2016 HALF YEAR RESULTS 17 AUGUST 2016
CAUTIONARY STATEMENT This presentation contains forward-looking statements. These statements have been made by the Directors in good faith based on the information available to them up to the time of their approval of this presentation. Due to the inherent uncertainties, including both economic and business risk factors underlying such forward-looking information, actual results may differ materially from those expressed or implied by these forward-looking statements. The Directors undertake no obligation to update any forward-looking statements contained in this presentation, whether as a result of new information, future events, or otherwise. 2016 HALF YEAR RESULTS 2
HALF YEAR 2016 GROUP PERFORMANCE SUMMARY 44.87c +10.8% (cc) Double digit growth in adjusted EPS Adj. EPS +10.5% (rc) € 157m Wholly owned +13.7% (cc) Strong EBITA performance driven by GPN EBITA +13.6% (rc) 11.0% Wholly owned +130bps (cc) Strong margin growth to double digit EBITA +130bps (rc) margin Reiterating FY guidance of 8% – 10% growth in adjusted EPS, constant currency Note: (i) EBITA is defined as earnings before interest, tax and amortisation and is stated before exceptional items. EBITA and EBITA margin are stated on a wholly owned basis. Wholly-owned excludes the group’s share of Joint Ventures & Associates (ii) CC denotes constant currency, RC denotes reported currency (iii) Constant currency (cc) growth rates removes the FX impact of translation of results to Euro. The average EURO US Dollar exchange rate for the first half of 2016 was € 1 = $1.116 (HY15: € 1 = $ 1.115). The Group’s most significant exposure is to the US Dollar. 2016 HALF YEAR RESULTS 3
SEGMENTAL SUMMARY TOTAL GROUP EBITA GROWTH +11.4% (CC*), +11.2% (RC*) COMMENTARY • Strong overall performance in € 176.5m first half € 158.7m € 81.7m • Strong performance from GPN € 60.7m driven by branded volume +35.0% (cc) GLANBIA growth across all regions +34.6% (rc) PERFORMANCE NUTRITION • Glanbia Nutritionals** delivered good volume growth € 60.3m € 58.0m of value added nutritional ingredients GLANBIA -4.0% (cc) NUTRITIONALS -3.8% (rc) • Dairy Ireland and JVs & Associates satisfactory € 20.2m -4.5% (cc) € 19.1m JVs & ASSOCIATES -5.4% (rc) € 17.5m € 17.7m DAIRY IRELAND +1.1% (rc) HY2015 HY2016 * CC denotes constant currency; RC denotes reported currency ** Global Ingredients has been rebranded Glanbia Nutritionals, the operations of the segment are unchanged 2016 HALF YEAR RESULTS 4
OPERATIONAL REVIEW 2016 HALF YEAR RESULTS
GLANBIA PERFORMANCE NUTRITION OPERATIONAL OVERVIEW Revenue • 12.0% revenue growth, constant currency € 505m Volume +8.0%; Price -6.7%; Acquisition +10.7% +12.0% (cc) +11.4% (rc) • 16.9% branded revenue growth, constant currency lfl branded 4.4% like for like branded revenue growth revenue growth Branded volume growth across all regions 4.4% • Input cost deflation, positive mix and operational EBITA leverage drove EBITA margin accretion of 280 bps € 81.7m • Continued focus on innovation; recent launches +35.0% (cc) performing well +34.6% (rc) • thinkThin growing strongly and integration on track EBITA margin 16.2% +280bps (cc) +280bps (rc) Results include impact of acquisitions completed since the prior period CC denotes constant currency; RC denotes reported currency 2016 HALF YEAR RESULTS 6
GLANBIA NUTRITIONALS* OPERATIONAL REVIEW Revenue • Performance in-line with expectations in context of € 573m challenging dairy markets -5.9% (cc) -6.0% (rc) • New organisational design in place, delivering an insight led commercial platform and transforming the customer experience EBITA € 58.0m • Good volume growth of value added nutritional -4.0% (cc) ingredients, led by strong growth in bar systems and -3.8% (rc) benefit of investment in high end whey, drove improved mix & margin EBITA margin 10.1% +20bps (cc) +20bps (rc) * Global Ingredients has been rebranded Glanbia Nutritionals, the operations of the segment are unchanged CC denotes constant currency; RC denotes reported currency 2016 HALF YEAR RESULTS 7
OPERATIONAL REVIEW DAIRY IRELAND JOINT VENTURES & ASSOCIATES Revenue EBITA EBITA margin Revenue EBITA EBITA margin € 402m € 19.1m 4.7% € 357m € 17.7m 5.0% -4.5% (cc) -8.8% (cc) +20bps (cc) -3.3% +1.1% +30bps -9.7% (rc) -5.4% (rc) +20bps (rc) • • Consumer Products: improved Reduced performance as a result of challenging dairy market environment performance driven by increased sales of value added products & input cost • Strong operational performance with reduction volume growth across all JVs and Associate • Agribusiness: somewhat reduced performance due to reductions in price and margin of feed & fertiliser Results include impact of acquisitions & disposals completed since the prior period CC denotes constant currency; RC denotes reported currency; Dairy Ireland is a euro denominated business 2016 HALF YEAR RESULTS 8
FINANCE REVIEW 2016 HALF YEAR RESULTS
KEY FINANCIAL HIGHLIGHTS GOOD FINANCIAL METRICS FOR HY16 HY16 REPORTED CONSTANT CURRENCY RESULTS CHANGE CHANGE WHOLLY OWNED REVENUE € 1.4bn +0.2% +0.4% WHOLLY OWNED EBITA € 157.4m +13.6% +13.7% WHOLLY OWNED EBITA % 11.0% +130bps +130bps ADJUSTED EPS 44.87c +10.5% +10.8% OPERATING CASH FLOW € 49.9m +202% INTERIM DIVIDEND 5.37c +10.0% 2016 HALF YEAR RESULTS 10
SEGMENTAL OVERVIEW STRONG PERFORMANCE LED BY GLANBIA PERFORMANCE NUTRITION HY16 Constant currency change € m Revenue EBITA Margin Revenue EBITA Margin Glanbia Performance Nutrition 505.3 81.7 16.2% +12.0% +35.0% +280 bps Glanbia Nutritionals 572.6 58.0 10.1% -5.9% -4.0% +20 bps Dairy Ireland 356.9 17.7 5.0% -3.3% +1.1% +30 bps Total wholly-owned businesses 1,434.8 157.4 11.0% +0.4% +13.7% +130 bps Joint Ventures & Associates 402.3 19.1 4.7% -8.8% -4.5% +20 bps Total Group 1,837.1 176.5 9.6% -1.7% 11.4% +110 bps 2016 HALF YEAR RESULTS 11
GLOBAL GROWTH PLATFORMS REVENUE DRIVERS GLANBIA PERFORMANCE NUTRITION +11.4% (+12.0% CC*) 10.7% € 505m (6.7)% 8.0% € 454m (0.6)% HY15 FX Volume Price Acquisitions HY16 * Constant Currency (CC) excluding the impact of FX 2016 HALF YEAR RESULTS 12
GLOBAL GROWTH PLATFORMS REVENUE DRIVERS GLANBIA NUTRITIONALS* -6.0% (-5.9% CC**) (8.1)% 2.2% € 609m (0.1)% € 573m HY15 FX Volume Price HY16 * Global Ingredients has been rebranded Glanbia Nutritionals, the operations of the segment are unchanged ** Constant Currency (CC) excluding the impact of FX 2016 HALF YEAR RESULTS 13
EBITA PROGRESSION WHOLLY OWNED EBITA GROWTH +13.6% (+13.7% CC*) € m (1.7)% 15.3% 160 0.1% € 157m 155 150 145 € 139m (0.1)% 140 135 130 HY15 FX Glanbia Performance Glanbia Nutritionals Dairy Ireland HY16 Nutrition * Constant Currency (CC) excluding the impact of FX 2016 HALF YEAR RESULTS 14
SUMMARY INCOME STATEMENT HY 2016 results summary Reported currency Constant currency pre exceptional € m HY16 HY15 Change Change Revenue (Wholly-owned) 1,434.8 1,431.7 +0.2% +0.4% +13.7% EBITA (Wholly-owned) 157.4 138.5 +13.6% EBITA margin 11.0% 9.7% +130 bps +130 bps - Amortisation of intangibles (19.4) (15.6) - Net finance costs (11.6) (10.7) - Share of results of JV&As 12.3 13.3 - Income tax (21.7) (19.1) 117.0 Profit for the period 106.4 Adjusted Earnings per Share 44.87c 40.60c +10.5% +10.8% 2016 HALF YEAR RESULTS 15
EXCEPTIONAL ITEMS SUMMARY € m HY16 HY15 1. Organisational redesign costs (6.2) (3.1) 2. Acquisition integration costs (1.9) - 3. Rationalisation costs (0.8) (1.1) 4. Disposal of interest in Joint Venture - (3.6) Exceptional charge pre-tax (8.9) (7.8) Taxation credit 1.6 0.5 Total exceptional charge (7.3) (7.3) 2016 HALF YEAR RESULTS 16
BALANCE SHEET & CASHFLOW Financing KPIs HY16 HY15 Net debt € 644 million € 577 million Net debt / Adjusted EBITDA 1 1.83 times 1.97 times Adjusted EBIT 1 / Net Finance Cost 11.4 times 9.8 times 1. The definition of adjusted EBITDA and adjusted EBIT are as per our financing agreements and include dividends from Joint Ventures & Associates. • Current committed debt facilities of approximately € 1,011 million • Operating cash flow € 49.9 million • Working capital position improved € 11.2 million • Total capital investment of € 41.7 million in first half, € 27.8m strategic investment • Pension deficit increased € 44.8m to € 132.1m driven primarily by a lower discount rate as a result of a reduced corporate bond yields in the period 2016 HALF YEAR RESULTS 17
SUMMARY & OUTLOOK 2016 HALF YEAR RESULTS
STRATEGY PROGRESSION GPN delivering strong growth Integrating and growing the thinkThin business Glanbia Nutritionals rebranded with new commercial organisation in place Continued growth of value added Nutritional Ingredients business Expanded margins across the Group Well managed cash position with further working capital gains On course to meet 2016 full year EPS guidance 2016 HALF YEAR RESULTS 19
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