Glanbia revenues up 16.9% in Q3 of year to date

Glanbia plc has announced its Third Quarter (Q3) 2019 Interim Management Statement, revealing a growth in revenues of 16.9% in the year-to-date (YTD) compared to 2018.

This has been driven by an increase in volume of 2.4%; an increase in price of 3.2%; and acquisitions adding 11.3%.

Glanbia reports a strong performance from nutritional solutions (NS), which has grown in revenue by 25.4%. Particularly, the acquisition of ingredients company Watson was responsible for a 12.2% growth in the division. Watson has also increased its volume by 9.3% and has seen price rise by 3.9%.

Other key findings in the Glanbia report include:

  • Glanbia Performance Nutrition (GPN) increased revenue by 16.5% with the SlimFast acquisition adding 25.8%, offset by a price decline of 1.4% and a volume decline of 7.9%. In Q3 a price increase was successfully implemented as planned in the US;
  • GPN like-for-like volumes were weaker than expected in the third quarter as key non-US markets in Brazil, the Middle East and India remained challenging. A series of actions by Glanbia are underway to address these issues, which will continue into 2020;
  • SlimFast growth accelerated in Q3 with YTD like-for-like sales, on a ‘pro-forma’ basis, up 34.8%;
  • Guidance reiterated for full-year 2019 adjusted earnings per share on a reported basis being in a range of 88c to 92c.

Glanbia’s full-year guidance of adjusted earnings per share is based on the assumption that foreign exchange rates remain at current levels.

The company expects ‘NS’ and US cheese to deliver strong revenue growth as the year progresses, along with a “positive contribution” from Watson.

GPN is also expected to deliver good overall revenue growth, as like-for-like revenue declines of mid-to-high single digits are countered by a strong performance from SlimFast.

Glanbia says that the like-for-like revenue declines in GPN “reflects an ongoing problem in the EU, Middle East, Brazil and India”.

Glanbia delivered 16.9% growth in wholly-owned revenues on a constant currency basis in the first nine months of 2019, versus the prior year.

“This was driven by a strong performance from Glanbia Nutritionals as it meets demand from its global and regional customers for dairy and non-dairy solutions, as well as a good contribution from acquisitions,” explained Siobhán Talbot, group managing director.

“In GPN, while we are very pleased with the performance of the SlimFast acquisition, our like-for-like volume performance is disappointing. This is largely driven by specific challenges in key non-US markets. We are actively addressing the issues in these markets as they represent a compelling long-term growth opportunity for the group,” she continued.

“We reiterate our full-year guidance of adjusted earnings per share on a reported basis of being in a range of 88c to 92c, assuming foreign exchange rates remain at current levels,” Talbot concluded.

Glanbia’s share of joint ventures increased by 8.6% in the first nine months of 2019, driven by a volume growth of 9% as a result of production growth. This was offset by a pricing decline of 0.4% due to comparatively lower year-on-year European markets.

The company’s net debt at October 5, 2019, was €815.8 million, a €418 million increase on the same figure after nine months of 2018. This has been driven by new acquisitions and the timing of the interim dividend payment.

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