REG - Glanbia PLC - First Quarter 2024 IMS

GlanbiaAnnouncement

01/05/2024 07:00

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RNS Number : 7024M  Glanbia PLC  01 May 2024

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 
(#_ftn1) .

 

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  (#_ftn2) 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  (#_ftn3) , 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

 

 1  (#_ftnref1) Adjusted Earnings Per Share ("EPS") on a constant currency
basis

 2  (#_ftnref2) 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 to 23 March 2024

 3  (#_ftnref3) Year-to-date to 26 April 2024

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