Glanbia exceeds expectations in half-year results despite ongoing economic pressure
IRELAND – Irish global nutrition group, Glanbia has delivered ‘the strongest pricing in their history, reflecting ‘improved commercial execution and focus against a background of a more orderly market’, according to American multinational independent investment bank, Jefferies Group.
Concurring with the statement from the bank, Glanbia said its half-year results had ‘exceeded’ expectations and were the result of measures the company had put in place to address ‘unprecedented’ inflation last year.
The overall profit after tax for the half year was €184.3m (US$183.01m) compared to €81.3m (US$ 80.73m) in HY 2021 while the revenue increased by 26.8% on a constant currency basis to €2.8 billion, an increase of 38.5% on a reported basis.
Basic EPS increased by 137% on HY 2021, with FY 2022 adjusted EPS expected to land between 9%-13% and 21%-25% if current foreign exchange rates are sustained.
The company also reported it has sold its €307m(US$304.85m) minority shares in Glanbia Ireland with the resulting gain on disposal of the investment totaling €55.9m(US$ 55.51m) treated as an exceptional item.
Ireland’s leading dairy revealed that its dairy portfolio was outperformed in the Nutritional segment, but US cheese records had a growth.
From all divisions, Glanbia Nutritionals (NS) recorded the strongest revenue growth of 32.2% constant currency (up 44.9% reported) year on year.
This was driven by a volume increase of 5.1%, mainly due to the strong performance of the non-dairy ingredients’ portfolio and US cheese.
In the US cheese space, a price increase of 28.8% as well as in volume (6.6%) led to revenue growth of 35.4% in HY 2022. Volume growth was attributed to the company’s new joint-venture plant in Michigan.
The sub-division Nutritional Solutions grew by 24.9% in revenue thanks to increases in volume (1.6%), an increase in price (17.9%), and the acquisitions of contract food manufacturer PacMoore and bioactive solutions maker Sterling Technology, which added 5.4%.
The non-dairy portfolio outperformed the dairy offerings in H1, and EBITA was 14.4% higher at €71.7m.
SlimFast volume declined by 12.1%, however, with plans afoot to address the ‘continuing headwinds in the diet category.
In the Americas, Glanbia is working on a brand refresh for SlimFast to include a new pack design that is set to be unveiled in the second part of 2022 and will be in place for the early 2023 diet season.
Globally, Optimum Nutrition grew by 23.2% while think!, Isopure and Amazing Grass (28.1%) also recorded both volume and pricing growth.
With such an impressive performance, Jefferies has upgraded FY 2022 EPS for Glanbia by 4% based on the nutrition company’s strong half-yearly results.
The investment bank expects share prices to land in the upper end of its forecast, at 13% and 24% for constant and actual respectively.
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