Aurivo achieves record sales turnover of €488.7m.
AURIVO recorded an operating profit (before one off exceptionals) of €8.5 million in 2020 - an increase of 170% on the previous year.
Announcing its full-year financial results today, in what was a uniquely challenging year due to the global pandemic, the co-op delivered a strong financial performance for 2020.
It achieved a record sales turnover of €488.7m, an increase of 9.4% on FY19 (2019: €446.8m), and delivered an operating profit (before one off exceptionals) of €8.5m, an increase of 170% on the previous year (2019: €3.2m).
Group EBITDA was €15.1m, an increase of 69.7% on FY19 (2019: €8.9m).
The closing nett debt position on December 31, 2020, was significantly improved at €2.2m (2019: €18.8m).
The Aurivo milk pool for 2020 was 477m litres – growth of 5.5% on 2019.
The average price paid for milk in 2020 was 35.61cpl including VAT (2019: 34.35cpl including VAT)
A new fixed milk price scheme was introduced in 2020, bringing the number of fixed milk price schemes to seven.
The year was also a solid one for new product development and innovation across the business.
Commenting on the annual results, Donal Tierney, Chief Executive of Aurivo, said: “Aurivo has reported a strong and resilient set of results for 2020, in what was a uniquely challenging year. Against the backdrop of a global crisis, the hard work and agility of our employees, suppliers and members enabled the co-op to maintain essential supplies, services, and food products across domestic and global markets.
“As CEO, I am particularly proud of the very high service levels that have been provided across all business units.”
He continued: “The Aurivo milk pool expanded by 5.5% in 2020 and despite initial concerns about the impact of Covid-19 and a noticeable fall in activity in the food service sector, overall demand for dairy held up well in 2020, with the decline in food service being countered by the surging demand in the retail sector.
“The Aurivo average milk price for the year was 35.61cpl compared to 34.35cpl in 2019. In addition, we established a milk stability fund of €3m which will be paid out in future years to help our milk supply base manage market volatility.”
Looking to 2021 and beyond, Mr. Tierney said: “Notwithstanding the unique year that was 2020, our strategic priorities for the business continue to resonate throughout Aurivo and underpin our approach to sustainable growth. While we expect pandemic restrictions to ease during 2021, its ongoing impact, however, will ensure another year of uncertainty and global disruption. We need to remain vigilant and adaptable to ensure the health and safety of our employees, customers, and farmer suppliers, while securing business continuity and future growth.”
Raymond Barlow, who was elected chairman of Aurivo in November 2020, said: “In an extraordinary year of volatility and global disruption, Aurivo stayed on track to record an impressive group business performance that enabled us to deliver for our shareholders and sustain and improve milk price in 2020.
“Fully recognising that our farmers are facing numerous challenges including increasing production costs and additional requirements, we are confident that the co-op has a robust, efficient, and sustainable business model to effectively deliver for all our shareholders, suppliers and customers for the years to come.”
Progress in 2020 is outlined as follows across Aurivo’s businesses:
Aurivo’s consumer foods business unit delivered a robust outturn for 2020, recording sales turnover of €96.9m - an increase of 1.9% on the previous year.
The co-op’s consumer foods milk brands are performing well in a very competitive marketplace – reporting an 8% increase in the retail channel.
As a ‘food-to-go’ business, My Goodness Limited (trading as For Goodness Shakes), Aurivo’s sports nutrition business was most impacted by Covid-19. Due to the implementation of remote working and the notable reduction in footfall across London and the regional cities across the UK and Ireland, sales volumes fell significantly in 2020. However, indications of sales recovery post lockdown have proven positive, with volumes increasing parallel to the lifting of restrictions across our primary markets.
Aurivo’s dairy ingredients business performed well, with a 17% uplift in turnover in 2020 to €198m.
While the business marked the official opening and investment of the new spray dryer in 2019, it was in 2020 that the business reaped the benefits of the investment with the new dryer producing 25,000 tonnes of various grades of enriched milk powder (EMP) ingredients. This investment has been a central enabler, allowing them to process 35% extra milk per week on the ADI site; with 2020 seeing the largest powder production volumes ever recorded at the plant.
Designated as an essential retail and manufacturing business throughout the pandemic, Aurivo’s agribusiness continued to grow at record rates, recording a sales turnover of €127.9m, an 11.2% increase on the previous year.
Changes in consumer behaviours brought about by Covid-19 saw strong customer engagement both in-store and online resulting in 1.65 million transactions in 2020.
Feed tonnage also delivered a strong performance with an increase in volume of 8%.
Difficulties already faced by the livestock marts business were compounded in 2020 by Covid-19, with enforced closures experienced by the industry in April 2020.
Reporting a turnover of €65.9m (2019: €67.5m), the business adapted to the environment, in an effort to protect customers and employees, by moving to online auctions for the first time in its history, in May and June last year.
The online auction offered an opportunity to buyers to purchase stock online, while providing real-time bidding information to farmers.