Ornua’s turnover up 18% to €2.1 billion in 2017

This morning (Wednesday, March 21) Ornua, Ireland’s largest exporter of Irish dairy products, announced that its turnover increased by 18% to €2.1 billion in 2017.

This was confirmed as the group published its operating and financial results for the year which ended on December 30, 2017 – marking the first year of Ornua’s new five-year growth plan, Ornua 2021.

Ornua delivered a “very strong trading performance” in 2017, with group EBITDA (Earnings before Interest, Taxes, Depreciation, and Amortisation) up 25% to €53.8 million.

As well as this, operating profit increased by 32% to €35.2 million – while profit before tax increased by 84% to €29.1 million.

Ornua also achieved another year of record Irish purchase volumes of 338,000t. The group closed the year with net cash of €0.3 million.

In November 2017, it refinanced its bank facilities for another five years – increasing them to €610 million – with the aim of leaving it well placed to support dairy industry expansion and to drive further growth across the group.

Commenting on the 2017 results, the CEO of Ornua, Kevin Lane, said: “2017 was a year of significant growth for Ornua with an excellent financial performance as we successfully delivered year one of our 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.

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 €3 billion revenue business with a sustainable EBITA margin of 3%.”

Other operational highlights

Meanwhile, 2017 was also a record year for Kerrygold in Germany and the US with double-digit volume growth, according to Ornua.

Expansion of Ornua Deutschland’s production facility continued last year – bringing the total facility investment to €60 million.

Some 34 new product innovations were launched in 2017, including a Kerrygold shredded cheese range in Germany.

These launches are reportedly part of Ornua’s strategy to extend the Kerrygold brand from a wellknown butter brand into a €1 billion global dairy brand in the coming years.

This occurred as white cheese ingredients products expanded to the UAE, Kuwait and Oman markets.

The “strategic acquisition and integration” of UK cheese ingredients business, F.J. Need (Foods) Ltd, also occurred in 2017, the same year as Ornua opened an innovation centre in CoreFX – a US ingredients business.

Facilitated by the strong product price returns paid by Ornua to its members, the group has reportedly been able to declare a €15 million members’ bonus in 2017 – up from €9.5 million in the previous year.

Outlook

In preparation for the post-Brexit trading environment, Ornua is reviewing a range of strategic measures to help minimise any potential negative impact.

In a statement, Ornua explained that its five UK businesses are “maintaining a rigorous focus on production efficiency, product quality, customer service and new product development – so that it remains a supplier of choice in the UK market”.

Going forward, the group aims to capitalise on its “established market-leading positions in major export markets such as the US and Germany, and to accelerate its development in key emerging markets such as Africa, China, Europe and the Middle East”.

Ornua claims that it will 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.