Glanbia plc. has issued its interim management statement for the first nine months of the year, with weakened dairy markets resulting in a revenue drop for the nutritionals side of the business.
For the period up to September 30, Glanbia Nutritionals-Nutritional solutions (GN NS) saw like-for-like revenue declined by 14%, reflecting a price decline of 7.6% and a volume decline of 6.4%.
This volume decline was driven by supply chain “rebalancing” earlier in the year, according to Glanbia, with some volume growth noted in the third quarter (Q3).
Meanwhile, the pricing decline for GN NS was driven by pricing in dairy markets, the business said.
The decline in revenue performance in GN NS meant that the overall group revenue for Glanbia plc. in the first nine months of the year fell by 9.1% on a constant currency basis (not accounting for exchange rate fluctuations), despite growth in Glanbia Performance Nutrition (GPN), the other main division of the group.
Like-for-like revenue for GPN increased by 3%, reflecting a price increase of 8.9% and a volume decline of 5.9%.
Positive sports nutrition volume was offset by volume decline in weight management, Glanbia said.
Optimum Nutrition, Glanbia’s sport protein powder brand, saw a strong performance, with volume growth in Q3 and 12-week consumption growth in the US of 9.5%.
During the first nine months of the year Glanbia completed a €100 million share buyback programme, and the acquisition of the business-to-business (B2B) bioactive ingredients business division of health and nutrition company PanTheryx for €46 million.
The group’s debt as of September 30 was €334.9 million.
Outlook for dairy markets
Looking forward for the rest of the year, Glanbia is upgrading its full-year guidance, saying it expects a 17% to 20% growth in adjusted earnings per share (EPS) on a constant currency basis, reflecting “a strong outlook” for quarter four (Q4).
The group is expecting revenue growth of approximately 5% in GPN, as the year-to-date revenue is expected to be augmented by further year-on-year growth in Q4.
For GN NS, a double-digit decline in like-for-like revenue is forecasted, driven by continued low dairy market pricing, and a mid-single digit volume decline.
The performance in joint ventures is expected to be reduced due to the sale of the Glanbia Cheese mozzarella joint venture last April.
Commenting on the group’s latest interim management statement, group managing director Siobhán Talbot said:
“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 EPS to between 17% and 20% on a constant currency basis.
“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 €100 million to shareholders via a share buyback programme and build strategic capabilities, with acquisition of the B2B bioactive ingredients of PanTheryx, highly complimentary to the capabilities in GN Nutritional Solutions,” Talbot added.