FDBusiness.com

Glanbia, the global nutritional products and solutions group, delivered a good financial and operating performance in the first six months of the year driven by growth in Global Performance Nutrition and Global Ingredients segments. Total group revenue including the group’s share of joint ventures & associates grew by 13.0% to Eur1.678 billion. This was split 8% volume growth and 5% price growth.

Total group EBITA increased by 6.4% to Eur123.9 million. However, group EBITA margin declined by 40 basis points to 7.4%, as margin growth within Global Performance Nutrition was more than offset by a decline in margins in the other business segments.

In May 2013, Glanbia announced a new organisational structure of the group. This new structure reflects the fact that Glanbia has built two very significant platforms in nutritional products and solutions. The first platform is business-to-consumer high quality performance nutrition with the largest global sports nutrition brand portfolio. This business segment is called Global Performance Nutrition. The second platform spans large-scale cheese manufacturing and value-added nutritional ingredient solutions. This business segment is called Global Ingredients and incorporates our US Cheese, Ingredient Technologies and Customised Premix Solutions businesses.

The group’s two other business segments are Dairy Ireland, comprising agribusiness and consumer products, and Joint Ventures & Associates, which encompasses the group’s strategic cheese and dairy ingredients joint ventures.

In the first half of 2013, Dairy Ireland revenue increased 9.2% to Eur383.2 million. This revenue growth reflects 8% volume growth and 4% pricing growth offset by the 3% negative impact of the Yoplait franchise disposal completed in the first half of 2012. EBITA decreased by 24.4% to Eur12.1 million and EBITA margin declined by 140 basis points.

Revenue for the first six months of the year from Joint Ventures & Associates increased 11.5% to Eur431.1 million. This growth was split 6% volume and 6% price. Glanbia Ingredients Ireland, Southwest Cheese and Glanbia Cheese all achieved positive revenue growth due to higher global dairy market prices as poor weather conditions in a number of the key exporting regions resulted in reduced supply and, consequently, higher dairy prices. EBITA increased by 9.1% to Eur20.3 million and EBITA margins were down slightly reflecting higher input costs across each of the four business units.

Artist’s impression of Glanbia Ingredients Ireland’s planned dairy processing facility.

Construction of Glanbia Ingredients Ireland’s new Eur150 million dairy processing facility is progressing well while a decision on the potential development of lactose production capacity in Southwest Cheese is expected to be made by the end of the year.

John Moloney, group managing director of Glanbia, comments: “The group’s first half performance was driven by Global Performance Nutrition and Global Ingredients. These two business segments now represent over 70% of group EBITA and are our core platforms for future growth. We expect little change in the external operating environment in the second half and with clear challenges remaining in Dairy Ireland we are maintaining our 2013 full year guidance of adjusted earnings per share growth of between 8% and 10%, on a constant currency basis.”

CAPTION:

Siobhán Talbot, group managing director designate, and John Moloney, group managing director of Glanbia.