June 1, 2022
Ornua, Ireland’s largest exporter of Irish dairy products, today published its operating and financial results for the twelve months ending 26th December 2021.
2021 Highlights
| Key Performance Indicators | 2021
€ million |
2020
€ million |
Year-on-Year change |
| Turnover | 2,504.1 | 2,343.5 | +6.9% |
| Group EBITDA* | 177.4 | 176.1 | +0.7% |
| Operating Profit* | 153.7 | 151.8 | +1.3% |
| Net Assets | 671.2 | 603.0 | +11.3% |
*Before exceptional items and pre-Ornua Value Payment
- Excellent trading performance with Group turnover up 6.9% to €2.5 billion.
- Kerrygold volume growth up 12%, with over 11 million packets of butter and cheese sold globally each week.
- Group EBITDA* and Operating Profit* up 7% and 1.3% respectively.
- Strong returns for Irish dairy farmers across 389,000MT of Irish product purchased, delivering an additional €78 million Ornua Value Payment to member suppliers, up 13.5% year-on-year.
- Ornua Ingredients doubled its footprint in the US market with the acquisition of Whitehall Specialties Inc, unlocking significant growth and innovation capacity.
- Approval granted for a €40 million expansion of Kerrygold Park to meet the growing global demand for Kerrygold.
- Bank facilities totalling €580 million successfully refinanced until 2026, supporting Irish dairy industry growth.
- Launched an ambitious five-year CSR & Sustainability strategy incorporating environmental, animal welfare, and community targets.
Commenting on the positive performance delivered in 2021, John Jordan, CEO, Ornua said: “Ornua maintained a strong, stable, and sustainable performance year-on-year, as we marked our 60th year in business. Despite persistent challenges, we are pleased to report a 6.9% increase in turnover and a 1.3% increase in operating profit* for 2021. This performance delivers on our commitment to maximise returns to our member co-operatives and the 14,000 farmers who supply them, with a 13.5% increase in our Ornua Value Payment in the year.
It was another record year for Kerrygold, with volume growth up 12% on 2020. Kerrygold continues to be the fastest selling brand on supermarket shelves in Germany and is the no.2 butter brand in the US; a market serving 330 million consumers. Our Ingredients business also performed strongly as we completed the acquisition of US cheese ingredients business Whitehall Specialities Inc. The addition of these four facilities across Wisconsin and Pennsylvania unlocks substantial growth in both the US and in other markets as we enhance our innovation and manufacturing capabilities, as well as adding 450 new skilled professionals to our workforce.
Our 60 years in business has stood to us in our capacity to respond to change and to continue to deliver for our customers, colleagues, and shareholders. While challenges persist in 2022, we are commercially and strategically well-placed to manage their impact on our business and continue to return value to our member co-ops and the Irish farming families that they represent.
We have been devastated by the tragic events that have unfolded in Ukraine these past months and recognise the plight of the Ukrainian people at this very difficult time. As a longstanding organisation with a global footprint, we acknowledge the impact of world events on our customers and the communities we serve and will continue to support all our stakeholders in navigating the knock-on effects of this terrible situation.”
Financial Performance
Group Turnover was up 6.9% to €2.5 billion, as consumption patterns started to recover from the impact of the Covid-19 pandemic.
Group EBITDA* and Operating Profit* were up 0.7% and 1.3% respectively. This performance was achieved as Ornua maximised value through a combination of growing its branded product range, expanding its innovation capabilities, and leveraging its strong customer partnerships and international scale.
As a co-operative whose purpose is to create value for 14,000 Irish farming families, Ornua successfully captured and returned significant value to its members in 2021, declaring a record Ornua Value Payment (premiums and bonuses) of €78 million, up 13.5% year-on-year. In addition, Ornua purchased €1.2 billion (389,000MT) of premium Irish dairy products, paying strong prices as reflected in the Ornua Purchase Price Index. This provided a critical global route to market for Ireland’s milk suppliers during a continued period of unprecedented challenges for the global dairy industry.
Business Performance
It was a milestone year for Kerrygold as consumers continued to gravitate towards the brands they trust. Kerrygold achieved 12% volume growth in the year, selling over 11 million packets of butter and cheese globally each week. Approval was granted for the €40 million expansion of Kerrygold Park in Mitchelstown, which will increase Kerrygold’s capability to meet growing global demand.
Ornua Ingredients also performed strongly expanding its product portfolio in Europe and the Middle East. The expansion of Ornua’s US footprint through the acquisition of Whitehall Specialties Inc unlocks significant innovation and manufacturing capabilities and enhances Ornua’s position as a leading supplier of pizza cheese products globally.
Dairy Markets
While the Covid-19 pandemic continued to affect all aspects of the global dairy industry, its impact on global milk supply was not as significant as its impact on demand. Global milk supply was positive with flows up 0.8% year-on-year, while global demand was resilient against the backdrop of the pandemic.
Demand in the retail sector was strong, with lockdowns encouraging consumers to eat at home. While global retail sales of dairy products eased compared to 2020, volumes were above 2019 levels. Overall foodservice demand was below average, particularly in Europe, but recovered strongly in the US and countries with fewer public restrictions. Chinese export demand was exceptional, but high pricing stifled demand in other regions. Global export growth was not as strong as in previous years, however, as trade was affected by weaker output and supply chain issues.
Growing Greener
In 2021, Ornua set a target of a 25% reduction in Scope 1 & 2 emissions by 2025. Last year, energy and water audits were completed across manufacturing facilities to identify opportunities for improvement. This enabled the business to develop a group-wide carbon reduction roadmap that clearly outlines a path to reducing its carbon footprint.
The Group also set a target of 20% intensity reduction in Scope 3 emissions by 2025 and is collaborating with all stakeholders in the supply chain to examine ways of further reducing its Green House Gas emissions, meeting demands of both customers and consumers.
Ornua is committed to 100% fully circular packaging by 2030 and last year began examining all packaging formats in an important step along this journey. The business has already successfully moved a number of products in its UK Private Label cheese portfolio to fully recyclable packaging.
Looking Ahead
The advantages and fundamentals of the Ornua business were evident in 2021 and will remain key as it grapples with the challenges of 2022 and beyond. The expansion of Kerrygold Park in Mitchelstown, commenced during this year and this facility will play an essential role in enabling the long-term growth of the brand for the benefit of Irish farming families and the wider Irish economy.
However, there are significant challenges ahead for Ornua and the wider dairy sector. The impact of inflation on raw materials, packaging, fuel, energy, and salaries will put significant competitive pressure on many businesses this year. Geopolitical instability, global trade barriers, supply chain challenges, and market volatility will also continue to have a significant impact and will need to be monitored and managed closely.
The Climate Action Plan and national targets will require enormous effort and close collaboration from all stakeholders. Ornua’s market-leading product portfolio and diversified global reach will underpin the Group’s long-term sustainability.