Glanbia publishes half year 2019 results

Agribusiness All Beef Co-op Corporate Dairy

Global nutrition group, Glanbia plc, has published its financial results for the six month period ended 29 June 2019 and revised the outlook for the full year.

Results summary for the financial half year 2019

  • Adjusted earnings per share of 36.69 cent, a decline of 10.8% constant currency (down 5.5% reported);
  • Glanbia Performance Nutrition EBITA declined by 30.2%, constant currency, (down 25.9% reported);
  • Wholly owned revenues of €1,758.4 million (2018: €1,477.8 million), up 12.0% constant currency on prior half year (up 19.0% reported);
  • Wholly owned revenue driven by volume growth of 1.6%, price decline of 0.2% and acquisitions of 10.6% constant currency, versus prior half year;
  • Glanbia Performance Nutrition, revenue growth of 13.4% constant currency (up 19.3% reported), driven by the SlimFast acquisition;
  • Nutritional Solutions, revenue growth of 27.0% constant currency (up 34.6% reported), driven by strong volume growth and the Watson acquisition;
  • US Cheese, revenue growth of 4.9% constant currency (up 12.4% reported);
  • Joint Ventures share of profit after tax was €26.8 million, up €9.0 million on prior half year; and
  • Interim dividend of 10.68 cent per share up 10% on prior half year.

 

Full year 2019 outlook

Full year 2019 guidance of adjusted earnings per share on a reported basis revised to 88 cent to 92 cent range assuming foreign exchange rates remain at current levels.

 

Commenting today Siobhán Talbot, Group Managing Director, said:

“Glanbia grew wholly owned revenues by 12.0%, on a constant currency basis, in the first half of 2019. Adjusted earnings per share declined in the period by 10.8% on a constant currency basis. Our Nutritional Solutions, US Cheese and Joint Venture businesses had good results in the period. The recent acquisitions of SlimFast and Watson are performing very well. Glanbia Performance Nutrition (“GPN”) had a disappointing first half reflecting a number of factors including, business seasonality, consumer channel shift in Europe and difficult global trade dynamics in key international markets. Overall while we have positive momentum across many parts of the Group, this has increased our caution for the remainder of the year. For full year 2019 Glanbia now expects to deliver adjusted earnings per share on a reported basis of between 88 cent to 92 cent assuming foreign exchange rates remain at current levels.”

 

2019 financial half year results highlights

   

 

 

Constant

€m

HY 2019

HY 2018(1)

Change

Currency Change(2)

Wholly owned business

 

 

    

Revenue

1,758.4

1,477.8

+19.0%

+12.0%

EBITA(3)

111.4

123.7

-9.9%

-15.3%

EBITA margin

6.3%

8.4%

-210 bps

-210bps

Equity Accounted Investees - Joint Ventures

 

 

 

 

Share of profit after tax

26.8

17.8

+50.6%

+47.3%

Total Group profit for the period

83.3

98.2

-15.2%

  

Reported basic earnings per share

28.22c

33.27c

-15.2%

 

 

 

 

 

 

Adjusted earnings per share

36.69c

38.83c

-5.5%

-10.8%

 

  1. Following implementation of IFRS 15, prior year revenue was restated to reflect the impact of recognising sales from Glanbia’s Joint Venture, Southwest Cheese. The impact was to increase prior half year sales by €365.8 million; there was no change to EBITA following this restatement.
  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 the first half of 2019 was €1 = $1.130 (HY 2018: €1 = $1.211).
  3. EBITA is defined as earnings before interest, tax and amortisation and is stated before exceptional items.

 

This release contains certain alternative performance measures. A detailed glossary of the key performance indicators and non-IFRS performance measures can be found on pages 33 to 39.

 

Foreign exchange

Glanbia generates a significant amount of its revenues in US Dollars and reports in Euro. To eliminate the impact of exchange rates on translation of results the Group uses constant currency reporting. 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 the first half of 2019 was €1 = $1.130 (HY 2018: €1 = $1.211). Therefore this leads to a difference between the constant currency change and the reported result.

 

Dividend per share

Consistent with Glanbia’s target annual dividend pay-out ratio of between 25% and 35% of adjusted earnings per share, the Board is recommending an interim dividend of 10.68 cent per share (HY 2018: 9.71 cent per share). This represents an increase of 10% on the prior year interim dividend. The dividend will be paid on 4 October 2019 to shareholders on the register of members as at 23 August 2019. Irish withholding tax will be deducted at the standard rate where appropriate.

 

Full year 2019 outlook

For full year 2019 Glanbia adjusted earnings per share is expected to be between 88 cent to 92 cent assuming foreign exchange rates remain at current levels. Versus prior year, on a constant currency basis, this would be a decline of between -7% to -3% (reported -3% to +1%).  The revision to the expected outlook for adjusted EPS is driven by a revised outlook for the GPN business. GPN expects momentum to increase significantly in the second half of 2019, however some of the global trade related challenges in certain international geographies seen in the first half of the year are expected to continue thereby reducing the overall result in GPN for the year.

 

In FY 2019 Glanbia expects to convert over 80% of EBITDA to operating cash flow and deliver a return on capital employed between 10% and 13%.

First Published 31 July 2019

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