Manufacturing & Supply Chain

Driven by its two growth platforms, Global Performance Nutrition and Global Ingredients, Irish dairy group Glanbia has delivered a good operating and financial performance for 2013. Total group revenues increased by 8% (10.5% constant currency) to €3.3 billion. Total group EBITA at €226.7 million was up 5.6% (9.2% constant currency). Total group EBITA margin was 6.9%, reflecting a 7.9% margin in Glanbia’s wholly owned businesses – down 10 basis points – and 4.3% in joint ventures and associates – down 30 basis points. Adjusted earnings per share was 55.46 cents, up 8.0%. This equates to 11.9% growth on a constant currency basis, ahead of our previously issued guidance.

The results were underpinned by a strong performance by Global Performance Nutrition as branded revenue growth drove a 100 basis point margin expansion and an EBITA increase of 27.9% on a constant currency basis. The Global Ingredients business increased revenues on a constant currency basis by 11.5% and EBITA increased 8.1% while margins were down by 30 basis points. Dairy Ireland’s results declined significantly due to the performance of Consumer Products while Joint Ventures & Associates delivered a positive performance overall.

Glanbia continued to invest significantly in the business over the course of 2013 with total capital expenditure of €112 million. The key projects undertaken in 2013 include capacity expansion in Global Performance Nutrition, Ingredient Technologies’ new state-of-the-art specialty grain processing facility in South Dakota and the new Cheese Innovation Centre in US Cheese. The return on capital employed achieved by the Group in 2013 increased by 10 basis points to 14.2%, a good result in the context of a substantial ongoing capital investment programme.

Siobhan Talbot, group managing director of Glanbia.

The acquisition of Nutramino Holding, a leading Scandinavian sports nutrition business with operations in Denmark, Sweden and Norway, in January 2014 is aligned with the growth strategy of Global Performance Nutrition. Nutramino focuses primarily on branded, ready-to-consume products sold through the gym and convenience channels. The acquisition gives Glanbia a strong foothold in the Scandinavian market and offers the potential to leverage Nutramino capability in the convenience sector in other markets. The business was acquired for a total consideration of approximately €25.5 million.

Siobhan Talbot, group managing director of Glanbia, says: “Our two global growth platforms performed well, particularly Global Performance Nutrition where strong momentum in branded revenue growth and international expansion delivered a 28% increase in profitability, on a constant currency basis. We expect 2014 to be another positive year for the group. We will benefit from our ongoing organic investment programme, good prospects for Global Ingredients and Global Performance Nutrition and an expected improvement in Dairy Ireland.”

She adds: “We are guiding 8% to 10% growth in adjusted earnings per share for the full year 2014, on a constant currency basis. Our ambition is to continue to deliver a similar annual organic growth rate through to 2018, while seeking to sustain a return on capital employed in excess of 12%.”