Ornua posts record revenues
Operating profit was up 32% compared to 2016, while EBITDA grew 25% to €53.8m ($66m). Profit before tax rose 84% to €29.1m ($35.7m).
Financial performance
The group closed the year with net cash of €0.3m ($368,000). In November 2017, it refinanced its bank facilities for another five years, increasing them to €610m ($749m) to support dairy industry expansion and to drive further growth.
On the back of the results, Ornua declared a €15m ($18m) members’ bonus, up from €9.5m ($11.7m) in 2016.
Kevin Lane, CEO of Ornua, said 2017 was a year of significant growth for Ornua with an excellent financial performance as the company successfully delivered year one of its new five-year growth plan.
“Product innovation continued at pace and allowed us to unlock new routes to market to ultimately drive value for our members, Ireland’s dairy processors and Irish farmers,” Lane said.
“A major emphasis on building scale and capability within our core business last year, coupled with the integration of recent acquisitions, leaves us well placed to drive further growth across our group.
“Despite volatile market conditions and Brexit uncertainties, we remain on track to deliver our 2021 vision of a €3bn ($3.7bn) [GH1] revenue business with a sustainable EBITA margin of 3%.”
Brand & ingredients
Ornua continued to grow its brand portfolio in key markets in 2017, which translated into a record year in Germany and the US, with both reporting double-digit volume growth.
Ornua Deutschland’s production facility at Neukirchen-Vluyn was expanded, bringing total investment in the facility to €60m ($73.7m).
There were 34 new product innovations, including a new Kerrygold shredded cheese range in Germany.
The launches are part of Ornua’s strategy to grow the Kerrygold brand into a €1bn ($1.2bn) global dairy brand in the coming years.
In the US, Ornua Ingredients North America had commissioned a new €2m ($2.5m) shred and dice line. In the Middle East, Ornua Ingredients expanded its white cheese products offering into the United Arab Emirates, Kuwait and Oman.
Important acquisitions
In the UK, Ornua acquired and integrated F.J. Need (Foods) Ltd into group operations and expanded the business’s production capabilities to strategically build scale at a time of uncertainty for the UK market.
In the US, Ornua opened a new innovation center at CoreFX, an ingredients business it acquired in 2016.
Outlook
In preparation for the post-Brexit trading environment, Ornua said it is reviewing a range of strategic measures to help minimize any potential negative impact.
Ornua said it will continue to capitalize on its established positions in major export markets such as the US and Germany, and accelerate its development in key emerging markets such as Africa, China, Europe and the Middle East.
The group noted it would continue to invest in new routes to market, in-market presence and new product development to deliver value for its members and farmers in Ireland.
