Glanbia is reporting a good start to the year financially, with revenues up 17% compared to the previous year.
This morning, Wednesday, April 22, the group released its interim management statement for the three-month period up to April 4, comprising the first quarter (Q1) of financial year 2020.
The statement was released in conjunction with the group’s annual general meeting (AGM), which is being held today.
Some of the key points of the statement are:
- Q1 2020 wholly-owned revenues increased 17% on a constant currency basis (20.2% reported) versus the prior year, due to good demand across both Glanbia Performance Nutrition (GPN) and Glanbia Nutritionals (GN);
- Limited operational disruption to date due to the “exceptional performance of Glanbia employees and supply chain partners”;
- Strong balance sheet and operating cash-flow; committed facilities of €1.15 billion with no debt due for renewal in the next 12 months and quarter-end net debt of €690 million;
- The final 2019 dividend will be paid to shareholders this Friday, April 24, 2020;
- Due to the uncertainty of the duration and impact of Covid-19, financial guidance previously issued on February 26, 2020, is withdrawn.
The statement added that group-wide plans are in place for operating during the Covid-19 outbreak, with the key priorities being: protecting health and safety among employees; continuing to supply food; and maintaining a good financial position.
“Glanbia had a good first quarter of 2020, growing revenues by 17% constant currency, versus the prior year. This was underpinned by good volume growth in both GPN and GN in the period,” according to Siobhán Talbot, group managing director.
“Overall, demand in our key end markets was positive in the first quarter. However, greater volatility in consumer shopping behaviour was evident in recent weeks arising from Covid-19, and due to uncertainty of the duration and impact of this pandemic, full-year 2020 financial guidance is withdrawn,” she added.
Talbot also expressed “deep thanks” to Glanbia employees, customers and suppliers.
Performance
In the three months ending April 4, 2020, Glanbia’s wholly-owned revenue increased by 17%, constant currency. On a reported basis, reflecting the stronger US dollar-euro foreign exchange rate, revenues increased 20.2% when compared to the same period in 2019.
The drivers of the revenue increase, on a constant currency basis, were price growth of 9.2% and volume growth of 6.3%.
Meanwhile, the acquisition of ingredients supplier Watson represented 1.5% of the revenue increase.
Covid-19
Strong demand in North America offset weaker demand in international markets where the challenges posed by Covid-19 had a greater impact.
In response to the Covid-19 pandemic, the group put in place ‘business continuity planning teams’.
The statement also outlined that a set of health and safety measures have been implemented at all Glanbia production sites worldwide, including: health monitoring; occupational health support; employee welfare supports; physical distancing; and hygiene and sanitation measures.
Outlook
Glanbia points out that “a significant proportion of the global population is now in lockdown, which has impacted consumer shopping activity in a variety of ways, and it is difficult to model how those behaviours will evolve”.
“Demand became more volatile at the end of the quarter and into April, particularly in GPN. At this time it is extremely difficult to assess the impact and duration of Covid-19 and therefore it is prudent for Glanbia to withdraw its 2020 full-year financial guidance, issued on February 26, 2020,” the statement added.