REG - Glanbia PLC - Glanbia Full Year 2022 Results
01/03/2023 07:00
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RNS Number : 4166R Glanbia PLC 01 March 2023
Glanbia Full Year 2022 results
Strong performance, with Group revenue up 21.2% and adjusted EPS(1) up 17.6%,
ahead of expectations (both constant currency)
1 March 2023 - Glanbia plc ("Glanbia", the "Group", the "Company", the "plc"),
the better nutrition company, announces its preliminary results for the 2022
financial year ended 31 December 2022 ("Full Year 2022", or "2022").
Key highlights:
· Group revenues of €5.6 billion (2021: €4.2 billion)
representing growth of 21.2% constant currency (up 34.4% reported);
· Group EBITA pre-exceptional €347.1m (2021: €270.6m), an
increase of 13.5% constant currency (up 28.3% reported);
· Adjusted earnings per share(1) ("EPS") of 104.02 cent (2021:
77.84 cent) representing growth of 17.6% constant currency (up 33.6%
reported);
· Basic EPS of 93.42 cent (2021: 57.57 cent);
· Operating cash flow conversion of 85.7% and year end net debt to
adjusted EBITDA ratio of 1.12 times (2021: 1.71 times);
· Glanbia Performance Nutrition ("GPN"):
o Branded like-for-like revenue +14.6% with pricing +16.7% and volume -2.1%;
o Optimum Nutrition ("ON") brand delivered US consumption growth(2) ( )of
30.8% for the 52 week period;
o EBITA growth of 10.5%; EBITA margin 11.2% (+10bps versus prior year);
· Glanbia Nutritionals - Nutritional Solutions ("GN NS"):
o Like-for-like revenue +12.6% with pricing +16.1% and volume -3.5%;
o EBITA growth of 13.0%, EBITA margin 11.4% (-10bps versus prior year);
· Continued progression on ESG agenda with further reductions targeted
by 2030 in Scope 1 and 2 carbon emissions;
· Capital allocation:
o Returned €173.5 million to shareholders in the year via share buybacks;
o Further €50 million share buyback programme announced, reflecting the
Group's strong cash flow and financial position;
o Recommended final dividend per share of 19.28 cent; total 2022 dividend
32.21 cent; a 10% increase on prior year, representing a payout ratio of
31.0%;
· The Group continues to focus on its better nutrition portfolio
and today announces the proposed sale of its interest in the Glanbia Cheese
JVs. During 2022, the Group acquired Sterling Technology, which complements
the GN NS portfolio, and completed the disposal of its interest in Glanbia
Ireland; and
· Glanbia expects to deliver adjusted EPS growth of 5% to 10%
constant currency in FY 2023.
Commenting today Siobhán Talbot, Group Managing Director, said:
"On behalf of the Glanbia team, I am pleased to report that Glanbia delivered
its highest ever annual earnings rformance in 2022 with adjusted EPS(1)
growing by 17.6% to 104.02c. This was achieved despite unprecedented
inflationary headwinds and was led by the strong performance of the Optimum
Nutrition brand, growing US consumption(2) by 30.8% in 2022, and continued
good delivery by our GN Nutritional Solutions business. This 2022 result
underpinned the delivery of the Group targets set out in 2018 for the period
2018 to 2022. Looking forward, our strategic focus on 'better nutrition'
growth platforms is clear and we are confident that it will drive sustained
growth in the coming years, delivering the targets set out at our recent
capital markets event.
We are aligning our portfolio to our strategy - completing the sale of the
plc's stake in Glanbia Ireland and adding new capability with the acquisition
of Sterling Technology in 2022. In addition, today we are announcing that we
have signed a non-binding memorandum of understanding for the sale of the
plc's holding in the Glanbia Cheese joint ventures to our joint venture
partner, Leprino Foods. This continued evolution of our portfolio will enable
Glanbia to focus on driving growth through our focused market leading
positions as a better nutrition company, playing into strong underlying
consumer health and wellness trends.
As a purpose led company, we continue to make progress on our ESG agenda,
increasing the ambition of our carbon reduction targets and building on the
strong inclusive culture of Glanbia through our Diversity, Equity and
Inclusion ("DE&I") strategy.
We reaffirm the financial targets for the period 2023 to 2025 as set out at
the recent capital markets event. With a strong balance sheet, our ambition
for 2023 and beyond is to focus on our better nutrition strategy, investing
and growing our Glanbia Performance Nutrition and GN Nutritional Solutions
businesses. In 2023, we expect adjusted EPS growth of 5% to 10% constant
currency, which will be driven by a strong operating performance in the better
nutrition businesses."
1 Adjusted earnings per share for continuing operations
2 Consumption growth is US measured in channels and includes Online, FDMC
(Food, Drug, Mass, Club) and Specialty channels. Data compiled from published
external sources and Glanbia estimates for the 52 week period to 1 January
2023
Summary financials(1)
2022 full year results Reported Constant
€'m 2022 2021 Change Currency Change(2)
Wholly-owned business (pre-exceptional)
Revenue 5,642.4 4,196.9 +34.4% +21.2%
EBITA(3) 347.1 270.6 +28.3% +13.5%
EBITA margin 6.2% 6.4%
Joint Ventures (continuing operations(4))
Share of profit after tax (pre-exceptional) 15.4 19.2
Profit after tax(5) 256.8 167.4
Profit after tax - continuing operations 199.6 141.0
Profit after tax - discontinued operations 57.2 26.4
Adjusted earnings per share(6) 104.02c 87.15c +19.4% +6.4%
Adjusted earnings per share (continuing operations) 104.02c 77.84c +33.6% +17.6%
Adjusted earnings per share (discontinued operations) - 9.31c
Basic earnings per share 93.42c 57.57c +62.3% +37.5%
Basic earnings per share (continuing operations) 72.67c 48.47c
Basic earnings per share (discontinued operations) 20.75c 9.10c
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 42.
2. To arrive at the constant currency change, the average exchange
rate for the current period is applied to the relevant reported result from
the same period in the prior year. The average euro US dollar exchange rate
for 2022 was €1 = $1.053 (2021: €1 = $1.183). Reported and constant
currency movements are on a pre-exceptional basis.
3. EBITA is defined as earnings before interest, tax and amortisation.
4. Continuing operations: The Glanbia Ireland joint venture was
classified as a discontinued operation on 17 December 2021. Results presented
for continuing operations excludes the impact on the Group of the Glanbia
Ireland joint venture. Discontinued operations reflects the contribution from
the Glanbia Ireland joint venture. Prior year comparatives have been restated
on the same basis.
5. Profit after tax includes the exceptional gain on disposal relating
to Glanbia Ireland.
6. Adjusted earnings per share includes the contribution of continuing
and discontinued operations.
FY 2022 results summary
Revenue progression 2022 versus 2021
Constant currency movement Reported movement
Volume Price Like-for-like Acquisition / (Disposals) Total constant currency Total reported
Glanbia Performance Nutrition (2.9%) 16.4% 13.5% 0.4% 13.9% 24.8%
Glanbia Nutritionals 1.9% 21.2% 23.1% 1.2% 24.3% 38.8%
Nutritional Solutions (3.5%) 16.1% 12.6% 4.0% 16.6% 28.4%
US Cheese 4.3% 23.4% 27.7% - 27.7% 43.3%
Total wholly-owned businesses 0.5% 19.7% 20.2% 1.0% 21.2% 34.4%
Revenue, EBITA and margin
2022 2021
€'m Revenue EBITA Margin % Revenue EBITA Margin %
Glanbia Performance Nutrition 1,625.7 182.1 11.2% 1,303.1 145.1 11.1%
Glanbia Nutritionals 4,016.7 165.0 4.1% 2,893.8 125.5 4.3%
Nutritional Solutions 1,126.6 128.2 11.4% 877.4 101.1 11.5%
US Cheese 2,890.1 36.8 1.3% 2,016.4 24.4 1.2%
Total wholly-owned businesses 5,642.4 347.1 6.2% 4,196.9 270.6 6.4%
2022 full year overview
Glanbia delivered a strong financial and operating performance in 2022. Group
revenue was €5,642.4 million (2021: €4,196.9 million), up 21.2% constant
currency (up 34.4% reported). Group EBITA was €347.1 million (2021: €270.6
million) up 13.5% constant currency (up 28.3% reported). Group profit after
tax for continuing operations for the period was €199.6 million (2021:
€141.0 million) up €28.6 million constant currency (up €58.6 million
reported).
Adjusted earnings per share ("EPS") for continuing operations was 104.02 cent
(2021: 77.84 cent) up 17.6% constant currency (up 33.6% reported).
Balance sheet and financing
The Group's continued focus on cash management delivered a strong performance
with an operating cash flow of €355.3 million (2021: €334.2 million),
which represents an OCF conversion of 85.7%. At the year end the Group had a
net debt position of €459.4 million (2021: €602.7 million) with the
decrease driven by the strong cash conversion and disciplined approach to
capital allocation. Net debt to adjusted EBITDA was 1.12 times (2021: 1.71
times). In December 2022, the Group renewed its debt facilities, and at the
year end had committed debt facilities of €1.22 billion (2021: €1.16
billion) with a weighted average maturity of 5.8 years (2021: 3.9 years).
Capital investment
Glanbia's total investment in capital expenditure (tangible and intangible
assets) was €68.9 million in 2022 (2021: €77.5 million). Strategic
investment totalled €49.5 million and included the investment in IT
infrastructure to support a global transformation of the Group's HR systems
and operating model. Total capital expenditure for 2023 is expected to be
€70 million to €80 million. Glanbia's ability to generate cash and its
available debt facilities ensure the Group has considerable capacity to
finance future investments.
Dividend per share
The Board is recommending a final dividend of 19.28 cent per share which
brings the total dividend for the year to 32.21 cent per share, a 10% increase
on prior year. This total dividend represents a payout ratio of 31.0% of 2022
adjusted EPS, which is within the Board's target of 25% to 35%. The final
dividend will be paid on 5 May 2023 to shareholders on the share register on
24 March 2023. Irish withholding tax will be deducted at the standard rate
where appropriate.
ESG update
Glanbia continues to deliver good progress against its environmental, social
and governance ("ESG") agenda. ESG targets were formally adopted by
shareholders into the remuneration policy and have been adopted as part of the
short-term and long-term incentive structures for the senior leadership teams.
· Environmental - Glanbia recently completed a process to re-align its
Scope 1 and 2 decarbonisation targets with a 1.5 degree pathway. The revised
ambition is for a 50% reduction (previously a 31% reduction) in Scope 1 and 2
carbon emissions by 2030 from a 2018 base. The Group has also strengthened its
improvement targets across water, waste and packaging impacts.
· Social - Glanbia's Diversity, Equity & Inclusion ("DE&I") agenda
progressed further during the year with a number of initiatives, including an
inclusive leadership development programme for senior leaders, additional
employee resource groups for multicultural and LGBTQ+ employees, and other
inclusion oriented HR policy measures.
· Governance - Board changes during the year increased female Board
representation to 36%.
Board update
In line with the relationship agreement with Glanbia Co-operative Society
Limited (the "Society") Patsy Ahern and John Murphy have announced their
intention to retire at the upcoming AGM on 4 May 2023, reducing the Society's
representation on the Board to three directors.
Change in presentation currency to US Dollar
Glanbia generates over 80% of its revenue and earnings, and has significant
assets and liabilities denominated in US Dollars. To reduce the potential for
foreign exchange volatility in future reported earnings, the Group has decided
to change its presentation currency to US Dollar effective from 1 January
2023. Financial restatements will be provided in advance of our Q1 trading
update.
Strategy
Glanbia's ambition is to deliver focused, scalable growth aligned with
enduring consumer mega-trends around health and wellness. The Group held a
Capital Markets event in November 2022, highlighting its continuing focus on
better nutrition to support healthy lives through specialist consumer brands
and ingredients. The event outlined Glanbia's growth agenda and provided an
overview of the strategies in its better nutrition growth platforms, GPN and
GN NS. In recent years the Group has both reorganised its business operating
models to drive sustained organic growth and reshaped its portfolio to sharpen
its focus on these growth platforms with the following portfolio optimisation
initiatives:
· Nutritional Solutions:
o On 11 March 2022, Glanbia acquired Sterling Technology, LLC ("Sterling"), a
bioactive ingredient company based in South Dakota, USA for a purchase price
of $60 million plus deferred consideration.
o The Group is in advanced discussions to divest Aseptic Solutions, a small
non-core US bottling facility. The transaction is expected to complete in the
first half of 2023.
· Joint Ventures:
o On 1 April 2022, Glanbia completed the disposal of its 40% interest in the
Glanbia Ireland joint venture ("Glanbia Ireland") to the Society for €307
million.
o Today, the Group has announced that a memorandum of understanding has been
signed for the sale of its shareholding in the Glanbia Cheese EU and Glanbia
Cheese UK joint ventures ("Glanbia Cheese") to Leprino Foods Company. It is
expected that Glanbia will receive initial cash proceeds in excess of €160
million (including the repayment of shareholder loans), with further
contingent consideration of up to €25 million dependant on the performance
of Glanbia Cheese over the next three years.
The Group remains confident in delivering the financial ambition outlined at
the Capital Markets event in November 2022, which was as follows:
2023-2025 financial ambition
Group metrics*
Adjusted earnings per share growth (on a constant currency basis) 5-10%
Operating Cash Flow conversion % 80%+
Return on Capital Employed ("ROCE") 10-13%
Business Unit metrics**
GPN average annual revenue growth 5-7%
GPN average EBITA margin % 12%+
GN NS average annual volume growth 3-5%
GN NS average EBITA margin % 12%+
* All Group metrics are average annual metrics for the three years 2023-2025
and include M&A activity.
** Business unit metrics based on organic growth.
Share buyback
During 2022 Glanbia purchased and cancelled 14.9 million ordinary shares,
representing 5.2% of total issued ordinary shares at the beginning of 2022, at
a total cost of €173.5 million (2021: €91.3 million). Today, the Group has
announced a further €50 million buyback programme as part of its broader
capital allocation policy.
2023 Outlook
Glanbia remains confident of delivering the financial ambition outlined at the
Capital Markets event in November 2022. The Group's strong performance in
2022, despite the challenging global environment, highlights the strength of
its consumer focused better nutrition portfolio, which is expected to drive
growth in 2023 and beyond.
Based on the current market environment and expectations for the remainder of
the year the Group outlines the following guidance for FY 2023:
· GPN expects revenue to grow by 5% to 7% on a constant currency
basis, and to deliver full year EBITA margins of 12.5%+. Revenue growth will
be primarily driven by pricing, and the business continues to closely monitor
consumer demand and customer inventory levels. The EBITA margin guidance is
underpinned by the GPN transformation programme, pricing action and the
expected reduction of dairy input costs in the second half of the year.
· GN NS expects a decline in like-for-like revenue driven by lower
dairy market pricing, with volumes expected to be broadly in line with FY
2022. GN NS EBITA margins are expected to be between 12% and 13%. The volume
expectation reflects customer supply chain rebalancing, particularly in the
first half of the year.
· Group EBITA growth is expected to be driven largely by growth in
GPN. GN NS and US Cheese EBITA are expected to be broadly in line with FY
2022, on a constant currency basis, with the performance in joint ventures
expected to be reduced due to the disposal of the Glanbia Cheese JVs.
· The Group is targeting an operating cash flow conversion rate of
80%+ for FY 2023.
Glanbia expects to deliver adjusted EPS growth of 5% to 10% constant currency
in FY 2023 with growth weighted to the second half of the year.
2022 operations review
(Commentary on percentage movements is on a constant currency basis
throughout)
Glanbia Performance Nutrition
€'m 2022 2021 Reported Constant
change currency change
Revenue 1,625.7 1,303.1 +24.8% +13.9%
EBITA 182.1 145.1 +25.5% +10.5%
EBITA margin 11.2% 11.1%
· Like-for-like ("LFL") branded revenue growth of +14.6% with
volume -2.1% and pricing +16.7%.
· ON, the leading brand in the sports nutrition sector globally,
continues to sustain a strong consumer position in key markets and delivered
US consumption growth of 30.8%.
· EBITA margin increase of +10bps versus prior year, despite
unprecedented inflation, with 12.0% EBITA margin delivered for the second half
of 2022.
Overall GPN revenue increased by 13.9% in 2022 versus prior year. This was
driven by volume declines of 2.9%, price increases of 16.4%, and the LevlUp
acquisition contributing 0.4%. Excluding the impact of the contract business,
which GPN exited in North America, like-for-like branded revenues increased by
14.6% with 16.7% growth in pricing partly offset by a volume decline of 2.1%.
Pricing was driven by the execution of strategic price increases across all
brands, in all regions, in response to inflationary trends. While volume
performance in the ON brand was strong, the overall decline was driven by the
SlimFast brand, where the brand refresh is currently in market.
GPN EBITA increased by 10.5% versus prior year to €182.1 million. The GPN
transformation programme, the scope of which was increased to help mitigate
inflation, is now complete and provides a fundamental underpin to margins as
the business moves through the current inflationary cycle. The benefits from
this programme, together with the pricing action taken, enabled the business
to deliver a 12.0% EBITA margin for the second half of the year.
Americas
GPN Americas delivered 12.3% revenue growth in 2022 compared to the prior
year, with like-for-like branded revenue increasing by 13.2%. This was driven
by significant pricing actions and revenue growth management initiatives. The
ON brand continued to exhibit very strong performance in the period and was
supported by continued brand investment and innovation. ON delivered US
consumption growth in 2022 of 30.8%. Strong consumption trends in the healthy
lifestyle portfolio also continued through the period across the think!,
Isopure and Amazing Grass brands, with US consumption in 2022 up 13.9%. The
SlimFast brand performance continues to be impacted by headwinds in the
overall diet category with US consumption in 2022 down 17.9%. The brand
refresh is in market as planned, supported by new branding and pack design,
creative content and innovation.
International
GPN International, which includes D2C brands, grew like-for-like revenues by
16.3% in 2022 compared to the prior year. This was driven by volume growth in
key regional markets, with consumption trends in Europe, India and Oceania
particularly strong. Pricing was positive across all regions due to the
execution of multiple price increases in response to inflationary trends.
Glanbia Nutritionals
2022 2021
€'m Revenue EBITA Margin % Revenue EBITA Margin %
Nutritional Solutions 1,126.6 128.2 11.4% 877.4 101.1 11.5%
US Cheese 2,890.1 36.8 1.3% 2,016.4 24.4 1.2%
Total Glanbia Nutritionals 4,016.7 165.0 4.1% 2,893.8 125.5 4.3%
Nutritional Solutions
Reported Constant
change currency change
€'m 2022 2021
Revenue 1,126.6 877.4 28.4% 16.6%
EBITA 128.2 101.1 26.8% 13.0%
EBITA margin 11.4% 11.5%
· GN NS LFL revenue growth of +12.6% with volumes -3.5% and pricing
+16.1%.
· EBITA growth of 13.0%, EBITA margin of 11.4% (10bps behind the
prior year).
· Recent acquisitions performed well in the year, building further
on innovation and operational capabilities in NS.
GN NS revenues increased by 16.6% in 2022 versus the prior year. This was
driven by a 3.5% decrease in volume, 16.1% increase in price and the net
impact of acquisitions and disposals delivering 4.0% revenue growth. While the
customised premix solutions portfolio delivered volume growth this was offset
by a volume decline in the protein solutions business driven largely by supply
chain realignment and inventory reduction by customers in the second half of
the year. Overall pricing was strong in the year driven by significantly
heightened dairy protein market prices.
GN NS EBITA was €128.2 million, 13.0% higher than prior year as margins were
sustained at broadly the same level as 2021.
US Cheese
€'m 2022 2021 Reported Constant
change currency change
Revenue 2,890.1 2,016.4 43.3% 27.7%
EBITA 36.8 24.4 50.8% 33.3%
EBITA margin 1.3% 1.2%
US Cheese revenue increased by 27.7% in 2022 versus the prior year. This was
driven by a 4.3% increase in volume and a 23.4% increase in price. Volume
growth was driven by expanded production through the new joint venture plant
in Michigan, which was commissioned during 2021. Price increases were aligned
to the higher year-on-year market pricing.
US Cheese EBITA increased by 33.3% to €36.8 million due to incremental
volumes and focus on driving operating leverage and efficiencies.
Joint Ventures (Glanbia share)
€'m - pre-exceptional 2022 2021 Change
Share of joint ventures' profit after tax - continuing operations 15.4 19.2 (3.8)
Share of joint ventures' profit after tax - discontinued operations - 25.7 (25.7)
Total 15.4 44.9 (29.5)
Glanbia's principal joint ventures (continuing operations) in 2022 include
MWC‐Southwest Holdings, Glanbia Cheese EU and Glanbia Cheese UK. The Group's
share of joint ventures' profit after tax pre‐exceptionals for continuing
operations decreased by €3.8 million to €15.4 million.
On 1 April 2022, Glanbia completed the disposal of its 40% interest in the
Glanbia Ireland joint venture to the Society for €307 million. The
transaction was approved by members of the Society on 17 December 2021,
following which this joint venture investment was considered as an investment
'held‐for‐sale', with equity accounting ceasing to apply from that date.
As part of the Group's on-going focus on optimising its portfolio, the Group
has today announced that it has signed a non-binding memorandum of
understanding for the sale of its 50% holding in Glanbia Cheese EU and 51%
holding in Glanbia Cheese UK (collectively the "Glanbia Cheese JVs") to
Leprino Foods Company. Based on preliminary results for both companies, the
Glanbia Cheese JVs contributed approximately €7.3 million to the share of
profit after tax of Glanbia equity accounted investees in 2022 (2021: €0.3
million). It is expected that Glanbia will receive initial cash proceeds in
excess of €160m (including the repayment of shareholder loans), with further
contingent consideration of up to €25m dependant on the performance of the
Glanbia Cheese JVs over the next three years. Subject to the satisfactory
completion of limited confirmatory diligence, the negotiation of binding
transaction agreements and other conditions, it is expected that the deal will
close in the first half of 2023.
FULL YEAR 2022 Finance Review
2022 Group income statement
2022 2021
€'m Pre-exceptional Exceptional Total Pre-exceptional Exceptional Total
Revenue - continuing operations 5,642.4 - 5,642.4 4,196.9 - 4,196.9
Earnings before interest, tax and (21.9)
amortisation (EBITA)
347.1 325.2 270.6 (48.4) 222.2
EBITA margin 6.2% - 6.2% 6.4% - 5.3%
Intangible asset amortisation and impairment (75.0) (26.5) (101.5) (63.9) - (63.9)
(48.4)
Operating profit 272.1 223.7 206.7 (48.4) 158.3
Finance income 1.8 7.3 9.1 2.0 - 2.0
Finance costs (22.5) (0.6) (23.1) (19.5) - (19.5)
Share of results of joint ventures 15.4 0.2 15.6 19.2 (2.0) 17.2
Profit before taxation 266.8 (41.5) 225.3 208.4 (50.4) 158.0
Income taxes (31.4) 5.7 (25.7) (24.6) 7.6 (17.0)
Profit after tax from continuing operations 235.4 (35.8) 199.6 183.8 (42.8) 141.0
- 57.2 57.2 25.7 0.7 26.4
Discontinued operations
Profit after tax from discontinued operations
Profit for the year 235.4
21.4 256.8 209.5 (42.1) 167.4
Revenue
Revenue increased in 2022 by 21.2% versus prior year on a constant currency
basis to €5.6 billion, an increase of 34.4% on a reported basis.
Like-for-like wholly-owned revenue increased by 20.2%, driven by positive
pricing of 19.7% and volume increases of 0.5%. The full year impact of the
2021 LevlUp and PacMoore acquisitions, and the recent Sterling Technology
acquisition added a further 1.0% to revenue. Detailed analysis of revenue is
set out within the operations review.
EBITA (pre-exceptional)
EBITA before exceptional items increased 13.5% constant currency (+28.3%
reported) to €347.1 million (2021: €270.6 million) with strong EBITA
delivery in both GPN and GN. EBITA margin in FY 2022 was 6.2%, compared to
6.4% in 2021 as a result of unprecedented inflationary trends across the
business, net of mitigating actions.
GPN pre-exceptional EBITA increased by 10.5% constant currency to €182.1
million (2021: €145.1 million), an increase of 25.5% on a reported basis.
GPN pre-exceptional EBITA margin at 11.2% was 10 basis points higher than
prior year reported, with an improving margin profile over the year and
delivering 12% margin in H2, 2022.
GN pre-exceptional EBITA grew 16.9% constant currency to €165.0 million
(2021: €125.5 million), an increase of 31.5% on a reported basis. GN
pre-exceptional EBITA margin was 4.1%, down 20 basis points reported from 2021
as the dilutive impact of higher dairy markets was largely mitigated by
improved business mix and operating efficiencies.
Net finance costs (pre-exceptional)
Net finance costs (pre-exceptional items) increased by €3.2 million to
€20.7 million (2021: €17.5 million). The increase was primarily driven by
increased average debt levels and stronger average US Dollar exchange rates in
2022 compared to 2021. The Group's average interest rate was 2.3% (2021:
3.0%). Glanbia operates a policy of fixing a significant amount of its
interest exposure, with 90% of projected 2023 debt currently contracted at
fixed rates.
Share of results of joint ventures
The Groups' share of results of joint ventures is stated after tax and before
exceptional items. The Group's share of joint venture profits from continuing
operations decreased by €3.8 million to €15.4 million (2021: €19.2
million). Operationally, the joint ventures, particularly in the US, delivered
a strong performance with year-on-year volume growth, benefiting from the full
year impact of the new Michigan facility, following successful commissioning
in 2021.
The prior year share of joint venture profits from discontinued operations
relate to the Glanbia Ireland investment which was classified as an asset
held-for-sale in 2021. Following receipt of all shareholder approvals and
regulatory clearances, the disposal was completed in April 2022, with the
related once off gain on disposal treated as an exceptional item in the
period.
Income taxes
The 2022 pre-exceptional tax charge increased by €6.8 million to €31.4
million (2021: €24.6 million). This represents an effective tax rate,
excluding joint ventures, of 12.5% (2021: 13.0%). The tax credit related to
exceptional items is €5.7m (2021: €7.6m). The Group currently expects that
its effective tax rate for 2023 will be in the range of 13.5% to 14.5%.
Exceptional items
€'m - continuing operations 2022 2021
Pension related costs (note 1) (1.7) (30.3)
Changes in the fair value of contingent consideration and call option (note 2) 6.7 -
Organisation redesign costs (note 3) - (18.1)
Portfolio related re-organisation costs (note 4) (2.9) -
Non-core assets held-for-sale (note 5) (43.8) -
Wholly-owned exceptional charge before tax (41.7) (48.4)
Share of results of joint ventures (note 1) 0.2 (2.0)
Exceptional tax credit 5.7 7.6
Exceptional (charge) after tax (35.8) (42.8)
€'m - discontinued operations 2022 2021
Exceptional gain from discontinued operations (note 6) 57.2 0.7
Exceptional gain/(charge) after tax - discontinued operations 57.2 0.7
Total exceptional gain/(charge) in the year 21.4 (42.1)
During 2022 there were cash outflows of €21.3 million in respect of
exceptional charges. During 2021 there were cash outflows of €55.9 million
in respect of exceptional charges incurred in FY 2021 and prior years.
Details of the exceptional items are as follows:
1. Pension related costs relate to the restructure of legacy defined
benefit pension schemes associated with the Group and joint ventures, which
included initiating a process for the ultimate buyout and wind up of these
schemes and a further simplification of schemes that remain. Costs incurred
relate to the estimated cost of the settlement loss as a result of acquiring
bulk purchase annuity policies to mirror and offset movements in known
liabilities of the schemes ('buy-in' transaction), as well as related advisory
and execution costs, net of gains from risk reduction activities. The
restructuring effort has progressed well during 2022, effectively managing the
volatile financial market conditions in the UK during 2022, with final wind up
of schemes planned for completion in 2023.
2. Changes in fair value of contingent consideration and call option
relates to contingent payments and call option associated with the 2021 LevlUp
acquisition that have now reduced following an assessment of conditions that
give rise to the additional payments.
3. Prior year organisation redesign costs related to a fundamental
reorganisation of the GPN segment to drive greater efficiencies, improve
margin and deliver top line growth. The investment phase of this programme is
now complete, with no further costs incurred during the period.
4. Portfolio related re-organisation costs relate to indirect one off
costs as a result of recent and planned portfolio changes. Following these
divestment decisions related to non-core businesses, the Group launched a
programme to realign Group-wide support functions and optimise structures of
the remaining portfolio, to more efficiently support business operations and
growth. This programme will continue into 2023 with realisation of benefits
from 2024 onwards. Costs incurred to date relate to advisory fees and people
related costs.
5. Non-core assets held-for-sale relate to fair value adjustments to
reduce the carrying value of certain assets to recoverable value. The assets
relate to a small US based bottling facility (Aseptic Solutions) which,
following the completion of a strategic portfolio review, were determined to
be non-core and a decision was made to divest the business, resulting in the
designation as held-for-sale at year end. Discussions are ongoing, and a sale
is expected to conclude in H1, 2023.
6. Exceptional gain from discontinued operations relates to the gain
arising on the divestment of the Group's interest in Glanbia Ireland,
following its classification as a discontinued operation in 2021. The 2021
gain includes one off gains on the settlement of forward contracts, net of one
off re-organisation costs within this joint venture.
Profit after tax
Profit after tax for the year was €256.8 million compared to €167.4
million in 2021, comprising continuing operations of €199.6 million (2021:
€141.0 million) and discontinued operations of €57.2 million (2021:
€26.4 million). Profit after tax from continuing operations comprises
pre-exceptional profit of €235.4 million (2021: €183.8 million) and
exceptional charges of €35.8 million (2021: €42.8 million). The €51.6
million increase in pre-exceptional profit after tax from continuing
operations is driven by the increased profitability of wholly-owned businesses
net of reduced profitability of joint ventures.
Profit after tax from discontinued operations in the current and prior year
relates to the Glanbia Ireland joint venture. As outlined above, the Group's
share of Glanbia Ireland was disposed in April 2022, with the resulting gain
being recognised as an exceptional gain.
Earnings Per Share (EPS)
2022 2021 Reported Constant Currency Change
Change
Basic EPS 93.42c 57.57c +62.3% +37.5%
- continuing operations 72.67c 48.47c +49.9% +23.5%
- discontinued operations 20.75c 9.10c +128.0% +128.0%
Adjusted EPS 104.02c 87.15c +19.4% +6.4%
- continuing operations 104.02c 77.84c +33.6% +17.6%
- discontinued operations nil 9.31c -100% -100%
Basic EPS increased by 62.3% reported versus prior year, driven by a
year-on-year increase in pre-exceptional profitability and the exceptional one
off gains on portfolio related adjustments.
Adjusted EPS is a Key Performance Indicator (KPI) of the Group, a key metric
guided to the market and a key element of Executive Director and senior
management remuneration. Adjusted EPS increased by 6.4% constant currency
(19.4% reported) in the year, driven primarily by the increased profitability
in both GPN and GN, offset by a reduced share of profits of joint ventures.
Adjusted EPS comprises continuing operations of 104.02 cent (2021: 77.84 cent)
and discontinued operations representing the now disposed Glanbia Ireland
joint venture of nil (2021: 9.31 cent).
Cash flow
The principal cash flow KPIs of the Group and Business Units are Operating
Cash Flow (OCF) and Free Cash Flow (FCF). OCF represents EBITDA of the
wholly-owned businesses net of business-sustaining capital expenditure and
working capital movements, excluding exceptional cash flows. FCF is calculated
as the cash flow in the year before the following items: strategic capital
expenditure, equity dividends paid, expenditure on share buyback, acquisition
spend, proceeds received on disposal, exceptional costs paid, loans/equity
invested in joint ventures and foreign exchange movements. 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 Executive Director
and senior management remuneration. OCF and FCF results for the Group are
outlined below.
€'m 2022 2021
EBITDA pre-exceptional 414.6 333.6
Movement in working capital (pre-exceptional) (39.9) 16.5
Business-sustaining capital expenditure (19.4) (15.9)
Operating cash flow 355.3 334.2
Net interest and tax paid (81.4) (51.5)
Dividends from joint ventures 14.5 33.9
Payment of lease liabilities (16.5) (19.1)
Other inflows/(outflows) (3.3) 6.4
Free cash flow 268.6 303.9
Strategic capital expenditure (49.5) (61.6)
Dividends paid to Company shareholders (84.4) (80.5)
Share buyback (purchase of own shares) (173.5) (91.3)
Payment for acquisition of subsidiaries (54.9) (95.0)
Exceptional costs paid (21.3) (55.9)
Proceeds from sale of property, plant and equipment 3.4 1.5
Loans/investment in joint ventures (18.2) (10.7)
Proceeds on disposal of interest in Glanbia Ireland 307.0 -
Net cash flow 177.2 (89.6)
Exchange translation (34.8) (23.6)
Cash/(debt) acquired on acquisition 0.9 4.4
Net debt movement 143.3 (108.8)
Opening net debt (602.7) (493.9)
Closing net debt (459.4) (602.7)
OCF was €355.3 million in the year (2021: €334.2 million) and represents a
strong cash conversion on EBITDA of 85.7% (2021: 100.2%). The OCF conversion
target for the year was 80%. The rate remains above target conversion levels,
reducing since the prior year as a result of an increased investment in
working capital due to higher pricing in receivables and inventory, and the
restoration of appropriate inventory buffer levels to ensure appropriate
supplies of raw materials to mitigate further inflationary exposures.
FCF was €268.6 million versus €303.9 million in 2021, with the reduction
primarily due to higher net tax payments in the year combined with a reduction
in dividend income from joint ventures following the disposal of the Group's
interest in Glanbia Ireland.
Capital allocated for the benefit of shareholders includes regular dividend
payments of €84.4 million (2021: €80.5 million) and the execution of share
buyback programmes of €173.5 million (2021: €91.3 million). The Board
continues to review buyback programmes as part of the Group's capital
allocation strategy as they provide an opportunity to allocate capital to the
benefit of shareholders.
Acquisition spend primarily relates to the acquisition of Sterling Technology,
a US based bioactive ingredient company, for an initial consideration of
€54.5 million which concluded in March 2022 and divestment proceeds relate
to the completion of the disposal of the Group's 40% holding in Glanbia
Ireland for a consideration of €307.0 million in April 2022.
Loans to/equity in joint ventures during 2022 includes the continued
investment in Glanbia Cheese EU, the mozzarella cheese joint venture in
Portlaoise, Ireland which was fully commissioned during Q4, 2022. Negotiations
are ongoing to sell the Group's interest in this joint venture, with full
repayment of outstanding loans on completion of the sales transaction.
Group financing
Financing Key Performance Indicators 2022 2021
Net debt (€'m) 459.4 602.7
Net debt: adjusted EBITDA 1.12 times 1.71 times
Adjusted EBIT: net finance cost 17.0 times 15.1 times
The Group's financial position continues to be strong. At year end 2022, net
debt was €459.4 million (2021: €602.7 million), a decrease of €143.3
million from prior year and the Group had committed debt facilities of
€1.215 billion (2021: €1.16 billion) with a weighted average maturity of
5.8 years (2021: 3.9 years). Glanbia's ability to generate cash, as well as
its available debt facilities ensures the Group has considerable capacity to
finance future investments. Net debt to adjusted EBITDA was 1.12 times (2021:
1.71 times) and interest cover was 17.0 times (2021: 15.1 times), both metrics
remaining well within financing covenants.
In December 2022, the Group completed the refinancing of €0.9 billion of
bank facilities, repayable in January 2024, with replacement facilities
repayable in December 2027. This refinancing improved the weighted average
maturity of committed debt facilities, at 2022 year end, to 5.8 years (2021:
3.9 years).
Use of capital
Capital expenditure
The cash outflow relating to capital expenditure for the year amounted to
€68.9 million (2021: €77.5 million) including €19.4 million of
business-sustaining capital expenditure and €49.5 million of strategic
capital expenditure. Key strategic projects completed in 2022 include ongoing
capacity enhancement and business integrations to drive further efficiencies
in operations.
Investments in Joint Ventures
During 2022, the Group continued developing its joint venture investment
portfolio. Following the successful commissioning of the US cheese and whey
manufacturing facility in Michigan in 2021, the Glanbia Cheese EU mozzarella
cheese plant in Ireland was fully commissioned during Q4, 2022. A further
€47.0 million was advanced to this venture in the period, all of which will
be fully repaid on completion of the planned divestment of the business in
2023.
Return on Capital Employed (ROCE)
2022 2021 Change
Return on Capital Employed 11.1% 10.1% +100bps
- continuing operations 11.1% 10.0% +110bps
- discontinued operations - 12.0% -1,200bps
Return on Capital Employed (ROCE) increased in 2022 by 100 basis points to
11.1%. This increase was primarily due to the continued growth in
profitability of the wholly-owned business, as well as the successful
execution of strategy through pricing and efficiency improvements to mitigate
the impact of unprecedented input cost inflation. Acquisitions remain a key
part of the growth strategy of the Group with investments assessed against a
target benchmark of 12% return after tax by the end of year three.
Dividends
The Board is recommending a final dividend of 19.28 cent per share which
brings the total dividend for the year to 32.21 cent per share, a 10% increase
over 2021. This total dividend represents a return of €87.9 million to
shareholders from 2022 earnings and a payout ratio of 31% of 2022 adjusted
Earnings Per Share which is in line with the Board's target dividend payout
ratio of 25% to 35%. The final dividend will be paid on 5 May 2023 to
shareholders on the share register on 24 March 2023.
Total Shareholder Return
Total Shareholder Return (TSR) for 2022 was -8.4%. The STOXX Europe 600 Food
& Beverage Index (F&B Index), a benchmark for the Group, decreased by
14.25% in 2022. The three-year period 2020 to 2022 Glanbia TSR was +15.6%
versus the F&B Index which decreased by 3.62%. The five-year Glanbia TSR
to 2022 was negative 19.2% versus the F&B Index of +10.79%. Glanbia's
share price at the end of the financial year was €11.92 compared to €12.30
at the 2021 year end, representing a decrease of 3%.
Impact of new accounting standards
No new accounting standards were adopted in 2022. Amendments to existing
standards during the year did not have a material impact on the Group.
Pension
The Group's net pension liability under IAS 19 (revised) 'Employee Benefits',
before deferred tax, improved by €15.8 million since 2021, resulting in a
net pension asset of €1.6 million at 31 December 2022 (2021: liability of
€14.2 million). The defined benefit pension position is calculated by
discounting the estimated future cash outflows using appropriate corporate
bond rates. During 2022, the company progressed the restructuring of UK
pension schemes, further reducing the Group's exposure to liabilities on these
legacy schemes. It is anticipated that the UK schemes will ultimately be wound
up in 2023, removing any related scheme assets and liabilities and associated
volatility from the Group's balance sheet.
Foreign exchange
Glanbia generates the majority of its earnings in US dollar currency and has
significant assets and liabilities denominated in US dollars. As a result, and
as Glanbia's reporting currency is euro, there can be a significant impact to
reported numbers arising from currency movements year-on-year and on
translation of US dollar non-monetary assets and liabilities in the
preparation of the Consolidated Financial Statements. Commentary is provided
on a constant currency basis to provide a better reflection of the underlying
operating results in the year, removing the translational currency impact. To
arrive at the constant currency change, the average foreign exchange rate for
the current period is applied to the relevant reported result from the same
period in the prior year. At the balance sheet date, due to the strengthening
of the US dollar in 2022, there was a currency translation gain arising
primarily on the translation of US assets and liabilities into euro which is
presented within other comprehensive income and amounted to €79.9 million in
the year. The amount included a gain of €0.2 million on the retranslation of
non-euro denominated cash and cash equivalents as presented in the cash flow
statement. Average and year end euro to US dollar rates were as follows:
Average Year end
2022 2021 2022 2021
1 euro converted to US dollar 1.0534 1.1826 1.0666 1.1326
Investor relations
Glanbia has a proactive approach to shareholder engagement with the Annual
General Meeting (AGM) being a key event annually. In 2022, a hybrid AGM was
held, with shareholders given the opportunity to attend the event in person or
participate online. All details relating to the AGM were published on the
Company's website: www.glanbia.com/agm (http://www.glanbia.com/agm) .
The Group Chairman consulted directly with a number of shareholders during the
year. A shareholder perceptions survey was also completed by an independent
third party, where shareholders and investors were given the opportunity to
provide confidential feedback to the company. Feedback was discussed with the
Board with actions taken on specific areas. The Group Secretary and Head of
Investor Relations also undertook a shareholder consultation on the Group's
share buyback resolution and support was noted.
In 2022, Glanbia attended 12 international equities investor conferences
(physically and virtually). In November 2022, the Group held a Capital Markets
Day at its GPN facilities in Illinois, USA, bringing together our investor and
shareholder communities to learn more about our strategy, including details of
our medium term financial objectives.
In addition to full year and half year results, Glanbia publishes interim
management statements after the first and third quarters to provide investors
with a regular update on performance and expectations throughout the year. All
releases, reports and presentations are made available immediately on
publication on the Group's investor relations website.
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 Directors of Glanbia have
carried out a robust assessment of the Group's principal risks, including
those that may threaten Glanbia's business model, future performance, solvency
or liquidity. The risk categorisation recognises the external risks associated
with the operating environment, which are typically considered and managed
through strategic processes, and the mainly internal risks associated with
people, processes and systems which are managed through Glanbia's internal
controls. Emerging risks with the potential to impact longer term success are
also considered to ensure appropriate plans are in place to respond to them
over time.
The Group's principal risks and uncertainties are summarised in the risk
profile table below. No new principal risks were identified during the year
while some fluctuation in the risk trends did arise including:
· The market disruption risk trend has increased from stable to
increasing during the year due to the potential impacts to demand from the
rising cost of living which has been intensified by continued inflationary
pressures and rising energy costs hitting household incomes.
· Economic, industry and political, climate change, supply chain,
talent management, and cyber security and data protection risks continue to
trend upwards.
· The importance of climate change risk on the Groups strategy
continues to increase with a significant and continued effort being applied at
a Group and business segment level in this area to address the evolving
regulatory landscape and increasing stakeholder expectations.
· While pandemic related risks have reduced due to the success of
vaccination rollout programmes, the supply chain risk trend remains elevated
with continued inflationary headwinds across the business driven by
geo-political conflict and increased global activity.
There may be other risks and uncertainties that are not yet considered
material or not yet known to Glanbia 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 Financial Technological Operational/Regulatory
Risk where trend is stable · Customer concentration • Taxation changes • Digital transformation • Health and safety
• Product safety and compliance
• Acquisition/integration
Risk where trend is increasing · Economic, industry and political · Cyber security and data protection · Supply chain
· Market disruption · Talent management
· Climate change
Key risk factors and uncertainties with the potential to impact on the Group's
financial performance in 2023 include:
· Economic, industry and political risk - continues to increase
primarily due to the inflationary pressures across the global economy and the
geo-political risks associated with the conflict between Russia and the
Ukraine.
· Market disruption risk - adverse changes in economic conditions
and/or continued inflationary and interest rate pressures could result in
reduced consumer spending which may disrupt demand. The inability to contain
the spread of global pandemics, such as Covid-19, may also disrupt markets in
2023.
· Supply chain risk - Glanbia is actively monitoring a number of
supply chain and inflationary pressures including:
o The overall impact on margins of movements in dairy pricing, particularly
in whey markets. This has resulted in price increases to offset some of the
increased input costs and further increases may be required in 2023 which may
disrupt demand due to price elasticity. Any further price increases will be
managed against the Group's ambition to continue to drive revenue growth;
o The ability of governments and medical agencies to suppress the spread of
global pandemics, such as the Covid-19 virus. This is important in preventing
unexpected supply chain disruptions which could result in restrictions on the
importation of key raw materials and/or negative impacts 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 due to a
pandemic or the geo-political environment in key trading regions would have
negative consequences from both a supply and pricing perspective;
o Labour markets continue to be competitive, particularly in the US, and
plants are operating at a high capacity. Labour inflation, together with
global supply chain cost increases in transport and logistics will continue to
require careful navigated in 2023;
· 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; and
· Health and safety risk - a failure to maintain good health and
safety practices or the risk of a global pandemic, such as Covid-19, 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
Covid-19 pandemic which build on the existing strong controls across the
Group.
The Group actively manages these and all other risks through its risk
management and internal control processes.
Cautionary statement
This announcement contains forward-looking statements. These statements have
been made by the Directors in good faith based on the information available to
them up to the time of their approval of this report. Due to the inherent
uncertainties, including both economic and business risk factors underlying
such forward-looking information, actual results may differ materially from
those expressed or implied by these forward-looking statements. The Directors
undertake no obligation to update any forward-looking statements contained in
this announcement, whether as a result of new information, future events, or
otherwise.
On behalf of the Board
Siobhán
Talbot
Mark Garvey
Group Managing Director Group
Finance Director
28 February 2023
Annual General Meeting (AGM)
Glanbia plc's AGM will be held on Thursday 4 May 2023, in the Lyrath Estate
Hotel, Kilkenny, Ireland.
Results webcast and dial-in details:
There will be a webcast and presentation to accompany this results
announcement at 8.30 a.m. GMT today. Please access the webcast from the
Glanbia website at https://www.glanbia.com/investors/results-centre, where the
presentation can also be viewed or downloaded. In addition, a dial-in facility
is available using the following numbers:
Global +353 (0)1 536 9584 (tel:%20+353%20(0)1%202465682)
Ireland +353 (0)1 536 9584 (tel:%20+353%20(0)1%202465682)
United Kingdom +44 (0) 203 936 2999 (tel:%20+44%20(0)330%20336%209601)
United States +1 855 (tel:%20+1%20323-701-0160) 9796 654
All other locations +44 (0) 203 936 2999 (tel:%20+44%20(0)330%20336%209601)
The access code for all participants is: 469953
A replay of the call will be available for 30 days approximately two hours
after the call ends.
For further information contact
Glanbia plc +353 56 777 2200
Siobhán Talbot, Group Managing Director
Mark Garvey, Group Finance Director
Liam Hennigan, Group Secretary & Head of Investor Relations +353 86 046 8375
Martha Kavanagh, Head of Corporate Communications +353 87 646 2006
Group income statement
for the financial year ended 31 December 2022
2022 2021
Notes Pre- Exceptional Total Pre- Exceptional Total
exceptional €'m €'m exceptional €'m €'m
€'m (note 4) €'m (note 4)
Continuing operations 2/3 5,642.4 - 5,642.4 4,196.9 - 4,196.9
Revenue
Operating profit before intangible asset amortisation and impairment (earnings 3 347.1 (21.9) 325.2 270.6 (48.4) 222.2
before interest, tax and amortisation (EBITA))
Intangible asset amortisation and impairment 3 (75.0) (26.5) (101.5) (63.9) - (63.9)
Operating profit 3 272.1 (48.4) 223.7 206.7 (48.4) 158.3
5 1.8 7.3 9.1 2.0 - 2.0
Finance income
Finance costs 5 (22.5) (0.6) (23.1) (19.5) - (19.5)
Share of results of joint ventures accounted for using the equity method 15.4 0.2 15.6 19.2 (2.0) 17.2
Profit before taxation 266.8 (41.5) 225.3 208.4 (50.4) 158.0
Income taxes 6 (31.4) 5.7 (25.7) (24.6) 7.6 (17.0)
Profit from continuing operations 235.4 (35.8) 199.6 183.8 (42.8) 141.0
13 -
Discontinued operations 57.2 57.2 25.7 0.7 26.4
Profit after tax from discontinued operations
Profit for the year 235.4 21.4 256.8 209.5 (42.1) 167.4
Attributable to:
Equity holders of the Company 11 257.6 167.0
Non-controlling interests (0.8) 0.4
256.8 167.4
Earnings Per Share from continuing operations attributable to the equity
holders of the Company
Basic Earnings Per Share (cent) 7 72.67 48.47
Diluted Earnings Per Share (cent) 7 71.76 48.30
Earnings Per Share attributable to the equity holders of the Company
Basic Earnings Per Share (cent) 7 93.42 57.57
Diluted Earnings Per Share (cent) 7 92.24 57.37
Group statement of comprehensive income
for the financial year ended 31 December 2022
Notes 2022 2021
€'m €'m
Profit for the year 256.8 167.4
Other comprehensive income
Items that will not be reclassified subsequently to the Group income 12.1 (0.5)
statement:
Remeasurements on defined benefit plans, net of deferred tax
Revaluation of equity investments at FVOCI, net of deferred tax 10 0.4 (0.2)
Share of other comprehensive income of joint ventures accounted for using the 11 0.5 1.7
equity method, net of deferred tax
Share of other comprehensive income of discontinued operations, net of 11 - 4.3
deferred tax
10 79.9 126.7
Items that may be reclassified subsequently to the Group income statement:
Currency translation differences
Currency translation difference arising on net investment hedge 10 (5.4) (6.7)
Gain on cash flow hedges, net of deferred tax 2.6 2.7
Share of other comprehensive income of joint ventures accounted for using the
equity method, net of deferred tax
15.6 6.2
Share of other comprehensive income of discontinued operations, net of - 1.1
deferred tax
Other comprehensive income for the year, net of tax 105.7 135.3
Total comprehensive income for the year 362.5 302.7
Attributable to:
Equity holders of the Company 363.3 302.3
Non-controlling interests (0.8) 0.4
Total comprehensive income for the year 362.5 302.7
Group balance sheet
as at 31 December 2022
Notes 31 December 1 January
2022 2022
€'m €'m
ASSETS
Non-current assets
Property, plant and equipment 478.9 485.2
Right-of-use assets 94.4 99.9
Intangible assets 1,452.1 1,375.4
Interests in joint ventures 211.2 184.8
Other financial assets 2.1 1.9
Loans to joint ventures 61.5 42.5
Deferred tax assets 4.7 4.7
Other receivables 0.3 0.8
Derivative financial instruments - 0.5
Retirement benefit assets 3.0 2.9
2,308.2 2,198.6
Current assets 703.7 593.6
Inventories
Trade and other receivables 379.5 359.4
Current tax receivable 12.9 8.8
Derivative financial instruments 2.9 2.2
Cash and cash equivalents (excluding bank overdrafts) 9 438.6 231.0
1,537.6 1,195.0
Assets held for sale 13 14.3 234.0
1,551.9 1,429.0
Total assets 3,860.1 3,627.6
EQUITY
Issued capital and reserves attributable to equity holders of the Company
Share capital and share premium 104.1 105.0
Other reserves 10 359.3 245.5
Retained earnings 11 1,397.7 1,381.7
1,861.1 1,732.2
Non-controlling interests 7.3 8.1
Total equity 1,868.4 1,740.3
LIABILITIES
Non-current liabilities
Borrowings 9 639.8 697.2
Lease liabilities 97.0 105.0
Other payables - 32.6
Retirement benefit obligations 1.4 17.1
Deferred tax liabilities 129.7 144.4
Provisions 3.8 3.6
871.7 999.9
Current liabilities
Trade and other payables 774.8 669.3
Borrowings 9 258.2 136.5
Lease liabilities 17.8 14.5
Current tax liabilities 50.7 53.0
Derivative financial instruments 1.0 1.2
Provisions 11.2 12.9
1,113.7 887.4
Liabilities held for sale 13 6.3 -
1,120.0 887.4
Total liabilities 1,991.7 1,887.3
Total equity and liabilities 3,860.1 3,627.6
Group statement of changes in equity
for the financial year ended 31 December 2022
Attributable to equity holders of the Company
Share capital and share premium Other Retained Total Non- Total
€'m reserves earnings €'m Controlling interests €'m
€'m
€'m
€'m
(note 10)
(note 11)
Balance at 2 January 2022 105.0 245.5 1,381.7 1,732.2 8.1 1,740.3
- - 257.6 257.6 (0.8) 256.8
Profit for the year
Other comprehensive income - 93.1 12.6 105.7 - 105.7
Total comprehensive income for the year - 93.1 270.2 363.3 (0.8) 362.5
Dividends - - (84.4) (84.4) - (84.4)
Purchase of own shares - (196.9) - (196.9) - (196.9)
Cancellation of own shares (0.9) 174.4 (173.5) - - -
Cost of share-based payments - 18.8 - 18.8 - 18.8
Transfer on exercise, vesting or expiry of share-based payments - (1.9) 1.9 - - -
Deferred tax on share-based payments - - 0.5 0.5 - 0.5
Sale of shares held by a subsidiary - - 1.3 1.3 - 1.3
Remeasurement of put option liability - 24.8 - 24.8 - 24.8
Transfer to Group income statement - 1.5 - 1.5 - 1.5
Balance at 31 December 2022 104.1 359.3 1,397.7 1,861.1 7.3 1,868.4
Balance at 3 January 2021 105.3 126.0 1,380.5 1,611.8 - 1,611.8
- - 167.0 167.0 0.4 167.4
Profit for the year
Other comprehensive income - 129.8 5.5 135.3 - 135.3
Total comprehensive income for the year - 129.8 172.5 302.3 0.4 302.7
Dividends - - (80.5) (80.5) - (80.5)
Purchase of own shares - (94.0) - (94.0) - (94.0)
Issuance of shares 0.2 - - 0.2 - 0.2
Cancellation of own shares (0.5) 91.8 (91.3) - - -
Cost of share-based payments - 15.9 - 15.9 - 15.9
Transfer on exercise, vesting or expiry of share-based payments
- 0.8 (0.8) - - -
Deferred tax on share-based payments - - 1.3 1.3 - 1.3
Non-controlling interests on acquisition of subsidiary - - - - 7.7 7.7
Recognition and remeasurement of put option liability - (24.8) - (24.8) - (24.8)
Balance at 1 January 2022 105.0 245.5 1,381.7 1,732.2 8.1 1,740.3
Group statement of cash flows
for the financial year ended 31 December 2022
Notes 2022 2021
€'m €'m
Cash flows from operating activities 12 393.0 358.0
Cash generated from operating activities before exceptional items
Cash outflow related to exceptional items (13.3) (55.9)
Interest received 1.5 2.1
Interest paid (including interest expense on lease liabilities) (23.2) (18.8)
Tax paid (59.7) (34.3)
Net cash inflow from operating activities 298.3 251.1
Cash flows from investing activities (54.9) (95.0)
Payment for acquisition of subsidiaries
Purchase of property, plant and equipment (31.9) (49.0)
Purchase of intangible assets (37.0) (28.5)
Interest paid in relation to property, plant and equipment 5 - (0.5)
Proceeds from sale of property, plant and equipment 3.4 1.5
Dividends received from related parties* 14.5 33.9
Loans advanced to joint ventures (47.0) (10.7)
Proceeds on repayment of loans advanced to Glanbia Ireland DAC 28.8 -
Proceeds from disposal/redemption of FVOCI financial assets 0.4 1.1
Proceeds on sale of shares held by subsidiary 1.4 -
Payments for FVOCI financial assets - (0.1)
Proceeds from disposal of Glanbia Ireland DAC (exceptional) 13 307.0 -
Cash outflow related to exceptional items 13 (8.0) -
Net cash inflow/(outflow) from investing activities 176.7 (147.3)
10
Cash flows from financing activities (196.9) (94.0)
Purchase of own shares
Drawdown of borrowings 688.4 458.5
Repayment of borrowings (780.8) (383.4)
Payment of lease liabilities (16.5) (19.1)
Dividends paid to Company shareholders 8 (84.4) (80.5)
Proceeds from issue of shares - 0.2
Net cash outflow from financing activities (390.2) (118.3)
Net increase/(decrease) in cash and cash equivalents 84.8 (14.5)
Cash and cash equivalents at the beginning of the year 94.5 91.6
Cash and cash equivalents acquired on acquisition 14 0.9 4.4
Effects of exchange rate changes on cash and cash equivalents 0.2 13.0
Cash and cash equivalents at the end of the year 9 180.4 94.5
* €12.2 million in 2021 related to discontinued operations and represented
the net cash inflow from investing activities from discontinued operations.
Notes to the financial statements
for the financial year ended 31 December 2022
1. Accounting policies
The financial information set out in this document does not constitute full
statutory financial statements but has been derived from the Group financial
statements for the year ended 31 December 2022 (referred to as the 2022
financial statements). The Group financial statements have been prepared in
accordance with EU adopted International Financial Reporting Standards
("IFRS"), IFRIC interpretations and those parts of the Companies Act 2014,
applicable to companies reporting under IFRS. The 2022 financial statements
have been audited and have received an unqualified audit report. Amounts are
stated in euro millions (€'m) unless otherwise stated. These financial
statements are prepared for the 52‐week period ended 31 December 2022.
Comparatives are for the 52‐week period ended 1 January 2022. The balance
sheets for 2022 and 2021 have been drawn up as at 31 December 2022 and 1
January 2022 respectively.
The financial statements have been prepared under the historical cost
convention as modified by use of fair values for certain other financial
assets, contingent consideration, put option liability, and derivative
financial instruments.
All notes to the financial statements include amounts for continuing
operations, unless indicated otherwise.
The Group's accounting policies which will be included in the 2022 financial
statements are consistent with those as set out in the 2021 financial
statements.
There are no new IFRS standards or amendments effective for the Group in 2022
which had a material impact on the financial statements.
The financial statements were approved and authorised for issue by the Board
of Directors on 28 February 2023 and signed on its behalf by D Gaynor, S
Talbot, and M Garvey.
Going concern
After making appropriate enquiries, the Directors have a reasonable
expectation that the Group has adequate resources to continue in operational
existence for a period of at least 12 months from the date of approval of the
financial statements. The Group therefore considers it appropriate to adopt
the going concern basis in preparing its financial statements.
Adoption of amended standards
The following changes to IFRS became effective for the Group during the
financial year but did not result in material changes to the Group's financial
statements:
• Property, Plant and Equipment: Proceeds before Intended Use -
Amendments to IAS 16
• Onerous Contracts - Cost of Fulfilling a Contract - Amendments to
IAS 37
• Annual Improvements to IFRS Standards 2018-2020
• Reference to the Conceptual Framework - Amendments to IFRS 3
New and amended standards that are not yet effective
The Group has not applied new standards and amendments to existing standards
that have been issued but are not yet effective. The most significant of which
are as follows:
Disclosure of Accounting Policies - Amendments to IAS 1 (EU effective date: on
or after 1 January 2023)
The IASB amended IAS 1 to require entities to disclose their material rather
than their significant accounting policies. The amendments define what is
'material accounting policy information' and explain how to identify when
accounting policy information is material. They further clarify that
immaterial accounting policy information does not need to be disclosed. If it
is disclosed, it should not obscure material accounting information. The Group
does not expect the adoption of the amendments to have a material impact on
the financial statements.
Classification of Liabilities as Current or Non-current - Amendments to IAS 1
(IASB effective date: on or after 1 January 2024)
The amendments clarify that liabilities are classified as either current or
non-current, depending on the rights that exist at the end of the reporting
period. Classification is unaffected by the expectations of the entity or
events after the reporting date (e.g. the receipt of a waiver or a breach of
covenant). The amendments also clarify what IAS 1 means when it refers to the
'settlement' of a liability. The Group is currently evaluating the impact of
the amendments on future periods.
Other changes to IFRS have been issued but are not yet effective for the
Group. However, they are either not expected to have a material impact on the
Group or they are not currently relevant for the Group.
2. Segment information
In accordance with IFRS 8 'Operating Segments', the Group has identified
Glanbia Performance Nutrition and Glanbia Nutritionals as reportable segments
as at 31 December 2022. Glanbia Performance Nutrition manufactures and sells
sports nutrition and lifestyle nutrition products through a variety of
channels including specialty retail, online, Food, Drug, Mass, Club (FDMC),
and gyms in a variety of formats, including powders, Ready-to-Eat (bars and
snacking foods) and Ready-to-Drink beverages. Glanbia Nutritionals
manufactures and sells cheese, dairy and non-dairy nutritional and functional
ingredients, and vitamin and mineral premixes targeting the increased market
focus on health and nutrition.
Glanbia Ireland is no longer reported as a segment following its disposal on 1
April 2022 (note 13). In accordance with IFRS 8 Operating Segments, the prior
period pre-exceptional segment results were restated to exclude Glanbia
Ireland and the segment assets associated with Glanbia Ireland are included
within "All other segments and unallocated" for the comparative period.
All other segments and unallocated include both the results of joint ventures
who manufacture and sell cheese and dairy ingredients and unallocated
corporate costs. These investees did not meet the quantitative thresholds for
reportable segments in 2022 or 2021. Amounts stated for joint ventures
represents the Group's share.
These segments align with the Group's internal financial reporting system and
the way in which the CODM assesses performance and allocates the Group's
resources. Each segment is reviewed in its totality by the CODM. The CODM
assesses the trading performance of operating segments based on a measure of
earnings before interest, tax, amortisation and exceptional items. Given that
net finance costs and income tax are managed on a centralised basis, these
items are not allocated between operating segments for the purposes of the
information presented to the CODM and are accordingly omitted from the
detailed segmental analysis below.
2022 2021
Glanbia Performance Nutrition Glanbia Nutritionals €'m All other segments and unallocated Total Glanbia Performance Nutrition Glanbia Nutritionals €'m All other segments Total
€'m €'m €'m €'m and unallocated €'m
€'m
Segment results (pre-exceptional)
Total gross segment revenue 1,625.8 4,123.1 - 5,748.9 1,303.3 2,955.5 - 4,258.8
Inter-segment revenue (0.1) (106.4) - (106.5) (0.2) (61.7) - (61.9)
Revenue 1,625.7 4,016.7 - 5,642.4 1,303.1 2,893.8 - 4,196.9
Operating profit before intangible asset amortisation and impairment (EBITA) 182.1 165.0 - 347.1 145.1 125.5 - 270.6
Share of results of joint ventures accounted for using the equity method -
- 15.4 15.4 - - 19.2 19.2
Profit after tax from discontinued operations - - - - - - 25.7 25.7
Segment assets and liabilities
Segment assets 1,818.2 1,264.3 777.6 3,860.1 1,741.3 1,138.9 747.4 3,627.6
Segment liabilities 433.1 471.9 1,086.7 1,991.7 441.4 446.7 999.2 1,887.3
Other segment information (pre-exceptional)
Depreciation of PP&E and ROU assets 22.9 44.6 - 67.5 23.4 39.6 (1.4) 61.6
Amortisation of intangible assets 53.0 22.0 - 75.0 45.7 18.2 - 63.9
Capital expenditure - additions 20.3 44.5 16.0 80.8 54.9 36.5 9.4 100.8
Capital expenditure - business combinations - 71.1 - 71.1 49.7 44.3 - 94.0
Inter-segment transfers or transactions are entered into under the normal
commercial terms and conditions that would also be available to unrelated
third parties. Revenue of approximately €1,076.3 million (2021: €736.3
million) and €829.4 million (2021: €543.3 million) is derived from two
external customers respectively within the Glanbia Nutritionals segment.
Pre-exceptional segment operating profit before intangible asset amortisation
and impairment (EBITA) is reconciled to reported profit before tax and profit
after tax in the Group income statement.
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 on the following page.
Revenue from external customers in the table below and in the disaggregation
of revenue by primary geographical markets table below 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.
2022 2021
Revenue Non-current Revenue Non-current
€'m assets €'m assets
€'m €'m
Ireland (country of domicile) 11.0 767.3 7.7 713.1
US 4,613.4 1,234.3 3,390.2 1,201.9
Other
- North America (excluding US) 96.4 6.0 79.9 5.2
- Europe (excluding Ireland) 432.6 218.1 372.6 214.7
- Asia Pacific 374.5 11.2 265.6 11.2
- LATAM 69.2 - 43.9 -
- Rest of World 45.3 - 37.0 -
5,642.4 2,236.9 4,196.9 2,146.1
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.
2022 2021
Glanbia Glanbia Total Glanbia Glanbia Total
Performance Nutrition Nutritionals €'m Performance Nutrition Nutritionals €'m
€'m €'m €'m €'m
Internal reporting structures
Nutritional Solutions - 1,126.6 1,126.6 - 877.4 877.4
US Cheese - 2,890.1 2,890.1 - 2,016.4 2,016.4
GPN Americas 1,098.0 - 1,098.0 872.3 - 872.3
GPN International (including Direct-to-Consumer) 527.7 - 527.7 430.8 - 430.8
1,625.7 4,016.7 5,642.4 1,303.1 2,893.8 4,196.9
Primary geographical markets 1,100.8 3,609.0 4,709.8 881.7 2,588.4 3,470.1
North America
Europe 317.8 125.8 443.6 265.4 114.9 380.3
Asia Pacific 161.7 212.8 374.5 119.5 146.1 265.6
LATAM 13.8 55.4 69.2 9.7 34.2 43.9
Rest of World 31.6 13.7 45.3 26.8 10.2 37.0
1,625.7 4,016.7 5,642.4 1,303.1 2,893.8 4,196.9
Timing of revenue recognition
Products transferred at point in time 1,625.7 4,016.7 5,642.4 1,303.1 2,893.8 4,196.9
Products transferred over time - - - - - -
1,625.7 4,016.7 5,642.4 1,303.1 2,893.8 4,196.9
Channel mix for Glanbia Performance Nutrition 2022 2021
€'m €'m
Distributor 367.0 287.7
Food, Drug, Mass, Club (FDMC) 575.6 440.0
Online 482.3 398.6
Specialty 200.8 176.8
1,625.7 1,303.1
The disaggregation of revenue by channel mix is most relevant for Glanbia
Performance Nutrition.
3. Operating profit
2022 2021
Notes Pre- Exceptional Total Pre- Exceptional Total
exceptional €'m €'m exceptional €'m €'m
€'m €'m
Revenue 5,642.4 - 5,642.4 4,196.9 - 4,196.9
Cost of goods sold (4,671.3) (16.6) (4,687.9) (3,359.9) (6.4) (3,366.3)
Gross profit 971.1 (16.6) 954.5 837.0 (6.4) 830.6
Selling and distribution expenses (415.4) (0.1) (415.5) (379.7) (0.3) (380.0)
Administration expenses (208.2) (4.7) (212.9) (185.9) (41.7) (227.6)
Net impairment losses on financial assets (0.4) (0.5) (0.9) (0.8) - (0.8)
Operating profit before intangible asset amortisation and impairment (EBITA) 347.1 (21.9) 325.2 270.6 (48.4) 222.2
Intangible asset amortisation and impairment 12 (75.0) (26.5) (101.5) (63.9) - (63.9)
Operating profit 272.1 (48.4) 223.7 206.7 (48.4) 158.3
4. Exceptional items
The nature of the total exceptional items is as follows:
Notes 2022 2021
€'m €'m
Pension related costs (a) 1.7 30.3
Organisation redesign costs (b) - 18.1
Portfolio related re-organisation costs (c) 2.9 -
Non-core assets held for sale (d) 43.8 -
Total 48.4 48.4
Remeasurements of contingent consideration and call option (e) (6.7) -
Share of results of joint ventures accounted for using the equity method (a) (0.2) 2.0
Exceptional tax credit 6 (5.7) (7.6)
Total exceptional charge from continuing operations 35.8 42.8
Exceptional gain after tax from discontinued operations (f) (57.2) (0.7)
Total exceptional (gain)/charge after tax for the year 12 (21.4) 42.1
Details of the exceptional items are as follows:
(a) Pension related costs relate to the restructure of legacy
defined benefit pension schemes associated with the Group and joint ventures,
which included initiating a process for the ultimate buyout and wind up of
these schemes and a further simplification of schemes that remain. Costs
incurred relate to the estimated cost of the settlement loss as a result of
acquiring bulk purchase annuity policies to mirror and offset movements in
known liabilities of the schemes ('buy-in' transaction), as well as related
advisory and execution costs, net of gains from risk reduction activities. The
restructuring effort has progressed well during 2022, effectively managing the
volatile financial market conditions in the UK during 2022, with final wind up
of schemes planned for completion in 2023.
(b) Prior year organisation redesign costs related to a fundamental
reorganisation of the GPN segment to drive greater efficiencies, improve
margin and deliver top line growth. The investment phase of this programme is
now complete, with no further costs incurred during the period.
(c) Portfolio related re-organisation costs relate to indirect one
off costs as a result of recent and planned portfolio changes. Following
divestment decisions related to non-core businesses, the Group launched a
programme to realign Group-wide support functions and optimise structures of
the remaining portfolio, to more efficiently support business operations and
growth. This programme will continue into 2023 with realisation of benefits
from 2024 onwards. Costs incurred to date relate to advisory fees and people
related costs.
(d) Non-core assets held for sale relate to fair value adjustments
to reduce the carrying value of certain assets to recoverable value. The
assets relate to a small US based bottling facility (Aseptic Solutions) which,
following the completion of a strategic portfolio review, were determined to
be non-core and a decision was made to divest the business, resulting in the
designation as held-for-sale at year end. Discussions are ongoing and a sale
is expected to conclude in H1, 2023.
(e) Remeasurements of contingent consideration and call option
relate to contingent payments and call option associated with the 2021 LevlUp
acquisition that have now reduced following an assessment of conditions that
give rise to the additional payments.
(f) Exceptional gain after tax from discontinued operations
relates to the gain arising on the divestment of the Group's interest in
Glanbia Ireland, following its classification as a discontinued operation in
2021. The 2021 gain includes one off gains on the settlement of forward
contracts, net of one off reorganisation costs within this joint venture.
5. Finance income and costs
Notes 2022 2021
€'m €'m
Finance income
Interest income on loans to joint ventures 1.1 1.4
Interest income on deposits 0.4 0.1
Interest income on swaps 0.2 -
Remeasurements of call option 0.1 0.5
Remeasurements of contingent consideration 4 7.3 -
Total finance income 9.1 2.0
Finance costs
Bank borrowing costs (7.0) (3.8)
Facility fees (1.7) (2.0)
Finance cost of private placement debt (9.7) (10.8)
Interest expense on swaps - (0.2)
Interest expense on lease liabilities (2.6) (2.5)
Remeasurements of call option 4 (0.6) -
Remeasurements of contingent consideration (1.5) (0.2)
Total finance costs (23.1) (19.5)
(14.0) (17.5)
Net finance costs
Capitalised borrowing costs of nil (2021: €0.5 million) on qualifying assets
are not included in net finance costs. Interest is capitalised at the Group's
average interest rate for the period of 2.3% (2021: 3.0%). Where relevant, tax
deduction for capitalised interest was taken in accordance with Sec 81(3), TCA
1997. Tax relief in relation to capitalised interest is nil (2021: €0.1
million).
6. Income taxes
2022 2021
€'m €'m
Current tax
Irish current tax charge 19.8 9.4
Adjustments in respect of prior years (1.2) -
Irish current tax for the year 18.6 9.4
28.4
Foreign current tax charge 28.4
Adjustments in respect of prior years 2.0 (0.4)
Foreign current tax for the year 30.4 28.0
Total current tax 49.0 37.4
Deferred tax
Deferred tax - current year (23.8) (20.2)
Adjustments in respect of prior years 0.5 (0.2)
Total deferred tax (23.3) (20.4)
Tax charge 25.7 17.0
The tax credit on exceptional items included in the above amounts is as
follows:
Notes 2022 2021
€'m €'m
Current tax credit on exceptional items (0.6) (3.1)
Deferred tax credit on exceptional items (5.1) (4.5)
Total tax credit on exceptional items for the year 4 (5.7) (7.6)
The tax credit on exceptional items has been disclosed separately above as it
relates to costs and income which have been presented as exceptional.
The tax on the Group's profit before tax differs from the theoretical amount
that would arise applying the corporation tax rate in Ireland, as follows:
2022 2021
€'m €'m
Profit before tax 225.3 158.0
Income tax calculated at Irish rate of 12.5% (2021: 12.5%) 28.2 19.8
Earnings at non-standard Irish tax rate 1.3 0.2
Difference due to overseas tax rates (capital and trading) 0.2 2.2
Adjustment to tax charge in respect of previous periods 1.3 (0.6)
Tax on share of results of joint ventures accounted for using the equity (2.0) (2.1)
method included in profit before tax
Other reconciling items (3.3) (2.5)
Total tax charge 25.7 17.0
Factors that may affect future tax charges and other disclosure requirements
The total tax charge in future periods will be affected by any changes to the
applicable tax rates in force in jurisdictions in which the Group operates and
other relevant changes in tax legislation. The total tax charge of the Group
may also be influenced by the effects of corporate development activity and
the resolution of uncertain tax positions where the final outcome of those
matters is different than the amounts recorded.
7. 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 year, excluding ordinary shares
purchased by the Group and held as own shares (note 10). The weighted average
number of ordinary shares in issue used in the calculation of Basic Earnings
Per Share is 275,760,676 (2021: 290,059,376).
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.
2022 2021
Continuing operations Discontinued operations Total Continuing operations Discontinued operations Total
Profit after tax attributable to equity holders of the Company (€'m) 200.4 57.2 257.6 140.6 26.4 167.0
Basic Earnings Per Share (cent) 72.67 20.75 93.42 48.47 9.10 57.57
Diluted Earnings Per Share (cent) 71.76 20.48 92.24 48.30 9.07 57.37
2022 2021
Weighted average number of ordinary shares in issue 275,760,676 290,059,376
Shares deemed to be issued for no consideration in respect of share awards 3,505,766 1,048,035
Weighted average number of shares used in the calculation of Diluted Earnings 279,266,442 291,107,411
Per Share
8. Dividends
The dividends paid and recommended on ordinary share capital are as follows:
Notes 2022 2021
€'m €'m
Equity dividends to shareholders
Final - paid 17.53c per ordinary share (2021: 15.94c) 49.1 46.5
Interim - paid 12.93c per ordinary share (2021: 11.75c) 35.4 34.2
Total 84.5 80.7
Reconciliation to Group statement of cash flows and Group statement of changes
in equity
Dividends to shareholders 84.5 80.7
Waived dividends in relation to own shares (0.1) (0.2)
Total dividends paid to equity holders of the Company 11 84.4 80.5
Equity dividends recommended
Final 2022 - proposed 19.28c per ordinary share (2021: 17.53c) 15 52.5 50.3
The amount of dividends recommended is based on the number of issued shares at
year end. The actual amount will be based on the number of issued shares on
the record date (note 15).
9. Net Debt
2022 2021
€'m €'m
Non-current
Bank borrowings 288.2 366.1
Private placement debt 351.6 331.1
639.8 697.2
Current 258.2 136.5
Bank overdrafts
Total borrowings 898.0 833.7
Net debt is a non-IFRS measure which we provide to investors as we believe
they find it useful. It is also used to calculate leverage under the Group's
financing arrangements, as defined within covenants. Refer to the Financing
Key Performance Indicators section in the Glossary for more details. Net debt
comprises the following:
2022 2021
€'m €'m
Private placement debt 351.6 331.1
Bank borrowings 158.4 149.2
Not subject to interest rate changes* 510.0 480.3
Bank borrowings 129.8 216.9
Cash and cash equivalents net of bank overdrafts (180.4) (94.5)
Subject to interest rate changes* (50.6) 122.4
Net debt 459.4 602.7
* Taking into account contractual repricing dates at the reporting date.
2022 2021
€'m €'m
Cash at bank and in hand 432.4 224.2
Short term bank deposits 6.2 6.8
Cash and cash equivalents in the Group balance sheet 438.6 231.0
Bank overdrafts used for cash management purposes (258.2) (136.5)
Cash and cash equivalents in the Group statement of cash flows 180.4 94.5
10. Other reserves
Capital and Currency reserve Hedging reserve Put option liability reserve Own Share- based payment reserve Other Total
merger reserve €'m €'m €'m shares €'m €'m €'m
€'m €'m
Balance at 2 January 2022 116.5 151.9 (10.6) (24.8) (6.4) 19.3 (0.4) 245.5
- 79.9 - - - - - 79.9
Currency translation differences
Net investment hedge - (5.4) - - - - - (5.4)
Revaluation - gross - - 27.3 - - - 0.6 27.9
Reclassification to profit or loss - gross - - (3.2) - - - - (3.2)
Deferred tax - - (5.9) - - - (0.2) (6.1)
Net change in OCI - 74.5 18.2 - - - 0.4 93.1
Purchase of own shares - - - - (196.9) - - (196.9)
Cancellation of own shares 0.9 - - - 173.5 - - 174.4
Cost of share-based payments - - - - - 18.8 - 18.8
Transfer on exercise, vesting or expiry
of share-based payments
- - - - 9.1 (11.0) - (1.9)
Remeasurement of put option liability - - - 24.8 - - - 24.8
Transfer to Group income statement* - - 1.5 - - - - 1.5
Balance at 31 December 2022 117.4 226.4 9.1 - (20.7) 27.1 - 359.3
116.0 31.9 (20.6) - (11.4) 10.3 (0.2) 126.0
Balance at 3 January 2021
- 126.7 - - - - - 126.7
Currency translation differences
Net investment hedge - (6.7) - - - - - (6.7)
Revaluation - gross - - 11.1 - - - (0.3) 10.8
Reclassification to profit or loss - gross - - 1.6 - - - - 1.6
Deferred tax - - (2.7) - - - 0.1 (2.6)
Net change in OCI - 120.0 10.0 - - - (0.2) 129.8
Purchase of own shares - - - - (94.0) - - (94.0)
Cancellation of own shares 0.5 - - - 91.3 - - 91.8
Cost of share-based payments - - - - - 15.9 - 15.9
Transfer on exercise, vesting or expiry - - - - 7.7 (6.9) - 0.8
of share-based payments
Recognition of put option liability - - - (23.2) - - - (23.2)
Remeasurement of put option liability - - - (1.6) - - - (1.6)
Balance at 1 January 2022 116.5 151.9 (10.6) (24.8) (6.4) 19.3 (0.4) 245.5
* On disposal of discontinued operation.
11. Retained earnings
Notes 2022 2021
€'m €'m
At the beginning of the year 1,381.7 1,380.5
Profit for the year attributable to equity holders of the Company 257.6 167.0
Other comprehensive income
- Remeasurements on defined benefit plans 13.5 -
- Deferred tax on remeasurements on defined benefit plans (1.4) (0.5)
- Share of remeasurements on defined benefit plans from joint ventures, net of 0.5 1.7
deferred tax
- Share of remeasurements on defined benefit plans from discontinued - 4.3
operations, net of deferred tax
12.6 5.5
Dividends 8 (84.4) (80.5)
Cancellation of own shares 10 (173.5) (91.3)
Transfer on exercise, vesting or expiry of share-based payments 10 1.9 (0.8)
Deferred tax on share-based payments 0.5 1.3
Sale of shares held by a subsidiary 1.3 -
At the end of the year 1,397.7 1,381.7
12. Cash generated from operating activities
Notes 2022 2021
€'m €'m
Profit for the year 256.8 167.4
Exceptional items 4 (21.4) 42.1
Profit after tax from discontinued operations - (25.7)
Income taxes 31.4 24.6
Profit before taxation 266.8 208.4
Share of results of joint ventures accounted for using the equity method (15.4) (19.2)
Finance costs 22.5 19.5
Finance income (1.8) (2.0)
Amortisation of intangible assets 3 75.0 63.9
Depreciation of property, plant and equipment 48.7 44.9
Depreciation of right-of-use assets 18.8 18.1
Cost of share-based payments 18.8 15.9
Difference between pension charge and cash contributions (0.5) (6.4)
Net write down of inventories 13.6 6.1
Non-cash movement in/on:
- provisions 1.0 8.7
- allowance for impairment of receivables 0.4 -
- cross currency swaps 2.6 (0.8)
- disposal of leases (0.4) (0.1)
Reversal of impairment of property, plant and equipment - (1.4)
Loss/(profit) on disposal of property, plant and equipment 0.4 (0.1)
Operating cash flows before movement in working capital 450.5 355.5
Increase in inventories (101.1) (186.1)
Decrease/(increase) in short-term receivables 5.6 (13.4)
Increase in short-term liabilities 40.9 207.1
Decrease in provisions (2.9) (5.1)
Cash generated from operating activities before exceptional items 393.0 358.0
13. Assets and liabilities held for sale, and discontinued operations
2022 2021
€'m €'m
Property, plant and equipment 9.5 -
Right-of-use assets 2.6 -
Inventories 2.2 -
Interest in joint venture - Glanbia Ireland - 234.0
Assets held for sale 14.3 234.0
Lease liabilities (6.3) -
Liabilities held for sale (6.3) -
The assets held for sale at 31 December 2022 relate to the non-core assets of
a small US based bottling facility (Aseptic Solutions USA Ventures, LLC).
Following the completion of a strategic portfolio review, these assets (and
related liabilities) which are part of the Glanbia Nutritional segment were
determined to be non-core and a decision was made to divest of them, resulting
in the designation as held for sale at year end. Discussions are ongoing with
a number of interested parties, and a sale is expected to conclude in H1,
2023. The lease liabilities at 31 December 2022 are directly associated with
the right-of-use assets classified as held for sale.
An impairment of €14.5 million was recognised as an exceptional charge in
the income statement immediately prior to the classification of the assets and
liabilities as held for sale. There was no further gain or loss recognised
subsequently. Associated cumulative amounts recognised in other comprehensive
income associated with the assets and liabilities held for sale as at 31
December 2022 were currency translation gains of
€3.9 million.
We do not regard the divestment of the non-core assets and the associated
liabilities as discontinued operations as they are not considered to be either
a separate major line of business or geographical area of operations.
The assets held for sale at 1 January 2022 related to the interest in Glanbia
Ireland. The Company announced its intention to sell its 40% holding in
Glanbia Ireland to Tirlán Co-operative Society Ltd (formerly known as Glanbia
Co-operative Society Ltd) for €307.0 million in November 2021 (the
"Transaction"). Members of Tirlán Co-operative Society Ltd (the "Society")
approved the Transaction on 17 December 2021. Accordingly, in the prior year,
the Group has treated the joint venture investment in Glanbia Ireland as an
asset held for sale on the Group balance sheet and ceased to apply the equity
method of accounting to its interest in Glanbia Ireland from 17 December 2021.
The Transaction was completed on 1 April 2022 for €307.0 million cash
following the approval of the independent shareholders of the Company and
receipt of regulatory approvals. As part of the terms of the Transaction, the
Company paid Glanbia Ireland a contribution of €8.0 million related to
pension obligations, separation and rebranding costs and has committed to a
maximum additional €1.5 million re-imbursement of rebranding costs in
connection with the Transaction. The gain of €57.2 million on disposal of
Glanbia Ireland (note 4) is based on the €307.0 million received, less the
carrying amount of the asset held for sale of €234.0 million and costs
associated with the transaction of €15.8 million.
The profit after tax from discontinued operations included in the Group income
statement in the prior year related to the Group's share of profit after tax
of Glanbia Ireland and are analysed as follows:
2021
€'m
Glanbia Ireland's results (100%)
Revenue 2,169.9
Expenses (2,088.3)
Profit before tax 81.6
Tax (10.3)
Profit after tax 71.3
Profit after tax attributable to equity holders of Glanbia Ireland 69.5
Reconciliation to the Group's share of Glanbia Ireland's profit after tax
Group's 40% share of profit after tax 27.8
Adjustments* (1.4)
Group's share of Glanbia Ireland's profit after tax presented as discontinued 26.4
operations
* Relates to adjustment in respect of unrealised profit on sales to the Group
and amortisation of intangible assets recognised on fair value adjustments.
14. Business combinations
On 11 March 2022 Glanbia acquired 100% of the voting shares of Sterling
Technology, LLC ("Sterling"), a bioactive ingredient company based in South
Dakota, USA. Sterling will complement the existing ingredient technology
portfolio of Nutritional Solutions providing bioactive ingredients which are
mainly used in the growing immunity and gut-health segments as well as in pet
nutrition. 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 builds on our offering in immunity solutions
in Nutritional Solutions. Goodwill of €22.5 million is expected 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 54.5
Contingent consideration 23.1
Total consideration 77.6
Less: fair value of net assets acquired (55.1)
Goodwill 22.5
The fair value of assets and liabilities arising from the acquisition are as
follows:
Property, plant and equipment 5.9
Right-of-use assets 0.6
Intangible assets - customer relationships 30.5
Intangible assets - recipes and know-how 10.0
Intangible assets - trade names 1.6
Inventories 3.3
Trade and other receivables 5.5
Cash and cash equivalents 0.9
Trade and other payables (2.6)
Lease liabilities (0.6)
Fair value of net assets acquired 55.1
The contingent consideration arrangement requires the Group to pay the former
owners of Sterling an earnout in 2023 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 US$27.5 million (€25.8 million translated at
period end exchange rate).
The fair value of the contingent consideration of €25.3 million at period
end was estimated by calculating the present value of the future expected
payments. The main significant unobservable input in the calculation is the
forecast EBITDA of Sterling over the relevant period. As it is deemed highly
probable that the higher end of the EBITDA range will be met, the Group have
assumed that the upper limit of the earnout will be payable. A 10% increase in
the forecast EBITDA would not change the fair value of the contingent
consideration. A 10% decrease in forecast EBITDA would result in a decrease in
fair value of the contingent consideration by €8.4 million.
The fair value of Sterling's trade and other receivables at the acquisition
date amounted to €5.5 million. The gross contractual amount for receivables
due is €5.8 million, of which €0.3 million is expected to be
uncollectible. Acquisition-related costs of €0.2 million incurred primarily
on professional fees are included in administrative expenses.
Combined impact of acquisitions
The revenue and profit before taxation and exceptional items of the Group,
including the post acquisition impact of the acquisition completed during the
year ended 31 December 2022, were as follows:
2022 Group excluding acquisition Group including acquisition
Acquisition €'m €'m
€'m
Revenue 22.0 5,620.4 5,642.4
Profit before taxation and exceptional items 5.0 261.8 266.8
The revenue and profit before taxation and exceptional items of the Group for
the year ended 31 December 2022 determined in accordance with IFRS 3 as though
the acquisition date for all business combinations effected during the year
had been at the beginning of the year would be as follows:
Pro-forma Group Pro-forma
2022 excluding group including
acquisition acquisition acquisition
€'m €'m €'m
Revenue 27.0 5,620.4 5,647.4
Profit before taxation and exceptional items 5.5 261.8 267.3
The Group acquired PacMoore Process Technologies, LLC in 2021 for which the
fair value of assets and liabilities were determined provisionally. There was
no change to goodwill following the finalisation of the fair value of assets
and liabilities during the measurement period.
15. Events after the reporting period
See note 8 for the final dividend, recommended by the Directors. Subject to
shareholder approval, this dividend will be paid on 5 May 2023 to shareholders
on the register of members on 24 March 2023, the record date.
Subsequent to the year end, Glanbia has signed a non-binding memorandum of
understanding for the sale of the Company's shareholding in Glanbia Cheese and
Glanbia Cheese EU joint ventures ("Glanbia Cheese") to Leprino Foods Company.
It is expected that Glanbia will receive initial cash proceeds in excess of
€160m (including the repayment of shareholder loans), with further
contingent consideration of up to €25m dependant on the performance of
Glanbia Cheese over the next three years.
Glanbia generates the majority of its earnings and has significant assets and
liabilities denominated in US dollar. To reduce the potential for foreign
exchange volatility in future reported earnings, the Group has decided to
change its presentation currency from Euro to US dollar with effect from 1
January 2023. The impact of change in presentation currency will be provided
in advance of the Q1, 2023 trading update.
16. Statutory financial statements
The financial information in this preliminary announcement does not constitute
the full statutory financial statements of Glanbia plc (the 'Company'), a copy
of which is required to be annexed to the Company's annual return filed with
the Companies Registration Office and will be published on www.glanbia.com
(http://www.glanbia.com) . A copy of the full statutory financial statements
in respect of the financial year ended 31 December 2022 will be annexed to the
Company's annual return for 2023. The auditors of the Company have made a
report, without any qualification, on their audit of the financial statements
of the Group and Company in respect of the financial year ended 31 December
2022, which were approved by the Directors on 28 February 2023. A copy of the
financial statements of the Group in respect of the year ended 1 January 2022
has been annexed to the Company's annual return for 2022 and filed with the
Companies Registration Office and is available on www.glanbia.com
(http://www.glanbia.com)
Glossary
Key Performance Indicators and non-IFRS performance measures
NOT COVERED BY INDEPENDENT AUDITOR'S REPORT
Non-IFRS performance measures
The Group reports certain performance measures 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 a more meaningful 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 used by the Group are:
G 1. Constant currency
G 2. Revenue
G 3. EBITA (pre-exceptional)
G 4. EBITA margin % (pre-exceptional)
G 5. EBITDA
G 6. Constant Currency Basic and Adjusted Earnings Per Share ("EPS")
G 7. Net debt
G 8. Financing Key Performance Indicators
G 9. Volume and pricing increase/(decrease)
G 10. Like-for-like revenue increase/(decrease)
G 11. Effective tax rate
G 12. Average interest rate
G 13. Operating cash conversion
G 14. Operating cash flow and free cash flow
G 15. Return on capital employed ("ROCE")
G 16. Total shareholder return ("TSR")
G 17. Dividend payout ratio
G 18. Compound annual growth rate ("CAGR")
G 19. Exceptional items
These principal non-IFRS performance measures are defined below with a
reconciliation of these measures to IFRS measures where applicable.
A number of the non-IFRS performance measures below have been re-presented to
reflect continuing and discontinued operations in line with the presentation
adopted in the Group income statement.
G 1. Constant currency
While the Group reports its results in euro, it generates a significant
proportion of its earnings in currencies other than euro, in particular US
dollar. 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 year-on-year change, the results for the prior year are
retranslated using the average exchange rates for the current year and
compared to the current year reported numbers.
The principal average exchange rates used to translate results for 2022 and
2021 are set out below:
1 euro = 2022 2021
US dollar 1.0534 1.1826
Pound sterling 0.8527 0.8596
G 2. Revenue
Revenue comprises sales of goods and services to external customers net of
value added tax, rebates and discounts. Revenue is one of the Group's Key
Performance Indicators and is an IFRS performance measure.
G 2.1 Revenue:
Reference to 2022 2021 2021 Constant Like-for-like
the Financial Statements/ Glossary Reported Reported Retranslated currency growth
€'m €'m €'m growth (G 10)
% %
Nutritional Solutions Note 2 1,126.6 877.4 966.3 16.6% 12.6%
US Cheese Note 2 2,890.1 2,016.4 2,263.9 27.7% 27.7%
Glanbia Nutritionals Note 2 4,016.7 2,893.8 3,230.2 24.3% 23.1%
Americas Note 2 1,098.0 872.3 978.0 12.3% 12.3%
International (including Direct-to-Consumer) Note 2 527.7 430.8 449.0 17.5% 16.3%
Glanbia Performance Nutrition Note 2 1,625.7 1,303.1 1,427.0 13.9% 13.5%
Revenue Note 3 5,642.4 4,196.9 4,657.2 21.2% 20.2%
G 3. EBITA (pre-exceptional)
EBITA (pre-exceptional) is defined as earnings before interest, tax and
amortisation. EBITA references throughout the annual report are on a
pre-exceptional basis unless otherwise indicated. EBITA (pre-exceptional) is
one of the Group's Key Performance Indicators.
Business Segment EBITA (pre-exceptional) growth on a constant currency basis
is one of the performance conditions in Glanbia's Annual Incentive Plan for
Senior Management. Refer to note 3 of the financial statements for the
reconciliation of EBITA (pre- exceptional).
G 3.1 EBITA (pre-exceptional):
Reference to 2022 2021 2021 Constant
the Financial Reported Reported Retranslated currency
Statements/ €'m €'m €'m growth
Glossary %
Nutritional Solutions 128.2 101.1 113.5 13.0%
US Cheese 36.8 24.4 27.6 33.3%
Glanbia Nutritionals Note 2 165.0 125.5 141.1 16.9%
Glanbia Performance Nutrition Note 2 182.1 145.1 164.8 10.5%
EBITA (pre-exceptional) Note 3 347.1 270.6 305.9 13.5%
G 4. EBITA margin % (pre-exceptional)
EBITA margin % (pre-exceptional) is defined as EBITA (pre-exceptional) as a
percentage of revenue. Refer to G 2.1 and G 3.1 for reconciliations of revenue
and EBITA (pre-exceptional) respectively. EBITA references throughout the
annual report are on a pre- exceptional basis unless otherwise indicated.
G 5. EBITDA
EBITDA is defined as earnings before interest, tax, depreciation (net of grant
amortisation) and amortisation. EBITDA references throughout the annual report
are on a pre-exceptional basis unless otherwise indicated.
Reference to 2022 2021
the Financial €'m €'m
Statements/
Glossary
EBITA (pre-exceptional) G 3.1 347.1 270.6
Depreciation* 67.5 63.0
EBITDA (pre-exceptional) G 8.1, G 14 414.6 333.6
* Includes depreciation of property, plant and equipment of €48.7 million
(2021: €44.9 million) and depreciation of right-of-use assets of €18.8
million (2021: €18.1 million).
G 6. Constant Currency Basic and Adjusted Earnings Per Share ("EPS")
G 6.1 Constant Currency Basic Earnings Per Share ("EPS")
Basic EPS 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 year, excluding ordinary shares purchased by the
Group and held as own shares (see note 10). Basic EPS has also been calculated
on a continuing basis (excluding Glanbia Ireland) in line with the
presentation of continuing and discontinued operations in the Group income
statement.
Reference to the Financial 2022 2021 2021
Statements/ Glossary Reported Reported Retranslated
€'m €'m €'m
Profit after tax attributable to equity holders of the Company Group income statement 257.6 167.0 197.0
Less: profit after tax attributable to equity holders of the Company - Group income statement (57.2) (26.4) (26.4)
discontinued operations
Profit after tax attributable to equity holders of the Company - continuing
operations
200.4 140.6 170.6
Weighted average number of ordinary shares in issue (thousands) Note 7 275,761 290,059 290,059
Basic Earnings Per Share (cent) - continuing operations Note 7 72.67 48.47 58.82
Basic Earnings Per Share (cent) Note 7 93.42 57.57 67.92
Constant currency change - continuing operations 23.5%
Constant currency change 37.5%
G 6.2 Constant Currency Adjusted Earnings Per Share ("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 year, excluding ordinary shares purchased by the Group and held as own
shares (see note 10). The Group concluded that adjusted EPS is a better
measure of underlying performance than Basic EPS as it excludes exceptional
items (net of related tax) that are not related to ongoing operational
performance and intangible asset amortisation, which allows better
comparability of companies that grow by acquisition to those that grow
organically. Adjusted EPS has also been calculated on a continuing basis
(excluding Glanbia Ireland) in line with the presentation of continuing and
discontinued operations in the Group income statement.
Adjusted EPS is one of the Group's Key Performance Indicators. 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 to the Financial 2022 2021 2021
Statements/Glossary Reported Reported Retranslated
€'m €'m €'m
Profit after tax from continuing operations Group income statement 199.6 141.0 171.0
Exceptional charge - continuing operations Group income statement 35.8 42.8 38.5
Profit after tax from continuing operations (pre-exceptional) Group income statement 235.4 183.8 209.5
Non-controlling interests Group income statement 0.8 (0.4) (0.4)
Amortisation and impairment of intangible assets (excluding software 50.6 42.4 47.5
amortisation) net of related tax of €8.0 million
(2021: €7.0 million, 2021 retranslated: €7.8 million) -
continuing operations (pre-exceptional)
Adjusted net income - continuing operations 286.8 225.8 256.6
Profit after tax from discontinued operations Group income statement 57.2 26.4 26.4
Exceptional credit - discontinued operations Group income statement (57.2) (0.7) (0.7)
Profit from discontinued operations (pre-exceptional) Group income statement - 25.7 25.7
Amortisation and impairment of intangible assets (excluding software - 1.3 1.3
amortisation) net of related tax (2021: €0.2 million) - discontinued
operations
Adjusted net income 286.8 252.8 283.6
Weighted average number of ordinary shares in issue (thousands) Note 7 275,761 290,059 290,059
Adjusted Earnings Per Share (cent) - continuing operations 104.02 77.84 88.46
Adjusted Earnings Per Share (cent) G 17 104.02 87.15 97.77
Constant currency growth - continuing operations 17.6%
Constant currency growth 6.4%
G 7. Net debt
Net debt is calculated as current and non-current borrowings less cash and
cash equivalents.
Reference to the Financial 2022 2021
Statements/Glossary €'m €'m
Cash and cash equivalents Group balance sheet (438.6) (231.0)
Current borrowings Group balance sheet 258.2 136.5
Non-current borrowings Group balance sheet 639.8 697.2
Net debt Note 9, G 14 459.4 602.7
G 8. Financing Key Performance Indicators
G 8.1 Net debt: adjusted EBITDA
Net debt: adjusted EBITDA is calculated as net debt at the end of the period
divided by adjusted EBITDA. Net debt is calculated as current and non-current
borrowings less cash and cash equivalents. Adjusted EBITDA is calculated in
accordance with lenders' facility agreements definitions which adjust EBITDA
for items such as exceptional items, dividends received from joint ventures,
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 to the Financial 2022 2021
Statements/Glossary €'m €'m
Net debt G 7 459.4 602.7
EBITDA G 5 414.6 333.6
IFRS 16 adjustment (19.1) (21.6)
Adjustments in accordance with lenders' facility agreements 16.5 40.8
Adjusted EBITDA 412.0 352.8
Net debt: adjusted EBITDA 1.12 1.71
G 8.2 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 joint ventures divided by adjusted net finance
cost. Adjusted net finance cost comprises finance costs less finance income
per the Group income statement plus borrowing costs capitalised into assets
and excludes finance income/costs on remeasurements of call options and
contingent consideration and interest expense on lease liabilities. Adjusted
EBIT 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).
Reference to the Financial 2022 2021
Statements/Glossary €'m €'m
Operating profit Group income statement 223.7 158.3
Exceptional charge Group income statement 48.4 48.4
Operating profit (pre-exceptional) Group income statement 272.1 206.7
Dividends received from related parties Group statement of cash flows 14.5 33.9
IFRS 16 adjustment - interest Note 5 (2.6) (2.5)
Adjusted EBIT 284.0 238.1
Adjusted net finance costs Note 5 16.7 15.8
Adjusted EBIT: adjusted net finance cost 17.0 15.1
G 9. Volume and pricing increase/(decrease)
Volume increase/(decrease) represents the impact of sales volumes within the
revenue movement year-on-year, excluding volume from acquisitions, on a
constant currency basis.
Pricing increase/(decrease) represents the impact of sales pricing (including
trade spend) within revenue movement year-on-year, excluding acquisitions, on
a constant currency basis.
G 9.1 Reconciliation of volume and pricing increase/(decrease) to constant
currency revenue growth:
Reference to Volume increase/ (decrease) Price Acquisitions Revenue increase
the Financial increase
Statements/
Glossary
Nutritional Solutions G 2.1 (3.5%) 16.1% 4.0% 16.6%
US Cheese G 2.1 4.3% 23.4% - 27.7%
Glanbia Nutritionals G 2.1 1.9% 21.2% 1.2% 24.3%
Glanbia Performance Nutrition G 2.1 (2.9%) 16.4% 0.4% 13.9%
2022 increase % - continuing operations revenue G 2.1 0.5% 19.7% 1.0% 21.2%
G 10. Like-for-like revenue increase/(decrease)
G 10.1 Glanbia Performance Nutrition ("GPN") like-for-like revenue
GPN like-for-like revenue represents the sales increase/(decrease)
year-on-year, excluding the incremental revenue contributions from current
year and prior year acquisitions and the impact of a 53rd week (when
applicable), on a constant currency basis.
GPN like-for-like branded revenue represents the sales increase/(decrease)
year-on-year on branded sales, excluding the incremental revenue contributions
from current year and prior year acquisitions and the impact of a 53rd week
(when applicable), on a constant currency basis. Like-for-like branded revenue
increase/(decrease) is one of the GPN segment's Key Performance Indicators.
Like-for-like branded revenue increase/(decrease) is one of the performance
conditions in Glanbia's Annual Incentive Plan for GPN Senior Management.
G 10.2 Glanbia Nutritionals like-for-like revenue
This represents the sales increase/(decrease) year-on-year, excluding the
incremental revenue contributions from current year and prior year
acquisitions and the impact of a 53rd week (when applicable), on a constant
currency basis.
G 11. 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 to the Financial 2022 2021
Statements/Glossary €'m €'m
Profit before tax - continuing operations Group income statement 225.3 158.0
Exceptional charge Group income statement 41.5 50.4
Profit before tax (pre-exceptional) - continuing operations Group income statement 266.8 208.4
Less share of results of joint ventures (pre-exceptional) Group income statement (15.4) (19.2)
251.4 189.2
Income tax Group income statement 25.7 17.0
Exceptional tax credit Group income statement 5.7 7.6
Income tax (pre-exceptional) Group income statement 31.4 24.6
Effective tax rate 12.5% 13.0%
G 12. Average interest rate
The average interest rate is defined as the annualised net finance costs
(excluding capitalised borrowing costs, finance income/costs on changes in
fair value of call option and contingent consideration and interest expense on
lease liabilities) divided by the average net debt during the reporting
period.
G 13. Operating cash conversion
Operating cash conversion is defined as Operating Cash Flow ("OCF") divided by
pre-exceptional EBITDA. Cash 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.
G 14. Operating cash flow and free cash flow
Operating cash flow is defined as pre-exceptional EBITDA net of business
sustaining capital expenditure and working capital movements, excluding
exceptional cash flows.
Operating cash flow is one of the Group's Key Performance Indicators.
Operating cash flow is one of the performance conditions in Glanbia's Annual
Incentive Plan.
Free cash flow 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 joint ventures, exceptional costs paid,
payment for acquisition of subsidiaries, proceeds received on disposals,
purchase of own shares under share buyback and currency translation movements.
Reference to the Financial 2022 2021
Statements/Glossary €'m €'m
Earnings before interest, tax, depreciation and amortisation (pre- exceptional G 5 414.6 333.6
EBITDA)
Movement in working capital (pre-exceptional) G 14.2 (39.9) 16.5
Business sustaining capital expenditure G 14.4 (19.4) (15.9)
Operating cash flow G 14.1 355.3 334.2
Net interest and tax paid G 14.3 (81.4) (51.5)
Dividends received from related parties Group statement of cash flows 14.5 33.9
Payments of lease liabilities Group statement of cash flows (16.5) (19.1)
Other (outflows)/inflows G 14.5 (3.3) 6.4
Free cash flow 268.6 303.9
Strategic capital expenditure G 14.4 (49.5) (61.6)
Dividends paid to Company shareholders Group statement of cash flows (84.4) (80.5)
Purchase of own shares under share buyback (173.5) (91.3)
Loans/investment in joint ventures G 14.6 (18.2) (10.7)
Exceptional costs paid G 14.7 (21.3) (55.9)
Proceeds from sale of property, plant and equipment Group statement of cash flows 3.4 1.5
Proceeds from disposal of Glanbia Ireland DAC Group statement of cash flows 307.0 -
Payment for acquisition of subsidiaries Group statement of cash flows (54.9) (95.0)
Net cash flow 177.2 (89.6)
Exchange translation (34.8) (23.6)
Cash acquired on acquisition 0.9 4.4
Net debt movement 143.3 (108.8)
Opening net debt (602.7) (493.9)
Closing net debt Note 9, G 7 (459.4) (602.7)
G 14.1 Reconciliation of operating cash flow to the Group statement of cash
flows in the Financial Statements:
Reference to the Financial 2022 2021
Statements/Glossary €'m €'m
Cash generated from operating activities before exceptional items Note 12 393.0 358.0
Less business sustaining capital expenditure G 14.4 (19.4) (15.9)
Non-cash items not adjusted in computing operating cash flow: Note 12 (18.8) (15.9)
Cost of share-based payments
Difference between pension charge and cash contributions Note 12 0.5 6.4
Reversal of impairment of property, plant and equipment Note 12 - 1.4
Other items - 0.2
Operating cash flow G 14 355.3 334.2
G 14.2 Movement in working capital:
Reference to the Financial 2022 2021
Statements/Glossary €'m €'m
Movement in working capital (pre-exceptional) G 14 (39.9) 16.5
Net write down of inventories (pre-exceptional) Note 12 (13.6) (6.1)
Non-cash movement in allowance for impairment of receivables Note 12 (0.4) -
Non-cash movement in provisions Note 12 (1.0) (8.7)
Non-cash movement on cross currency swaps Note 12 (2.6) 0.8
Movement in working capital (57.5) 2.5
G 14.3 Net interest and tax paid:
Reference to the Financial 2022 2021
Statements/Glossary €'m €'m
Interest received Group statement of cash flows 1.5 2.1
Interest paid (including interest expense on lease liabilities) Group statement of cash flows (23.2) (18.8)
Tax paid Group statement of cash flows (59.7) (34.3)
Interest paid in relation to property, plant and equipment Group statement of cash flows - (0.5)
Net interest and tax paid G 14 (81.4) (51.5)
G 14.4 Capital expenditure:
Reference to the Financial 2022 2021
Statements/Glossary €'m €'m
Business sustaining capital expenditure G 14 19.4 15.9
Strategic capital expenditure G 14 49.5 61.6
Total capital expenditure 68.9 77.5
Purchase of property, plant and equipment Group statement of cash flows 31.9 49.0
Purchase of intangible assets Group statement of cash flows 37.0 28.5
Total capital expenditure per the Group statement of cash flows 68.9 77.5
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.
G 14.5 Other (outflows)/inflows:
Reference to the Financial 2022 2021
Statements/Glossary €'m €'m
Cost of share-based payments Note 12 18.8 15.9
Difference between pension charge and cash contributions Note 12 (0.5) (6.4)
Loss/(profit) on disposal of property, plant and equipment Note 12 0.4 (0.1)
Proceeds from disposals/redemption of FVOCI financial assets Group statement of cash flows 0.4 1.1
Payments for FVOCI financial assets Group statement of cash flows - (0.1)
Proceeds from issue of shares Group statement of cash flows - 0.2
Purchase of own shares by Employee Share (Scheme) Trust (23.4) (2.7)
Proceeds of sale of shares held by subsidiary Group statement of cash flows 1.4 -
Non cash movement on disposal of leases Note 12 (0.4) (0.1)
Reversal of impairment of property, plant and equipment Note 12 - (1.4)
Total other (outflows)/inflows G 14 (3.3) 6.4
G 14.6 Loans/investments in joint ventures:
Reference to the Financial 2022 2021
Statements/Glossary Reported Reported
€'m €'m
Loans advanced to joint ventures Group statement of cashflows (47.0) (10.7)
Proceeds on repayments of loans advanced to Glanbia Ireland DAC Group statement of cashflows 28.8 -
Total loans/investments in joint ventures G 14 (18.2) (10.7)
G 14.7 Exceptional cash paid:
Reference to the Financial 2022 2021
Statements/Glossary Reported Reported
€'m €'m
Cash outflow related to exceptional items - operating activities Group statement of cashflows (13.3) (55.9)
Cash outflow related to exceptional items - investing activities Group statement of cashflows (8.0) -
Total exceptional cash paid G 14 (21.3) (55.9)
G 15. Return on capital employed ("ROCE")
ROCE is defined as the Group's earnings before interest, and amortisation (net
of related tax) plus the Group's share of the results of joint ventures after
interest and tax divided by capital employed. Capital employed comprises the
sum of the Group's total assets plus cumulative intangible asset amortisation
and impairment less current liabilities and deferred tax liabilities excluding
all borrowings and lease liabilities, retirement benefit assets, cash and
acquisition related contingent consideration and contract options. It is
calculated by taking the average of the relevant opening and closing balance
sheet amounts. ROCE has also been calculated on a continuing basis (excluding
Glanbia Ireland) in line with the presentation of continuing and discontinued
operations in the Group income statement.
In years where the Group makes significant acquisitions or disposals, the ROCE
calculation is adjusted appropriately, to ensure the acquisition or disposal
are equally time apportioned in the numerator and the denominator.
ROCE is one of the Group's Key Performance Indicators. ROCE is one of the
performance conditions in Glanbia's Long-term Incentive Plan.
Reference to the Financial Statements/Glossary 2022 2021
€'m €'m
Operating profit Group income statement 223.7 158.3
Exceptional charge Group income statement 48.4 48.4
Operating profit (pre-exceptional) Group income statement 272.1 206.7
Tax on operating profit (34.0) (26.9)
Amortisation and impairment of intangible assets net of related tax of 63.5 53.9
€11.5m (2021: €10.0m) (pre-exceptional)
Share of results of joint ventures accounted for using the equity method Group income statement 15.4 19.2
Return - continuing operations 317.0 252.9
Profit after tax from discontinued operations Group income statement 57.2 26.4
Exceptional credit Group income statement (57.2) (0.7)
Profit after tax from discontinued operations - pre-exceptional Group income statement - 25.7
Return 317.0 278.6
Total assets Group balance sheet 3,860.1 3,627.6
Current liabilities Group balance sheet (1,113.7) (887.4)
Deferred tax liabilities Group balance sheet (129.7) (144.4)
Less: cash and cash equivalents Group balance sheet (438.6) (231.0)
Less: current financial liabilities (borrowings) Group balance sheet 258.2 136.5
Less: call option over non-controlling interests - (0.5)
Less: acquisition related liabilities 25.3 -
Less: short term lease liabilities Group balance sheet 17.8 14.5
Less: retirement benefit assets Group balance sheet (3.0) (2.9)
Plus: accumulated amortisation 513.3 392.5
Capital employed before adjustments 2,989.7 2,904.9
Adjustment for acquisitions G 15.1 49.4 (12.0)
Adjustment for joint venture held for sale G 15.2 (234.0) (18.5)
Capital employed after adjustments 2,805.1 2,874.4
Average capital employed 2,855.0 2,751.7
Adjustment for discontinued operations G 15.2 - (215.0)
Average capital employed - continuing operations 2,855.0 2,536.7
Return on capital employed - continuing operations 11.1% 10.0%
Return on capital employed 11.1% 10.1%
G 15.1. Adjustment for acquisitions
This adjustment is required to ensure the capital employed of the acquisitions
Sterling Technologies (2022), LevlUp and PacMoore (2021) are appropriately
time apportioned in the denominator.
G 15.2. Adjustment for discontinued operations
This adjustment is required to ensure the capital employed of the joint
venture held for sale (Glanbia Ireland) is appropriately time apportioned in
the denominator.
The adjustment for discontinued operations removes the average capital
employed of Glanbia Ireland to calculate the return on capital employed for
continuing operations.
G 16. Total shareholder return ("TSR")
TSR represents the change in the capital value of a listed quoted company over
a period, plus dividends reinvested, expressed as a plus or minus percentage
of the opening value.
TSR is one of the Group's Key Performance Indicators. TSR is one of the
performance conditions in Glanbia's Long- term Incentive Plan.
G 17. Dividend payout ratio
Dividend payout ratio is defined as the annual dividend per ordinary share
divided by the Adjusted Earnings Per Share. The dividend payout ratio provides
an indication of the value returned to shareholders relative to the Group's
total earnings.
Reference to the Financial 2022 2021
Statements/Glossary € cent € cent
Adjusted Earnings Per Share G 6.2 104.02 87.15
Dividend recommended/paid per ordinary share Note 8 32.21 29.28
Dividend payout % 31.0% 33.6%
G 18. Compound annual growth rate ("CAGR")
The compound annual growth rate is the annual growth rate over a period of
years. It is calculated on the basis that each year's growth is compounded.
G 19. Exceptional items
The Group considers that items of income or expense which are material by
virtue of their scale and nature should be disclosed separately if the Group
financial statements are to fairly present the financial performance and
financial position of the Group. Determining which transactions are to be
considered exceptional in nature is often a subjective matter. However,
circumstances that the Group believes would give rise to exceptional items for
separate disclosure are outlined in the accounting policy on exceptional
items. Exceptional items are included on the income statement line item to
which they relate. In addition, for clarity, separate disclosure is made of
all items in one column on the face of the Group income statement. Refer to
note 4 for an analysis of exceptional items recognised in 2022.
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