REG - Glanbia PLC - Third Quarter 2024 Interim Management Statement

GlanbiaAnnouncement

06/11/2024 07:00

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RNS Number : 0732L  Glanbia PLC  06 November 2024

THIRD QUARTER 2024 INTERIM MANAGEMENT STATEMENT

Continued momentum in third quarter, full year guidance reiterated

Announcing new operating model

6 November 2024 - Glanbia plc, the Better Nutrition company ("Glanbia" or the
'Group'), is issuing this Interim Management Statement for the nine month
period ended 5 October 2024 ("the period" or "YTD Q3 2024").

Highlights1

 

·      YTD Q3 2024 Group performance in line with expectations;

·      Reiterating full year guidance of 5% to 8% growth in adjusted
EPS2;

·      Group revenue growth of 6.0%;

·      Glanbia Performance Nutrition ("GPN") revenue growth of +1.7%;

o  Optimum Nutrition and Isopure continued their growth momentum, delivering
strong volume growth;

·      Glanbia Nutritionals ("GN") - Nutritional Solutions ("NS")
revenue growth of +14.4% (7.2% of which related to acquisitions);

o  Volume trends continue to improve with strong growth in premix and protein
solutions businesses;

·      €100 million share buyback on-going with €88.6 million bought
in the year-to-date;

·      Further €50 million buyback authorisation approved by the Board
to commence in early 2025; and

·      As part its on-going portfolio evolution, the Group is today
announcing a change in its operating model, separating its Glanbia
Nutritionals business into two new segments.

 

Commenting today Hugh McGuire, Chief Executive Officer, said:

 

"Glanbia continued to deliver good momentum during the third quarter, driven
by revenue growth across our portfolio of better nutrition brands and
ingredients. Volume growth was driven by our protein growth brands Optimum
Nutrition and Isopure, as well as premix and protein solutions.

Today, we are announcing the separation of our GN business into two new
segments - Health & Nutrition and Dairy Nutrition. The new structure is
designed to further streamline our business, sharpen our focus on our end use
markets, and position ourselves for the next phase of growth. As part of this
change in our operating model, we are commencing a group wide transformation
programme which will allow us to fund and drive growth in our business,
supporting our ambition to maximise long-term value for shareholders.

We are also announcing an additional €50 million share buyback authorisation
which reflects our strong cash flows and balance sheet position further
increasing our returns to shareholders.

Looking ahead to the remainder of 2024, we will continue to focus on
delivering growth across our portfolio and we are reiterating our full year
guidance of 5% to 8% growth in adjusted EPS."

 

(1) Current period reported revenues are not comparable with those of the
prior period reported numbers as a result of the amendment of commercial
arrangements between Glanbia Nutritionals and its US joint venture effective 1
January 2024, hence for the prior period, pro-forma numbers are used for
comparative purposes which includes constant currency throughout. Revenue
growth includes the impact of the 53(rd) week.

(2) Adjusted Earnings Per Share ("EPS") on a constant currency basis.

Summary revenue progression (all commentary is on a constant currency basis)

 

For comparability purposes, commentary on revenue for the total Group and the
GN segment presented in this announcement is on a pro-forma basis reflecting
the change in commercial arrangements associated with the Group's US joint
venture. Further details of this change were published on 28 February 2024.

 

                                Summary of YTD Q3 2024 revenue progression versus prior year
                                                                                                                     Total constant

                                                                                           Acquisition / Disposals   currency

                                Volume       Price        Like-for-like(3)   53(rd) week
 Glanbia Performance Nutrition  3.2%         (4.0%)       (0.8%)             2.5%          -                         1.7%
 Glanbia Nutritionals           2.0%         1.6%         3.6%               3.0%          3.4%                      10.0%
 Nutritional Solutions          5.0%         (0.9%)       4.1%               3.1%          7.2%                      14.4%
 US Cheese                      (0.7%)       3.9%         3.2%               2.9%          -                         6.1%
 Total wholly-owned businesses  2.6%         (1.1%)       1.5%               2.7%          1.8%                      6.0%

 

In the nine months ended 5 October 2024, wholly-owned revenue increased 6.0%
compared to the same period in 2023. The main drivers of the revenue growth
were a volume increase of 2.6%, a price decrease of 1.1%, the positive impact
of the 53rdweek of 2.7% and the net impact of acquisitions and disposals of
1.8%.

GPN

 

GPN revenue increased by 1.7% which was driven by volume growth of 3.2%, a
price decline of 4.0% and the positive impact of the 53rdweek of 2.5%.

Overall momentum continued through the period, with volume growth particularly
strong across Optimum Nutrition and Isopure, partly offset by a decline in
other portfolio brands. Pricing was negative largely as a result of tactical
price reductions and promotional activity. Optimum Nutrition and Isopure
delivered double digit volume growth.

GPN Americas revenue was broadly in line with the prior year as growth in
performance nutrition and healthy lifestyle was offset by a decline in weight
management. Optimum Nutrition continued its strong momentum and delivered US
consumption4growth of 1.1% with strong growth in most channels, offset by some
weakness in the Specialty channel. Trends in the healthy lifestyle portfolio
continued to be robust with US consumption4growth of 1.2%.

GPN International revenue grew by 4.7% driven by strong volume growth in the
Optimum Nutrition brand across key priority markets.

GN

 

GN revenue increased by 10.0%, driven by a 2.0% increase in volume, a 1.6%
increase in price, an increase of 3.0% driven by the impact of the 53rdweek
and an increase of 3.4% driven by the net impact of acquisitions and
disposals.

 

(3) Like-for-like revenue change represents the revenue increase/(decrease)
period-on-period, excluding the incremental revenue contributions from current
period and prior period acquisitions and disposals and the impact of a 53(rd)
week, on a pro-forma and constant currency basis.

(4) Consumption growth is US measured channels and includes Online, FDMC
(Food, Drug, Mass, Club) and Specialty channels. Data compiled from published
external sources and Glanbia estimates for the 13 week period to 5 October
2024.

Nutritional Solutions ("NS")

NS revenue increased by 14.4%, which was driven by a 5.0% increase in volume,
a 0.9% decrease in price, an increase of 3.1% from the impact of the 53rd week
and a 7.2% increase from the net impact of acquisitions and disposals. Volume
growth was predominantly driven by a strong performance in the premix
solutions and protein businesses. Price declines were driven primarily by
lower dairy market pricing and reduced input costs in the first half of the
year which reversed in the third quarter. The Flavor Producers acquisition,
which was completed in April 2024, is performing well.

US Cheese

 

US Cheese revenue increased by 6.1%, driven by a 0.7% decrease in volume, a
3.9% increase in price as a result of pass-through pricing and an increase of
2.9% driven by the impact of the 53rdweek.

Strategic updates

 

The Group is today announcing its intention to create a new operating model,
separating its GN business into two new segments - Health & Nutrition and
Dairy Nutrition. The Health & Nutrition segment will primarily incorporate
the premix solutions and flavours platforms with the Dairy Nutrition segment
focusing on cheese and dairy ingredients and will comprise the portfolios of
protein solutions (currently in NS) and US Cheese as well as being the
commercial partner for the Group's joint venture MWC-Southwest Holdings LLC.
The new structure is designed to further streamline the business, increase
focus on end use markets and to provide greater insight into Glanbia's value
drivers and growth opportunities. The Group expects the new operating model to
be implemented during FY 2025 and further details will be provided in early
2025.

In order to maximise the benefit of this operating model change, Glanbia is
commencing a group wide transformation programme designed to fund and enable
the next phase of growth. The programme will focus on identifying
opportunities to enhance productivity and drive efficiencies across
operations, accelerating digital transformation and ensuring the Group is well
positioned to capitalise on future market growth opportunities.

Financing

 

The Group's balance sheet remains in a strong position. The Group's net debt
at 5 October 2024 was $619.7 million, an increase of $284.8 million versus
prior year and a reduction of $25.7 million versus half year 2024. The Group
has committed debt facilities of $1.3 billion.

Share buyback

 

On 14 August 2024, the Group commenced the second €50 million tranche of a
€100 million share buyback authority originally announced on 28 February
2024. Between 14 August 2024 and 5 October 2024, €27.7 million was deployed
repurchasing 1,747,776 ordinary shares on Euronext Dublin at an average price
of €15.84. The Group has spent a total of €88.6 million on share buybacks
year-to-date5.

Today, Glanbia is announcing that its Board has approved a further €50
million share buyback authority, to commence in early 2025, reflecting the
strong capital position of the Group.

2024 Outlook

 

Based on the current market environment and expectations for the remainder of
the year, the Group reiterates its guidance and expects to deliver adjusted
EPS growth of 5% to 8% in 2024.

Ends

 

(5) Year-to-date to 4 November 2024

Cautionary statement

 

This announcement contains forward-looking statements. These statements have
been made by the Directors in good faith based on the information available to
them up to the time of their approval of this report. Due to the inherent
uncertainties, including both economic and business risk factors underlying
such forward-looking information, actual results may differ materially from
those expressed or implied by these forward-looking statements. The Directors
undertake no obligation to update any forward-looking statements contained in
this announcement, whether as a result of new information, future events, or
otherwise.

IMS conference call and webcast details

 

There will be an analysts' conference call and webcast presentation to
accompany this Interim Management Statement at 8.30 a.m. (GMT) today. Please
access the webcast from the Glanbia website at
https://www.glanbia.com/investors/financial-calendar,
(http://www.glanbia.com/investors/financial-calendar) where the presentation
can also be viewed or downloaded.

A replay of the call will be available for 30 days from this afternoon. Please
see the link below to the Investor Relations section of the Glanbia plc
website for details:

https://www.glanbia.com/investors/financial-calendar
(http://www.glanbia.com/investors/financial-calendar)

 

 For further information contact
 Glanbia plc +353 (0)56 777 2200
 Mark Garvey, Chief Financial Officer
 Liam Hennigan, Group Secretary & Head of Investor Relations:      +353 (0)86 046 8375
 Martha Kavanagh, Director of Corporate Affairs:                   +353 (0)87 646 2006

 

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