Ornua publishes 2016 review

Ornua has published a review of its 2016 operational and financial performance. It delivered a strong trading performance in 2016 and turnover rose by 9%, on a like for like basis, to €1.75 billion. This performance was achieved in a year of volatile milk prices and political uncertainty in a number of key markets.

The operational highlights of 2016 include:

• Record Kerrygold global retail sales of €900 million with the US reporting 20% volume growth
• Successful launch of Kerrygold yogurts in Germany – over 10 million pots sold in first six months
• Opening of Kerrygold Park, a 50,000 MT butter production and packing plant in Co. Cork
• Commissioning and opening of Al Wazeen – Ornua Saudi Arabia’s cheese plant in Riyadh
• Successful integration of Shanghai based dairy manufacturer, Ambrosia Dairy, into Ornua Asia
• Acquisition and integration of US powder ingredients business, CoreFX Ingredients.

Kevin Lane, CEO of Ornua, explains, “We are very pleased to report a strong 2016 performance. Excellent performances in established markets such as Germany and the US were accompanied by continued expansion in our developing markets of Africa, China and the Middle East. These results were achieved against a backdrop of significant market volatility and political uncertainty. We have built a diverse global business by investing in our brands, technology, in-market presence and our people. Ornua now exports to over 110 countries around the world. This strategy is ensuring our ability to continue to deliver for our members and for the Irish dairy industry, even in more uncertain market conditions.”

2016 saw revenue growth in the business, this result includes investment in new and existing facilities, a €6 million increase in brand and market development bringing total group investment to €51 million in 2016 and delivery of strong product prices returns to members.

The group closed the year with net cash of €57.2 million compared to net debt of €17.3 million in 2015 and a very strong balance sheet with net assets in excess of €500 million. This provides the group with significant flexibility to fund future growth and support the working capital requirements of its members.

Irish product purchases rose by 7%, year on year, outstripping the rise in Irish milk supply of 4%. Over the last four years, Irish purchases have grown by 33%. This growth demonstrates Ornua’s strong product price returns.

Ornua’s brand portfolio had an excellent year with growth across all core markets. Kerrygold reported record annual global retail sales of €900 million. Ornua’s ambition is to move Kerrygold from being a world class butter brand to an instantly recognisable €1 billion global dairy brand in the coming years. 2016 saw the successful launch of Kerrygold yogurts in Germany, Kerrygold Spreadable in the UK and the continued roll out of Kerrygold Irish Cream Liqueur across Europe and the US.

2016 also saw investment in Ireland with the opening of Kerrygold Park, the new global home for the Kerrygold brand. The €38m butter production and packaging plant, with a production capacity of 50,000 tonnes, enables Ornua to deliver new product formats to its consumers around the world.

In early 2017, Ornua acquired F.J. Need (Foods) Limited, a UK-based cheese ingredients company. This acquisition significantly strengthens Ornua’s presence in the UK ingredients sector.