reorganized and optimized, which involved closing the Laval and Blainville plants and transferring hams, deli meats, pâtés and cretons to the Saint-Henri, Trois-Rivières and Cornwall plants. 

In 2023, all plants in the further processed pork sector participated in renewing a major private brand contract, which enabled Olymel to meet its objective of increasing profitability. 

Bacon 

Importantly, in 2023, the bacon sector was hit with a long general strike of union employees at the Drummondville plant, requiring several reorganizations of operations and transfers of production to the Cornwall plant. Despite this situation, the bacon sector posted another record year of profits in 2023, surpassing the previous year. 

Fresh poultry 

Despite recording a decline, the poultry sector continued to perform very well in 2023, after generating historic results in 2022. The year was marked by the sale of Olymel’s interest in Volaille Giannone in April and the purchase, at the end of 2023, of a guaranteed supply volume, representing approximately 40,000 birds per week. This purchase, along with increased slaughtering speed and chain efficiency, will enable us to generate even higher poultry margins in the coming year. 

Selling prices, which remained at high levels, combined with continued initiatives to optimize our operations, enabled the poultry sector to generate a significant contribution. 

Olymel’s market share for turkey in Canada and Québec declined in 2023. Bird quality continues to be a major issue, as well as cysts in male birds. However, it appears that the production volumes in 2024 will have a negative effect on our results, amid increased imports of turkey meat from Chile. 

Further processed poultry 

Continuing the trend in 2022, further processed poultry generated excellent results in 2023. Even though the number of kilos sold were lower compared with 2022, increased selling prices resulted in higher meat margins. The renegotiation of several collective bargaining agreements led to an increase in direct labour costs. 

A restructuring of operations at the further processed poultry plants began at the end of 2023, with the announcement of the closure of the Paris, Ontario plant that will lead to the redevelopment of the Oakville plant in 2024 and to investments at the Sainte-Rosalie plant to boost production capacities. 

In the food service sector, the contracts with “formula-based” selling prices created in 2022, which made it possible to ensure contributions regardless of changes in live bird prices, proved to be successful in a context of high livestock prices. In the retail sector, higher margins offset a decrease in volume. 

Feeding the world with tomorrow in mind 

In 2023, Olymel was able to make the necessary and difficult decisions to get through an exceptional crisis and turn around its financial position of the last few years, 2022 in particular. 

The impact of all the actions carried out quickly proved effective, and all these measures, united around an optimization plan, enabled us to achieve a historic turnaround in the organization’s results in one year. Nonetheless more efforts are still needed to reach the break-even level in the fresh pork sector and maintain our momentum in the other sectors. 

Major projects were also launched during the year, including the implementation of brand-new integrated management systems (ERP, HRMS), the development of a corporate responsibility policy, the streamlining and optimization of our distribution and storage operations and, finally, a major human capital project. 

Olymel has embarked on a major strategic planning project and value creation initiatives for taking short-term actions and making informed medium and long-term decisions. An important focus for 2024 will be working capital management to continue reducing debt. 

I would like to thank Pascal Houle, Chief Executive Officer of Sollio Cooperative Group, and Richard Ferland, President of the Board of Directors, and all the directors, for their unwavering support of Olymel. 

Finally, I would like to acknowledge and express all my gratitude for the efforts and perseverance of our employees who, during this year of major changes, were able to adapt, to support our organization as it evolves and have demonstrated, through their resilience, the strength of their commitment. I am extremely proud of what we have succeeded in achieving together. 

We will continue to do what we do best: feeding the world with tomorrow in mind!