International

Overview

International markets are served by Food Ingredients & Nutritionals. Food Ingredients processes 3.4 billion litres of milk and produces cheese, butter, casein and protein ingredients at world-class facilities in Ireland and the USA. The Group's Nutritionals business produces a wide range of speciality whey proteins, customised premix solutions and nutritional ingredients for use by food and beverage companies.

Food Ingredients USA and global Nutritionals had a strong performance in 2008, driven by favourable pricing and good organic volume increases. Optimum Nutrition, Inc. (Optimum) acquired in August 2008, made a first time contribution in line with expectations. This underpinned a satisfactory performance by the International division for the full year.

International

Outlook

2009 will be a tough year. Global dairy markets have weakened considerably from previous high levels with the outlook for 2009 deteriorating further since the beginning of the year. In broad terms in 2009 we expect that global dairy markets will remain weak and somewhat volatile. We would expect that these markets will bottom out as a result of some supply contraction in a number of countries and as a result are likely to begin to rebalance through the end of 2009 and into early next year with some price recovery as a consequence. However, in 2009 Food Ingredients Ireland will be the most challenged in the context of Global dairy markets. We expect this business to breakeven in 2009. Food Ingredients USA is expected to deliver a resilient performance, albeit down when compared with a strong result in 2008. Nutritionals is expected to deliver a robust performance.