Carbery Group releases 2020 Annual Report and Financial Results

Carbery Group releases 2020 Annual Report and Financial Results

Carbery Group performance resilient throughout 2020, with expansion project completed and revenue growth of 5.8%

• Despite disruption caused by Covid-19, revenue was up 5.8% to €459.5m across the Group.
• 596m litres of milk were processed at Carbery’s Ballineen site, an increase of 5% in milk volume, supplied by 1,215 local farmer shareholders
• Major business focus in 2020 was completing the €78million cheese diversification project and opening up new markets for Carbery products, particularly in Asia
• Continued focus on achieving ambitious sustainability targets across the Group saw emissions intensity reduce by 4.8%
• Working in partnership with farmers to continue to reduce carbon footprint of farms

Carbery Group, the West Cork based international ingredients, flavours, and award-winning cheese producer, has reported a solid financial performance for the year ended 31 December 2020. Overall, group turnover increased by 5.8% to just under €460m.

Group EBITDA (earnings before interest, tax, depreciation (net of grants), amortisation of goodwill and other intangibles and exceptional items) increased by 1% to €44.9m (2019: €44.3m). On a constant currency basis EBITDA increased by 2%. The Group reported a decrease in EBITA (operating profit before interest, tax, amortisation of goodwill and other intangibles and exceptional items) to €28.3m (2019: 30.2m) reflecting a year-on-year decrease of 6.2%. On a constant currency basis EBITA decreased by 5%. The group’s net debt position at 31st December 2020 was €57.8m (2019: €47.2m).

TJ Sullivan, Chairman of Carbery Group, commented that the positive business results reflected the Group’s strong position, but that other factors were also at play: “The diverse nature of our business has helped us weather what 2020 and Covid-19 brought. We also have to credit the exceptional performance of our employees in Ballineen and around the world who, throughout very stressful conditions globally, remained committed, kept themselves and each other safe, and continued to deliver for our customers. I also want to credit our farmers who continued the supply of our milk at the highest quality throughout the stresses of the year.”

“The performance of each of our businesses allowed us to continue to maximise the returns paid to our suppliers though our milk price, and we supported the price from our stability fund when the markets took a hit due to Covid”, he said.

Milk volumes supplied to Carbery’s processing facility in Ballineen, West Cork, increased by 5% last year, to 596m litres of milk. While Covid did delay the finalisation of Carbery’s expansion project, towards the end of the year the first mozzarella was produced for customers from the new €78m facility at Ballineen.
Carbery Group CEO Jason Hawkins says, despite Covid-19 related delays, the expansion project was completed and the new plant is producing mozzarella. “The resilience of our business performance in a challenging year has given us increased confidence in the investment and diversification strategies we have pursued over the last few years. With the challenges of a potential hard Brexit behind us, and our new plant online, as well as the investments we continue to make in our value-added Taste and Nutrition business segments, I’m confident that we will continue to generate value for the farmers of West Cork.”

“Our focus in terms of how we operate continues to be on sustainability – both in the traditional sense of creating a resilient business, but also in working with key partners in our community, in the economy and with our farmers to build a future that will protect our resources for future generations and create opportunities for them.”

Sector analysis
Dairy Business

Carbery’s dairy business throughout 2020 had a strong and resilient performance against a backdrop of volatile and rapidly shifting markets. The new mozzarella plant was commissioned in late 2020 with the first commercial orders sent to the UK, South Korea, China and Europe. Cheddar demand remained strong throughout the pandemic and 55,000t of cheese were produced in 2020.
Countering the decline of food service, retail demand was very strong throughout the pandemic, which can be seen through the increased demand for cheddar overall and in particular for high-quality cheddars which Carbery specialises in producing. Carbery Group’s Carbery Cracker product had a brand refresh and research to accompany that campaign showed that 72% of consumers surveyed would prefer to buy Irish cheese.
The Group’s international business continued to grow, particularly in Asia, with the launch of the Carbery Dairy brand. Carbery took part in the first virtual Bord Bia trade mission to Vietnam, Indonesia and Malaysia.

Nutrition Business
Asia continues to be a focus region for the Nutrition business. Growth in the region is supported through a distribution network of personnel that are experts in their local nutrition markets. The Optipep® product portfolio continues to be the principal strategic product focus for Carbery in China, where the company has achieved wins and developed new opportunities in infant, sports and clinical nutrition markets in 2020.
Carbery continued to expand on their research for performance nutrition in 2020, which saw the launch of Optipep® 4Power, a hydrolysed whey protein that, when taken before a high-intensity workout, helps athletes produce and sustain more power compared to whey protein concentrate.

Taste Business – Synergy
The Taste platform performed strongly in 2020, despite the multiple challenges that the year presented. Teams continued to be focused on executing across key platforms of natural extracts, nutrition, beverage and dairy taste across the globe. The decline in foodservice did impact parts of the business but research and new product development continued, interactions with current and prospective customers pivoted to digital, and overall, the busines recovered well by the end of the year.

Sustainability

The Group continued to work towards a target of becoming carbon neutral by 2035 across all sites through decarbonising existing energy sources. Carbery conducted a group-wide materiality assessment to provide strategic input to guide sustainability activities. Emissions intensity across the Group reduced by 4.8% between 2019 and 2020 – more product is being made, but it has less embedded carbon. In 2020, water use per unit of production across the Group was reduced by 2.8%.

The Group already work in partnership with their farmer suppliers to explore how to reduce carbon emissions from their farms through initiatives like Carbery Greener Dairy Farms™ and the ‘Farm Zero C’ project. Carbon Navigator data assembled and calculated by Bord Bia through the Sustainable Dairy Assurance Scheme (SDAS) shows that Carbery farmers have reduced their carbon footprint by 4.2% in 2020 compared to 2019.

The Farm Zero C project, launched in 2020, is a comprehensive effort to find ways to decarbonise on-farm dairy emissions. The project brings together a group of academic and industry experts in a world-first attempt to come up with a farm-level solution for a global problem. The interdisciplinary programme of work is targeting soil and grassland; animal diet and breeding; biodiversity; life cycle analysis; and renewable energy. It is also considering business models and planning to ensure all proposed interventions are commercially viable for farmers. In addition, the project is looking at the potential for carbon trading to be integrated within a low emission farm model. Shinagh Farm, owned by the four West Cork Co-ops of Bandon, Barryroe, Drinagh and Lisavaird, is the site of the project.
ENDS

For more information, please contact:
Louise Kelly, Communications Manager, Carbery Group
louisekelly@carbery,.com or +353 83 888 5995
Frans Van Cauwelaert, Wilson Hartnell
frans.vancauwelaert@ogilvy.com or +353 (0)87 947 6743

About Carbery Group
Carbery Group is an international dairy, flavours and nutritional ingredients company headquartered in Ballineen, Co. Cork, Ireland. It is owned by four Irish co-operatives, Bandon, Barryroe, Drinagh and Lisavaird, and employs almost 800 people, with 1215 local farmer suppliers. Carbery operates from 10 locations including Ireland, the UK, the USA, Brazil, Italy, Indonesia and Thailand and supplies more than 50 countries worldwide.

Carbery was established in 1965 and remains one of Ireland’s leading producers of award-winning cheeses for the industrial, foodservice and retail sectors. The company produces a wide range of cheese, including the Dubliner brand, Carbery Cracker, cheddar, reduced fat cheeses and Red Leicester. Ballineen is the largest single cheese-producing facility in Ireland, producing almost 25% of Ireland’s annual cheese output.

From these roots, Carbery has extended both its product portfolio and global reach, becoming a leading innovator in whey protein ingredients. Carbery’s nutrition business provides a comprehensive range of advanced whey proteins for the infant, sport, clinical nutrition, and mainstream food and beverage markets. The market-leading Optipep® whey protein hydrolysate range delivers scientifically supported health and performance benefits , and is suitable for use in a wide variety of applications.

Carbery’s move into the wider food and beverage market was further enhanced by an ambitious acquisition programme launched in the late 1990s. Its objective was to become a leading international supplier of added-value ingredients and flavours while retaining its heritage and expertise in dairy. Through a series of acquisitions in the UK, the USA, Europe, South America and Asia, Carbery has successfully built Synergy, its international flavours business.

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