TIDMGLB
RNS Number : 9475R
Glanbia PLC
01 November 2023
THIRD QUARTER 2023 INTERIM MANAGEMENT STATEMENT
Continued momentum in third quarter with full year earnings
guidance upgraded to 17% to 20% growth in adjusted EPS(1)
01 November 2023 - Glanbia plc, the better nutrition company
("Glanbia", the 'Group', the 'Company' or the 'plc'), is issuing
this Interim Management Statement for the nine month period ended
30 September 2023 ("the period" or "YTD Q3 2023").
Highlights
-- Upgrading full year guidance to 17% to 20% growth in adjusted
EPS(1) , reflecting year-to-date performance and a strong outlook
for Q4;
-- Group revenue for the period declined 9.1% constant currency
with growth in Glanbia Performance Nutrition ("GPN") offset by
decline in Glanbia Nutritionals ("GN");
-- Glanbia Performance Nutrition:
o Like-for-like branded revenue increased by 3.0% reflecting a
price increase of 8.9% and a volume decline of 5.9%;
o Pricing reflects 2022 pricing action across all brands;
positive sports nutrition volume was offset by volume decline in
weight management;
o Strong Optimum Nutrition ("ON") brand trends continue with
good volume growth in the quarter and 12 week US consumption growth
of 9.5%(2) ;
o FY 2023 EBITA margins expected to be between 14.0% and 14.5%,
an increase of 280bps to 330bps on FY 2022;
-- Glanbia Nutritionals - Nutritional Solutions ("GN NS"):
o Like-for-like revenue declined 14.0% reflecting a volume
decline of 6.4% and a price decline of 7.6%;
o Volume decline driven by supply chain rebalancing earlier in
the year with volume growth delivered in the third quarter;
o Pricing decline driven by dairy market pricing, with positive
pricing in the custom premix solutions business;
o FY 2023 EBITA margins expected to be between 12.0% and 13.0%,
an increase of 60bps to 160bps on FY 2022;
-- Completed EUR100 million share buyback programme and the
acquisition of the B2B bioactive ingredients business of PanTheryx
for $46 million ; and
-- Strong balance sheet with net debt of $334.9 million as at 30 September 2023.
________________________
[1] Adjusted earnings per share ("EPS") growth on a constant
currency basis
(2) Consumption growth is US measured channels and includes
Online, FDMC (Food, Drug, Mass, Club) and Specialty channels. Data
compiled from published external sources and Glanbia estimates to
10 September 2023
Commenting today, Siobhán Talbot, Group Managing Director
said:
"I am pleased to announce that Glanbia has continued to deliver
good momentum during the third quarter which, together with a
strong outlook for the remainder of the year, today results in an
upgrade in expected growth in full year adjusted earnings per share
to between 17% and 20% on a constant currency basis. The Group's
portfolio of better nutrition brands and ingredients continues to
resonate strongly with consumers seeking health and wellness, with
a particular focus on protein. The Optimum Nutrition brand within
GPN, delivered strong revenue growth in the period while in GN
Nutritional Solutions, overall volume trends have stabilised with
volume growth in the third quarter driven by protein solutions.
Glanbia continues to generate strong cash flow, which has been
allocated in the period to complete the return of EUR100 million to
shareholders via a share buyback programme and build strategic
capabilities, with the acquisition of the B2B bioactive ingredients
business of PanTheryx, highly complementary to the capabilities in
GN Nutritional Solutions."
23 Outlook
The Group is today upgrading its full year guidance to 17% to
20% growth in adjusted EPS constant currency, based on year-to-date
delivery and the continued momentum in GPN. The Group outlines the
following guidance for FY 2023:
-- GPN expects revenue growth of approximately 5.0% on a
constant currency basis, as year-to-date revenue growth of 2.7%
will be significantly augmented further by strong year-on-year
growth in the fourth quarter. GPN EBITA margins are now expected to
be between 14.0% and 14.5%.
-- GN NS expects a low double-digit decline in like-for-like
revenue driven by lower dairy market pricing and a mid-single digit
volume decline. GN NS EBITA margins are expected to be between
12.0% and 13.0%.
-- The performance in joint ventures is expected to be
marginally reduced due to the sale of the Glanbia Cheese mozzarella
joint ventures at the end of last April.
-- The Group expects to deliver an operating cash flow conversion rate of 80% to 90%.
Summary revenue progression
Summary of YTD Q3 2023 revenue progression
versus prior year
Reported
Constant currency movement movement
============================================================
Total
Acquisition constant Total
Volume Price Like-for-like / Disposals currency reported
======= ==========
Glanbia Performance
Nutrition (6.2%) 8.9% 2.7% - 2.7% 2.5%
----------------------- ------- -------- -------------- ------------- ---------- ----------
Glanbia Nutritionals (1.1%) (11.9%) (13.0%) (0.9%) (13.9%) (13.9%)
----------------------- ------- -------- -------------- ------------- ---------- ----------
Nutritional Solutions (6.4%) (7.6%) (14.0%) (3.2%) (17.2%) (17.4%)
US Cheese 1.1% (13.6%) (12.5%) - (12.5%) (12.5%)
----------------------- ------- -------- -------------- ------------- ---------- ----------
Total wholly-owned
businesses (2.5%) (5.9%) (8.4%) (0.7%) (9.1%) (9.2%)
======================= ======= ======== ============== ============= ========== ==========
In the nine months ended 30 September 2023 compared to the same
period in 2022, wholly-owned revenue declined 9.1% constant
currency (down 9.2% reported). The drivers of the revenue decline,
on a constant currency basis, were a volume decline of 2.5%, a
price decline of 5.9%, and the net impact of acquisitions and
disposals delivering 0.7% decline.
Glanbia Performance Nutrition (all commentary is on a constant
currency basis)
GPN revenue increased by 2.7% in the first nine months of 2023.
This was driven by price increases of 8.9% offset by a volume
decline of 6.2%. Like-for-like branded revenue for the period
increased by 3.0%, with 8.9% pricing growth and a volume decline of
5.9%.
Pricing was positive across all brands reflecting the
annualisation of strategic price increases executed in 2022.
Overall volume momentum continued to improve in GPN through the
period, with Optimum Nutrition delivering good global volume
growth, offset by the decline in SlimFast. Optimum Nutrition, GPN's
flagship global brand which now represents over 60% of the GPN
brand portfolio, experienced strong growth in all key markets,
driven by the continued expansion of the "More of You In You"
communications platform and increased distribution.
GPN EBITA margins for FY 2023 are now expected to be between
14.0% and 14.5% driven by the continued focus on revenue growth
management initiatives, operating efficiencies and margin
optimisation.
Americas
GPN Americas revenue declined by 1.8% in the period, with strong
growth in the Optimum Nutrition and Isopure brands offsetting the
declines in SlimFast, which was anticipated. Pricing was positive
across all brands.
Optimum Nutrition continued its strong performance and delivered
US consumption growth of 9.5% in the 12 weeks to mid-September,
building on a strong comparative period. Trends in the healthy
lifestyle portfolio remained robust with US consumption growth of
12.3% in the 12 weeks to mid-September across the Isopure, think!,
and Amazing Grass brands. The protein category in North America is
currently resonating very strongly with active lifestyle consumers,
in response to which GPN has increased marketing investment in the
Optimum Nutrition and Isopure brands, driving distribution gains
and volume growth in the period.
SlimFast, which now represents 10% of the GPN global portfolio,
continues to decline as ongoing challenges within the diet and
weight management category have resulted in reduced shelf space and
consumer demand. US consumption in the 12 weeks to mid-September
was down 35.8%.
International
GPN International revenue grew by 12.3% in the period, with
strong volume growth. Optimum Nutrition, GPN's flagship global
brand, continues to gain traction with new consumers in key
priority markets, supported by higher levels of marketing
investment. Pricing was positive across all regions due to the
execution of the 2022 price increases.
Glanbia Nutritionals (all commentary is on a constant currency
basis)
GN revenue declined 13.9% in the period. This was driven by a
1.1% decline in volume, 11.9% decline in price, and a decline of
0.9% driven by the net impact of acquisitions and disposals.
Nutritional Solutions
GN NS revenue declined by 17.2% in the period. This was driven
by a 7.6% decline in price, a 6.4% decline in volume, and a decline
of 3.2% driven by the net impact of acquisitions and disposals.
The price decline was driven by the decline in dairy market
pricing, with positive pricing in the custom premix solutions
business. The volume decline was driven largely by the anticipated
customer supply chain rebalancing, particularly in the custom
premix solutions business. Overall volume trends have continued to
improve during the period, with good demand for protein solutions
underpinning GN NS volume growth in the third quarter, a trend
expected to continue into Q4.
GN NS expects EBITA margins for FY 2023 to be between 12.0% and
13.0% as a result of operating efficiencies and the accretive
impact of lower dairy pricing.
PanTheryx acquisition
On 30 September 2023 Glanbia acquired the B2B bioactive
ingredients business of PanTheryx, Inc. ("PanTheryx"), a US based
health and nutrition business, for consideration of $46 million.
PanTheryx FY 2022 revenue was $30.6 million.
US Cheese
US Cheese revenue declined by 12.5% in the period, driven by a
13.6% decline in year-on-year dairy market pricing. Volumes
increased by 1.1% reflecting robust end market demand and strong
customer relationships.
Share buyback
On 15 September 2023, Glanbia completed its previously announced
share buyback programme. Between 1 March 2023 and 15 September
2023, Glanbia deployed EUR100 million, repurchasing 7,215,827
ordinary shares on Euronext Dublin at an average price of
EUR13.86.
Financing
The Group's balance sheet remains in a strong position.
Glanbia's net debt at 30 September 2023 was $334.9 million which
represents a decrease of $395.8 million versus the net debt
position at the end of the third quarter of 2022. At the end of the
period the Group had committed debt facilities of $1.3 billion.
Glanbia's ability to generate cash and its available debt
facilities ensure the Group has considerable capacity to finance
future investments.
Ends
Cautionary statement
This announcement contains forward-looking statements. These
statements have been made by the Directors in good faith based on
the information available to them up to the time of their approval
of this report. Due to the inherent uncertainties, including both
economic and business risk factors underlying such forward-looking
information, actual results may differ materially from those
expressed or implied by these forward-looking statements. The
Directors undertake no obligation to update any forward-looking
statements contained in this announcement, whether as a result of
new information, future events, or otherwise.
IMS conference call and webcast details
There will be an analysts' conference call and webcast
presentation to accompany this Interim Management Statement at 8.30
a.m. (GMT) today. Please access the webcast from the Glanbia
website at https://www.glanbia.com/investors/results-and-events,
where the presentation can also be viewed or downloaded.
To listen to the call, please dial-in using the following
numbers:
Ireland +353 (0)1 691 7842
United Kingdom +44 (0)203 936 2999
United States +1 646 787 9445
All other locations +44 (0)203 936 2999
Access code: 665128
A replay of the call will be available for 30 days from this
afternoon. Please see the link below to the Investor Relations
section of the Glanbia plc website for details:
https://www.glanbia.com/investors/results-centre
For further information contact
Glanbia plc +353 (0)56 777 2200
Mark Garvey, Group Finance Director
Liam Hennigan, Group Secretary & Head of Investor Relations: +353 (0)86 046 8375
Donal O'Keeffe, Investor Relations Director: +353 (0)86 047
2974
Martha Kavanagh, Director of Corporate Affairs : +353 (0)87 646 2006
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END
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