2016 Annual Report For Web 7.3MB

AGI
FOUNDED IN 1996
AGI is a leading manufacturer
of grain and fertilizer handling,
storage and conditioning
equipment. Our brands are
amongst the most recognized
in global agriculture in both
Commercial and Farm sectors.
We have manufacturing
facilities in Canada, the United
States, the United Kingdom,
Brazil, Italy and South Africa
and distribute our products
globally.
The AGI catalog includes
food process and conveyance
equipment, design,
manufacturing, installation
and maintenance. Our product
catalog includes portable
handling equipment (augers,
belt conveyors, grain vacs),
permanent handling systems
(bucket elevators, enclosed
belt conveyors, structural)
and storage and conditioning
systems (bins/silos, aeration
and drying) that service the
grain, fuel biomass and
fertilizer industries for on-farm
and commercial operations.
CEO’S MESSAGE
2016 Annual Report: CEO Message
The AGI story is one of change and growth. 2016 marks 20 years of
steady and consistent growth in product lines, geographies, capabilities,
people, sales and profitability. 2016 was also a year of momentum.
Our pace of change and growth increased significantly throughout the
year as we completed five acquisitions, sold two non-core businesses,
launched our largest organic growth project in Brazil, and adapted our
global organization to accommodate our increased scale and velocity
of change. All of this on top of a long list of other strategic projects
completed throughout AGI.
Scale and velocity, two themes that resonated with us in 2016, two
themes that ultimately resulted in record sales and adjusted EBITDA in
all four quarters. Scale and velocity together create momentum which,
of course, can be positive or negative. In 2016, the contribution from
our teams created significant, positive, sustainable momentum across
our entire business. The momentum created in 2016 is the result of
the hard work of great people across AGI. Our team grew substantially
in 2016 and we are very pleased and proud to welcome our new team
members to the AGI family. It is ultimately this expanding group of
dedicated AGI team members working on twenty-five production floors,
and the sales teams and functional support groups around the world
that determine our success going forward, and are responsible for
creating and maintaining our lasting momentum.
While we celebrated our 20-year anniversary in 2016, AGI became a
public company in 2004 with an IPO share price of $10. Since that date,
we have returned $338 million to our shareholders in dividends and
substantially grown our book value and market value while fulfilling
our objective to become a leading provider of equipment and services
to grain producers, traders and processors. We have had steady
growth in sales, growing from $63 million in 2004 to $532 million in
2016 resulting in a CAGR of almost 20% over the 12 years since our
IPO. Our growth in net income and book value have grown less quickly,
with CAGR’s of 8% and 9%, respectively, and our focus going forward
is to smooth and increase both metrics. Our adjusted EBITDA number,
a useful reflection of our core earning power, has grown at a 16%
CAGR since 2004 to a record $100 million in 2016 – 30% higher than
our previous record. These metrics are strong for a small company
subject to both the normal growing pains as well as the nuances of
being an agriculture company susceptible to swings in weather and
the corresponding impact on our regional markets. Our urgency for
change and growth is to minimize the impact of regional weather and
05 CEO MESSAGE
FIELD TO CONSUMER
2016 ANNUAL REPORT
CEO MESSAGE 06