Post-tax profits at Glanbia rose to €167.4 million in 2021, compared to €143.8 million in 2020, the full year accounts for the company show.

In 2021, Glanbia wholly-owned revenue was €4,196.9 million, an increase of 13.1%. Glanbia said that this was driven by growth in volume of 16.1% offset by a decline in price of 4% and acquisitions adding 1%.

Glanbia’s pre-exceptional share of joint venture profit after tax for continuing operations decreased by €18.5 million to €19.2 million for 2021, as a result of strong prior year comparatives as well as commissioning costs for new joint venture plants, according to the full year results.

Profits

Profit after tax for the year was €167.4 million compared to €143.8 million in 2020, comprising continuing operations of €141 million (2020: €120.8 million) and discontinued operations of €26.4 million (2020: €23 million).

Profit after tax from continuing operations comprises pre-exceptional profit of €183.8 million (2020: €151.4 million) and exceptional charges of €42.8 million (2020: €30.6 million).

The €32.4 million increase in pre-exceptional profit after tax is driven by the increased profitability of the wholly-owned business net of reduced profitability from joint ventures. 

Basic earnings/share was 57.57 cent (2020: 48.72 cent).

Dividend 

The board of Glanbia is recommending a final dividend of 17.53 cent/share which brings the total dividend for the year to 29.28 cent/share, a 10% increase on the prior year.

The final dividend will be paid on May 6, 2022 to shareholders on the share register on March 25, 2022.  

Share buyback

Glanbia shareholders approved the company’s general authority to purchase shares of up to 10% of the issued share capital of the company at the 2021 annual general meeting (AGM) on May 6, 2021. 

During 2021, Glanbia purchased and cancelled 7,272,432 ordinary shares, representing 2.5% of total issued ordinary shares at the beginning of 2021, at a total cost of €91.3 million. 

According to the report on the company’s results, buyback activity has continued in 2022 and between January 4, 2022 and March 1, 2022, the company has purchased for cancellation 5,941,210 million shares at a total cost of €73.4 million.

The board said it regularly considers share buybacks as an optional capital allocation tool and today (Thursday, March 3) announces that it has launched a further €50 million buyback programme and will seek to renew the general authority for a share buyback programme at the next AGM on May 5, 2022.  

Strategy 

The group stated that it has made significant progress on its portfolio during the year.

In line with its strategy of simplifying the business behind its growth platforms, Glanbia agreed the disposal of the 40% interest in the Glanbia Ireland DAC joint venture (Glanbia Ireland) to Glanbia Co-operative Society Ltd. for €307 million.

Glanbia said its growth strategy is now exclusively focused on meeting the increasing consumer trend for better nutrition by driving growth in its key areas of nutrition expertise, which spans innovative ingredient solutions and leading performance and lifestyle nutrition brands.

According to the company, the group’s cheese and dairy ingredients activities, both wholly-owned and joint ventured, provide “reliable returns and a robust source of ingredients supply”.

Glanbia Ireland disposal update

Shareholders have approved the disposal of the 40% interest in the Glanbia Ireland.

Subject to standard regulatory clearances, it is expected that this transaction will close in quarter two of 2022 with €307 million to be paid in cash on closing.

Glanbia will continue to provide certain corporate, business and IT services to Glanbia Ireland for a number of years following the close of the transaction, the full year results report indicates.

While Glanbia will continue to be a customer of Glanbia Ireland for certain ingredients, these product supply agreements are apparently not material to the group’s operating performance or financial results.

Within 18 months of completion, Glanbia Ireland is required to change its name to a new name that does not include the name or word ‘Glanbia’.

Outlook for inflation and Ukraine conflict impact

During 2022, Glanbia anticipates the effects of Covid-19 will further abate, however the ongoing impact of cost inflation, especially dairy-related, will need to continue to be actively managed according to the company.

Given this context, Glanbia has started 2022 with good revenue growth in both Glanbia Performance Nutrition (GPN) and Glanbia Nutritionals, Nutritional Solutions (GN NS) and expects both businesses to deliver high single-digit percentage revenue growth for 2022, largely driven by pricing.

In GPN during the second half of 2021, effective pricing actions were implemented to help mitigate growing inflationary pressures and these pricing actions are expected to continue in 2022. 

In addition, the efficiency benefits of the GPN transformation programme, incremental cost savings and dairy raw material forward purchases, are expected to further mitigate the effects of cost inflation.

Glanbia said that at this stage the consequences for the global economy of the tragic events in Ukraine are uncertain.

The company will continue to monitor customer and consumer confidence across all its markets carefully. The group has no operations in either Russia or Ukraine and total revenues to these regions are less than 2% of group revenue.  

Glanbia
Siobhan Talbot – Group managing director Glanbia

Siobhán Talbot, group managing director of Glanbia said: “I am pleased to announce that Glanbia delivered a strong performance in 2021 compared to the prior year, as good revenue growth delivered an increase of 23.9% in adjusted EPS, constant currency, for continuing operations.

“This was well ahead of our expectations at the beginning of 2021 and was driven by strong global consumer demand in Glanbia’s areas of nutrition expertise across ingredient solutions and our portfolio of nutrition brands.

“Our robust and effective operational execution delivered an excellent cash performance with 100.2% cash conversion in the year,” she added.

Talbot explained that Galnbia also made progress on a number of strategic initiatives:

  • GPN delivered in excess of its initial margin improvement target on the transformation programme and added the German-based LevlUp brand to the Glabia portfolio;
  • GN NS expanded Glanbia’s healthy snacking capability with the acquisition of PacMoore;
  • Commissioned a large-scale joint venture cheese and whey plant in Michigan, US.
  • Agreed the disposal of the plc’s interest in Glanbia Ireland DAC to Glanbia Co-operative Society Ltd. for €307 million.
  • From strong cash flow, Glanbia returned over €91.3 million last year to shareholders via share buybacks as well as raising the dividend by 10%.