THIRD
QUARTER 2024 INTERIM MANAGEMENT STATEMENT
Continued momentum
in
third quarter,
full year
guidance reiterated
Announcing new
operating model
6 November 2024 - Glanbia plc, the Better Nutrition
company ("Glanbia" or the 'Group'), is issuing this Interim
Management Statement for the nine month period ended 5 October 2024
("the period" or "YTD Q3 2024").
Highlights1
· YTD Q3
2024 Group performance in line with expectations;
· Reiterating full year guidance of 5% to 8% growth in adjusted
EPS2;
· Group
revenue growth of 6.0%;
· Glanbia Performance Nutrition ("GPN") revenue growth of
+1.7%;
o Optimum Nutrition and Isopure continued their growth momentum,
delivering strong volume growth;
· Glanbia Nutritionals ("GN") - Nutritional Solutions ("NS")
revenue growth of +14.4% (7.2% of which related to acquisitions);
o Volume trends continue to improve with strong growth in premix
and protein solutions businesses;
· €100
million share buyback on-going with €88.6 million bought in the
year-to-date;
· Further €50 million buyback authorisation approved by the
Board to commence in early 2025; and
· As
part its on-going portfolio evolution, the Group is today
announcing a change in its operating model, separating its Glanbia
Nutritionals business into two new segments.
Commenting today Hugh McGuire,
Chief Executive Officer, said:
"Glanbia continued to deliver good momentum during
the third quarter, driven by revenue growth across our portfolio of
better nutrition brands and ingredients. Volume growth was driven
by our protein growth brands Optimum Nutrition and Isopure, as well
as premix and protein solutions.
Today, we are announcing the separation of our GN
business into two new segments - Health & Nutrition and Dairy
Nutrition. The new structure is designed to further streamline our
business, sharpen our focus on our end use markets, and position
ourselves for the next phase of growth. As part of this change in
our operating model, we are commencing a group wide transformation
programme which will allow us to fund and drive growth in our
business, supporting our ambition to maximise long-term value for
shareholders.
We are also announcing an additional €50 million
share buyback authorisation which reflects our strong cash flows
and balance sheet position further increasing our returns to
shareholders.
Looking ahead to the remainder of 2024, we will
continue to focus on delivering growth across our portfolio and we
are reiterating our full year guidance of 5% to 8% growth in
adjusted EPS."
1 Current period reported revenues are not comparable with those
of the prior period reported numbers as a result of the amendment
of commercial arrangements between Glanbia Nutritionals and its US
joint venture effective 1 January 2024, hence for the prior period,
pro-forma numbers are used for comparative purposes which includes
constant currency throughout. Revenue growth includes the impact of
the 53rd week.
2 Adjusted Earnings Per Share ("EPS") on a constant currency
basis.
Summary revenue progression (all
commentary is on a constant currency basis)
For comparability purposes, commentary on revenue for
the total Group and the GN segment presented in this announcement
is on a pro-forma basis reflecting the change in commercial
arrangements associated with the Group's US joint venture. Further
details of this change were published on 28 February 2024.
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Summary of YTD Q3 2024
revenue progression versus prior year
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Volume
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Price
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Like-for-like3
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53rd week
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Acquisition / Disposals
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Total constant
currency
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Glanbia Performance Nutrition
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3.2%
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(4.0%)
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(0.8%)
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2.5%
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-
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1.7%
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Glanbia Nutritionals
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2.0%
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1.6%
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3.6%
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3.0%
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3.4%
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10.0%
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Nutritional Solutions
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5.0%
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(0.9%)
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4.1%
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3.1%
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7.2%
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14.4%
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US
Cheese
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(0.7%)
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3.9%
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3.2%
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2.9%
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-
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6.1%
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Total wholly-owned businesses
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2.6%
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(1.1%)
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1.5%
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2.7%
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1.8%
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6.0%
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In the nine months ended 5 October 2024, wholly-owned
revenue increased 6.0% compared to the same period in 2023. The
main drivers of the revenue growth were a volume increase of 2.6%,
a price decrease of 1.1%, the positive impact of the 53rdweek of 2.7% and the net impact of acquisitions and
disposals of 1.8%.
GPN
GPN revenue increased by 1.7% which was driven by
volume growth of 3.2%, a price decline of 4.0% and the positive
impact of the 53rdweek of 2.5%.
Overall momentum continued through the period, with
volume growth particularly strong across Optimum Nutrition and
Isopure, partly offset by a decline in other portfolio brands.
Pricing was negative largely as a result of tactical price
reductions and promotional activity. Optimum Nutrition and Isopure
delivered double digit volume growth.
GPN Americas revenue was broadly in line with the
prior year as growth in performance nutrition and healthy lifestyle
was offset by a decline in weight management. Optimum Nutrition
continued its strong momentum and delivered US
consumption4growth of 1.1% with strong
growth in most channels, offset by some weakness in the Specialty
channel. Trends in the healthy lifestyle portfolio continued to be
robust with US consumption4growth of
1.2%.
GPN International revenue grew by 4.7% driven by
strong volume growth in the Optimum Nutrition brand across key
priority markets.
GN
GN revenue increased by 10.0%, driven by a 2.0%
increase in volume, a 1.6% increase in price, an increase of 3.0%
driven by the impact of the 53rdweek and an
increase of 3.4% driven by the net impact of acquisitions and
disposals.
3 Like-for-like revenue change represents the revenue
increase/(decrease) period-on-period, excluding the incremental
revenue contributions from current period and prior period
acquisitions and disposals and the impact of a 53rd
week, on a pro-forma and constant currency basis.
4 Consumption growth is US measured channels and includes
Online, FDMC (Food, Drug, Mass, Club) and Specialty channels. Data
compiled from published external sources and Glanbia estimates for
the 13 week period to 5 October 2024.
Nutritional Solutions ("NS")
NS revenue increased by 14.4%, which was driven by a
5.0% increase in volume, a 0.9% decrease in price, an increase of
3.1% from the impact of the 53rd week and a 7.2% increase from the
net impact of acquisitions and disposals. Volume growth was
predominantly driven by a strong performance in the premix
solutions and protein businesses. Price declines were driven
primarily by lower dairy market pricing and reduced input costs in
the first half of the year which reversed in the third quarter. The
Flavor Producers acquisition, which was completed in April 2024, is
performing well.
US Cheese
US Cheese revenue increased by 6.1%, driven by a 0.7%
decrease in volume, a 3.9% increase in price as a result of
pass-through pricing and an increase of 2.9% driven by the impact
of the 53rdweek.
Strategic updates
The Group is today announcing its intention to create
a new operating model, separating its GN business into two new
segments - Health & Nutrition and Dairy Nutrition. The Health
& Nutrition segment will primarily incorporate the premix
solutions and flavours platforms with the Dairy Nutrition segment
focusing on cheese and dairy ingredients and will comprise the
portfolios of protein solutions (currently in NS) and US Cheese as
well as being the commercial partner for the Group's joint venture
MWC-Southwest Holdings LLC. The new structure is designed to
further streamline the business, increase focus on end use markets
and to provide greater insight into Glanbia's value drivers and
growth opportunities. The Group expects the new operating model to
be implemented during FY 2025 and further details will be provided
in early 2025.
In order to maximise the benefit of this operating
model change, Glanbia is commencing a group wide transformation
programme designed to fund and enable the next phase of growth. The
programme will focus on identifying opportunities to enhance
productivity and drive efficiencies across operations, accelerating
digital transformation and ensuring the Group is well positioned to
capitalise on future market growth opportunities.
Financing
The Group's balance sheet remains in a strong
position. The Group's net debt at 5 October 2024 was $619.7
million, an increase of $284.8 million versus prior year and a
reduction of $25.7 million versus half year 2024. The Group has
committed debt facilities of $1.3 billion.
Share buyback
On 14 August 2024, the Group commenced the second €50
million tranche of a €100 million share buyback authority
originally announced on 28 February 2024. Between 14 August 2024
and 5 October 2024, €27.7 million was deployed repurchasing
1,747,776 ordinary shares on Euronext Dublin at an average price of
€15.84. The Group has spent a total of €88.6 million on share
buybacks year-to-date5.
Today, Glanbia is announcing that its Board has
approved a further €50 million share buyback authority, to commence
in early 2025, reflecting the strong capital position of the
Group.
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%
in 2024.
Ends
5 Year-to-date to 4 November 2024
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 8.30 a.m. (GMT) today. Please access the webcast from the
Glanbia website at https://www.glanbia.com/investors/financial-calendar,
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/financial-calendar
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For further information
contact
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Glanbia plc
+353 (0)56 777 2200
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Mark
Garvey, Chief Financial Officer
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Liam
Hennigan, Group Secretary & Head of Investor Relations:
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+353 (0)86 046 8375
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Martha
Kavanagh, Director of Corporate Affairs:
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+353 (0)87 646 2006
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