TIDMGLB
RNS Number : 2501W
Glanbia PLC
17 August 2022
Glanbia half year 2022 results
Good first half momentum, full year outlook upgraded to 9% to
13% growth in adjusted EPS constant currency
17 August 2022 - Glanbia plc ("Glanbia", the "Group", the
"Company", the "plc"), the global nutrition company, is publishing
its financial results for the six month period ended 2 July 2022
("half year 2022", or "HY 2022").
Half year highlights include:
-- Group revenues of EUR2.8 billion (HY 2021: EUR2 billion)
represents growth of 26.8% constant currency (up 38.5%
reported);
-- Strong operating performance
o Glanbia Performance Nutrition ("GPN") branded like-for-like
volume +1.9%, pricing +13.9%
o Nutritional Solutions ("NS") like-for-like volume +1.6%,
pricing +17.9%;
-- Group EBITA pre-exceptional EUR171.7m (HY 2021: EUR159.9m), a
decrease of 3.5% constant currency (up 7.4% reported);
-- Adjusted earnings per share(1) ("EPS") ahead of expectations
at 52.31 cent (HY 2021: 48.84 cent), a decrease of 3.8% constant
currency (up 7.1% reported);
-- Basic EPS of 66.13 cent (HY 2021: 27.90 cent);
-- Net debt to adjusted EBITDA ratio of 1.83 times (HY 2021: 1.51 times);
-- Completed the disposal of 40% interest in Glanbia Ireland and
acquired Sterling Technology, a US bioactive ingredient
company;
-- Continued progress against ESG targets and Board diversity increased;
-- Returned EUR127.1m to shareholders in the period via share buybacks;
-- Interim dividend increased by 10% to 12.93 cent per share; and
-- Strong H2 EBITA growth expected over prior year - full year
guidance upgraded to 9% to 13% adjusted EPS constant currency
growth (21% to 25% reported(2) )
Commenting today Siobhán Talbot, Group Managing Director,
said:
"I am pleased to report that half year 2022 results have
exceeded our plans, demonstrating the impact of a series of actions
implemented since the latter part of last year in response to
unprecedented inflation.
Revenues grew strongly with significant pricing initiatives and
volume growth in all business segments in the period. Adjusted EPS
1 at 52.31 cent, reflected improving momentum across the Group,
building on a strong 2021 comparator. We continue to make progress
on our strategic agenda and with the completion of the sale of the
Company's minority interest in Glanbia Ireland, Glanbia plc
continues to evolve as a focused, purpose led global nutrition
company.
We will continue to monitor inflationary trends into the second
half of the year but are confident that further pricing action and
operational efficiencies will deliver improving margins and strong
year-on-year EBITA growth.
Current expectations for improved EBITA growth in GPN underpin
the upgrade in full year guidance for the Group, with growth in
adjusted EPS1 now expected to be 9% to 13%, constant currency.
Based on current foreign exchange rates, the reported adjusted EPS
growth is expected to be 21% to 25%."
1 Adjusted earnings per share ("EPS") for continuing
operations
2 Based on foreign exchange rates being sustained for the
reminder of 2022
Summary financials (pre-exceptional)(1)
2022 half year results Reported Constant
Currency
EURm HY 2022 HY 2021 Change Change(2)
======================================= ======= ======= ======== ===========
Wholly-owned business
Revenue 2,828.8 2,042.2 +38.5% +26.8%
EBITA(3) 171.7 159.9 +7.4% -3.5%
EBITA margin 6.1% 7.8%
Joint Ventures (continuing
operations(4) )
Share of profit after tax 11.4 18.8
Profit after tax 121.5 133.5
--------------------------------------- ------- ------- -------- -----------
Profit after tax - continuing
operations 121.5 122.4
Profit after tax - discontinued
operations - 11.1
--------------------------------------- ------- ------- -------- -----------
Adjusted earnings per share(5) 52.31c 52.86c -1.0% -10.4%
--------------------------------------- ------- ------- -------- -----------
Adjusted earnings per share
(continuing operations) 52.31c 48.84c +7.1% -3.8%
Adjusted earnings per share
(discontinued operations) - 4.02c
======= ======= ======== ===========
Exceptional gains/(costs)
(after tax) (continuing operations) 6.9 (52.2)
Basic earnings per share (continuing
operations) 46.1c 24.09c
Basic earnings per share (discontinued
operations) 20.03c 3.81c
--------------------------------------- ------- ------- -------- -----------
1. This release contains certain alternative performance
measures. Detailed explanation of the key performance indicators
and non-IFRS performance measures can be found in the glossary on
pages 35 to 43.
2. To arrive at the constant currency change, the average
exchange 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 exchange rate for HY 2022 was EUR1 = $1.093 (HY
2021: EUR1 = $1.204). Reported and constant currency movements are
on a pre-exceptional basis.
3. EBITA is defined as earnings before interest, tax and amortisation.
4. Continuing operations. The Glanbia Ireland joint venture was
classified as a discontinued operation on 17 December 2021. Results
presented for continuing operations excludes the impact on the
Group of the Glanbia Ireland joint venture. Discontinued operations
reflects the contribution from the Glanbia Ireland joint venture.
Prior year comparatives have been restated on the same basis.
5. Adjusted earnings per share includes the contribution of
continuing and discontinued operations.
2022 financial half year results summary
Revenue progression HY 2022 versus HY 2021
-----------------------
Reported
Constant currency movement movement
============================================================ ==========
Total
constant Total
Volume Price Like-for-like Acquisition currency(2) reported
======= ==========
Glanbia Performance
Nutrition 0.5% 13.6% 14.1% 0.8% 14.9% 24.4%
----------------------- ------- ------ -------------- ------------ ------------- ----------
Glanbia Nutritionals 5.1% 25.4% 30.5% 1.7% 32.2% 44.9%
----------------------- ------- ------ -------------- ------------ ------------- ----------
Nutritional Solutions 1.6% 17.9% 19.5% 5.4% 24.9% 35.4%
US Cheese 6.6% 28.8% 35.4% - 35.4% 49.2%
----------------------- ------- ------ -------------- ------------ ------------- ----------
Total wholly-owned
businesses 3.7% 21.7% 25.4% 1.4% 26.8% 38.5%
----------------------- ------- ------ -------------- ------------ ------------- ----------
Revenue, EBITA
and margin
-----------------------
HY 2022 HY 2021
-------- -------- ------- -------- -------- -------
Margin Margin
EURm Revenue EBITA % Revenue EBITA %
======================= -------- -------- ------- -------- -------- -------
Glanbia Performance
Nutrition 794.1 82.3 10.4% 638.4 90.2 14.1%
-------- -------- ------- -------- -------- -------
Glanbia Nutritionals 2,034.7 89.4 4.4% 1,403.8 69.7 5.0%
-------- -------- ------- -------- -------- -------
Nutritional Solutions 588.8 71.7 12.2% 434.8 56.6 13.0%
-------- -------- ------- -------- -------- -------
US Cheese 1,445.9 17.7 1.2% 969.0 13.1 1.4%
======================= -------- -------- ------- -------- -------- -------
Total wholly-owned
businesses 2,828.8 171.7 6.1% 2,042.2 159.9 7.8%
----------------------- -------- -------- ------- -------- -------- -------
2022 half year overview
The Group's results for the first half of 2022 were very solid
in the context of unprecedented inflationary trends across the
business. Significant management actions were taken to mitigate
cost inflation including price increases and other efficiency
measures. Consumer response to date to higher pricing has been
better than expected in key areas with volume growth in both GPN
and GN for the half year. EBITA margins in the period reduced as
actions to mitigate inflation did not fully insulate year-on-year
margins which, particularly in GPN, were comparatively high in the
first half of 2021.
Glanbia wholly-owned revenue was EUR2,828.8 million, an increase
of 26.8% constant currency (up 38.5% reported). GPN revenues grew
by 14.9% constant currency (up 24.4% reported) on prior year driven
by a 0.5% increase in volumes, favourable pricing of 13.6% and the
positive impact of acquisitions of 0.8%. GPN had good volume and
consumption growth in performance nutrition, healthy lifestyle and
direct-to-consumer ("D2C") brands which was offset by continuing
headwinds in the diet category and the SlimFast brand. Pricing was
positive across all GPN brands. GN revenues were up 32.2% constant
currency (up 44.9% reported) on prior period driven by volume
increase of 5.1%, price increases of 25.4%, and the positive impact
of the PacMoore and Sterling Technology acquisitions of 1.7%. GN
volume growth was largely driven by growth in the Nutritional
Solutions non-dairy ingredient portfolio and US Cheese.
Wholly-owned EBITA pre-exceptional was EUR171.7 million, down
3.5% constant currency (up 7.4% reported).
GPN pre-exceptional EBITA decreased by 18.1% constant currency
(down 8.8% reported) to EUR82.3 million (HY 2021: EUR90.2 million).
GPN pre-exceptional EBITA margin at 10.4% (HY 2021: 14.1%) was 370
basis points lower than prior year as significant inflation in cost
of goods sold was not fully mitigated by increased pricing and
incremental benefits from the GPN transformation programme. GN
pre-exceptional EBITA increased by 15.5% constant currency (up
28.3% reported) to EUR89.4 million (HY 2021: EUR69.7 million) with
good growth in both NS and US Cheese. GN pre-exceptional EBITA
margin at 4.4% (HY 2021: 5.0%) was 60 basis points lower than prior
year largely due to the dilutive impact of higher pricing.
The Group's joint ventures (continuing operations) performed in
line with expectations with profit after tax decreasing by EUR7.4
million to EUR11.4 million for the first half of 2022 due to strong
prior year comparatives.
Total Group profit after tax for continuing operations
(pre-exceptional items) for the period was EUR121.5 million, down
EUR0.9 million on prior half year.
Adjusted EPS for continuing operations for the period of 52.31
cent represents a decline of 3.8% constant currency (up 7.1%
reported) versus a strong prior year comparative.
Capital investment
Glanbia's total investment in capital expenditure (tangible and
intangible assets) was EUR29.3 million in the first half of 2022
(HY 2021: EUR39.7 million). Strategic investment totalled EUR22.0
million related largely to IT investment supporting a global
transformation of the Group's HR systems and operating model. Total
capital expenditure for the year is expected to be EUR70 million to
EUR80 million.
Dividend per share
The Board is recommending an interim dividend of 12.93 cent per
share (HY 2021: 11.75 cent per share) representing a 10% increase
on prior year interim dividend. Glanbia's overall dividend policy
remains unchanged at a target annual dividend payout ratio of
between 25% and 35% of adjusted EPS. The interim dividend will be
paid on 7 October 2022 to shareholders on the register of members
as at 26 August 2022. Irish withholding tax will be deducted at the
standard rate where appropriate.
Share buyback
Glanbia maintained share buyback activity through the first half
of 2022, deploying EUR127.1 million in the period (HY 2021: EUR33.4
million). Following the Company's AGM on 5 May 2022, Glanbia
consulted with, and received support from, a number of its
independent shareholders on the use of share buy-backs as a capital
allocation tool, where appropriate. On 23 June 2022, the Group
launched a further EUR50 million share buyback which is ongoing. In
the year to date Glanbia has deployed a total of EUR148.0 million
on share buybacks.
Board update
As part of Glanbia's focus on Board renewal, on 29 July 2022,
the Company announced the appointment of two non-executive
Directors to the Board effective 1 August 2022, Ms. Ilona Haaijer
and Ms. Kimberly Underhill. This follows the reduction in Glanbia
Co-operative Society Limited's representation on the Board from
seven Directors in 2021, to five in 2022 with a further agreed
reduction to three in 2023. Ms. Haaijer, a Dutch citizen, brings
extensive and significant leadership experience of strategic
development, change management, mergers and acquisitions and
leading complex, global businesses in the food ingredients and
consumer sectors. Ms. Underhill, a US citizen, brings extensive and
significant leadership experience in US and international consumer
products businesses, with particular strength in product
development, marketing, portfolio management, brand-building,
strategic planning and international business development. The
Board is currently made up of 14 members, five of which are female,
and in 2023 the overall size of the Board is planned to reduce to
13 Members.
ESG update
Glanbia continues to make solid progress against its stated
objectives in its environmental, social and governance agenda. As
referenced above, recent Board changes have increased female Board
membership to 36%. Initiatives in the roadmap to decarbonise
operations (Scope 1 & 2) emissions in line with the Group's
Science Based Targets initiative ("SBTi") targets are advancing
through technical, engineering, procurement and financial
evaluation and decision making. A separate working strand on dairy
supply chain (Scope 3) emissions reductions is also progressing,
together with assessing priority suppliers in all categories
through EcoVadis, a provider of business sustainability ratings.
The Group will finalise water targets, and is completing zero waste
planning for all operational sites, in 2022. Glanbia's Diversity,
Equity & Inclusion ("DEI") agenda has further progressed with
the launch of an inclusive leadership development programme for
senior leaders as well as additional employee resource groups for
LGBTQ+ and multicultural employees. DEI targets have been cascaded
into leadership incentives deeper in the organisation and, to
assist target delivery, Glanbia is formally measuring employee
attitudes to inclusion and belonging as well as female management
participation levels.
Capital Markets Event
The Group will be holding a Capital Markets event on November
9(th) to update the market on its growth agenda, while also
providing an opportunity to meet divisional management.
Outlook
The resilience and momentum of Glanbia's core brands and
nutritional solutions ingredients portfolio in HY 2022 supports the
Group's confidence in its ability to navigate continuing external
risks including an increasingly challenging economic environment,
the impact of geopolitical tensions, and unprecedented inflation.
In the absence of any further unanticipated major market
disruption, Glanbia expects sustained revenue and earnings momentum
in H2 2022.
In FY 2022, GPN expects to deliver low teens percentage revenue
growth while GN NS expects strong double-digit percentage revenue
growth. As previously noted, revenue growth in both platforms will
be primarily driven by pricing. EBITA growth is expected to be
delivered in GPN, GN NS and US Cheese based on the momentum to date
and the actions taken to mitigate material inflation headwinds.
Full year expectations for joint ventures are unchanged from prior
views. The full year GPN EBITA margin outlook has improved with the
targeted EBITA margin of 12% expected to be achieved in the fourth
quarter and full year margin contraction now expected to be up to
50bps versus prior year. In GN NS, the expected full year margin
contraction of c.100bps will be driven by the mathematical dilution
related to significant pricing changes, particularly in dairy
ingredients. From a Group perspective the strong focus on cash
generation is expected to deliver an operating cash flow conversion
rate of over 80% for FY 2022.
Based on these latest expectations for full year earnings growth
in GPN and GN, Glanbia is now confident to upgrade full year
guidance for growth in adjusted EPS to a range of 9% to 13%
constant currency. Should current foreign exchange rates be
sustained for the remainder of 2022 the reported adjusted EPS
growth would be expected to be in a range of 21% to 25%.
Inside Information
This announcement contains inside information as set out in the
paragraphs titled Outlook. The person responsible for arranging for
the release of this announcement on behalf of Glanbia plc is Liam
Hennigan, Group Secretary and Head of Investor Relations. The time
and date of this announcement is, at 7am BST, 17 August 2022.
Financial half year 2022 operations review
Glanbia Performance Nutrition
Constant
Reported currency
EURm HY 2022 HY 2021 change change
============== ======== ======== ========= ==========
Revenue 794.1 638.4 +24.4% +14.9%
EBITA 82.3 90.2 -8.8% -18.1%
EBITA margin 10.4% 14.1%
============== ======== ======== ========= ==========
Commentary on percentage movements is on a constant currency
basis throughout.
GPN revenue increased by 14.9% in HY 2022 versus prior year.
This was driven by volume growth of 0.5%, price increases of 13.6%,
and the LevlUp acquisition contributing 0.8%. Excluding the impact
of contract business, which has been exited in North America,
branded like-for-like revenues increased by 15.8% with 13.9% growth
in pricing and 1.9% volume growth. Pricing was driven by the
execution of price increases in the third quarter of 2021 and first
half of 2022 to mitigate cost inflation . Volume growth was strong
in the performance nutrition and lifestyle brand portfolios with
volume decline in SlimFast as the expected weakness in the diet
category continues. Globally the Optimum Nutrition ("ON") brand
grew by 23.2% in the period with strong volume and pricing growth.
The healthy lifestyle brands of think!, Isopure and Amazing Grass
also grew strongly at 28.1% with both volume and price growth.
SlimFast revenue declined by 12.1% in the period and plans are well
underway to navigate category weakness and drive brand performance
into the key diet season of early 2023.
GPN EBITA decreased by 18.1% versus prior year to EUR82.3
million. Earnings declined in the period as the net impact of
inflation reduced margins. The GPN transformation programme, the
scope of which was increased in HY 2022 to help mitigate inflation,
is providing a fundamental underpin to margins as the business
moves through the current inflationary cycle. The continuing
benefits from this programme together with further planned pricing
action is expected to increase EBITA margins in the second half of
the year with margins expected to reach the targeted level of 12%
in the fourth quarter.
Americas
GPN Americas delivered 12.0% revenue growth in the first half of
2022 compared to the prior year, with branded like-for-like revenue
increasing by 13.8%. This was driven by volume growth in the
performance nutrition and healthy lifestyle categories offset by
challenges in the diet category. Pricing was positive in all
categories. The ON brand had a very strong performance in the
period with ON consumption(1) growth in the 12 weeks to mid-June
2022 of 32.3%. ON continues to leverage its strong position with
innovation to support new consumer opportunities in plant protein,
dairy RTD and energy/hydration. The SlimFast brand performance
continues to be impacted by headwinds in the diet category with
consumption(1) in the 12 weeks to mid-June 2022 down 16.7%. The
brand refresh planned for the second half of the year is on track
to be in market in advance of the early 2023 key diet season,
supported by new brand and pack design, creative content and
innovation. T he strong consumption trends in the healthy lifestyle
portfolio continued in the period across the think!, Isopure and
Amazing Grass brands.
International
GPN International, which includes D2C brands, grew like-for-like
revenues by 19.0% in the first half of 2022 compared to prior year.
This was driven by volume growth in key regional markets, with
consumption trends in Europe and Asia particularly strong. Pricing
was positive across all regions due to price increases in response
to inflationary trends.
1. Consumption growth is measured in North American channels and
includes Online, FDMC (Food, Drug, Mass, Club) and Specialty
channels. Data compiled from published external sources and Glanbia
estimates to 12 June 2022.
Glanbia Nutritionals
HY 2022 HY 2021
Margin Margin
EURm Revenue EBITA % Revenue EBITA %
============================ ======== ======== ======= ======== ======== =======
Nutritional Solutions 588.8 71.7 12.2% 434.8 56.6 13.0%
US Cheese 1,445.9 17.7 1.2% 969.0 13.1 1.4%
============================ ======== ======== ======= ======== ======== =======
Total Glanbia Nutritionals 2,034.7 89.4 4.4% 1,403.8 69.7 5.0%
---------------------------- -------- -------- ------- -------- -------- -------
Commentary on percentage movements is on a constant currency
basis throughout.
Nutritional Solutions
Constant
Reported currency
EURm HY 2022 HY 2021 change change
============== ======== ======== ========= ==========
Revenue 588.8 434.8 +35.4% +24.9%
EBITA 71.7 56.6 +26.7% +14.4%
EBITA margin 12.2% 13.0%
============== ======== ======== ========= ==========
NS revenues increased in the first half of 2022 by 24.9%. This
was driven by a 1.6% increase in volume, 17.9 % increase in price,
and the PacMoore and Sterling Technology acquisitions delivering
5.4% of the revenue growth. Volume growth for the period reflects
strong growth in the non-dairy portfolio somewhat offset by a
decline in dairy as NS increased internal sales to GPN in the
period. Price increase was driven by dairy ingredients due to
strong market pricing, along with pricing action taken across the
portfolio to offset the impact of raw material cost inflation.
The PacMoore acquisition, which completed in September 2021, is
performing well and NS completed the acquisition of Sterling
Technology in March 2022 which further complements the NS
portfolio.
NS EBITA was EUR71.7 million, 14.4% higher than prior year due
to a strong performance across all areas of the business. Margins
decreased from 13% to 12.2% due to the dilutive impact of higher
pricing.
US Cheese
Constant
Reported currency
EURm HY 2022 HY 2021 change change
============== ======== ======== ========= ==========
Revenue 1,445.9 969.0 +49.2% +35.4%
EBITA 17.7 13.1 +35.1% +20.4%
EBITA margin 1.2% 1.4%
============== ======== ======== ========= ==========
US Cheese revenue increased in the first half of 2022 by 35.4%.
This was driven by a 6.6% increase in volume and a 28.8% increase
in price. Volume growth was related to the new joint venture plant
in Michigan which was commissioned during 2021. Price increase was
related to the higher year-on-year market pricing.
US Cheese EBITA increased by 20.4% to EUR17.7 million in HY 2022
due to incremental volumes. Margin declined from 1.4% to 1.2% as a
result of the dilutive impact of higher pricing.
Joint Ventures (Glanbia share)
EURm - pre-exceptionals HY 2022 HY 2021 Change
====================================== ======== ======== =======
Share of joint ventures' profit
after tax - continuing operations 11.4 18.8 (7.4)
Share of joint ventures' profit
after tax - discontinued operations - 11.1 (11.1)
Total 11.4 29.9 (18.5)
====================================== ======== ======== =======
Glanbia's principal joint ventures (continuing operations)
include MWC--Southwest Holdings, Glanbia Cheese UK and Glanbia
Cheese EU. Glanbia uses the equity method of accounting for its
joint ventures and includes its share of joint venture profit after
tax in the adjusted earnings per share calculation. The Group's
share of joint ventures' profit after tax pre--exceptionals for
continuing operations decreased by EUR7.4 million to EUR11.4
million in the first half of 2021. Joint ventures continue to
perform in line with expectations with growth expected in the
second half versus prior year .
On 1 April 2022, Glanbia completed the disposal of its 40%
interest in the Glanbia Ireland joint venture ("Glanbia Ireland")
to Glanbia Co-operative Society Limited (the 'Society') for EUR307
million. The transaction was approved by members of the Society on
17 December 2021, following which this joint venture investment was
considered as an investment 'held -- for -- sale ' , with equity
accounting ceasing to apply from that date. Other joint venture
operations remain part of the Group and are unaffected by this
transaction.
HALF YEAR 2022 Finance Review
Half year 2022 Group Income Statement
HY 2022 HY 2021
--------------- ----------- ------- -------------------------------------
EURm Pre-exceptional Exceptional Total Pre-exceptional Exceptional Total
============================== =============== =========== ======= =============== =========== =======
Revenue 2,828.8 - 2,828.8 2,042.2 - 2,042.2
============================== =============== =========== ======= =============== =========== =======
Earnings before interest,
tax and amortisation
(EBITA) 171.7 (0.6) 171.1 159.9 (53.7) 106.2
EBITA margin 6.1% - 6.1% 7.8% - 5.2%
============================== =============== =========== ======= =============== =========== =======
Intangible asset amortisation (36.2) - (36.2) (30.0) - (30.0)
============================== =============== =========== ======= =============== =========== =======
Operating profit 135.5 (0.6) 134.9 129.9 (53.7) 76.2
Finance income 0.5 7.3 7.8 0.7 - 0.7
Finance costs (10.2) - (10.2) (11.5) - (11.5)
Share of results of
Joint Ventures 11.4 0.2 11.6 18.8 (2.3) 16.5
============================== =============== =========== ======= =============== =========== =======
Profit before taxation 137.2 6.9 144.1 137.9 (56.0) 81.9
Income taxes (15.7) - (15.7) (15.5) 3.8 (11.7)
============================== =============== =========== ======= =============== =========== =======
Profit from continuing
operations 121.5 6.9 128.4 122.4 (52.2) 70.2
============================== =============== =========== ======= =============== =========== =======
Discontinued operations
Profit after tax from
discontinued operations - 55.9 55.9 11.1 - 11.1
============================== =============== =========== ======= =============== =========== =======
Profit for the half
year 121.5 62.8 184.3 133.5 (52.2) 81.3
============================== =============== =========== ======= =============== =========== =======
Revenue
Revenue increased by 26.8% versus prior half year on a constant
currency basis to EUR2.8 billion, an increase of 38.5% on a
reported basis. GPN revenues grew by 14.9% constant currency (up
24.4% reported) on prior period driven by a 0.5% increase in
volumes, favourable pricing of +13.6% and acquisitions contributing
a further 0.8%. GN also recorded a strong performance with revenues
up 32.2% constant currency (up 44.9% reported) on prior period
driven by volume increases of 5.1%, positive pricing of 25.4% and
the positive impact of the recent PacMoore and Sterling Technology
acquisitions of 1.7%.
EBITA
EBITA before exceptional items decreased by 3.5% constant
currency (increase of 7.4% reported) to EUR171.7 million (HY 2021:
EUR159.9 million).
GPN pre-exceptional EBITA decreased by 18.1% constant currency
(decrease of 8.8% reported) to EUR82.3 million (HY 2021: EUR90.2
million). GPN pre-exceptional EBITA margin at 10.4% reduced from
14.1% at HY 2021.
GN pre-exceptional EBITA increased by 15.5% constant currency
(up 28.3% reported) to EUR89.4 million (HY 2021: EUR69.7 million).
GN pre-exceptional EBITA margin decreased from 5.0% to 4.4% since
HY 2021.
Net finance costs
Net finance costs before exceptional items decreased by EUR1.1
million to EUR9.7 million (HY 2021: EUR10.8 million). The decrease
was driven primarily by the full period impact of lower interest
rates on fixed rate indebtedness refinanced during 2021. The
Group's average interest rate in HY 2022 was 2.2% (HY 2021: 3.8%).
Glanbia operates a policy of fixing a significant amount of its
interest exposure, with 95% of projected 2022 debt currently
contracted at fixed rates.
Share of results of Joint Ventures (continuing operations)
The Group's pre-exceptional share of joint venture (continuing
operations) profits decreased by EUR7.4 million to EUR11.4 million
(HY 2021: EUR18.8 million) in the half year. The share of results
of joint ventures is stated after tax.
Income taxes
The half year 2022 pre-exceptional tax charge increased by
EUR0.2 million to EUR15.7 million (HY 2021: EUR15.5 million). This
represents an effective tax rate, excluding joint ventures, of
12.5% (HY 2021: 13%) and is in line with expectation. The Group
currently expects that its effective tax rate for FY 2022 will be
in the range of 12% to 13%.
Share of results of Joint Ventures (discontinued operations)
In November 2021, the Group announced its intention to sell its
remaining 40% interest in Glanbia Ireland DAC to Glanbia
Co-operative Society Limited, and following the receipt of all
shareholder approvals and regulatory clearances, completed the
disposal in April 2022. As the investment was considered 'held for
sale' in the period, equity accounting did not apply. The resulting
once off gain on disposal of the investment has been treated as an
exceptional item in the period.
Exceptional items
Exceptional items incurred in the first half of 2022 resulted in
a net post-tax exceptional gain of EUR62.8m (HY 2021: charge of
EUR52.2m). Details of the exceptional items incurred in the period
are as follows:
EURm - continuing operations HY 2022 HY 2021
===================================================== ======= =======
Pension related costs (note 1) (0.6) (38.9)
Changes in fair value of contingent consideration
(note 2) 7.3 -
Organisation redesign costs (note 3) - (14.8)
Wholly-owned exceptional gain/(charge) before
tax 6.7 (53.7)
Share of results of equity accounted investees,
net of tax (note 1) 0.2 (2.3)
Exceptional tax credit - 3.8
----------------------------------------------------- ------- -------
Exceptional gain/(charge) after tax 6.9 (52.2)
----------------------------------------------------- ------- -------
EURm - discontinued operations
----------------------------------------------------- ------- -------
Exceptional gain from discontinued operations
(note 4) 55.9 -
----------------------------------------------------- ------- -------
Exceptional gain after tax - discontinued operations 55.9 -
----------------------------------------------------- ------- -------
Total Exceptional gain/(charge) in the period 62.8 (52.2)
===================================================== ======= =======
1. Pension related costs relate to the restructure of legacy
defined benefit pension schemes associated with the Group and joint
ventures, which included initiating a process for the ultimate buy
out and wind up of these schemes and a further simplification of
the schemes that remain. Costs incurred relate to the estimated
cost of the settlement loss as a result of acquiring bulk purchase
annuity policies to mirror and offset movements in known
liabilities of the schemes ('buy-in' transaction), as well as
related advisory and execution costs net of gains arising from risk
reduction activities. This restructuring, which commenced in 2021
is on track and anticipated to conclude during the second half of
2022.
2. Changes in fair value of contingent consideration relate to
contingent payments associated with the 2021 LevlUp acquisition
that have now reduced following an assessment of conditions that
give rise to the additional payments.
3. Prior year organisation redesign costs related to a
fundamental reorganisation of the GPN segment that realigned
operating and supply chain structures in support of individual
businesses, sharpened focus on brands and optimised
routes-to-market across non-US markets to drive greater
efficiencies, improve margin and deliver top line growth. The
investment phase of this multi-year strategic programme is now
complete, with no further costs incurred during the period.
4. Exceptional gain from discontinued operations relates to the
gain arising on the completion of the disposal of the Group's 40%
interest in Glanbia Ireland DAC ("Glanbia Ireland") to Glanbia
Co-operative Society Limited. The gain represents the difference
between proceeds received, net of transaction related costs, and
the carrying value of the Group's investment in Glanbia Ireland.
The transaction completed on 1 April 2022.
Profit after tax
Profit after tax for the half year was EUR184.3 million compared
to EUR81.3 million in HY 2021, comprising continuing operations of
EUR128.4 million (HY 2021: EUR70.2 million) and discontinued
operations of EUR55.9 million (HY 2021: EUR11.1). Profit after tax
from continuing operations comprises pre-exceptional profit of
EUR121.5 million (HY 2021: EUR122.4 million) and exceptional gains
of EUR6.9 million (HY 2021: charge of EUR52.2 million).
Pre-exceptional profitability is consistent period on period.
Profit after tax from discontinued operations in both the
current and preceding period relates entirely to Glanbia Ireland.
As outlined above, the Group's share of Glanbia Ireland was
disposed in April 2022, with the resulting gain on disposal being
recognised as an exceptional gain.
Earnings per share (EPS)
Constant
Reported currency
HY 2022 HY 2021 change change
--------------------------- ------- ------- --------- ---------
Basic EPS 66.13c 27.90c +137.0% +107.4%
- continuing operations 46.10c 24.09c +91.4% +64.2%
- discontinued operations 20.03c 3.81c +425.7% +425.7%
--------------------------- ------- ------- --------- ---------
Adjusted EPS 52.31c 52.86c (1.0%) (10.4%)
- continuing operations 52.31c 48.84c +7.1% (3.8%)
- discontinued operations - 4.02c - -
--------------------------- ------- ------- --------- ---------
Basic EPS increased by 137.0% versus prior period, as a result
of exceptional gains in the current period, compared to exceptional
losses in the prior period.
Adjusted EPS is a key performance indicator ("KPI") of the Group
and a key metric guided to the market and a key element of
Executive Director and senior management remuneration. Adjusted EPS
remained consistent with the prior period and comprises continuing
operations of 52.31 cent (HY 2021: 48.84 cent) and discontinued
operations (related to Glanbia Ireland which was divested in April
2022) of nil (HY 2021: 4.02 cent). Full year 2022 adjusted EPS is
expected to be in the range of 9% to 13% growth on a constant
currency basis versus prior year.
Cash flow
The principal cash flow KPIs of the Group and business segments
are Operating Cash Flow ("OCF") and Free Cash Flow ("FCF"). OCF
represents EBITDA of the wholly-owned businesses net of
business-sustaining capital expenditure and working capital
movements, excluding exceptional cash flows. FCF is calculated as
the cash flow in the period before the following items: strategic
capital expenditure, equity dividends paid, expenditure on share
buyback, acquisition spend, proceeds received on disposal,
exceptional costs paid, loans/equity invested in joint ventures,
and foreign exchange movements. These metrics are used to monitor
the cash conversion performance of the Group and Business Units and
identify available cash for strategic investment. OCF conversion,
which is OCF as a percentage of EBITDA, is a key element of the
Executive Directors and senior management remuneration. OCF and FCF
half year results for the Group are outlined below.
EURm HY 2022 HY 2021
============================================== ======= =======
EBITDA pre-exceptional 204.0 191.2
Movement in working capital (pre-exceptional) (225.3) (24.0)
Business-sustaining capital expenditure (7.3) (5.8)
============================================== ======= =======
Operating cash flow (28.6) 161.4
Net interest and tax paid (31.8) (30.6)
Dividends from joint ventures 2.6 17.4
Payment of lease liabilities (7.4) (9.7)
Other (outflows)/inflows (2.0) 3.2
============================================== ======= =======
Free cash flow (67.2) 141.7
Strategic capital expenditure (22.0) (33.9)
Dividend paid to Company shareholders (49.0) (46.4)
Share buyback (purchase of own shares) (127.1) (33.4)
Payment for acquisition of subsidiaries (54.4) (31.4)
Exceptional costs paid (14.8) (43.5)
Repayment of/(loans) to joint ventures 25.3 (3.5)
Proceeds on disposal of interest in Glanbia
Ireland 307.0 -
============================================== ======= =======
Net cash flow (2.2) (50.4)
Exchange translation (44.1) (9.8)
Cash acquired on acquisition 0.9 4.4
============================================== ======= =======
Net debt movement (45.4) (55.8)
Net debt at the beginning of the period (602.7) (493.9)
Net debt at the end of the period (648.1) (549.7)
============================================== ======= =======
OCF was an outflow of EUR28.6 million (HY 2021: inflow of
EUR161.4 million) and represents a cash conversion on EBITDA of
-14% (HY 2021: 84.4%) in the period. The decrease in OCF versus
prior period was due primarily to an increased investment in
working capital as a result of higher pricing in both inventory and
receivables. The OCF conversion rate is expected to gradually
adjust to more normalised levels during the second half of 2022 and
full year cash conversion is expected to be c.80% in line with
target.
FCF was an outflow of EUR67.2 million (HY 2021: inflow of
EUR141.7 million), with the movement since prior period primarily
as a result of movements in OCF outlined above, as well as a
decrease in dividend income from Joint Ventures following the
disposal of Glanbia Ireland.
Capital allocated for the benefit of shareholders includes
regular dividend payments of EUR49 million (HY 2021: EUR46.4
million) and the execution of share buyback programmes of EUR127.1
million (HY 2021: EUR33.4 million), with the most recent buyback
programme that launched in June 2022 ongoing at HY 2022.
Acquisition spend relates to the acquisition of Sterling
Technology, a US based bioactive ingredient company, for an initial
consideration of US$59.4 million which concluded in March 2022, and
divestment proceeds relate to the completion of the disposal of the
Group's 40% holding in Glanbia Ireland for a consideration of
EUR307 million in April 2022.
Group financing
Financing key performance indicators HY 2022 HY 2021
==================================== ========== ==========
Net debt: adjusted EBITDA 1.83 times 1.51 times
Adjusted EBIT: net finance cost 16.0 times 14.5 times
==================================== ========== ==========
The Group's financial position remains strong. Net debt at the
2022 half year was EUR648.1 million. This is an increase of EUR98.4
million from the prior half year net debt of EUR549.7 million. At
half year 2022, Glanbia had committed debt facilities of EUR1.22
billion (HY 2021: EUR1.13 billion) with a weighted average maturity
of 3.5 years. Glanbia's ability to generate cash as outlined above
and available debt facilities ensures the Group has considerable
capacity to finance future investments. Net debt to adjusted EBITDA
was 1.83 times and interest cover was 16 times, with both metrics
remaining well within financing covenants.
Use of capital
Capital expenditure
The cash outflow relating to capital expenditure for half year
2022 amounted to EUR29.3 million (HY 2021: EUR39.7 million) which
includes EUR7.3 million of business-sustaining capital expenditure
and EUR22 million of strategic capital expenditure.
Investments in equity accounted investees
During half year 2022, a further EUR3.5 million was invested in
Glanbia Cheese EU, the joint venture mozzarella cheese plant in
Portlaoise, Ireland, bringing the total invested to EUR42.2
million, with a further EUR13.0 million committed. Commissioning is
ongoing and remains on track to be completed in 2022.
Pension
The Group's net pension position under IAS 19 (revised)
'Employee Benefits', before deferred tax, improved by EUR16.1
million since 1 January 2022, resulting in a net pension asset of
EUR1.9 million at 2 July 2022. The defined benefit pension position
is calculated by discounting the estimated future cash outflows
using appropriate corporate bond rates. Restructuring of legacy
defined pension schemes which began in 2021 is ongoing. Favourable
market conditions resulted in actuarial gains in the period, which
reduced the net pension liability resulting in a net asset position
at period end.
Dividends
Glanbia's overall dividend policy remains unchanged at a target
annual dividend payout ratio of between 25% and 35% of adjusted
EPS. In line with this policy the Board is recommending an interim
dividend of 12.93 cent per share (HY 2021: 11.75 cent per share).
The dividend will be paid on 7 October 2022 to shareholders on the
register of members as at 26 August 2022. Irish withholding tax
will be deducted at the standard rate where appropriate.
Share buyback
During the first half of 2022, the Group completed a share
buyback programme of EUR50 million which launched in December 2021
and commenced a further programme of EUR50 million in June 2022,
which was ongoing at HY 2022. A total of EUR96.1 million was
deployed under these programmes in the period, with a further
EUR31.0 million deployed to participate in a share placement by
Glanbia Co-operative Society in advance of completing the Glanbia
Ireland transaction.
Foreign exchange
Glanbia generates over 90% of its earnings in US dollar currency
and has significant assets and liabilities denominated in US
dollars. As a result, and as Glanbia's reporting currency is euro,
there can be a significant impact to reported numbers arising from
currency movements year-on-year and on translation of US dollar
non-monetary assets and liabilities in the preparation of the half
year consolidated financial statements. Commentary has been
provided within the income statement on a constant currency basis
to provide a better reflection of the underlying operating results
in the year, as this removes the translational currency impact. To
arrive at the constant currency change, the average foreign
exchange rate for the current period is applied to the relevant
reported result from the same period in the prior year. At the
balance sheet date, primarily due to the strengthening of the US
dollar compared to 2021 year end, there was a translation gain
arising on the translation of non-euro denominated assets and
liabilities into euro. The gain on translation of non-monetary
assets and liabilities into euro is presented within other
comprehensive income and amounted to EUR140.3 million in the half
year (HY 2021: EUR62.0 million). Period-end euro to US dollar rates
were as follows:
HY 2022 FY 2021 HY 2021
------------------------------ ------- ------- --------
1 euro converted to US dollar 1.0425 1.1326 1.1823
------------------------------ ------- ------- --------
Financial strategy
Glanbia's financial strategy is very much aligned with its
overall strategy of ensuring the Group delivers on its key
financial goals. Specific financial goals to enable this strategy
include:
-- Assessing both external and organic investment opportunities
against a target benchmark of 12% return after tax by end of year
three;
-- Focusing the organisation on cash conversion through improved
working capital management and disciplined business-sustaining
capital expenditure, with a goal of greater than 80% cash
conversion as a percentage of EBITDA;
-- Leveraging the Group's activities to enable improved cost
structures utilising shared services, procurement, IT and a
continuous improvement mindset;
-- Maintaining the capital structure of the Group within an
implicit investment-grade credit profile; and
-- Capital allocation policy to return capital to shareholders
which includes a dividend policy with a payout ratio of between 25%
and 35% and the authorisation to implement a share buyback
programme.
Principal risks and uncertainties
The Board of Glanbia plc has the ultimate responsibility for the
Group's systems of risk management and internal control. The
Group's risk management framework outlines the key stakeholder risk
management responsibilities. It is designed to ensure that there is
input across all levels of the business to the management of risk
and to enable the Group to remain responsive to the ever changing
environment in which it operates. This framework, together with the
processes to identify, manage and mitigate potential material key
risks to the achievement of the Group's strategic objectives are
set out in detail on pages 67-75 of Glanbia plc's 2021 Annual
Report.
The Group's principal risks and uncertainties are summarised in
the risk profile diagram below and remain relevant and unchanged
from the risks reported for the year ended 1 January 2022, with no
new principal risks identified. The underlying risk trend and
potential impacts of some of these risks has evolved with the
Market Disruption risk trend increasing partly due to the continued
inflationary pressures which may disrupt consumer demand as price
increases are implemented. There may be other risks and
uncertainties that are not yet considered material or not yet known
to the Group and this list will change if these risks assume
greater importance in the future.
Strategic/External Financial Technological Operational/Regulatory
----------- -------------------------------- ----------------------- ----------------------------------------- ------------------------------------
Risk where
trend is * Customer concentration * Taxation changes * Digital transformation * Health and safety
stable
* Product safety and compliance
* Acquisition/Integration
----------- -------------------------------- ----------------------- ----------------------------------------- ------------------------------------
Risk where
trend is * Economic, Industry and Po * Cyber security and data protection * Supply chain
increasing litical
* Talent management
* Market disruption
* Climate change
----------- -------------------------------- ----------------------- ----------------------------------------- ------------------------------------
The Board is closely monitoring the key risks that could
materially and adversely affect the Group's ability to achieve its
strategic objectives, particularly those whose probability of
occurrence/extent of impact are elevated by the consequences of the
ongoing war in Ukraine, the deteriorating global economic outlook
and the increasing inflationary, energy and interest rate pressures
together with the continually evolving nature of Covid-19.
In our previous disclosures, we explained how Covid-19 had
wide-ranging consequences on our principal risks and uncertainties
and was not presented as a single principal risk. This has not
changed and the same approach has been taken in relation to the
impacts of the Russian invasion of Ukraine, with the consequences
being captured in the relevant principal risks rather than shown as
a stand-alone item. The key risk factors and uncertainties with the
potential to impact on the Group's financial performance in the
second half of 2022 include:
-- Economic, industry and political risk - continues to increase
primarily due to the current and potential future consequences of
the Russian invasion of Ukraine, the resulting geopolitical and
macroeconomic uncertainties and the significant inflationary
impacts affecting both our operational costs and our consumer's
finances. The Board is also closely monitoring the escalating
tensions in other key trading regions, particularly between China
and Taiwan, where any potential conflict, economic sanctions or
trade rulings would impact Glanbia's growth objectives.
-- Market disruption risk - adverse changes in economic
conditions, continued inflationary pressures, energy availability
and cost impacts, and interest rate increases could result in
reduced consumer spending which may disrupt demand and increase
operational and financial costs. The risk of further waves of
Covid-19 and the inability to contain the spread of new variants
may also disrupt markets in the second half of 2022.
-- Supply chain risk - Glanbia is actively monitoring a number
of supply chain and inflationary pressures including:
o The overall impact on margins of movements in dairy pricing,
particularly in whey markets, which experienced significant price
increases over the last eighteen months and may continue into the
remainder of 2022. This has resulted in price increases to offset
some of the increased input costs and further price increases are
envisaged in H2 2022 which may disrupt demand due to price
elasticity. Any further price increases will be managed against the
Group's ambition to continue to drive revenue growth;
o The ability of governments and medical agencies to suppress
the spread of the Covid-19 virus. This continues to be important in
preventing unexpected supply chain disruptions which could result
in restrictions on the importation of key raw materials and/or
negative impacts on our international sales channels. The Group is
holding appropriate safety stocks of core raw materials, however a
prolonged impact to supply chains due to Covid-19 or the
geopolitical environment in key trading regions would have negative
consequences from both a supply and pricing perspective; and
o Labour markets continue to be competitive and plants are
operating at a high capacity. Labour inflation, together with
global supply chain cost increases in energy transport, logistics
and containers will continue to require careful navigation.
-- Customer concentration risk - while strategically the Group
aims to build strong customer relationships with major customers,
material disruption with, or loss of, one or more of these
customers, or a significant deterioration in commercial terms,
could materially impact profitability. This risk can also expose
the Group to credit exposure and other balance sheet risks. The
Board is focused on utilising available mitigation to limit such
exposures where possible. This remains relevant for the remainder
of 2022 as customers navigate the macroeconomic downturn on their
operations and any potential challenges imposed by Covid-19
restrictions.
-- Health and safety risk - a failure to maintain good health
and safety practices or a significant escalation in the spread of
the virus or new variants, in our core markets, may adversely
impact performance. A wide range of additional measures and
mitigations have been introduced as a result of the Covid-19
pandemic which build on the existing strong controls across the
Group.
Thirteen thematic Climate-related Risks and Opportunities (CROs)
were outlined in the plc's 2021 Annual Report following a
comprehensive climate change risk assessment in conjunction with
The Carbon Trust, an independent sustainability consultant, on the
parts of the business over which Glanbia has operational control.
This helped the plc to better understand the potential impacts from
physical climate risks largely associated with a failure to act,
and the potential transition risks associated with the transition
to a decarbonised economy.
The reassessment of these CROs and the completion of scenario
and quantification analysis which will consider available
mitigation measures and the interplay of the material CROs
identified with each other under a number of temperature scenarios
and the associated potential impact, including taking into
consideration a two-degree or lower scenario, are currently in
progress and will be outlined in the plc's 2022 Annual Report.
The Group actively manages these and all other risks (inclusive
of emerging risks) through its risk management and internal control
processes.
Cautionary statement
Glanbia plc has made forward-looking statements in this document
that are based on management's beliefs and assumptions and on
information currently available to management. Forward-looking
statements include, but are not limited to, information concerning
the Group's possible or assumed future results of operations,
business strategies, financing plans, competitive position,
potential growth opportunities, potential operating performance
improvements, the effects of competition and the effects of future
legislation or regulations. Forward-looking statements include all
statements that are not historical facts and can be identified by
the use of forward-looking terminology such as the words 'believe',
'develop', 'expect', 'ensure', 'arrive', 'achieve', 'anticipate',
'maintain', 'grow', 'aim', 'deliver', 'sustain', 'should' or the
negative of these terms or similar expressions. Forward-looking
statements involve risks, uncertainties and assumptions. Actual
results may differ materially from those expressed in these
forward-looking statements. You should not place undue reliance on
any forward-looking statements. The risk factors included on pages
72 to 75 of the Group's 2021 Annual Report, could cause the Group's
results to differ materially from those expressed in
forward-looking statements. There may be other risks and
uncertainties that the Group is unable to predict at this time or
that the Group currently does not
expect to have a material adverse effect on its business. These
forward-looking statements are made as of the date of this
document. The Group expressly disclaims any obligation to update
these forward-looking statements other than as required by law. The
forward-looking statements in this release do not constitute
reports or statements published in compliance with any of
Regulations 6 to 8 of the Transparency (Directive 2004/109/EC)
Regulations 2007.
Results webcast and dial-in details
There will be a webcast and presentation to accompany this
results announcement at 8.30 a.m. BST today. Please access the
webcast from the Glanbia website at
https://www.glanbia.com/investors/results-and-events, where the
presentation can also be viewed or downloaded. In addition, a
dial-in facility is available using the following numbers:
+353 (0)1 246
Ireland 5638
+44 (0)330 165
UK 4012
+31 (0)20 703
Netherlands 8218
+33 (0)1 70 73
France 03 39
+49 (0)69 22222
Germany 5197
Italy +39 02 00638217
+46 (0)8 5664
Sweden 2765
USA +1 323-701-0160
+44 (0)330 165
Rest of the world 4016
The access code for all participants is: 9182171
A replay of the call will be available for 30 days approximately
two hours after the call ends.
For further information contact
Glanbia plc +353 56 777 2200
Mark Garvey, Group Finance Director
Liam Hennigan, Group Secretary and
Head of Investor Relations +353 (0)86 046 8375
Martha Kavanagh, Head of Corporate
Communications +353 (0)87 646 2006
2022 half year financial report
Responsibility statement
Each of the Directors of Glanbia plc, whose names and functions
are listed on the Group's website (www.glanbia.com), confirms that
to the best of each person's knowledge and belief:
-- the 2022 Half Year Financial Report is in accordance with
International Accounting Standard (IAS) 34, 'Interim Financial
Reporting', as adopted by the European Union and the Transparency
(Directive 2004/109/EC) Regulations 2007, as amended, and the
Central Bank (Investment Market Conduct) Rules 2019; and
-- the 2022 Half Year Financial Report includes a fair review of:
o important events that have occurred during the first six
months of the year, and their impact on the condensed consolidated
interim financial statements;
o a description of the principal risks and uncertainties for the
remaining six months of the financial year;
o details of any related party transactions that have materially
affected the Group's financial position or performance in the six
months ended 2 July 2022, and material changes to related party
transactions described in the Annual Report for the year ended 1
January 2022; and
o any changes in the related parties' transactions described in
the last annual report that could have a material effect on the
financial position or performance of the group in the first six
months of the current financial year.
On behalf of the Board
Siobhán Talbot Mark Garvey
Group Managing Director Group Finance Director
16 August 2022
Condensed Group Income statement
for the half year ended 2 JULY 2022
Half Half
year year
2022 2021
=============== ============= ======= =============== ============= =======
Exceptional Exceptional
EURm EURm
Pre-exceptional (note Total Pre-exceptional (note Total
Notes EURm 7) EURm EURm 7) EURm
=========================== ===== =============== ============= ======= =============== ============= =======
CONTINUING OPERATIONS
Revenue 6 2,828.8 - 2,828.8 2,042.2 - 2,042.2
--------------------------- ----- --------------- ------------- ------- --------------- ------------- -------
Operating profit before
intangible
asset amortisation
(earnings
before interest, tax and
amortisation
(EBITA)) 6 171.7 (0.6) 171.1 159.9 (53.7) 106.2
Intangible asset
amortisation 13 (36.2) - (36.2) (30.0) - (30.0)
--------------------------- ----- --------------- ------------- ------- --------------- ------------- -------
Operating profit 6 135.5 (0.6) 134.9 129.9 (53.7) 76.2
Finance income 9 0.5 7.3 7.8 0.7 - 0.7
Finance costs 9 (10.2) - (10.2) (11.5) - (11.5)
Share of results of joint
ventures
accounted for using the
equity
method 4 11.4 0.2 11.6 18.8 (2.3) 16.5
--------------------------- ----- --------------- ------------- ------- --------------- ------------- -------
Profit before taxation 137.2 6.9 144.1 137.9 (56.0) 81.9
Income taxes 10 (15.7) - (15.7) (15.5) 3.8 (11.7)
--------------------------- ----- --------------- ------------- ------- --------------- ------------- -------
Profit from continuing
operations 121.5 6.9 128.4 122.4 (52.2) 70.2
DISCONTINUED OPERATIONS
Profit after tax from
discontinued
operations 3 - 55.9 55.9 11.1 - 11.1
--------------------------- ----- --------------- ------------- ------- --------------- ------------- -------
Profit for the period 121.5 62.8 184.3 133.5 (52.2) 81.3
--------------------------- ----- --------------- ------------- ------- --------------- ------------- -------
Attributable to:
Equity holders of the
Company 12 184.6 81.3
Non-controlling interests (0.3) -
--------------------------- ----- --------------- ------------- ------- --------------- ------------- -------
184.3 81.3
--------------------------- ----- --------------- ------------- ------- --------------- ------------- -------
Earnings Per Share from continuing operations attributable to the equity
holders of the Company
Basic Earnings Per Share
(cent) 12 46.10 24.09
Diluted Earnings Per Share
(cent) 12 45.64 24.01
--------------------------- ----- --------------- ------------- ------- --------------- ------------- -------
Earnings Per Share attributable to the equity holders of the Company
Basic Earnings Per Share (cent) 12 66.13 27.90
Diluted Earnings Per Share (cent) 12 65.47 27.81
--------------------------------------------------- ---- ------- -------
Condensed Group Statement of comprehensive Income
for the half year ended 2 JULY 202 2
Half year Half year
2022 2021
Notes EURm EURm
========================================================== ===== ========= =========
Profit for the period 184.3 81.3
Other comprehensive income
Items that will not be reclassified subsequently
to the Group income statement
Remeasurements on defined benefit plans, net of deferred
tax 14.0 3.4
Share of other comprehensive income of joint ventures,
net of deferred tax 18.2 0.6 -
Revaluation of equity instruments at FVOCI, net of
deferred tax 18.1 0.2 (0.2)
Share of other comprehensive income of discontinued
operations, net of deferred tax 18.2 - 11.2
Items that may be reclassified subsequently to the
Group income statement
Currency translation differences 18.1 140.3 62.0
Currency translation difference arising on net investment
hedge 18.1 (7.5) (3.0)
Gain on cash flow hedges, net of deferred tax 2.1 1.8
Share of other comprehensive income of joint ventures,
net of deferred tax 9.5 3.7
Share of other comprehensive income of discontinued
operations, net of deferred tax - 0.1
Other comprehensive income for the period, net of
tax 159.2 79.0
---------------------------------------------------------- ----- --------- ---------
Total comprehensive income for the period 343.5 160.3
---------------------------------------------------------- ----- --------- ---------
Total comprehensive income attributable to:
Equity holders of the Company 343.8 160.3
Non-controlling interests (0.3) -
Total comprehensive income for the period 343.5 160.3
---------------------------------------------------------- ----- --------- ---------
Condensed Group Balance sheet
as at 2 JULY 202 2
2 July 1 January
2022 2022
Notes EURm EURm
====================================================== ===== ======= =========
ASSETS
Non-current assets
Property, plant and equipment 517.1 485.2
Right-of-use assets 103.5 99.9
Intangible assets 1,533.5 1,375.4
Interests in joint ventures 215.3 184.8
Other financial assets 1.9 1.9
Loans to joint ventures 17.2 42.5
Deferred tax assets 4.8 4.7
Other receivables 0.6 0.8
Derivative financial instruments 0.5 0.5
Retirement benefit assets 8 4.8 2.9
------------------------------------------------------ ----- ------- ---------
2,399.2 2,198.6
------------------------------------------------------ ----- ------- ---------
Current assets
Inventories 713.7 593.6
Trade and other receivables 558.6 359.4
Current tax receivables 8.8 8.8
Derivative financial instruments 2.2 2.2
Cash and cash equivalents (excluding bank overdrafts) 232.0 231.0
------------------------------------------------------ ----- ------- ---------
1,515.3 1,195.0
Joint venture held for sale 3 - 234.0
------------------------------------------------------ ----- ------- ---------
1,515.3 1,429.0
------------------------------------------------------ ----- ------- ---------
Total assets 3,914.5 3,627.6
------------------------------------------------------ ----- ------- ---------
EQUITY
Issued capital and reserves attributable to equity
holders of the Company
Share capital and share premium 17 104.4 105.0
Other reserves 18.1 391.8 245.5
Retained earnings 18.2 1,408.8 1,381.7
------------------------------------------------------ ----- ------- ---------
1,905.0 1,732.2
Non-controlling interests 7.8 8.1
------------------------------------------------------ ----- ------- ---------
Total equity 1,912.8 1,740.3
------------------------------------------------------ ----- ------- ---------
LIABILITIES
Non-current liabilities
Borrowings 14 787.3 697.2
Lease liabilities 106.9 105.0
Other payables 20.7 32.6
Retirement benefit obligations 8 2.9 17.1
Deferred tax liabilities 146.0 144.4
Provisions 16 3.3 3.6
1,067.1 999.9
------------------------------------------------------ ----- ------- ---------
Current liabilities
Trade and other payables 757.9 669.3
Borrowings 14 92.8 136.5
Lease liabilities 18.9 14.5
Current tax liabilities 52.9 53.0
Derivative financial instruments 0.8 1.2
Provisions 16 11.3 12.9
------------------------------------------------------ ----- ------- ---------
934.6 887.4
------------------------------------------------------ ----- ------- ---------
Total liabilities 2,001.7 1,887.3
------------------------------------------------------ ----- ------- ---------
Total equity and liabilities 3,914.5 3,627.6
------------------------------------------------------ ----- ------- ---------
Condensed Group Statement of changes in equity
For the half year ended 2 JULY 202 2
Attributable to equity holders
of the Company
==================================================
Share capital
and share Other Retained Non-
premium reserves earnings controlling
EURm EURm EURm Total interests Total
Half year 2022 (note 17) (note 18.1) (note 18.2) EURm EURm EURm
============================== ============= ============ ============ ======= ============ =======
Balance at 2 January 2022 105.0 245.5 1,381.7 1,732.2 8.1 1,740.3
Profit for the period - - 184.6 184.6 (0.3) 184.3
Other comprehensive income - 144.6 14.6 159.2 - 159.2
Total comprehensive income
for the period - 144.6 199.2 343.8 (0.3) 343.5
------------------------------ ------------- ------------ ------------ ------- ------------ -------
Dividends - - (49.0) (49.0) - (49.0)
Purchase of own shares - (136.6) - (136.6) - (136.6)
Cancellation of own shares (0.6) 126.8 (126.2) - - -
Cost of share-based payments - 7.6 - 7.6 - 7.6
Transfer on exercise, vesting
or expiry of share-based
payments - (2.1) 2.1 - - -
Deferred tax on share-based
payments - - 1.0 1.0 - 1.0
Changes in fair value of
put option liability - 4.5 - 4.5 - 4.5
Transfer to Group income
statement - 1.5 - 1.5 - 1.5
Balance at 2 July 2022 104.4 391.8 1,408.8 1,905.0 7.8 1,912.8
------------------------------ ------------- ------------ ------------ ------- ------------ -------
Half year 2021
============================== ===== ====== ======= ======= === =======
Balance at 3 January 2021 105.3 126.0 1,380.5 1,611.8 - 1,611.8
Profit for the period - - 81.3 81.3 - 81.3
Other comprehensive income - 64.4 14.6 79.0 - 79.0
Total comprehensive income
for the period - 64.4 95.9 160.3 - 160.3
------------------------------ ----- ------ ------- ------- --- -------
Dividends - - (46.4) (46.4) - (46.4)
Purchase of own shares - (35.3) - (35.3) - (35.3)
Issuance of shares 0.2 - - 0.2 - 0.2
Cancellation of own shares (0.2) 33.6 (33.4) - - -
Cost of share-based payments - 6.2 - 6.2 - 6.2
Deferred tax on share-based
payments - - 0.8 0.8 - 0.8
Non-controlling interests
on acquisition of subsidiary - - - - 7.8 7.8
Recognition of put option
liability - (23.2) - (23.2) - (23.2)
Balance at 3 July 2021 105.3 171.7 1,397.4 1,674.4 7.8 1,682.2
------------------------------ ----- ------ ------- ------- --- -------
Condensed gROUP Statement of cash flows
For the half year ended 2 JULY 202 2
Half year Half year
2022 2021
Notes EURm EURm
============================================================ ===== ========= =========
Cash flows from operating activities
Net cash flows from operating activities before exceptional
items 20 (14.1) 171.8
Cash outflow related to exceptional items (6.8) (43.5)
Interest received 1.0 0.4
Interest paid (including interest expense on lease
liabilities) (9.4) (10.6)
Tax paid (23.4) (20.4)
Net cash (outflow)/inflow from operating activities (52.7) 97.7
------------------------------------------------------------ ----- --------- ---------
Cash flows from investing activities
Proceeds from disposal of Glanbia Ireland DAC (exceptional) 3 307.0 -
Cash outflow related to exceptional items (8.0) -
Payment for acquisition of subsidiaries (54.4) (31.4)
Purchase of property, plant and equipment (12.7) (25.6)
Purchase of intangible assets (16.6) (14.1)
Loans advanced to joint ventures 19 (3.5) (3.5)
Loans advanced to Glanbia Ireland DAC which were
repaid 19 28.8 -
Dividends received from joint ventures 19 2.6 17.4
Proceeds from disposal/redemption from FVOCI financial
assets 0.3 0.5
Net cash inflow/(outflow) from investing activities 243.5 (56.7)
------------------------------------------------------------ ----- --------- ---------
Cash flows from financing activities
Purchase of own shares 18.1 (136.6) (35.3)
Drawdown of borrowings 14 427.9 308.1
Repayment of borrowings 14 (388.5) (274.7)
Payment of lease liabilities (7.4) (9.7)
Dividends paid to Company shareholders (49.0) (46.4)
------------------------------------------------------------ ----- --------- ---------
Net cash outflow from financing activities (153.6) (58.0)
------------------------------------------------------------ ----- --------- ---------
Net increase/(decrease) in cash and cash equivalents 14 37.2 (17.0)
Cash and cash equivalents at the beginning of the
period 94.5 91.6
Cash and cash equivalents acquired on acquisition 14 0.9 4.4
Effects of exchange rate changes on cash and cash
equivalents 6.6 4.6
Cash and cash equivalents at the end of the period 139.2 83.6
------------------------------------------------------------ ----- --------- ---------
Cash and cash equivalents at the end of the period include:
2 July 3 July
2022 2021
EURm EURm
====================================================== ====== ======
Cash and cash equivalents (excluding bank overdrafts) 232.0 156.6
Bank overdrafts 14 (92.8) (73.0)
------------------------------------------------------ ------ ------
14 139.2 83.6
------------------------------------------------------ ------ ------
Net cash inflow from investing activities from discontinued
operations was EUR327.8 million (2021 HY: EUR12.2 million)
Notes to the financial statements
For the half year ended 2 JULY 202 2
1. General information
Glanbia plc (the "Company") and its subsidiaries (together the
"Group") is a leading global nutrition group with geographical
presence in regions that include North America, Europe and Asia
Pacific. The Company is a public limited company incorporated and
domiciled in Ireland, the number under which it is registered is
129933. The address of its registered office is Glanbia House,
Kilkenny, Ireland, R95 E866. The Company is the ultimate parent
company of the Group and its shares are quoted on the Euronext
Dublin and London Stock Exchange.
These condensed consolidated interim financial statements as at,
and for the period commencing 2 January 2022 and ended 2 July 2022
(half year/six months) ("interim financial statements") were
approved for issue by the Board of Directors on 16 August 2022.
2. Basis of preparation
The interim financial statements have been prepared in
accordance with IAS 34 'Interim Financial Reporting' as adopted by
the European Union, the Transparency (Directive 2004/109/EC)
Regulations 2007 as amended, and the Central Bank (Investment
Market Conduct) Rules 2019. The interim financial statements should
be read in conjunction with the financial statements as at, and for
the year ended 1 January 2022 ("2021 Annual Report"). The interim
financial statements do not include all of the information required
for a complete set of IFRS financial statements and have not been
audited or reviewed by the Group's auditor.
The methods of computation, presentation and accounting policies
adopted in the preparation of the interim financial statements are
consistent with those applied in the 2021 Annual Report other than
those noted below. The Group's accounting policies are set out in
note 2 to the financial statements in the 2021 Annual Report.
Amended standard adopted in the current period
Amendments to IAS 16 'Property, Plant and Equipment: Proceeds
before intended use' were adopted in the current year. They did not
result in a material impact on the Group's results.
Re-presentation
Certain comparative amounts in the Group statement of changes in
equity and the "other reserves and retained earnings" note have
been re--presented on a basis consistent with the current period.
The re--presentation is to present the recognition of put option
liability in other reserves. There was no impact on previously
reported profit or net assets. In addition, consistent with the
2021 Annual Report, the comparative Group income statement and
Group statement of comprehensive income were re--presented to
reflect a discontinued operation (note 3).
Critical accounting judgements and estimates
The significant judgements made by management in applying the
Group's accounting policies and the key sources of estimation
uncertainty in preparing the interim financial statements were the
same as those that applied to the 2021 Annual Report.
Going concern
The time period that the Directors have considered in evaluating
the appropriateness of the going concern basis in preparing the
interim financial statements is a period of at least 12 months from
the date of approval of these interim financial statements (the
"period of assessment").
The Directors have given due regard to the Group's available
cash resources, borrowing facilities and related covenant
requirements which taken together, provide confidence that the
Group will be able to meet its obligations as they fall due; and
the Group's financial risk management policies as described in the
2021 Annual Report, the nature of business activities and the
factors likely to impact operating performance and future growth.
No material uncertainties have been identified.
Having assessed the relevant business risks identified and
discussed in the Principal risks and uncertainties on page 12, the
Directors believe that the Group is well placed to manage these
risks successfully and they have a reasonable expectation that the
Group has adequate resources to continue in operational existence
for the period of assessment with no material uncertainties. The
Group therefore considers it appropriate to adopt the going concern
basis in preparing its interim financial statements.
Foreign currency translation
The interim financial statements are presented in euro, which is
the Company's functional and presentation currency.
The principal exchange rates used for the translation of results
and balance sheets into euro are as follows:
Average Period end
========= ========= ====== ===========================
Half year Half year Year 2 July 3 July 1 January
1 euro = 2022 2021 2021 2022 2021 2022
=============== ========= ========= ====== ====== ====== =========
US dollar 1.0928 1.2044 1.1826 1.0425 1.1823 1.1326
Pound sterling 0.8422 0.8677 0.8596 0.8665 0.8600 0.8403
--------------- --------- --------- ------ ------ ------ ---------
3. Joint venture held for sale and discontinued operations
The Company announced its intention to sell its 40% holding in
Glanbia Ireland DAC ("Glanbia Ireland") to Glanbia Co-operative
Society Ltd (the "Society") for EUR307.0 million in November 2021
(the "Transaction"). Members of the Society approved the
Transaction on 17 December 2021. Accordingly, in the prior year,
the Group has treated the joint venture arrangement in Glanbia
Ireland as an asset held for sale on the Group balance sheet and
ceased to apply the equity method of accounting to its interest in
Glanbia Ireland from 17 December 2021.
The Transaction was completed on 1 April 2022 for EUR307.0
million cash following the approval of the independent shareholders
of the Company and receipt of regulatory approvals. The gain of
EUR55.9 million on disposal of Glanbia Ireland (note 7) is based on
the EUR307.0 million received, less the carrying amount of the
asset held for sale of EUR234.0 million and costs associated with
the transaction of EUR17.1 million. Refer to note 19 for further
details of the Transaction.
4. Segment information
Glanbia Ireland is no longer reported as a segment following its
disposal on 1 April 2022 (note 3). Accordingly, the prior period
pre-exceptional segment results excludes Glanbia Ireland and the
segment assets associated with Glanbia Ireland is included within
"All other segments and unallocated" for the comparative
period.
Pre-exceptional segment results are as follows:
Glanbia Total All other
Performance Glanbia reportable segments
Nutrition Nutritionals segments and unallocated Total
Half year 2022 EURm EURm EURm EURm EURm
======================================= ============ ============= =========== ================ =======
Total gross segment revenue 794.2 2,083.4 2,877.6 - 2,877.6
Inter-segment revenue (0.1) (48.7) (48.8) - (48.8)
---------------------------------------- ------------ ------------- ----------- ---------------- -------
Revenue 794.1 2,034.7 2,828.8 - 2,828.8
---------------------------------------- ------------ ------------- ----------- ---------------- -------
Operating profit before intangible
asset amortisation (EBITA) 82.3 89.4 171.7 - 171.7
---------------------------------------- ------------ ------------- ----------- ---------------- -------
Shares of results of joint ventures
accounted for using the equity method - - - 11.4 11.4
---------------------------------------- ------------ ------------- ----------- ---------------- -------
Half year 2021
======================================= ===== ======= ======= ==== =======
Total gross segment revenue 638.5 1,423.0 2,061.5 - 2,061.5
Inter-segment revenue (0.1) (19.2) (19.3) - (19.3)
---------------------------------------- ----- ------- ------- ---- -------
Revenue 638.4 1,403.8 2,042.2 - 2,042.2
---------------------------------------- ----- ------- ------- ---- -------
Operating profit before intangible
asset amortisation (EBITA) 90.2 69.7 159.9 - 159.9
---------------------------------------- ----- ------- ------- ---- -------
Shares of results of joint ventures
accounted for using the equity method - - - 18.8 18.8
---------------------------------------- ----- ------- ------- ---- -------
Segment earnings before interest, tax, amortisation and
exceptional items are reconciled to reported profit before tax and
profit after tax in the Group income statement.
The segment assets and liabilities are as follows:
Glanbia Total All other
Performance Glanbia reportable segments
Nutrition Nutritionals segments and unallocated Total
2 July 2022 EURm EURm EURm EURm EURm
==================== ============ ============= =========== ================ =======
Segment assets 1,918.1 1,462.8 3,380.9 533.6 3,914.5
Segment liabilities 453.4 481.8 935.2 1,066.5 2,001.7
---------------------- ------------ ------------- ----------- ---------------- -------
1 January 2022
==================== ======= ======= ======= ===== =======
Segment assets 1,741.3 1,138.9 2,880.2 747.4 3,627.6
Segment liabilities 441.4 446.7 888.1 999.2 1,887.3
---------------------- ------- ------- ------- ----- -------
Geographical information
Revenue from external customers, and non-current assets, other
than financial instruments, deferred tax assets, and retirement
benefit assets attributable to the country of domicile and all
foreign countries of operation for which revenue/non-current assets
exceed 10% of total Group revenue/non-current assets are set out
below.
Revenue from external customers in the table below and in the
disaggregation of revenue by primary geographical markets table is
allocated to geographical areas based on the place of delivery or
collection of the products sold as agreed with customers as opposed
to the end use market where the product may be consumed.
Revenue Non-current assets
==================== ====================
Half year Half year 2 July 1 January
2022 2021 2022 2022
EURm EURm EURm EURm
======================================= ========= ========= ======== ==========
Ireland (country of domicile) 5.4 3.7 830.0 713.1
US 2,317.5 1,646.2 1,309.2 1,201.9
Other
- North America (excluding US) 49.1 38.1 5.3 5.2
- Europe (excluding Ireland) 228.9 175.4 213.9 214.7
- Asia Pacific 172.4 134.2 11.6 11.2
- LATAM 34.7 26.1 - -
- Rest of World 20.8 18.5 - -
--------------------------------------- --------- --------- -------- ----------
2,828.8 2,042.2 2,370.0 2,146.1
--------------------------------------- --------- --------- -------- ----------
Disaggregation of revenue
Revenue is disaggregated based on the Group's internal reporting
structures, the primary geographical markets in which the Group
operates, the timing of revenue recognition, and channel mix as set
out in the following tables:
Half year Half year
2022 2021
============ ============== ======= ============ ============== =======
Glanbia Glanbia
Performance Glanbia Performance Glanbia
Nutrition Nutritionals Total Nutrition Nutritionals Total
EURm EURm EURm EURm EURm EURm
============================== ============ ============== ======= ============ ============== =======
Internal reporting structures
Nutritional Solutions - 588.8 588.8 - 434.8 434.8
US Cheese - 1,445.9 1,445.9 - 969.0 969.0
GPN Americas 538.7 - 538.7 436.6 - 436.6
GPN International (including
Direct-to-Consumer) 255.4 - 255.4 201.8 - 201.8
Total 794.1 2,034.7 2,828.8 638.4 1,403.8 2,042.2
------------------------------- ------------ -------------- ------- ------------ -------------- -------
Primary geographical markets
North America 539.0 1,827.6 2,366.6 439.3 1,245.0 1,684.3
Europe 160.5 73.8 234.3 117.5 61.6 179.1
Asia Pacific 72.1 100.3 172.4 63.3 70.9 134.2
LATAM 8.3 26.4 34.7 4.8 21.3 26.1
Rest of World 14.2 6.6 20.8 13.5 5.0 18.5
Total 794.1 2,034.7 2,828.8 638.4 1,403.8 2,042.2
--------------------------------- ----- ------- ------- ----- ------- -------
Timing of revenue recognition
Products transferred at point in
time 794.1 2,034.7 2,828.8 638.4 1,403.8 2,042.2
Products transferred over time - - - - - -
--------------------------------- ----- ------- ------- ----- ------- -------
Total 794.1 2,034.7 2,828.8 638.4 1,403.8 2,042.2
--------------------------------- ----- ------- ------- ----- ------- -------
Half year Half year
2022 2021
Channel mix for Glanbia Performance Nutrition EURm EURm
============================================== ========= =========
Distributor 176.1 139.8
Food, Drug, Mass, Club (FDMC) 269.1 208.0
Online 251.1 199.4
Specialty 97.8 91.2
---------------------------------------------- --------- ---------
Total 794.1 638.4
---------------------------------------------- --------- ---------
The disaggregation of revenue by channel mix is most relevant
for Glanbia Performance Nutrition.
5. Seasonality
Historically, due to the somewhat seasonal nature of the retail
segment into which the Glanbia Performance Nutrition segment sells,
higher revenues and operating profits were expected in the second
half of the year than in the first six months. This has not
occurred in the current and prior year with strong demand in the
first half. Glanbia Nutritionals revenues and operating profits,
although impacted by dairy markets, are typically more evenly
spread throughout the year.
6. Operating profit
Half Half
year year
2022 2021
=============== ============= ========= =============== ============= =========
Exceptional Exceptional
EURm EURm
Pre-exceptional (note Total Pre-exceptional (note Total
Notes EURm 7) EURm EURm 7) EURm
======================= ===== =============== ============= ========= =============== ============= =========
Revenue 4 2,828.8 - 2,828.8 2,042.2 - 2,042.2
Cost of goods sold (2,333.1) - (2,333.1) (1,613.2) (5.5) (1,618.7)
----------------------- ----- --------------- ------------- --------- --------------- ------------- ---------
Gross profit 495.7 - 495.7 429.0 (5.5) 423.5
Selling and
distribution expenses (221.4) - (221.4) (175.0) - (175.0)
Administration expenses (101.0) (0.6) (101.6) (93.4) (48.2) (141.6)
Net impairment losses
on financial
assets (1.6) - (1.6) (0.7) - (0.7)
----------------------- ----- --------------- ------------- --------- --------------- ------------- ---------
Operating profit before
intangible
asset amortisation
(EBITA) 4 171.7 (0.6) 171.1 159.9 (53.7) 106.2
Intangible asset
amortisation 13 (36.2) - (36.2) (30.0) - (30.0)
----------------------- ----- --------------- ------------- --------- --------------- ------------- ---------
Operating profit 135.5 (0.6) 134.9 129.9 (53.7) 76.2
----------------------- ----- --------------- ------------- --------- --------------- ------------- ---------
7. Exceptional items
Half year Half year
2022 2021
Notes EURm EURm
=========================================================== ===== ========= =========
Pension related costs (a) 0.6 38.9
Changes in fair value of contingent consideration (b) (7.3) -
Organisation redesign costs (c) - 14.8
Share of results of joint ventures accounted for
using the equity method (a) (0.2) 2.3
Exceptional tax credit 10 - (3.8)
----------------------------------------------------------- ----- --------- ---------
Total exceptional (gain)/charge from continuing operations (6.9) 52.2
Exceptional gain after tax from discontinued operations (d) (55.9) -
----------------------------------------------------------- ----- --------- ---------
Total exceptional (gain)/charge for the period 20 (62.8) 52.2
----------------------------------------------------------- ----- --------- ---------
(a) Pension related costs relate to the restructure of legacy
defined benefit pension schemes associated with the Group and joint
ventures, which included initiating a process for the ultimate buy
out and wind up of these schemes and a further simplification of
the schemes that remain. Costs incurred relate to the estimated
cost of the settlement loss as a result of acquiring bulk purchase
annuity policies to mirror and offset movements in known
liabilities of the schemes ("buy-in" transaction), as well as
related advisory and execution costs net of gains arising from risk
reduction activities. This restructuring, which commenced in 2021
is on track and anticipated to conclude during the second half of
2022.
(b) Changes in fair value of contingent consideration relate to
contingent payments associated with the 2021 LevlUp acquisition
that have now reduced following an assessment of conditions that
give rise to the additional payments.
(c) Prior year Organisation redesign costs related to a
fundamental reorganisation of the GPN segment that realigned
operating and supply chain structures in support of individual
businesses, sharpened focus on brands and optimised
routes-to-market across non-US markets to drive greater
efficiencies, improve margin and deliver top line growth. The
investment phase of this multi-year strategic programme is now
complete, with no further costs incurred during the period.
(d) Exceptional gain from discontinued operations relates to the
gain arising on the completion of the disposal of the Group's 40%
interest in Glanbia Ireland to Glanbia Co-Operative Society
Limited. The gain represents the difference between proceeds
received, net of transaction related costs, and the carrying value
of the Group's investment in Glanbia Ireland. The transaction
completed on 1 April 2022 (note 3).
8. Retirement benefit obligations
The Group has a number of defined benefit pension plans in the
Republic of Ireland ("Ireland") and the United Kingdom ("UK"). The
defined benefit pension plans in Ireland and the UK are
administered by independent Boards of Trustees through separate
trustee controlled funds.
During 2021, the Trustee Boards of the UK pension plans
completed a buy-in transaction whereby the assets of the plans were
invested in a bulk purchase annuity policy with a UK pension
insurance specialist. The insurance policy was purchased using the
existing assets of the plans and a contribution of EUR35.9 million
from the Group. It is the intention of the Trustee Boards that the
plans will move to a full buy-out as soon as practical, following
which the insurance company will become responsible for the UK
pension plan obligations. On completion of the buy-out, the defined
benefit assets (comprising the annuity policy) and matching defined
benefit obligations will be derecognised from the (condensed) Group
balance sheet.
The majority of the net UK pension liabilities at 2 July 2022
and 1 January 2022 relates primarily to Guaranteed Minimum Pension
equalisation ("GMPe"). These GMPe liabilities may require an
additional contribution from the Group prior to the completion of
the aforementioned buy-out which is expected to occur in the second
half of 2022 and result in the recognition of a charge/gain in the
income statement.
Reconciliation of the amounts recognised on the condensed Group
balance sheet to net defined benefit pension plan
asset/(liability):
2 July 1 January
2022 2022
EURm EURm
=================================================== ====== =========
Retirement benefit asset 4.8 2.9
Retirement benefit obligation (2.9) (17.1)
--------------------------------------------------- ------ ---------
Net defined benefit pension plan asset/(liability) 1.9 (14.2)
--------------------------------------------------- ------ ---------
The net asset disclosed above relates to funded plans. The
movement in the net defined benefit pension plan asset/(liability)
is as follows:
2 July 1 January
2022 2022
EURm EURm
=============================================================== ====== =========
At the beginning of the period (14.2) (29.3)
Current service cost (0.9) (1.9)
Net interest cost (0.1) (0.1)
Settlement loss - (28.8)
--------------------------------------------------------------- ------ ---------
Total amount recognised in profit or loss (1.0) (30.8)
Remeasurements:
- Return of plan assets excluding interest income (44.7) 1.9
- Actuarial loss arising from experience adjustments (1.8) (1.7)
- Actuarial loss arising from demographic adjustments - (0.7)
- Actuarial gain arising from changes in financial assumptions 68.6 0.5
- Change in asset ceiling excluding interest expense (6.5) -
--------------------------------------------------------------- ------ ---------
Total amount recognised in other comprehensive income 15.6 -
Exchange differences 0.1 (0.4)
Contributions paid/payable by the employer 1.4 46.2
Net asset attributed to the Group - 0.1
--------------------------------------------------------------- ------ ---------
At the end of the period 1.9 (14.2)
--------------------------------------------------------------- ------ ---------
During the current period the Group recognised an amount of the
total surplus on one of the plans based on the economic benefits
that the Group could gain from a reduction in future
contributions.
The principal assumptions used for the purposes of the actuarial
valuations were as follows:
Half year 2022 Half year 2021 Year 2021
===================== ====================== =====================
ROI UK ROI UK ROI UK
============================= ======== =========== ======== =========== ======== =============
Discount rate 3.40% 3.85% 1.10% 1.95% 1.10% 1.90%
Inflation rate 2.40% 2.65%-3.25% 1.50% 2.60%-3.20% 2.10% 2.80%-3.40%
Future salary increases* 3.40% 0.00% 2.50% 0.00% 3.10% 0.00%
Future pension increases 0.00% 2.65%-3.10% 0.00% 2.60%-3.05% 0.00% 2.75%-3.25%
Mortality rates (years):
- Male - reaching 65 years
of age in 20 years' time 24.2 22.3 24.1 22.2 24.1 22.1
- Female - reaching 65 years
of age in 20 years' time 26.3 24.6 26.2 24.4 26.2 24.5
- Male - currently aged
65 years old 21.9 21.2 21.8 21.1 21.8 21.1
- Female - currently aged
65 years old 24.3 23.4 24.2 23.2 24.2 23.2
----------------------------- -------- ----------- -------- ----------- -------- -------------
*The ROI defined benefit pension plans are on a career average
structure therefore this assumption does not have a material
impact. The UK defined benefit pension plans comprise solely
pensioners and deferred pensioners.
9. Finance income and costs
Half year Half year
2022 2021
Notes EURm EURm
================================================== ===== ========= =========
Finance income
Interest income on loans to related parties 20 0.5 0.7
Changes in fair value of contingent consideration 7 7.3 -
Total finance income 7.8 0.7
-------------------------------------------------- ----- --------- ---------
Finance costs
Bank borrowing costs (2.5) (2.7)
Facility fees (0.8) (1.0)
Finance cost of private placement debt (4.9) (6.4)
Interest expense on lease liabilities (1.2) (1.3)
Interest expense on swaps (0.2) (0.1)
Changes in fair value of contingent consideration (0.6) -
Total finance costs 20 (10.2) (11.5)
-------------------------------------------------- ----- --------- ---------
Net finance costs (2.4) (10.8)
-------------------------------------------------- ----- --------- ---------
Included within finance income is an exceptional item of EUR7.3
million (note 7).
10. Income taxes
The Group's income tax charge of EUR15.7 million (HY 2021:
EUR11.7 million) net of an exceptional tax credit of nil (HY 2021:
EUR3.8 million) (note 7) has been prepared based on the Group's
best estimate of the weighted average tax rate that is expected for
the full financial year.
11. Dividends
Half year Half year
2022 2021
EURm EURm
================================================== ========= =========
Equity dividends to shareholders
Final - 17.53c per ordinary share, paid on 6 May
2022 (FY 2021: 15.94c, paid on 7 May 2021) 49.1 46.5
Interim - 12.93c per ordinary share, payable on 7
October 2022 (HY 2021: 11.75c, paid on 1 October
2021) 35.7 34.2
--------------------------------------------------- --------- ---------
Of the EUR49.1 million (HY 2021: EUR46.5 million) dividends paid
during the half year ended 2 July 2022, EUR0.1 million (HY 2021:
EUR0.1 million) are waived in relation to own shares.
These interim financial statements do not reflect interim
dividends. The amount of interim dividends recommended is based on
the number of issued shares at period end (note 17). The actual
amount will be based on the number of issued shares on the record
date. There are no income tax consequences for the Company in
respect of dividends proposed prior to issuance of the interim
financial statements.
12. Earnings per share
Basic
Basic Earnings Per Share is calculated by dividing profit after
tax attributable to the equity holders of the Company by the
weighted average number of ordinary shares in issue during the
period, excluding ordinary shares purchased by the Group and held
as own shares. The weighted average number of ordinary shares in
issue used in the calculation of Basic Earnings Per Share is
279,154,299 (HY 2021: 291,355,433).
Half year Half year
2022 2021
=========== ============ ===== =========== ============ =====
Continuing Discontinued Continuing Discontinued
operations operations Total operations operations Total
================================== =========== ============ ===== =========== ============ =====
Profit after tax attributable
to equity holders of the Company
(EURm) 128.7 55.9 184.6 70.2 11.1 81.3
Basic Earnings Per Share (cent) 46.10 20.03 66.13 24.09 3.81 27.90
----------------------------------- ----------- ------------ ----- ----------- ------------ -----
Diluted
Diluted Earnings Per Share is calculated by adjusting the
weighted average number of ordinary shares in issue to assume
conversion of all potential dilutive ordinary shares. Share awards
are the Company's only potential dilutive ordinary shares.
The share awards, which are performance based, are treated as
contingently issuable shares because their issue is contingent upon
satisfaction of specified performance conditions as well as the
passage of time. Contingently issuable shares are included in the
calculation of diluted Earnings Per Share to the extent that
conditions governing exercisability have been satisfied, as if the
end of the reporting period were the end of the vesting period.
Half year Half year
2022 2021
=========================================================== =========== ===========
Weighted average number of ordinary shares in issue 279,154,299 291,355,433
Shares deemed to be issued for no consideration in respect
of share awards 2,822,926 944,385
Weighted average number of shares used in the calculation
of diluted Earnings Per Share 281,977,225 292,299,818
----------------------------------------------------------- ----------- -----------
Half year Half year
2022 2021
=========== ============ ===== =========== ============ =====
Continuing Discontinued Continuing Discontinued
operations operations Total operations operations Total
================================== =========== ============ ===== =========== ============ =====
Diluted Earnings Per Share (cent) 45.64 19.83 65.47 24.01 3.80 27.81
----------------------------------- ----------- ------------ ----- ----------- ------------ -----
13. Property, plant and equipment, right-of-use assets,
intangible assets and interests in joint ventures
Property, plant and equipment
During the six month period to 2 July 2022, there was an
increase of property, plant and equipment arising from additions of
EUR13.2 million (HY 2021: EUR25.0 million) and from business
combinations of EUR5.9 million (HY 2021: EUR0.2 million). Exchange
differences gain of EUR36.3 million (HY 2021: EUR14.6 million gain)
and depreciation charges of EUR23.5 million (HY 2021: EUR22.3
million) were also recognised in the period. An impairment of nil
(HY 2021: EUR4.8 million) was recognised in the period.
Right-of-use assets
During the six month period to 2 July 2022, there was an
increase of right-of-use assets arising from additions of EUR6.3
million (HY 2021: EUR9.2 million) and from business combinations of
EUR0.6 million (HY 2021: EUR0.3 million). The increase was offset
by depreciation charges of EUR8.7 million (HY 2021: EUR10.4
million) and disposals of EUR1.8 million (HY 2021: EUR1.3 million).
Exchange differences gain of EUR7.2 million (HY 2021: EUR2.9
million gain) were also recognised in the period. An impairment
charge of nil (HY 2021: EUR0.5 million credit) was recognised in
the period.
Intangible assets
During the six month period to 2 July 2022, the Group spent
EUR16.3 million (HY 2021: EUR14.1 million) in relation to software
and development costs. In addition, there was an increase of
EUR64.1 million (HY 2021: EUR49.0 million) of intangible assets
arising from business combinations during the period. Exchange
differences gain of EUR113.9 million (HY 2021: EUR42.5 million
gain) and amortisation charges of EUR36.2 million (HY 2021: EUR30.0
million) were also recognised in the period.
Interests in joint ventures
The increase in interests in joint ventures during the current
period is due to share of profit after tax of EUR11.6 million (HY
2021: EUR16.5 million), exchange differences gain of EUR11.4
million (HY 2021: EUR7.0 million gain), share of OCI of EUR10.1
million (HY 2021: EUR3.7 million) and dividend received of EUR2.6
million (HY 2021: EUR5.2 million).
14. Borrowings
2 July 1 January
2022 2022
EURm EURm
======================= ====== =========
Non-current
Bank borrowings 427.6 366.1
Private placement debt 359.7 331.1
787.3 697.2
----------------------- ------ ---------
Current
Bank overdrafts 92.8 136.5
----------------------- ------ ---------
Total borrowings 880.1 833.7
----------------------- ------ ---------
The maturity profile of borrowings, and undrawn committed and
uncommitted facilities is as follows:
2 July 2022 1 January 2022
=========================
Undrawn Undrawn Undrawn Undrawn
committed uncommitted committed uncommitted
Borrowings facilities facilities Borrowings facilities facilities
EURm EURm EURm EURm EURm EURm
============ ===== ========= ========== =========== ============ ========== =========== ============
12 months or
less 92.8 - 15.9 136.5 - 15.9
Between 1
and
2 years - - - - - -
Between 2 and
5 years 427.6 434.1 - 366.1 463.2 -
More than 5
years 359.7 - - 331.1 - -
------------------------------ ---------- ----------- ------------ ---------- ----------- ------------
880.1 434.1 15.9 833.7 463.2 15.9
---------------------------- ---------- ----------- ------------ ---------- ----------- ------------
Net debt is a non-IFRS measure which we provide to investors as
we believe they find it useful. Net debt comprises the
following:
2 July 3 July
2022 2021
EURm EURm
================================================= ======= ======
Bank borrowings and private placement debt 787.3 633.3
Cash and cash equivalents net of bank overdrafts (139.2) (83.6)
------------------------------------------------- ------- ------
648.1 549.7
------------------------------------------------- ------- ------
Net debt reconciliation is as follows:
Half year Half year
2022 2021
Notes EURm EURm
===================================================== ===== ========= =========
Net debt at the beginning of the period 602.7 493.9
Drawdown of borrowings 427.9 308.1
Repayment of borrowings (388.5) (274.7)
Exchange translation adjustment on net debt 44.1 9.8
Net (increase)/decrease in cash and cash equivalents (37.2) 17.0
Cash and cash equivalents acquired on acquisition 22 (0.9) (4.4)
Net debt at the end of the period 648.1 549.7
----------------------------------------------------- ----- --------- ---------
15. Fair value of financial instruments
There have been no changes to the risk management procedures or
policies since 1 January 2022. Refer to note 29 of the 2021 Annual
Report for details on these risk management procedures and
policies.
Except as detailed in the following table, the Group deemed that
the carrying amounts of financial instruments measured at amortised
cost in the interim financial statements approximate their fair
value due to their short-term nature:
2 July 2022 1 January 2022
==================== ====================
Carrying Carrying
amount Fair value amount Fair value
EURm EURm EURm EURm
======================================== ======== ========== ======== ==========
Financial assets
Non-current loans to joint ventures 17.2 16.6 42.5 42.6
Non-current financial asset measured at
amortised cost 0.1 0.1 0.2 0.2
Financial liabilities
Non-current borrowings 787.3 728.0 697.2 673.2
---------------------------------------- -------- ---------- -------- ----------
Fair value is estimated by discounting future contractual cash
flows using current market interest rates from observable interest
rates at the end of the reporting period that are available to the
Group for similar financial instruments (classified as level 2 in
the fair value hierarchy).
The following table shows the fair values of financial
instruments measured at fair value:
Fair 2 July 1 January
value 2022 2022
hierarchy EURm EURm
================================================= =========== ====== =========
Assets
Equity instrument designated at FVOCI - BDO Level
Development Capital Fund 2 1.3 1.1
Level
Interest rate swaps - cash flow hedges 2 1.2 -
Cross currency swaps - fair value through income Level
statement 2 - 1.4
Level
Foreign exchange contracts - cash flow hedges 2 1.0 0.8
Level
Call option over non-controlling interests (NCI) 3 0.5 0.5
Liabilities
Cross currency swaps - fair value through income Level
statement 2 (0.7) -
Level
Foreign exchange contracts - cash flow hedges 2 (0.1) -
Level
Interest rate swaps - cash flow hedges 2 - (1.2)
Level
Put option liability 3 (20.3) (24.8)
Level
Contingent consideration 3 (24.9) (7.3)
-------------------------------------------------- ---------- ------ ---------
Refer to note 29 of the 2021 Annual Report for details of the
valuation process of the above financial assets and liabilities and
note 22 of these interim financial statements for the valuation
methodology of the contingent consideration at period end which is
related to the acquisition of Sterling Technology, LLC.
The movement in carrying amounts associated with Level 3
financial instruments are as follows:
Call option Put option Contingent
over NCI liability consideration
EURm EURm EURm
=================================== =========== ========== ==============
At 2 January 2022 0.5 (24.8) (7.3)
Additions through business
combination (note 22) - - (23.1)
Remeasurements - 4.5 6.7
Exchange translation adjustments - - (1.2)
------------------------------------ ----------- ---------- --------------
At 2 July 2022 0.5 (20.3) (24.9)
----------------------------------- ----------- ---------- --------------
At 3 January 2021 - - (17.4)
Additions through business
combination 0.4 (23.2) (7.2)
Exchange translation adjustments - - (0.6)
------------------------------------ --- ------ ------
At 3 July 2021 0.4 (23.2) (25.2)
----------------------------------- --- ------ ------
16. Provisions
Property
and lease Legal and
Restructuring commitments operational Total
EURm EURm EURm EURm
====================================== ============= ============ ============ =====
At 2 January 2022 - non-current - 3.6 - 3.6
At 2 January 2022 - current 2.3 2.5 8.1 12.9
Amount provided for in the period - - 0.2 0.2
Utilised in the period (2.1) (0.3) (0.2) (2.6)
Unused amounts reversed in the period - - (0.3) (0.3)
Exchange differences 0.1 0.4 0.3 0.8
--------------------------------------- ------------- ------------ ------------ -----
At 2 July 2022 0.3 6.2 8.1 14.6
--------------------------------------- ------------- ------------ ------------ -----
Non-current - 3.3 - 3.3
Current 0.3 2.9 8.1 11.3
--------------------------------------- ------------- ------------ ------------ -----
0.3 6.2 8.1 14.6
-------------------------------------- ------------- ------------ ------------ -----
17. Share capital and share premium
Number
of Ordinary Share
shares shares premium Total
(thousands) EURm EURm EURm
============================= ============ ======== ======== =====
At 2 January 2022 287,169 17.2 87.8 105.0
Cancellation of own shares (10,831) (0.6) - (0.6)
----------------------------- ------------ -------- -------- -----
At 2 July 2022 276,338 16.6 87.8 104.4
----------------------------- ------------ -------- -------- -----
At 3 January 2021 294,402 17.7 87.6 105.3
Issuance of shares 40 - 0.2 0.2
Cancellation of own shares (3,147) (0.2) - (0.2)
----------------------------- ------- ----- ---- -----
At 3 July 2021 291,295 17.5 87.8 105.3
----------------------------- ------- ----- ---- -----
The total authorised number of ordinary shares in the current
and prior period is 350 million shares with a par value of EUR0.06
per share. All issued shares are fully paid, and carry one vote per
share and a right to dividends.
During the half year ended 2 July 2022, 10.8 million ordinary
shares (HY 2021: 3.1 million) were cancelled through the share
buyback programme. The amount paid to repurchase these shares was
initially recognised in the own shares reserve and was transferred
to retained earnings on cancellation.
18. Other reserves and retained earnings
18.1 Other reserves
Share
Capital Put option based
and merger Currency Hedging liability Own payment
reserve reserve reserve reserve shares reserve Other Total
Half year 2022 EURm EURm EURm EUR'm EURm EURm EURm EURm
================================= =========== ======== ======== ========== ======= ======== ===== =======
Balance at 2 January 2022 116.5 151.9 (10.6) (24.8) (6.4) 19.3 (0.4) 245.5
Currency translation differences - 140.3 - - - - - 140.3
Net investment hedge - (7.5) - - - - - (7.5)
Revaluation - gross - - 15.9 - - - 0.3 16.2
Reclassification to profit
or loss - gross - - (0.7) - - - - (0.7)
Deferred tax - - (3.6) - - - (0.1) (3.7)
- 132.8 11.6 - - - 0.2 144.6
Purchase of own shares - - - - (136.6) - - (136.6)
Cancellation of own shares 0.6 - - - 126.2 - - 126.8
Cost of share-based payments - - - - - 7.6 - 7.6
Transfer on exercise, vesting
or expiry of
share-based payments - - - - 7.2 (9.3) - (2.1)
Changes in fair value of
put option liability (note
15) - - - 4.5 - - - 4.5
Transfer to Group income
statement* - - 1.5 - - - - 1.5
Balance at 2 July 2022 117.1 284.7 2.5 (20.3) (9.6) 17.6 (0.2) 391.8
--------------------------------- ----------- -------- -------- ---------- ------- -------- ----- -------
Half year 2021
================================= ===== ===== ====== ====== ====== ===== ===== ======
Balance at 3 January 2021 116.0 31.9 (20.6) - (11.4) 10.3 (0.2) 126.0
Currency translation differences - 62.0 - - - - - 62.0
Net investment hedge - (3.0) - - - - - (3.0)
Revaluation - gross - - 7.0 - - - (0.3) 6.7
Reclassification to profit
or loss - gross - - 0.2 - - - - 0.2
Deferred tax - - (1.6) - - - 0.1 (1.5)
- 59.0 5.6 - - - (0.2) 64.4
Purchase of own shares - - - - (35.3) - - (35.3)
Cancellation of own shares 0.2 - - - 33.4 - - 33.6
Cost of share-based payments - - - - - 6.2 - 6.2
Transfer on exercise, vesting
or expiry of
Share-based payments - - - - 5.4 (5.4) - -
Recognition of put option
liability - - - (23.2) - - - (23.2)
--------------------------------- ----- ----- ------ ------ ------ ----- ----- ------
Balance at 3 July 2021 116.2 90.9 (15.0) (23.2) (7.9) 11.1 (0.4) 171.7
--------------------------------- ----- ----- ------ ------ ------ ----- ----- ------
*On disposal of discontinued operation.
Refer to note 23 of the 2021 Annual Report for a description of
the components of other reserves.
18.2 Retained earnings
Half year Half year
2022 2021
Notes EURm EURm
======================================================= ===== ========= =========
At the beginning of the period 1,381.7 1,380.5
Profit for the period attributable to equity holders
of the Company 184.6 81.3
Other comprehensive income
- Remeasurements on defined benefit plans 8 15.6 3.6
- Deferred tax on remeasurements on defined benefit
plans (1.6) (0.2)
- Share of remeasurements on defined benefit plans
from joint ventures, net of deferred tax 0.6 -
- Share of remeasurements on defined benefit plans
from discontinued operations, net of deferred tax - 11.2
------------------------------------------------------- ----- --------- ---------
14.6 14.6
Dividends (49.0) (46.4)
Cancellation of own shares (126.2) (33.4)
Transfer on exercise, vesting or expiry of share-based
payments 18.1 2.1 -
Deferred tax on share-based payments 1.0 0.8
At the end of the period 1,408.8 1,397.4
------------------------------------------------------- ----- --------- ---------
19. Related party transactions
Refer to note 3 for the disposal of Glanbia Ireland which was a
joint venture of the Group up to 1 April 2022. From 2 April 2022,
Glanbia Ireland became a wholly owned subsidiary of Glanbia
Co-operative Society Limited and also a other related party to the
Group. Accordingly transactions with Glanbia Ireland from 2 April
2022 were included within Glanbia Co-operative Society Limited and
its subsidiaries ("Glanbia Co-operative Group") in the table below.
As part of the terms of the Transaction, the Company paid Glanbia
Ireland a contribution of EUR8 million related to pension
obligations, separation and rebranding costs and has committed to a
maximum additional EUR1.5 million re-imbursement of rebranding
costs in connection with the Transaction.
Other transactions that occurred with related parties during the
period ended 2 July 2022 include:
Half year Half year
2022 2021
EURm EURm
===================================================== ========= =========
Dividends paid to Glanbia Co-operative Group 15.3 14.9
Dividend received from joint ventures 2.6 17.4*
Loans advanced to joint ventures 3.5 3.5
Loans advanced to Glanbia Ireland which were repaid 28.8 -
Sales of goods and services
- Sales of services to joint ventures 14.6 32.0
- Sales of services to Glanbia Co-operative Group 8.7 1.4
Purchases of goods and services
- Purchases of goods from joint ventures 1,049.5 663.9
- Purchases of goods from Glanbia Co-operative Group 16.5 -
------------------------------------------------------ --------- ---------
* Includes EUR12.2 million received from Glanbia Ireland.
20. Net cash flows from operating activities before exceptional items
Half year Half year
2022 2021
Notes EURm EURm
======================================================== ===== ========= =========
Profit for the year 184.3 81.3
Exceptional items 7 (62.8) 52.2
Profit after tax from discontinued operations - (11.1)
Income taxes 15.7 15.5
-------------------------------------------------------- ----- --------- ---------
Profit before taxation 137.2 137.9
Share of results of joint ventures accounted for
using the equity method 4 (11.4) (18.8)
Finance costs 9 10.2 11.5
Finance income 9 (0.5) (0.7)
Amortisation of intangible assets 13 36.2 30.0
Depreciation of property, plant and equipment 13 23.5 22.3
Depreciation of right-of-use assets 13 8.7 10.4
Net movement in allowance for impairment of receivables 2.1 0.4
Cost of share-based payments 18.1 7.6 6.2
Net write down/(reversal) of inventories 5.6 (1.2)
Other 1.3 (1.8)
Operating cash flows before movement in working capital 220.5 196.2
Movement in working capital (234.6) (24.4)
Net cash flows from operating activities before
exceptional items (14.1) 171.8
-------------------------------------------------------- ----- --------- ---------
21. Contingent liabilities and commitments
Contingent liabilities
Guarantees provided by financial institutions amounting to
EUR7.2 million (FY 2021: EUR6.9 million) are outstanding at 2 July
2022. The Group does not expect any material loss to arise from
these guarantees. The Group has contingent liabilities in respect
of legal claims arising in the ordinary course of business. It is
not anticipated that any material liability will arise from these
contingent liabilities other than those provided for.
Commitments
At 2 July 2022 the Group had entered into contractual
commitments for the acquisition of property, plant and equipment
amounting to EUR6.2 million (FY 2021: EUR8.3 million) and software
of EUR1.2 million (FY 2021: EUR1.5).
As at 2 July 2022, the Group has committed to invest EUR10.0
million (FY 2021: EUR10.0 million) cash contributions in Glanbia
Cheese EU Limited, a joint venture of the Group, which is
contingent on the successful commissioning of the plant.
Additionally, there was an undrawn loan facility of EUR3.0 million
as at 2 July 2022 (FY 2021: EUR1.3 million) which was provided by
the Group to the joint venture.
22. Business combinations
On 11 March 2022 Glanbia acquired 100% of the voting shares of
Sterling Technology, LLC ("Sterling"), a bioactive ingredient
company based in South Dakota, USA. Sterling will complement the
existing ingredient technology portfolio of Nutritional Solutions
providing bioactive ingredients which are mainly used in the
growing immunity and gut-health segments as well as in pet
nutrition. The goodwill relates to the acquired workforce, the
expectation that the business will give rise to synergies across
the Glanbia Nutritionals segment, will generate future sales beyond
the existing customer base, as well as the opportunity to expand
the business into new markets, where there are no existing
customers, and further builds on our offering in immunity solutions
in Nutritional Solutions. Goodwill of EUR22.0 million is expected
to be deductible for tax purposes.
Details of the net assets acquired and goodwill arising from the
acquisition are as follows:
Total
EURm
=============================================================== ===== ======
Cash paid 54.0
Contingent consideration 23.1
Total purchase consideration 77.1
Less: Fair value of net assets acquired (55.1)
--------------------------------------------------------------- ----- ------
Goodwill 22.0
--------------------------------------------------------------- ----- ------
The provisional fair value of assets and liabilities arising
from the acquisition are as follows:
Total
Notes EURm
=============================================================== ===== ======
Property, plant and equipment 13 5.9
Right-of-use assets 13 0.6
Intangible assets - customer relationships 30.5
Intangible assets - recipes and know-how 10.0
Intangible assets - trade names 1.6
Inventories 3.3
Trade and other receivables 5.5
Cash and cash equivalents 14 0.9
Trade and other payables (2.6)
Lease liabilities (0.6)
Fair value of net assets acquired 55.1
--------------------------------------------------------------- ----- ------
The contingent consideration arrangement requires the Group to
pay the former owners of Sterling an earnout in 2023 if a
pre-defined earnings threshold is exceeded within a defined period
post acquisition. Under the acquisition agreement, the undiscounted
amount of future payments for which the Group may be liable ranges
from nil to US$27.5 million (EUR26.4 million translated at the
period end exchange rate).
The fair value of the contingent consideration of EUR24.9
million at period end (note 15) was estimated by calculating the
present value of the future expected payments. The main significant
unobservable input in the calculation is the forecast EBITDA of
Sterling over the relevant period. As it is deemed highly probable
that the higher end of the EBITDA range will be met, the Group have
assumed that the upper limit of the earnout will be payable. A 10%
increase in the forecast EBITDA would not change the fair value of
the contingent consideration. A 10% decrease in forecast EBITDA
would result in a decrease in fair value of the contingent
consideration by EUR8.4 million.
The fair value of Sterling's trade and other receivables at the
acquisition date amounted to EUR5.5 million. The gross contractual
amount for receivables due is EUR5.8 million, of which EUR0.3
million is expected to be uncollectible. Acquisition-related costs
of EUR0.6 million incurred primarily on professional fees are
included in administrative expenses.
Due to the proximity of the date of the acquisition to the
reporting date, completion accounts have not been formally agreed
between the purchaser and seller at the date of approving the
interim financial statements. Accordingly, the initial assignment
of fair values to identifiable net assets acquired has been
performed on a provisional basis. In addition, management will need
to finalise the valuation exercise undertaken by the Group's
external valuation specialist relating to the acquisition. It is
therefore possible the final amounts for the assets and liabilities
may differ from the provisional values. Any amendments to these
fair values within the 12 month timeframe from the date of
acquisition will be disclosed in the 2022 Annual Report as
stipulated by IFRS 3 'Business Combinations'.
Combined impact of acquisitions
The revenue and profit before taxation and exceptional items of
the Group, including the post-acquisition impact of acquisition
completed during the period ended 2 July 2022, were as follows:
Group Consolidated
2022 excluding group including
acquisition acquisition acquisition
EURm EURm EURm
============================================= ============ ============ ================
Revenue 9.4 2,819.4 2,828.8
Profit before taxation and exceptional items 2.2 135.0 137.2
============================================= ============ ============ ================
The revenue and profit before taxation and exceptional items of
the Group for the period ended 2 July 2022 determined in accordance
with IFRS 3 as though the acquisition date for all business
combinations effected during the year had been at the beginning of
the period would be as follows:
Group Pro-forma
2022 excluding consolidated
acquisition acquisition group
EURm EURm EURm
============================================= ============ ============ =============
Revenue 14.3 2,819.4 2,833.7
Profit before taxation and exceptional items 2.5 135.0 137.5
--------------------------------------------- ------------ ------------ -------------
The Group acquired PacMoore Process Technologies, LLC in 2021
for which the fair value of assets and liabilities were determined
provisionally. There was no change to goodwill following the
finalisation of the fair value of assets and liabilities during the
measurement period.
23. Events after the reporting period
See note 11 for the interim dividend, recommended by the
Directors, to be paid on 7 October 2022.
Other than as described above, there have been no material
events subsequent to the end of the interim period ended 2 July
2022 which require disclosure in this report.
24. Information
The interim financial statements are considered non-statutory
financial statements for the purposes of the Companies Act 2014 and
in compliance with section 340(4) of that Act we state that:
-- the interim financial statements have been prepared to meet
our obligation under the Transparency (Directive 2004/109/EC)
Regulations 2007 as amended (Statutory Instrument No. 277 of
2007);
-- the interim financial statements do not constitute the
statutory financial statements of the Group and are unaudited;
-- the statutory financial statements as at, and for the
financial year ended 1 January 2022 will be annexed to the 2021
annual return and filed with the Companies Registration Office;
-- the statutory auditor of the Group have made a report under
section 391 in the form required by section 336 Companies Act 2014
in respect of the statutory financial statements of the Group;
and
-- the matters referred to in the statutory auditor's report
were unqualified, and did not include a reference to any matters to
which the statutory auditor drew attention by way of emphasis
without qualifying the report.
Copies of this half yearly financial report are available for
download from the Group's website at www.glanbia.com.
glossary
Key peRformance indicators and non-ifrs performance measures
Non-IFRS performance measures
The Group reports certain performance measures that are not
defined under IFRS but which represent additional measures used by
the Board of Directors and the Glanbia Operating Executive in
assessing performance and for reporting both internally and to
shareholders and other external users. The Group believes that the
presentation of these non-IFRS performance measures provides useful
supplemental information which, when viewed in conjunction with our
IFRS financial information, provides readers with a more meaningful
understanding of the underlying financial and operating performance
of the Group.
These non-IFRS performance measures may not be uniformly defined
by all companies and accordingly they may not be directly
comparable with similarly titled measures and disclosures by other
companies. None of these non-IFRS performance measures should be
considered as an alternative to financial measures drawn up in
accordance with IFRS.
The principal non-IFRS performance measures used by the Group
are:
Relevant
for Relevant
Half year for
2022 Year 2021
================================================== ========== ==========
G 1. Constant currency
G 2. Revenue
G 3. EBITA (pre-exceptional)
G 4. EBITA margin % (pre-exceptional)
G 5. EBITDA
G 6. Constant Currency Basic and Adjusted Earnings
Per Share ("EPS")
G 7. Net debt
G 8. Financing Key Performance Indicators
G 9. Volume and pricing increase/(decrease)
G 10. Like-for-like revenue increase/(decrease)
G 11. Effective tax rate
G 12. Average interest rate
G 13. Operating cash conversion
G 14. Operating cash flow and free cash flow
G 15. Dividend payout ratio
G 16. Compound annual growth rate ("CAGR")
G 17. Exceptional items
Total shareholder return
Return on capital employed
The principal non-IFRS performance measures relevant to the
interim period are defined below with a reconciliation of these
measures to IFRS measures where applicable.
A number of the non-IFRS performance measures below have been
re-presented to reflect continuing and discontinued operations in
line with the presentation adopted in the Group income
statement.
Total shareholder return and return on capital employed are not
considered relevant by the Group for the interim period as they are
performance measures considered on an annual basis only as part of
the performance conditions in Glanbia's Long-term Incentive
Plan.
G 1. Constant currency
While the Group reports its results in euro, it generates a
significant proportion of its earnings in currencies other than
euro, in particular US dollar. Constant currency reporting is used
by the Group to eliminate the translational effect of foreign
exchange on the Group's results. To arrive at the constant currency
period-on-period change, the results for the prior period are
retranslated using the average exchange rates for the current
period and compared to the current period reported numbers.
The principal average exchange rates used to translate results
as at the reporting dates are set out below:
Half year Half year Year
1 euro = 2022 2021 2021
=============== ========= ========= ======
US dollar 1.0928 1.2044 1.1826
Pound sterling 0.8422 0.8677 0.8596
--------------- --------- --------- ------
G 2. Revenue
Revenue comprises sales of goods and services to external
customers net of value added tax, rebates and discounts. Revenue is
one of the Group's Key Performance Indicators and is an IFRS
performance measure.
G 2.1 Group revenue
Reference
to the Half year Half year Constant
interim Half year 2021 2021 currency Like-for-like
financial 2022 Reported Retranslated growth growth
statements/glossary EUR'm EUR'm EUR'm % %
============================== ===================== ========= ========== ============= ========= =============
Nutritional Solutions Note 4 588.8 434.8 471.5 24.9% 19.5%
US Cheese Note 4 1,445.9 969.0 1,068.0 35.4% 35.4%
------------------------------ --------------------- --------- ---------- ------------- --------- -------------
Glanbia Nutritionals Note 4 2,034.7 1,403.8 1,539.5 32.2% 30.5%
------------------------------ --------------------- --------- ---------- ------------- --------- -------------
Americas Note 4 538.7 436.6 480.9 12.0% 12.0%
International (including
Direct-to-Consumer) Note 4 255.4 201.8 210.2 21.5% 19.0%
------------------------------ --------------------- --------- ---------- ------------- --------- -------------
Glanbia Performance Nutrition Note 4 794.1 638.4 691.1 14.9% 14.1%
------------------------------ --------------------- --------- ---------- ------------- --------- -------------
Revenue Note 6 2,828.8 2,042.2 2,230.6 26.8% 25.3%
------------------------------ --------------------- --------- ---------- ------------- --------- -------------
G 3. EBITA (pre-exceptional)
EBITA (pre-exceptional) is defined as earnings before interest,
tax and amortisation. EBITA references throughout the half year
results are on a pre-exceptional basis unless otherwise indicated.
EBITA (pre-exceptional) is one of the Group's Key Performance
Indicators. Business Segment EBITA (pre-exceptional) growth on a
constant currency basis is one of the performance conditions in
Glanbia's Annual Incentive Plan for Senior Management. Refer to
note 6 of the interim financial statements for the reconciliation
of EBITA (pre-exceptional).
G 3.1 EBITA (pre-exceptional)
Reference
to the Half year Half year Constant
interim Half year 2021 2021 currency
financial 2022 Reported Retranslated growth
statements/glossary EUR'm EUR'm EUR'm %
============================== ===================== ========= ========== ============= =========
Nutritional Solutions 71.7 56.6 62.7 14.4%
US Cheese 17.7 13.1 14.7 20.4%
----------------------------------------------------- --------- ---------- ------------- ---------
Glanbia Nutritionals Note 4 89.4 69.7 77.4 15.5%
------------------------------ --------------------- --------- ---------- ------------- ---------
Glanbia Performance Nutrition Note 4 82.3 90.2 100.5 (18.1%)
------------------------------ --------------------- --------- ---------- ------------- ---------
EBITA (pre-exceptional) Note 6 171.7 159.9 177.9 (3.5%)
------------------------------ --------------------- --------- ---------- ------------- ---------
G 4. EBITA margin % (pre-exceptional)
EBITA margin % (pre-exceptional) is defined as EBITA
(pre-exceptional) as a percentage of revenue. Refer to G 2.1 and G
3.1 for reconciliations of revenue and EBITA (pre-exceptional)
respectively. EBITA references throughout the half year results are
on a pre-exceptional basis unless otherwise indicated.
G 5. EBITDA
EBITDA is defined as earnings before interest, tax, depreciation
(net of grant amortisation) and amortisation. EBITDA references
throughout the half year results are on a pre-exceptional basis
unless otherwise indicated.
Reference
to the
interim Half year Half year
financial 2022 2021
statements/glossary EUR'm EUR'm
========================= ===================== ========= =========
EBITA (pre-exceptional) G 3.1 171.7 159.9
Depreciation* 32.3 31.3
------------------------------------------------ --------- ---------
EBITDA (pre-exceptional) G 14 204.0 191.2
------------------------- --------------------- --------- ---------
*Includes depreciation of property, plant and equipment of
EUR23.5 million (HY 2021: EUR22.3 million) and depreciation of
right-of-use assets (excluding exceptional) of EUR8.8 million (HY
2021: EUR9.0 million).
G 6. Constant Currency Basic and Adjusted Earnings Per Share
("EPS")
G 6.1 Constant Currency Basic Earnings Per Share
Basic EPS is calculated by dividing the net profit attributable
to the equity holders of the Company by the weighted average number
of ordinary shares in issue during the period, excluding ordinary
shares purchased by the Group and held as own shares (see note 12).
Basic EPS has also been calculated on a continuing basis (excluding
Glanbia Ireland) in line with the presentation of continuing and
discontinued operations in the Condensed Group income
statement.
Reference
to the Half year Half year Year
interim Half year 2021 2021 2021
financial 2022 Reported Retranslated Reported
statements/glossary EUR'm EUR'm EUR'm EUR'm
====================================== ===================== ========= ========= ============= =========
Condensed
Profit after tax attributable Group income
to equity holders of the Company statement 184.6 81.3 92.9 167.0
Less: Profit after tax attributable Condensed
to equity holders of the Company Group income
- discontinued operations statement (55.9) (11.1) (11.1) (26.4)
-------------------------------------- --------------------- --------- --------- ------------- ---------
Profit after tax attributable
to equity holders of the Company
- continuing operations Note 12 128.7 70.2 81.8 140.6
-------------------------------------- --------------------- --------- --------- ------------- ---------
Weighted average number of ordinary
shares in issue (thousands) Note 12 279,154 291,355 291,355 290,059
-------------------------------------- --------------------- --------- --------- ------------- ---------
Basic Earnings Per Share (cent)
- continuing operations 46.10 24.09 28.08 48.47
Basic Earnings Per Share (cent) Note 12 66.13 27.90 31.89 57.57
-------------------------------------- --------------------- --------- --------- ------------- ---------
Constant currency change - continuing
operations 64.2%
Constant currency change 107.4%
------------------------------------------------------------- --------- --------- ------------- ---------
G 6.2 Constant Currency Adjusted Earnings Per Share
Adjusted EPS is defined as the profit after tax attributable to
the equity holders of the Company, before exceptional items and
intangible asset amortisation and impairment (excluding software
amortisation), net of related tax, divided by the weighted average
number of ordinary shares in issue during the period, excluding
ordinary shares purchased by the Group and held as own shares (see
note 12). The Group concluded that adjusted EPS is a better measure
of underlying performance than Basic EPS as it excludes exceptional
items (net of related tax) that are not related to ongoing
operational performance and intangible asset amortisation, which
allows better comparability of companies that grow by acquisition
to those that grow organically. Adjusted EPS has also been
calculated on a continuing basis (excluding Glanbia Ireland) in
line with the presentation of continuing and discontinued
operations in the Condensed Group income statement.
Adjusted EPS is one of the Group's Key Performance Indicators.
Adjusted EPS growth on a constant currency basis is one of the
performance conditions in Glanbia's Annual Incentive Plan and in
Glanbia's Long-term incentive plan.
Reference
to the Half year Half year Year
interim Half year 2021 2021 2021
financial 2022 Reported Retranslated Reported
statements/glossary EUR'm EUR'm EUR'm EUR'm
========================================= ===================== ========= ========= ============= =========
Condensed
Profit after tax from continuing Group income
operations statement 128.4 70.2 81.8 141.0
Condensed
Exceptional (credit)/charge - Group income
continuing operations statement (6.9) 52.2 54.8 42.8
----------------------------------------- --------------------- --------- --------- ------------- ---------
Condensed
Profit after tax from continuing Group income
operations (pre-exceptional) statement 121.5 122.4 136.6 183.8
Condensed
Group income
Non-controlling interests statement 0.3 - - (0.4)
Amortisation of intangible assets
(excluding software amortisation)
net of related tax of EUR3.8 million
(HY 2021: EUR3.4 million, HY 2021
retranslated EUR3.7 million, FY
2021: EUR7.0 million) - continuing
operations 24.2 19.9 21.9 42.4
---------------------------------------------------------------- --------- --------- ------------- ---------
Adjusted net income - continuing
operations 146.0 142.3 158.5 225.8
---------------------------------------------------------------- --------- --------- ------------- ---------
Condensed
Profit after tax from discontinued Group income
operations statement 55.9 11.1 11.1 26.4
Condensed
Exceptional credit - discontinued Group income
operations statement (55.9) - - (0.7)
Condensed
Profit after tax from discontinued Group income
operations (pre-exceptional) statement - 11.1 11.1 25.7
Amortisation and impairment of
intangible assets (excluding software
amortisation) net of related tax
of nil (HY 2021: EUR0.1 million,
HY 2021 retranslated EUR0.1 million,
FY 2021: EUR0.2 million) - discontinued
operations - 0.6 0.6 1.3
---------------------------------------------------------------- --------- --------- ------------- ---------
Adjusted net income 146.0 154.0 170.2 252.8
---------------------------------------------------------------- --------- --------- ------------- ---------
Weighted average number of ordinary
shares in issue (thousands) Note 12 279,154 291,355 291,355 290,059
Adjusted Earnings Per Share (cent)
- continuing operations 52.31 48.84 54.39 77.84
Adjusted Earnings Per Share (cent) G 15 52.31 52.86 58.41 87.15
----------------------------------------- --------------------- --------- --------- ------------- ---------
Constant currency change - continuing
operations (3.8%)
Constant currency change (10.4%)
---------------------------------------------------------------- --------- --------- ------------- ---------
G 7. Net debt
Net debt is calculated as current and non-current borrowings
less cash and cash equivalents.
Reference
to the
interim Half year Half year Year
financial 2022 2021 2021
statements/glossary EUR'm EUR'm EUR'm
========================== ===================== ========= ========= =======
Condensed
Group balance
Cash and cash equivalents sheet (232.0) (156.6) (231.0)
Condensed
Group balance
Current borrowings sheet 92.8 73.0 136.5
Condensed
Group balance
Non-current borrowings sheet 787.3 633.3 697.2
-------------------------- --------------------- --------- --------- -------
Note 14,
Net debt G 14 648.1 549.7 602.7
-------------------------- --------------------- --------- --------- -------
G 8. Financing Key Performance Indicators
The following are the financing key performance indicators
defined as per the Group's financing agreements.
G 8.1 Net debt: adjusted EBITDA
Net debt: adjusted EBITDA is calculated as net debt at the end
of the period divided by adjusted EBITDA. Net debt is calculated as
current and non-current borrowings less cash and cash equivalents.
Adjusted EBITDA is calculated in accordance with lenders' facility
agreements definitions which adjust EBITDA for items such as
exceptional items, dividends received from joint ventures,
acquisitions or disposals and to reverse the net impact on EBITDA
as a result of adopting IFRS 16 "Leases". Adjusted EBITDA is a
rolling 12 month measure (a period of 12 consecutive months
determined on a rolling basis with a new 12 month period beginning
on the first day of each month).
Reference
to the
interim Half year Half year Year
financial 2022 2021 2021
statements/glossary EUR'm EUR'm EUR'm
=========================================== ===================== ========== ========== ==========
Note 14,
Net debt G 7 648.1 549.7 602.7
------------------------------------------- --------------------- ---------- ---------- ----------
Rolling EBITDA 346.4 346.5 333.6
Adjustments in line with lenders' facility
agreements 7.4 16.4 19.2
------------------------------------------------------------------ ---------- ---------- ----------
Rolling adjusted EBITDA 353.8 362.9 352.8
------------------------------------------------------------------ ---------- ---------- ----------
Net debt: adjusted EBITDA 1.83 times 1.51 times 1.71 times
------------------------------------------------------------------ ---------- ---------- ----------
G 8.2 Adjusted EBIT: adjusted net finance cost
Adjusted EBIT: adjusted net finance cost is calculated as
earnings before interest and tax adjusted for the IFRS 16 "Leases"
impact on operating profit plus dividends received from joint
ventures divided by adjusted net finance cost. Adjusted net finance
cost comprises finance costs less finance income per the Condensed
Group income statement plus borrowing costs capitalised into assets
and excludes finance income/costs on changes in fair value of call
options and contingent consideration and interest expense on lease
liabilities. Adjusted EBIT and adjusted net finance cost are
rolling 12 month measures (a period of 12 consecutive months
determined on a rolling basis with a new 12 month period beginning
on the first day of each month).
Half year Half year Year
2022 2021 2021
EUR'm EUR'm EUR'm
======================================= =========== ========== ==========
Operating profit 207.6 297.1 158.3
Exceptional charge 4.7 (73.0) 48.4
---------------------------------------- ----------- ---------- ----------
Operating profit (pre-exceptional) 212.3 224.1 206.7
Dividends received from joint ventures 19.1 36.1 33.9
IFRS 16 adjustment - interest (2.5) (2.5) (2.5)
---------------------------------------- ----------- ---------- ----------
Rolling adjusted EBIT 228.9 257.7 238.1
Rolling net finance cost 14.3 17.8 15.8
---------------------------------------- ----------- ---------- ----------
Adjusted EBIT: net finance cost 16.0 times 14.5 times 15.1 times
---------------------------------------- ----------- ---------- ----------
G 9. Volume and pricing increase/(decrease)
Volume increase/(decrease) represents the impact of sales
volumes within the revenue movement period-on-period, excluding
volume from acquisitions, on a constant currency basis.
Pricing increase/(decrease) represents the impact of sales
pricing (including trade spend) within revenue movement
period-on-period, excluding acquisitions, on a constant currency
basis.
G 9.1 Reconciliation of volume and pricing increase/(decrease)
to constant currency revenue growth
Reference
to the
interim Volume Price Revenue
financial increase/ increase/ Acquisitions/ increase/
statements/glossary (decrease) (decrease) (disposals) (decrease)
============================== ===================== =========== =========== ============= ===========
Nutritional Solutions G 2.1 1.6% 17.9% 5.4% 24.9%
US Cheese G 2.1 6.6% 28.8% - 35.4%
------------------------------ --------------------- ----------- ----------- ------------- -----------
Glanbia Nutritionals G 2.1 5.1% 25.4% 1.7% 32.2%
Glanbia Performance Nutrition G 2.1 0.5% 13.6% 0.8% 14.9%
------------------------------ --------------------- ----------- ----------- ------------- -----------
HY 2022 increase % - revenue G 2.1 3.7% 21.7% 1.4% 26.8%
------------------------------ --------------------- ----------- ----------- ------------- -----------
G 10. Like-for-like revenue increase/(decrease)
G 10.1 Glanbia Performance Nutrition ("GPN") like-for-like
revenue
GPN like-for-like revenue represents the sales
increase/(decrease) period-on-period, excluding the incremental
revenue contributions from current period and prior period
acquisitions, on a constant currency basis.
GPN like-for-like branded revenue represents the sales
increase/(decrease) period-on-period on branded sales, excluding
the incremental revenue contributions from current period and prior
period acquisitions, on a constant currency basis. Like-for-like
branded revenue increase/(decrease) is one of the GPN segment's Key
Performance Indicators. Like-for-like branded revenue
increase/(decrease) is one of the performance conditions in
Glanbia's Annual Incentive Plan for GPN Senior Management.
G 10.2 Glanbia Nutritionals like-for-like revenue
This represents the sales increase/(decrease) period-on-period,
excluding the incremental revenue contributions from current period
and prior period acquisitions, on a constant currency basis.
G 11. Effective tax rate
The effective tax rate is defined as the income tax charge
divided by the profit before tax less share of results of joint
ventures which is calculated on a pre-exceptional basis.
Reference to the interim Half year Half year
financial 2022 2021
statements/glossary EUR'm EUR'm
========================================== ========================= ========= =========
Condensed Group income
Profit before tax - continuing operations statement 144.1 81.9
Condensed Group income
Exceptional charge statement (6.9) 56.0
------------------------------------------ ------------------------- --------- ---------
Profit before tax (pre-exceptional) Condensed Group income
- continuing operations statement 137.2 137.9
Less share of results of joint ventures Condensed Group income
(pre-exceptional) statement (11.4) (18.8)
------------------------------------------ ------------------------- --------- ---------
125.8 119.1
Condensed Group income
Income tax statement 15.7 11.7
Exceptional tax credit - 3.8
--------------------------------------------------------------------- --------- ---------
Condensed Group income
Income tax (pre-exceptional) statement 15.7 15.5
Effective tax rate 12.5% 13.0%
--------------------------------------------------------------------- --------- ---------
G 12. Average interest rate
The average interest rate is defined as the annualised net
finance costs (excluding capitalised borrowing costs, finance
income/costs on changes in fair value of call option and contingent
consideration and interest expense on lease liabilities) divided by
the average net debt during the reporting period.
G 13. Operating cash conversion
Operating cash conversion is defined as Operating Cashflow
("OCF") divided by pre-exceptional EBITDA. Cash conversion is a
measure of the Group's ability to convert trading profits into cash
and is an important metric in the Group's working capital
management programme.
G 14. Operating cash flow and free cash flow
Operating cash flow is defined as pre-exceptional Group EBITDA
net of business sustaining capital expenditure and working capital
movements, excluding exceptional cash flows.
Operating cash flow is one of the Group's Key Performance
Indicators. Operating cash flow is one of the performance
conditions in Glanbia's Annual Incentive Plan.
Free cash flow is calculated as the net cash flow in the period
before the following items: strategic capital expenditure,
dividends paid to Company shareholders, loans/investments in joint
ventures, exceptional costs paid, payment for acquisition of
subsidiaries, proceeds received on disposals, purchase of own
shares under share buyback and currency translation movements.
Half year Half year
Reference to the interim 2022 2021
financial statements/glossary EUR'm EUR'm
============================================== =============================== ========= =========
EBITDA (pre-exceptional) G 5 204.0 191.2
Movement in working capital (pre-exceptional) G 14.2 (225.3) (24.0)
Business sustaining capital expenditure G 14.4 (7.3) (5.8)
---------------------------------------------- ------------------------------- --------- ---------
Operating cash flow G 14.1 (28.6) 161.4
Net interest and tax paid G 14.3 (31.8) (30.6)
Condensed Group statement
Dividends received from joint ventures of cash flows 2.6 17.4
Condensed Group statement
Payments of lease liabilities of cash flows (7.4) (9.7)
Other (outflows)/inflows G 14.5 (2.0) 3.2
---------------------------------------------- ------------------------------- --------- ---------
Free cash flow (67.2) 141.7
Strategic capital expenditure G 14.4 (22.0) (33.9)
Condensed Group statement
Dividends paid to Company shareholders of cash flows (49.0) (46.4)
Purchase of own shares under share
buyback (127.1) (33.4)
Condensed Group statement
Loans/investments in joint ventures of cash flows 25.3 (3.5)
Cash outflow related to exceptional Condensed Group statement
items of cash flows (14.8) (43.5)
Proceeds from sale of Glanbia Ireland Condensed Group statement
DAC of cash flows 307.0 -
Condensed Group statement
Payment for acquisition of subsidiaries of cash flows (54.4) (31.4)
---------------------------------------------- ------------------------------- --------- ---------
Net cash flow (2.2) (50.4)
Exchange translation Note 14 (44.1) (9.8)
Cash acquired on acquisition Note 14 0.9 4.4
Net debt movement (45.4) (55.8)
Opening net debt Note 14 (602.7) (493.9)
---------------------------------------------- ------------------------------- --------- ---------
Closing net debt G 7, Note 14 (648.1) (549.7)
---------------------------------------------- ------------------------------- --------- ---------
G 14.1 Reconciliation of operating cash flow to the Condensed
Group statement of cash flows in the interim financial
statements
Half year Half year
Reference to the interim 2022 2021
financial statements/glossary EUR'm EUR'm
========================================= =============================== ========= =========
Net cash flows from operating activities
before exceptional items Note 20 (14.1) 171.8
Less: business sustaining capital
expenditure G 14.4 (7.3) (5.8)
Non-cash items not adjusted in computing
operating cash flow:
Cost of share-based payments Note 20 (7.6) (6.2)
Other reconciling items 0.4 1.6
-------------------------------------------------------------------------- --------- ---------
Operating cash flow G 14 (28.6) 161.4
----------------------------------------- ------------------------------- --------- ---------
G 14.2 Movement in working capital
Half year Half year
Reference to the interim 2022 2021
financial statements/glossary EUR'm EUR'm
============================================== =============================== ========= =========
Movement in working capital (pre-exceptional) G 14 (225.3) (24.0)
Net (write-down)/reversal of inventories
(pre-exceptional) Note 20 (5.6) 1.2
Net movement in allowance for impairment
of receivables Note 20 (2.1) (0.4)
Other reconciling items (1.6) (1.2)
------------------------------------------------------------------------------- --------- ---------
Movement in net working capital Note 20 (234.6) (24.4)
---------------------------------------------- ------------------------------- --------- ---------
G 14.3 Net interest and tax paid
Half year Half year
Reference to the interim 2022 2021
financial statements/glossary EUR'm EUR'm
================================== =============================== ========= =========
Condensed Group statement
Interest received of cash flows 1.0 0.4
Interest paid (including interest Condensed Group statement
expense on leases liabilities) of cash flows (9.4) (10.6)
Condensed Group statement
Tax paid of cash flows (23.4) (20.4)
Net interest and tax paid G 14 (31.8) (30.6)
---------------------------------- ------------------------------- --------- ---------
G 14.4 Capital expenditure
Half year Half year
Reference to the interim 2022 2021
financial statements/glossary EUR'm EUR'm
========================================== =============================== ========= =========
Business sustaining capital expenditure G 14 7.3 5.8
Strategic capital expenditure G 14 22.0 33.9
========================================== =============================== ========= =========
Total capital expenditure 29.3 39.7
--------------------------------------------------------------------------- --------- ---------
Condensed Group statement
Purchase of property, plant and equipment of cash flows 12.7 25.6
Condensed Group statement
Purchase of intangible assets of cash flows 16.6 14.1
------------------------------------------ ------------------------------- --------- ---------
Total capital expenditure per the
Condensed Group statement of cash
flows 29.3 39.7
--------------------------------------------------------------------------- --------- ---------
Business sustaining capital expenditure
The Group defines business sustaining capital expenditure as the
expenditure required to maintain/replace existing assets with a
high proportion of expired useful life. This expenditure does not
attract new customers or create the capacity for a bigger business.
It enables the Group to keep operating at current throughput rates
but also keep pace with regulatory and environmental changes as
well as complying with new requirements from existing
customers.
Strategic capital expenditure
The Group defines strategic capital expenditure as the
expenditure required to facilitate growth and generate additional
returns for the Group. This is
generally expansionary expenditure beyond what is necessary to
maintain the Group's current competitive position.
G 14.5 Other (outflows)/inflows
Half year Half year
Reference to the interim 2022 2021
financial statements/glossary EUR'm EUR'm
================================== =============================== ========= =========
Cost of share-based payments Note 20 7.6 6.2
Proceeds from disposal/redemption Condensed Group statement
from FVOCI financial assets of cash flows 0.3 0.5
Purchase of own shares (9.5) (1.9)
Other reconciling items (0.4) (1.6)
Total other (outflows)/inflows G 14 (2.0) 3.2
---------------------------------- ------------------------------- --------- ---------
G 15. Dividend payout ratio
Dividend payout ratio is defined as the interim dividend per
ordinary share divided by the Adjusted Earnings Per Share. The
dividend payout ratio provides an indication of the value returned
to shareholders relative to the Group's total earnings.
Reference to the interim Half year Half year
financial 2022 2021
statements/glossary EUR cent EUR cent
======================================= ========================= ========= =========
Adjusted Earnings Per Share G 6.2 52.31 52.86
Dividend recommended/paid per ordinary
share Note 11 12.93 11.75
--------------------------------------- ------------------------- --------- ---------
Dividend payout % 24.7% 22.2%
------------------------------------------------------------------ --------- ---------
G 16. Compound annual growth rate ("CAGR")
The compound annual growth rate is the annual growth rate over a
period of years. It is calculated on the basis that each year's
growth is compounded.
G 17. Exceptional items
The Group considers that items of income or expense which are
material by virtue of their scale and nature should be disclosed
separately if the Group financial statements are to fairly present
the financial performance and financial position of the Group.
Determining which transactions are to be considered exceptional in
nature is often a subjective matter. However, circumstances that
the Group believes would give rise to exceptional items for
separate disclosure are outlined in the accounting policy on
exceptional items in note 2 to the 2021 financial statements.
Exceptional items are included on the income statement line item to
which they relate. In addition, for clarity, separate disclosure is
made of all items in one column on the face of the Group income
statement. Refer to note 7 for an analysis of exceptional items
recognised in half year 2022.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
IR BKABKNBKBNFD
(END) Dow Jones Newswires
August 17, 2022 02:00 ET (06:00 GMT)
Glanbia (LSE:GLB)
Historical Stock Chart
From Mar 2024 to Apr 2024
Glanbia (LSE:GLB)
Historical Stock Chart
From Apr 2023 to Apr 2024
