Glanbia
Full Year 2023 results
Strong
performance with adjusted EPS1 growth of 20.5% constant
currency
28 February 2024 - Glanbia plc ("Glanbia", the
"Group", the "Company", the "plc"), the 'Better Nutrition company',
announces its preliminary results for the 2023 financial year ended
30 December 2023 ("2023" or "FY23").
As announced on 1 March 2023, the Group has
changed its presentation currency from euro to US dollar. All
figures presented are in US dollar unless stated otherwise, with
comparative figures also restated in US dollar.
Summary:
· Group Financial Performance:
o Adjusted
earnings per share ("EPS")1 of 131.37 $cent (2022:
109.57 $cent) representing growth of 20.5% constant currency (up
19.9% reported);
o Group
revenues of $5.4 billion (2022: $5.9 billion) representing a
decline of 8.7%, constant and reported currency;
o Group EBITA
pre-exceptional $424.0 million (2022: $365.7 million), an increase
of 16.4% constant currency (up 15.9% reported);
o Basic EPS of
129.21 $cent (2022: 98.40 $cent);
o Operating
Cash Flow ("OCF") conversion of 90.4% (2022: 85.7%) and year end
net debt to adjusted EBITDA ratio of 0.5 times (2022: 1.13
times);
· Glanbia Performance Nutrition ("GPN"):
o Like-for-like
("LFL") branded revenue growth of 5.1% with pricing +5.4% and
volume -0.3%;
o Optimum
Nutrition ("ON") brand delivered LFL revenue growth of 17.0% with
both volume and price growth; US consumption growth2 of
13.7% for the 52 week period;
o Increased
brand and marketing investment, prioritising the protein growth
brands of Optimum Nutrition, Isopure and think!;
o EBITA margin
of 14.2% (2022: 11.2%), an increase of 300bps;
· Glanbia Nutritionals ("GN") - Nutritional Solutions ("GN
NS"):
o LFL revenue
decrease of 12.3% with pricing -9.0% and volume -3.3%;
o Volume trends
continued to improve through the second half of FY23 with volume
growth in Q3 and Q4;
o EBITA margin
of 12.5% (2022: 11.4%), an increase of 110bps;
· Capital allocation:
o Recommended
final dividend per share of 21.21 €cent; representing a total 2023
dividend of 35.43 €cent; a 10% increase on prior year, representing
a payout ratio of 29.2%;
o Returned €100
million to shareholders in the year via share buybacks. Reflecting
the Group's strong cash flow and financial position, the Group is
today announcing its intention to return a further €100 million via
share buybacks in FY 2024, starting initially with a €50m buyback
programme;
· 2024
Outlook:
o Glanbia
expects to deliver adjusted EPS growth of 5% to 8% constant
currency in FY 2024.
1 Adjusted
earnings per share ("EPS") for continuing operations.
2 Consumption growth is US measured in channels and includes
Online, FDMC (Food, Drug, Mass, Club) and Specialty channels. Data
compiled from published external sources and Glanbia estimates for
the 52 week period to 31 December 2023.
Commenting today Hugh McGuire, Chief Executive Officer,
said:
"On behalf of the Glanbia team, I am pleased
to report that the Group delivered an excellent performance in 2023
with adjusted EPS1 growing by 20.5% to 131.37c. This was
driven by strong global consumer demand, with Optimum Nutrition
continuing its growth momentum, delivering volume and price growth
in the period. In our Nutritional Solutions business, overall
volume trends continued to improve through the year, with a
sequential improvement in volume growth in the fourth
quarter.
Our strong operational and financial
performance continued to generate excellent cash flow, with 90.4%
cash conversion in the year. We continued to evolve our portfolio
with the acquisition of a bioactive ingredients business and the
sale of our share of Glanbia Cheese joint ventures. We increased
the dividend by 10% and returned €100 million to shareholders via
our share buyback programme.
Glanbia is a company with very strong
fundamentals - a clear strategy, a portfolio of great brands and
ingredients playing into strong underlying consumer health and
wellness trends with a team of talented people. Looking ahead, we
will focus on driving growth and shareholder value by stepping up
awareness and distribution of our great brands, with a robust
innovation pipeline across both our growth platforms. In 2024, we
expect adjusted EPS growth of 5% to 8% constant currency, which
will be driven by a strong operating performance across both GPN
and GN NS."
Summary financials1 - continuing
operations
FY23 results
|
|
|
|
Constant
|
$'m
|
2023
|
2022
|
Reported
Change
|
Currency
Change2
|
Wholly-owned business (pre-exceptional)
|
|
|
|
|
Revenue
|
5,425.4
|
5,943.7
|
(8.7%)
|
(8.7%)
|
EBITA3
|
424.0
|
365.7
|
15.9%
|
16.4%
|
EBITA margin
|
7.8%
|
6.2%
|
|
|
|
|
|
|
|
Joint Ventures
|
|
|
|
|
Share of profit after tax
(pre-exceptional)
|
12.5
|
16.3
|
|
|
|
|
|
|
|
Profit after tax
|
298.1
|
248.0
|
|
|
|
|
|
|
|
Adjusted earnings per share
|
131.37c
|
109.57c
|
19.9%
|
20.5%
|
Basic earnings per share
|
130.41c
|
76.55c
|
|
|
|
|
|
|
|
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 US dollar euro exchange rate for 2023 was $1 = €0.9247
(2022: $1 = €0.9493). Reported and
constant currency movements are on a pre-exceptional
basis.
3. EBITA
(pre-exceptional) is defined as earnings before interest, tax and
amortisation.
FY23 results summary
Revenue progression
|
2023 versus
2022
|
|
|
Constant Currency
Movement
|
Reported
Movement
|
|
Volume
|
Price
|
Like-for-like
|
Acquisition /
(Disposals)
|
Total Constant
Currency
|
Total
Reported
|
Glanbia Performance Nutrition
|
(0.6%)
|
5.4%
|
4.8%
|
-
|
4.8%
|
4.9%
|
Glanbia Nutritionals
|
(0.4%)
|
(13.0%)
|
(13.4%)
|
(0.8%)
|
(14.2%)
|
(14.2%)
|
Nutritional
Solutions
|
(3.3%)
|
(9.0%)
|
(12.3%)
|
(2.6%)
|
(14.9%)
|
(15.0%)
|
US Cheese
|
0.7%
|
(14.6%)
|
(13.9%)
|
-
|
(13.9%)
|
(13.9%)
|
Total wholly-owned businesses
|
(0.5%)
|
(7.7%)
|
(8.2%)
|
(0.5%)
|
(8.7%)
|
(8.7%)
|
Revenue, EBITA and Margin
|
|
|
|
|
2023
|
|
|
2022
|
|
$'m
|
Revenue
|
EBITA
|
Margin %
|
Revenue
|
EBITA
|
Margin %
|
Glanbia Performance Nutrition
|
1,795.6
|
255.4
|
14.2%
|
1,712.5
|
191.9
|
11.2%
|
Glanbia Nutritionals
|
3,629.8
|
168.6
|
4.6%
|
4,231.2
|
173.8
|
4.1%
|
Nutritional
Solutions
|
1,008.5
|
126.2
|
12.5%
|
1,186.8
|
135.0
|
11.4%
|
US Cheese
|
2,621.3
|
42.4
|
1.6%
|
3,044.4
|
38.8
|
1.3%
|
Total wholly-owned businesses
|
5,425.4
|
424.0
|
7.8%
|
5,943.7
|
365.7
|
6.2%
|
2023 full year overview
Glanbia delivered a strong financial and
operating performance in 2023. Group revenue was $5,425.4 million
(2022: $5,943.7 million), down 8.7% constant and reported currency,
primarily driven by dairy pricing. Group EBITA (before exceptional
items) was $424.0 million (2022: $365.7 million), up 16.4% constant
currency (up 15.9% reported). Group pre-exceptional profit after
tax for continuing operations was $298.1 million (2022: $248.0
million), up 21.1% constant currency (up 20.2%
reported).
Adjusted earnings per share ("EPS") was 131.37
$cent (2022: 109.57 $cent), up 20.5% constant currency (up 19.9%
reported).
Balance sheet and financing
The Group's continued focus on cash management
delivered a strong performance with an Operating Cash Flow of
$445.9 million (2022: $374.3 million), which represents an OCF
conversion of 90.4% (2022: 85.7%). At year end, the Group had a net
debt position of $248.7 million (2022: $490.0 million) with the
decrease driven by strong cash generation, the sale of the Group's
interest in the Glanbia Cheese UK and EU joint ventures and a
disciplined approach to capital allocation. Net debt to adjusted
EBITDA was 0.5 times (2022: 1.13 times). At year end, the Group had
committed debt facilities of $1.3 billion (2022: $1.3 billion) with
a weighted average maturity of 4.7 years (2022: 5.8
years).
Capital investment
Glanbia's total investment in capital
expenditure (tangible and intangible assets) was $74.2 million in
2023 (2022: $72.5 million). Strategic investment totalled $51.7
million and included ongoing capacity enhancement, business
integrations, and IT investments to drive further efficiencies in
operations. Total capital expenditure for 2024 is expected to be
$75 million to $85 million. Glanbia's ability to generate cash and
its available debt facilities ensure the Group has considerable
capacity to finance future investments.
Dividend per share
The Board is recommending a final dividend of
21.21 €cent per share which brings the total dividend for the year
to 35.43 €cent per share, a 10% increase on prior year. This total
dividend represents a payout ratio of 29.2% of 2023 adjusted EPS,
which is within the Company's target payout ratio of 25% to 35%.
The final dividend will be paid on 3 May 2024 to shareholders on
the share register on 22 March 2024. Irish withholding tax will be
deducted at the standard rate where appropriate. The Company's
primary dividend payment currency remains euro.
Share buyback
During 2023 Glanbia purchased and cancelled
7,215,827 million ordinary shares, representing 2.7% of total
issued ordinary shares at the beginning of 2023, at a total cost of
€100 million (2022: €173.5 million). The Company's Board has
approved a further €100 million share buyback authority in 2024 as
part of its capital allocation policy. Today, the Group will launch
an initial €50 million share buyback programme under this
authority. Further details on the share buyback programme will be
provided in a separate announcement today.
Sustainability
The Group remains on track to meet its
commitment to reduce Scope 1 and 2 carbon emissions by 50% by 2030
from a 2018 base, delivering a 15.9% reduction of Scope 1 and 2
carbon emissions in 2023 versus the previous year. In addition, the
Group demonstrated continued progress across our other
environmental commitments relating to climate, water, waste and
consumer packaging.
Strategy
During 2023 the Group continued to sharpen its
focus on its core better nutrition growth platforms and simplify
it's reporting structure. This included the following
initiatives:
· Portfolio
evolution:
o Q1 2023 -
divested Aseptic Solutions.
o Q2 2023 -
divested Glanbia Cheese UK and EU joint ventures.
o Q4 2023 -
acquired a bioactive nutritional ingredients business.
· Simplification
of reporting:
o Q1 2023 -
announced change of presentation currency to US dollar.
o Q3 2023 -
announced amendment of commercial arrangements associated with US
joint ventures.
The Group remains confident in delivering the
financial ambition outlined at the Capital Markets event in
November 2022, which was as follows:
2023-2025 financial ambition
|
Ambition
|
2023
result
|
Group metrics*
|
|
|
Adjusted Earnings Per Share growth
(on a constant currency basis)
|
5-10%
|
20.5%
|
Operating Cash Flow conversion
%
|
80%+
|
90.4%
|
Return on Capital Employed
("ROCE")
|
10-13%
|
12.2%
|
* All Group metrics are average
annual metrics for the three years 2023-2025 and include M&A
activity.
Change in commercial arrangements associated with US joint
venture and change to EBITDA in 2024
As announced on 16 August 2023, the Group has
amended the commercial arrangements associated with its US joint
venture effective 1 January 2024. Under the new commercial terms,
in accordance with IFRS 15 Glanbia will recognise commissions
earned on the sale of joint venture products, whereas previously
Glanbia recorded the gross value of revenues and corresponding cost
of sales on joint venture products sold. The change in
commercial terms will impact the recognition and presentation of
revenues and cost of sales from 2024 onwards only.
The Group has also decided to adopt EBITDA
(Earnings Before Interest, Tax, Depreciation and Amortisation) as a
key performance measure from 2024. This aligns with industry
standards.
The table below re-presents the pro-forma
revenue for 2023 and 2022 to reflect the change in the Group's
commercial arrangements associated with its US joint venture as if
the terms were effective from the beginning of 2022. The impact is
to decrease revenue; there is no change to EBITDA. The table also
provides EBITDA by segment, in line with future
reporting.
Pro-forma Revenue, EBITDA
and Margin (pre-exceptional)
|
|
2023
|
2022
|
|
$'m
|
Reported
|
Pro-forma
Adjustment
|
Pro-forma
|
Reported
|
Pro-forma
Adjustment
|
Pro-forma
|
|
Revenue
|
|
|
|
|
|
|
|
Glanbia Performance
Nutrition
|
1,795.6
|
-
|
1,795.6
|
1,712.5
|
-
|
1,712.5
|
|
Glanbia Nutritionals
|
3,629.8
|
(1,795.6)
|
1,834.2
|
4,231.2
|
(2,123.3)
|
2,107.9
|
|
Nutritional
Solutions
|
1,008.5
|
(123.1)
|
885.4
|
1,186.8
|
(183.1)
|
1,003.7
|
|
US Cheese
|
2,621.3
|
(1,672.5)
|
948.8
|
3,044.4
|
(1,940.2)
|
1,104.2
|
|
Group Revenue
|
5,425.4
|
(1,795.6)
|
3,629.8
|
5,943.7
|
(2,123.3)
|
3,820.4
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
|
|
|
|
|
|
Glanbia Performance
Nutrition
|
282.3
|
-
|
282.3
|
216.0
|
-
|
216.0
|
|
Glanbia Nutritionals
|
211.1
|
-
|
211.1
|
220.8
|
-
|
220.8
|
|
Nutritional
Solutions
|
157.3
|
-
|
157.3
|
171.2
|
-
|
171.2
|
|
US Cheese
|
53.8
|
-
|
53.8
|
49.6
|
-
|
49.6
|
|
Group EBITDA
|
493.4
|
-
|
493.4
|
436.8
|
-
|
436.8
|
|
|
|
|
|
|
|
|
|
EBITDA Margin
|
|
|
|
|
|
|
|
Glanbia Performance
Nutrition
|
15.7%
|
-
|
15.7%
|
12.6%
|
-
|
12.6%
|
|
Glanbia Nutritionals
|
5.8%
|
+570bps
|
11.5%
|
5.2%
|
+530bps
|
10.5%
|
|
Nutritional
Solutions
|
15.6%
|
+220bps
|
17.8%
|
14.4%
|
+270bps
|
17.1%
|
|
US Cheese
|
2.1%
|
+360bps
|
5.7%
|
1.6%
|
+290bps
|
4.5%
|
|
Group EBITDA Margin
|
9.1%
|
+450bps
|
13.6%
|
7.3%
|
+410bps
|
11.4%
|
|
Board changes
The following Board changes have taken place
at the Company since the beginning of 2023.
Siobhán Talbot stepped down from her position
as Group Managing Director of the Company and Executive Director on
the Glanbia Board on 31 December 2023 and retired from the Group in
January 2024. Hugh McGuire, was appointed Chief Executive Officer
of the Company and joined the Glanbia Board as an Executive
Director on 1 January 2024.
In line with the relationship agreement with
Tirlán Co-operative Society Limited (the "Society") Patsy Ahern and
John Murphy retired at the Company's annual general meeting ("AGM")
held on 4 May 2023, reducing the Society's representation on the
Board to three directors. On the same date, the Group announced the
appointment of Gabriella Parisse to its Board as an Independent
Non-Executive Director effective 1 June 2023.
Róisín Brennan succeeded Dan O'Connor as
Senior Independent Director of the Company on 30 December 2023. Dan
O'Connor succeeded Donard Gaynor as Chair of the Environmental,
Social and Governance ("ESG") Committee on 30 December 2023. Mr
O'Connor has informed the Board that it is his intention to retire
from the Board at the Company's AGM in 2025.
Mark Garvey, Chief Financial Officer and
Executive Director of the Company, was appointed a member of the
ESG Committee on 30 December 2023.
The Glanbia Board is comprised of 13 members:
the Chairman, two Executive Directors, ten Non-Executive Directors
including three representatives from Tirlán Co-operative Society
Limited.
2024 Outlook
The Group's strong performance in 2023,
despite the challenging global environment, highlights the strength
of its consumer focused Better Nutrition portfolio, which is
expected to drive growth in 2024 and beyond.
Based on the current market environment and
expectations for the remainder of the year the Group outlines the
following guidance for FY 2024:
· GPN expects to
deliver 4% to 7% revenue growth*.
· GN NS expects to
deliver 3% to 5% volume growth.
· EBITDA margins
for GPN and GN NS to be sustained at least at the same level as
2023.
· The Group is
targeting an operating cash flow conversion rate of
80%+.
Glanbia expects to deliver adjusted EPS growth
of 5% to 8% constant currency in 2024.
* on a constant currency basis and
includes the impact of the 53rd week in 2024.
2023 operations
review
(Commentary on percentage
movements is on a constant currency basis
throughout)
Glanbia Performance Nutrition
$'m
|
2023
|
2022
|
Reported
Change
|
Constant
Currency
Change
|
Revenue
|
1,795.6
|
1,712.5
|
+4.9%
|
+4.8%
|
EBITA
|
255.4
|
191.9
|
+33.1%
|
+33.7%
|
EBITA margin
|
14.2%
|
11.2%
|
+300bps
|
|
· Like-for-like
("LFL") branded revenue growth of +5.1% with volume -0.3% and
pricing +5.4%.
· Optimum
Nutrition, the number 1 global brand in the sports nutrition
sector, delivered LFL revenue growth of 17.0% with both volume and
price growth.
· EBITA margin of
14.2%, an increase of 300bps versus 2022.
GPN revenue increased by 4.8% in 2023. This
was driven by price increases of 5.4% partly offset by a volume
decline of 0.6%. Pricing was positive following the execution of
price increases in 2022. The price increases implemented to offset
inflation have largely been maintained across the portfolio with
consumer elasticity within the performance nutrition category
better than expected. The volume decline was largely driven by the
SlimFast brand, which represents 9% of GPN revenue, with the
previously highlighted challenges in the diet category impacting
the brand's performance. ON, which represents 62% of GPN revenue,
delivered both volume and price growth in the period as the
strength of the brand continues to drive global distribution and
velocities, supported by increased marketing activation and brand
investment.
GPN EBITA increased by 33.7% versus prior year
to $255.4 million and EBITA margin increased by 300 basis points to
14.2%. This was driven by continued focus on revenue growth
management initiatives, operating efficiencies and margin
optimisation. The positive phasing of input costs in the second
half of 2023 supported both further brand investment and margin
improvement.
Americas
GPN Americas grew LFL revenue by 0.9% in 2023,
with strong growth in the ON and Isopure brands offset by
anticipated declines in the SlimFast brand.
The ON brand continues to strengthen its
strong consumer position and delivered US consumption growth of
13.7%1 in 2023, building on a strong
comparative period. This was driven by strong growth in the club
and online channels and was supported by the successful activation
of the 'More of You in You' brand campaign. Trends in the healthy
lifestyle portfolio remained robust, with US consumption growth of
11.2%1 across the think!, Isopure and
Amazing Grass brands. The strong growth in the ON and Isopure
brands in the period was driven largely by the powders format,
which continues to resonate as a value offering with
consumers.
International
GPN International, which represents 35% of GPN
global revenue portfolio, grew LFL revenue by 12.8% in 2023. Growth
across the region was broad based and driven by both volume and
price growth of the ON brand, which was supported by increased
brand investment and expanded distribution.
Glanbia Nutritionals
|
|
2023
|
|
|
2022
|
|
$'m
|
Revenue
|
EBITA
|
Margin %
|
Revenue
|
EBITA
|
Margin %
|
Nutritional Solutions
|
1,008.5
|
126.2
|
12.5%
|
1,186.8
|
135.0
|
11.4%
|
US Cheese
|
2,621.3
|
42.4
|
1.6%
|
3,044.4
|
38.8
|
1.3%
|
Total Glanbia Nutritionals
|
3,629.8
|
168.6
|
4.6%
|
4,231.2
|
173.8
|
4.1%
|
1 Consumption growth is US measured in channels and includes
Online, FDMC (Food, Drug, Mass, Club) and Specialty channels. Data
compiled from published external sources and Glanbia estimates for
the 52 week period to 31 December 2023.
Nutritional Solutions
|
|
|
Reported
Change
|
Constant
Currency
Change
|
$'m
|
2023
|
2022
|
Revenue
|
1,008.5
|
1,186.8
|
(15.0%)
|
(14.9%)
|
EBITA
|
126.2
|
135.0
|
(6.5%)
|
(6.2%)
|
EBITA margin
|
12.5%
|
11.4%
|
+110bps
|
|
· LFL
revenue decline of 12.3% with volumes -3.3% and pricing
-9.0%.
· EBITA margin of 12.5%, an increase of 110 basis points versus
2022.
· Sequential volume improvement as the period progressed, with
positive volumes in Q3 and Q4.
GN NS revenue decreased by 14.9% in 2023. This
was driven by a 3.3% decrease in volume, 9.0% decrease in price and
a decrease of 2.6% driven by the net impact of acquisitions and
disposals. The volume decline was driven largely by customer supply
chain rebalancing in the custom premix solutions business in the
first half of the year, which sequentially improved as the year
progressed. Volumes in the protein business were positive and
underpinned by good demand for protein. The price decline was
driven by the decline in dairy market pricing, with positive
pricing in the custom premix solutions business.
GN NS continues to support customers across a
broad range of categories, ultimately seeking to address growing
consumer health and wellness trends. While 2023 saw a period of
customer inventory rebalancing in the custom premix business, the
demand at a consumer level remains fundamentally
unchanged.
As announced on 1 November 2023, Glanbia
acquired a B2B bioactive nutritional ingredients business. This is
an exciting addition to our portfolio of nutritional ingredients,
building out our dairy bioactive platform in colostrum-enriched
nutraceuticals that support gut health and immunity.
GN NS EBITA was $126.2 million, a 6.2% decline
versus prior year, primarily as a result of the volume decline in
the first half of 2023. EBITA margins increased by 110 basis points
versus prior year to 12.5% as a result of both operating
efficiencies and the mathematical impact of lower dairy
pricing.
US Cheese
$'m
|
2023
|
2022
|
Reported
Change
|
Constant
Currency
Change
|
Revenue
|
2,621.3
|
3,044.4
|
(13.9%)
|
(13.9%)
|
EBITA
|
42.4
|
38.8
|
+9.3%
|
+9.6%
|
EBITA margin
|
1.6%
|
1.3%
|
+30bps
|
|
US Cheese revenue declined by 13.9% in 2023.
This was driven by a 0.7% increase in volume and a 14.6% decline in
price, with the pricing decline aligned to the lower year-on-year
cheese market pricing.
US Cheese EBITA increased by 9.6% to $42.4
million as a result of strong operating efficiencies and some
procurement benefits. US Cheese operates a pass-through pricing
model which broadly protects earnings from changes in market
pricing.
Joint Ventures (Glanbia share) - continuing
operations
$'m
|
2023
|
2022
|
Reported
Change
|
Share of joint ventures' profit
after tax
|
12.5
|
16.3
|
(3.8)
|
The Group's share of joint ventures' profit
after tax pre‐exceptional
items decreased by $3.8 million to $12.5 million, largely driven by
the sale of its shareholdings in the Glanbia Cheese Limited and
Glanbia Cheese EU Limited joint ventures on 28 April 2023. On
completion, the Group received initial proceeds of €178.9 million,
which included repayment of shareholder loans. The memorandum of
understanding for the sale was signed on 14 February 2023 and the
Group ceased to apply the equity method of accounting for its
interest in these joint ventures from that date.
FULL YEAR 2023
Finance Review
As announced on 1 March 2023, the Group has
changed the currency in which it presents its financial results
from euro to US dollar. Unless stated otherwise, the figures in
this finance review are stated in US dollar. Comparative figures
have been restated in US dollar.
2023 Group income statement
|
|
2023
|
|
|
2022
|
|
$'m
|
Pre-
exceptional
|
Exceptional
|
Total
|
Pre-
exceptional
|
Exceptional
|
Total
|
Revenue - continuing operations
|
5,425.4
|
-
|
5,425.4
|
5,943.7
|
-
|
5,943.7
|
Earnings before interest, tax and
amortisation (EBITA)
|
424.0
|
47.8
|
471.8
|
365.7
|
(23.1)
|
342.6
|
EBITA margin
|
7.8%
|
-
|
8.7%
|
6.2%
|
-
|
5.8%
|
Intangible asset amortisation and
impairment
|
(79.6)
|
-
|
(79.6)
|
(79.1)
|
(27.9)
|
(107.0)
|
Operating profit
|
344.4
|
47.8
|
392.2
|
286.6
|
(51.0)
|
235.6
|
Finance income
|
9.8
|
-
|
9.8
|
1.9
|
7.7
|
9.6
|
Finance costs
|
(22.1)
|
-
|
(22.1)
|
(23.7)
|
(0.6)
|
(24.3)
|
Share of results of joint
ventures
|
12.5
|
-
|
12.5
|
16.3
|
0.2
|
16.5
|
Profit before taxation
|
344.6
|
47.8
|
392.4
|
281.1
|
(43.7)
|
237.4
|
Income taxes
|
(46.5)
|
1.8
|
(44.7)
|
(33.1)
|
6.0
|
(27.1)
|
Profit after tax from continuing operations
|
298.1
|
49.6
|
347.7
|
248.0
|
(37.7)
|
210.3
|
Discontinued operations
(Loss)/profit after tax from
discontinued operations
|
-
|
(3.2)
|
(3.2)
|
-
|
60.3
|
60.3
|
Profit for the year
|
298.1
|
46.4
|
344.5
|
248.0
|
22.6
|
270.6
|
Revenue
Revenue decreased in 2023 by 8.7% versus prior
year (constant and reported currency basis) to $5.4 billion.
Like-for-like wholly-owned revenue decreased by 8.2%, driven by
volume and pricing declines of 0.5% and 7.7% respectively. Detailed
analysis of revenue is set out within the operations
review.
EBITA (pre-exceptional)
EBITA before exceptional items increased 16.4%
constant currency (+15.9% reported) to $424.0 million
(2022:
$365.7 million) with strong EBITA delivery in
GPN and with GN marginally down primarily due to supply chain
destocking. EBITA margin in FY 2023 was 7.8%, compared to 6.2% in
2022, representing an increase of 160 basis points.
GPN pre-exceptional EBITA increased by 33.7%
constant currency to $255.4 million (2022: $191.9 million), an
increase of 33.1% on a reported basis. GPN pre-exceptional EBITA
margin at 14.2% was 300 basis points higher than prior year (2022:
11.2%).
GN pre-exceptional EBITA declined 2.7%
constant currency to $168.6 million (2022: $173.8 million), a
decrease of 3.0% on a reported basis. GN pre-exceptional EBITA
margin was 4.6%, an increase of 50 basis points from 2022 (2022:
4.1%).
Net
finance costs (pre-exceptional)
Net finance costs (pre-exceptional items)
decreased by $9.5 million to $12.3 million (2022: $21.8 million).
The decrease was primarily driven by a reduction in the Group's
average net financial indebtedness during 2023 compared to 2022, as
well as strong returns on gross cash balances as variable interest
rates rose in the period. The Group's average interest rate was
2.0% (2022: 2.3%). Glanbia operates a policy of fixing a
significant amount of its interest exposure, with 95% of projected
2024 debt currently contracted at fixed rates.
Share of results of joint ventures (all continuing
operations)
The Group's share of results of joint ventures
is stated after tax and before exceptional items. The Group's share
of joint venture profits from continuing operations decreased by
$3.8 million to $12.5 million (2022: $16.3 million), primarily as a
result of disposals in the year (see below), somewhat offset by an
improvement in the performance of the retained US joint venture
operations.
Following the agreement reached to sell the
Group's share of its investments in the Glanbia Cheese UK and
Glanbia Cheese EU joint venture operations on 14 February 2023,
equity accounting ceased to apply from this date and the
investments were considered held-for-sale. This sales transaction
was completed on 28 April 2023.
Income taxes
The 2023 pre-exceptional tax charge increased
by $13.4 million to $46.5 million (2022: $33.1 million). This
represents an effective tax rate, excluding joint ventures, of
14.0% (2022: 12.5%). The tax credit related to exceptional items is
$1.8 million (2022: $6.0 million). The Group currently expects that
its effective tax rate for 2024 will increase as a result of global
tax legislation changes in the jurisdictions in which the Group
operates.
Exceptional items
$'m - continuing operations
|
2023
|
2022
|
Net exceptional gain on
disposal/exit of operations (note 1)
|
56.3
|
-
|
Pension related costs (note
2)
|
(2.5)
|
(1.8)
|
Portfolio related re-organisation
costs (note 3)
|
(6.0)
|
(3.1)
|
Changes in fair value of
contingent consideration (note 4)
|
-
|
7.1
|
Non-core assets held-for-sale
(note 5)
|
-
|
(46.1)
|
Wholly-owned exceptional
gain/(charge) before tax
|
47.8
|
(43.9)
|
Share of results of joint ventures
(note 2)
|
-
|
0.2
|
Exceptional tax credit
|
1.8
|
6.0
|
Exceptional gain/(charge) after
tax
|
49.6
|
(37.7)
|
|
|
|
|
$'m - discontinued operations
|
2023
|
2022
|
Exceptional (charge)/gain from discontinued operations (note
6)
|
(3.2)
|
60.3
|
Exceptional (charge)/gain after tax
- discontinued operations
|
(3.2)
|
60.3
|
|
|
|
Total exceptional gain in the year
|
46.4
|
22.6
|
|
|
|
|
|
|
Details of the exceptional items are as
follows:
1.
Net exceptional
gain on disposal/exit of operations primarily relates to the net gains on disposal of the UK and
EU Glanbia Cheese joint venture operations and a small US bottling
facility (Aseptic Solutions) which was designated as held-for-sale
at 31 December 2022 (note 5 below). Both transactions concluded
during 2023 and the net gain represents the difference between
proceeds received, net of costs associated with the divestment and
exit of these non-core businesses and the carrying value of the
investments.
2. 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 buyout and wind up of these schemes and a further
simplification of 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 from risk
reduction activities. The restructuring effort involved the careful
navigation of external market factors, with final wind up of
schemes anticipated in 2024.
3. Portfolio related
re-organisation costs relate to
indirect one off costs as a result of recent portfolio changes.
Following these divestment decisions related to non-core
businesses, the Group launched a programme to realign Group-wide
support functions and optimise structures of the remaining
portfolio, to more efficiently support business operations and
growth. This strategic multi-year programme continues in 2024.
Costs incurred to date relate to advisory fees and people related
costs.
4.
Prior year changes in fair value of contingent
consideration relate to contingent payments associated with
the 2021 LevlUp acquisition that reduced following an assessment of
conditions that gave rise to the additional payments.
5.
Prior year non-core assets
held-for-sale relate to fair value
adjustments to reduce the carrying value of certain assets to
recoverable value. The assets relate to the Aseptic Solutions business which was successfully
divested during 2023 (see note 1 above).
6. Exceptional (charge)/gain
from discontinued operations relates to the divestment of Tirlán Limited (formerly known
as Glanbia Ireland DAC) ("Tirlán"). The prior year gain represents
the initial gain on disposal of the Group's interest in this
entity. The current year charge relates to the crystallisation of
certain contingent costs associated with the divestment transaction
following the conclusion of negotiations on separation of the
common infrastructure of both organisations.
Profit after tax
Profit after tax for the year was $344.5
million compared to $270.6 million in 2022, comprising continuing
operations of $347.7 million (2022: $210.3 million) and a loss on
discontinued operations of $3.2 million (2022: profit of $60.3
million). Profit after tax from continuing operations comprises
pre-exceptional profit of $298.1 million (2022: $248.0 million) and
a net exceptional gain of $49.6 million (2022: charge of $37.7
million). The $50.1 million increase in pre-exceptional profit
after tax from continuing operations is driven by the continued
growth in profitability of wholly-owned businesses net of reduced
profitability of joint ventures following the disposal of the UK
and EU cheese joint venture operations in April 2023.
Profit after tax from discontinued operations
relates entirely to the divestment of the Group's interest in
Tirlán which completed in April 2022, with further costs associated
with the transaction crystallising in 2023.
Earnings Per Share (EPS)
|
2023
|
2022
|
Reported
Change
|
Constant
Currency
Change
|
Basic EPS
|
129.21c
|
98.40c
|
+31.3%
|
+31.3%
|
- continuing operations
|
130.41c
|
76.55c
|
+70.4%
|
+71.7%
|
- discontinued
operations
|
(1.2c)
|
21.85c
|
(105.5%)
|
(105.3%)
|
Adjusted EPS
|
131.37c
|
109.57c
|
+19.9%
|
+20.5%
|
- continuing operations
|
131.37c
|
109.57c
|
+19.9%
|
+20.5%
|
- discontinued
operations
|
nil
|
nil
|
nil
|
nil
|
Basic EPS increased by 31.3% reported versus
prior year, driven by a year-on-year increase in pre-exceptional
profitability and the exceptional one off gains on portfolio
related adjustments.
Adjusted EPS is a Key Performance Indicator
("KPI") of the Group, a key metric guided to the market and a key
element of Executive Director and senior management remuneration.
Adjusted EPS increased by 20.5% constant currency (19.9% reported)
in the year, all from continuing operations.
Cash flow
The principal cash flow KPIs of the Group and
Business Units 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 year 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
Executive Director and senior management remuneration. OCF and FCF
results for the Group are outlined below.
$'m
|
2023
|
2022
|
EBITDA pre-exceptional
|
493.4
|
436.8
|
Movement in working capital
(pre-exceptional)
|
(25.0)
|
(42.1)
|
Business-sustaining capital
expenditure
|
(22.5)
|
(20.4)
|
Operating cash flow
|
445.9
|
374.3
|
Net interest and tax paid
|
(51.8)
|
(85.7)
|
Dividends from joint ventures
|
32.0
|
15.3
|
Payment of lease liabilities
|
(19.9)
|
(17.4)
|
Other inflows/(outflows)
|
(16.4)
|
(3.5)
|
Free cash flow
|
389.8
|
283.0
|
Strategic capital expenditure
|
(51.7)
|
(52.1)
|
Dividends paid to Company
shareholders
|
(97.2)
|
(88.9)
|
Share buyback (purchase of own
shares)
|
(108.7)
|
(182.8)
|
Payment for acquisition of
businesses/subsidiaries
|
(72.2)
|
(60.3)
|
Exceptional costs paid
|
(13.5)
|
(22.4)
|
Proceeds from sale of property,
plant and equipment
|
-
|
3.6
|
Loans/investment in joint
ventures
|
67.8
|
(19.2)
|
Proceeds on disposal of non-core
businesses
|
132.0
|
339.3
|
Net cash flow
|
246.3
|
200.2
|
Exchange translation
|
(5.5)
|
(8.6)
|
Cash/(debt) acquired on
acquisition
|
0.5
|
1.0
|
Net debt movement
|
241.3
|
192.6
|
Opening net debt
|
(490.0)
|
(682.6)
|
Closing net debt
|
(248.7)
|
(490.0)
|
OCF was $445.9 million in the year (2022:
$374.3 million) and represents a strong cash conversion on EBITDA
of 90.4% (2022: 85.7%). The OCF conversion target for the year was
80%. The increase in OCF since prior year was due primarily to the
increased profitability across the business, combined with a
reduced investment in working capital as pricing and inventory
volumes returned to more normalised levels following a level of
significant inflation supply chain disruption throughout
2022.
FCF was $389.8 million versus $283.0 million
in 2023, with the movement since prior year primarily as a result
of movements in OCF (outlined above), as well as reduction in net
interest cost and increased dividend returns from joint venture
operations.
Capital allocated for the benefit of
shareholders includes regular dividend payments of $97.2 million
(2022: $88.9 million) and the execution of a share buyback
programme of €100 million (2022: €173.5 million). The Board
continues to review buyback programmes as part of the Group's
capital allocation strategy as they provide an opportunity to
allocate capital to the benefit of shareholders.
Acquisition spend relates primarily to the
acquisition of the B2B bioactive ingredients business of PanTheryx,
for an initial consideration of $45.1 million and the final
contingent payment in respect of the 2022 Sterling Technology
acquisition of $26.8 million. Divestment proceeds relate primarily
to the disposal of the Group's interest in Glanbia Cheese UK and EU
joint ventures in April 2023.
Loans to/equity in joint ventures during 2023
includes the full repayment of outstanding loans to Glanbia Cheese
EU, in advance of completing the disposal of the UK and EU cheese
businesses in April 2023.
Group financing
Financing Key Performance Indicators
|
2023
|
2022
|
Net debt ($'m)
|
248.7
|
490.0
|
Net debt: adjusted EBITDA
|
0.5
times
|
1.13 times
|
Adjusted EBIT: adjusted net finance cost
|
38.1
times
|
17.0 times
|
The Group's financial position continues to be
strong. At year-end 2023, net debt was $248.7 million (2022: $490.0
million), a decrease of $241.3 million from prior year and the
Group had committed debt facilities of $1.3 billion (2022: $1.3
billion) with a weighted average maturity of 4.7 years (2022: 5.8
years). Glanbia's ability to generate cash, as well as its
available debt facilities ensures the Group has considerable
capacity to finance future investments. Net debt to adjusted EBITDA
was 0.5 times (2022: 1.13 times) and interest cover was 38.1 times
(2022: 17.0 times), both metrics remaining well within financing
covenants.
Use
of capital
Capital expenditure
Cash outflow relating to capital expenditure
for the year amounted to $74.2 million (2022: $72.5 million)
including
$22.5 million of business-sustaining capital
expenditure and $51.7 million of strategic capital expenditure. Key
strategic projects completed in 2023 include ongoing capacity
enhancement, business integrations, and IT investments to drive
further efficiencies in operations.
Investments in Joint Ventures
During 2023, a further $3.5 million was
advanced to the Glanbia Cheese EU operations which were
subsequently divested along with the Glanbia Cheese UK operations.
In advance of the divestment of UK and EU joint venture operations,
which completed in April 2023, outstanding loans of $71.3 million
were repaid in full.
Return on Capital Employed ("ROCE")
|
2023
|
2022
|
Change
|
Return on Capital Employed
- continuing
operations
- discontinued
operations
|
12.2%
12.2%
-
|
10.7%
10.7%
-
|
+150bps
+150bps
-
|
Return on Capital Employed increased in 2023
by 150 basis points to 12.2%. This increase was primarily due to
the continued growth in profitability of the wholly-owned business,
as well as the successful execution of strategy through pricing and
efficiency improvements to improve margin and drive sustainable
long term returns. Acquisitions remain a key part of the growth
strategy of the Group with investments assessed against a target
benchmark of 12% return after tax by the end of year
three.
Dividends
The Board is recommending a final dividend of
21.21 €cent per share which brings the total dividend for the year
to
35.43 €cent per share, a 10% increase over
2022. This total dividend represents a return of €93.9 million to
shareholders from 2023 earnings and a payout ratio of 29.2% of 2023
adjusted Earnings Per Share which is in line with the Board's
target dividend payout ratio of 25% to 35%. The final dividend will
be paid on 3 May 2024 to shareholders on the share register on 22
March 2024.
Total Shareholder Return
Total Shareholder Return (TSR) for 2023 was
+28.04%. The STOXX Europe 600 Food & Beverage Index (F&B
Index), a benchmark for the Group, decreased by 0.73% in 2023. The
three-year period 2021 to 2023 Glanbia TSR was +54.16% versus the
F&B Index which increased by 8.03%. The five-year Glanbia TSR
to 2023 was +2.28% versus the F&B Index of +31.79%. Glanbia's
share price at the end of the financial year was €14.91 compared to
€11.92 at the 2022 year end, representing an increase of
25.1%.
Impact of new and amended accounting
standards
Adoption of new standards and amendments to
existing standards during the year did not have a material impact
on the Group.
Pension
The Group's net pension position under IAS 19
(revised) 'Employee Benefits', before deferred tax, improved by
$5.5 million since 2022, resulting in a net pension asset of $7.2
million at 30 December 2023 (2022: asset of $1.7 million). The
defined benefit pension position is calculated by discounting the
estimated future cash outflows using appropriate corporate bond
rates. During 2023, the Company progressed the restructuring of UK
pension schemes, successfully completing the "buy-out" of two
legacy schemes and further reducing the Group's exposure to
liabilities on these schemes. It is anticipated that these UK
schemes will ultimately be wound up in 2024.
Foreign exchange
Glanbia generates the majority of its earnings
in US dollar currency and has significant assets and liabilities
denominated in US dollars. As a result, from 2023 Glanbia changed
the currency in which it presents its financial results from euro
to US dollar to reduce (but not eliminate) the impact to reported
numbers arising from currency movements year-on-year and on
retranslation of non-monetary assets and liabilities in the
preparation of the consolidated financial statements. Commentary
continues to be provided on a constant currency basis to provide a
better reflection of the underlying operating results in the year,
removing 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. Key non-US dollar currencies for the
Group over the period were euro and pound sterling, for which
average and year-end rates were as follows: Average and year end
euro to US dollar rates were as follows:
|
Average
|
|
Year end
|
|
2023
|
2022
|
|
2023
|
2022
|
1 US dollar converted to
euro
|
0.9247
|
0.9493
|
|
0.9050
|
0.9376
|
1 US dollar converted to pound
sterling
|
0.8043
|
0.8095
|
|
0.7865
|
0.8315
|
Investor relations
Glanbia has a proactive approach to
shareholder engagement with the Annual General Meeting ("AGM")
being a key event annually. In 2023, an in person AGM was held on 4
May at the Lyrath Hotel in Kilkenny. All details relating to the
AGM were published on the Company's website: www.glanbia.com/agm.
The Group Chairman consulted directly with a
number of shareholders during the year. In addition, the Chair of
the Remuneration Committee consulted with shareholders on the
Company's Remuneration Policy. Feedback from these engagements was
shared with and discussed with the Board.
In 2023, Glanbia attended 11 international
equities investor conferences. In May 2023, the Group held an
analyst event in London, UK, providing a deep dive on the GPN
business, its strategy and key growth drivers.
In addition to full year and half year
results, Glanbia publishes interim management statements after the
first and third quarters to provide investors with a regular update
on performance and expectations throughout the year. All releases,
reports and presentations are made available immediately on
publication on the Group's investor relations website.
Looking ahead
From 2024, the Group is adopting new
commercial terms associated with our US joint venture operations,
changing the recognition and presentation of revenues and cost of
sales, without any material impact on profits. In addition, the
Group will move to presentation of Earnings Before Interest, Tax,
Depreciation and Amortisation ("EBITDA"). These presentational
changes will continue the Group's ambition to simplify reporting to
be more in line with our peers. Further pro-forma detail on the
impact of these changes is provided earlier in the
release.
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 Directors of Glanbia have carried out a
robust assessment of the Group's principal risks, including those
that may threaten Glanbia's business model, future performance,
solvency or liquidity. The risk categorisation recognises the
external risks associated with the operating environment, which are
typically considered and managed through strategic processes, and
the mainly internal risks associated with people, processes and
systems which are managed through Glanbia's internal controls.
Emerging risks with the potential to impact longer term success are
also considered to ensure appropriate plans are in place to respond
to them over time.
The Group's principal risks and uncertainties
are summarised in the risk profile table below. The principal risk
Economic, Industry and Political risk, reported in 2022, has been
split into two principal risks with the political narrative now
captured within a new Geopolitical principal risk and the Economic
and industry risk remaining as a standalone risk. No new emerging
principal risks were identified in 2023 while some fluctuation in
the principal risk trends did arise including:
· Geopolitical risk: As geopolitical tensions escalated and
became more widespread globally, the Directors have determined that
this risk area now warrants a standalone principal risk. The market
consequences of the war in Ukraine and tensions in the Middle East
continue to create volatility.
· Economic
and industry: the macroeconomic environment continues to show
volatility with recessionary conditions which impacted some
countries in 2023 looking set to continue in 2024.
·
Market disruption risk
continues to trend upwards. Adverse changes in economic conditions,
persistent inflation, energy and interest rate pressures have
continued to increase the cost of living and could result in
reduced consumer spending which may disrupt demand and further
increase operational and financial costs.
· Climate change risk continues to trend upwards due to the
evolving climate landscape, expected future developments in ESG
regulations, and the increasing stakeholder reporting
expectations.
·
Cyber security and data protection
risks continue to trend upwards due to rapidly accelerating
technological changes in areas such as Artificial Intelligence
("AI") and growing global cybersecurity control threats.
· Supply chain and Talent management risks have stabilised as
supply chain risk mitigation measures have been successfully
deployed, and labour market conditions continue to
normalise.
There may be other risks and uncertainties
that are not yet considered material or not yet known to Glanbia
and this list will change if these risks assume greater importance
in the future. Likewise, some of the current risks will drop off
the key risks schedule as management actions are implemented or
changes in the operating environment occur.
|
Strategic/External
|
Financial
|
Technological
|
Operational/Regulatory
|
Risk where trend is stable
|
·
Customer concentration
|
· Taxation changes
|
· Digital transformation
|
· Health and safety
· Product safety and compliance
· Acquisition/integration
· Supply chain
· Talent management
|
Risk where trend is
increasing
|
·
Geopolitical
·
Economic and industry
·
Market disruption
·
Climate change
|
·
|
· Cyber security and data protection
|
·
|
Key risk factors and uncertainties with the
potential to impact on the Group's financial performance in 2024
include:
· Geopolitical risk - geopolitical tensions in the regions
where we operate, may pose potential challenges that could
adversely affect our pursuit of growth objectives. The Board is
closely monitoring tensions in key trading regions, particularly
between China and Taiwan, where any potential conflict, economic
sanctions or trade rulings could impact Glanbia's growth
objectives. The upcoming US presidential election also has the
potential to create short-term uncertainty.
· Economic and industry risk - the macroeconomic environment
continued to be uncertain as some markets entered recession in
2023. There is continuing pressure from high interest rates,
monetary tightening by central banks, and currency fluctuations
which the Group continues to navigate and mitigate where
possible.
· Market disruption risk - while energy prices have shown signs
of stabilising, food prices remain elevated and further shocks from
geopolitical tensions may contribute to further inflationary
pressures. The Group will continue to monitor this and any other
adverse changes in economic conditions, such as the heightened cost
of living and increased interest rates that could result in reduced
consumer spending and a slowdown in consumer demand.
· 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. The impact of any potential future price increases
will continue to be assessed for price elasticity effects and 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
global pandemics. This is important in preventing unexpected supply
chain disruptions which could result in restrictions on the
importation of key raw materials and/or negative impacts on the
Group's international sales channels; and
o The Group is
holding appropriate safety stocks of core raw materials however the
potential prolonged impact from a geopolitical event in a key
trading region, a material shift in the ESG regulatory landscape or
heightened inflationary impacts to supply chains would have
negative consequences from both a supply and pricing
perspective.
· 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.
· Health and
safety risk - a failure to maintain good health and safety
practices or the risk of a global pandemic, in Glanbia's core
markets, may adversely impact performance. A wide range of
additional measures and mitigations have been introduced as a
result of the pandemic which build on the existing strong controls
across the Group.
The Group actively manages these and all other
risks through its risk management and internal control
processes.
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.
On behalf of the Board
Hugh McGuire
Mark Garvey
Chief Executive Officer
Chief Financial Officer
27 February 2024
Annual General Meeting (AGM)
Glanbia plc's AGM will be held on Wednesday 1
May 2024, in the Newpark Hotel, Kilkenny, Ireland.
Results webcast and dial-in details:
There will be a webcast and
presentation to accompany this results announcement at 8.30 a.m.
GMT today. Please access the webcast from the Glanbia website
at
https://www.glanbia.com/investors/results-reports-and-presentations
where the presentation can also be viewed or
downloaded. In addition, a dial-in facility is available using the
following numbers:
Ireland
|
+353 (0)1 691 7842
|
United Kingdom
|
+44 (0) 203 936 2999
|
United States
|
+1 646 787 9445
|
All other locations
|
+44 (0) 203 936 2999
|
The access code for all participants is:
513573
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
Hugh McGuire, Chief Executive
Officer
|
|
Mark Garvey, Chief Financial
Officer
|
|
Liam Hennigan, Group Secretary & Head of
Investor Relations
|
+353 86 046 8375
|
Martha Kavanagh, Director of
Corporate Affairs
|
+353 87 646 2006
|
Group income statement
for the financial year ended 30 December
2023
|
|
|
2023
|
|
|
|
Restated*
2022
|
|
|
Notes
|
Pre-
exceptional
$m
|
Exceptional
$m
(note 4)
|
Total
$m
|
|
Pre-
exceptional
$m
|
Exceptional
$m
(note 4)
|
Total
$m
|
Continuing operations
Revenue
|
2/3
|
5,425.4
|
-
|
5,425.4
|
|
5,943.7
|
-
|
5,943.7
|
|
|
|
|
|
|
|
|
|
Operating profit before intangible asset
amortisation and impairment (earnings before interest, tax and
amortisation (EBITA))
|
3
|
424.0
|
47.8
|
471.8
|
|
365.7
|
(23.1)
|
342.6
|
Intangible asset amortisation and
impairment
|
3
|
(79.6)
|
-
|
(79.6)
|
|
(79.1)
|
(27.9)
|
(107.0)
|
Operating profit
|
3
|
344.4
|
47.8
|
392.2
|
|
286.6
|
(51.0)
|
235.6
|
Finance income
|
5
|
9.8
|
-
|
9.8
|
|
1.9
|
7.7
|
9.6
|
Finance costs
|
5
|
(22.1)
|
-
|
(22.1)
|
|
(23.7)
|
(0.6)
|
(24.3)
|
Share of results of joint ventures accounted
for using the equity method
|
|
12.5
|
-
|
12.5
|
|
16.3
|
0.2
|
16.5
|
Profit before taxation
|
|
344.6
|
47.8
|
392.4
|
|
281.1
|
(43.7)
|
237.4
|
Income taxes
|
6
|
(46.5)
|
1.8
|
(44.7)
|
|
(33.1)
|
6.0
|
(27.1)
|
Profit from continuing operations
|
|
298.1
|
49.6
|
347.7
|
|
248.0
|
(37.7)
|
210.3
|
Discontinued operations
(Loss)/profit after tax from discontinued
operations
|
13
|
-
|
(3.2)
|
(3.2)
|
|
-
|
60.3
|
60.3
|
Profit for the year
|
|
298.1
|
46.4
|
344.5
|
|
248.0
|
22.6
|
270.6
|
Attributable to:
|
|
|
|
|
|
|
|
|
Equity holders of the Company
|
11
|
|
|
344.4
|
|
|
|
271.4
|
Non-controlling interests
|
|
|
|
0.1
|
|
|
|
(0.8)
|
|
|
|
|
344.5
|
|
|
|
270.6
|
Earnings Per Share
from continuing operations attributable to the equity holders of
the Company
|
|
|
|
|
Basic Earnings Per Share (cent)
|
7
|
|
|
130.41
|
|
|
|
76.55
|
Diluted Earnings Per Share (cent)
|
7
|
|
|
128.67
|
|
|
|
75.59
|
Earnings Per Share attributable to the equity
holders of the Company
|
|
|
|
|
Basic Earnings Per Share (cent)
|
7
|
|
|
129.21
|
|
|
|
98.40
|
Diluted Earnings Per Share (cent)
|
7
|
|
|
127.50
|
|
|
|
97.18
|
*
|
Restated throughout for presentation in US
dollar. See note 1 for further details.
|
Group statement of comprehensive income
for the financial year ended 30 December
2023
|
Notes
|
2023
$m
|
Restated*
2022
$m
|
Profit for the year
|
|
344.5
|
270.6
|
|
|
|
|
Other comprehensive income
|
|
|
|
Items that will not be reclassified
subsequently to the Group income statement:
Remeasurements on defined benefit plans, net of
deferred tax
|
|
1.5
|
12.7
|
Revaluation of equity investments at FVOCI, net
of deferred tax
|
10
|
0.2
|
0.5
|
Share of other comprehensive income of joint
ventures accounted for using the equity method,
net of deferred tax
|
11
|
0.1
|
0.5
|
Items that may be reclassified subsequently to
the Group income statement:
Currency translation differences
|
10
|
4.4
|
(32.5)
|
Currency translation difference arising on net
investment hedge
|
10
|
3.5
|
(5.7)
|
Movement in cash flow hedges, net of deferred
tax
|
|
(2.9)
|
2.8
|
Share of other comprehensive income of joint
ventures accounted for using the equity method,
net of deferred tax
|
|
|
|
|
(2.5)
|
17.2
|
Other comprehensive income for the year, net of
tax
|
|
4.3
|
(4.5)
|
Total comprehensive income for the
year
|
|
348.8
|
266.1
|
Attributable to:
|
|
|
|
Equity holders of the Company
|
|
348.7
|
266.9
|
Non-controlling interests
|
|
0.1
|
(0.8)
|
Total comprehensive income for the
year
|
|
348.8
|
266.1
|
*
|
Restated throughout for presentation in US
dollar. See note 1 for further details.
|
Group balance sheet
as at 30 December 2023
|
Notes
|
30 December
2023
$m
|
Restated*
31 December
2022
$m
|
Restated*
2 January
2022
$m
|
ASSETS
|
|
|
|
|
Non-current assets
|
|
|
|
|
Property, plant and equipment
|
|
515.1
|
510.8
|
549.6
|
Right-of-use assets
|
|
88.3
|
100.7
|
113.2
|
Intangible assets
|
|
1,537.3
|
1,548.8
|
1,557.7
|
Interests in joint ventures
|
|
159.3
|
225.3
|
209.3
|
Other financial assets
|
|
2.6
|
2.3
|
2.2
|
Loans to joint ventures
|
|
-
|
65.6
|
48.1
|
Deferred tax assets
|
|
5.2
|
5.0
|
5.4
|
Other receivables
|
|
-
|
0.3
|
0.9
|
Derivative financial instruments
|
|
-
|
-
|
0.6
|
Retirement benefit assets
|
|
8.2
|
3.2
|
3.3
|
|
|
2,316.0
|
2,462.0
|
2,490.3
|
Current assets
Inventories
|
|
550.2
|
750.5
|
672.3
|
Trade and other receivables
|
|
501.8
|
404.8
|
407.0
|
Current tax receivable
|
|
17.4
|
13.7
|
10.0
|
Derivative financial instruments
|
|
-
|
3.1
|
2.5
|
Cash and cash equivalents (excluding bank
overdrafts)
|
9
|
413.7
|
467.9
|
261.7
|
|
|
1,483.1
|
1,640.0
|
1,353.5
|
Assets held for sale
|
13
|
-
|
15.2
|
265.0
|
|
|
1,483.1
|
1,655.2
|
1,618.5
|
Total assets
|
|
3,799.1
|
4,117.2
|
4,108.8
|
|
|
|
|
|
EQUITY
|
|
|
|
|
Issued capital and reserves attributable to
equity holders of the Company
|
|
|
|
|
Share capital and share premium
|
|
129.7
|
130.2
|
131.1
|
Other reserves
|
10
|
172.1
|
167.9
|
161.8
|
Retained earnings
|
11
|
1,830.8
|
1,686.2
|
1,669.0
|
|
|
2,132.6
|
1,984.3
|
1,961.9
|
Non-controlling interests
|
|
-
|
8.4
|
9.2
|
Total equity
|
|
2,132.6
|
1,992.7
|
1,971.1
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
Non-current liabilities
|
|
|
|
|
Borrowings
|
9
|
553.5
|
682.5
|
789.7
|
Lease liabilities
|
|
89.3
|
103.5
|
119.0
|
Other payables
|
|
-
|
-
|
36.9
|
Retirement benefit obligations
|
|
1.0
|
1.5
|
19.3
|
Deferred tax liabilities
|
|
137.9
|
138.3
|
163.6
|
Provisions
|
|
4.3
|
4.0
|
4.1
|
|
|
786.0
|
929.8
|
1,132.6
|
Current liabilities
|
|
|
|
|
Trade and other payables
|
|
659.1
|
826.5
|
758.1
|
Borrowings
|
9
|
108.9
|
275.4
|
154.6
|
Lease liabilities
|
|
20.1
|
19.0
|
16.4
|
Current tax liabilities
|
|
67.3
|
54.1
|
60.0
|
Derivative financial instruments
|
|
2.0
|
1.0
|
1.4
|
Provisions
|
|
23.1
|
12.0
|
14.6
|
|
|
880.5
|
1,188.0
|
1,005.1
|
Liabilities held for sale
|
13
|
-
|
6.7
|
-
|
|
|
880.5
|
1,194.7
|
1,005.1
|
Total liabilities
|
|
1,666.5
|
2,124.5
|
2,137.7
|
Total equity and liabilities
|
|
3,799.1
|
4,117.2
|
4,108.8
|
*
|
Restated throughout for presentation in US
dollar. See note 1 for further details.
|
Group statement of changes in equity
for the financial year ended 30 December
2023
|
Attributable to equity holders of the
Company
|
|
|
2023
|
Share capital and share premium
$m
|
Other
reserves
$m
(note 10)
|
Retained
earnings
$m
(note 11)
|
Total
$m
|
Non-
Controlling interests
$m
|
Total
$m
|
Balance at 1 January 2023
|
130.2
|
167.9
|
1,686.2
|
1,984.3
|
8.4
|
1,992.7
|
Profit for the year
|
-
|
-
|
344.4
|
344.4
|
0.1
|
344.5
|
Other comprehensive income
|
-
|
2.7
|
1.6
|
4.3
|
-
|
4.3
|
Total comprehensive income for the
year
|
-
|
2.7
|
346.0
|
348.7
|
0.1
|
348.8
|
Dividends
|
-
|
-
|
(97.2)
|
(97.2)
|
-
|
(97.2)
|
Purchase of own shares
|
-
|
(148.1)
|
-
|
(148.1)
|
-
|
(148.1)
|
Cancellation of own shares
|
(0.5)
|
109.2
|
(108.7)
|
-
|
-
|
-
|
Cost of share-based payments
|
-
|
24.5
|
-
|
24.5
|
-
|
24.5
|
Transfer on exercise, vesting or expiry of
share-based payments
|
-
|
5.8
|
(5.8)
|
-
|
-
|
-
|
Deferred tax on share-based payments
|
-
|
-
|
2.1
|
2.1
|
-
|
2.1
|
Acquisition of NCI
|
-
|
-
|
8.2
|
8.2
|
(8.5)
|
(0.3)
|
Transfer to Group income statement
|
-
|
10.1
|
-
|
10.1
|
-
|
10.1
|
Balance at 30 December 2023
|
129.7
|
172.1
|
1,830.8
|
2,132.6
|
-
|
2,132.6
|
Restated*
2022
|
|
|
|
|
|
|
Balance at 2 January 2022
|
131.1
|
161.8
|
1,669.0
|
1,961.9
|
9.2
|
1,971.1
|
Profit for the year
|
-
|
-
|
271.4
|
271.4
|
(0.8)
|
270.6
|
Other comprehensive income
|
-
|
(17.7)
|
13.2
|
(4.5)
|
-
|
(4.5)
|
Total comprehensive income for the
year
|
-
|
(17.7)
|
284.6
|
266.9
|
(0.8)
|
266.1
|
Dividends
|
-
|
-
|
(88.9)
|
(88.9)
|
-
|
(88.9)
|
Purchase of own shares
|
-
|
(207.4)
|
-
|
(207.4)
|
-
|
(207.4)
|
Cancellation of own shares
|
(0.9)
|
183.7
|
(182.8)
|
-
|
-
|
-
|
Cost of share-based payments
|
-
|
19.8
|
-
|
19.8
|
-
|
19.8
|
Transfer on exercise, vesting or expiry of
share-based payments
|
|
|
|
|
|
|
-
|
(2.0)
|
2.0
|
-
|
-
|
-
|
Deferred tax on share-based payments
|
-
|
-
|
0.5
|
0.5
|
-
|
0.5
|
Sale of shares held by a subsidiary
|
-
|
-
|
1.8
|
1.8
|
-
|
1.8
|
Remeasurement of put option
liability
|
-
|
28.0
|
-
|
28.0
|
-
|
28.0
|
Transfer to Group income statement
|
-
|
1.7
|
-
|
1.7
|
-
|
1.7
|
Balance at 31 December 2022
|
130.2
|
167.9
|
1,686.2
|
1,984.3
|
8.4
|
1,992.7
|
*
|
Restated throughout for presentation in US
dollar. See note 1 for further details.
|
Group statement of cash flows
for the financial year ended 30 December
2023
|
Notes
|
2023
$m
|
Restated*
2022
$m
|
Cash flows from operating activities
Cash generated from operating activities before
exceptional items
|
12
|
491.4
|
413.6
|
Cash outflow related to exceptional
items
|
|
(11.8)
|
(13.6)
|
Interest received
|
|
10.7
|
1.6
|
Interest paid (including interest expense on
lease liabilities)
|
|
(22.0)
|
(24.4)
|
Tax paid
|
|
(40.5)
|
(62.9)
|
Net cash inflow from operating
activities
|
|
427.8
|
314.3
|
Cash flows from investing activities
Payment for acquisition of
subsidiaries
|
|
(71.9)
|
(60.3)
|
Purchase of property, plant and
equipment
|
|
(42.0)
|
(33.4)
|
Purchase of intangible assets
|
|
(32.2)
|
(39.1)
|
Proceeds from sale of property, plant and
equipment
|
|
-
|
3.6
|
Dividends received from related
parties
|
|
32.0
|
15.3
|
Proceeds from disposal/redemption of FVOCI
financial assets
|
|
-
|
0.4
|
Proceeds on sale of shares held by
subsidiary
|
|
-
|
1.8
|
Proceeds from disposal of Glanbia Cheese**
(exceptional)
|
13
|
123.4
|
-
|
Proceeds on repayment of loans advanced to
Glanbia Cheese
|
13
|
71.3
|
-
|
Loans advanced to Glanbia Cheese
|
|
(3.5)
|
(49.5)
|
Proceeds from disposal of assets and
liabilities held for sale (exceptional)
|
|
8.6
|
-
|
Net cash (outflow)/inflow from discontinued
operations***
|
|
(1.7)
|
360.8
|
Net cash inflow from investing
activities
|
|
84.0
|
199.6
|
Cash flows from financing activities
Purchase of own shares
|
10
|
(148.1)
|
(207.4)
|
Drawdown of borrowings
|
|
140.8
|
707.5
|
Repayment of borrowings
|
|
(271.6)
|
(822.5)
|
Payment of lease liabilities
|
|
(19.9)
|
(17.4)
|
Acquisition of NCI
|
|
(0.3)
|
-
|
Dividends paid to Company
shareholders
|
8
|
(97.2)
|
(88.9)
|
Net cash outflow from financing
activities
|
|
(396.3)
|
(428.7)
|
Net increase in cash and cash
equivalents
|
|
115.5
|
85.2
|
Cash and cash equivalents at the beginning of
the year
|
|
192.5
|
107.1
|
Cash and cash equivalents acquired on
acquisition
|
14
|
0.5
|
1.0
|
Effects of exchange rate changes on cash and
cash equivalents
|
|
(3.7)
|
(0.8)
|
Cash and cash equivalents at the end of the
year
|
9
|
304.8
|
192.5
|
*
|
Restated throughout for presentation in US
Dollar. See note 1 for further details.
|
**
|
Comprised Glanbia Cheese Limited and Glanbia
Cheese EU Limited (collectively referred to as "Glanbia Cheese")
which are now named Leprino Foods Limited and Leprino Foods EU
Limited respectively (collectively referred to as "Leprino
Foods").
|
***
|
Related to disposal of Tirlán Limited (formerly
known as Glanbia Ireland DAC). $1.7 million related to
reimbursement of rebranding costs to Tirlán Limited (note 13)
(exceptional). $360.8 million in the prior year comprised proceeds
from disposal of $339.3 million (exceptional), proceeds on
repayment of loans of $30.3 million and cash outflow related to
exceptional items of $8.8 million.
|
Notes to the financial statements
for the financial year ended 30 December
2023
1.
Accounting policies
The financial information set out in this
document does not constitute full statutory financial statements
but has been derived from the Group financial statements for the
year ended 30 December 2023 (referred to as the 2023 financial
statements). The Group financial statements have been prepared in
accordance with EU adopted International Financial Reporting
Standards ("IFRS"), IFRIC interpretations and those parts of the
Companies Act 2014, applicable to companies reporting under IFRS.
The 2023 financial statements have been audited and have received
an unqualified audit report. Amounts are stated in US Dollar
millions ($m) unless otherwise stated. These financial statements
are prepared for the 52‐week
period ended 30 December 2023. Comparatives are for the
52‐week period ended 31
December 2022. The balance sheets for 2023 and 2022 have been drawn
up as at 30 December 2023 and 31 December 2022
respectively.
The financial statements have been prepared
under the historical cost convention as modified by use of fair
values for certain other financial assets, contingent
consideration, put option liability, and derivative financial
instruments.
All notes to the financial statements include
amounts for continuing operations, unless indicated
otherwise.
The Group's accounting policies which will be
included in the 2023 financial statements are consistent with those
as set out in the 2022 financial statements other than the change
of presentation currency as detailed below.
There are no new IFRS standards or amendments
effective for the Group in 2023 which had a material impact on the
financial statements.
The financial statements were approved and
authorised for issue by the Board of Directors on 27 February 2024
and signed on its behalf by
D Gaynor, H McGuire, and M Garvey.
Change of presentation currency
Glanbia generates the majority of its revenue
and earnings, and has significant assets and liabilities
denominated in US Dollar. To reduce the potential for foreign
exchange volatility in current and future reported earnings, the
Group decided to change its presentation currency from euro to US
Dollar effective from 1 January 2023.
A change of presentation currency represents a
change in accounting policy under IAS 8 Accounting Policies,
Changes in Accounting Estimates and Errors which is accounted for
retrospectively. The reported financial information for the year
ended 31 December 2022 and Group balance sheet as at 1 January 2022
have been translated from euro to US Dollar using the following
procedures:
•
Assets and liabilities denominated in non-US Dollar
currencies were translated into US Dollar at the relevant closing
rates of exchange;
•
Non-US Dollar trading results were translated into US Dollar
at the relevant average rates of exchange;
•
Share capital, share premium, own shares, dividends and
movements in capital and merger account were translated at the
historic rates prevailing on the date of each transaction.
Movements in other equity accounts were translated into US Dollar
at the relevant average rates of exchange; and
• The
cumulative translation reserve was set to nil at 4 January 2004,
the date of transition to IFRS, and has been restated as if the
Group has reported in US Dollar since that date.
The principal exchange rates used for the
translation of results and balance sheets into US Dollar are as
follows:
|
Average
|
|
Closing
Rates
|
1 US Dollar =
|
2023
|
2022
|
|
30 December 2023
|
31 December
2022
|
1 January 2022
|
euro
|
0.9247
|
0.9493
|
|
0.9050
|
0.9376
|
0.8829
|
Pound sterling
|
0.8043
|
0.8095
|
|
0.7865
|
0.8315
|
0.7419
|
Going concern
After making appropriate enquiries, the
Directors have a reasonable expectation that the Group has adequate
resources to continue in operational existence for a period of at
least 12 months from the date of approval of the financial
statements. The Group therefore considers it appropriate to adopt
the going concern basis in preparing its financial
statements.
Adoption of new and amended standards
The following changes to IFRS became effective
for the Group during the financial year but did not result in
material changes to the Group's financial statements:
•
IFRS 17 Insurance Contracts
•
Definition of Accounting Estimates - Amendments to IAS
8
•
Disclosure of Accounting Policies - Amendments to IAS
1
•
Deferred Tax related to Assets and Liabilities arising from a
Single Transaction - Amendments to IAS 12
•
International Tax Reform - Pillar Two Model Rules -
Amendments to IAS 12
New and amended standards that are not yet
effective
The Group has not applied new standards and
amendments to existing standards that have been issued but are not
yet effective. The Group intends to adopt these amended standards,
if applicable, when they become effective.
Classification of Liabilities as Current or
Non-current - Amendments to IAS 1 (EU effective date: on or after 1
January 2024)
The amendments clarify that liabilities are
classified as either current or non-current, depending on the
rights that exist at the end of the reporting period.
Classification is unaffected by the expectations of the entity or
events after the reporting date (e.g. the receipt of a waiver or a
breach of covenant). The amendments also clarify what IAS 1 means
when it refers to the 'settlement' of a liability. The Group is
currently evaluating the impact of the amendments on future
periods.
Other changes to IFRS have been issued but are
not yet effective for the Group. However, they are either not
expected to have a material impact on the Group or they are not
currently relevant for the Group.
2.
Segment information
In accordance with IFRS 8 'Operating Segments',
the Group has identified Glanbia Performance Nutrition and Glanbia
Nutritionals as reportable segments as at 30 December 2023. Glanbia
Performance Nutrition manufactures and sells sports nutrition and
lifestyle nutrition products through a variety of channels
including specialty retail, online, Food, Drug, Mass, Club (FDMC),
and gyms in a variety of formats, including powders, Ready-to-Eat
(bars and snacking foods) and Ready-to-Drink beverages. Glanbia
Nutritionals manufactures and sells cheese, dairy and non-dairy
nutritional and functional ingredients, and vitamin and mineral
premixes targeting the increased market focus on health and
nutrition.
Following the disposal of Tirlán Limited in the
prior year (note 13), it was no longer reported as a
segment.
All other segments and unallocated include both
the results of joint ventures who manufacture and sell cheese and
dairy ingredients and unallocated corporate costs. These investees
did not meet the quantitative thresholds for reportable segments in
2023 or 2022. Amounts stated for joint ventures represents the
Group's share.
These segments align with the Group's internal
financial reporting system and the way in which the CODM assesses
performance and allocates the Group's resources. Each segment is
reviewed in its totality by the CODM. The CODM assesses the trading
performance of operating segments based on a measure of earnings
before interest, tax, amortisation and exceptional items. Given
that net finance costs and income tax are managed on a centralised
basis, these items are not allocated between operating segments for
the purposes of the information presented to the CODM and are
accordingly omitted from the detailed segmental analysis
below.
|
|
2023
|
|
|
|
|
2022
|
|
|
|
Glanbia Performance Nutrition
$m
|
Glanbia Nutritionals $m
|
All other segments
and unallocated
$m
|
Total
$m
|
|
Glanbia Performance Nutrition
$m
|
Glanbia Nutritionals
$m
|
All other segments
and unallocated
$m
|
Total
$m
|
Segment results (pre-exceptional)
|
|
|
|
|
|
|
|
|
|
Total gross segment revenue
|
1,795.7
|
3,717.4
|
-
|
5,513.1
|
|
1,712.6
|
4,343.3
|
-
|
6,055.9
|
Inter-segment revenue
|
(0.1)
|
(87.6)
|
-
|
(87.7)
|
|
(0.1)
|
(112.1)
|
-
|
(112.2)
|
Revenue
|
1,795.6
|
3,629.8
|
-
|
5,425.4
|
|
1,712.5
|
4,231.2
|
-
|
5,943.7
|
|
|
|
|
|
|
|
|
|
|
Operating profit before intangible asset
amortisation and impairment (EBITA)
|
255.4
|
168.6
|
-
|
424.0
|
|
191.9
|
173.8
|
-
|
365.7
|
Share of results of joint ventures accounted
for using the equity method
|
-
|
-
|
12.5
|
12.5
|
|
-
|
-
|
16.3
|
16.3
|
|
|
|
|
|
|
|
|
|
|
Segment assets and liabilities
|
|
|
|
|
|
|
|
|
|
Segment assets
|
1,859.6
|
1,285.1
|
654.4
|
3,799.1
|
|
1,939.3
|
1,348.5
|
829.4
|
4,117.2
|
Segment liabilities
|
394.7
|
403.5
|
868.3
|
1,666.5
|
|
461.9
|
503.3
|
1,159.3
|
2,124.5
|
|
|
|
|
|
|
|
|
|
|
Other segment information
(pre-exceptional)
|
|
|
|
|
|
|
|
|
Depreciation of PP&E and ROU
assets
|
26.9
|
42.5
|
-
|
69.4
|
|
24.1
|
47.0
|
-
|
71.1
|
Amortisation of intangible assets
|
56.8
|
22.8
|
-
|
79.6
|
|
55.9
|
23.2
|
-
|
79.1
|
Capital expenditure - additions
|
16.1
|
48.9
|
12.6
|
77.6
|
|
21.4
|
46.7
|
17.0
|
85.1
|
Capital expenditure - business
combinations
|
-
|
41.8
|
-
|
41.8
|
|
-
|
78.1
|
-
|
78.1
|
Inter-segment transfers or transactions are
entered into under the normal commercial terms and conditions that
would also be available to unrelated third parties. Revenue of
approximately $966.2 million (2022: $1,133.8 million) and $771.3
million (2022: $873.7 million) is derived from two external
customers respectively within the Glanbia Nutritionals
segment.
Pre-exceptional segment operating profit before
intangible asset amortisation and impairment (EBITA) is reconciled
to reported profit before tax and profit after tax in the Group
income statement.
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 on the following
page.
Revenue from external customers in the table
below and in the disaggregation of revenue by primary geographical
markets table below 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.
|
2023
|
|
2022
|
|
Revenue
$m
|
Non-current
assets
$m
|
|
Revenue
$m
|
Non-current
assets
$m
|
Ireland (country of domicile)
|
18.0
|
821.4
|
|
11.6
|
818.2
|
US
|
4,296.7
|
1,281.5
|
|
4,859.8
|
1,316.8
|
Other
|
|
|
|
|
|
- North America (excluding US)
|
106.6
|
6.3
|
|
101.5
|
6.4
|
- Europe (excluding Ireland)
|
473.0
|
178.7
|
|
455.7
|
232.6
|
- Asia Pacific
|
379.3
|
12.0
|
|
394.5
|
11.9
|
- LATAM
|
95.0
|
0.1
|
|
72.9
|
-
|
- Rest of World
|
56.8
|
-
|
|
47.7
|
-
|
|
5,425.4
|
2,300.0
|
|
5,943.7
|
2,385.9
|
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.
|
|
2023
|
|
|
|
2022
|
|
|
Glanbia
Performance Nutrition
$m
|
Glanbia
Nutritionals
$m
|
Total
$m
|
|
Glanbia
Performance Nutrition
$m
|
Glanbia
Nutritionals
$m
|
Total
$m
|
Internal reporting structures
|
|
|
|
|
|
|
|
Nutritional Solutions
|
-
|
1,008.5
|
1,008.5
|
|
-
|
1,186.8
|
1,186.8
|
US Cheese
|
-
|
2,621.3
|
2,621.3
|
|
-
|
3,044.4
|
3,044.4
|
GPN Americas
|
1,166.7
|
-
|
1,166.7
|
|
1,156.6
|
-
|
1,156.6
|
GPN International (including
Direct-to-Consumer)
|
628.9
|
-
|
628.9
|
|
555.9
|
-
|
555.9
|
|
1,795.6
|
3,629.8
|
5,425.4
|
|
1,712.5
|
4,231.2
|
5,943.7
|
Primary geographical markets
North America
|
1,185.5
|
3,217.8
|
4,403.3
|
|
1,159.6
|
3,801.7
|
4,961.3
|
Europe
|
361.1
|
129.9
|
491.0
|
|
334.8
|
132.5
|
467.3
|
Asia Pacific
|
196.6
|
182.7
|
379.3
|
|
170.3
|
224.2
|
394.5
|
LATAM
|
13.6
|
81.4
|
95.0
|
|
14.5
|
58.4
|
72.9
|
Rest of World
|
38.8
|
18.0
|
56.8
|
|
33.3
|
14.4
|
47.7
|
|
1,795.6
|
3,629.8
|
5,425.4
|
|
1,712.5
|
4,231.2
|
5,943.7
|
Timing of revenue recognition
|
|
|
|
|
|
|
|
Products transferred at point in
time
|
1,795.6
|
3,629.8
|
5,425.4
|
|
1,712.5
|
4,231.2
|
5,943.7
|
Products transferred over time
|
-
|
-
|
-
|
|
-
|
-
|
-
|
|
1,795.6
|
3,629.8
|
5,425.4
|
|
1,712.5
|
4,231.2
|
5,943.7
|
Channel mix for Glanbia Performance
Nutrition
|
2023
$m
|
2022
$m
|
Distributor
|
369.3
|
386.6
|
Food, Drug, Mass, Club (FDMC)
|
630.3
|
606.3
|
Online
|
576.3
|
508.1
|
Specialty
|
219.7
|
211.5
|
|
1,795.6
|
1,712.5
|
The disaggregation of revenue by channel mix is
most relevant for Glanbia Performance Nutrition.
3.
Operating profit
|
|
2023
|
|
2022
|
|
|
Notes
|
Pre-
exceptional
$m
|
Exceptional
$m
|
Total
$m
|
|
Pre-
exceptional
$m
|
Exceptional
$m
|
Total
$m
|
|
Revenue
|
|
5,425.4
|
-
|
5,425.4
|
|
5,943.7
|
-
|
5,943.7
|
|
Cost of goods sold
|
|
(4,301.3)
|
-
|
(4,301.3)
|
|
(4,920.7)
|
(17.5)
|
(4,938.2)
|
|
Gross profit
|
|
1,124.1
|
-
|
1,124.1
|
|
1,023.0
|
(17.5)
|
1,005.5
|
|
Selling and distribution expenses
|
|
(474.6)
|
(0.4)
|
(475.0)
|
|
(437.5)
|
(0.1)
|
(437.6)
|
|
Administration expenses
|
|
(228.1)
|
48.2
|
(179.9)
|
|
(219.3)
|
(5.0)
|
(224.3)
|
|
Net impairment gain/(loss) on financial
assets
|
|
2.6
|
-
|
2.6
|
|
(0.5)
|
(0.5)
|
(1.0)
|
|
Operating profit before intangible asset
amortisation and impairment (EBITA)
|
|
424.0
|
47.8
|
471.8
|
|
365.7
|
(23.1)
|
342.6
|
|
|
|
Intangible asset amortisation and
impairment
|
12
|
(79.6)
|
-
|
(79.6)
|
|
(79.1)
|
(27.9)
|
(107.0)
|
|
Operating profit
|
|
344.4
|
47.8
|
392.2
|
|
286.6
|
(51.0)
|
235.6
|
|
4.
Exceptional items
The nature of the total exceptional items is as
follows:
|
Notes
|
2023
$m
|
2022
$m
|
Net exceptional gain on disposal/exit of
operations
|
(a)
|
(56.3)
|
-
|
Pension related costs
|
(b)
|
2.5
|
1.8
|
Portfolio related reorganisation
costs
|
(c)
|
6.0
|
3.1
|
Remeasurements of contingent
consideration
|
(d)
|
-
|
(7.1)
|
Non-core assets held for sale
|
(e)
|
-
|
46.1
|
Total
|
|
(47.8)
|
43.9
|
Share of results of joint ventures
|
(b)
|
-
|
(0.2)
|
Tax credit on exceptional items
|
6
|
(1.8)
|
(6.0)
|
Total exceptional (gain)/charge from continuing
operations
|
|
(49.6)
|
37.7
|
Exceptional charge/(gain) after tax from
discontinued operations
|
(f)
|
3.2
|
(60.3)
|
Total exceptional gain after tax for the
year
|
12
|
(46.4)
|
(22.6)
|
Details of the exceptional items are as
follows:
(a) Net exceptional gain on disposal/exit of
operations primarily relates to the net gains on disposal of
the UK and EU Glanbia Cheese joint venture operations and a small
US bottling facility (Aseptic Solutions) which was designated as
held for sale at 31 December 2022 (note (e) below). Both
transactions concluded during 2023 and the net gain represents the
difference between proceeds received, net of costs associated with
the divestment and exit of these non-core businesses and the
carrying value of the investments.
(b) 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 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 from risk reduction activities. The restructuring effort
involved the careful navigation of external market factors, with
final wind up of the schemes anticipated in 2024.
(c) Portfolio related reorganisation costs
relate to indirect one off costs as a result of recent portfolio
changes. Following divestment decisions related to non-core
businesses, the Group launched a programme to realign Group-wide
support functions and optimise structures of the remaining
portfolio, to more efficiently support business operations and
growth. This strategic multi-year programme continues in 2024.
Costs incurred to date relate to advisory fees and people-related
costs.
(d) Prior year remeasurements of contingent
consideration relate to contingent payments associated with
the 2021 LevlUp acquisition that reduced following an assessment of
conditions that gave rise to the additional payments.
(e) Prior year non-core assets held for sale relate to
fair value adjustments to reduce the carrying value of certain
assets to recoverable value. The assets relate to the Aseptic
Solutions business which was successfully divested during 2023 (see
note (a) above).
(f) Exceptional charge/(gain) after tax from
discontinued operations relates to the divestment of Tirlán
Limited (formerly known as Glanbia Ireland DAC) ("Tirlán"). The
prior year gain represented the initial gain on disposal of the
Group's interest in this entity. The current year charge relates to
the crystallisation of certain contingent costs associated with the
divestment transaction following the conclusion of negotiations on
separation of the common infrastructure of both
organisations.
5.
Finance income and costs
|
|
2023
$m
|
2022
$m
|
Finance income
|
|
|
|
Interest income on loans to joint
ventures
|
|
1.0
|
1.2
|
Interest income on cash and deposits
|
|
4.6
|
0.4
|
Interest income on swaps
|
|
4.0
|
0.2
|
Remeasurements of call option
|
|
-
|
0.1
|
Remeasurements of contingent
consideration
|
|
0.2
|
7.7
|
Total finance income
|
|
9.8
|
9.6
|
Finance costs
|
|
|
|
Bank borrowing costs
|
|
(6.4)
|
(7.4)
|
Facility fees
|
|
(2.9)
|
(1.8)
|
Finance cost of private placement
debt
|
|
(10.1)
|
(10.2)
|
Interest expense on lease
liabilities
|
|
(2.7)
|
(2.7)
|
Remeasurements of call option
|
|
-
|
(0.6)
|
Remeasurements of contingent
consideration
|
|
-
|
(1.6)
|
Total finance costs
|
|
(22.1)
|
(24.3)
|
Net finance costs
|
|
(12.3)
|
(14.7)
|
6.
Income taxes
|
|
2023
$m
|
2022
$m
|
Current tax
|
|
|
|
Irish current tax charge
|
|
5.3
|
20.9
|
Adjustments in respect of prior
years
|
|
(2.3)
|
(1.3)
|
Irish current tax for the year
|
|
3.0
|
19.6
|
Foreign current tax charge
|
|
47.0
|
29.9
|
Adjustments in respect of prior
years
|
|
(5.8)
|
2.1
|
Foreign current tax for the year
|
|
41.2
|
32.0
|
Total current tax
|
|
44.2
|
51.6
|
Deferred tax
|
|
|
|
Deferred tax - current year
|
|
(5.2)
|
(25.0)
|
Adjustments in respect of prior
years
|
|
5.7
|
0.5
|
Total deferred tax
|
|
0.5
|
(24.5)
|
Tax charge
|
|
44.7
|
27.1
|
The tax credit on exceptional items included in
the above amounts is as follows:
|
|
|
|
|
Notes
|
2023
$m
|
2022
$m
|
Current tax credit on exceptional
items
|
|
(1.8)
|
(0.6)
|
Deferred tax credit on exceptional
items
|
|
-
|
(5.4)
|
Total tax credit on exceptional items for the
year
|
4
|
(1.8)
|
(6.0)
|
The tax credit on exceptional items has been
disclosed separately above as it relates to costs and income which
have been presented as exceptional.
The tax on the Group's profit before tax
differs from the theoretical amount that would arise applying the
corporation tax rate in Ireland, as follows:
|
2023
$m
|
2022
$m
|
Profit before tax
|
392.4
|
237.4
|
Income tax calculated at Irish rate of 12.5%
(2022: 12.5%)
|
49.1
|
29.7
|
Earnings at non-standard Irish tax
rate
|
0.9
|
1.4
|
Difference due to overseas tax rates (capital
and trading)
|
(4.8)
|
0.2
|
Adjustment to tax charge in respect of previous
periods
|
(2.3)
|
1.4
|
Tax on share of results of joint ventures
accounted for using the equity method included in profit before
tax
|
(1.6)
|
(2.1)
|
Other reconciling items
|
3.4
|
(3.5)
|
Total tax charge
|
44.7
|
27.1
|
7.
Earnings Per Share
Basic
Basic Earnings Per Share is calculated by
dividing profit after tax attributable to the equity holders of the
Company by the weighted average number of ordinary shares in issue
during the year, excluding ordinary shares purchased by the Group
and held as own shares (note 10). The weighted average number of
ordinary shares in issue used in the calculation of Basic Earnings
Per Share is 266,548,048 (2022: 275,760,676).
Diluted
Diluted Earnings Per Share is calculated by
adjusting the weighted average number of ordinary shares in issue
to assume conversion of all potential dilutive ordinary shares.
Share awards are the Company's only potential dilutive ordinary
shares. The share awards, which are performance based, are treated
as contingently issuable shares, because their issue is contingent
upon satisfaction of specified performance conditions, as well as
the passage of time. Contingently issuable shares are included in
the calculation of Diluted Earnings Per Share to the extent that
conditions governing exercisability have been satisfied, as if the
end of the reporting period were the end of the vesting
period.
|
|
2023
|
|
|
|
2022
|
|
|
Continuing operations
|
Discontinued operations
|
Total
|
|
Continuing operations
|
Discontinued operations
|
Total
|
Profit after tax attributable to equity holders
of the Company ($m)
|
347.6
|
(3.2)
|
344.4
|
|
211.1
|
60.3
|
271.4
|
Basic Earnings Per Share (cent)
|
130.41
|
(1.20)
|
129.21
|
|
76.55
|
21.85
|
98.40
|
Diluted Earnings Per Share (cent)
|
128.67
|
(1.17)
|
127.50
|
|
75.59
|
21.59
|
97.18
|
|
2023
|
2022
|
|
Weighted average number of ordinary shares in
issue
|
266,548,048
|
275,760,676
|
Shares deemed to be issued for no consideration
in respect of share awards
|
3,594,033
|
3,505,766
|
Weighted average number of shares used in the
calculation of Diluted Earnings Per Share
|
270,142,081
|
279,266,442
|
|
|
|
|
|
8.
Dividends
The dividends paid and recommended on ordinary
share capital are as follows:
|
Notes
|
2023
$m
|
2022
$m
|
Equity dividends to shareholders
|
|
|
|
Final - paid EUR 19.28c per ordinary share
(2022: EUR 17.53c)
|
|
57.6
|
51.7
|
Interim - paid EUR 14.22c per ordinary share
(2022: EUR 12.93c)
|
|
39.9
|
37.3
|
Total
|
|
97.5
|
89.0
|
Reconciliation to Group statement of cash flows
and Group statement of changes in equity
Dividends to shareholders
|
|
97.5
|
89.0
|
Waived dividends in relation to own
shares
|
|
(0.3)
|
(0.1)
|
Total dividends paid to equity holders of the
Company
|
11
|
97.2
|
88.9
|
Equity dividends recommended
|
|
|
|
Final 2023 - proposed EUR 21.21c per ordinary
share (2022: EUR 19.28c)
|
15
|
62.1
|
56.0
|
The amount of dividends recommended is based on
the number of issued shares at year end. The actual amount will be
based on the number of issued shares on the record date (note
15).
9.
Net debt
|
|
2023
$m
|
2022
$m
|
Non-current
|
|
|
|
Bank borrowings
|
|
178.5
|
307.5
|
Private placement debt
|
|
375.0
|
375.0
|
|
|
553.5
|
682.5
|
Current
Bank overdrafts
|
|
108.9
|
275.4
|
Total borrowings
|
|
662.4
|
957.9
|
Net debt is a non-IFRS measure which we provide
to investors as we believe they find it useful. It is also used to
calculate leverage under the Group's financing arrangements, as
defined within covenants. Refer to the Financing Key Performance
Indicators section in the Glossary for more details. Net debt
comprises the following:
|
|
2023
$m
|
2022
$m
|
Private placement debt
|
|
375.0
|
375.0
|
Bank borrowings
|
|
169.0
|
169.0
|
Not subject to interest rate
changes*
|
|
544.0
|
544.0
|
Bank borrowings
|
|
9.5
|
138.5
|
Cash and cash equivalents net of bank
overdrafts
|
|
(304.8)
|
(192.5)
|
Subject to interest rate changes*
|
|
(295.3)
|
(54.0)
|
Net debt
|
|
248.7
|
490.0
|
*
|
Taking into account contractual repricing dates
at the reporting date.
|
|
|
2023
$m
|
2022
$m
|
Cash at bank and in hand
|
|
404.5
|
461.3
|
Short term bank deposits
|
|
9.2
|
6.6
|
Cash and cash equivalents in the Group balance
sheet
|
|
413.7
|
467.9
|
Bank overdrafts used for cash management
purposes
|
|
(108.9)
|
(275.4)
|
Cash and cash equivalents in the Group
statement of cash flows
|
|
304.8
|
192.5
|
10. Other reserves
|
|
Capital and
merger reserve
$m
|
Currency reserve
$m
|
Hedging reserve
$m
|
Own
shares
$m
|
Share-based payment reserve
$m
|
Other
$m
|
Total
$m
|
Balance at 1 January 2023
|
|
136.2
|
12.6
|
9.7
|
(22.0)
|
31.4
|
-
|
167.9
|
Currency translation differences
|
|
-
|
4.4
|
-
|
-
|
-
|
-
|
4.4
|
Net investment hedge
|
|
-
|
3.5
|
-
|
-
|
-
|
-
|
3.5
|
Revaluation - gross
|
|
-
|
-
|
(6.5)
|
-
|
-
|
0.3
|
(6.2)
|
Reclassification to profit or loss -
gross
|
|
-
|
-
|
(0.3)
|
-
|
-
|
-
|
(0.3)
|
Deferred tax
|
|
-
|
-
|
1.4
|
-
|
-
|
(0.1)
|
1.3
|
Net change in OCI
|
|
-
|
7.9
|
(5.4)
|
-
|
-
|
0.2
|
2.7
|
Purchase of own shares
|
|
-
|
-
|
-
|
(148.1)
|
-
|
-
|
(148.1)
|
Cancellation of own shares
|
|
0.5
|
-
|
-
|
108.7
|
-
|
-
|
109.2
|
Cost of share-based payments
|
|
-
|
-
|
-
|
-
|
24.5
|
-
|
24.5
|
Transfer on exercise, vesting or expiry
of share-based payments
|
|
|
|
|
|
|
|
|
|
-
|
-
|
-
|
23.9
|
(18.1)
|
-
|
5.8
|
Transfer to Group income statement*
|
|
-
|
9.9
|
0.2
|
-
|
-
|
-
|
10.1
|
Balance at 30 December 2023
|
|
136.7
|
30.4
|
4.5
|
(37.5)
|
37.8
|
0.2
|
172.1
|
Balance at 2 January 2022
|
|
135.3
|
50.8
|
(12.0)
|
(7.0)
|
23.2
|
(28.5)
|
161.8
|
Currency translation differences
|
|
-
|
(32.5)
|
-
|
-
|
-
|
-
|
(32.5)
|
Net investment hedge
|
|
-
|
(5.7)
|
-
|
-
|
-
|
-
|
(5.7)
|
Revaluation - gross
|
|
-
|
-
|
29.8
|
-
|
-
|
0.7
|
30.5
|
Reclassification to profit or loss -
gross
|
|
-
|
-
|
(3.4)
|
-
|
-
|
-
|
(3.4)
|
Deferred tax
|
|
-
|
-
|
(6.4)
|
-
|
-
|
(0.2)
|
(6.6)
|
Net change in OCI
|
|
-
|
(38.2)
|
20.0
|
-
|
-
|
0.5
|
(17.7)
|
Purchase of own shares
|
|
-
|
-
|
-
|
(207.4)
|
-
|
-
|
(207.4)
|
Cancellation of own shares
|
|
0.9
|
-
|
-
|
182.8
|
-
|
-
|
183.7
|
Cost of share-based payments
|
|
-
|
-
|
-
|
-
|
19.8
|
-
|
19.8
|
Transfer on exercise, vesting or expiry
of share-based payments
|
|
-
|
-
|
-
|
9.6
|
(11.6)
|
-
|
(2.0)
|
Remeasurement of put option
liability
|
|
-
|
-
|
-
|
-
|
-
|
28.0
|
28.0
|
Transfer to Group income statement*
|
|
-
|
-
|
1.7
|
-
|
-
|
-
|
1.7
|
Balance at 31 December 2022
|
|
136.2
|
12.6
|
9.7
|
(22.0)
|
31.4
|
-
|
167.9
|
*
|
On disposal of foreign operations in the
current year (2022: discontinued operation).
|
11. Retained
earnings
|
Notes
|
2023
$m
|
2022
$m
|
At the beginning of the year
|
|
1,686.2
|
1,669.0
|
Profit for the year attributable to equity
holders of the Company
|
|
344.4
|
271.4
|
Other comprehensive income
|
|
|
|
- Remeasurements on defined benefit
plans
|
|
1.7
|
14.4
|
- Deferred tax on remeasurements on defined
benefit plans
|
|
(0.2)
|
(1.7)
|
- Share of remeasurements on defined benefit
plans from joint ventures, net of deferred tax
|
|
0.1
|
0.5
|
|
|
1.6
|
13.2
|
Dividends
|
8
|
(97.2)
|
(88.9)
|
Cancellation of own shares
|
10
|
(108.7)
|
(182.8)
|
Transfer on exercise, vesting or expiry of
share-based payments
|
10
|
(5.8)
|
2.0
|
Deferred tax on share-based payments
|
|
2.1
|
0.5
|
Sale of shares held by a subsidiary
|
|
-
|
1.8
|
Derecognition of NCI
|
|
8.2
|
-
|
At the end of the year
|
|
1,830.8
|
1,686.2
|
12. Cash generated
from operating activities
|
Notes
|
2023
$m
|
2022
$m
|
Profit for the year
|
|
344.5
|
270.6
|
Exceptional items
|
4
|
(46.4)
|
(22.6)
|
Income taxes
|
|
46.5
|
33.1
|
Profit before taxation
|
|
344.6
|
281.1
|
Share of results of joint ventures accounted
for using the equity method
|
|
(12.5)
|
(16.3)
|
Finance costs
|
|
22.1
|
23.7
|
Finance income
|
|
(9.8)
|
(1.9)
|
Amortisation of intangible assets
|
3
|
79.6
|
79.1
|
Depreciation of property, plant and
equipment
|
|
49.7
|
51.3
|
Depreciation of right-of-use assets
|
|
19.7
|
19.8
|
Cost of share-based payments
|
|
24.5
|
19.8
|
Difference between pension charge and cash
contributions
|
|
(2.7)
|
(0.5)
|
Net write down of inventories
|
|
18.4
|
14.3
|
Non-cash movement in/on:
|
|
|
|
- provisions
|
|
7.4
|
1.0
|
- allowance for impairment of
receivables
|
|
(3.8)
|
0.4
|
- cross currency swaps
|
|
0.7
|
2.7
|
- disposal of leases
|
|
-
|
(0.4)
|
Loss on disposal of property, plant and
equipment
|
|
1.2
|
0.4
|
Operating cash flows before movement in working
capital
|
|
539.1
|
474.5
|
Decrease/(increase) in inventories
|
|
191.2
|
(105.5)
|
(Increase)/decrease in short-term
receivables
|
|
(91.1)
|
8.6
|
(Decrease)/increase in short-term
liabilities
|
|
(144.4)
|
39.7
|
Decrease in provisions
|
|
(3.4)
|
(3.7)
|
Cash generated from operating activities before
exceptional items
|
|
491.4
|
413.6
|
13. Assets and
liabilities held for sale, and discontinued operations
Assets and liabilities held for sale
The Group signed a memorandum of understanding
for the sale of its shareholding in the Glanbia Cheese EU and
Glanbia Cheese UK joint ventures ("Glanbia Cheese") to Leprino
Foods Company on 14 February 2023. The Group treated the joint
venture arrangements in Glanbia
Cheese as an asset held for sale and ceased to
apply the equity method of accounting to its interest in Glanbia
Cheese from this date. The transaction allowed the Group to focus
on its core better nutrition strategy and to allocate further
capital to its global growth businesses.
The sale was completed on 28 April 2023 for an
initial cash consideration of $125.2 million (€114.0 million) and
repayment of $71.3 million (€64.9 million) of shareholder loans.
The gain of $60.3 million on disposal of Glanbia Cheese (included
in net exceptional gain on disposal/exit of operations (note 4)) is
based on the $125.2 million received less working capital
adjustments of $1.8 million, carrying amount of the asset held for
sale at 28 April 2023 of $52.2 million, costs of $2.8 million, and
associated cumulative debit amounts recognised in other
comprehensive income of $8.1 million that were reclassified to the
Group income statement.
The assets and liabilities held for sale at 31
December 2022 related to the non-core assets of a small US based
bottling facility (Aseptic Solutions). Following the completion of
a strategic portfolio review, these assets and related liabilities
which were part of the Glanbia Nutritionals segment were determined
to be non-core and a decision was made to divest of them, resulting
in the designation as held for sale at 2022 year end. The
divestment was completed on 6 March 2023. The gain on disposal of
$0.4 million (included in net exceptional gain on disposal/exit of
operations (note 4)) is based on $11.2 million consideration, less
the carrying amount of the net assets held for sale of $9.3 million
on the date of the transaction and costs associated with the
transaction of $1.5 million.
Assets and liabilities held for sale at 31
December 2022 relate to:
|
|
|
2022
$m
|
Property, plant and equipment
|
|
|
10.1
|
Right-of-use assets
|
|
|
2.7
|
Inventories
|
|
|
2.4
|
Assets held for sale
|
|
|
15.2
|
Lease liabilities
|
|
|
(6.7)
|
Liabilities held for sale
|
|
|
(6.7)
|
The above divestments are not regarded as
discontinued operations as they were not considered to be either
separate major lines of business
or geographical areas of operations.
Discontinued operations
The profit from discontinued operations in the
prior year relates to the disposal of Tirlán Limited on 1 April
2022. The gain of $60.3 million (note 4) is based on the $339.3
million received, less the carrying amount of the asset held for
sale of $265.0 million and costs associated with the transaction of
$14.0 million. As part of the terms of the disposal, the Company
paid Tirlán Limited a contribution of $8.8 million in 2022 related
to pension obligations, separation and rebranding costs and an
additional $1.7 million in the current year for the re-imbursement
of rebranding costs. The charge in the current year of $3.2 million
(note 4) relates to the crystallisation of certain contingent costs
associated with the divestment transaction following the conclusion
of negotiations on separation of the common infrastructure of both
organisations.
14. Business
combinations
On 2 October 2023 Glanbia acquired the B2B
bioactive ingredients business of PanTheryx, Inc. ("PanTheryx"), a
US based health and nutrition business*. The acquisition builds on
Glanbia Nutritionals' strategic capabilities and will complement
the existing ingredient technology portfolio of Nutritional
Solutions providing a wider breadth of technical capabilities to
support its customers. The provisional amount of unallocated
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 bioactive solutions in
Nutritional Solutions. Goodwill of $11.4 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
$m
|
Cash consideration
|
|
45.1
|
Less: fair value of net assets
acquired
|
|
(33.7)
|
Goodwill
|
|
11.4
|
*
|
Glanbia acquired a group of assets and
liabilities which constituted a business. Accordingly, the
transaction is accounted for using acquisition
accounting.
|
The fair value of assets and liabilities
arising from the acquisition are as follows:
Property, plant and equipment
|
|
11.4
|
Right-of-use assets
|
|
1.2
|
Intangible assets - customer
relationships
|
|
4.5
|
Intangible assets - recipes and
know-how
|
|
10.0
|
Intangible assets - trade names
|
|
3.3
|
Inventories
|
|
5.6
|
Trade and other receivables
|
|
2.4
|
Cash and cash equivalents
|
|
0.5
|
Trade and other payables
|
|
(4.1)
|
Lease liabilities
|
|
(1.1)
|
Fair value of net assets acquired
|
|
33.7
|
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 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 2024 interim financial
statements.
The fair value of PanTheryx's trade and other
receivables at the acquisition date amounted to $2.4 million. The
gross contractual amount for receivables due is $2.2 million, of
which $0.2 million is expected to be uncollectible.
Acquisition-related costs of $1.0 million incurred primarily on
professional fees are included in administrative
expenses.
PanTheryx contributed $4.0 million of revenues
and $(0.2) million of profit before taxation and exceptional items
for the period from the date of acquisition to the reporting date.
If the acquisition of PanTheryx had occurred on 1 January 2023,
pro-forma Group revenue and Group profit before taxation and
exceptional items for the year ended 30 December 2023 would have
been $5,442.5 million and $346.8 million respectively.
In 2022, the Group acquired Sterling
Technology, LLC ("Sterling"). Refer to 2022 Annual Report for
details of the Sterling acquisition. During the year, the Group
paid the former owners of Sterling an earnout of $26.8
million.
15. Events after the
reporting period
See note 8 for the final dividend, recommended
by the Directors. Subject to shareholder approval, this dividend
will be paid on 3 May 2024 to shareholders on the register of
members on 22 March 2024, the record date.
16. Statutory
financial statements
The financial information in this preliminary
announcement does not constitute the full statutory financial
statements of Glanbia plc (the 'Company'), a copy of which is
required to be annexed to the Company's annual return filed with
the Companies Registration Office and will be published on www.glanbia.com. A copy of the full
statutory financial statements in respect of the financial year
ended 30 December 2023 will be annexed to the Company's annual
return for 2024. The auditors of the Company have made a report,
without any qualification, on their audit of the financial
statements of the Group and Company in respect of the financial
year ended 30 December 2023, which were approved by the Directors
on 27 February 2024. A copy of the financial statements of the
Group in respect of the year ended 31 December 2022 has been
annexed to the Company's annual return for 2023 and filed with the
Companies Registration Office and is available on www.glanbia.com
Glossary of non-IFRS performance measures
The Group reports certain performance measures
including key performance indicators 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 defined below with a reconciliation of these
measures to IFRS measures where applicable. Please note where
referenced "GIS" refers to Group income statement, "GBS" refers to
Group balance sheet, and "GSCF" refers to Group statement of cash
flows. EBITA and EBITDA references throughout the annual report are
on a pre-exceptional basis unless otherwise indicated.
The sequencing of the non-IFRS performance
measures has been changed in the current year such that related
measures are grouped together. 2022 financial information has been
restated throughout for presentation in US Dollar. See note 1 of
the financial statements for further details.
G 1. Revenue
Revenue comprises sales of goods and services
to external customers net of value added tax, rebates and
discounts.
|
Reference
|
2023
Reported
$m
|
2022
Reported
$m
|
2022
Constant
currency
$m
|
Constant
currency
revenue
growth (G 2)
%
|
Like-for-like
revenue
growth
(G 3)
%
|
Nutritional Solutions
|
Note 2
|
1,008.5
|
1,186.8
|
1,185.5
|
(14.9%)
|
(12.3%)
|
US Cheese
|
Note 2
|
2,621.3
|
3,044.4
|
3,044.4
|
(13.9%)
|
(13.9%)
|
Glanbia Nutritionals
|
Note 2
|
3,629.8
|
4,231.2
|
4,229.9
|
(14.2%)
|
(13.4%)
|
GPN Americas
|
Note 2
|
1,166.7
|
1,156.6
|
1,156.0
|
0.9%
|
0.9%
|
GPN International (including
Direct-to-Consumer)
|
Note 2
|
628.9
|
555.9
|
557.4
|
12.8%
|
12.8%
|
Glanbia Performance Nutrition
|
Note 2
|
1,795.6
|
1,712.5
|
1,713.4
|
4.8%
|
4.8%
|
Revenue
|
Note 3
|
5,425.4
|
5,943.7
|
5,943.3
|
(8.7%)
|
(8.2%)
|
G 2. Volume and pricing increase/(decrease)
Volume increase/(decrease) represents the
impact of sales volumes within the revenue movement year-on-year,
excluding volume from acquisitions and disposals and the impact of
a 53rd week (when applicable), on a constant currency
basis.
Pricing increase/(decrease) represents the
impact of sales pricing (including trade spend) within revenue
movement year-on-year, excluding acquisitions and disposals, on a
constant currency basis.
Reconciliation of volume and pricing
increase/(decrease) to constant currency revenue growth:
|
|
Volume
increase/ (decrease)
|
Price
increase/
(decrease)
|
Acquisitions / (disposals)
|
Constant
currency
revenue growth
(G 1)
|
Nutritional Solutions
|
|
(3.3%)
|
(9.0%)
|
(2.6%)
|
(14.9%)
|
US Cheese
|
|
0.7%
|
(14.6%)
|
-
|
(13.9%)
|
Glanbia Nutritionals
|
|
(0.4%)
|
(13.0%)
|
(0.8%)
|
(14.2%)
|
Glanbia Performance Nutrition
|
|
(0.6%)
|
5.4%
|
-
|
4.8%
|
2023 decrease % - revenue
|
|
(0.5%)
|
(7.7%)
|
(0.5%)
|
(8.7%)
|
G 3. Like-for-like revenue increase/(decrease)
GN and GPN like-for-like total revenue
represents the sales increase/(decrease) year-on-year, excluding
the incremental revenue contributions from current year and prior
year acquisitions and disposals and the impact of a 53rd week (when
applicable), on a constant currency basis.
GPN like-for-like branded revenue represents
the sales increase/(decrease) year-on-year on branded sales,
excluding the incremental revenue contributions from current year
and prior year acquisitions and disposals and the impact of a 53rd
week (when applicable), 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 4. EBITDA (pre-exceptional)
EBITDA (pre-exceptional) is defined as earnings
before interest, tax, depreciation (net of grant amortisation) and
amortisation.
|
Reference
|
2023
$m
|
2022
$m
|
EBITA (pre-exceptional)
|
G 5
|
424.0
|
365.7
|
Depreciation*
|
Note 2
|
69.4
|
71.1
|
EBITDA (pre-exceptional)
|
G 9.2, G 13
|
493.4
|
436.8
|
*
|
Includes depreciation of property, plant and
equipment of $49.7 million (2022: $51.3 million) and depreciation
of right-of-use assets of $19.7 million (2022: $19.8
million).
|
G 5. EBITA (pre-exceptional)
EBITA (pre-exceptional) is defined as earnings
before interest, tax and amortisation. Business Segment EBITA
growth on a constant currency basis is one of the performance
conditions in Glanbia's Annual Incentive Plan for Senior
Management. Refer to note 3 of the financial statements for the
reconciliation of EBITA (pre-exceptional) to IFRS
measures.
|
Reference
|
2023
Reported
$m
|
2022
Reported
$m
|
2022
Constant
currency
$m
|
Constant
currency
growth
%
|
Nutritional Solutions
|
|
126.2
|
135.0
|
134.5
|
(6.2%)
|
US Cheese
|
|
42.4
|
38.8
|
38.7
|
9.6%
|
Glanbia Nutritionals
|
Note 2
|
168.6
|
173.8
|
173.2
|
(2.7%)
|
Glanbia Performance Nutrition
|
Note 2
|
255.4
|
191.9
|
191.0
|
33.7%
|
EBITA (pre-exceptional)
|
Note 3
|
424.0
|
365.7
|
364.2
|
16.4%
|
G 6. EBITA margin % (pre-exceptional)
EBITA margin % (pre-exceptional) is defined as
EBITA (pre-exceptional) as a percentage of revenue. Refer to G 1
and G 5 for revenue and EBITA (pre-exceptional)
respectively.
G 7. Constant Currency Basic and Adjusted Earnings
Per Share ("EPS")
G 7.1 Constant Currency Basic EPS
Basic EPS is an IFRS measure and defined in
note 7 of the financial statements. Basic EPS has also been
calculated on a
continuing basis in line with the presentation
of continuing and discontinued operations in the GIS. (Loss)/profit
after tax in this
performance measure refers to the amount
attributable to equity holders of the Company.
|
Reference
|
2023
Reported
$m
|
2022
Reported
$m
|
2022
Constant
currency
$m
|
Profit after tax
|
GIS
|
344.4
|
271.4
|
271.4
|
Loss/(profit) after tax - discontinued
operations
|
GIS
|
3.2
|
(60.3)
|
(61.9)
|
Profit after tax - continuing
operations
|
G 7.2
|
347.6
|
211.1
|
209.5
|
Weighted average number of ordinary shares in
issue (thousands)
|
Note 7
|
266,548
|
275,761
|
275,761
|
Basic EPS (cent) - continuing
operations
|
Note 7
|
130.41
|
76.55
|
75.95
|
Basic EPS (cent)
|
Note 7
|
129.21
|
98.40
|
98.39
|
Constant currency change - continuing
operations
|
|
71.7%
|
|
|
Constant currency change
|
|
31.3%
|
|
|
G 7.2 Constant Currency Adjusted EPS
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
year, excluding ordinary shares purchased by the Group and held as
own shares (see note 10). The Group believes that adjusted EPS
provides useful information of underlying performance as it
excludes exceptional items (net of related tax) that are not
related to ongoing operational performance and intangible asset
amortisation, which allows for comparability of companies that grow
by acquisition to those that grow organically. Adjusted EPS has
also been calculated on a continuing basis in line with the
presentation of continuing and discontinued operations in the
GIS.
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
|
2023
Reported
$m
|
2022
Reported
$m
|
2022
Constant
currency
$m
|
Profit after tax from continuing
operations
|
G 7.1
|
347.6
|
211.1
|
209.5
|
Exceptional (gain)/charge - continuing
operations
|
GIS
|
(49.6)
|
37.7
|
37.6
|
Profit after tax from continuing operations
(pre-exceptional)
|
|
298.0
|
248.8
|
247.1
|
Amortisation and impairment of intangible
assets (excluding software amortisation) net of related tax of $7.8
million (2022: $8.4 million, 2022 constant currency: $8.5 million)
- continuing operations
|
|
52.1
|
53.4
|
53.4
|
Adjusted net income - continuing
operations
|
|
350.1
|
302.2
|
300.5
|
(Loss)/profit after tax from discontinued
operations
|
GIS
|
(3.2)
|
60.3
|
61.9
|
Exceptional charge/(credit) - discontinued
operations
|
GIS
|
3.2
|
(60.3)
|
(61.9)
|
Profit from discontinued operations
(pre-exceptional)
|
GIS
|
-
|
-
|
-
|
Adjusted net income
|
|
350.1
|
302.2
|
300.5
|
Weighted average number of ordinary shares in
issue (thousands)
|
Note 7
|
266,548
|
275,761
|
275,761
|
Adjusted EPS (cent) - continuing
operations
|
|
131.37
|
109.57
|
108.98
|
Adjusted EPS (cent)
|
G 16
|
131.37
|
109.57
|
108.98
|
Constant currency growth - continuing
operations
|
|
20.5%
|
|
|
Constant currency growth
|
|
20.5%
|
|
|
G 8. 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 9. Financing Key Performance Indicators
G 9.1 Net debt
Net debt is calculated as current and
non-current borrowings less cash and cash equivalents. Refer to
note 9 of the financial statements for net debt at the end of the
reporting period.
G 9.2 Net debt: adjusted EBITDA
Net debt: adjusted EBITDA is calculated as net
debt at the end of the period divided by adjusted EBITDA. Adjusted
EBITDA is calculated in accordance with lenders' facility
agreements definitions which adjust EBITDA for items such as
exceptional items, dividends received from related parties,
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
|
2023
$m
|
2022
$m
|
Net debt
|
Note 9
|
248.7
|
490.0
|
EBITDA
|
G 4
|
493.4
|
436.8
|
Adjustments in line with lenders' facility
agreements
|
|
6.8
|
(2.7)
|
Adjusted EBITDA
|
|
500.2
|
434.1
|
Net debt: adjusted EBITDA
|
|
0.50
times
|
1.13 times
|
G 9.3 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 related parties divided by adjusted net finance cost. Adjusted
net finance cost comprises finance costs plus borrowing costs
capitalised into assets less adjustments including finance
income/costs on remeasurements 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).
|
Reference
|
2023
$m
|
2022
$m
|
Operating profit
|
GIS
|
392.2
|
235.6
|
Exceptional (credit)/charge
|
GIS
|
(47.8)
|
51.0
|
Operating profit (pre-exceptional)
|
GIS
|
344.4
|
286.6
|
Dividends received from related
parties
|
GSCF
|
32.0
|
15.3
|
IFRS 16 adjustment - interest expense on lease
liabilities
|
Note 5
|
(2.7)
|
(2.7)
|
Adjusted EBIT
|
|
373.7
|
299.2
|
Net finance costs
|
Note 5
|
12.3
|
14.7
|
Adjustments
|
|
(2.5)
|
2.9
|
Adjusted net finance cost
|
|
9.8
|
17.6
|
Adjusted EBIT: adjusted net finance
cost
|
|
38.1
times
|
17.0 times
|
G 10. Average interest rate
The average interest rate is defined as the
annualised net finance costs (excluding capitalised borrowing
costs, finance income/costs on remeasurements of call option and
contingent consideration and interest expense on lease liabilities)
divided by the average net debt during the reporting
period.
G 11. Return on capital employed ("ROCE")
ROCE is defined as the Group's earnings before
interest, and amortisation (net of related tax) plus the Group's
share of the results of joint ventures after interest and tax
divided by capital employed. Capital employed comprises the sum of
the Group's total assets plus cumulative intangible asset
amortisation and impairment less current liabilities and deferred
tax liabilities excluding all borrowings and lease liabilities,
retirement benefit assets, cash and acquisition related contingent
consideration and contract options. It is calculated by taking the
average of the relevant opening and closing balance sheet amounts.
ROCE has also been calculated on a continuing basis in line with
the presentation of continuing and discontinued operations in the
GIS.
ROCE is one of the performance conditions in
Glanbia's Long-term Incentive Plan.
|
Reference
|
2023
$m
|
2022
$m
|
Operating profit (pre-exceptional)
|
G 9.3
|
344.4
|
286.6
|
Tax on operating profit
|
|
(48.2)
|
(35.8)
|
Amortisation and impairment of intangible
assets net of related tax of $12.7m (2022: $12.2m)
(pre-exceptional)
|
|
66.9
|
66.9
|
Share of results of joint ventures accounted
for using the equity method
(pre-exceptional)
|
GIS
|
12.5
|
16.3
|
Return - continuing operations
|
|
375.6
|
334.0
|
(Loss)/profit after tax from discontinued
operations
|
GIS
|
(3.2)
|
60.3
|
Exceptional charge/(credit) - discontinued
operations
|
GIS
|
3.2
|
(60.3)
|
Profit after tax from discontinued operations
(pre-exceptional)
|
GIS
|
-
|
-
|
Return
|
|
375.6
|
334.0
|
Capital employed before adjustments
|
(a)
|
3,068.2
|
3,188.8
|
Adjustment for acquisitions
|
(b)
|
(23.4)
|
52.7
|
Adjustment for joint venture held for
sale
|
(b)
|
(65.4)
|
(265.0)
|
Adjustment for disposal of assets held for
sale
|
(b)
|
(9.8)
|
-
|
Capital employed after adjustments
|
|
2,969.6
|
2,976.5
|
Average capital employed - continuing
operations
|
|
3,079.2
|
3,133.3
|
Average capital employed
|
|
3,079.2
|
3,133.3
|
|
|
|
|
Return on capital employed - continuing
operations
|
|
12.2%
|
10.7%
|
Return on capital employed
|
|
12.2%
|
10.7%
|
(a) Capital employed before adjustments
|
Reference
|
2023
$m
|
2022
$m
|
Total assets
|
GBS
|
3,799.1
|
4,117.2
|
Current liabilities
|
GBS
|
(880.5)
|
(1,188.0)
|
Deferred tax liabilities
|
GBS
|
(137.9)
|
(138.3)
|
Less: cash and cash equivalents
|
GBS
|
(413.7)
|
(467.9)
|
Less: current financial liabilities
(borrowings)
|
GBS
|
108.9
|
275.4
|
Less: acquisition related
liabilities
|
|
-
|
27.0
|
Less: short term lease liabilities
|
GBS
|
20.1
|
19.0
|
Less: retirement benefit assets
|
GBS
|
(8.2)
|
(3.2)
|
Plus: accumulated amortisation and
impairment
|
|
580.4
|
547.6
|
Capital employed before adjustments
|
|
3,068.2
|
3,188.8
|
(b) Adjustment for acquisitions, joint ventures and
assets held for sale
In years where the Group makes significant
acquisitions or disposals, the ROCE calculation is adjusted
appropriately, to ensure the acquisition or disposal are equally
time apportioned in the numerator and the denominator. For
information on acquisitions and assets held for sale, refer to
notes 14 and 13 respectively.
G 12. Cash flow Key Performance Indicators
G 12.1 Operating cash flow
Operating cash flow is defined as EBITDA
(pre-exceptional) net of business sustaining capital expenditure
and working capital movements, excluding exceptional cash
flows.
Reconciliation of operating cash flow to cash
generated from operating activities before exceptional
items:
|
Reference
|
2023
$m
|
2022
$m
|
Cash generated from operating activities before
exceptional items
|
GSCF
|
491.4
|
413.6
|
Less: business sustaining capital
expenditure
|
G 20(b)
|
(22.5)
|
(20.4)
|
Non-cash items not adjusted in computing
operating cash flow:
|
|
|
|
- Cost of share-based payments
|
Note 12
|
(24.5)
|
(19.8)
|
- Difference between pension charge and cash
contributions
|
Note 12
|
2.7
|
0.5
|
- Other items
|
|
(1.2)
|
0.4
|
Operating cash flow
|
G 13
|
445.9
|
374.3
|
G 12.2 Free cash flow
Free cash flow is calculated as the net cash
flow in the year before the following items: strategic capital
expenditure, dividends paid to Company shareholders,
loans/investments in related parties, exceptional costs paid,
payment for acquisition of subsidiaries, proceeds received on
disposals, purchase of own shares under share buyback. Refer to G
12.1 and G 13 for the reconciliation of free cash flow to
GSCF.
G 13. Summary cash flow
The summary cash flow is prepared on a
different basis to the Group statement of cash flows and as such
the reconciling items between EBITDA and net debt movement may
differ from amounts presented in the Group statement of cash flows.
The summary cash flow details movements in net debt while the Group
statement of cash flow details movements in cash and cash
equivalents. The reconciliations of various reconciling items in
the summary cash flow to IFRS information are presented separately
in G 20 for a clear presentation of information.
|
Reference
|
2023
$m
|
2022
$m
|
EBITDA (pre-exceptional)
|
G 4
|
493.4
|
436.8
|
Movement in working capital
(pre-exceptional)
|
G 20(a)
|
(25.0)
|
(42.1)
|
Business sustaining capital
expenditure
|
G 20(b)
|
(22.5)
|
(20.4)
|
Operating cash flow
|
G 12.1
|
445.9
|
374.3
|
Net interest and tax paid
|
G 20(c)
|
(51.8)
|
(85.7)
|
Dividends received from related
parties
|
GSCF
|
32.0
|
15.3
|
Payments of lease liabilities
|
GSCF
|
(19.9)
|
(17.4)
|
Other outflows
|
G 20(d)
|
(16.4)
|
(3.5)
|
Free cash flow
|
|
389.8
|
283.0
|
Strategic capital expenditure
|
G 20(b)
|
(51.7)
|
(52.1)
|
Dividends paid to Company
shareholders
|
GSCF
|
(97.2)
|
(88.9)
|
Loans/investments in related parties
|
G 20(e)
|
67.8
|
(19.2)
|
Purchase of own shares under share
buyback
|
G 20(f)
|
(108.7)
|
(182.8)
|
Exceptional cash paid
|
G 20(g)
|
(13.5)
|
(22.4)
|
Proceeds from sale of property, plant and
equipment
|
GSCF
|
-
|
3.6
|
Acquisitions/disposals
|
G 20(h)
|
59.8
|
279.0
|
Net cash flow
|
|
246.3
|
200.2
|
Exchange translation
|
|
(5.5)
|
(8.6)
|
Cash acquired on acquisition
|
|
0.5
|
1.0
|
Net debt movement
|
|
241.3
|
192.6
|
Opening net debt
|
|
(490.0)
|
(682.6)
|
Closing net debt
|
Note 9
|
(248.7)
|
(490.0)
|
G 14. Operating cash conversion
Operating cash conversion is defined as
Operating Cash Flow divided by EBITDA (pre-exceptional). Cash
conversion is a measure of the Group's ability to convert adjusted
trading profits into cash and is an important metric in the Group's
working capital management programme. The measure is a key element
of Executive Director and senior management
remuneration.
G 15. Effective tax rate
The effective tax rate is defined as the
pre-exceptional income tax charge divided by the profit before tax
less share of results of joint
ventures.
|
Reference
|
2023
$m
|
2022
$m
|
Profit before tax - continuing
operations
|
GIS
|
392.4
|
237.4
|
Exceptional (credit)/charge
|
GIS
|
(47.8)
|
43.7
|
Profit before tax (pre-exceptional) -
continuing operations
|
GIS
|
344.6
|
281.1
|
Less share of results of joint ventures
(pre-exceptional)
|
GIS
|
(12.5)
|
(16.3)
|
|
|
332.1
|
264.8
|
Income tax
|
GIS
|
44.7
|
27.1
|
Exceptional tax credit
|
GIS
|
1.8
|
6.0
|
Income tax (pre-exceptional)
|
GIS
|
46.5
|
33.1
|
Effective tax rate
|
|
14.0%
|
12.5%
|
G 16. Dividend payout ratio
Dividend payout ratio is defined as the US
Dollar equivalent annual dividend per ordinary share divided by the
Adjusted EPS. US Dollar equivalent dividend is based on the actual
dividend recommendation/payment in Euro, retranslated to US Dollar
at the average exchange rate in the year. The dividend payout ratio
provides an indication of the value returned to shareholders
relative to the Group's total earnings.
|
Reference
|
2023
|
2022
|
Adjusted EPS
|
G 7.2
|
$
131.37c
|
$ 109.57c
|
Dividend recommended/paid per ordinary share in
Euro
Equivalent US Dollar dividend translated at
average rate for the year
|
|
€
35.43c
$
38.32c
|
€ 32.21c
$ 33.93c
|
Dividend payout ratio
|
|
29.2%
|
31.0%
|
G 17. Total shareholder return ("TSR")
TSR represents the change in the capital value
of a listed quoted company over a period, plus dividends
reinvested, expressed as a plus or minus percentage of the opening
value. TSR is one of the performance conditions in Glanbia's
Long-term Incentive Plan.
G 18. Exceptional items
The definition of exceptional items and the
analysis of exceptional items is disclosed in note 2 of the
published financial statements and note 4 of the financial
statements respectively.
G 19. Constant currency
While the Group reports its results in US
Dollar, it generates a proportion of its earnings in currencies
other than US Dollar, in particular Euro. 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 year-on-year change, the results for the prior
year are retranslated using the average exchange rates for the
current year and compared to the current year reported numbers. The
principal average exchange rates used to translate results for 2023
and 2022 are outlined in note 1 of the financial
statements.
G 20. Cash flow items
This section presents reconciliations of
various reconciling items in the summary cash flow (G 13) to IFRS
information.
(a) Movement in working capital
|
Reference
|
2023
$m
|
2022
$m
|
Movement in working capital
|
|
(47.7)
|
(60.9)
|
Net write down of inventories
(pre-exceptional)
|
Note 12
|
18.4
|
14.3
|
Non-cash movement in allowance for impairment
of receivables
|
Note 12
|
(3.8)
|
0.4
|
Non-cash movement in provisions
|
Note 12
|
7.4
|
1.0
|
Non-cash movement on cross currency
swaps
|
Note 12
|
0.7
|
2.7
|
Other reconciling items
|
|
-
|
0.4
|
Movement in working capital
(pre-exceptional)
|
G 13
|
(25.0)
|
(42.1)
|
(b) Capital expenditure
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.
|
Reference
|
2023
$m
|
2022
$m
|
Business sustaining capital
expenditure
|
G 13
|
(22.5)
|
(20.4)
|
Strategic capital expenditure
|
G 13
|
(51.7)
|
(52.1)
|
Total capital expenditure
|
|
(74.2)
|
(72.5)
|
Reconciliation of capital expenditure to
GSCF:
|
Reference
|
2023
$m
|
2022
$m
|
Purchase of property, plant and
equipment
|
GSCF
|
(42.0)
|
(33.4)
|
Purchase of intangible assets
|
GSCF
|
(32.2)
|
(39.1)
|
Total capital expenditure per the
GSCF
|
|
(74.2)
|
(72.5)
|
(c) Net interest and tax paid
|
Reference
|
2023
$m
|
2022
$m
|
Interest received
|
GSCF
|
10.7
|
1.6
|
Interest paid (including interest expense on
lease liabilities)
|
GSCF
|
(22.0)
|
(24.4)
|
Tax paid
|
GSCF
|
(40.5)
|
(62.9)
|
Net interest and tax paid
|
G 13
|
(51.8)
|
(85.7)
|
(d) Other inflows/(outflows)
|
Reference
|
2023
$m
|
2022
$m
|
Cost of share-based payments
|
Note 12
|
24.5
|
19.8
|
Difference between pension charge and cash
contributions
|
Note 12
|
(2.7)
|
(0.5)
|
Loss on disposal of property, plant and
equipment
|
Note 12
|
1.2
|
0.4
|
Purchase of own shares by Employee Share
(Scheme) Trust
|
|
(39.4)
|
(24.6)
|
Proceeds from disposals/redemption of FVOCI
financial assets
|
GSCF
|
-
|
0.4
|
Proceeds on sale of shares held by
subsidiary
|
GSCF
|
-
|
1.8
|
Non-cash movement on disposal of
leases
|
Note 12
|
-
|
(0.4)
|
Other reconciling items
|
|
-
|
(0.4)
|
Total other outflows
|
G 13
|
(16.4)
|
(3.5)
|
(e) Loans/investments in related parties
|
Reference
|
2023
$m
|
2022
$m
|
Loans advanced to Glanbia Cheese*
|
GSCF
|
(3.5)
|
(49.5)
|
Proceeds on repayment of loans advanced to
Glanbia Cheese
|
GSCF
|
71.3
|
-
|
Proceeds on repayments of loans advanced to
Tirlán Ltd
|
GSCF
|
-
|
30.3
|
Total loans/investments in related
parties
|
G 13
|
67.8
|
(19.2)
|
*
|
Comprised Glanbia Cheese Limited and Glanbia
Cheese EU Limited (collectively referred to as "Glanbia Cheese")
which are now named Leprino Foods Limited and Leprino Foods EU
Limited respectively (collectively referred to as "Leprino
Foods").
|
(f) Purchase of own shares
|
Reference
|
2023
$m
|
2022
$m
|
Purchase of own shares under share
buyback
|
G 13
|
(108.7)
|
(182.8)
|
Purchase of own shares by Employee Share
(Scheme) Trust
|
G 20(d)
|
(39.4)
|
(24.6)
|
Total purchase of own shares
|
GSCF
|
(148.1)
|
(207.4)
|
(g) Exceptional cash paid
|
Reference
|
2023
$m
|
2022
$m
|
Cash outflow related to exceptional items -
operating activities
|
GSCF
|
(11.8)
|
(13.6)
|
Cash outflow related to exceptional items -
investing activities
|
GSCF
|
(1.7)
|
(8.8)
|
Total exceptional cash paid
|
G 13
|
(13.5)
|
(22.4)
|
(h) Acquisitions/disposals
|
Reference
|
2023
$m
|
2022
$m
|
Proceeds from disposal of Glanbia Cheese
(exceptional)
|
GSCF
|
123.4
|
-
|
Proceeds from disposal of assets and
liabilities held for sale (exceptional)
|
GSCF
|
8.6
|
-
|
Proceeds from disposal of Tirlán Ltd
|
GSCF
|
-
|
339.3
|
Payment for acquisition of
subsidiaries
|
GSCF
|
(71.9)
|
(60.3)
|
Payment for acquisition of NCI
|
GSCF
|
(0.3)
|
-
|
Total acquisitions/disposals
|
G 13
|
59.8
|
279.0
|