Glanbia reported a positive revenue growth of 4.8% in the first quarter, ending March 31, in a statement made in conjunction with the group’s AGM to be held later today.
It did, however, as a result of a weaker US Dollar Euro foreign exchange rate, report a decrease in revenue by 8.1% compared to the same period in 2017.
Glanbia attributed the performance to volume growth seen in both Glanbia Performance nutrition and Glanbia Nutritionals, which was 7.2%. Acquisitions by the group contributed to 3.6% growth in revenue.
The Interim Management Statement also noted that due to a weaker dairy market and brand investment into Glanbia Performance Nutrition pricing declined by 6% year on year.
Siobhán Talbot, Glanbia managing director said, “The year has started as planned and we reiterate our full year guidance of 5% to 8% growth in adjusted earnings per share, constant currency, from the continuing Group (pro-forma) in 2018 with growth to be delivered in the second half of the year.”
Product Performance
Glanbia Performance Nutrition (‘GPN’) delivered good revenue growth when compared to last year’s performance with an increase of 9.3%. This was mainly driven by volume growth of 5.5%, the acquisition of Body & Fit which delivered 7.8%, offset by a price decking of 4%.
GPN delivered positive volume growth across international markets, most notably in the US. The Interim Management Statement stated that the US market was broad-based across key channels, while in non-US regions, emerging markets delivered strong growth on the back of prior investment from the group in ‘building its international capabilities’.
Glanbia Nutritionals (GN) delivered expected revenue growth in the first quarter, with revenue increasing by 1.1% due to an 8.6% increase in volume sale offset by a 7.5% price decline.
Glanbia’s Nutritional Solutions saw a decline in revenue of 3.6%. The group said that this was driven by a volume growth of 6.2% across dairy and non-dairy ingredients offset by a price decline of 6.2%. Glanbia attributed this decline to ‘relatively lower year on year dairy prices’.
Cheese revenue in the US increased by 5% in the period, driven by volume growth of 13.7%. This was attributed to the timing of customer off-takes versus the prior year. Pricing declined by 8.7% as a result of reduced cheese markets year on year.
Joint Ventures
Revenue from Joint Ventures increased by 29.7% in the first quarter. The transaction to create Glanbia Ireland delivered 34.8% revenue growth, with volume growth of 4.3% which was offset by a price decline of 9.4% due to the weaker dairy markets.
The nutrition group noted that the project to expand production capacity in its Southwest Cheese facility in the US by 25% is nearing completion, and commissioning is to expected to be concluded by the second quarter of this year.
Full-Year Outlook
Glanbia's net debt at 31 March 2018 was €385 million, a decrease of €350 million compared to the same period of last year.
The Interim Management Statement said that earnings growth is expected to be delivered in the second half of 2018. Comparative dairy market pricing and planned investments will deliver a reduced performance in the first half of the year.
Glanbia expects an approximate 8% translational headwind to full-year reported results if the average Euro-US Dollar foreign exchange rate for the full year remains at similar levels to the average rate for the first quarter of 2018.
© 2018 Checkout – your source for the latest Irish retail news. Article by Aidan O’Sullivan. Click subscribe to sign up for the Checkout print edition.
