Glanbia Q3 2020 results

Glanbia plc the global nutrition group, has published its financial results for the nine month period ended 3 October 2020.

Results summary for Q3 2020

• Improving trends in Q3 2020 while navigating the challenges resulting from the Covid-19 pandemic;
• Q3 YTD wholly owned revenues up 1.0% reported. On a like-for-like* basis up 3.1% versus prior year;
• Good performance from Glanbia Nutritionals (“GN”) maintaining growth trajectory, Q3 YTD like-for-like revenues up 10.9% versus prior year;
• Foodarom acquisition closed in the third quarter;
• Improving trends in Glanbia Performance Nutrition (“GPN”) in the third quarter. Q3 2020 like-for-like branded revenue down 2.3% versus Q3 2019 with positive pricing. Q3 2020 EBITA margin in double digits;
• GPN transformation programme on track and delivering margin improvements;
• Joint Ventures (“JVs”) continue to deliver a robust performance;
• Group is in a strong financial position, net debt at Q3 period end improved by €187.7 million versus the prior year with a net debt to EBITDA ratio of 1.95 times;
• Glanbia announces intention to launch a share buy-back programme of up to €50 million; and
• In Q4 2020, notwithstanding continued Covid-19 related uncertainty, Glanbia expects GN and JVs to continue to deliver a resilient earnings performance in addition to further sequential improvement in GPN.

Commenting today, Siobhán Talbot, Group Managing Director said:

“I would like to again acknowledge the tremendous efforts of all my Glanbia colleagues as well as our supplier and customer partners as we navigate the challenges of 2020.

I am pleased to announce that in the first nine months of 2020 Glanbia grew like-for-like wholly owned revenues by 3.1% (up 1.0% reported).  Through the challenges of the Covid-19 pandemic the Glanbia portfolio has been resilient, particularly the Glanbia Nutritionals segment and our joint ventures. In the third quarter, trends in Glanbia Performance Nutrition improved significantly with an increase in revenues and margins versus the second quarter as markets gradually reopened and trading patterns improved. The Group has continued to focus on improving its financial position while maintaining investment in growth; with all key strategic projects on track and the acquisition of Foodarom closing in the third quarter. Operating cash flow has been strong and net debt versus the same period in the prior year has reduced by €188 million. We expect to continue to build momentum into Q4 and to exit the year well positioned for 2021 growth.”

Performance update

In the nine months ended 3 October 2020, wholly owned revenue on a reported basis increased by 1.0% when compared to the same period in 2019. Excluding the impact of the 53rd week in 2019 and acquisitions wholly owned revenues in the first nine months of 2020 were up 3.1% on a constant currency basis. The drivers of this revenue increase were price growth of 4.8% offset by a volume decline of 1.7%. Price growth reflected strong cheese markets in the period in GN and volume decline in GPN, primarily as a result of the challenges experienced in the second quarter. Acquisitions delivered 0.6% revenue in the Q3 YTD 2020.

Outlook

In Q4 2020, Glanbia expects GN and JVs to continue to deliver a resilient earnings performance in addition to further sequential improvement in GPN. However, the Group remains vigilant of the continuing uncertainties arising from Covid-19.  Good operating cash flow is expected to continue in the fourth quarter with net debt to adjusted EBITDA ratio anticipated to be below 2 times by year-end.

Share buy-back

Glanbia is announcing today that it intends to launch a share repurchase programme of up to €50 million. The intention is to acquire Glanbia shares on the open market and subsequently cancel them. The Board has decided to launch this programme as a result of the strong cash flows in the business which provides an opportunity to allocate capital to benefit shareholders. Glanbia expects to commence the share repurchase programme in November 2020 and an announcement with further details will be made immediately prior to its formal launch.

Covid-19 update

The Group’s Covid-19 business continuity planning teams continue to focus on three priorities: protect employees, continue food supply and maintain the strong financial position, to ensure Glanbia can emerge safely and strongly from the pandemic’s impact. 

To date there has been no interruption to the Group’s operations globally due to the exceptional work performed by Glanbia’s employees, suppliers and customer partners. 

All strategic projects across the Group are on track which include the GPN Transformation programme, two major JV plant construction projects, the Foodarom acquisition (which closed in Q3) and a refinancing of the Group’s key finance facilities which was recently agreed. The Group’s financial position has improved due to continued strong operating cash flow with a rolling 12 month conversion rate well ahead of the targeted 80% and this has led to a reduction in net debt by €187.7 million versus Q3 2019.

For further details, see full statement here.

First Published on 29 October 2020