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Ornua publishes 2016 review

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By Jim Cornall+

16-May-2017

Ornua is looking to grow Kerrygold to a €1bn brand.
Ornua is looking to grow Kerrygold to a €1bn brand.

Ornua, Ireland’s largest exporter of primary Irish dairy products, has published a review of its 2016 operational and financial performance, as well as a goal to build revenues of €3bn ($3.3bn) by 2021.

The company said its EBITDA rose 18% to €43.1m ($47.6m), while profit was €6.46m ($7.1m) in 2016, compared to €54.8m ($60.5m) in 2015.

The group closed the year with net cash of €57.2m ($63.2m) compared to a net debt of €17.3m ($19.1m) in 2015 and a balance sheet with net assets in excess of €500m ($552m).

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%.

Brands

Ornua’s brand portfolio grew in all core markets, with Kerrygold reporting annual global retail sales of €900m. Ornua said its ambition is to move Kerrygold to an ‘instantly recognizable’ €1bn global dairy brand in the coming years.

2016 highlights

Kerrygold global retail sales of €900m ($994m) with the US reporting 20% volume growth

Launch of Kerrygold Yogurts in Germany – more than 10m 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

Integration of Shanghai-based dairy manufacturer, Ambrosia Dairy, into Ornua Asia

Acquisition and integration of US powder ingredients business, CoreFX Ingredients

In 2016, launches included Kerrygold Yogurts in Germany, Kerrygold Spreadable in the UK and the continued roll-out of Kerrygold Irish Cream Liqueur across Europe and the US.

Expansion

Ornua trades in more than 110 countries around the world, and 2016 saw in-market expansion with the opening of a new Ornua facility in Saudi Arabia, upgrades to the existing production facility at Neukirchen-Vluyn in Germany, and the development of a purpose-built production line for yogurt brand, EasiYo, at Ornua Nutrition Ingredients UK.

In addition, Ornua acquired US powder ingredients business, CoreFX Ingredients.

The opening of Kerrygold Park, a €38m ($42m) butter production and packaging plant, with a production capacity of 50,000 tonnes, also took place in 2016, which Ornua says enables delivery of new product formats to its global consumers.

Ornua 2021

The company said that 2016 saw the completion of a business transformation strategy to prepare Ornua for the post-EU milk quota environment.

Ornua 2021 is the new strategy, which will guide the Group’s growth for the next five years; it details the group’s target to build sustainable and value-added routes to market for Irish dairy products, generating revenues of €3bn and a sustainable EBITA margin of 3% by 2021, whilst ensuring strong product price returns for members.

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