Glanbia has launched a new share buyback programme of up to €50 million and upped its interim dividend for shareholders after recording a stronger than expected first-half performance.
The global nutrition group surpassed forecasts, recording an 11.2 per cent rise in revenues to €2.04 billion on a reported basis. This compares to €1.84 billion for the same six months a year earlier.
Managing director Siobhán Talbot said the strong performance was in part a natural bounce back from the impact of Covid-19 on the business.
However, she said the pandemic had “magnified” existing consumer trends towards health and wellness, on which, she said, the company was ideally placed to capitalise.
The group’s performance nutrition unit, which sells protein powders to gym-goers and dieters – several under its best-selling Optimum Nutrition brand – saw revenue grow by almost 20 per cent to €638 million.
“Our compelling belief has always been that consumers’ increasing focus on health and wellbeing positions Glanbia well for the future, given our portfolio of nutrition brands and ingredient solutions,” said Ms Talbot.
Global market
Glanbia has 12-13 per cent of the global market for performance nutrition products and is the biggest seller of these on Amazon.
Prior to the pandemic, it had reported problems with its performance nutrition business related to tariffs, slowing growth in several markets and supply chain issues.
However, Ms Talbot said the company now had a better mix of products and a better mix of channels to the consumer.
The other side of the company’s business – nutritionals – reported a 7.6 per cent rise in turnover to €1.4 billion for the half year. Glanbia said it generated over €160 million of operating cash flow and reduced net debt by more than €100 million.
The strong first-half performance drove a significant improvement in profit, with adjusted earnings per share (EPS) of 52.86 cent in the period, which was an increase of 70.2 per cent.
Climate change
On the issue of climate change, Ms Talbot said the agri-food industry faced a significant challenge, but Ireland was one of the most carbon-efficient dairy locations on the planet.
She said sustainability was a primary focus for the company, noting that it was the recycling of whey byproducts from cheesemaking which spawned its sport nutrition business. Glanbia has pledged to reduce its carbon emissions by 30 per cent by 2030. In its report, the company said it is guiding for adjusted EPS growth of 17 per cent to 22 per cent for the year on a constant currency basis versus the prior year. Glanbia is recommending an interim dividend of 11.75 cent per share, a rise of 10 per cent, with this to be paid in October.
“Our focused actions to drive demand coupled with the consumer response to market reopenings in the first half of 2021 has strengthened our belief that these trends will continue to deliver long-term growth for Glanbia,” she added.
