Glanbia reveals new US acquisition and increased 2018 earnings

Glanbia plc has announced its results for the financial year ending December 29, 2018, revealing a 9% increase in adjusted earnings per share – as well as the acquisition of the US firm Watson.

The dairy giant has announced that it has agreed to acquire Watson, a US-based non-dairy ingredient solutions business, for $89 million.

In its financial results for 2018, the firm recorded adjusted earnings per share of 91.01c – up 9.0% constant currency on the prior year on a pro-forma basis.

Wholly-owned revenue amounted to €2,386.3 million – down slightly on 2017 figures of €2,387.1 million.

Wholly-owned earnings before interest, tax and amortisation (EBITA) came in at €284.9 million, up 5.2% on the previous year’s €283.2 million constant currency, according to Glanbia, while wholly-owned EBITA margin was up 10 bps (basis point) constant currency on the prior year.

Glanbia Performance Nutrition (GPN) delivered revenue growth of 9.5% constant currency with like-for-like branded volume growth of 9.2% and EBITA of €173.1 million, a 6.7% increase on the prior year, constant currency.

Meanwhile, Glanbia Nutritionals (GN) revenue declined 0.6% constant currency and delivered EBITA of €111.8 million, a 3.0% increase on the previous year, constant currency. Volume growth in GN Nutritional Solutions was 8.5% in 2018.

Glanbia also completed the acquisition of SlimFast for $350 million in November 2018, described as a “complementary brand within the GPN portfolio”.

Joint Ventures (JV) reported a share of profits after tax (before exceptional items) of €45.3 million – up €2.5 million on the prior year. A number of JV investments were also announced during 2018.

Reported profit for the year was €234 million, up €2.6 million on the prior year on a pre-exceptional basis. While the firm also recorded an operating cash flow of €301.7 million, representing an operating cash conversion rate of 92%.

Glanbia announced a recommended final dividend of 14.49c/share. Full year dividend of 24.20c was revealed – a 10% increase on prior year and representing a pay-out ratio of 26.6% of adjusted earnings per share.

Finally, Glanbia has announced plans to reorganise the composition of its board of directors during 2019 with appointment of three new independent non-executive directors to its board.

Commenting today Siobhan Talbot, group managing director, said: “I am pleased to announce a 9.0% growth in pro-forma adjusted earnings per share, constant currency, for Glanbia for 2018.

“This was largely driven by strong volume growth across our business, in particular in the branded portfolio of GPN and the Nutritional Solutions component of GN.

Consumer demand for our brands and nutritional ingredients remains strong, underpinned by positive long-term global health and wellness trends.

“We continue to invest in expanding our business and its capabilities and we completed the acquisition of SlimFast in November 2018.

“Today, I am happy to announce that we have agreed to acquire Watson for $89 million. Watson is a non-dairy ingredient solutions business headquartered in Connecticut in the US.

“It is a highly complementary addition to our Nutritional Solutions business and will help broaden our capabilities in the ingredients sector.

The outlook for 2019 is positive and Glanbia expects to deliver 5% to 8% growth in adjusted earnings per share, constant currency.

“If the Euro : US Dollar exchange rate remains at current levels, the reported 2019 result will be 3% higher than the constant currency outlook,” Talbot concluded.