TIDMGLB
RNS Number : 8703W
Glanbia PLC
24 April 2019
FIRST QUARTER 2019 INTERIM MANAGEMENT STATEMENT
Q1 Revenue growth of 8.4%, constant currency - Full year
guidance reiterated
24 April 2019 - Glanbia plc, the global nutrition group
('Glanbia', the 'Group' or the "plc"), is issuing this Interim
Management Statement for the three month period ended 30 March
2019. This statement is issued in conjunction with the plc.'s
Annual General Meeting which is being held today.
Commenting today, Siobhán Talbot, Group Managing Director
said:
"Glanbia grew revenues by 8.4%, constant currency, in the first
quarter of 2019 underpinned by growth in both Glanbia Nutritionals
and Glanbia Performance Nutrition in the period. Glanbia
Nutritionals was the main driver of revenue growth with a good
performance in particular from the Nutritional Solutions business.
Glanbia Performance Nutrition revenue growth in the first quarter
was driven by a strong performance from the recently acquired
SlimFast brand. Our strategy remains on track and we reiterate our
full year guidance of 5% to 8% growth in adjusted earnings per
share, constant currency, in 2019, with growth to be delivered in
the second half of the year."
Performance update
In the three months ended 30 March 2019, wholly owned revenue
increased 8.4%, constant currency. On a reported basis, reflecting
the stronger US Dollar Euro foreign exchange rate, revenue
increased 16.2% when compared to the same period in 2018. The
drivers of revenue increase on a constant currency basis were
volume growth of 1.4%, acquisitions of 9.7% offset by a price
decline of 2.7%.
Board changes
On 20 February 2019, Glanbia announced changes to the
composition of its Board with Ms Mary Minnick and Mr Richard Laube
to be appointed as independent Non-Executive Directors on 1 May
2019.
Today, Glanbia is announcing that Mr John Daly will be appointed
to the Board as an independent Non-Executive Director effective 1
May 2019. Accordingly, Paul Haran will retire on the same day.
John Daly (aged 62) currently serves as Chairman of both Britvic
plc, a leading soft drinks company and Vivo Energy plc, a
downstream petroleum company. He is also a member of the Board of
G4S plc, a security services business, and has announced his
intention to retire from this Board on 16 May 2019. He is a former
Non-executive Director of Ferguson plc. Mr Daly retired from his
position as an Executive Director of British American Tobacco
("BAT") in 2013. Over a 19 year international career at BAT, he
held commercial leadership roles in both developed and emerging
markets culminating as chief operating officer. Mr Daly holds an
MBA from University College Dublin and a Diploma in Marketing from
the Chartered Institute of Marketing (UK).
Mr. Daly has notified Glanbia plc that, save as disclosed
herein, he does not have any details to be disclosed as required
under Paragraph 6.6.7, Chapter 6 of the Euronext Dublin Listing
Rules and Paragraph 9.6.13, Chapter 9 of the UK Listing Rules
On 1 May 2019, Mr Dan O'Connor will take up the role of Senior
Independent Director on the Board.
The Company will announce changes to the composition of its
Board Committees arising from these new appointments (which will
continue to comprise only of Independent Non-Executive Directors)
in due course.
Watson acquisition
On 28 February 2019 Glanbia completed the acquisition of Watson
LLC and Polymer Films LLC (collectively known as "Watson") for $89
million in cash (the "Transaction"). Watson is a US based non-dairy
ingredient solutions business and is a complementary acquisition
for the Group. Watson is now part of the Nutritional Solutions
business within Glanbia Nutritionals. The Transaction was fully
financed by Glanbia's existing banking facilities and it is
expected to be marginally accretive to earnings per share in
2019.
Glanbia Performance Nutrition (all commentary is on a constant
currency basis**)
Glanbia Performance Nutrition ('GPN') delivered revenue growth
in the first three months of 2019. Compared to the prior year,
revenue increased by 4.9% and this was driven by the SlimFast
acquisition delivering 24.8% offset by a volume decline of 16.5%
and a price decline of 3.4%.
The SlimFast acquisition is performing strongly with the
integration of the business continuing as planned. Growth was
driven by the core range and particularly strong consumer demand
for recent innovations in the UK and US, in particular the Keto
range.
Volume decline in the first quarter reflects both the
seasonality in the business following a strong Q4 2018 and specific
supply chain initiatives in the period which impacted the phasing
of sales in certain non-US markets. Price decline reflects a
continuation of brand investment and pricing initiatives to negate
the impact at consumer level of FX and tariff headwinds.
GPN's lifestyle and direct-to-consumer brands performed well in
the period. Product innovation continued in the first quarter with
good performances from recently launched products in weight
management, energy and plant based formats.
The full year 2019 outlook for GPN is good. Consumption growth
trends are expected to remain positive for the remainder of the
year and this is expected to drive growth over the full year. Price
increases will be implemented in the second half of the year and
full year revenue growth is expected to be driven by a mix of
volume and price increases.
Glanbia Nutritionals (all commentary is on a constant currency
basis**)
Glanbia Nutritionals ('GN') delivered strong revenue growth in
the first three months of 2019. Revenue increased by 10.4% versus
prior year. This was driven by a volume increase of 11.2%, offset
by a price decline of 2.4% and the Watson acquisition delivering
1.6%. Revenue drivers across Nutritional Solutions and US Cheese
are set out below. Glanbia has adopted the new revenue accounting
standard IFRS 15 (Revenue from Contracts with Customers) in 2019.
Revenue reporting in Glanbia Nutritionals recognises 100% of the
sales from the Southwest Cheese Joint Venture ("SwC JV") with
comparisons to prior year on the same basis.
Nutritional Solutions (NS)
NS is a leading provider of customised nutrient premixes,
advanced-technology protein solutions, functional beverages and
flavours. NS has a diverse product portfolio and supports its
customers on both a global and regional basis, supplying solutions
that improve product functionality and nutritional profile.
NS revenue increased by 22.1% in the period. This was driven by
volume growth of 16.1%, a price increase of 0.7% and the Watson
acquisition delivering 5.3%.
Volume growth was driven by a strong performance in value-added
dairy solutions against a relatively weak first quarter in 2018.
Non-dairy solutions also performed well with good volume growth in
the Asian region in particular. Price increase was primarily driven
by improved mix in dairy solutions.
US Cheese
US Cheese is a leading producer and marketer of American-style
cheddar cheese in the US supplying brand owners and private label
companies who in turn supply major retail and food service
operators. US Cheese operates all of the dairy processing plants
within GN and also the SwC JV plant which produces cheese and whey
ingredients.
US Cheese revenue increased by 5.5% in the period. This was
driven by volume growth of 9.1% primarily due to capacity expansion
in the SwC JV plant completed in the prior year. Pricing decreased
by 3.6% as a result of lower cheese markets year on year. US Cheese
operates a pass through pricing model which provides substantial
protection against dairy price movements.
The full year 2019 outlook for GN is good with positive momentum
continuing across the Nutritional Solutions business driven by
strong underlying volume growth and expected positive pricing.
Joint Ventures (all commentary is on a constant currency
basis*)
Revenues from Joint Ventures ("JVs") increased by 14.9% in the
first three months of 2019. This was driven by volume growth of
13.6%, mainly from Glanbia Ireland and the SwC JV, and a price
increase of 1.3% as a result of improved year on year dairy
markets.
Financing
Glanbia's net debt at 30 March 2019 was EUR809.8 million, which
represents an increase of EUR424.7 million versus the net debt
position at the end of the first quarter of 2018. This increase has
been primarily driven by the acquisitions of Watson and SlimFast.
The Group's balance sheet remains in a strong position.
Full year outlook
Glanbia reiterates its guidance that adjusted earnings per share
for the continuing Group is expected to grow between 5% - 8%
constant currency for full year 2019. If the average Euro US Dollar
foreign exchange rate for the full year remains at similar levels
to the average rate for the first quarter of 2019 Glanbia expects
the full year 2019 reported result to be 3% higher than the
constant currency outlook.
* 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 Q1 2019 was EUR1 = $1.136 (Q1 2018 was EUR1 = $1.
229).
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. (BST) today.
To listen to the call, please dial-in using the following
numbers:
Ireland UK Europe USA Pass code
0330 336 +44 330 336
01 246 5638 9125 9125 323-994-2093 8638109
--------- ------------ ------------- ----------
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, Group Director of Strategic Planning & Investor Relations: +353 86 046 8375
Martha Kavanagh, Head of Corporate Communications: +353 87 646
2006
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END
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