The global nutrition group saw group revenues increase 9.6% for the first three months compared to the same period last year. Once the effect of currency is stripped out, total group revenues increased 7.7%.
In its wholly owned businesses, revenues increased 4.7% compared to the same period last year. Increased prices contributed 2.1% of the growth, along with 1.7% volume growth and a 0.9% contribution from acquisitions.
Our strategic initiatives remain on track
Siobhán Talbot, group managing director, said: “Our strategic initiatives remain on track having signed binding legal agreements, subject to certain approvals, to sell 60% of Dairy Ireland (consumer and agri) to Glanbia Co-op.”
The group is holding its annual general meeting this Wednesday. The proposed transaction to sell 60% of Dairy Ireland to the co-op is subject to shareholder approvals by both Glanbia Co-op and Glanbia plc, which is understood to be taking place on 18 May.
The group said Glanbia Performance Nutrition (GPN) delivered in line with expectations – however, acknowledged that there were some challenges in the US, its largest market.
It said non-US markets countered some of those challenges. Volumes fell 3.1% but there was a 0.3% boost in prices. This and the acquisition of Amazing Grass, a non-dairy protein brand, contributing 2.6%, saw overall revenues decrease marginally by 0.2%. There was a fall-off in contract revenues as the group concentrates on driving branded revenues.
The group said that the full-year outlook for GPN is good, with like-for-like branded revenue growth expected to be in the mid single-digit range, driven by volume growth weighted towards the second half of the year. It said margins are expected to be in the mid-teen range, albeit below 2016 levels. This was as a result of increased input costs but partly offset by price, mix and efficiency improvements.
The ingredients business reported revenue growth of 10.3% for the first three months, driven by a 7.6% increase in prices, mainly as a result of improved dairy markets. Volumes increased 2.7%. The group said US cheese performed in line with expectations, with solid demand.
The consumer and agri division reported an increase in revenues of 2.3%, which was driven by a volume increase of 7.2%, offset by a price decline of 4.9%. Glanbia said there was a reduction in private label business. However, it had continued its growth in value-added milks.
Joint ventures and associates
Revenues from its joint ventures, which include Glanbia Ingredients Ireland (GII), increased 19.2% in the first three months of 2017 versus the prior year. Pricing increased by 17.7% as a result of improved dairy markets. Volume increased by 1.5% as growth in GII more than offset some volume declines in other joint ventures.
Glanbia is currently expanding production capacity by 25% at the South West Cheese facility in the US, and creating a new joint venture in Michigan to build a large-scale cheese facility.
Glanbia’s net debt at 1 April 2017 was €735m, an increase of €297m compared to its year-end net debt position, driven mainly by the acquisitions of Amazing Grass and Body & Fit.
Glanbia reiterated its full-year guidance of 7% to 10% growth in adjusted earnings per share, constant currency, with growth weighted to the second half of the year.