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President’s message

A big step in the right direction


Sollio Cooperative Group has again demonstrated its great resilience, posting financial results that contrast with those of the last two years. With consolidated sales of $8.3 billion, Sollio Cooperative Group generated net earnings of $115.4 million for fiscal 2023. The business turnaround plan and the asset optimization plan have been successes. Our many efforts were not in vain.


The sale of assets has allowed us to reduce our debt and reposition certain sectors, depending on their strategic nature, for the future. Choices had to be made to ensure our actions were as targeted as possible, with the least amount of collateral damage.


We were determined to succeed and rebuild solid foundations. With the optimization plan now completed, the situation has improved, but there are still many challenges. Optimization, operational efficiency and consolidation efforts will need to continue.


The good results of the last fiscal year are encouraging, but we need to remain vigilant. Rising interest rates, inflationary pressures, the labour shortage, market fluctuations and our debt ratio are all factors that call for caution.


To lead us into the future, strategic planning is underway to optimize our performance and make our divisions stronger. The gains anticipated by strategic planning initiatives are structural and are expected to generate benefits, not only in the short term, but more importantly, over the long-term.



Challenges for Sollio and the network 

Over the course of the past year, I had the privilege of touring cooperatives in our network. I made great discoveries and enjoyed inspiring encounters with people who love their work. People for whom cooperation and wealth creation, across all our regions, are priorities at all times: hard-working employees, dedicated leaders and committed producers. Managers and elected representatives are on the lookout for business opportunities to create wealth for their members.


These discussions also provided an opportunity for us to take stock of important issues. Among the major challenges that Sollio Cooperative Group and its network must face is the realignment of hog production and its profitability chain. This is a major challenge for all stakeholders in the pork industry.


Hog production has gone through a serious crisis. No link in the chain has been spared, both in production and processing. Sector consolidation has not only hit Québec, but also the United States, Europe, and the rest of Canada, where farms and plants have had to shut down due to a lack of profitability.


It’s never pleasant to manage negative growth. Independent pork producers have been hit particularly hard. We had to reorganize the supply chains and slaughter infrastructure. The decision to close our pork processing plant in Vallée-Jonction, in the Beauce region, was undoubtedly one of the hardest in the history of Sollio Cooperative Group.



We are proud of the contribution of hog production and proces­sing to the economy of Québec and Canada. It is a highly dynamic sector, driven by people with passion from every angle. Let’s make sure that this sector continues to be a major contributor to the economy and development of the regions for years to come. 



The strengths of the cooperative model

We are both owners and users of the cooperative, which is one of the biggest strengths of the cooperative model on which we can and must rely. As owners of the cooperative, we are its directors and the decision makers of its strategic orientations. As users of the cooperative, we take a critical look at the organization. 


Being owners-users pushes us to constantly rethink our methods. It’s this strength that makes the business model relevant to our members and contributes to the sustainability of the cooperative model. 


For 100 years now, agricultural producers have been investing in the cooperative, 100 years of believing in this business model. And in the world of agriculture, one of our greatest prides and one of our greatest values is the next generation. 


Sollio Cooperative Group has always prided itself on supporting the next generation. Our various succession programs have been a success, and we continue to improve them on an ongoing basis, as evidenced once again this year by the increase in the amounts paid to the Fonds coopératif d’aide à la relève agricole. 


As farmers, we always want to pass on an improved business to the next generation. As members of one of the largest agri-food cooperatives, this is also what we want for our organization: to bequeath to future generations a cooperative that is always in a better position, always stronger and more successful. 


Sollio Cooperative Group is a flagship of the agri-food sector, which contributes to the prosperity of farming families. I am convinced that our cooperative model, our size, our track record, our human resources and our equity will enable us to be mains­tays of prosperity for farming families for many years to come. 


To do this, we cannot ignore major environmental and societal issues. We must participate in and contribute to the fight against and adaptation to climate change. As we saw again this year, agriculture is on the front line when dealing with the vagaries of weather. When it comes to climate change, agriculture is both a victim and a source of solutions. 


Sollio Cooperative Group and its network are well positioned to be a mobilizing force to feed the world in a sustainable way. 


Our cooperative model, our corporate responsibility approach, our research efforts, our quality human resources and our presence across the territory are all assets that allow us to continue to improve our environmental performance and support agricultural producers by offering them innovative solutions. I deeply believe in this collective strength fuelled by passion, pride, commitment and altruism. 


In closing, I must emphasize that I am surrounded by an excep­tional and talented team of managers and directors. It is a great privilege to be able to count on the solidarity, experience and competence of the directors, managers and employees of Sollio Cooperative Group and the cooperative network. 


On behalf of myself and the Board of Directors, I would also like to thank the network for its support as well as Pascal Houle, Chief Executive Officer, his teams, and all employees. It is their efforts, dedication and perseverance that allow Sollio Cooperative Group to embark on the next 100 years of its existence in style.






Dividends paid to the cooperative pork chain


Working capital


Earnings before patronage refunds, income taxes and discontinued operations


Preferred shares and equity of the Cooperative


Patronage refunds 

Message from the Chief Executive Officer

The Sollio Cooperative Group returns to profitability


After two particularly difficult years for our finances, we are pleased to see our cooperative return to profitability at the end of fiscal 2023. Consolidated results, up sharply this year, are gratifying and testify to the major turnaround work undertaken. For the fiscal year ended October 28, 2023, Sollio Cooperative Group recorded sales of $8.3 billion and net earnings of $115.4 million, including a loss from discontinued operations. In fiscal 2022, sales totalled $8.4 billion, while the Cooperative recorded a net loss of $336.9 million. Sollio Cooperative Group’s balance sheet also significantly improved with a decrease of $610.5 million in long-term debt. 


The disciplined strategic approach we opted for two years ago is now paying off. This resulted in an overall asset optimization plan that does not jeopardize the marketing tools and services available to member-producers or the organization’s strategic capabilities. The decisions taken in this context, whether to sell assets or downsize certain operations, have enabled us to significantly improve our financial position and report much more satisfactory results this year. 



Sollio Food

The most significant turnaround occurred at Sollio Food with the division’s net earnings up $584.4 million compared to fiscal 2022. The actions implemented to improve performance of the fresh pork sector, such as renegotiations of agreements, the difficult decision to reduce slaughtering and the massive influx of foreign workers, made it possible to generate higher value-added products, thereby improving operating margins. Other factors contributing to improved results included the reopening of market access to China. 



Sollio Agriculture

Sollio Agriculture reported a $77.3 million decrease in its net earnings compared to fiscal 2022. This difference is mainly due to the write-down of long-term assets and the exceptional results recorded last year in the crop production sector. The repositioning of the grain sector has also generated significant positive effects. 



Sollio Retail

Sollio Retail also reported satisfactory results given the economic situation, with net earnings down by $6.5 million. After many prosperous years, the construction and renovation industry is currently operating in an unfavourable economic context. The key to success will be an increase in housing starts, which we hope to see over the coming year. 


Needless to say, I’m proud of the implementation of our optimi­zation and turnaround plan, which is the fruit of the unwavering commitment of all our teams and which was implemented without affecting our core business. I am also satisfied with the results of our divisions, which met or exceeded expectations. The work carried out on the organization’s financing and capital has also enabled us to position ourselves more favourably in relation to our creditors and generate substantial savings. This turnaround illustrates our organization’s ability to transform, adapt and evolve in a constantly changing economic landscape. 


Our pride in this achievement, however, must also be matched by our desire to continue the work. Despite this return to overall profitability, the coming year will be marked by the continuation of the various initiatives undertaken over the past fiscal year, and the logical follow-up to our turnaround and optimization plan. We must continue to build up our foundations and put in place the mechanisms to ensure we are a resilient, disciplined and sustainable organization.


Strategic planning, currently underway at Sollio Cooperative Group and within each division, will enable us to confirm our orientations and priorities for the coming years. Several initiatives have been identified to optimize our performance and strengthen our divisions to face the challenges ahead. One of the major projects that awaits us is improving operational efficiency, an essential pillar to ensure our sustainability and competitiveness, and which will enhance our agility and relevance. 



Cooperative values are at the heart of our projects


The financial challenges we had to quickly surmount over the last years have inevitably limited the number of projects undertaken by the organization. Nonetheless, we have carefully selected promising and essential projects on which to focus in order to remain a player of choice in the industries in which we operate. Such is the case with our proactive and committed approach to corporate responsibility, which reached significant milestones during the year. Firstly, to ensure that our future actions were well founded, we consulted our internal and external stakeholders. The information gathered will enable us to integrate a diversity of perspectives into an action plan, which will constitute a strategic roadmap for the years to come. In the same vein, we carried out an in-depth assessment of our environmental impact by carrying out our water and greenhouse gas (GHG) emission reviews. The crucial data collected was the fruit of meticulous work and will form an important basis for setting our targets. 


The embodiment of our cooperative values was reflected in many other ways over the past year. In particular, we are continuing to implement an ethical approach within the organization, in order to reiterate to employees the importance of ethical conduct, which is fundamental to an organization’s long-term success. Equity, one of Sollio Cooperative Group’s four cooperative values, takes on its full meaning as we move towards a more equitable, diverse and inclusive corporate culture (EDI). A 2023-2025 action plan has been drawn up to help bring this culture to life on a daily basis in our cooperative. 


Sollio Cooperative Group’s new century began with a landmark year. Fiscal 2023 has been a challenging one financially, but it has also been marked by exceptional resilience and significant achievements for our organization. We’re not at the end of the tunnel but we’re certainly entering a new phase. Unwelcome as they were, there’s no doubt that the challenges we’ve faced of late have strengthened our commitment to excellence and shaped our vision for a more prosperous future. 


In closing, I would like to extend my sincere thanks to the members of Sollio Cooperative Group’s Board of Directors, including our President, Richard Ferland, for their constant support. Many thanks also to the elected representatives and managers of the cooperatives in our network for their solidarity and trust over the past few years. Special thanks to my colleagues on the Executive Committee, and to our divisional managers, who have faced adversity with leadership, courage and determination. Finally, I would like to acknowledge the work of all the employees of Sollio Cooperative Group and its divisions – competent and dedicated people who take pride in carrying out our mission.




Creating value in three industries

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Pursuing Sollio Agriculture’s full potential
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Sollio Agriculture

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. 


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BMR Group builds on solid foundations
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BMR Group

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! 

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A year of major challenges, opportunities and restructuring projects for Olymel
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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. 




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! 

Chief Financial Officer's message

Repositionned for the future


The results reported in this financial review clearly demonstrate the significant turnaround achieved by Sollio Cooperative Group [the “Cooperative”]. Our balance sheet is once again aligned with our long-term objectives and given the financing projects completed this year, our overall financing cost will be significantly lower in the upcoming fiscal years. 


Market trends


Since 2020, the Cooperative’s results have been greatly impacted by turbulent capital markets. 




Foreign exchange and interest rates


In fiscal 2023, the U.S. dollar exchange rate was favourable for exports, remaining above 1.3100 throughout the year, with an average of 1.3485 compared to 1.2874 in fiscal 2022. The Japanese yen exchange rate had the opposite effect with an average of 0.0102 in 2023 compared to 0.0971 in 2022, and in addition was highly volatile. 


Interest rates continued to rise in 2023. The Bank of Canada’s prime interest rate rose from 3.75% to 5.00% during the year, affecting the Cooperative’s cost of borrowing. 



Commodity prices


The average price of pork cuts was US$90.73/100 pounds for 2023, down 12.3% from the previous fiscal year. The 11.5% decline in corn prices partially offset the decline in pork prices, but average hog production margins during the fiscal year were lower than in 2022, impacting the results of hog production sectors. However, the resumption of exports in some markets and actions taken to increase the value of our operations generated higher profits in the fresh pork business. 


In terms of agricultural inputs, fertilizer prices dropped sharply in 2023 to average US$638.90/metric tonne, down 40.5% compared to fiscal 2022 when the conflict in Ukraine had a direct impact on world prices. This price decline had a significant favorable effect on the reduction of Sollio Agriculture’s working capital. 



Housing starts 


Housing starts in Québec plunged 32% in 2023, a historic decline that significantly impacted Sollio Retail, particularly in the contractor segment. 



Review of 2023 financial results 

The Cooperative’s consolidated sales totalled $8.3 billion in 2023, down $177 million or 2.1% from fiscal 2022. This decrease is mainly attributable to Sollio Retail with market interest rate hikes affecting demand for building materials and hardware products. 



Cost of sales and selling and administrative expenses totalled $8.1 billion compared with $8.6 billion for the previous year. This decline was observed across all divisions, but to a greater extent within Sollio Food, owing to lower hog supply costs in 2023 and the decrease in slaughtering during the year. 


Net financial expenses increased to $90.7 million in fiscal 2023 from $84.0 million for the previous fiscal year, driven primarily by hikes in the Bank of Canada’s prime interest rate. The reduction in debt allowed to significantly limit the increase in total interest expense. 


Based on the results of its divisions, Sollio Cooperative Group reported consolidated operating earnings of $35.5 million, compared with an operating loss of $227.5 million in fiscal 2022. 


Other income and expenses include the share of results of joint arrangements, namely businesses in which Sollio Cooperative Group has joint control. This share totalled $63.5 million in 2023 compared with $60.0 million in the previous fiscal year. Although the shares of joint arrangements in the fertilizer sector were down compared to the exceptional results of 2022, a Sollio Food joint arrangement posted an exceptional loss in 2022 that was not repeated in 2023. 


The share of results of entities subject to significant influence, namely businesses in which the Cooperative has an investment of less than 50%, amounted to $7.4 million in fiscal 2023, compared with $12.4 million in 2022. This decline is mostly explained by a smaller share of results of an entity operating in the slaughterhouse by-product valorization sector. 


Investment income, which represents interest and dividend income from investments, totalled $2.7 million in 2023 compared with $2.8 million for the prior fiscal year. 


Le poste « gains nets (pertes nettes) à la cession et dévaluation d’actifs » s’établit à 24,7 millions de dollars en 2023, compara-tivement à une perte de 161,4 millions de dollars en 2022.Le gain de 2023 provient majoritairement de la disposition d’un placement détenu par Sollio Alimentation, compensé par la dévaluation de certains actifs. La perte de 2022 provenait quant à elle de réévaluations d’actifs incorporels et de l’écart d’acquisition de Sollio Alimentation. 


Net gains (losses) on disposal and write-down of assets amounted to $24.7 million in fiscal 2023 compared with a loss of $161.4 million in 2022. The 2023 gain was mostly generated by the disposal of an investment held by Sollio Food, partly offset by the writing down of certain assets. The 2022 loss resulted from the impairment of intangible assets and goodwill in Sollio Food. 


Gains on remeasurement of interest rate swaps represented a gain of $9.4 million in 2023 compared with $22.3 million for the previous fiscal year. The significantly higher value in 2022 was driven by the sharp rise in interest rates during the year. All swaps were settled during the year to realize gains. A new series of financial instruments covering a $250 million debt was entered into since then. 


In 2023, gains arising from insurance benefits amounted to $3.8 million, compared with $2.1 million in 2022. These were amounts received from insurance claims. 


Balance sheet 

As at October 28, 2023, the consolidated balance sheet of Sollio Cooperative Group showed assets totalling $3.8 billion compared with $4.6 billion as at the end of the previous fiscal year. This decrease is reflected in both current assets, down $475.0 million, and in long-term assets, down $351.9 million. The change in current assets resulted mainly from the decrease in Sollio Agriculture’s agricultural and other inventories, due primarily to the difference in the fertilizer volume, in line with the division’s objective to limit its exposure to price fluctuations until the next season, as well as to the significant reduction in the grain sector following the discontinuation of grain export activities. The decline in long-term assets was mainly due to disposals made under the ambitious asset sale program aimed at divesting non-strategic assets. The plan to reposition activities also led to the recognition of impairment losses on the Cooperative’s infrastructures, further reducing long-term assets. 


The disposal of assets during the year significantly reduced the level of utilization of the consolidated credit facility, which improved the Cooperative’s debt-to-equity ratio. This ratio stood at 26:74 at the end of fiscal 2023 compared with 41:59 as at the end of the previous fiscal year. Share capital, contributed surplus and reserve totalled $1.8 billion as at the fiscal year-end compared with $1.7 billion as at the previous fiscal year-end. These items represented 47.1% of total assets in 2023 compared with 37.9% as at the previous fiscal year-end. 


For its long-term debt, as at October 28, 2023, Sollio Cooperative Group had secured, through agreements with Canadian financial institutions, the financing required for ensuring the smooth running of its operations. Our primary agreement with a syndicate of financial institutions consists of an overall credit facility of $1.1 billion, maturing in December 2026. Drawdowns amounted to $302.2 million at the end of fiscal 2023 compared with $858.9 million in 2022. 


The Cooperative also entered into a term loan agreement of $270 million on December 22, 2023. This loan, secured by hypothecs on some agricultural assets, has the same maturity as the bank syndicated facility and will enable the Cooperative to replace a term loan maturing in 2024 for Sollio Food and repurchase preferred investment shares at the beginning of fiscal 2024. For the financing in the form of preferred investment shares, on December 7, 2022, the Board of Directors approved the issuance of a new series of shares to settle dividends payable in respect of fiscal 2022 and the first six months of fiscal 2023. All the shares issued under this series were repurchased on August 1, 2023, while 10% of all outstanding series were repurchased in January 2024. 



Cash flows 


Operating activities generated cash inflows of $457.6 million in 2023, up $699.2 million from fiscal 2022. In 2023, the Cooperative generated earnings adjusted for non-cash items of $133.6 million, up $164.6 million from fiscal 2022. The net change in non-cash working capital items was up $534.6 million, due mainly to the decline in value and reduction of inventories. 


Investing activities generated cash inflows of $275.8 million in 2023, up $168.3 million from fiscal 2022. This increase was driven by the disposal of assets, particularly an investment in Sollio Food, and by the receipt of higher dividend proceeds from interests in joint arrangements in the crop production sector related to 2022. 


These significant inflows allowed for repayments of $728.8 million under financing activities, of which $597.9 million was used to repay debts. The redemption of preferred shares and dividends and interest on preferred investment shares resulted in disbursements of $92.2 million and $48.4 million, respectively. 


Accordingly, fiscal 2023 ended on a much more positive note as far as the Cooperative’s financial position is concerned. Debt reduction efforts having been successful, we can now work with a much more robust balance sheet than at this time last year. I would like to acknowledge the support of our financial partners and the efforts made by the internal teams to achieve this ambitious turnaround. We’re now in a favourable position to invest in our operational efficiency projects and thereby make our Cooperative even more resilient in the face of market fluctuations and the global environment in which we operate.

Other reports to download

2023 Consolidated financial statements
2022 Annual report
2021 Annual report
2020 Annual Report
2019 Annual Report
2018 Annual Report
Sollio Cooperative Group is an organization resolutely turned towards the future.
Creating value in three industries