REG - Glanbia PLC - Glanbia 2024 Half Year Results
14/08/2024 07:00
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RNS Number : 3355A Glanbia PLC 14 August 2024
Glanbia plc
2024 Half Year
Results
Half year results for the six month period ended
29 June 2024
14 August 2024
Glanbia Half Year 2024 results
Strong performance with adjusted EPS(1) growth of 12.4%; full year guidance
reiterated
14 August 2024 - Glanbia plc ("Glanbia", the "Group", the "Company", the
"plc"), the 'Better Nutrition company', announces its half year results for
the six month period ended 29 June 2024 ("Half Year 2024" or "HY 2024").
Highlights(2):
· Group Financial Performance:
o Adjusted EPS1 of 68.20 $cent (HY 2023: 60.78 $cent) representing growth of
12.4% on a constant currency basis (up 12.2% reported);
o Group revenues(2) of $1.82 billion (HY 2023: $1.84 billion) representing a
decrease of 1.1% on a constant currency basis with volume +1.8%, pricing -4.0%
and +1.1% increase from acquisitions;
o Group EBITDA pre-exceptional of $261.6 million (HY 2023: $232.2 million),
an increase of 12.8% constant currency (up 12.7% reported);
o Group EBITDA pre-exceptional margin(2) of 14.4% (HY 2023: 12.6%), an
increase of 180bps;
o Basic EPS of 54.71 $cent (HY 2023: 71.90 $cent);
· Glanbia Performance Nutrition ("GPN"):
o Volume growth of +3.1% with pricing -3.9% resulting in a 0.8% revenue
decrease on a like-for-like ("LFL") basis;
o Optimum Nutrition delivered LFL revenue growth of +7.7% driven by volume
growth of 11.8%;
o EBITDA margin of 17.7% (HY 2023: 13.5%), an increase of 420bps;
· Glanbia Nutritionals - Nutritional Solutions ("GN NS"):
o Volume growth of +3.1%, driven by good volume growth in the premix
solutions business, with pricing -3.9% resulting in a 0.8% revenue decrease on
a LFL basis;
o EBITDA margin(2) of 17.7% (HY 2023: 18.3%), a decrease of 60bps;
· Capital allocation:
o Interim dividend increased by 10% to 15.64 €cent per share;
o Returned €50 million to shareholders in the period as part of a €100
million share buyback authority. Today, the Group is launching a buyback
programme for the remaining €50 million under this authority;
o Strong balance sheet with net debt to adjusted EBITDA ratio of 1.22 times
(HY 2023: 0.99 times);
· 2024 Outlook:
o 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 strong performance in the
first half of the year with adjusted EPS growth of 12.4%. This was driven by
volume growth of 3.1% across both our Better Nutrition growth platforms.
Optimum Nutrition, our flagship global brand, continues to strengthen its
leadership position and delivered double-digit volume growth in the period,
supported by increased marketing investment.
Our earnings growth was driven by a strong performance in GPN, with volume
growth, earnings and margin reflecting strong consumer demand. NS's first half
performance was on track, led by good customer demand for premix and protein
solutions. Our strong operational and financial performance continues to
support our capital allocation framework, with the interim dividend increased
by 10% and €50 million returned to shareholders via share buybacks. Today we
are launching a further €50 million share buyback programme.
Looking ahead, we continue to focus on driving growth across our portfolio of
great brands and ingredients. The category trends remain positive, and with
the continued consumer and customer demand for our Better Nutrition brands and
ingredients we will see a sequential improvement in volumes across GPN and NS
in the second half of the year. Today we are reiterating our full year
guidance of 5% to 8% growth in adjusted EPS".
______________________________
1 Adjusted Earnings Per Share ("EPS") on a constant currency basis.
1 Current period reported revenues and EBITDA margin 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.
Refer to page 7 for details and refer to Appendix 1 for the reconciliation
between reported and pro-forma numbers.
US Joint Venture reporting and Group EBITDA
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 recognises
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 impacts the
recognition and presentation of revenues and cost of sales from 2024 onwards
only.
The Group has also adopted EBITDA (earnings before interest, tax, depreciation
and amortisation) as a key performance measure from 2024. This aligns with
industry standards.
For comparability purposes, commentary on revenue and EBITDA margins for the
Glanbia Nutritionals segment and the Group total presented in this
announcement is on a pro-forma basis as if the terms of these amended
commercial arrangements were effective from the beginning of 2023. Refer to
Appendix 1 for the reconciliation between 2023 reported and pro-forma numbers.
Summary financials(1)
2024 half year results Constant
HY 2024 HY 2023 Change currency change(2)
$m
Income Statement
Revenue 1,815.6 1,836.8 (1.2%) (1.1%)
EBITDA 261.6 232.2 12.7% 12.8%
EBITDA margin 14.4% 12.6% +180bps +180bps
Joint Ventures
Share of profit after tax (pre-exceptional) 3.7 6.5
Profit after tax 143.3 193.4
Adjusted EPS 68.20c 60.78c 12.2% 12.4%
Basic EPS 54.71c 71.90c (23.9%) (24.3%)
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 40.
2. To arrive at the constant currency change, the average exchange rate
for the current period is applied to the relevant result from the same period
in the prior year. The average US dollar euro exchange rate for HY 2024 was $1
= €0.9247 (HY 2023: $1 = €0.9253). All movements in the above table are on
a pre-exceptional basis.
HY 2024 results summary (pre-exceptional)
Revenue progression HY 2024 versus HY 2023
Constant Currency Movement
Volume Price LFL Acquisitions / (disposals) Total constant currency
Glanbia Performance Nutrition 3.1% (3.9%) (0.8%) - (0.8%)
Glanbia Nutritionals 0.6% (4.1%) (3.5%) 2.1% (1.4%)
Nutritional Solutions 3.1% (3.9%) (0.8%) 4.3% 3.5%
US Cheese (1.7%) (4.1%) (5.8%) - (5.8%)
Group Total 1.8% (4.0%) (2.2%) 1.1% (1.1%)
Revenue, EBITDA and Margin
HY 2024 HY 2023
$m Revenue EBITDA Margin % Revenue EBITDA Margin %
Glanbia Performance Nutrition 882.1 156.4 17.7% 888.9 120.2 13.5%
Glanbia Nutritionals 933.5 105.2 11.3% 947.9 112.0 11.8%
Nutritional Solutions 469.4 82.9 17.7% 455.1 83.3 18.3%
US Cheese 464.1 22.3 4.8% 492.8 28.7 5.8%
Group Total 1,815.6 261.6 14.4% 1,836.8 232.2 12.6%
2024 half year overview
Glanbia delivered a strong financial and operating performance in HY 2024.
Group revenue was $1,815.6 million (HY 2023: $1,836.8 million), down 1.1%
constant currency. Group EBITDA (before exceptional items) was $261.6 million
(HY 2023: $232.2 million) up 12.8% constant currency (up 12.7% reported).
Group profit after tax was $143.3 million (HY 2023: $193.4 million) down $51.1
million constant currency (down $50.1 million reported).
Adjusted EPS was 68.20 $cent (HY 2023: 60.78 $cent) up 12.4% constant currency
(up 12.2% reported).
Balance sheet and financing
Glanbia's net debt at 29 June 2024 was $645.4 million (HY 2023: $450.8
million) which represents an increase of $194.6 million driven largely by the
acquisition of Flavor Producers which closed in the second quarter of 2024.
Net debt to adjusted EBITDA was 1.22 times (HY 2023: 0.99 times). At the end
of the period the Group had committed debt facilities of $1.3 billion (HY
2023: $1.3 billion). Glanbia's ability to generate cash and its available debt
facilities ensure the Group has considerable capacity to finance future
investments.
Capital investment
Glanbia's total investment in capital expenditure (strategic and maintenance)
was $44.9 million in the first half of 2024 (HY 2023: $36.8 million).
Strategic investment totalled $30.3 million and included ongoing capacity
enhancement, business integrations, and IT investments to drive further
efficiencies in operations. Total capital expenditure for the year is expected
to be between $80 million and $90 million.
Dividend per share
The Board is recommending an interim dividend of 15.64 €cent per share (HY
2023: 14.22 €cent per share) representing a 10% increase on the prior year
interim dividend. Glanbia's overall dividend policy remains unchanged at a
target annual dividend payout ratio of between 25% and 35% of adjusted EPS.
The interim dividend will be paid on 4 October 2024 to shareholders on the
register of members as at 23 August 2024. Irish withholding tax will be
deducted at the standard rate where appropriate. The Company's primary
dividend payment currency remains Euro.
Share buyback
On 28 February 2024, the Group announced a €100 million share buyback
programme and immediately commenced €50 million of the announced buyback.
This initial €50 million programme was completed on 26 June 2024. Between 28
February 2024 and 26 June 2024, Glanbia deployed €50 million, repurchasing
2,785,366 ordinary shares on Euronext Dublin at an average price of €17.95.
Glanbia is announcing the commencement of the remaining €50 million share
buyback today and this is subject to a separate announcement published today.
Board update
In line with the Company's relationship agreement with Tirlán Co-operative
Society Limited, Gerard O'Brien and Thomas Phelan were appointed to the Board
of Glanbia with effect from 1 June 2024, in place of Patrick Murphy and
Brendan Hayes, who retired on 1 May 2024 and 31 May 2024, respectively.
Additionally, on 1 May 2024, Paul Duffy and Kimberly Underhill were appointed
as members to the Nomination and Governance Committee.
2024 Outlook
Today, the Group is reiterating its guidance for adjusted EPS growth of 5% to
8% in FY 2024 on a constant currency basis. This is expected to be driven by:
· GPN revenue growth of 2.0% to 5.0%;
· GPN EBITDA margins of 16.0% to 16.5%;
· GN NS volume growth of 3.0% to 5.0%; and
· GN NS EBITDA margins of 18.0% to 19.0%.
Glanbia also expects to deliver an operating cash flow conversion rate of 80%+
in FY 2024.
Half year 2024 operations review
(Commentary on percentage movements is on a constant currency basis
throughout)
Glanbia Performance Nutrition
$m HY 2024 HY 2023 Reported Constant
change currency change
Revenue 882.1 888.9 (0.8%) (0.8%)
EBITDA 156.4 120.2 30.1% 30.3%
EBITDA margin 17.7% 13.5%
· LFL revenue decline of 0.8% with volume +3.1% and pricing -3.9%.
· Optimum Nutrition, the number 1 brand in the sports nutrition
sector, delivered LFL revenue growth of 7.7% with volume growth of 11.8%.
· EBITDA margin of 17.7%, an increase of 420bps versus HY 2023.
GPN revenue decreased by 0.8% in HY 2024 versus prior year. This was driven by
a 3.1% increase in volume, offset by a price decrease of 3.9%. The volume
growth was largely driven by a strong performance from the Optimum Nutrition
brand and a good performance in the healthy lifestyle brand portfolio which
was primarily offset by volume declines in the SlimFast brand. Pricing was
negative largely as a result of planned promotional activity, some tactical
price reductions in the period and a strong comparative.
Optimum Nutrition, which represents 65% of GPN revenue, delivered revenue
growth of 7.7% driven by volume growth of 11.8% offset by planned promotions
which decreased price by 4.1%. The brand continues to have strong growth
momentum as it drives distribution and velocities. This was supported by
increased marketing investment versus prior year.
GPN EBITDA increased by 30.3% versus prior year to $156.4 million and EBITDA
margin increased by 420 basis points to 17.7%. This was largely driven by
lower input costs and continued focus on revenue growth management
initiatives.
Americas
GPN Americas revenue declined by 3.0% in HY 2024, with volume growth in
performance nutrition and healthy lifestyle brands offset by declines in the
weight management category. Optimum Nutrition continues to strengthen its
strong consumer position and delivered US measured consumption growth of
0.2%(1), building on a strong comparative period.
Trends in the healthy lifestyle portfolio remained robust, with US measured
consumption growth of 3.0%(1) across the think!, Isopure and Amazing Grass
brands against a strong comparative period. The SlimFast brand, which now
represents 7% of the GPN global portfolio, continued to be impacted by
headwinds in the weight management category.
International
GPN International, which represents 36% of GPN revenue, grew by 3.3% in HY
2024. This was driven by good volume growth in the Optimum Nutrition brand
across key priority markets, which was supported by increased marketing
investment.
Glanbia Nutritionals
HY 2024 HY 2023
$m - pre-exceptional Revenue EBITDA Margin % Revenue EBITDA Margin %
Nutritional Solutions 469.4 82.9 17.7% 455.1 83.3 18.3%
US Cheese 464.1 22.3 4.8% 492.8 28.7 5.8%
Total Glanbia Nutritionals 933.5 105.2 11.3% 947.9 112.0 11.8%
Nutritional Solutions
Change Constant
currency change
$m - pre-exceptional HY 2024 HY 2023
Revenue 469.4 455.1 3.1% 3.5%
EBITDA 82.9 83.3 (0.5%) (0.5%)
EBITDA margin 17.7% 18.3%
________________________
1 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 14 July 2024.
Nutritional Solutions (continued)
· LFL revenue decline of 0.8% on a pro-forma basis with volumes
+3.1% and pricing -3.9%.
· EBITDA margin of 17.7%, a decrease of 60 basis points versus HY
2023 on a pro-forma basis.
· Flavor Producers acquisition completed in April 2024. Integration
on track.
GN NS revenue increased by 3.5% in HY 2024. This was driven by a 3.1% increase
in volume, a 3.9% decline in price and a 4.3% increase driven by the impact of
acquisitions. The volume growth was driven largely by a strong performance in
the premix solutions business. The price decline was as a result of lower
dairy market pricing and reduced input costs.
The Flavor Producers acquisition, which was completed in April 2024,
significantly expands GN NS's flavours offering in the attractive and growing
natural and organic flavours market and is performing well.
GN NS EBITDA was $82.9 million, a 0.5% decline versus prior year. EBITDA
margins decreased by 60 basis points versus prior year to 17.7% as a result of
the impact of lower dairy pricing and business mix in the period.
US Cheese
$m - pre-exceptional HY 2024 HY 2023 Change Constant
currency change
Revenue 464.1 492.8 (5.8%) (5.8%)
EBITDA 22.3 28.7 (22.3%) (22.3%)
EBITDA margin 4.8% 5.8%
US Cheese revenue declined by 5.8% in HY 2024. This was driven by a 1.7%
decrease in volume and a 4.1% decline in pricing, which was aligned to lower
year-on-year market pricing.
US Cheese EBITDA decreased by 22.3% to $22.3 million as a result of lower
market pricing and lapping procurement benefits in prior year.
Joint Ventures (Glanbia share)
$m - pre-exceptional HY 2024 HY 2023 Change
Share of joint ventures' profit after tax 3.7 6.5 (2.8)
The Group's share of joint ventures' profit after tax pre‐exceptional items
decreased by $2.8 million to $3.7 million driven by higher input costs.
Appendix 1
The table below re-presents the reported and pro-forma revenue for FY 2023 and
HY 2023 to reflect the change in the Group's commercial arrangements between
Glanbia Nutritionals and its US joint venture as if the terms were effective
from the beginning of 2023. The impact is to decrease revenue; there is no
change to EBITDA. The table also provides EBITA by segment, in line with
previous reporting and EBITDA by segment, in line with current reporting. The
HY 2024 reported numbers are also provided below.
Pro-forma Revenue, EBITA, EBITDA and Margin*
$m HY 2024 HY 2023 FY 2023
Pro-forma Pro-forma
Reported Reported Adjustment Pro-forma Reported Adjustment Pro-forma
Revenue
Nutritional Solutions 469.4 525.5 (70.4) 455.1 1,008.5 (123.1) 885.4
US Cheese 464.1 1,357.0 (864.2) 492.8 2,621.3 (1,672.5) 948.8
Glanbia Nutritionals 933.5 1,882.5 (934.6) 947.9 3,629.8 (1,795.6) 1,834.2
Glanbia Performance Nutrition 882.1 888.9 - 888.9 1,795.6 - 1,795.6
Group Revenue 1,815.6 2,771.4 (934.6) 1,836.8 5,425.4 (1,795.6) 3,629.8
EBITA
Nutritional Solutions 66.1 67.8 - 67.8 126.2 - 126.2
US Cheese 16.6 23.0 - 23.0 42.4 - 42.4
Glanbia Nutritionals 82.7 90.8 - 90.8 168.6 - 168.6
Glanbia Performance Nutrition 143.8 107.8 - 107.8 255.4 - 255.4
Group EBITA 226.5 198.6 - 198.6 424.0 - 424.0
EBITA Margin
Nutritional Solutions 14.1% 12.9% +200 bps 14.9% 12.5% +180 bps 14.3%
US Cheese 3.6% 1.7% +300 bps 4.7% 1.6% +290 bps 4.5%
Glanbia Nutritionals 8.9% 4.8% +480 bps 9.6% 4.6% +460 bps 9.2%
Glanbia Performance Nutrition 16.3% 12.1% - 12.1% 14.2% - 14.2%
Group EBITA Margin 12.5% 7.2% +360 bps 10.8% 7.8% +390 bps 11.7%
Depreciation
Nutritional Solutions 16.8 15.5 - 15.5 31.1 - 31.1
US Cheese 5.7 5.7 - 5.7 11.4 - 11.4
Glanbia Nutritionals 22.5 21.2 - 21.2 42.5 - 42.5
Glanbia Performance Nutrition 12.6 12.4 - 12.4 26.9 - 26.9
Group Depreciation 35.1 33.6 - 33.6 69.4 - 69.4
EBITDA
Nutritional Solutions 82.9 83.3 - 83.3 157.3 - 157.3
US Cheese 22.3 28.7 - 28.7 53.8 - 53.8
Glanbia Nutritionals 105.2 112.0 - 112.0 211.1 - 211.1
Glanbia Performance Nutrition 156.4 120.2 - 120.2 282.3 - 282.3
Group EBITDA 261.6 232.2 - 232.2 493.4 - 493.4
EBITDA Margin
Nutritional Solutions 17.7% 15.9% +240 bps 18.3% 15.6% +220 bps 17.8%
US Cheese 4.8% 2.1% +370 bps 5.8% 2.1% +360 bps 5.7%
Glanbia Nutritionals 11.3% 5.9% +590 bps 11.8% 5.8% +570 bps 11.5%
Glanbia Performance Nutrition 17.7% 13.5% - 13.5% 15.7% - 15.7%
Group EBITDA Margin 14.4% 8.4% +420 bps 12.6% 9.1% +450 bps 13.6%
*EBITA and EBITDA references are on a pre-exceptional basis
Half Year 2024 Finance Review
Half year 2024 results summary pre-exceptional Constant Currency
$m HY 2024 HY 2023 Change Change
Revenue* 1,815.6 1,836.8 (1.2%) (1.1%)
EBITDA 261.6 232.2 12.7% 12.8%
EBITDA margin* 14.4% 12.6% +180bps +180bps
- Amortisation of intangible assets (38.9) (40.0)
- Depreciation of PPE & ROU Assets (35.1) (33.6)
- Net finance costs (10.4) (7.0)
- Share of results of Joint Ventures 3.7 6.5
- Income taxes (28.4) (21.2)
Profit for the period 152.5 136.9
Basic earnings per share 54.71c 71.90c (23.9%) (24.3%)
Adjusted earnings per share 68.20c 60.78c 12.2% 12.4%
Revenue
Revenue* decreased by 1.1% versus prior half year on a constant currency basis
to $1.82 billion. GPN revenues declined by 0.8% constant currency on prior
period driven by negative pricing of 3.9%, net of volume increase of 3.1%. GN
revenues* declined 1.4% constant currency on prior period driven by volume
increases of 0.6%, price decreases of 4.1% and M&A related increases of
2.1%.
EBITDA
EBITDA before exceptional items increased by 12.8% constant currency (12.7%
reported) to $261.6 million (HY 2023: $232.2 million), with EBITDA margin*
growth of 180 basis points to 14.4% (HY 2023: 12.6% pro-forma).
GPN pre-exceptional EBITDA increased by 30.3% constant currency (30.1%
reported) to $156.4 million (HY 2023: $120.2 million). GPN pre-exceptional
EBITDA margin increased by 420 basis points to 17.7% (HY 2023: 13.5%).
GN pre-exceptional EBITDA decreased by 6.1% constant currency (6.1% pro-forma)
to $105.2 million (HY 2023: $112.0 million). GN pre-exceptional EBITDA margin*
decreased by 50 basis points to 11.3% (HY 2023: 11.8% pro-forma).
Net finance costs
Net finance costs increased by $3.4 million to $10.4 million (HY 2023: $7.0
million). The increase was driven primarily by an increase in interest rates
on certain fixed-rate funding which was re-financed in late 2023. The Group's
average interest rate on a rolling 12 month basis to 29 June 2024 was 3.4% (HY
2023: 2.1%). Glanbia operates a policy of fixing a significant amount of its
interest exposure, with 90% of projected 2024 debt currently contracted at
fixed rates.
Share of results of Joint Ventures
The Group's pre-exceptional share of joint venture profits decreased by $2.8
million to $3.7 million (HY 2023: $6.5 million). The decrease was driven by
higher input costs. The share of results of joint ventures is stated after
tax.
Income taxes
The half year 2024 pre-exceptional tax charge increased by $7.2 million to
$28.4 million (HY 2023: $21.2 million). This represents an effective tax rate,
excluding joint ventures, of 16.0% (HY 2023: 14.0%) and is in line with
expectation. The Group currently expects that its effective tax rate for FY
2024 will be in the range of 15% to 17%.
* Current period reported revenues and EBITDA margin 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. Refer to Appendix 1 for the reconciliation
between reported and pro-forma numbers.
Exceptional items
Exceptional items incurred in the first half of 2024 resulted in a net
post-tax exceptional charge of $9.2m (HY 2023: gain $56.5m). Details of the
exceptional items incurred in the period are as follows:
$m HY 2024 HY 2023
Portfolio related reorganisation costs (note 1) (6.0) (0.7)
Acquisition and integration costs (note 2) (5.0) -
Pension related costs (note 3) (0.2) (1.2)
Net exceptional gain on disposal/exit of operations (note 4) - 57.8
Total (11.2) 55.9
Exceptional tax credit 2.0 0.6
Total exceptional (charge)/gain for the period (9.2) 56.5
1. Portfolio related reorganisation costs relates to expenditure resulting
from recent portfolio changes. Following divestment decisions related to
non-core businesses, the Group launched a programme in 2023 to realign
Group-wide support functions and optimise structures of the remaining
portfolio, to more efficiently support business operations and growth. This
multi-year strategic programme continues into 2024, with realisation of
benefits from 2025 onwards. Costs incurred to date relate to advisory fees and
people related costs.
2. Acquisition and integration costs relate to the transaction costs
associated with the Flavor Producers acquisition.
3. Pension related costs relate to the restructure of legacy defined
benefit pension schemes associated with the Group, which include costs related
to the ultimate wind up of these schemes, including professional fees, and a
further simplification of the schemes that remain with final wind up of
schemes targeted by the end of 2025.
4. Prior year net exceptional gain on disposal/exit of operations
primarily relates to the net gains on disposal of Leprino Foods (formerly
known as Glanbia Cheese) and a small US based bottling facility (Aseptic
Solutions) which was designated as held for sale at 31 December 2022. 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.
Profit after tax
Profit after tax for the half year was $143.3 million compared to $193.4
million in HY 2023, comprising pre-exceptional profit of $152.5 million (HY
2023: $136.9 million) and exceptional charge of $9.2 million (HY 2023: gain of
$56.5 million).
Earnings per share (EPS)
The decrease in basic EPS is largely due to the reduction in exceptional
profits from the prior year, as outlined above.
Adjusted EPS is a key performance indicator ("KPI") of the Group and a key
metric guided to the market and a key element of Executive Director and senior
management remuneration. Adjusted EPS increased by 12.4% constant currency
(+12.2% reported). Full year 2024 adjusted EPS is expected to be in the range
of 5% to 8% growth on a constant currency basis versus prior year.
Cash flow
The principal cash flow KPIs of the Group and business segments are Operating
Cash Flow ("OCF") and Free Cash Flow ("FCF"). Refer to G 6.1 and G 6.2 of the
glossary included in the interim financial statements for the definition of
these measures. 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 the Executive Directors and senior management
remuneration. OCF and FCF half year results for the Group are outlined below.
$m HY 2024 HY 2023
EBITDA (pre-exceptional) 261.6 232.2
Movement in working capital (pre-exceptional) (148.2) (181.4)
Business-sustaining capital expenditure (14.6) (9.5)
Operating cash flow 98.8 41.3
Net interest and tax paid (26.0) (37.0)
Dividends from related parties - 19.5
Payment of lease liabilities (10.7) (10.8)
Other outflows (8.5) (5.0)
Free cash flow 53.6 8.0
Strategic capital expenditure (30.3) (27.3)
Dividend paid to Company shareholders (59.6) (57.3)
Share buyback (purchase of own shares) (54.0) (69.3)
Proceeds from disposal of property, plant and equipment 1.9 -
Repayment of loans from joint ventures - 67.8
Exceptional costs paid (9.1) (8.5)
Acquisitions/disposals (298.8) 130.8
Net cash flow (396.3) 44.2
Exchange translation (2.1) (5.0)
Cash acquired on acquisition 1.7 -
Net debt movement (396.7) 39.2
Net debt at the beginning of the period (248.7) (490.0)
Net debt at the end of the period (645.4) (450.8)
OCF was an inflow of $98.8 million (HY 2023: $41.3 million) and represents a
cash conversion on EBITDA of 37.8% (HY 2023: 17.8%) in the period. The
increase in OCF versus prior period was due primarily to increased EBITDA and
improved working capital performance. Full year OCF cash conversion is
expected to be in line with the 80%+ target.
FCF was an inflow of $53.6 million (HY 2023: $8.0 million), with the movement
since prior period primarily as a result of movements in OCF outlined above,
as well as a decrease in dividend income from Joint Ventures.
Capital allocated for the benefit of shareholders includes regular dividend
payments of $59.6 million (HY 2023: $57.3 million) and the execution of share
buyback programmes of $54.0 million (HY 2023: $69.3 million), the most recent
buyback programme launched in February 2024, with the first tranche concluding
in June 2024.
Acquisition spend relates to the acquisition in April 2024 of Flavor
Producers, LLC, a leading flavour platform in the US, for up-front
consideration of $298.8 million. Divestment proceeds in the prior year
primarily related to the disposal of the Group's interest in the UK and
Ireland Glanbia Cheese joint ventures.
Capital expenditure
The cash outflow relating to capital expenditure for half year 2024 amounted
to $44.9 million (HY 2023: $36.8 million) which includes $14.6 million of
business-sustaining capital expenditure and $30.3 million of strategic capital
expenditure.
Group financing
Financing key performance indicators HY 2024 HY 2023
Net debt: adjusted EBITDA 1.22 times 0.99 times
Adjusted EBIT: adjusted net finance cost 28.0 times 23.1 times
The Group's financial position remains strong. Net debt at the 2024 half year
was $645.4 million. This represents an increase of $194.6 million from the
prior half year net debt of $450.8 million. At half year 2024, Glanbia had
committed debt facilities of $1.3 billion (HY 2023: $1.3 billion) with a
weighted average maturity of 4.3 years (HY 2023: 5.2 years). Glanbia's ability
to generate cash as outlined above and available debt facilities ensures the
Group has considerable capacity to finance future investments. Net debt to
adjusted EBITDA was 1.22 times (HY 2023: 0.99 times) and interest cover was
28.0 times (HY 2023: 23.1 times), with both metrics remaining well within
financing covenants.
Pension
The Group's net pension position under IAS 19 (revised) 'Employee Benefits',
before deferred tax, improved by $3.4 million since 30 December 2023,
resulting in a net pension asset of $10.6 million as at 29 June 2024. The
defined benefit pension position is calculated by discounting the estimated
future cash outflows using appropriate corporate bond rates. Restructuring of
legacy defined pension schemes which began in 2021 is ongoing. Favourable
market conditions resulted in actuarial gains in the period, which reduced the
net pension liability resulting in an increase in the net asset position at
period end.
Dividends
Glanbia's overall dividend policy remains unchanged at a target annual
dividend payout ratio of between 25% and 35% of adjusted EPS. In line with
this policy, the Board is recommending an interim dividend of 15.64 €cent
per share (HY 2023: 14.22 €cent per share). The dividend will be paid on 4
October 2024 to shareholders on the register of members as at 23 August 2024.
Irish withholding tax will be deducted at the standard rate where appropriate.
Share buyback
In February 2024, the Group commenced an initial €50 million share buyback
programme under a €100 million share buyback authority. A total of $54.0
million (HY 2023: $69.3 million) was deployed under this programme in the
period. The first tranche concluded in June 2024 and a second €50 million
share buyback will commence on 14(th) August.
Foreign exchange
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
period-on-period change, the results for the prior period are retranslated
using the average exchange rates for the current period and compared to the
current period reported numbers. The principal average exchange rates used to
translate results for 2024 and 2023 are outlined below:
HY 2024 FY 2023 HY 2023
1 US Dollar converted to euro 0.9247 0.9247 0.9253
Financial strategy
Glanbia's financial strategy is very much aligned with its overall strategy of
ensuring the Group delivers on its key financial goals. Specific financial
goals to enable this strategy include:
· Assessing both external and organic investment opportunities against
a target benchmark of 12% return after tax by end of year three;
· Focusing the organisation on cash conversion through improved
working capital management and disciplined business-sustaining capital
expenditure, with a goal of greater than 80% cash conversion as a percentage
of EBITDA;
· Leveraging the Group's activities to enable improved cost
structures utilising shared services, procurement, IT and a continuous
improvement mindset;
· Maintaining the capital structure of the Group within an implicit
investment-grade credit profile; and
· Capital allocation policy to return capital to shareholders which
includes a dividend policy with a payout ratio of between 25% and 35% and the
authorisation to implement a share buyback programme.
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 Group's risk management
framework outlines the key stakeholder risk management responsibilities. It is
strategically designed to foster risk awareness and ensure active
participation across all levels of the business to the management of risk. A
primary objective is to enable the Group to remain responsive to the dynamic
environment in which it operates. This framework, together with the processes
to identify, manage and mitigate potential material key risks to the
achievement of the Group's strategic objectives are set out in detail on pages
72 - 85 of Glanbia plc's 2023 Annual Report.
The Group's principal risks and uncertainties, which are summarised in the
risk profile table below, continue to remain relevant and unchanged from the
risks reported for the year ended 30 December 2023. No new principal risks
were identified during the year. Geopolitical risk, Economic and Industry
risk, Market Disruption risk, Climate Change risk, and Cyber Security and Data
Protection risk continue to trend upwards due to the ongoing geopolitical
instability, continuing macroeconomic uncertainties, dynamic ESG regulatory
landscape and rapid technological evolution, particularly in AI, and
continuing global cybersecurity control threats.
There may be other risks and uncertainties that are not yet considered
material or not yet known to the Group 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 Technological Operational/Regulatory Financial
Risk where trend is stable • Customer Concentration • Digital Transformation • Health and Safety • Taxation Changes
• Product Safety and Compliance
• Acquisition/Integration
• Supply Chain
• Talent Management
Risk where trend is increasing • Geopolitical • Cyber Security and Data Protection
• Economic and Industry
• Climate Change
The Board is closely monitoring the key risks that could materially and
adversely affect the Group's ability to achieve its strategic objectives,
particularly those whose probability of occurrence/extent of impact are
elevated by the consequences of the continued geopolitical uncertainties and
instability from ongoing wars/conflicts and major global elections. Similar,
to our previous disclosures, these risks have wide-ranging consequences on our
principal risks and uncertainties with the consequences being captured across
a number of our principal risks, as well as within the stand-alone
Geopolitical risk. The key risk factors and uncertainties with the potential
to impact on the Group's financial performance in the second half of 2024
include:
· Geopolitical risk - the ongoing geopolitical situation remains
fragile. The market consequences of the ongoing war in Ukraine, conflicts in
the Middle East and tensions between China and neighbouring countries continue
to create volatility. The Board is closely monitoring tensions in key trading
regions where any potential conflict, economic sanctions or trade rulings
would 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
continues to be uncertain. Capital markets volatility, combined with higher
interest rates and growing unemployment could fuel pressure on consumer
spending and push the US economy into recession. The Group will continue to
monitor these and any other adverse changes in economic conditions which may
increase the cost of living and disrupt demand through reduced consumer
spending.
· Market disruption risk - while inflation has reduced in the
majority of our core markets it remains sticky and vulnerable to potential
negative impacts from geopolitical tensions and the upcoming US presidential
election. Given the potential for a combination of external factors to
influence this position, continued action is being taken by the Group to
mitigate remaining inflationary pressures and competitor challenges.
· Supply chain risk - while supply chain volatility has continued to
reduce in the period, the ongoing geopolitical tensions could potentially
impact the importation of key raw materials and/or negatively impact on the
Group's international sales channels. The Group is holding appropriate safety
stocks for core raw materials, however a prolonged impact to supply chains,
extreme weather events and natural disasters, heightened inflation or a
geo-political event in a key trading region 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 and remain in
place which build on the existing strong controls across the Group.
We have identified and assessed our climate-related risks and opportunities
(CROs) and continue to monitor and embed the identified impacts within our
governance, operations and strategic model and risk management system. The
CROs as outlined in the 2023 Annual Report on pages 64 to 71 continue to apply
to the Group and are expected to remain the same for the remainder of 2024. We
are focused on managing our impacts within our own operations, in particular
relating to our Scope 1 and Scope 2 emission targets by meeting key elements
of our transition plan; to progressively shift towards 100% renewable energy
procurement (Scope 2) by 2030 and reduce on-site emissions (Scope 1) through
operational efficiencies and capital investments. We also acknowledge the
material impact of our Scope 3 emissions and have a roadmap in place with our
key dairy supply stakeholders which will deliver a detailed transition plan to
meet our Scope 3 commitments. Our progress on Scope 1 and Scope 2 emission
targets is on track and we are finalizing our Scope 3 transition plan for
presentation to the Board by year-end.
The Group actively manages these and all other risks, inclusive of emerging
risks, through its risk management and internal control processes.
Cautionary statement
Glanbia plc has made forward-looking statements in this document that are
based on management's beliefs and assumptions and on information currently
available to management. Forward-looking statements include, but are not
limited to, information concerning the Group's possible or assumed future
results of operations, business strategies, financing plans, competitive
position, potential growth opportunities, potential operating performance
improvements, the effects of competition and the effects of future legislation
or regulations. Forward-looking statements include all statements that are not
historical facts and can be identified by the use of forward-looking
terminology such as the words 'believe', 'develop', 'expect', 'ensure',
'arrive', 'achieve', 'anticipate', 'maintain', 'grow', 'aim', 'deliver',
'sustain', 'should' or the negative of these terms or similar expressions.
Forward-looking statements involve risks, uncertainties and assumptions.
Actual results may differ materially from those expressed in these
forward-looking statements. You should not place undue reliance on any
forward-looking statements. The risk factors included on pages 76 to 83 of the
Group's 2023 Annual Report, could cause the Group's results to differ
materially from those expressed in forward-looking statements. There may be
other risks and uncertainties that the Group is unable to predict at this time
or that the Group currently does not expect to have a material adverse effect
on its business. These forward-looking statements are made as of the date of
this document. The Group expressly disclaims any obligation to update these
forward-looking statements other than as required by law. The forward-looking
statements in this release do not constitute reports or statements published
in compliance with any of Regulations 6 to 8 of the Transparency (Directive
2004/109/EC) Regulations 2007.
HY 2024 conference call and webcast details
There will be an analysts' conference call and webcast presentation to
accompany this results announcement at 8.30 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
2024 half year financial report
Responsibility statement
Each of the Directors of Glanbia plc, whose names and functions are listed on
the Group's website (www.glanbia.com), confirms that to the best of each
person's knowledge and belief:
· the 2024 Half Year Financial Report is in accordance with
International Accounting Standard (IAS) 34, 'Interim Financial Reporting', as
adopted by the European Union and the Transparency (Directive 2004/109/EC)
Regulations 2007, as amended, and the Central Bank (Investment Market Conduct)
Rules 2019 and the Disclosure Guidance and Transparency Rules of the UK's
Financial Conduct Authority; and
· the 2024 Half Year Financial Report includes a fair review of:
o important events that have occurred during the first six months of the
year, and their impact on the condensed consolidated interim financial
statements;
o a description of the principal risks and uncertainties for the remaining
six months of the financial year;
o details of any related party transactions that have materially affected
the Group's financial position or performance in the six months ended 29 June
2024, and material changes to related party transactions described in the
Annual Report for the year ended 30 December 2023; and
o any changes in the related parties' transactions described in the last
annual report that could have a material effect on the financial position or
performance of the Group in the first six months of the current financial
year.
On behalf of the Board
Hugh
McGuire
Mark Garvey
Chief Executive Officer
Chief Financial Officer
13 August 2024
Condensed Group Income statement
for the half year ended 29 June 2024
Half year 2024 Half year 2023
Notes Pre-exceptional $m Total Pre- Total
Exceptional $m $m exceptional Exceptional $m
(note 5) $m $m
(note 5)
Revenue* 3 1,815.6 - 1,815.6 2,771.4 - 2,771.4
Cost of goods sold* (1,211.0) - (1,211.0) (2,246.6) - (2,246.6)
Gross profit 604.6 - 604.6 524.8 - 524.8
Selling and distribution expenses (240.4) - (240.4) (226.8) (0.6) (227.4)
Administration expenses (137.7) (11.2) (148.9) (99.4) 56.5 (42.9)
Operating profit before intangible asset amortisation 226.5 (11.2) 215.3 198.6 55.9 254.5
Intangible asset amortisation 11 (38.9) - (38.9) (40.0) - (40.0)
Operating profit 187.6 (11.2) 176.4 158.6 55.9 214.5
Finance income 7 4.0 - 4.0 5.7 - 5.7
Finance costs 7 (14.4) - (14.4) (12.7) - (12.7)
Share of results of joint ventures accounted for using the equity method 3 3.7 - 3.7 6.5 - 6.5
Profit before taxation 180.9 (11.2) 169.7 158.1 55.9 214.0
Income taxes 8 (28.4) 2.0 (26.4) (21.2) 0.6 (20.6)
Profit for the period 152.5 (9.2) 143.3 140.6 136.9 56.5 193.4
Attributable to:
Equity holders of the Company 10 143.3 193.6
Non-controlling interests - (0.2)
143.3 193.4
Earnings Per Share attributable to the equity holders of the Company
Basic Earnings Per Share (cent) 10 54.71 71.90
Diluted Earnings Per Share (cent) 10 54.03 70.91
*Current period revenue and cost of goods sold are not comparable with those
of the prior period. Refer to note 2 for details.
Condensed Group Statement of comprehensive Income
for the half year ended 29 June 2024
Notes Half year
2024 Half year
$m 2023
$m
Profit for the period 143.3 193.4
Other comprehensive income
Items that will not be reclassified subsequently to the Group income statement
Remeasurements on defined benefit plans, net of deferred tax 3.2 2.3
Share of other comprehensive income of joint ventures, net of deferred tax 15.2 - 0.1
Revaluation of equity instruments at FVOCI, net of deferred tax 15.1 - 0.1
Items that may be reclassified subsequently to the Group income statement
Currency translation differences 15.1 (7.1) 2.4
Currency translation difference arising on net investment hedge 15.1 (3.1) 1.8
Gain/(loss) on cash flow hedges, net of deferred tax 0.4 (2.0)
Share of other comprehensive income of joint ventures, net of deferred tax 2.2 0.1
Other comprehensive income for the period, net of tax (4.4) 4.8
Total comprehensive income for the period 138.9 198.2
Total comprehensive income attributable to:
Equity holders of the Company 138.9 198.4
Non-controlling interests - (0.2)
Total comprehensive income for the period 138.9 198.2
Condensed Group Balance sheet
as at 29 June 2024
Notes 29 June
2024 30 December
$m 2023
$m
ASSETS
Non-current assets
Property, plant and equipment 11 525.9 515.1
Right-of-use assets 11 85.2 88.3
Intangible assets 11 1,778.2 1,537.3
Interests in joint ventures 165.2 159.3
Other financial assets 2.3 2.6
Deferred tax assets 4.8 5.2
Retirement benefit assets 6 11.6 8.2
2,573.2 2,316.0
Current assets
Inventories 647.3 550.2
Trade and other receivables 500.0 501.8
Current tax receivable 24.4 17.4
Derivative financial instruments 0.1 -
Cash and cash equivalents (excluding bank overdrafts) 300.9 413.7
1,472.7 1,483.1
Total assets 4,045.9 3,799.1
EQUITY
Issued capital and reserves attributable to equity holders of the Company
Share capital and share premium 14 129.5 129.7
Other reserves 15.1 163.3 172.1
Retained earnings 15.2 1,858.6 1,830.8
Total equity 2,151.4 2,132.6
LIABILITIES
Non-current liabilities
Borrowings 12 770.7 553.5
Lease liabilities 85.9 89.3
Retirement benefit obligations 6 1.0 1.0
Deferred tax liabilities 127.1 137.9
Provisions 4.4 4.3
989.1 786.0
Current liabilities
Trade and other payables 598.0 659.1
Borrowings 12 175.6 108.9
Lease liabilities 19.9 20.1
Current tax liabilities 94.3 67.3
Derivative financial instruments 0.2 2.0
Provisions 17.4 23.1
905.4 880.5
Total liabilities 1,894.5 1,666.5
Total equity and liabilities 4,045.9 3,799.1
Condensed Group Statement of changes in equity
For the half year ended 29 June 2024
Attributable to equity holders of the Company
Share capital and share premium Other Retained Non- Total
Half year 2024 $m reserves earnings Total controlling interests $m
(note 14) $m $m $m $m
(note 15.1) (note 15.2)
Balance at 31 December 2023 129.7 172.1 1,830.8 2,132.6 - 2,132.6
Profit for the period - - 143.3 143.3 - 143.3
Other comprehensive income - (7.6) 3.2 (4.4) - (4.4)
Total comprehensive income for the period - (7.6) 146.5 138.9 - 138.9
Dividends - - (59.6) (59.6) - (59.6)
Purchase of own shares - (71.7) - (71.7) - (71.7)
Cancellation of own shares (0.2) 54.2 (54.0) - - -
Cost of share-based payments - 9.6 - 9.6 - 9.6
Transfer on exercise, vesting or expiry of share-based payments - 6.7 (6.7) - - -
Deferred tax on share-based payments - - 1.6 1.6 - 1.6
Balance at 29 June 2024 129.5 163.3 1,858.6 2,151.4 - 2,151.4
Half year 2023
Balance at 1 January 2023 130.2 167.9 1,686.2 1,984.3 8.4 1,992.7
Profit for the period - - 193.6 193.6 (0.2) 193.4
Other comprehensive income - 2.4 2.4 4.8 - 4.8
Total comprehensive income for the period - 2.4 196.0 198.4 (0.2) 198.2
Dividends - - (57.3) (57.3) - (57.3)
Purchase of own shares - (82.7) - (82.7) - (82.7)
Cancellation of own shares (0.3) 68.4 (68.1) - - -
Cost of share-based payments - 10.0 - 10.0 - 10.0
Transfer on exercise, vesting or expiry of share-based payments - 5.9 (5.9) - - -
Deferred tax on share-based payments - - 0.8 0.8 - 0.8
Transfer to Group income statement - 8.1 - 8.1 - 8.1
Balance at 1 July 2023 129.9 180.0 1,751.7 2,061.6 8.2 2,069.8
Condensed gROUP Statement of cash flows
For the half year ended 29 June 2024
Notes Half year
2024 Half year
$m 2023
$m
Cash flows from operating activities
Net cash flows from operating activities before exceptional items 17 122.3 59.2
Cash outflow related to exceptional items (9.1) (8.5)
Interest received 4.3 5.2
Interest paid (including interest expense on lease liabilities) (13.5) (13.5)
Tax paid (16.8) (28.7)
Net cash inflow from operating activities 87.2 13.7
Cash flows from investing activities
Payment for acquisition of subsidiaries 19 (298.8) -
Purchase of property, plant and equipment (29.8) (18.3)
Purchase of intangible assets (15.1) (18.5)
Dividends received from related parties 16 - 19.5
Proceeds from disposal of Leprino Foods (exceptional) - 123.4
Proceeds on repayment of loans advanced to Leprino Foods EU Limited 16 - 71.3
Loans advanced to Leprino Foods EU Limited 16 - (3.5)
Proceeds from disposal of assets and liabilities held for sale (exceptional) - 7.4
Proceeds from disposal/redemption of FVOCI financial assets 0.3 -
Proceeds from sale of property, plant and equipment 1.9 -
Net cash (outflow)/inflow from investing activities (341.5) 181.3
Cash flows from financing activities
Purchase of own shares 15.1 (71.7) (82.7)
Drawdown of borrowings 12 314.6 140.8
Repayment of borrowings 12 (96.1) (245.6)
Payment of lease liabilities (10.7) (10.8)
Dividends paid to Company shareholders 15.2 (59.6) (57.3)
Net cash inflow/(outflow) from financing activities 76.5 (255.6)
Net decrease in cash and cash equivalents 12 (177.8) (60.6)
Cash and cash equivalents at the beginning of the period 304.8 192.5
Cash and cash equivalents acquired on acquisition 12 1.7 -
Effects of exchange rate changes on cash and cash equivalents (3.4) (3.8)
Cash and cash equivalents at the end of the period 12 125.3 128.1
Cash and cash equivalents at the end of the period include:
29 June 1 July
2024 2023
$m $m
$m
Cash and cash equivalents (excluding bank overdrafts) 300.9 251.0
Bank overdrafts (175.6) (122.9)
12 125.3 128.1
Notes to the financial statements
For the half year ended 29 June 2024
1. General information
Glanbia plc (the "Company") and its subsidiaries (together the "Group") is a
leading global nutrition group with geographical presence in regions that
include North America, Europe and Asia Pacific. The Company is a public
limited company incorporated and domiciled in Ireland, the number under which
it is registered is 129933. The address of its registered office is Glanbia
House, Kilkenny, Ireland, R95 E866. The Company is the ultimate parent company
of the Group and its shares are quoted on the Euronext Dublin and London Stock
Exchange.
These condensed consolidated interim financial statements as at, and for the
period commencing 31 December 2023 and ended 29 June 2024 (half year/six
months) ("interim financial statements") were approved for issue by the Board
of Directors on 13 August 2024.
2. Basis of preparation
The interim financial statements have been prepared in accordance with IAS 34
Interim Financial Reporting as adopted by the European Union, the Transparency
(Directive 2004/109/EC) Regulations 2007 as amended, and the Central Bank
(Investment Market Conduct) Rules 2019 and the Disclosure Guidance and
Transparency Rules of the UK's Financial Conduct Authority. The interim
financial statements should be read in conjunction with the financial
statements as at, and for the year ended 30 December 2023 ("2023 Annual
Report"). The interim financial statements do not include all of the
information required for a complete set of IFRS financial statements and have
not been audited or reviewed by the Group's auditor.
The methods of computation, presentation and accounting policies adopted in
the preparation of the interim financial statements are consistent with those
applied in the 2023 Annual Report other than those noted below. The Group's
accounting policies are set out in note 2 to the financial statements in the
2023 Annual Report. All amounts relate to continuing operations unless
otherwise stated.
Income statement format
Certain line items on the condensed group income statement that were
previously presented in the Operating profit note have now been presented
directly on the condensed group income statement. There is no impact on
reported profit or net assets as a result of this change.
Change in US joint venture commercial arrangements
Following an announcement on 16 August 2023, the Group amended the commercial
arrangements between Glanbia Nutritionals and its US joint venture effective 1
January 2024. Under the previous commercial terms, the Group was considered to
be a principal under IFRS 15 and consequently recorded the gross value of
revenues and corresponding cost of sales on joint venture products sold. Under
the new commercial terms, the Group is considered to be an agent under IFRS 15
and recognises commissions earned on the sale of joint venture products. The
change in commercial terms has impacted the recognition and presentation of
revenues and cost of sales from 2024 onwards only. Consequently, revenues,
costs of sales, and corresponding transactional amounts with its joint venture
of the current reporting period are not comparable with those of the previous
reporting period.
Critical accounting judgements and estimates
The significant judgements made by management in applying the Group's
accounting policies and the key sources of estimation uncertainty in preparing
the interim financial statements were the same as those that applied to the
2023 Annual Report, with the exception of the change in commercial
arrangements with the US joint venture noted above which results in the Group
being considered an agent under IFRS 15.
Going concern
The time period that the Directors have considered in evaluating the
appropriateness of the going concern basis in preparing the interim financial
statements is a period of at least 12 months from the date of approval of
these interim financial statements (the "period of assessment").
The Directors have given due regard to the Group's available cash resources,
borrowing facilities and related covenant requirements which taken together,
provide confidence that the Group will be able to meet its obligations as they
fall due, and the Group's financial risk management policies as described in
the 2023 Annual Report, the nature of business activities and the factors
likely to impact operating performance and future growth.
Having assessed the relevant business risks identified and discussed in the
Principal risks and uncertainties on pages 12 and 13, the Directors believe
that the Group is well placed to manage these risks successfully and they have
a reasonable expectation that the Group has adequate resources to continue in
operational existence for the period of assessment. The Group therefore
considers it appropriate to adopt the going concern basis in preparing its
interim financial statements.
Foreign currency translation
The interim financial statements are presented in US dollar.
The principal exchange rates used for the translation of results and balance
sheets into US dollar are as follows:
Average Period end
1 US dollar = Half year Half year Year 29 June 1 July 30 December 2023
2024 2023 2023 2024 2023
euro 0.9247 0.9253 0.9247 0.9341 0.9203 0.9050
Pound sterling 0.7904 0.8110 0.8043 0.7906 0.7899 0.7865
3. Segment information
Half year 2024 Half year 2023
Glanbia Performance Nutrition Glanbia Nutritionals* All other Glanbia Performance Nutrition Glanbia Nutritionals All other
$m $m Segments $m $m segments and unallocated
and unallocated Total $m Total
$m $m $m
Segment results (pre-exceptional)
Total gross segment revenue 882.6 959.7 - 1,842.3 889.0 1,929.3 - 2,818.3
Inter-segment revenue (0.5) (26.2) - (26.7) (0.1) (46.8) - (46.9)
Revenue 882.1 933.5 - 1,815.6 888.9 1,882.5 - 2,771.4
Earnings before interest, tax, depreciation, amortisation and exceptional 156.4 105.2 - 261.6 120.2 112.0 - 232.2
items (EBITDA)**
Shares of results of joint ventures accounted for using the equity method - - 3.7 3.7 - - 6.5 6.5
29 June 2024 30 December 2023
Glanbia Performance Nutrition Glanbia Nutritionals All other Glanbia Performance Nutrition Glanbia Nutritionals All other
$m $m segments and unallocated $m $m segments and unallocated
$m Total $m Total
$m $m
Segment assets and liabilities
Segment assets 1,872.7 1,617.3 555.9 4,045.9 1,859.6 1,285.1 654.4 3,799.1
Segment liabilities 399.6 322.2 1,172.7 1,894.5 394.7 403.5 868.3 1,666.5
Segment earnings before interest, tax, depreciation, amortisation and
exceptional items are reconciled to reported profit before taxation and profit
after taxation as follows:
Notes Half year Half year
2024 2023
$m $m
Earnings before interest, tax, depreciation, amortisation and exceptional 261.6 232.2
items
Finance income 7 4.0 5.7
Finance costs 7 (14.4) (12.7)
Shares of results of joint ventures accounted for using the equity method 3.7 6.5
Exceptional items 5 (11.2) 55.9
Intangible asset amortisation 11 (38.9) (40.0)
Depreciation of property, plant and equipment 11 (25.1) (23.8)
Depreciation of right-of-use assets 11 (10.0) (9.8)
Profit before taxation 169.7 214.0
Income taxes 8 (26.4) (20.6)
Profit for the period 143.3 193.4
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 below.
Revenue from external customers in the table below and in the disaggregation
of revenue by primary geographical markets table 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.
Revenue Non-current assets
Half year Half year 29 June 30 December
2024 2023 2024 2023
$m $m $m $m
Ireland (country of domicile) 12.3 10.6 806.9 821.4
US* 1,238.3 2,192.9 1,560.8 1,281.5
Other
- North America (excluding US) 56.2 52.0 6.0 6.3
- Europe (excluding Ireland) 229.0 238.3 169.2 178.7
- Asia Pacific 198.2 200.6 11.7 12.0
- LATAM 50.7 52.5 0.1 0.1
- Rest of World 30.9 24.5 - -
1,815.6 2,771.4 2,554.7 2,300.0
* Current period revenue is not comparable with that of the prior period.
Refer to note 2 for details.
** The Group moved to presenting EBITDA in lieu of EBITA in the current period
to continue its ambition to simplify reporting to be more in line with its
peers.
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:
Half year 2024 Half year 2023
Glanbia Performance Nutrition Total Glanbia Performance Nutrition Total
$m Glanbia Nutritionals* $m $m $m Glanbia Nutritionals $m
$m
Internal reporting structures
Nutritional Solutions - 469.4 469.4 - 525.5 525.5
US Cheese - 464.1 464.1 - 1,357.0 1,357.0
GPN Americas 568.1 - 568.1 585.5 - 585.5
GPN International (including Direct-to-Consumer) 314.0 - 314.0 303.4 - 303.4
Total 882.1 933.5 1,815.6 888.9 1,882.5 2,771.4
Primary geographical markets
North America 569.2 725.3 1,294.5 593.2 1,651.7 2,244.9
Europe 173.6 67.7 241.3 180.9 68.0 248.9
Asia Pacific 110.5 87.7 198.2 90.5 110.1 200.6
LATAM 9.1 41.6 50.7 7.7 44.8 52.5
Rest of World 19.7 11.2 30.9 16.6 7.9 24.5
Total 882.1 933.5 1,815.6 888.9 1,882.5 2,771.4
Timing of revenue recognition
Products transferred at point in time 882.1 933.5 1,815.6 888.9 1,882.5 2,771.4
Products transferred over time - - - - - -
Total 882.1 933.5 1,815.6 888.9 1,882.5 2,771.4
*Current period revenue is not comparable with that of the prior period. Refer
to note 2 for details.
Channel mix for Glanbia Performance Nutrition Half year Half year
2024 2023
$m $m
Distributor 197.0 176.7
Food, Drug, Mass, Club (FDMC) 314.0 311.5
Online 267.3 281.8
Specialty 103.8 118.9
Total 882.1 888.9
The disaggregation of revenue by channel mix is most relevant for Glanbia
Performance Nutrition.
4. Seasonality
Due to the somewhat seasonal nature of the retail segment into which the
Glanbia Performance Nutrition segment sells, a higher level of business
activity is expected in the second half of the year than in the first six
months. The operations of the Glanbia Nutritionals segment is typically more
evenly spread throughout the year.
5. Exceptional items
Notes Half year Half year
2024 2023
$m $m
Portfolio related reorganisation costs (a) 6.0 0.7
Acquisition and integration costs (b) 5.0 -
Pension related costs (c) 0.2 1.2
Net exceptional gain on disposal/exit of operations (d) - (57.8)
Total 11.2 (55.9)
Exceptional tax credit 8 (2.0) (0.6)
Total exceptional charge/(gain) for the period 17 9.2 (56.5)
(a) Portfolio related reorganisation costs relates to expenditure
resulting from recent portfolio changes. Following divestment decisions
related to non-core businesses, the Group launched a programme in 2023 to
realign Group-wide support functions and optimise structures of the remaining
portfolio, to more efficiently support business operations and growth. This
multi-year strategic programme continues into 2024, with realisation of
benefits from 2025 onwards. Costs incurred to date relate to advisory fees and
people related costs.
(b) Acquisition and integration costs relate to the transaction costs
associated with the Flavor Producers acquisition.
(c) Pension related costs relate to the restructure of legacy defined
benefit pension schemes associated with the Group, which include costs related
to the ultimate wind up of these schemes, including professional fees, and a
further simplification of the schemes that remain with final wind up of
schemes targeted by the end of 2025.
(d) Prior year net exceptional gain on disposal/exit of operations
primarily relates to the net gains on disposal of Leprino Foods (formerly
known as Glanbia Cheese) and a small US based bottling facility (Aseptic
Solutions) which was designated as held for sale at 31 December 2022. 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.
6. Retirement benefit obligations
Recognition in the Condensed Group balance sheet:
29 June 30 December
2024 2023
$m $m
Non-current assets - Surplus on defined benefit pension plan 11.6 8.2
Non-current liabilities - Deficit on defined benefit pension plan (1.0) (1.0)
Net defined benefit pension plans asset 10.6 7.2
The net asset disclosed above relates to funded plans. The movement in the net
defined benefit pension plans asset is as follows:
29 June 30 December
2024 2023
$m $m
At the beginning of the period 7.2 1.7
Current service cost (0.4) (1.0)
Interest income 0.1 0.2
Settlement loss* - (0.7)
Total amount recognised in profit or loss (0.3) (1.5)
Remeasurements
- Return of plan assets in excess of interest income 0.3 (3.4)
- (Loss)/gain from experience adjustments (0.7) 2.0
- Gain from changes in demographic assumptions - 1.5
- Gain from changes in financial assumptions 4.1 1.6
Total amount recognised in other comprehensive income 3.7 1.7
Exchange differences (0.2) 0.2
Contributions paid/payable by the employer 0.2 5.1
At the end of the period 10.6 7.2
* Included in pension related costs (note 5).
The principal assumptions used for the purposes of the actuarial valuations
were as follows:
Half year 2024 Half year 2023 Year 2023
ROI UK ROI UK ROI UK
Discount rate 3.60% 5.30% 3.60% 5.40% 3.20% 4.70%
Inflation rate 2.10% 2.70%-3.25% 2.40% 2.75%-3.35% 2.00% 2.55%-3.10%
Future salary increases* 3.10% 0.00% 3.40% 0.00% 3.00% 0.00%
Future pension increases 0.00% 2.65%-3.10% 0.00% 2.75%-3.30% 0.00% 2.55%-3.00%
Mortality rates (years):
- Male - reaching 65 years of age in 20 years' time 24.3 21.7 24.2 22.3 24.3 21.7
- Female - reaching 65 years of age in 20 years' time 26.4 24.1 26.3 24.6 26.4 24.1
- Male - currently aged 65 years old 22.1 20.8 21.9 21.3 22.1 20.7
- Female - currently aged 65 years old 24.4 23.0 24.3 23.4 24.4 22.9
* The ROI defined benefit pension plans are on a career average structure
therefore this assumption does not have a material impact. The UK defined
benefit pension plans comprise solely pensioners and deferred pensioners.
7. Finance income and costs
Half year Half year
2024 2023
$m $m
Finance income
Interest income on loans to joint ventures - 1.0
Interest income on cash and deposits 3.8 1.6
Interest income on swaps 0.2 3.1
Total finance income 4.0 5.7
Finance costs
Bank borrowing costs (6.5) (4.3)
Facility fees (1.5) (1.4)
Finance cost of private placement debt (5.1) (5.1)
Interest expense on lease liabilities (1.3) (1.4)
Remeasurements of contingent consideration - (0.5)
Total finance costs (14.4) (12.7)
Net finance costs (10.4) (7.0)
8. Income taxes
The Group's income tax charge of $26.4 million (HY 2023: $20.6 million) net of
an exceptional tax credit of $2.0 million (HY 2023: $0.6 million) (note 5) has
been prepared based on the Group's best estimate of the weighted average tax
rate that is expected for the full financial year. Based on legislation in
effect and current financial forecasts, the Group does not expect to pay a
material top-up tax with respect to its 2024 financial year (the year ending 4
January 2025).
9. Dividends
Half year Half year
2024 2023
$m $m
Equity dividends to shareholders
Final - EUR 21.21c per ordinary share, paid on 3 May 2024 (FY 2023: EUR 60.2 57.6
19.28c, paid on 5 May 2023)
Interim - EUR 15.64c per ordinary share, payable on 4 October 2024 (HY 2023: 43.9 39.9
EUR 14.22c, paid on 6 October 2023)
Of the $60.2 million (HY 2023: $57.6 million) dividends paid during the half
year ended 29 June 2024, $0.4 million (HY 2023: $0.3 million) are waived in
relation to own shares. There was also a dividend withholding tax refund of
$0.2 million in the current period (HY 2023: nil).
These interim financial statements do not reflect the interim dividends
recommended for 2024. The amount of interim dividends recommended is based on
the number of issued shares at period end (note 14). The actual amount will be
based on the number of issued shares on the record date. There are no income
tax consequences for the Company in respect of dividends proposed prior to
issuance of the interim financial statements.
10. Earnings per share
Basic
Basic Earnings Per Share is calculated by dividing profit after tax
attributable to the equity holders of the Company by the weighted average
number of ordinary shares in issue during the period, excluding ordinary
shares purchased by the Group and held as own shares.
Diluted
Diluted Earnings Per Share is calculated by adjusting the weighted average
number of ordinary shares in issue to assume conversion of all potential
dilutive ordinary shares. Share awards are the Company's only potential
dilutive ordinary shares.
The share awards, which are performance based, are treated as contingently
issuable shares because their issue is contingent upon satisfaction of
specified performance conditions as well as the passage of time. Contingently
issuable shares are included in the calculation of Diluted Earnings Per Share
to the extent that conditions governing exercisability have been satisfied, as
if the end of the reporting period were the end of the vesting period.
Half year Half year
2024 2023
Profit after tax attributable to equity holders of the Company ($m) 143.3 193.6
Basic Earnings Per Share (cent) 54.71 71.90
Diluted Earnings Per Share (cent) 54.03 70.91
Half year Half year
2024 2023
Weighted average number of ordinary shares in issue 261,915,963 269,254,932
Shares deemed to be issued for no consideration in respect of share awards 3,309,696 3,761,216
Weighted average number of shares used in the calculation of Diluted Earnings 265,225,659 273,016,148
Per Share
11. Property, plant and equipment, right-of-use assets and intangible assets
Property, plant and equipment
During the six month period to 29 June 2024, property, plant and equipment
increased by $10.8 million to $525.9 million, arising from additions of $27.7
million (HY 2023: $21.0 million) and from business combinations of $11.3
million (HY 2023: nil). The increase was offset by depreciation charges of
$25.1 million (HY 2023: $23.8 million) and disposals of $1.2 million (HY 2023:
nil). Exchange differences loss of $1.9 million (HY 2023: $1.4 million gain)
was also recognised in the period.
Right-of-use assets
During the six month period to 29 June 2024, right-of-use assets decreased by
$3.1 million to $85.2 million, arising from depreciation charges of $10.0
million (HY 2023: $9.8 million), remeasurement loss of $1.1 million (HY 2023:
$1.0 million gain) and disposals of $0.3 million (HY 2023: $0.1 million). The
decrease was offset by additions of $6.1 million (HY 2023: $2.4 million) and
business combinations of $2.3 million (HY 2023: nil). Exchange differences
loss of $0.1 million (HY 2023: $0.2 million gain) were also recognised in the
period.
Intangible assets
During the six month period to 29 June 2024, intangible assets increased by
$240.9 million to $1,778.2 million, arising from additions of $15.1 million
(HY 2023: $18.5 million) and from business combinations of $270.5 million (HY
2023: nil). The increase was reduced by amortisation charges of $38.9 million
(HY 2023: $40.0 million). Exchange differences loss of $5.8 million (HY 2023:
$3.4 million gain) were also recognised in the period.
12. Borrowings
29 June 30 December
2024 2023
$m $m
Non-current
Bank borrowings 395.7 178.5
Private placement debt 375.0 375.0
770.7 553.5
Current
Bank overdrafts 175.6 108.9
Total borrowings 946.3 662.4
Bank borrowings increased due to net drawdown of borrowings during the current
period.
The maturity profile of borrowings, and undrawn committed and uncommitted
facilities is as follows:
29 June 2024 30 December 2023
Borrowings Undrawn committed facilities Undrawn uncommitted facilities Borrowings Undrawn committed Undrawn uncommitted facilities
$m $m $m $m facilities $m
$m
12 months or less 175.6 - 16.7 108.9 - 16.9
Between 1 and 2 years - - - - - -
Between 2 and 5 years 495.7 528.1 - 278.5 767.2 -
More than 5 years 275.0 - - 275.0 - -
946.3 528.1 16.7 662.4 767.2 16.9
Net debt is a non-IFRS measure which we provide to investors as we believe
they find it useful. Net debt comprises the following:
29 June 1 July
2024 2023
$m $m
Bank borrowings and private placement debt 770.7 578.9
Cash and cash equivalents net of bank overdrafts (125.3) (128.1)
645.4 450.8
Net debt reconciliation is as follows:
Half year Half year
2024 2023
$m $m
Net debt at the beginning of the period 248.7 490.0
Drawdown of borrowings 314.6 140.8
Repayment of borrowings (96.1) (245.6)
Exchange translation adjustment on net debt 2.1 5.0
Net decrease in cash and cash equivalents 177.8 60.6
Cash and cash equivalents acquired on acquisition (note 19) (1.7) -
Net debt at the end of the period 645.4 450.8
13. Fair value of financial instruments
There have been no changes to the risk management procedures or policies since
30 December 2023. Refer to note 30 of the 2023 Annual Report for details on
these risk management procedures and policies.
Except as detailed in the following table, the Group deemed that the carrying
amounts of financial instruments measured at amortised cost in the interim
financial statements approximate their fair value due to their short-term
nature:
29 June 2024 30 December 2023
Carrying Fair value Carrying Fair value
amount $m amount $m
$m $m
Non-current borrowings payable 770.7 705.9 553.5 496.8
Fair value is estimated by discounting future contractual cash flows using
current market interest rates from observable interest rates at the end of the
reporting period that are available to the Group for similar financial
instruments (classified as level 2 in the fair value hierarchy).
The following table shows the fair values of financial instruments measured at
fair value:
Fair value hierarchy 29 June 30 December
2024 2023
$m $m
Assets
Equity instrument designated at FVOCI - The BDO Development Capital Fund Level 2 1.4 1.7
Cross currency swaps - fair value through income statement Level 2 0.1 -
Contingent consideration receivable - Leprino Foods Level 3 - -
Liabilities
Foreign exchange contracts - cash flow hedges Level 2 (0.1) (0.5)
Cross currency swaps - fair value through income statement Level 2 (0.1) (1.5)
Contingent consideration payable - Flavor Producers, LLC Level 3 - -
There was no movement in the carrying amounts associated with Level 3
financial instruments. Refer to note 29 of the 2023 Annual Report for details
of the valuation process of the financial assets and liabilities and note 19
of these interim financial statements for the valuation methodology of the
contingent consideration at period end which is related to the acquisition of
Flavor Producers, LLC.
14. Share capital and share premium
Number of Ordinary Share Total
shares shares premium $m
(thousands) $m $m
At 31 December 2023 265,072 19.8 109.9 129.7
Cancellation of own shares (2,786) (0.2) - (0.2)
At 29 June 2024 262,286 19.6 109.9 129.5
At 1 January 2023 272,287 20.3 109.9 130.2
Cancellation of own shares (4,637) (0.3) - (0.3)
At 1 July 2023 267,650 20.0 109.9 129.9
The total authorised number of ordinary shares in the current and prior period
is 350 million shares with a par value of €0.06 per share. All issued shares
are fully paid, and carry one vote per share and a right to dividends.
15. Other reserves and retained earnings
15.1 Other reserves
Half year 2024 Capital and merger reserve Currency reserve Hedging reserve Own Share based payment reserve Other
$m $m $m shares $m $m Total
$m $m
Balance at 31 December 2023 136.7 30.4 4.5 (37.5) 37.8 0.2 172.1
Currency translation differences - (7.1) - - - - (7.1)
Net investment hedge - (3.1) - - - - (3.1)
Revaluation - gross - - 3.3 - - - 3.3
Reclassification to profit or loss - gross - - 0.2 - - - 0.2
Deferred tax - - (0.9) - - - (0.9)
- (10.2) 2.6 - - - (7.6)
Purchase of own shares - - - (71.7) - - (71.7)
Cancellation of own shares 0.2 - - 54.0 - - 54.2
Cost of share-based payments - - - - 9.6 - 9.6
Transfer on exercise, vesting or expiry of share-based payments - - - 30.8 (24.1) - 6.7
Balance at 29 June 2024 136.9 20.2 7.1 (24.4) 23.3 0.2 163.3
Half year 2023
Balance at 1 January 2023 136.2 12.6 9.7 (22.0) 31.4 - 167.9
Currency translation differences - 2.4 - - - - 2.4
Net investment hedge - 1.8 - - - - 1.8
Revaluation - gross - - (1.3) - - 0.1 (1.2)
Reclassification to profit or loss - gross - - (0.9) - - - (0.9)
Deferred tax - - 0.3 - - - 0.3
- 4.2 (1.9) - - 0.1 2.4
Purchase of own shares - - - (82.7) - - (82.7)
Cancellation of own shares 0.3 - - 68.1 - - 68.4
Cost of share-based payments - - - - 10.0 - 10.0
Transfer on exercise, vesting or expiry of share-based payments - - - 22.9 (17.0) - 5.9
Transfer to Group income statement - 7.9 0.2 - - - 8.1
Balance at 1 July 2023 136.5 24.7 8.0 (13.7) 24.4 0.1 180.0
Refer to note 23 of the 2023 Annual Report for a description of the components
of other reserves.
15.2 Retained earnings
Notes Half year Half year
2024 2023
$m $m
At the beginning of the period 1,830.8 1,686.2
Profit for the period attributable to equity holders of the Company 143.3 193.6
Other comprehensive income
- Remeasurements on defined benefit plans 6 3.7 2.6
- Deferred tax on remeasurements on defined benefit plans (0.5) (0.3)
- Share of remeasurements on defined benefit plans from joint ventures, net of - 0.1
deferred tax
3.2 2.4
Dividends (59.6) (57.3)
Cancellation of own shares 15.1 (54.0) (68.1)
Transfer on exercise, vesting or expiry of share-based payments 15.1 (6.7) (5.9)
Deferred tax on share-based payments 1.6 0.8
At the end of the period 1,858.6 1,751.7
16. Related party transactions
On 28 April 2023, Glanbia disposed of Leprino Foods (formerly known as Glanbia
Cheese) which were joint ventures of the Group up to that date. From 29 April
2023, they became other related parties to the Group. Accordingly transactions
with them before and after the disposal are included within "Transactions with
joint ventures" and "Transactions with Leprino Foods" respectively.
Transactions that occurred with related parties during the period ended 29
June 2024 include:
Half year Half year
2024 2023
$m $m
Transactions with joint ventures
Dividends received* - 19.5
Sales of services** 26.8 9.6
Purchases of goods** 7.2 957.0
Repayment of loans by Leprino Foods - 71.3
Loans advanced to Leprino Foods - 3.5
Transactions with Tirlán Co-operative Group
Dividends paid 17.3 16.0
Sales of services 14.1 15.4
Sales of goods 0.3 0.3
Purchases of goods 23.7 27.2
Purchases of services 0.3 0.8
Transactions with Leprino Foods
Sales of services 1.5 -
* $4.5 million of the prior year figure relates to Leprino Foods.
** Current period figures are not comparable with those of the prior period.
Refer to note 2 for details.
There have been no significant changes in the nature and scale of the
transactions with directors and key management personnel as described in the
2023 Annual Report.
17. Net cash flows from operating activities before exceptional items
Notes Half year Half year
2024 2023
$m $m
Profit for the period 143.3 193.4
Exceptional items 5 9.2 (56.5)
Income taxes 28.4 21.2
Profit before taxation 180.9 158.1
Share of results of joint ventures accounted for using the equity method 3 (3.7) (6.5)
Finance costs 7 14.4 12.7
Finance income 7 (4.0) (5.7)
Amortisation of intangible assets 11 38.9 40.0
Depreciation of property, plant and equipment 11 25.1 23.8
Depreciation of right-of-use assets 11 10.0 9.8
Cost of share-based payments 15.1 9.6 10.0
Net write down of inventories 10.4 8.1
Other (4.8) (5.1)
Operating cash flows before movement in working capital 276.8 245.2
Movement in working capital (154.5) (186.0)
Net cash flows from operating activities before exceptional items 122.3 59.2
18. Contingent liabilities and commitments
Contingent liabilities
Guarantees provided by financial institutions amounting to $7.3 million (FY
2023: $7.3 million) are outstanding at 29 June 2024. The Group does not expect
any material loss to arise from these guarantees. The Group has contingent
liabilities in respect of legal claims arising in the ordinary course of
business. It is not anticipated that any material liability will arise from
these contingent liabilities other than those provided for.
Commitments
At 29 June 2024 the Group had entered into contractual commitments for the
acquisition of property, plant and equipment amounting to $7.7 million (FY
2023: $7.2 million) and software of $0.2 million (FY 2023: $1.0 million).
19. Business combinations
On 26 April 2024, Glanbia acquired 100% of the voting equity interests of
Aroma Holding Company, LLC which owns Flavor Producers, LLC ("Flavor
Producers"), via cash and contingent consideration as noted below. 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 acquisition is consistent with Glanbia's strategy of
acquiring complementary businesses to grow its Better Nutrition platforms.
Flavor Producers significantly expands Nutritional Solutions' flavours
offering, bringing new capabilities in the attractive and growing natural and
organic flavours market which are aligned with long-term consumer trends. The
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 complements the recipes and know-how across
the Glanbia Nutritionals segment. Of the goodwill recognised in respect of the
acquisition, the Group expects the full amount to be deductible for tax
purposes.
Details of the net assets acquired and goodwill arising from the acquisition
are as follows:
Total
$m
Cash paid 298.8
Contingent consideration -
Total purchase consideration 298.8
Less: Fair value of net assets acquired (154.3)
Goodwill 144.5
The provisional fair value of assets and liabilities arising from the
acquisition are as follows:
Notes Total
$m
Property, plant and equipment 11 11.3
Right-of-use assets 11 2.3
Intangible assets - trade names 8.0
Intangible assets - customer relationships 17.0
Intangible assets - recipes and know-how 101.0
Inventories 10.6
Trade and other receivables 14.6
Cash and cash equivalents 12 1.7
Trade and other payables (8.5)
Lease liabilities (2.3)
Deferred tax liabilities (1.4)
Fair value of net assets acquired 154.3
The contingent consideration arrangement requires the Group to pay the sellers
an earnout in 2025 if a pre-defined earnings threshold is exceeded within a
defined period post acquisition. Under the acquisition agreement, the
undiscounted amount of future payments for which the Group may be liable
ranges from nil to
$55.0 million.
The fair value of the contingent consideration was estimated by calculating
the present value of the future expected payments and was nil at period end
(note 13). The main significant unobservable input in the calculation is the
forecast EBITDA of Flavor Producers over the relevant period. A 10%
increase/decrease in the forecast EBITDA would not have a material effect on
the fair value of the contingent consideration.
The fair value of Flavor Producers trade and other receivables at the
acquisition date amounted to $14.6 million. The gross contractual amount for
trade receivables due is $11.6 million, of which $0.2 million is expected to
be uncollectible. Acquisition-related costs of $5.0 million incurred primarily
on professional fees are included in administrative expenses (exceptional).
Flavor Producers contributed $14.6 million of revenue and incurred a loss of
$0.2 million before taxation and exceptional items for the period from the
date of acquisition to the reporting date. If the acquisition of Flavor
Producers had occurred on 31 December 2023, pro-forma Group revenue and Group
profit before taxation and exceptional items for the period ended 29 June 2024
would have been $1,844.3 million and $180.2 million respectively.
Due to the proximity of the date of the acquisition to the reporting date,
completion accounts have not been formally agreed between Glanbia and the
sellers at the date of approving the interim 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 will be made within
the 12 month timeframe from the date of acquisition as stipulated by IFRS 3
'Business Combinations'.
The Group acquired PanTheryx, Inc. in 2023 for which the fair values of the
net identifiable assets were determined provisionally. The valuation exercise
is near finalisation. We expect any amendments to these fair values to be
disclosed in the 2024 Annual Report.
20. Events after the reporting period
See note 9 for the interim dividend, recommended by the Directors, to be paid
on 4 October 2024.
Other than as described above, there have been no material events subsequent
to the end of the interim period ended 29 June 2024 which require disclosure
in this report.
21. Information
The interim financial statements are considered non-statutory financial
statements for the purposes of the Companies Act 2014 and in compliance with
section 340(4) of that Act we state that:
· the interim financial statements have been prepared to meet our
obligation under the Transparency (Directive 2004/109/EC) Regulations 2007 as
amended (Statutory Instrument No. 277 of 2007);
· the interim financial statements do not constitute the statutory
financial statements of the Group and are unaudited;
· the statutory financial statements as at, and for the financial
year ended 30 December 2023 will be annexed to the 2024 annual return and
filed with the Companies Registration Office;
· the statutory auditor of the Group have made a report under
section 391 in the form required by section 336 Companies Act 2014 in respect
of the statutory financial statements of the Group; and
· the matters referred to in the statutory auditor's report were
unqualified, and did not include a reference to any matters to which the
statutory auditor drew attention by way of emphasis without qualifying the
report.
Copies of this half yearly financial report are available for download from
the Group's website at 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 an enhanced 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 relevant to the interim period are
defined below with a reconciliation of these measures to IFRS measures where
applicable. Please note where referenced "CGIS" refers to Condensed Group
income statement, "CGBS" refers to Condensed Group balance sheet, and "CGSCF"
refers to Condensed Group statement of cash flows. EBITA and EBITDA references
throughout the interim report are on a pre-exceptional basis unless otherwise
indicated.
The definition of exceptional items and the analysis of exceptional items are
disclosed in note 2 to the financial statements of the 2023 Annual Report and
note 5 of these interim financial statements respectively.
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
period-on-period change, the results for the prior period are retranslated
using the average exchange rates for the current period and compared to the
current period reported numbers. The principal average exchange rates used to
translate results for 2024 and 2023 are outlined in note 2 of the interim
financial statements.
Total shareholder return and return on capital employed are not considered
relevant by the Group for the interim period as they are performance measures
considered on an annual basis only as part of the performance conditions in
Glanbia's Long-term Incentive Plan.
As announced on 16 August 2023, the Group has amended the commercial
arrangements associated with its US joint venture effective 1 January 2024
(see note 2 of the financial statements for further details). Revenue for the
Glanbia Nutritionals segment and total revenue presented below is on a
pro-forma basis as if the terms of this amendment were effective from the
beginning of 2023. Prior year pro-forma revenue numbers are provided for
illustrative purposes and to aid comparability to 2024 reported revenue.
G 1. Revenue measures
G 1.1 Constant currency and like-for-like revenue change
GN and GPN like-for-like revenue change represents the sales
increase/(decrease) period-on-period, excluding the incremental revenue
contributions from current period and prior period acquisitions and disposals
and the impact of a 53(rd) week (when applicable), on a pro-forma and constant
currency basis.
GPN like-for-like branded revenue change represents the sales
increase/(decrease) period-on-period on branded sales, excluding the
incremental revenue contributions from current period and prior period
acquisitions and disposals and the impact of a 53(rd) week (when applicable),
on a constant currency basis. Like-for-like branded revenue change is one of
the GPN segment's Key Performance Indicators and one of the performance
conditions in Glanbia's Annual Incentive Plan for GPN Senior Management.
Reference HY 2024 HY 2023 HY 2023 HY 2023 Constant currency Like-for-like change
Reported Reported Pro-forma Constant currency* change (G 1.2) (G 1.2) %
$m $m $m $'m %
Nutritional Solutions Note 3 469.4 525.5 455.1 453.5 3.5% (0.8%)
US Cheese Note 3 464.1 1,357.0 492.8 492.8 (5.8%) (5.8%)
Glanbia Nutritionals Note 3 933.5 1,882.5 947.9 946.3 (1.4%) (3.5%)
GPN Americas Note 3 568.1 585.5 585.5 585.5 (3.0%) (3.0%)
GPN International (including Direct-to-Consumer) Note 3 314.0 303.4 303.4 304.0 3.3% 3.3%
Glanbia Performance Nutrition Note 3 882.1 888.9 888.9 889.5 (0.8%) (0.8%)
Revenue CGIS 1,815.6 2,771.4 1,836.8 1,835.8 (1.1%) (2.2%)
*Based on pro-forma figures.
G 1.2 Volume and pricing increase/(decrease)
Volume increase/(decrease) represents the impact of sales volumes within the
revenue movement period-on-period, excluding volume from acquisitions and
disposals and the impact of a 53(rd) week (when applicable), on a pro-forma
and constant currency basis.
Pricing increase/(decrease) represents the impact of sales pricing (including
trade spend) within revenue movement period-on-period, excluding acquisitions
and disposals, on a pro-forma and constant currency basis.
Reconciliation of volume and pricing increase/(decrease) to constant currency
revenue change:
Volume increase/ Price Like-for-like change Acquisitions/ Constant currency
(decrease) increase/ (G 1.1) (disposals) change (G 1.1)
(decrease)
Nutritional Solutions 3.1% (3.9%) (0.8%) 4.3% 3.5%
US Cheese (1.7%) (4.1%) (5.8%) - (5.8%)
Glanbia Nutritionals 0.6% (4.1%) (3.5%) 2.1% (1.4%)
Glanbia Performance Nutrition 3.1% (3.9%) (0.8%) - (0.8%)
HY 2024 increase/(decrease) % - revenue 1.8% (4.0%) (2.2%) 1.1% (1.1%)
G 2. EBITDA and EBITDA margin % (pre-exceptional)
EBITDA (pre-exceptional) is defined as earnings before interest, tax,
depreciation (net of grant amortisation) and amortisation. Refer to note 3 of
the interim financial statements for the reconciliation of EBITDA
(pre-exceptional) to IFRS measures.
EBITDA margin % (pre-exceptional) is defined as EBITDA (pre-exceptional) as a
percentage of revenue. The Group moved to presenting EBITDA margin % in lieu
of EBITA margin % in the current period to continue its ambition to simplify
reporting to be more in line with its peers.
Reference HY 2024 HY 2023 HY 2023 Constant
Reported Reported Constant currency currency
$m $'m $m change
%
Nutritional Solutions 82.9 83.3 83.3 (0.5%)
US Cheese 22.3 28.7 28.7 (22.3%)
Glanbia Nutritionals Note 3 105.2 112.0 112.0 (6.1%)
Glanbia Performance Nutrition Note 3 156.4 120.2 120.0 30.3%
EBITDA (pre-exceptional) Note 3, G 6.4 261.6 232.2 232.0 12.8%
G 3. EBITA (pre-exceptional)
EBITA (pre-exceptional) is defined as earnings before interest, tax and
amortisation. EBITA (pre-exceptional) is one of the performance conditions in
Glanbia's Annual Incentive Plan for Senior Management.
Reference HY 2024 HY 2023
$m $m
EBITDA (pre-exceptional) G 2 261.6 232.2
Depreciation* (35.1) (33.6)
EBITA (pre-exceptional) 226.5 198.6
* Includes depreciation of property, plant and equipment of $25.1 million (HY
2023: $23.8 million) and depreciation of right-of-use assets of $10.0 million
(HY 2023: $9.8 million).
G 4. Constant currency earnings per share ("EPS") measures
G 4.1 Constant currency basic EPS
Basic EPS is an IFRS measure and defined in note 10 of the interim financial
statements. Profit after tax in this performance measure refers to the amount
attributable to equity holders of the Company.
Reference HY 2024 HY 2023 HY 2023 Year 2023
Reported Reported Constant currency Reported
$m $m $m $m
Profit after tax CGIS 143.3 193.6 194.6 344.4
Profit after tax- discontinued operations - - - 3.2
Profit after tax - continuing operations G 4.2 143.3 193.6 194.6 347.6
Weighted average number of ordinary shares in issue (thousands) Note 10 261,916 269,255 269,255 266,548
Basic EPS (cent) - continuing operations Note 10 54.71 71.90 72.26 130.41
Basic EPS (cent) Note 10 54.71 71.90 72.26 129.21
Constant currency change - continuing operations (24.3%)
Constant currency change (24.3%)
G 4.2 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 period, 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 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 HY 2024 HY 2023 HY 2023 Year 2023
Reported Reported Constant currency Reported
$m $m $m $m
Profit after tax from continuing operations G 4.1 143.3 193.6 194.6 347.6
Exceptional charge/(credit) - continuing operations CGIS 9.2 (56.5) (57.8) (49.6)
Profit after tax from continuing operations (pre-exceptional) 152.5 137.1 136.8 298.0
Amortisation and impairment of intangible assets (excluding 26.1 26.6 26.6 52.1
software amortisation)*- continuing operations
Adjusted net income - continuing operations 178.6 163.7 163.4 350.1
Loss after tax from discontinued operations - - - (3.2)
Exceptional charge - discontinued operations - - - 3.2
Profit from discontinued operations (pre-exceptional) - - - -
Adjusted net income 178.6 163.7 163.4 350.1
Weighted average number of ordinary shares in issue (thousands) Note 10 261,916 269,255 269,255 266,548
Adjusted EPS (cent) - continuing operations G 8 68.20 60.78 60.69 131.37
Adjusted EPS (cent) 68.20 60.78 60.69 131.37
Constant currency change - continuing operations 12.4%
Constant currency change 12.4%
* Net of related tax of $3.9 million (HY 2023: $4.0 million, HY 2023
retranslated $4.0 million, FY 2023: $7.8 million)
G 5. Financing measures
G 5.1 Net debt
Net debt is calculated as current and non-current borrowings less cash and
cash equivalents. Refer to note 12 of the interim financial statements for net
debt at the end of the reporting period.
G 5.2 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 HY 2024 HY 2023 Year 2023
$m $m $m
Net debt Note 12 645.4 450.8 248.7
Rolling EBITDA 522.8 446.0 493.4
Adjustments in line with lenders' facility agreements 4.3 9.1 6.8
Rolling adjusted EBITDA 527.1 455.1 500.2
Net debt: adjusted EBITDA 1.22 times 0.99 times 0.50 times
G 5.3 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 interest expense on
lease liabilities and finance income/costs on contingent consideration and
remeasurements of call options. This measure and the numbers in the table
below are on a rolling 12 month basis (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).
HY 2024 HY 2023 Year 2023
$m $m $m
Operating profit 375.9 302.6 392.2
Exceptional (credit) (2.6) (5.5) (47.8)
Operating profit (pre-exceptional) 373.3 297.1 344.4
Dividends received from related parties 12.5 31.9 32.0
IFRS 16 adjustment - interest expense on lease liabilities (2.5) (2.7) (2.7)
Adjusted EBIT 383.3 326.3 373.7
Net finance cost 16.4 16.7 12.3
Adjustments (2.7) (2.6) (2.5)
Adjusted net finance cost 13.7 14.1 9.8
Adjusted EBIT: net finance cost 28.0 times 23.1 times 38.1 times
G 5.4 Average interest rate
The average interest rate is defined as the rolling 12 month adjusted net
finance cost divided by average net debt. Adjusted net finance cost comprises
finance costs plus borrowing costs capitalised into assets less adjustments
including interest expense on lease liabilities and finance income/costs on
contingent consideration and remeasurements of call options. Average net debt
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).
G 6. Cash flow measures
G 6.1 Operating cash flow ("OCF")
OCF is defined as EBITDA (pre-exceptional) net of business sustaining capital
expenditure and working capital movements, excluding exceptional cash flows.
Refer to G 6.4 for the calculation of OCF.
Reconciliation of OCF to cash generated from operating activities before Reference HY 2024 HY 2023
exceptional items:
$m $m
Cash generated from operating activities before exceptional items CGSCF 122.3 59.2
Less: business sustaining capital expenditure G 10(b) (14.6) (9.5)
Non-cash items not adjusted in computing OCF:
- Cost of share-based payments Note 17 (9.6) (10.0)
- Other items 0.7 1.6
OCF G 6.4 98.8 41.3
G 6.2 Free cash flow ("FCF")
FCF 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 and purchase of
own shares under share buyback. Refer to G 6.1 and G 6.4 for the
reconciliation of FCF to CGSCF.
G 6.3 Operating cash conversion ("OCF Conversion")
OCF conversion is defined as Operating Cashflow ("OCF") divided by EBITDA
(pre-exceptional). OCF 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 6.4 Summary cash flow
The summary cash flow is prepared on a different basis to the CGSCF and as
such the reconciling items between EBITDA and net debt movement may differ
from amounts presented in the CGSCF. The summary cash flow details movements
in net debt while the CGSCF 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 10 for a clear presentation of
information.
Reference HY 2024 HY 2023
$m $m
EBITDA (pre-exceptional) G 2 261.6 232.2
Movement in working capital (pre-exceptional) G 10(a) (148.2) (181.4)
Business sustaining capital expenditure G 10(b) (14.6) (9.5)
Operating cash flow G 6.1 98.8 41.3
Net interest and tax paid G 10(c) (26.0) (37.0)
Dividends received from related parties CGSCF - 19.5
Payments of lease liabilities CGSCF (10.7) (10.8)
Other outflows G 10(d) (8.5) (5.0)
Free cash flow 53.6 8.0
Strategic capital expenditure G 10(b) (30.3) (27.3)
Dividends paid to Company shareholders CGSCF (59.6) (57.3)
Purchase of own shares under share buyback G 10(f) (54.0) (69.3)
Proceeds from disposal of property, plant and equipment CGSCF 1.9 -
Loans/investments in related parties G 10(e) - 67.8
Exceptional costs paid CGSCF (9.1) (8.5)
Acquisitions/disposals G 10(g) (298.8) 130.8
Net cash flow (396.3) 44.2
Exchange translation Note 12 (2.1) (5.0)
Cash acquired on acquisition Note 12 1.7 -
Net debt movement (396.7) 39.2
Opening net debt Note 12 (248.7) (490.0)
Closing net debt Note 12 (645.4) (450.8)
G 7. 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 HY 2023
HY 2024 $m
$m
Income tax CGIS 26.4 20.6
Exceptional tax credit CGIS 2.0 0.6
Income tax (pre-exceptional) CGIS 28.4 21.2
Profit before tax CGIS 169.7 214.0
Exceptional charge/(credit) CGIS 11.2 (55.9)
Profit before tax (pre-exceptional) CGIS 180.9 158.1
Less: share of results of joint ventures (pre-exceptional) CGIS (3.7) (6.5)
177.2 151.6
Effective tax rate 16.0% 14.0%
G 8. Dividend payout ratio
Dividend payout ratio is defined as the US dollar equivalent interim 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 period. The dividend payout
ratio provides an indication of the value returned to shareholders relative to
the Group's total earnings.
Reference HY 2024 HY 2023
Adjusted EPS G 4.2 $ 68.20c $ 60.78c
Dividend recommended/paid per ordinary share in euro Note 9 € 15.64c € 14.22c
Equivalent US dollar dividend translated at average exchange rate in the $ 16.91c $ 15.37c
period
Dividend payout ratio 24.8% 25.3%
G 9. Compound annual growth rate ("CAGR")
CAGR is the annual growth rate over a period of years. It is calculated on the
basis that each year's growth is compounded.
G 10. Cash flow items
(a) Movement in working capital
Reference HY 2024 HY 2023
$m $m
Movement in working capital (pre-exceptional) Note 17 (154.5) (186.0)
Net write down of inventories (pre-exceptional) Note 17 10.4 8.1
Other reconciling items (4.1) (3.5)
Total movement in net working capital G 6.4 (148.2) (181.4)
(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 HY 2024 HY 2023
$m $m
Business sustaining capital expenditure G 6.1, G 6.4 14.6 9.5
Strategic capital expenditure G 6.4 30.3 27.3
Total capital expenditure 44.9 36.8
Purchase of property, plant and equipment CGSCF 29.8 18.3
Purchase of intangible assets CGSCF 15.1 18.5
Total capital expenditure per CGSCF 44.9 36.8
(c) Net interest and tax paid
Reference HY 2024 HY 2023
$m $m
Interest received CGSCF 4.3 5.2
Interest paid (including interest expense on lease liabilities) CGSCF (13.5) (13.5)
Tax paid CGSCF (16.8) (28.7)
Total net interest and tax paid G 6.4 (26.0) (37.0)
(d) Other inflows/(outflows)
Reference HY 2024 HY 2023
$m $m
Cost of share-based payments Note 17 9.6 10.0
Purchase of own shares by Employee Share (Scheme) Trust G 10(f) (17.7) (13.4)
Other reconciling items (0.4) (1.6)
Total other outflows G 6.4 (8.5) (5.0)
(e) Loans/investments in related parties
Reference HY 2024 HY 2023
$m $m
Loans advanced to Leprino Foods EU Limited CGSCF - (3.5)
Proceeds on repayment of loans advanced to Leprino Foods EU Limited CGSCF - 71.3
Total loans/investments in related parties G 6.4 - 67.8
(f) Purchase of own shares
Reference HY 2024 HY 2023
$m $m
Purchase of own shares under share buyback G 6.4 (54.0) (69.3)
Purchase of own shares by Employee Share (Scheme) Trust G 10(d) (17.7) (13.4)
Total purchase of own shares CGSCF (71.7) (82.7)
(g) Acquisitions/disposals
Reference HY 2024 HY 2023
$m $m
Payment for acquisition of subsidiaries CGSCF (298.8) -
Proceeds from disposal of Leprino Foods (exceptional) CGSCF - 123.4
Proceeds from disposal of assets and liabilities held for sale (exceptional) CGSCF - 7.4
Total acquisitions/disposals G 6.4 (298.8) 130.8
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