Ornua Announces Group Full-year Results for 2023

April 24, 2024

Dairy co-operative and Kerrygold owner records solid performance with Turnover of €3.4 billion

Ornua, Ireland's largest exporter of Irish dairy products and owner of the Kerrygold brand, today published its operating and financial results for the 12 months ending 30 December 2023, reporting a Group turnover of €3.4 billion.

2023 Financial Highlights

Key Performance Indicators	2023 € million	2022 € million	Year-on-Year change
Turnover	3,399.9	3,422.4	-0.7%
Group EBITDA*	149.8	157.0	-4.6%
Operating Profit*	116.8	127.2	-8.2%
Net Assets	745.1	728.1	+2.3%

*Before exceptional items and pre Ornua Value Payment

2023 Performance Highlights

• Solid trading performance with Group Turnover of €3.4 billion.
• €1.6 billion of Irish dairy products purchased, providing continued security of strong returns for Member Co-operatives, and 14,000 Irish dairy farming families.
• Ornua delivered brand premium and bonuses to its Member Co-operatives amounting to an Ornua Value Payment of €74.5 million - up year-on-year (€72.5 million in 2022).
• €481.5 million in working capital facilities provided to support working capital requirements of Member Co-operatives.
• Official opening of new €40 million development at Kerrygold Park, increasing production capacity to approximately one million retail packs per day.
• A total of 26 new Kerrygold products and product extensions were launched in key markets.
• Successful disposal of the remaining 20% shareholding of DPI Specialty Foods Inc, a US food distribution business, for €40.3 million.

Donal Buggy, Interim CEO, Ornua said: "I am pleased to report a solid business performance for 2023, with Group Turnover of €3.4 billion, representing a stable result year-on-year following a record sales performance in the previous year. Ornua responded dynamically to significant instability in the global trading environment by remaining focused on our strategy and on our commitment to deliver for our customers, our Member Co-operatives and Irish farming families.

Group EBITDA and Operating Profit, pre Ornua Value Payment, were below 2022 at €149.8 million and €116.8 million respectively. This was reflective of the challenging market conditions that the Irish dairy industry faced in 2023. Ornua continued to prioritise value returns to our Member Co-operatives, paying strong product prices for premium Irish dairy products amounting to €1.6 billion. We were pleased to complete a major €40 million development at the global home of Kerrygold - Kerrygold Park - which brings the total production capacity of our flagship butter facility to approximately one million retail packs of butter per day. This growth responds to increased demand for the brand globally, matched by our continued commitment to drive the Kerrygold brand forward towards further success.

Looking ahead, while there is continued uncertainty around the impact of macroeconomic factors on already challenging global market conditions, we remain optimistic about the future and focused on achieving sustainable growth in key markets."

Operational Performance

Despite the continued impact of inflation, price fluctuation in branded categories and an unprecedented level of market competition, Kerrygold maintained its market leading position across multiple markets. In the US, Kerrygold continued to experience volume sales growth, further strengthening its position as the number two branded butter in the world's largest consumer market. The future growth of Kerrygold in key international markets will be supported by the recent expansion of Kerrygold Park, completed in 2023, doubling the production capacity of the Mitchelstown facility to 80,000MT.

The Ornua Ingredients global business recorded a balanced performance in the year. Despite challenging market conditions, Ornua maintained a focus on close collaboration with a diverse customer base to innovate for the future and strengthen the standing of the business as a leading supplier of bespoke dairy ingredients solutions.

Dairy Markets

Global milk supply fluctuated in the year, rising by just 0.1% overall in 2023. Global dairy demand rose by approximately 0.5%, following a decline of 0.5% in 2022.

Looking to the rest of the year ahead, global milk supply looks likely to remain flat which should support the market. While it is expected that the dairy market will stabilise in the coming months, buyers will need more certainty regarding demand if commodity pricing is to firm in the second half of the year.

Sustainability

Ornua's sustainability journey as an organisation has been greatly supported through the development of a new Group ESG strategy in 2023 which will accelerate the business's efforts to reduce its environmental impact and enhance its positive social impact globally over the coming years.

In line with its commitment to set science-based targets, Ornua has submitted its application and has commenced target validation. While the target validation process is ongoing, the Group continues to make progress at pace, recording a 12% reduction in Scope 1 and 2 emissions globally in 2023, supported by its continued transition to renewable energy sources across the Group network.

Ornua's ambition for Scope 3 emissions, in line with science-based targets, is to achieve a 30% reduction, including sequestration, by 2030. The organisation's new Group ESG strategy will drive actions forward towards this goal.

Ornua has also continued to invest in key initiatives to support the development and adoption of sustainable solutions across its supply chain and at producer level, while maintaining its high responsible sourcing standards and protecting Ireland's grass-based farming system.

Looking Ahead

While global market conditions remain challenging in 2024, Ornua is well-positioned to leverage its experience, agility and resilience to deliver consistent growth during challenging times. In 2023, Ornua introduced a new five-year strategic plan, Path to Prosper, which aims to drive continued sustainable growth for Ornua and ensure the business continues to meet the needs of its customers, Member Co-operatives and Irish farming families.

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