Performance nutrition drives growth at Glanbia

Glanbia, the Irish performance nutrition and ingredients group, grew its sales by 10.7 per cent to €1.3 billion in the first six months of its year, with the group's performance nutrition division a "key contributor" to this growth. The group's Irish division however suffered from falling prices.

Earnings (EBITA) increased by 10.3 per cent to €107.3 million and adjusted earnings per share grew 11.5 per cent in the six months to July 5th 2014.

“Global performance nutrition was the key contributor delivering strong branded revenue growth, through effective execution in core channels and continued international growth,” Siobhán Talbot, group managing director said. Revenues in this division advanced by 17 per cent to €374.6 million.

The group's global ingredients delivered a "satisfactory" first half in the context of milk procurement issues in Idaho and unfavourable whey pricing dynamics.

While Glanbia’s Irish operation “performed in line with expectation”, it was behind the prior year as stabilisation in consumer products was more than offset by a lower performance in agribusiness. Revenues fell by 7.7 per cent to €353.8 million, 2.8 per cent of which was accounted for by a fall in pricing, while earnings (EBITA) declined by 13.2 per cent to €10.5 million.

Rationalisation costs amounting to € 0.6 million were incurred in the group’s Irish operations in the first six months of the year. These costs relate to the ongoing rationalisation and efficiency programmes being implemented in both consumer products and agribusiness. The group expects to incur exceptional costs of € 11 million related to these programmes for the full year 2014.

The group also announced plans for a € 60 million strategic investment programme in global ingredients aimed at maximising the value of its whey pool and “further strengthening our position as a leader in value-added dairy ingredients”.

Looking ahead, Ms Talbot said: “The outlook for the remainder of the year is positive and we expect to achieve our guidance of 8 per cent to 10 per cent growth in adjusted earnings per share on a constant currency basis for 2014.”

While global performance nutrition is again expected to be the main drive of this growth, "dairy Ireland is expected to deliver an improved performance versus the prior year".

Davy Stockbrokers said that the results indicate that Glanbia “remains in excellent health, exhibiting an ideal mix of earnings growth, robust returns and capital discipline”.