Glanbia Performance Nutrition “main driver” of company’s revenue growth in first nine months of 2017

01 Nov 2017 --- Global nutrition group Glanbia plc. has highlighted strong performances from Glanbia Performance Nutrition and Glanbia Nutritionals in its Interim Management Statement for the nine-month period ending on September 30 2017. The highlights include a 9 percent increase in revenues for Glanbia Performance Nutrition and a 4.6 percent revenue growth for Glanbia Nutritionals.

“Glanbia delivered a good result in the first nine months of 2017 with wholly owned revenue from continuing operations growing 6.6 percent in the period,” comments Siobhán Talbot, Group Managing Director at Glanbia. “Glanbia Performance Nutrition was the main driver of revenue growth with Glanbia Nutritionals continuing to perform well.”

“Our Joint Ventures delivered strong revenue growth as a result of improved dairy markets,” Talbot adds. “The outlook for the remainder of 2017 is positive and we reiterate our full-year guidance of 7 percent to 10 percent growth in pro forma adjusted earnings per share, constant currency, for the continuing Group.”

“Glanbia’s portfolio of branded performance nutrition products and ingredient solutions are addressing the growth opportunities arising from four major consumer megatrends: Health and wellness, life on the go, active lifestyles and clean labelling,” a Glanbia spokesperson tells NutritionInsight.

“We are constantly developing innovative solutions to meet specific customer and consumer functional and nutritional needs,” the Glanbia spokesperson adds. “Our ability to connect to these consumer megatrends and deliver simple, healthy and exceptional products has allowed us to hold the number one position in a global market that is estimated to grow to US$20 billion by 2020.”

Glanbia Performance Nutrition innovates to drive growth
Glanbia Performance Nutrition delivered what is described by the company as a “satisfactory” performance in the first nine months of the year. In that period, revenues increased by 9 percent. This was driven by a 2.7 percent increase in volume, 7.4 percent growth from the acquisitions of Amazing Grass and Body & Fit offset by a 1.1 percent price decrease.

The overall volume movement year to date reflected branded revenue growth offset by a decline in contract business, according to Glanbia. The drivers of growth have been a good performance in the online and mass channels in the US as well as a strong performance across the EMEA and LAAPAC markets. The price decrease was primarily a function of brand investment and innovation support in the US with full-year pricing expected to be broadly in line with year-to-date levels.

Innovation continues to be a driver of growth, Glanbia notes, with a range of products focused on convenience formats and plant based ingredients performing well across the branded portfolio. The pipeline of new product launches will continue into the fourth quarter and will be broad based across channel, format and territory.

The full-year 2017 outlook for Glanbia Performance Nutritionals is good, the company believes. It continues to expect delivery of like-for-like branded revenue growth in the mid-single digit range for the full year recognizing a seasonal uplift in quarter four. Full-year EBITA margins are expected to be in the mid teen range broadly in line with half-year 2017 levels.

Strong outlook for Glanbia Nutritionals
Glanbia Nutritionals delivered a good performance in the first nine months of 2017 with revenue growth of 4.6 percent. This was driven by a price increase of 2.5 percent, mainly as a result of improved dairy markets, versus prior year and volume growth of 2.1 percent, driven by Nutritional Solutions.

Nutritional Solutions delivered good price and volume increases in the period. This was driven by increased sales of value added dairy and micro-nutrient solutions which continued to perform well with customers across developed and emerging markets.

However, US Cheese performance was somewhat challenged in the period with Glanbia citing adverse product mix due to cheese market dynamics where supply has outpaced demand for certain formats. Overall, pricing was in line with prior year and volume declined marginally.

The full-year 2017 outlook for Glanbia Nutritionals is good, the company notes. Revenue and EBITA growth is expected to be driven by volume and pricing growth in Nutritional Solutions.

Financing
Glanbia’s net debt at the end of the third quarter of 2017 was €482 million (US$561 million) which represents a decrease of €144 million versus the net debt position at the end of the third quarter of 2016. This was primarily driven by the receipt of €210 million in net cash proceeds relating to the Dairy Ireland transaction, somewhat offset by the acquisition of Amazing Grass and Body & Fit, and increased working capital primarily due to acquisitions, higher activity levels and higher commodity markets.

The full-year 2017 net debt to adjusted EBITDA ratio, as calculated per financing agreements, is expected to be approximately 1.0 times based on current business activity. Total 2017 capital expenditure is expected to be in the range of €65 million to €75 million.

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 7 percent and 10 percent constant currency for full year 2017.