Your Board of Directors is pleased to report on the operations for Pembina Co-op. This year our Annual General Meeting was held at St. Leon Community Hall on June 14, 2023 at 7:30pm!
Board President, Marc Grenier called the meeting to order and Director Ernest Fraser was pleased to provide the Invocation. Board President Marc Grenier then welcomed all those in attendance and introduced the Board of Directors while providing a brief overview of the 2022 activities and accomplishments.
Board Secretary Bert de Rocquigny then read the minutes of the previous AGM held on June 16, 2022 in St. Leon, MB.
Board of Directors Report
Board President Marc Grenier spoke to the members in attendance about the financial results of the previous year and the similar 2021 struggles that were faced again in 2022 with supply issues, logistic problems, staffing shortages and significant inflation. Despite these continued struggles, in the fiscal 2022 year, Pembina Co-op had another record year in sales as well as the second-best year on record in terms of earnings.
President Grenier spoke of the balance sheet remaining strong and member's equity, reserves and retained savings total $85.1 million compared to the previous year of $80.8 million.
During the 2022 fiscal year, the Board of Directors approved cash repayments to members totaling nearly $6.3 million. Pembina Co-op invested $3.5 million in new capital assets, including new office buildings for Swan Lake Agro and Mariapolis Agro as well as the acquisition of a food/liquor store in the community of Souris, MB.
For the 2023 fiscal year, several capital asset projects are planned with a total cost of $6 million, which includes a fertilizer shed for Cypress River Agro, new office building at Baldur Agro and Point-of-Sale system upgrades for the Home and Building Centres located in Oakbank MB, Pilot Mound MB, St. Claude MB, St. Leon MB and Souris MB.
President Grenier gave thanks to the dedicated team members of Pembina Co-op and to the members for their continued support.
General Manager Curtis Lehouillier presented the Manager's report by briefly reviewing the Vision, Mission and Values of Pembina Co-op, as well as the guiding statements that drive the five (5) pillars of Pembina's corporate performance management.
Market Pillar — pertains to the Co-op members and includes areas such as sales, product offerings and services provided. For the 2022 year, two (2) primary goals were targeted:
- Overall Sales Growth of 5% — target reached! Total sales for the 2022 fiscal year were $232.1 million, which was $59.8 million over the 2021 fiscal year in sales.
- Increase membership — target reached! Prior to 2022, we assessed that we were facing a declining membership base and set goals to increase the number of new members we welcome to Pembina Co-op. Our previous average was 480 new members per year and we began promoting the benefits of memberships through marketing strategies. We also streamlined our membership sign up process to include online sign up. Our goal was to attract 500 new members each year. In 2021, the Board of Directors approved 716 new memberships. In 2022, the Board of Directors approved another 700 new members to Pembina Co-op!
Operations Pillar — focuses on the Co-op's income statement and pertains to efficiencies in expense control, utilization of technology, health & safety, regulatory compliance and day-to-day operational activities. There were two (2) primary goals set for 2022, one of which was to achieve a local earning of 2% of sales, and in 2022, the local earnings hit 3.1% of sales. The second goal, as described by General Manager Lehouillier pertains to expense control, or return on investment in inventory. The goal was to achieve 3.6 in inventory turns for all commodities, and we achieved 4.0 in inventory turns which is well above our 2021 results and significantly higher than the target.
General Manager Lehouillier took time to address the closures/sale of business that Pembina Co-op experienced in 2022.
"While our Co-op is a large retail with over $232 million in sales, it is made up of 23 individual cost centres operating in 15 different communities. At Pembina, we do not enjoy the same economies of scale that other retails have; they are able to achieve similar sales volumes with half the number of physical locations. In the core of our trading area, we struggle as our retail outlets compete for the same customers. In some of our markets, the demographics are not in our favor as there are not enough people to support the number of stores in the area to the extent requires to keep them profitable. This makes it critical for us to continue to be diligent in managing our operations and identifying under-performing or unprofitable areas of our business."
Financial Pillar — focuses on the strength of the Co-op's balance sheet and pertains to its ability to meet its future financial commitments. Pembina Co-op continues to invest in your business and in our communities, with prudent investments maintaining the long-term financial planning that continues to strengthen the balance sheet.
Sustainability Pillar — focuses on sustaining community and our environment, being a good corporate citizen. Ensuring environmental and workplace safety practices are in place and followed as well supporting our community's sustainability through financial support for infrastructure and groups. In 2022, Pembina Co-op donated almost $100,000 towards community events and projects, paid over $400,00 in property taxes and returned $6.3 million in cash back to its members! These are all dollars that are staying within our trading area as opposed to going to distant shareholders that have no connection to our communities.
People Pillar — focuses on our team members and their employee experience. Areas such as culture, engagement, recruitment, retention, learning, development, diversity, inclusion and succession planning all have an impact on the success of our Co-op. Our primary goal is to engage and develop our people to take on greater responsibility and become future leaders, not only within Pembina Co-op, but within the communities that we serve. In 2022, we had 9 team members participate in various training programs to prepare them for an increase in responsibility in their current role, or to prepare them to step into a leadership or senior leadership role.
General Manager Lehouillier concluded his report with personally giving thanks to team members who have or are reaching major milestones within the Co-operative Retailing System in 2023.
Auditor's Report & Financial Statement
Controller Catherine Sotheran presented to the members in attendance an overview of the Auditor's Report and Financial Statement for the fiscal year ending January 31, 2023. The Auditor's Report details what was audited and provides an opinion on the financial statements of Pembina Co-op, through MNP, LLP, Chartered Professional Accountants.
FOR THE FULL AUDITOR's REPORT, please see the attached below.