Glanbia reports revised 2019 outlook following mixed 6 months

Glanbia has announced a revised outlook for the full year of 2019, with adjusted earnings per share on a reported basis revised to a 88-92c range, a decline of between -7% and -3%, assuming foreign exchange rates remain at current levels.

The Irish nutritional company also published its financial results for the first six months of 2019, showing some mixed results over the past few months.

For the first half of 2019, Glanbia’s adjusted earnings per share amounted to 36.69c, a decline of 10.8% at constant currency.

The Glanbia Performance Nutrition division’s earnings before interest, tax and amortisation (EBITA) declined by 30.2%, constant currency.

The group reported wholly owned revenues of €1,758.4 million, up 12.0% constant currency on the prior half year.

Wholly owned revenue was driven by volume growth of 1.6%, a price decline of 0.2% and acquisitions of 10.6% constant currency, versus the prior half year, it was added.

The group’s division Glanbia Performance Nutrition did see revenue growth of 13.4% constant currency, driven by the SlimFast acquisition; while the Nutritional Solutions division recorded revenue growth of 27.0% constant currency – this was driven by strong volume growth and the Watson acquisition.

The US cheese aspect saw revenue growth of 4.9% constant currency, while the group’s joint ventures share of profit after tax was €26.8 million, up €9.0 million on the prior half year.

Finally, there was an interim dividend of 10.68c per share recorded, up 10% on the prior half year.

Half-year overview

In the first half of 2019, Glanbia’s wholly owned revenue was €1,758.4 million, an increase of 12.0% constant currency.

Wholly owned EBITA was €111.4 million, down 15.3% constant currency. Wholly owned EBITA margins from operations were 6.3%, down 210 basis points on a constant currency and reported basis driven by lower margins in the group divisions.

Glanbia’s share of Equity Accounted Investees (Joint Ventures) profit after tax increased by €9.0 million to €26.8 million for the first half of 2019.

Total group profit (after exceptional items) for the period was €83.3 million, down €14.9 million on the prior half year.

In FY 2019, Glanbia expects to convert over 80% of EBITDA to operating cash-flow and deliver a return on capital employed between 10% and 13%.

Commenting today, Siobhán Talbot, group managing director, said:

“The recent acquisitions of SlimFast and Watson are performing very well.

Glanbia Performance Nutrition had a disappointing first half reflecting a number of factors including, business seasonality, consumer channel shift in Europe and difficult global trade dynamics in key international markets.

Overall, while we have positive momentum across many parts of the group, this has increased our caution for the remainder of the year,” Talbot said.

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