Carbery Group reports 23% increase in 2017 turnover to €417 million

Carbery Group, the West Cork based international ingredients company, has reported a strong financial performance for the year ended 31 December 2017.

Group turnover for the year was up 22.7% to €417.3 million from €340.0 million in the previous year. EBITDA (earnings before interest, tax, depreciation and amortisation), increased to €41.8 million, up from €37.0 million in 2016, and the Group is reporting increased EBITA (operating profit before interest, tax, amortisation and exceptional items) of €31.0 million (2016: €27.1 million).

Jason Hawkins, Chief Executive Officer, Carbery Group said that the positive results were achieved as a result of strong trading performance across all three of Carbery’s strategic business platforms of Dairy, Nutrition and Taste. “Our Dairy business performed well on the back of strong dairy markets and continuing growth in our milk supply. Carbery’s Nutritional Ingredients platform continued to drive growth across new products, customers and markets, and Synergy, our international Taste business, once again delivered a very strong performance with growth across all key markets,” he said.

Mr. Hawkins noted that, as a result of very strong dairy markets and a good business performance, Carbery was able to continue to pay a leading milk price to its supplier shareholders during 2017. In addition, at the year end, the Board declared a 1 cent per litre bonus for 2017 milk.

Supplies of milk to Carbery’s processing facility in Ballineen increased by 8.2% to 509 million litres in 2017, and are up 28% since the removal of quotas. Mr. Hawkins also commented that “the Carbery Board allocated €10 million into its Stability Fund at year end to support future milk prices during times of price volatility.”

During 2017 Carbery invested a further €17.1 million across its global operations. This brings investment in the business over the past five years to a total of €80 million.

Carbery Group’s net debt position at 31 December 2017 was reduced to €12.7 million (2016: €26.2 million).  See Five Year Financial Review below.

Dairy Business
Carbery’s dairy business performed well in 2017 with steady growth experienced in its cheese business, supported by its partnership with Ornua.

Whilst noting that Brexit is a significant concern, particularly for Carbery’s cheese business given the importance of the UK market for Irish cheddar, Mr. Hawkins said: “We have a Brexit working team evaluating and preparing for all scenarios under either a soft or hard Brexit. We are also working closely with Irish governmental and industry bodies to ensure the potential implications of Brexit are understood and that we, and the dairy industry, are supported.”

Carbery launched its fourth fixed milk price scheme for its milk suppliers in December 2017. These schemes continue to offer some income stability in a volatile dairy market.

Nutrition Business
Carbery’s nutrition business, which includes a broad range of protein products, performed very well in 2017, driven by ongoing organic volume growth and the development of new markets. Continued investment in Research and Development has enabled the launch of a range of specialised nutritional ingredients for the infant and sports nutrition markets, with a particular focus on Asia and North America. Mr. Hawkins stated that Carbery’s Nutrition team is very focused on the development of new valued added technologies and markets.

Taste Business – Synergy
Synergy, Carbery Group’s international taste division, is a leading supplier of flavourings, extracts and essences. It supplies customers around the globe from operations in Europe, North America, South America and Asia.

Innovation is central to the Synergy growth platform noted Mr. Hawkins, adding that the team is focused on investing in and delivering innovative Taste technologies to support Carbery’s global customer base.

The business once again delivered strong results in 2017, continuing to create value for Carbery shareholders.

Mr. Hawkins said that the global Synergy team is well equipped to continue to drive organic growth and value for shareholders while also being well positioned to take advantage of any acquisition opportunities that will further enhance the Group’s Taste platform.

Looking to the future
Commenting on the market outlook for 2018, Jason Hawkins said that Carbery Group is well positioned to continue to build upon the strong performance achieved in 2017.

“Dairy markets will prove more challenging for our dairy business and milk suppliers in 2018, particularly if EU supply growth continues at recent levels. We currently have our stability fund in place to support potentially volatile and weakened markets. At the same time the management team will continue to manage dairy commodity risk across the business. I am optimistic that longer term dairy demand is healthy and that Carbery will continue to create value for our shareholders through investment in research and development, new product opportunities and facility expansion to cater for planned growth,” he concluded.

Carbery Group reports increase in profits of 6% for 2016

Carbery Group has reported an increase in earnings before interest, taxes, depreciation and amotisation (EBITDA) to €37m on turnover of €340m for 2016.

EBITDA increased by 4.8 per cent, up from €35.3m in 2015. Turnover for the year was down slightly at €340m compared to €349.5m in the previous year.

The Group is reporting operating profit before interest, tax, amortisation and exceptional items (EBITA) of €27.1m (2015: €25.5m), reflecting a year-on-year increase of 6 per cent. On a constant currency basis, EBITA increased by 9 per cent year on year.

Continuing on course with the group’s growth strategy, the Carbery Group invested €15.4m in its dairy and ingredients departments during 2016, increasing the total investment made by the company since 2011 to €78.2m.

By Division

Carbery’s dairy business in Ireland recorded good margins and expansion in both its ingredients and cheese divisions, in spite of lower prices for cheese during the year. The volume of milk processed at Ballineen in 2016 was up 4.4% to 470 million litres.

Carbery’s ingredients division has developed new business in high-value fields such as infant nutrition and clinical nutrition.

Carbery Group’s international flavour and natural extracts division, Synergy, has recorded good growth in its main customer markets of the UK, Europe, the USA, South America and south-east Asia.

Outlook

The outlook for the Carbery Group business is reportedly positive for 2017, given its strong and dynamic dairy, ingredients and flavours business divisions.

 

 

 

Carbery Group 2015 Financial Results

Carbery Group has reported strong results across all divisions for the year ended 31 December 2015 while continuing to pay industry leading milk prices to its suppliers.

Carbery’s earnings before interest, tax, depreciation and amortisation (EBITDA), increased by 33% to €35.3 million, up from €26.5 million in 2014, on an increased turnover of €349.5 million (2014: €316.6 million). Operating profit, before amortisation and exceptional items, increased to €25.5 million in 2015 from €18.3 million in 2014.

An exceptional credit of €6 million reported in the 2015 accounts relates to the sale of Carbery’s 50% stake in the Nutrifont joint venture in Brazil.

Following the removal of milk quota restrictions in 2015 milk supplies from Carbery’s West Cork shareholder suppliers increased by 13% in the 2015 calendar year to 450 million litres. For the full year post quota to the end of March 2016 milk supplies were up 18%. In a year when milk prices were weaker across the dairy sector West Cork suppliers again benefited from Carbery’s industry leading price. The continuing ability to deliver a competitive milk price for shareholder suppliers, whilst also significantly increasing shareholder value, illustrates the successful progress the Group continues to make across its growing international food ingredients and flavour businesses.

Re-investment in the business remains critical to Carbery’s growth plans and during 2015 group capital expenditure amounted to €20 million. Amongst other projects, this includes an investment in an Enterprise Resource Planning (ERP) project for Synergy, Carbery’s international flavour and natural extracts business.

The group’s net debt position at 31 December 2015 was reduced by 20% to €27.8 million (2014: €34.5 million).

The increase in 2015 operating profit is attributable to increased earnings in Carbery’s ingredients division partly offset by lower earnings in Carbery’s dairy division. Earnings growth in the ingredients division is due to year on year earnings growth in Carbery’s nutritional ingredients business as well as strong organic growth in the Synergy division. The lower reported earnings in the dairy business is primarily due to Carbery paying an industry leading milk price to its suppliers in increasingly challenging global dairy markets.

Carbery Group 2014 Financial Results

Carbery Group, the leading international manufacturer of value-added ingredients, flavours and cheese, has reported Operating profit before exceptional items of €12.7 million for year ending December 2014. Turnover was €316.6 million. During 2014 Carbery Group maintained its focus on adding value to its operating activities with group capital expenditure of €14.7 million across its dairy, nutrition ingredients and international taste business divisions. Significant investments were made
in Carbery’s cheese processing facilities in Ballineen, Co Cork to facilitate post quota expansion.

Carbery’s nutritional business also had a good year in 2014, benefiting from strong markets and from increased output of specialised ingredients, in particular its hydrolysed protein range. The company is engaged in a number of public/private research initiatives including the Dairy Products Technology Centre and Food for Health Ireland.

Synergy, Carbery Group’s taste and natural extracts business, had another successful performance in 2014. Results were driven by growth and consolidation in the established markets in the EU and US with new markets in South East Asia and South America continuing to be areas of focus for Synergy’s international growth. In its first full year of operation Synergy Thailand has had a very successful year, with Carbery’s operating presence in the region facilitating significant new business wins. Synergy flavours US and EU also benefited from significant investments in new analytical and sensory capabilities to support their innovation drive and deliver a more tailored customer experience.