TIDMGLB
RNS Number : 0047M
Glanbia PLC
25 April 2018
FIRST QUARTER 2018 INTERIM MANAGEMENT STATEMENT
Q1 Revenue growth of 4.8% - Full year guidance reiterated
25 April 2018 - Glanbia plc, the global nutrition group
('Glanbia', the 'Group' or the "plc"), is issuing this Interim
Management Statement for the three month period ended 31 March
2018. This statement is issued in conjunction with the plc's Annual
General Meeting which is being held today.
Commenting today, Siobhán Talbot, Group Managing Director
said:
"Glanbia delivered positive revenue growth of 4.8%, constant
currency, in the first quarter of 2018 from wholly owned continuing
operations. Glanbia Performance Nutrition was the main driver of
revenue growth with continued good volume momentum across key
markets. Glanbia Nutritionals also delivered volume growth across
its portfolio. The year has started as planned and we reiterate our
full year guidance of 5% to 8% growth in adjusted earnings per
share, constant currency, from the continuing Group (pro-forma*) in
2018 with growth to be delivered in the second half of the
year."
Performance update (Continuing operations)
In the three months ended 31 March 2018, wholly owned revenue
from continuing operations increased 4.8%, constant currency. On a
reported basis, reflecting the weaker US Dollar Euro foreign
exchange rate, revenue decreased 8.1% when compared to the same
period in 2017. The key driver of revenue increase on a constant
currency basis was volume growth from both Glanbia Performance
Nutrition and Glanbia Nutritionals which was 7.2%. Acquisitions
contributed 3.6% growth in revenue. Pricing declined by 6.0% year
on year driven by relatively weaker dairy markets and brand
investment in Glanbia Performance Nutrition.
Glanbia Performance Nutrition (all commentary is on a constant
currency basis**)
Glanbia Performance Nutrition ('GPN') delivered good revenue
growth in the first three months of 2018. Compared to the prior
year, revenue increased by 9.3% and this was driven by volume
growth of 5.5%, the Body & Fit acquisition delivering 7.8%,
offset by a price decline of 4.0%.
GPN delivered volume growth in both the US and other key
international markets. In the US this was broad based across key
channels. In non US regions, emerging markets delivered strong
growth as GPN continues to benefit from the prior investment in
building its international capabilities. As previously noted
negative price was primarily a function of brand investment and
innovation support. The Body & Fit direct to consumer brand,
acquired in the first quarter of 2017, performed well and Glanbia
is investing in this business to accelerate growth as well as build
overall digital capability for GPN.
Innovation is a central component of the GPN growth strategy and
in the period the recently launched ON Cake Bites and BSN Syntha-6
Protein Crisp bars performed well.
The full year 2018 outlook for GPN is good. Guidance is
reiterated for delivery of like-for-like branded volume growth in
the mid-to-high single digit range. GPN will continue to invest
behind innovation and its brands and expects EBITA margins for the
full year to be broadly in line with 2017 as these investments will
be funded by lower input costs, which will crystallise in the
second half of the year.
Glanbia Nutritionals (all commentary is on a constant currency
basis**)
Glanbia Nutritionals ('GN') delivered revenue growth in line
with expectations in the first three months of 2018. Revenues
increased by 1.1% versus prior year. This was driven by a volume
increase of 8.6% offset by a price decline of 7.5%.
Nutritional Solutions
Nutritional Solutions revenue declined by 3.6% in the period.
This was driven by volume growth of 2.6% which was across dairy and
non-dairy ingredients offset by a price decline of 6.2% which was
related to relatively lower year on year dairy prices. Growth
within Nutritional Solutions continues to be with a variety of
multinational and regional customers.
US Cheese
US Cheese revenue increased by 5.0% in the period. This was
driven by volume growth of 13.7% due to the timing of customer
off-takes versus the prior year. Pricing declined by 8.7% as a
result of reduced cheese markets year on year.
The full year 2018 outlook for GN is positive. Guidance is
reiterated for volume growth in Nutritional Solutions in the
mid-to-high single digit range for the full year. This will offset
market related price declines in US cheese and dairy
ingredients.
Joint Ventures (all commentary is on a constant currency
basis**)
Revenues from Joint Ventures ("JVs") increased by 29.7% in the
first three months of 2018. The transaction to create Glanbia
Ireland delivered 34.8% revenue growth, volume growth was 4.3% and
this was offset by a price decline of 9.4% as a result of
comparatively lower year on year dairy markets. As a result, the
outlook for JVs is for earnings to be reduced in 2018 versus prior
year particularly in the first half of the year.
The project to expand production capacity by 25% at the
Southwest Cheese facility in the US is nearing completion with
commissioning expected to be concluded in quarter two, 2018.
Financing
Glanbia's net debt at 31 March 2018 was EUR385 million, which
represents a decrease of EUR350 million versus the net debt
position at the end of the first quarter of 2017. This improvement
has been primarily driven by the receipt of proceeds from disposals
made in 2017. The Group's balance sheet is in a strong position and
Glanbia expects to deliver over 80% operating cash conversion of
EBITDA in 2018. Total 2018 capital expenditure is expected to be
approximately EUR75 million to EUR85 million.
Full year outlook
Glanbia reiterates its guidance that on a pro-forma* basis
adjusted earnings per share for the continuing Group is expected to
grow between 5% - 8% constant currency for full year 2018. Earnings
growth is expected to be delivered in the second half of 2018.
Comparative dairy market pricing and planned investments will
deliver a reduced performance in the first half of the year. If the
average Euro US Dollar foreign exchange rate for the full year
remains at similar levels to the average rate for the first quarter
of 2018 Glanbia expects an approximate 8% translational headwind to
full year reported results.
* Pro-forma adjusted Earnings Per Share of the continuing Group,
constant currency. This eliminates the contribution of discontinued
operations from prior year comparatives. Discontinued operations
relates to assets which were sold on 2 July 2017.
** To arrive at the Constant Currency change, the average FX
rate for the current period is applied to the relevant reported
result from the same period in the prior year. The average Euro US
Dollar FX rate for Q1 2018 was EUR1 = $1.229 (Q1 2017 was EUR1 =
$1.07).
Ends
Cautionary statement
This announcement contains forward-looking statements. These
statements have been made by the Directors in good faith based on
the information available to them up to the time of their approval
of this report. Due to the inherent uncertainties, including both
economic and business risk factors underlying such forward looking
information, actual results may differ materially from those
expressed or implied by these forward-looking statements. The
Directors undertake no obligation to update any forward-looking
statements contained in this announcement, whether as a result of
new information, future events, or otherwise.
IMS conference call dial-in details
There will be an analysts' conference call to accompany this
Interim Management Statement at 8.30 a.m. (GMT) today.
To listen to the call, please dial-in using the following
numbers:
Ireland UK Europe USA Pass code
----------- --------- ------------ -------- ----------
0330 336 +44 330 336 323 794
01 2465621 9411 9411 2094 3038748
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A replay of the call will be available for 30 days from this
afternoon. Please see the link below to the Investor Relations
section of the Glanbia plc website for details:
http://www.glanbia.com/investors/results-centre
For further information contact
Glanbia plc +353 56 777 2200
Mark Garvey, Group Finance Director
Liam Hennigan, Head
of Investor Relations: +353 86 046 8375
Martha Kavanagh, Head
of Media Relations: +353 87 646 2006
This information is provided by RNS
The company news service from the London Stock Exchange
END
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