Ornua operating profit up 69%
Group turnover reached €2.3bn ($2.77bn), and group EBITDA grew by 49.6% to €107.4m ($129.2m), driving a 69.2% increase in operating profit to €83.1m ($100m).
Ornua exports to more than 110 countries and is the owner of the €1bn ($1.2bn) Kerrygold brand, which experienced 13% volume growth in 2020, selling more than 10m packets of butter and cheese a week.
John Jordan, CEO of Ornua, said, “Ornua had a unique performance in a unique year, and we are pleased to report a record profit with operating profit of +69%. The strong fundamentals of our business – great people and great products – came to the fore allowing us to maximize the opportunity presented with the change in consumer behavior, doubling down on driving profitable value growth against the backdrop of the global pandemic. This performance delivers on our commitment to maximize returns to our member co-operatives and the 14,000 farmers who supply them.
“Looking ahead, we are cautiously optimistic about the gradual re-opening of economies as the global vaccine rollout gathers pace; we have clarity on Brexit, and we welcome strong signals from the US on improved US/EU trade relations. This, coupled with Ornua’s clear and ambitious new 5-year strategy focussed on driving profitable growth in priority global markets, will ensure we continue to deliver value for the 14,000 Irish farming families we represent.”
In 2020, Ornua purchased more than 366,000MT of Irish dairy products at a value in excess of €1bn. In addition, Ornua paid member co-ops an additional €68.7m ($82.6m), up 54%, in premiums and bonuses through the Ornua Value Payment in proportion to the product supplied to Ornua.
Ornua Ingredients delivered positive year-on-year growth despite being exposed to the impact of large scale and prolonged restaurant closures globally. Last year also saw investment, with Ornua Ingredients North America expanding its facility in Wisconsin, unlocking a further 30% growth capacity. Ornua Ingredients Europe implemented Evolve, a business transformation project, in two of its UK manufacturing facilities, to enhance its ways of working and to support the business with technology to drive maximum production capabilities and efficiencies.
The company also launched Growth for Good 2025, its new five-year growth strategy, and saw a 25% decrease in absolute emissions and 38% decrease in carbon intensity per tonne of product since 2016.
Dairy markets proved resilient throughout the pandemic, aided by retail sales and strong demand for milk powders from China, Southeast Asia, and Africa. Product balance within commodity markets supported milk price stability, with Irish milk price averaging above 30 cents per liter. Looking to 2021, Ornua said the outlook is largely positive with the market underpinned by foodservice recovery and strong export demand. Global milk output is likely to continue growing in 2021, with a projected growth of 1.3%.
Ornua said while the global trading environment continues to pose challenges, there is cautious optimism in the clarity around Brexit, the suspension of US trade tariffs and the re-opening of global economies in line with the vaccine roll-out. Looking to 2021, Ornua said it will continue to focus on its people, serving its customers, and returning value for Irish farming families.
