Carbery Group Annual Report 2019

Carbery Group focuses on sustainable growth with turnover of €434 million for 2019

Carbery Group, the West Cork based international ingredients and cheese company, has reported a solid financial performance for the year ended 31 December 2019, grounded in a commitment to responsible expansion and sustainability across the Group.

Group turnover increase of 3% achieved through growth across all business segments.

€78m cheese diversification project due for completion later in 2020

Milk volumes in 2019 were 567 million litres, a growth of 42% between 2015 and 2019, all processed in Ballineen, West Cork

Across the group globally, production has increased by 20% since 2017, but carbon emissions have reduced by 11.7%

Aim to be carbon neutral by 2035 across all Carbery locations

Jason Hawkins, Chief Executive Officer for Carbery, commented that while the positive business results were a major achievement, what he and his team are most proud of is how these results have been achieved. “At Carbery, we have been focusing on how the business performs, but also on how we do business. Due to our cooperative model, and our close relationship with our farmer suppliers in West Cork, we have always been connected to the community and the product that we produce. Throughout 2019 we have been working on how we can safeguard the future of our business, while improving on that connection and commitment, both in Ireland and in our operations across the world.”

“It’s hard to believe, as we reflect on 2019, that the challenges posed by Covid19 in 2020 were on the horizon.  Looking forward, Carbery Group is focused on our business continuity plans and managing the situation so we can maintain uninterrupted production processes across our businesses throughout this crisis. Our cheese diversification project has been slightly delayed but is almost complete. Like all processors, we are closely monitoring volatile dairy markets across the world. Our primary concerns, as we remain at the peak of this crisis, are to safeguard the health of our employees and our farmer suppliers, as we endeavour to maintain production.”

Growth across all business segments

The cheese diversification investment of €78 million has demanded a significant amount of energy and focus from the Carbery team in Ballineen in 2019 and while slightly delayed, Carbery expects the new mozzarella line will be operational in 2020. The commercial activities supporting this investment have also been significant.

Growth in 2019 has been driven by expansion across all platforms. Carbery’s Nutrition business continued to grow and performed strongly in 2019. To support market expansion into Asia, a commercial base in Shanghai was opened during the year.

Strong performance across the Group’s taste division Synergy was driven by the continuing implementation of the newly updated global strategy. This includes responding to the changing taste and dietary needs of the European customer base, as well as supporting growth plans in Asia by the opening in 2019 of Carbery Group’s first customer centre in Indonesia.

The Americas Taste business continues to deliver strong results and 2019 saw the launch of the Dairy Taste portfolio in the Americas market.  Synergy US headquarters in Wauconda, Illinois was expanded by 38,000 square feet during 2019 to accommodate future business growth.

In terms of future plans for growth across the group, Jason Hawkins stated “While we are committed to growing the company, underpinning our growth ambitions is a focus on growing in a sustainable way, which will guarantee a stable and successful future for our business, our shareholder suppliers, our people, the community and the environment.

For Carbery Group, being sustainable means ensuring our business is futureproofed and resilient.  It means working to protect and enhance the legacy of our farmer suppliers in West Cork. It means ensuring our people feel valued and secure. It means being able to stand over our supply chain, our business decisions, and the lasting impact we make on the environment and communities around us. It means being a proud part of the food industry of Ireland and globally.”

Growing sustainably

In terms of the evolution of the Carbery Group’s corporate responsibility and sustainability focus, 2019 was a year of further significant progress. Against a backdrop of a 20% increase in production in the 8 manufacturing sites globally, the Group was able to achieve a reduction in carbon emissions of 11.7%.  Since 2017, carbon emissions intensity per tonne of production has reduced by 28.5% at Ballineen. 

Some of the initiatives driven by the strategy include:

Since 2018, electricity purchased has been 100% from renewable sources through a green tariff.

Our Every Drop Counts water programme has saved 1.4m litres of water per day in Ballineen

The Carbery Greener Dairy Farms™ programme provides support to help farmers reduce energy use and carbon emissions. The 25 farms participating have reduced emissions by 15%.

In summer 2019, a small-scale grass bio-refinery was tested on five Carbery farms in West Cork –the first of its kind to be trialled in Ireland and one of the first in Europe.

An Ethical Procurement policy which outlines expectations on environmental, social and human rights aspects related to procurement is being built into the contracts process.

95% of the paper and cardboard bought in Ballineen is certified sustainable

From 2020, the Group will begin light-weighting plastic packaging and sourcing alternatives with a view to reducing the amount of plastic used by as much as 10 tonnes a year.

Carbery Group has been recognised for many of the improvements made to their processes. Some of these achievements include: LEED certification (Leadership in Energy and Environmental Design) for the extension to the Synergy US plant, Green Awards in 2018 (sustainable energy award) and 2019 (sustainable water award) and a nomination for the Board Bia Sustainability Awards in 2019.

The Group aim to be carbon neutral by 2035 across all sites through decarbonising existing energy sources.

Financial performance

Group turnover increased by 3% to €434.1m, while on a constant currency basis turnover increased by 1.0% year-on-year. Group EBITDA (earnings before interest, tax, depreciation (net of grants), amortisation of goodwill, other intangibles and exceptional items) increased by 1% to €44.3m (2018: €43.9m)

Group EBITA (operating profit before interest, tax, amortisation of goodwill, other intangibles and exceptional items) decreased to €30.2m (2018: 32.4m) reflecting a year-on-year decrease of 7%. On a constant currency basis EBITA decreased by 11%. The group’s net debt position at 31st December was €47.2m (2018: €30.1m).

Milk volumes increased by 6% in 2019 to 567 million litres.

Chairman of the Carbery Group Board, TJ Sullivan, commented “Financially, our 2019 performance was strong and in line with our targets, while we continued to evolve our business strategy. We also supported the milk price for our farmer suppliers from business profits and using our stability fund. Post the elimination of quotas in 2015 our milk volumes have grown by 42% to 567 million litres which we have processed entirely at our site in Ballineen in 2019.

He added; “On behalf of the Board I’d like to thank the management, staff, shareholders and everyone involved in a successful 2019. In particular thanks to the farmer suppliers and their families who have been a huge part of our 2019 growth, and I want to assure them we are doing all we can to continue to protect this growth throughout 2020 and the current Covid19 crisis”

The the full report can be read on the Carbery website 

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