FIRST QUARTER 2024 INTERIM
MANAGEMENT STATEMENT
Continued momentum in first
quarter, full year guidance reiterated
01 May 2024 - Glanbia plc, the Better
Nutrition company ("Glanbia", the 'Group', the 'Company' or the
'plc'), is issuing this Interim Management Statement for the three
month period ended 30 March 2024 ("first quarter" or "Q1
2024"). This statement is issued in
conjunction with the plc's Annual General Meeting ("AGM") which is
being held today.
Highlights
·
Q1 2024 Group performance in line with
expectations;
·
Volume growth of 1.5% offset by a price decline of
-6.9%, driven largely by dairy market pricing, resulting in Group
revenue for the period declining -5.5% on a constant currency and
pro-forma basis;
·
Glanbia Performance Nutrition ("GPN"):
o Like-for-like ("LFL") revenue declined by -1.9% reflecting
volume growth of 1.4% and a price decline of -3.3%;
o Optimum
Nutrition continues to strengthen its leadership position and
delivered strong volume growth in the quarter, supported by
increased brand investment;
·
Glanbia Nutritional Solutions ("NS"):
o LFL
revenue declined -1.7% on a pro-forma
basis, reflecting volume growth of
3.8% and a price decline
of -5.5%;
o Volume
trends continue to improve with strong growth in the premix
solutions business in the quarter. Pricing
decline driven largely by dairy market pricing;
·
Continued progress on the strategic agenda with
the acquisition of Flavor Producers, a leading US flavour platform
providing flavours and extracts to the food and beverage
industries, for $300 million plus potential deferred
consideration;
·
€100 million share buyback on-going with €29.8
million of €50 million first tranche bought in the year-to-date;
and
·
Reiterating full year guidance of 5% to 8% growth
in adjusted EPS[1].
Commenting today Hugh McGuire, Chief Executive Officer,
said:
"I am pleased to report that Glanbia
delivered a good performance in the first quarter, which was driven
by the continued strong global demand for our Better Nutrition
brands and ingredients.
Consistent with our strategy to
acquire complementary businesses to grow our Better Nutrition
platforms, we recently completed the acquisition of Flavor
Producers. This acquisition significantly expands our flavours
offering and brings new capabilities in the attractive and growing
natural and organic flavours market, aligned with long term
consumer trends.
With the first quarter having
progressed as planned, we reiterate our full year guidance of 5% to
8% growth in adjusted Earnings Per Share, which will be driven by a
strong operating performance across both GPN and NS."
2024
Outlook
Based on the current market
environment and expectations for the remainder of the year, the
Group reiterates its guidance and expects to deliver adjusted EPS
growth of 5% to 8% constant currency in 2024.
Summary revenue progression (all commentary is on a constant
currency basis)
As announced on 16 August 2023, the
Group has amended the commercial arrangements associated with its
US joint venture effective 1 January 2024. Commentary on revenue
for the Glanbia Nutritionals segment and total wholly-owned
business presented in this announcement is on a pro-forma basis as
if the terms of this amendment were effective from the beginning of
2023.
|
Summary of Q1 2024 revenue
progression versus prior year
|
|
Constant currency
movement
|
|
|
Volume
|
Price
|
Like-for-like
|
Acquisition /
Disposals
|
Total constant
currency
|
Total
reported
currency
|
Glanbia Performance Nutrition
|
1.4%
|
(3.3%)
|
(1.9%)
|
-
|
(1.9%)
|
(1.6%)
|
Glanbia Nutritionals
|
1.7%
|
(10.2%)
|
(8.5%)
|
(0.3%)
|
(8.8%)
|
(8.9%)
|
Nutritional
Solutions
|
3.8%
|
(5.5%)
|
(1.7%)
|
(0.6%)
|
(2.3%)
|
(2.5%)
|
US Cheese
|
0.0%
|
(14.3%)
|
(14.3%)
|
-
|
(14.3%)
|
(14.3%)
|
Total wholly-owned businesses
|
1.5%
|
(6.9%)
|
(5.4%)
|
(0.1%)
|
(5.5%)
|
(5.4%)
|
In the three months ended 30 March
2024, wholly-owned revenue declined 5.5% on a constant currency
basis (down 5.4% reported) compared to the same period in 2023. The
main drivers of the revenue decline, on a constant currency basis,
were a volume increase of 1.5%, a price decline of 6.9% and a
negative 0.1% net impact of acquisitions and disposals.
Glanbia Performance Nutrition
GPN revenue decreased by 1.9% in the
first three months of 2024. Volume growth of 1.4% was offset by a
price decline of 3.3%.
Overall momentum continued through
the period, with Optimum Nutrition, Isopure and think! delivering
good volume growth, partly offset by a decline in SlimFast. Pricing
was negative largely as a result of planned promotional activity in
the period. Optimum Nutrition, GPN's flagship global brand which
represents over 60% of GPN revenue, experienced strong volume
growth. The brand continues to strengthen its leadership position
supported by increased brand investment and marketing activation
including the "Unlock More You" campaign and new brand partnerships
across key markets.
GPN Americas revenue declined by 5.1%
in the period with volume growth in performance nutrition and
lifestyle offset by a decline in weight management. Optimum
Nutrition continued its strong momentum and delivered US
consumption[2] in line with a strong
comparative period, with some weakness in the Specialty channel
offset by good growth in other channels. Trends in the healthy
lifestyle portfolio continued to be robust with US
consumption2 growth of 7.5%. The SlimFast
brand continued to be impacted by headwinds in the diet
category.
GPN International revenue grew by
4.7% in the period, driven by good volume growth. Optimum Nutrition
continues to gain traction with consumers in key markets, supported
by higher levels of marketing investment and the continued
development of in-market capabilities.
Glanbia Nutritionals
GN revenue declined 8.8% in the
period. This was driven by a 1.7% increase in volume, a 10.2%
decrease in price, and a decrease of 0.3% driven by the net impact
of acquisitions and disposals.
Nutritional Solutions
NS revenue declined by 2.3% in the
period. This was driven by a 3.8% increase in volume, a 5.5%
decrease in price, and a decrease of 0.6% from the net impact of
acquisitions and disposals. The volume growth was driven by a
strong performance in the premix solutions business, partly offset
by reduced volumes in dairy solutions due to the timing of customer
offtakes. The price decline was largely driven by the decline in
dairy market pricing.
Acquisition of Flavor Producers
On 26 April 2024, Glanbia completed
its acquisition of Flavor Producers, LLC ("Flavor Producers") for
an initial consideration of $300 million, with an additional
potential deferred payment of up to $55 million conditional on
performance in 2024. Flavor Producers is a
leading flavour platform in the US, providing flavours and extracts
to the food and beverage industries, with a focus on organic and
natural ingredients.
The transaction is consistent with
Glanbia's strategy of acquiring complementary businesses to grow
its Better Nutrition platforms. Flavor Producers significantly
expands NS's flavours offering, bringing new capabilities in the
attractive and growing natural and organic flavours market which
are aligned with long-term consumer trends.
US
Cheese
US Cheese revenue declined by 14.3%
in the period, with flat volumes and a 14.3% decline in pricing,
which was aligned to the lower year-on-year cheese market
pricing.
Share buyback
As announced on 28 February 2024, the
Group has commenced an initial €50 million share buyback programme
under a €100 million share buyback authority. Between 28 February
2024 and 30 March 2024, Glanbia deployed €17.8 million,
repurchasing 1,016,533 ordinary shares on Euronext Dublin at an
average price of €17.54. Year-to-date[3],
Glanbia has spent a total of €29.8 million on share
buybacks.
Financing
The Group's balance sheet remains in
a strong position. Glanbia's net debt at 30 March 2024 was
$289.4 million, a decrease of $315.4 million versus the net debt
position at the end of Q1 2023. At the end of the period the Group
had committed debt facilities of $1.3 billion.
Annual General Meeting
Glanbia is holding its AGM in person
at 11.00 am (BST) today at the Newpark Hotel, Kilkenny,
Ireland.
Board and Committee changes
Mr Pat Murphy will retire from the
Board of Directors of the Company at the conclusion of today's AGM.
The Board has approved the appointments of Kimberly Underhill and
Paul Duffy to the Nominations and Governance Committee on 1 May
2024.
Ends
Cautionary statement
This announcement contains
forward-looking statements. These statements have been made by the
Directors in good faith based on the information available to them
up to the time of their approval of this report. Due to the
inherent uncertainties, including both economic and business risk
factors underlying such forward-looking information, actual results
may differ materially from those expressed or implied by these
forward-looking statements. The Directors undertake no obligation
to update any forward-looking statements contained in this
announcement, whether as a result of new information, future
events, or otherwise.
IMS
conference call and webcast details
There will be an analysts' conference
call and webcast presentation to accompany this Interim Management
Statement at 8.00 a.m. (BST) today. Please access the webcast from
the Glanbia website at
https://www.glanbia.com/investors/results-and-events, where the
presentation can also be viewed or downloaded.
A replay of the call will be
available for 30 days from this afternoon. Please see the link
below to the Investor Relations section of the Glanbia plc website
for details:
https://www.glanbia.com/investors/results-centre
For
further information contact
Glanbia plc +353 (0)56 777
2200
Mark Garvey, Chief Financial
Officer
Liam Hennigan, Group Secretary &
Head of Investor
Relations:
+353 (0)86 046 8375
Martha Kavanagh, Director of
Corporate
Affairs:
+353 (0)87 646 2006