DUBLIN: Food and ingredients group Glanbia said this morning that it is keeping its full-year earnings growth forecast of 9-11 per cent as it reported a strong set of first half results, driven by its global performance nutrition division.
Group revenues stood at €1.9bn in the six months to July 4th 2015, down by 8. 4 per cent on a constant currency basis, as good branded revenue growth was offset by pricing declines as a result of global dairy market weakness. Total group earnings (EBITA) was € 158.7m, with adjusted earnings per share of 40.60 cent.
Siobhán Talbot, group managing director said: “Today’s results demonstrate that our strategy is on track. As a global nutrition company, whose purpose is ‘delivering better nutrition for every step of life’s journey’, we are focused on the development of a branded and ingredient product portfolio to serve the growing consumer demand for nutritional products in formats suitable for healthy and active lifestyles. This has provided some insulation from the challenges of volatile global dairy markets”.
Glanbia’s global performance nutrition (GPN) division delivered a strong performance in the first half of 2015, against high 2014 comparative metrics. Revenues increased 1.9 per cent to €453.5m. Growth was driven by “continued investment driven operational efficiencies across the business, mix improvement from the increased proportion of branded sales, and some reduction in input costs” Glanbia said.
The group’s dairy Ireland division performed well, with earnings (EBITA) of € 17.5 m, as margins recovered to 4.7 per cent and revenues rose by 4.7 per cent to €368.9m. The group incurred rationalisation costs of €1.1m in H1, largely due to the ongoing redundancy programme in its dairy Ireland division.
Global ingredients delivered “a satisfactory performance” in the first half of 2015, in the context of challenging global dairy markets. Revenues decreased by 11.7 per cent to € 609.3m as volume growth of 6.8 per cent was offset by an 18.5 per cent decrease in prices.
Glanbia is reiterating its full guidance of adjusted earnings per share growth of between 9 and 11 per cent, on a constant currency basis. But, given the strength of the US dollar, this is likely to translate to reported earnings growth of 25 per cent for the full year.
Global performance nutrition is expected to be the main driver of 2015 growth “as momentum returns to the US business albeit this is somewhat offset by currency and geopolitical related challenges in certain non US markets”, but dairy Ireland is also forecast to deliver some recovery in margins .
