TIDMGLB
RNS Number : 3254D
Glanbia PLC
26 April 2017
FIRST QUARTER 2017 INTERIM MANAGEMENT STATEMENT
Glanbia Q1 2017 up date - strategic initiatives on track and
full year guidance reiterated
26 April 2017 - Glanbia plc, the global nutrition group
('Glanbia', the 'Group' or the "plc"), is issuing this Interim
Management Statement for the three month period ended 1 April 2017.
This statement is issued in conjunction with the plc's Annual
General Meeting which is being held today.
Commenting today, Siobhán Talbot, Group Managing Director
said:
"Glanbia delivered good revenue growth in the first three months
of 2017. Glanbia Nutritionals had a good performance and was the
main driver of growth. Glanbia Performance Nutrition delivered in
line with expectations, as a strong performance in non U.S. markets
countered some challenges in the U.S. market. The outlook for the
remainder of 2017 is positive and we reiterate our full year
guidance of 7% to 10% growth in adjusted earnings per share,
constant currency, from the continuing Group (pro-forma*) with
growth weighted to the second half of the year.
Our strategic initiatives remain on track; we have completed the
acquisition of Body & Fit, have signed binding legal
agreements, subject to certain approvals, to sell 60% of the Dairy
Ireland segment to Glanbia Co-operative Society Limited and
continue to plan with our partners in the US for the creation of a
new joint venture to build a scale cheese and whey plant in the
State of Michigan."
Performance update
In the three months ended 1 April 2017, wholly owned revenue
increased 7.0% on a reported basis and was up 4.7% on a constant
currency basis when compared to the same period in 2016. This was
driven by pricing growth of 2.1% mainly as a result of improved
dairy markets versus prior year, volume growth of 1.7% and a
contribution from acquisitions of 0.9%. Total Group Revenue,
including Glanbia's share of Joint Ventures and Associates,
increased 9.6% on a reported basis and 7.7% on a constant currency
basis.
Glanbia Performance Nutrition (constant currency**)
Glanbia Performance Nutrition ('GPN') delivered in line with
expectations in the first three months of the year. Revenues
decreased marginally by 0.2%, as a 0.3% increase in pricing and
2.6% growth from the acquisition of Amazing Grass was offset by a
3.1% volume decrease. The overall revenue movement reflected
branded revenue growth offset by a continued decline in contract
business. On a like-for-like basis first quarter comparatives in
the U.S. impacted performance however this was countered by strong
year-on-year growth in non US markets. The Amazing Grass
acquisition performed in line with expectations in the period,
while GPN closed the Body & Fit acquisition on 31 March 2017.
Existing management teams will remain with the acquired businesses
and integration will largely be related to installing Glanbia
support systems. GPN remains focused on growth through innovation
and the recently launched thinkThin Super-fruit bars and ON Cake
Bites are exciting additions to the portfolio, both of which are
performing well.
The full year 2017 outlook for GPN is good, with like-for-like
branded revenue growth expected to be in the mid-single digit
range, driven by volume growth weighted towards the second half of
the year. Full year EBITA margins are expected to be in the mid
teen range albeit below 2016 levels as input cost increases are
partly offset by price, mix and efficiency improvements.
Glanbia Nutritionals (constant currency**)
Glanbia Nutritionals ('GN') delivered a good performance in the
first three months of 2017 with revenue growth of 10.3%. This was
driven by a price increase of 7.6%, mainly as a result of improved
dairy markets, versus prior year and volume growth of 2.7%,
primarily driven by Nutritional Solutions.
Nutritional Solutions delivered price and volume increases in
the period as sales growth of value added systems was broad based
across a range of formats and sectors. Product mix continues to
improve within the Nutritional Solutions portfolio increasing
exposure to higher growth end markets.
US Cheese performed in line with expectations in the first
quarter of 2017. Demand remains solid and average cheese prices
were higher in the period versus prior year. Operationally the
plants performed well.
The full year 2017 outlook for GN is good. Revenue and EBITA
growth is expected to be driven by the continued growth of
Nutritional Solutions and improved dairy markets.
Dairy Ireland
Dairy Ireland delivered a satisfactory performance in the first
three months of the year despite the challenges of higher input
costs. Revenue in the period increased by 2.3% which was driven by
a volume increase of 7.2%, offset by a price decline of 4.9%.
Agribusiness delivered improved volumes from sales of animal
feed and fertiliser which was offset somewhat by commodity related
price declines. Consumer Foods delivered an improvement in overall
product mix as continued growth in value-added-milks offset a
reduction in private label business.
Joint Ventures & Associates (constant currency**)
Revenues from Joint Ventures & Associates ("JVAs") increased
by 19.2% in the first three months of 2017 versus prior year.
Pricing increased by 17.7% as a result of improved dairy markets.
Volume increased by 1.5% as growth in Glanbia Ingredients Ireland
more than offset some volume declines in other JVAs.
Good progress has been made on strategic developments within
JVAs. The project to expand production capacity by 25% at the South
West Cheese facility in the U.S. is progressing to plan with
commissioning expected in 2018. In addition the proposed creation
of a new Joint Venture in Michigan, US to build a large scale
cheese facility is on track.
Financing
Glanbia's net debt at 1 April 2017 was EUR735 million, which
represents an increase of EUR297 million versus the net debt
position at year end 2016. This was primarily driven by the
acquisitions of Amazing Grass and Body & Fit which closed in
the period, and seasonal working capital requirements. Total 2017
capital expenditure is expected to be approximately EUR90 million
to EUR100 million.
Update on Dairy Ireland sale process
Today, Glanbia has announced that it has signed binding
transaction agreements with Glanbia Co-operative Society Limited
(the "Society") to sell to the Society a 60% interest in the Dairy
Ireland segment and related associate businesses (the "Proposed
Transaction"). The Proposed Transaction is subject to shareholder
approvals by both the Society and Glanbia which are likely to take
place in May 2017. A separate announcement has been published today
which outlines the key terms of the Proposed Transaction. A
Circular outlining the Proposed Transaction will be posted shortly
to all Glanbia shareholders on the register at 25 April 2017. If
approved by the shareholders of Glanbia and the Society and
remaining pre completion requirements are met, Glanbia expects the
Proposed Transaction to complete by mid-year. The Dairy Ireland
transaction is expected to be 5%-7% adjusted earnings per share
dilutive on a full-year basis.
Full year outlook
Glanbia reiterates its guidance that on a pro-forma* basis
adjusted earnings per share for the continuing Group is expected to
grow between 7% - 10% constant currency for full year 2017 with
growth evenly balanced across Glanbia Performance Nutrition and
Glanbia Nutritionals.
* Pro-forma adjusted EPS of the continuing Group has been
provided assuming the Dairy Ireland transaction took place at the
start of FY 2016.
** To arrive at the Constant Currency Change, the average FX
rate for the current period is applied to the relevant reported
result from the same period in the prior year. The average Euro US
Dollar FX rate for Q1 2017 was EUR1 = $1.07 (Q1 2016: EUR1 =
$1.10).
Ends
Cautionary statement
This announcement contains forward-looking statements. These
statements have been made by the Directors in good faith based on
the information available to them up to the time of their approval
of this report. Due to the inherent uncertainties, including both
economic and business risk factors underlying such forward looking
information, actual results may differ materially from those
expressed or implied by these forward-looking statements. The
Directors undertake no obligation to update any forward-looking
statements contained in this announcement, whether as a result of
new information, future events, or otherwise.
IMS conference call dial-in details
There will be an analysts' conference call to accompany this
Interim Management Statement at 8.30 a.m. (GMT) today.
To listen to the call, please dial-in using the following
numbers:
Ireland UK Europe USA Pass code
-------- --------- ------------ -------- ----------
01 246 0330 336 +44 330 336 719 325
5621 9411 9411 2385 3209114
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A replay of the call will be available for 30 days from this
afternoon. Please see the link below to the Investor Relations
section of the Glanbia plc website for details:
http://www.glanbia.com/investors/results-centre
For further information contact
Glanbia plc +353 56 777 2200
Mark Garvey, Group Finance
Director
Liam Hennigan, Head of Investor
Relations: +353 86 046 8375
Mark Garrett, Director of
Communications & Public Affairs: +353 86 601 9655
This information is provided by RNS
The company news service from the London Stock Exchange
END
QRFZMGZDNKFGNZM
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