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Glanbia Increases Revenues But Earnings Decline

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Glanbia Increases Revenues But Earnings Decline

Glanbia Increases Revenues But Earnings Decline
March 02
15:20 2020
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Glanbia, the global nutrition group, delivered strong revenue growth in its 2019 financial year ended 4 January 2020 with revenue increasing by 16.6% to €3.876 billion. The drivers of revenue growth included a 6.6% increase in pricing, a 9.9% contribution from acquisitions with overall volume broadly in line with 2018.

Price and volume growth was driven by a good performance from the group’s Glanbia Nutritionals (GN) business and by the acquisitions of Watson and SlimFast also performing well in 2019. GN saw broad-based volume growth with notable performances in vitamin and mineral blends, and healthy snack ingredients, underlining the continued consumer shift towards health and wellness.

Wholly-owned EBITA was €276.8 million, a 7.8% decline and EBITA margin was 7.1%, 190bps lower than 2018. EBITA decline was due to the Glanbia Performance Nutrition (GPN) segment, which encountered challenges in international markets throughout 2019 as well as lower sales in the North American Specialty and Club channels resulting in lower volumes and negative operating leverage. This decline was partially offset by a 10.5% increase in EBITA in GN driven by volume growth, price increases and the Watson acquisition.

Glanbia’s share of its joint ventures’ (JVs) profit after tax increased by €3.3 million to €48.6 million in 2019 primarily as a result of good growth in volume in all JVs. Total group profit after exceptional items was €180.2 million.

Exceptional items of €34.6 million, after tax, primarily relates to the GPN segment as well as Brexit mitigation costs and acquisition integration costs in 2019. There were no exceptional items in 2018. Total group profit was €214.8 million for 2019 down from €234.0 million in 2018 as a result of lower year-on-year EBITA. As a result of lower group profit, adjusted earnings per share was 88.10 cent which was 7.7% lower than 2018 but within the previously issued guidance range.

Siobhán Talbot, Group Managing Director of Glanbia, comments: “It was disappointing that earnings were impacted by challenges in the Glanbia Performance Nutrition (GPN) segment and to address these we have conducted a comprehensive business review and are taking actions to simplify our business, allowing us to concentrate on our core brands, and optimising our routes to market across channels and geographies. As a result, we expect GPN to regain branded revenue growth momentum in 2020.”

She continues: “Glanbia is financially strong and cash generative. We have increased our dividend by 10% and we are proposing to our shareholders that we adopt a share buyback programme in 2020. We are confident that the actions being taken will position the company to generate enhanced shareholder value in a growing healthy nutrition market.”

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