26 February 2020 Siobhán Talbot Mark Garvey Group Managing Director Group Finance Director
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. 2 Glanbia plc FY 2019 Results
EPS 88.10c; in line with guidance but below ambition Revenue growth driven by GN & acquisitions Executing a clear strategy to address GPN challenges, drive Earnings impacted by challenges in GPN top & bottom line momentum Operating cash conversion 86% Full year dividend increased by 10%. Payout ratio 30% Seeking authority for Share Buyback Programme 3 Glanbia plc FY 2019 Results
Actions Regain growth Organisational Ongoing momentum in GPN review execution Completed comprehensive Group-wide projects Continuing evolution of review of GPN strategy initiated to target GN Nutritional Solutions across Brand, Geography productivity benefits from through organic growth & & Operational model leveraging scale strategic acquisitions Series of initiatives JVs executing planned underway to deliver top- strategy line momentum & margin improvement 4 Glanbia plc FY 2019 Results
Growing consumer reach Challenging year on organic revenue & EBITA Revenue EBITA margin €1,363.8m €146.4m +11.0% cc -19.6% cc Revenue growth driven by Slimfast Margin Driven by Margin decline driven by mix and negative 10.7% operating leverage due to lower LFL revenue Slimfast -410 bps cc – Constant Currency Definitions and reconciliations of non-IFRS metrics can be found in the Appendix of this presentation and further information can be found in the Financial 6 Glanbia plc FY 2019 Results Statements and Glossary
Regaining growth momentum in the branded business Plan to drive revenue growth & margin improvement Brand Re-organisation Route-to-market ON & Slimfast key platform Business re-organised Detailed market-by-market brands, 69% of branded review completed • NA Performance Nutrition portfolio • NA Lifestyle Responding to changing Exiting US Contract business market dynamics • International Streamlining product portfolios Improving routes-to-market • DTC – SKU rationalisation in India & Brazil Talent investment across the business Refining approach to Optimising the supply chain innovation Targeting 200+ bps margin improvement by 2022 NA – North America 7 Glanbia plc FY 2019 Results DTC – Direct-to-Consumer
GPN’s platform brands which are key category players $325m brand – US & UK $655m brand - Globally GPN’s platform Performance Nutrition GPN’s platform brand in US and UK brand Globally lifestyle nutrition Key formats – RTD & RTE Key formats - RTM Protein & Energy 8 Glanbia plc FY 2019 Results
39% of total GPN sales (€538m) ON key platform brand BSN & Isopure focused on specific channels & consumer segments ON consumption in 2019* mid-single digit growth Positive pricing in H2 9 Glanbia plc FY 2019 Results *NA measured channels captures 72% of total ON North America net sales
29% of total GPN sales (€392m) Slimfast key platform brand Slimfast 2019 consumption grew by 49% in measured channels* think! re-launched in RTE category Amazing Grass playing into Plant Nutrition trend 10 Glanbia plc FY 2019 Results *NA measured channels captures 73% of total Slimfast North America net sales
26% of total GPN sales (€359m) (13% Europe / 13% RoW) Double-digit decline in 2019 Business simplification commenced in 2019 ON key platform brand Priority markets China, India, Oceania, UK and Western Europe 11 Glanbia plc FY 2019 Results
Online is GPN’s largest channel and digital capability is enabling growth worldwide Building in-house Working with e- Engaging GPN DTC capability Commerce leaders Consumers Revenue Online 26% 6% of total GPN sales Installed Hybris e-Commerce platform to enable scaling Other of business ON campaign channels 1200 individual Expanding in 2020 to be in a 74% total of 14 markets pieces of digital content deployed across 25 markets 2019 12 Glanbia plc FY 2019 Results
GN Operating Review
Strong growth in value-added functional ingredients Expanding portfolio Revenue growth driven by premix in Asia, healthy snacking solutions & Watson acquisition Revenue EBITA €744.9m €100.0m EBITA growth driven by volume +23.4% cc +7.1% cc Innovation continues to be a key driver of growth Margin Driven by EBITA margin impacted by sales mix & tariff 13.4% organic growth headwinds & acquisition -210 bps cc – Constant Currency 14 Glanbia plc FY 2019 Results Definitions and reconciliations of non-IFRS metrics can be found in the Appendix of this presentation and further information can be found in the Financial Statements and Glossary
Innovation Acquired in Q1 2019 Healthy snacking technology development Complementary technologies & • High protein solutions supply chain to Nutritional Solutions • Crisp technology • Cereals & plant-based solutions Customers across personal care and food sectors Enhanced solutions capability Integration on track 15 Glanbia plc FY 2019 Results
Strong operational performance Scale dairy operations Revenue growth driven by Southwest Cheese Revenue EBITA expansion and positive dairy markets €1,767.0m €30.4m Stable revenue & profit stream continued in FY +18.5% cc +23.6% cc 2019 Margin Driven by Margin expansion driven by good operating 1.7% capacity performance expansion +10 bps cc – Constant Currency 16 Glanbia plc FY 2019 Results Definitions and reconciliations of non-IFRS metrics can be found in the Appendix of this presentation and further information can be found in the Financial Statements and Glossary
JVs Operating Review
Revenue and margin growth Scale dairy operations Revenue growth driven by volume across all Joint Ventures Revenue Share of PAT €1,476.1m €48.6m PAT growth of 5.9% driven by capacity expansion and good operating performance +€ 3.3m +12.9% cc New JV in Ireland to be commissioned by end of 2020 New JV in Michigan USA to be commissioned by PAT Q3 2021 Driven by €48.6m capacity expansion +5.9% cc cc – Constant Currency Definitions and reconciliations of non-IFRS metrics can be found in the Appendix of this presentation and further information can be found in the Financial Statements 18 Glanbia plc FY 2019 Results and Glossary
Drivers of wholly-owned 2019 results summary Constant Revenue growth Pre-exceptional Reported currency currency €'m • 9.9% contribution from acquisitions • 6.6% increase in pricing 2019 2018 Change Change Revenue (Wholly-owned) 3,875.7 3,170.5¹ 705.2 16.6% EBITA margin impacted by EBITA (Wholly-owned) 276.8 284.9 (8.1) (7.8%) • Negative operating leverage EBITA margin 7.1% 9.0% -190 bps -190 bps • Impact of product mix Amortisation (60.9) (45.9) (15.0) • Tariff headwinds Net Finance Costs (26.3) (17.5) (8.8) Share of Joint Ventures 48.6 45.3 3.3 Effective tax rate of 12.3% Income Tax (23.4) (32.8) 9.4 (2018: 14.8%) Profit for the period (pre-exceptional) 214.8 234.0 (19.2) • Primarily driven by geographic mix of Adjusted EPS 88.10 91.01 (2.91) (7.7%) profits Basic EPS 61.04 79.28 (18.24) (26.6%) 1 – Restated to reflect the adoption of IFRS 15 20 Glanbia plc FY 2019 Results Definitions and reconciliations of non-IFRS metrics can be found in the Appendix of this presentation and further information can be found in the Financial Statements and Glossary
Challenging markets impacting volume – Review completed, actions to address under way 20.6% 4.2% (9.0%) €1,363.8m (0.6%) €1,179.6m FY18 FX Volume Price Acquisition FY19 21 Glanbia plc FY 2019 Results
Organic growth with strong benefit from Watson acquisition Nutritional Solutions 12.6% 3.8% 7.0% 4.6% €744.9m €577.0m FY18 FX Volume Price Acquisition FY19 US Cheese 13.6% 4.9% 5.5% €1,767.0m €1,413.9m FY18 FX Volume Price FY19 22 Glanbia plc FY 2019 Results
Initiatives commenced to restore growth in GPN Organisation Redesign 2019 • To position GPN for future growth Exceptional Items €'000 Organisation redesign costs 12.7 Asset Impairment – Business Asset impairments 17.3 Simplification • Rationalisation of 35% of GPN total Acquisition integration costs 6.8 SKUs completed Brexit related costs 2.3 Acquisition Integration Total exceptional charge before taxation 39.1 • Costs related to the integration of Slimfast & Watson Exceptional tax credit (4.5) Total exceptional charge after taxation 34.6 Brexit mitigation 23 Glanbia plc FY 2019 Results
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