Performance boosters: Glanbia results boosted by nutrition businesses

25 Apr 2018 --- Glanbia nutrition group, Glanbia plc, has noted strong growth in its Glanbia Performance Nutrition (GPN) sector, as well as promising volume growth from the Glanbia Nutritionals (GN) portfolio. Highlights include a 9.3 percent revenue increase from 2017 for GPN, and a 1.1 percent increase from 2017 for GN. The news comes from the release of the company's Interim Management Statement for the past three month period.

“Glanbia delivered positive revenue growth of 4.8 percent, constant currency, in the first quarter of 2018 from wholly owned continuing operations. GPN was the main driver of revenue growth with continued good volume momentum across key markets. GN also delivered volume growth across its portfolio. The year has started as planned and we reiterate our full year guidance of 5 percent to 8 percent growth in adjusted earnings per share, constant currency, from the continuing Group in 2018 with growth to be delivered in the second half of the year,” says Siobhán Talbot, Group Managing Director.

In the three months ended March 31, 2018, wholly owned revenue from continuing operations increased 4.8 percent, constant currency. On a reported basis, reflecting the weaker US Dollar Euro foreign exchange rate, revenue decreased 8.1 percent when compared to the same period in 2017.

The critical driver of revenue increase on a constant currency basis was volume growth from both GPN and GN which was 7.2 percent. Acquisitions contributed 3.6 percent growth in revenue. Pricing declined by 6 percent year on year driven by relatively weaker dairy markets and brand investment in GPN.

Strong outlook for Glanbia Performance Nutrition
GPN delivered good revenue growth in the first three months of 2018. Compared to the prior year, revenue increased by 9.3 percent and this was driven by volume growth of 5.5 percent, the Body & Fit acquisition delivering 7.8 percent, offset by a price decline of 4.0 percent.

GPN delivered volume growth in both the US and other key international markets. In the US this was broad-based across key channels. In non-US regions, emerging markets delivered strong growth as GPN continues to benefit from the prior investment in building its international capabilities. As previously noted negative price was primarily a function of brand investment and innovation support. The Body & Fit direct to consumer brand, acquired in the first quarter of 2017, performed well and Glanbia is investing in this business to accelerate growth as well as build overall digital capability for GPN.

Innovation is a central component of the GPN growth strategy and in the period the recently launched ON Cake Bites and BSN Syntha-6 Protein Crisp bars performed well.

The full year 2018 outlook for GPN is good. Guidance is reiterated for delivery of like-for-like branded volume growth in the mid-to-high single digit range. GPN will continue to invest behind innovation and its brands and expects EBITA margins for the full year to be broadly in line with 2017 as these investments will be funded by lower input costs, which will crystallize in the second half of the year.

Positive 2018 for Glanbia Nutritionals predicted
Glanbia Nutritionals delivered revenue growth in line with expectations in the first three months of 2018. Revenues increased by 1.1 percent versus prior year. This was driven by a volume increase of 8.6 percent offset by a price decline of 7.5 percent.

The full year 2018 outlook for GN is positive. Guidance is reiterated for volume growth in Nutritional Solutions in the mid-to-high single digit range for the full year. This will offset market related price declines in US cheese and dairy ingredients.

Further categories:

Nutritional Solutions
Nutritional Solutions revenue declined by 3.6 percent in the period. This was driven by volume growth of 2.6 percent which was across dairy and non-dairy ingredients offset by a price decline of 6.2 percent which was related to relatively lower year on year dairy prices. Growth within Nutritional Solutions continues to be with a variety of multinational and regional customers.

US Cheese
US Cheese revenue increased by 5 percent in the period. This was driven by volume growth of 13.7 percent due to the timing of customer off-takes versus the prior year. Pricing declined by 8.7 percent as a result of reduced cheese markets year on year.

Full year outlook
Glanbia reiterates its guidance that on a pro-forma basis adjusted earnings per share for the continuing Group is expected to grow between 5-8 percent constant currency for full year 2018. Earnings growth is expected to be delivered in the second half of 2018. Comparative dairy market pricing and planned investments will deliver a reduced performance in the first half of the year. If the average Euro-US Dollar foreign exchange rate for the full year remains at similar levels to the average rate for the first quarter of 2018, Glanbia expects an approximate 8 percent translational headwind to full-year reported results.

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