TIDMGLB
RNS Number : 1714V
Glanbia PLC
01 November 2017
THIRD QUARTER 2017 INTERIM MANAGEMENT STATEMENT
Good performance in the first nine months of 2017
Reiterating full year guidance of 7%-10% growth in pro forma
adjusted earnings per share from the continuing Group, constant
currency
1 November 2017 - Glanbia plc, the global nutrition group
('Glanbia', the 'Group' or the "plc"), is issuing this Interim
Management Statement for the nine month period ended 30 September
2017.
Commenting today, Siobhán Talbot, Group Managing Director
said:
"Glanbia delivered a good result in the first nine months of
2017 with wholly owned revenue from continuing operations growing
6.6% in the period. Glanbia Performance Nutrition ("GPN") was the
main driver of revenue growth with Glanbia Nutritionals ("GN")
continuing to perform well. Our Joint Ventures delivered strong
revenue growth as a result of improved dairy markets. The outlook
for the remainder of 2017 is positive and we reiterate our full
year guidance of 7% to 10% growth in pro forma* adjusted earnings
per share, constant currency, for the continuing Group."
Performance update
In the nine months ended 30 September 2017, wholly owned revenue
from continuing operations increased 6.6% on a reported and
constant currency basis when compared to the same period in 2016.
On a constant currency basis, this was driven by volume growth of
2.4%, pricing growth of 0.9% and a contribution from acquisitions
of 3.3%. Total Group Revenue, including Glanbia's share of Joint
Ventures and Associates, increased 13.5% on a reported basis and
13.7% on a constant currency basis. This was driven by 2.3% volume
growth, 6.4% price improvement and a 5.0% contribution from
acquisitions.
Glanbia Performance Nutrition (constant currency**)
GPN delivered a satisfactory performance in the first nine
months of the year. In that period, revenues increased by 9.0%.
This was driven by a 2.7% increase in volume, 7.4% growth from the
acquisitions of Amazing Grass and Body & Fit offset by a 1.1%
price decrease.
The overall volume movement year to date reflected branded
revenue growth offset by a decline in contract business. The
drivers of growth have been a good performance in the online and
mass channels in the US as well as a strong performance across the
EMEA and LAAPAC markets. The price decrease was primarily a
function of brand investment and innovation support in the US with
full year pricing expected to be broadly in line with year to date
levels.
Innovation continues to be a driver of growth with a range of
products focused on convenience formats and plant based ingredients
performing well across the branded portfolio. The pipeline of new
product launches will continue into the fourth quarter and will be
broad based across channel, format and territory.
The full year 2017 outlook for GPN is good. GPN continues to
expect delivery of like-for-like branded revenue growth in the
mid-single digit range for the full year recognising a seasonal
uplift in quarter four. Full year EBITA margins are expected to be
in the mid teen range broadly in line with half year 2017
levels.
Glanbia Nutritionals (constant currency**)
GN delivered a good performance in the first nine months of 2017
with revenue growth of 4.6%. This was driven by a price increase of
2.5%, mainly as a result of improved dairy markets, versus prior
year and volume growth of 2.1%, driven by Nutritional
Solutions.
Nutritional Solutions delivered good price and volume increases
in the period. This was driven by increased sales of value added
dairy and micro-nutrient solutions which continued to perform well
with customers across developed and emerging markets.
US Cheese performance was somewhat challenged in the period with
product mix adverse due to cheese market dynamics where supply has
outpaced demand for certain formats. Overall, pricing was in line
with prior year and volume declined marginally.
The full year 2017 outlook for GN is good. Revenue and EBITA
growth is expected to be driven by volume and pricing growth in
Nutritional Solutions.
Discontinued Operations
The sale of 60% of Dairy Ireland and related investments in
Joint Ventures was completed on 2 July 2017 and has been classified
as discontinued operations. Revenues in 2017 for discontinued
operations are as reported in Glanbia's half year 2017 results
which were published on 10 August 2017. The Dairy Ireland business
is now consolidated within the Glanbia Ireland Joint Venture.
Joint Ventures (constant currency**)
Joint Ventures ("JVs") delivered a strong performance in the
first nine months of 2017 with revenues increasing by 33.6% versus
the same period in the prior year. This was driven by a price
increase of 21.9% as a result of improved dairy markets, volume
improvement of 2.3% and acquisitions providing 9.4% revenue growth
as a result of Glanbia Ireland's acquisition of 60% of Dairy
Ireland.
JVs are expected to deliver a strong performance for full year
2017 primarily as a result of improved dairy markets.
Financing
Glanbia's net debt at the end of the third quarter of 2017 was
EUR482 million which represents a decrease of EUR144 million versus
the net debt position at the end of the third quarter of 2016. This
was primarily driven by the receipt of EUR210 million in net cash
proceeds relating to the Dairy Ireland transaction, somewhat offset
by the acquisition of Amazing Grass and Body & Fit, and
increased working capital primarily due to acquisitions, higher
activity levels and higher commodity markets. The full year 2017
net debt to adjusted EBITDA ratio, as calculated per financing
agreements, is expected to be approximately 1.0 times based on
current business activity. Total 2017 capital expenditure is
expected to be in the range of EUR65 million to EUR75 million.
Full year outlook
Glanbia reiterates its guidance that on a pro-forma* basis
adjusted earnings per share for the continuing Group is expected to
grow between 7% - 10% constant currency for full year 2017.
* Pro-forma adjusted EPS of the continuing Group has been
provided assuming the Dairy Ireland transaction took place at the
start of FY 2016. On this basis FY 2016 Pro-forma EPS is 80.40
cent.
** To arrive at the Constant Currency Change, the average FX
rate for the current period is applied to the relevant reported
result from the same period in the prior year. The average Euro US
Dollar FX rate for the first nine months of 2017 was EUR1 = $1.11
(Average for first nine months of 2016: EUR1 = $1.12).
Ends
Cautionary statement
This announcement contains forward-looking statements. These
statements have been made by the Directors in good faith based on
the information available to them up to the time of their approval
of this report. Due to the inherent uncertainties, including both
economic and business risk factors underlying such forward looking
information, actual results may differ materially from those
expressed or implied by these forward-looking statements. The
Directors undertake no obligation to update any forward-looking
statements contained in this announcement, whether as a result of
new information, future events, or otherwise.
IMS conference call dial-in details
There will be an analysts' conference call to accompany this
Interim Management Statement at 8.30 a.m. (GMT) today.
To listen to the call, please dial-in using the following
numbers:
Ireland UK Europe USA Pass code
-------- --------- ------------ -------- ----------
01 246 0330 336 +44 330 336 719 457
5638 9105 9105 1036 1705911
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A replay of the call will be available for 30 days from this
afternoon. Please see the link below to the Investor Relations
section of the Glanbia plc website for details:
http://www.glanbia.com/investors/results-centre
For further information contact
Glanbia plc +353 56 777 2200
Mark Garvey, Group Finance Director
Liam Hennigan, Head of Investor Relations: +353 86 046 8375
Mark Garrett, Director of Communications & Public Affairs: +353 86 601 9655
Martha Kavanagh, Head of Media Relations: +353 87 646 2006
This information is provided by RNS
The company news service from the London Stock Exchange
END
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