Ornua published its operating and financial results for the 12 months ending December 26, 2020, with group turnover reaching €2.3 billion.
Exporting into 110 countries, Ornua owns the €1 billion Kerrygold brand – which experienced 13% volume growth in 2020, selling over 10 million packets of butter and cheese a week.
According to the dairy exporter, group earnings before interest taxation, depreciation and amortisation (EBITDA) grew by 49.6% to €107.4 million.
This drove a 69.2% increase in operating profit to €83.1 million.
“This performance was achieved against the backdrop of a complex trading environment dominated by Covid-19, market volatility, and the macro-economic challenges of Brexit and punitive US tariffs,” the company said.
Ornua trading performance
The group said its trading performance is a result of “Ornua’s agility in maximising on the opportunity arising from the sharp change in consumer behaviour due to global lockdowns”.
However, it said that this financial performance is unlikely to be repeated as the retail and foodservice global landscape re-adjusts to the re-opening of economies post-pandemic.
A spokesperson for the company said: “Ornua’s purpose is to create value for Irish farming families by providing guaranteed routes to market and maximising the price paid back to co-ops and farmers for Irish dairy produce.
In 2020, Ornua purchased over 366,000MT of Irish dairy products at a value in excess of €1 billion.
“In addition, Ornua paid member co-ops an additional €68.7 million, up 54%, in premiums and bonuses through the Ornua Value Payment in proportion to the product supplied to Ornua.”
Business performance
In 2020, Ornua’s branded and own label portfolio benefitted from the change in consumer behaviour, which saw people all over the world gravitate towards brands they trust.
In the US, Kerrygold has become the preferred dairy brand for 10% of US consumers, making it the “No. 2 butter brand”.
Kerrygold butter continues to be the fastest selling brand on supermarket shelves in Germany, with brand strength supporting the launch of additional cheddar products in 2020.
In the UK, Pilgrims Choice outperformed the cheddar category with 29% growth year-on-year, securing its position as the No. 2 cheddar brand in the UK market.
Ornua Ingredients delivered positive year-on-year growth despite being exposed to the impact of largescale and prolonged restaurant closures globally.
In terms of investment, Ornua Ingredients North America expanded its facility in Wisconsin, up to a further 30% growth capacity.
Market Outlook
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 30c/L.
Looking to 2021, the outlook is largely positive with the market underpinned by foodservice recovery and strong export demand, Ornua says.
Global milk output is likely to continue growing in 2021, with a projected growth of +1.3%.
Looking Ahead
The strong fundamentals of the Ornua business were evident in 2020 and remain key as the global economy looks set for a staggered re-awakening in 2021.
Ornua’s market-leading product portfolio and diversified global reach will underpin the business’s long-term sustainability into next year and beyond.
While the global trading environment continues to pose challenges, the organisation said 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.