Glanbia plc 2018 Full Year Results Presentation 20 th February, 2019 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
Delivering our financial ambition 2018 – 2022 2018 Financial Metrics Achieved Summary Ambition* Result Total Group € 5bn € 3.7bn Total group Revenue by 2022 Revenue +4.6% Driven by Adj. EPS growth 5% - 10% +9% growth platforms Focused capital ROCE 10% - 13% 13.2% allocation OCF Conversion > 80% 92.0% Strong execution Dividend Payout Ratio 25% - 35% 26.6% Dividend +10% *Ambitions have been updated for IFRS 15 - refer to slide 23 for updated ambition Unless clearly identified all revenue and profit movements in this presentation are on a constant currency basis. A reconciliation of constant currency and 4 reported movements is contained in the Appendix of this presentation
Powerful consumer trends driving our business Global Macro Trends Health and On-the-go food Digitally Clean wellness and beverages connected labelling Group focused and aligned to drive growth Strategic Pillars Protect and grow Selectively build and Embed enablers across the core the business scale beyond the core Investing in digital Acquisitions GPN like-for-like DTC platform Branded volume +9.2% Growing our presence in Nutritional Solutions Emerging markets volume +8.5% Growth in JVs via capital efficient Ongoing talent development Innovation central to our success model 5
Growth Performance Strong demand driving growth in all regions EBITA Revenue € 1,180m € 173.1m Innovation ahead of target +9.5% +6.7% Margins in-line with long- term guidance LFL Branded EBITA margin volume 14.7% +9.2% -40 bps 7
Portfolio continues to evolve Regional Mix Channel Mix Format Mix Share of Revenue Share of Revenue Share of Revenue CAPS/TABS 4% 4% FDMC 10% RTD 5% 5% 21% RTE 5% 14% Online Energy 22% 15% North 14% 61% 65% America 28% RTM Distributor 32% 25% 71% Protein 63% Rest of the Specialty 39% World 36% 35% 26% 2015 2018 2015 2018 2015 2018 Emerging markets driving Channel shift to Innovation around core formats strong growth Online & FDMC & lifestyle driving growth 8
Excellent addition to the portfolio FY 2018 pro-forma revenue $247m +17% Great brand to participate in $8 billion weight management category Market leading position in RTD in the US & UK Further platform for innovation 9
Revenue EBITA Nutritional Solutions (NS) delivers 8.5% volume growth NS growth driven by customers seeking: € 1,207m € 111.8m Protein Functionality -0.6% +3.0% Convenience Clean Label US Cheese earnings largely Nutritional Solutions Nutritional Solutions EBITA Revenue margin protected by operating model +3.0% Mid-teens US Cheese US Cheese Revenue EBITA margin -3.1% Low-to-mid single digits 10
Driving growth in Nutritional Solutions Agreed purchase price $89m Complementary technologies 2018 Revenue $101m & supply chain to Nutritional Solutions US based non-dairy Customers across personal care and food sectors ingredients solutions Global & Regional Expected to close by Q2 2019 customer base Marginally earnings US based with 3 sites accretive to FY 2019 in CT & IL results 11
2014 – 2018 2018 – 2022 2018 Financial Metrics Achieved Result Ambition Result 10.2% 1 Adj. EPS growth 5% - 10% 9% 13.9% 2 ROCE 10% - 13% 13.2% 84.7% 3 OCF Conversion > 80% 92.0% 20.1% 4 Dividend Payout Ratio 25% - 35% 26.6% 1. Average adjusted EPS as reported on a constant currency basis over the 5 year period 2014 to 2018 2. Average ROCE over the 5 year period 2014 to 2018 is based on a reported ROCE in each financial year and adjusted for deferred tax in prior years to ensure like-for- like comparison with 2017 & 2018 3. Operating Cash Flow (“OCF”) conversion is defined as Operating Cash Flow divided by pre -exceptional EBITDA. The 2014 – 2018 metric takes the averages of OCF conversion over the period. In 2017, pro-forma cash-flow figures were used to reflect the disposal of 60% of Dairy Ireland 4. Dividend Payout Ratio is defined as Dividend Per Share divided by Adjusted Earnings Per Share. The 2014 – 2018 metric takes the averages of the Dividend Payout Ratio over the period. In 2017, pro-forma Adjusted EPS was used in the calculation of Dividend Payout Ratio. Dividend per share for 2018 is 24.2c (2017: 22.0c) 13
2018 results summary Pre-exceptional Constant €’m Reported currency currency 2018 2017 Change 2018 Revenue (Wholly-owned) 2,386.3 2,387.1 (0.8) +4.1% EBITA (Wholly-owned) 284.9 283.2 +1.7 +5.2% EBITA margin 11.9% 11.9% +0 bps +10 bps Amortisation (45.9) (43.1) Net Finance Costs (17.5) (23.0) Share of Joint Ventures 45.3 42.8 Income Tax (32.8) (38.3) Profit for the period (pre-exceptional) 234.0 221.6 Adjusted EPS* 91.0c 87.1c +3.9c +9.0% *2017 Adjusted EPS is on a pro-forma basis for continuing operations. It eliminates the impact of discontinued operations. 14
Wholly Owned Revenue Constant €’m Reported currency currency 2018 2017 % Change % Change Glanbia Performance Nutrition 1,179.6 1,121.1 +5.2% +9.5% Nutritional Solutions 526.7 531.9 (1.0%) +3.0% US Cheese 680.0 734.1 (7.4%) (3.1%) Glanbia Nutritionals 1,206.7 1,266.0 (4.7%) (0.6%) Wholly Owned Revenue 2,386.3 2,387.1 (0.0%) +4.1% 15
€ 1,250m € 1,180m 4.5% (4.1%) € 1,150m 9.1% € 1,121m (3.9%) € 1,050m € 950m € 850m € 750m FY17 FX Volume Price Acquisitions FY18 16
Nutritional Solutions € 550m (5.5%) 8.5% € 530m € 532m € 527m (3.8%) € 510m € 490m FY17 FX Volume Price FY18 US Cheese € 750m € 730m € 734m (4.4%) € 710m 1.7% (4.8%) € 690m € 680m € 670m € 650m € 630m FY17 FX Volume Price FY18 17
€ 340m € 328m ( € 10m) € 320m ( € 16m) € 300m € 302m € 4m € 295m ( € 42m) € 280m € 32m € 260m € 240m € 220m € 200m 2018 EBITDA Working Capital Business 2018 Operating Net Interest & Tax Dividends from Other FCF 2018 Sustaining Capex Cash Flow JV&A's 18
€ 417m Total Investment Investment in JV’s Investments in JVs € 42m Acquisitions € 241m Strategic Capex Sustaining Capex SlimFast € 313m Amazing Grass & € 104m Body & Fit € 168m € 15m € 57m € 49m € 46m € 32m € 24m € 16m 2016 2017 2018 2018 Return on Capital Employed 13.2% 2018-2022 Ambition - Return on Capital Employed 10% - 13% 19
2018 update Strategic update Share of JV PAT Glanbia Glanbia Michigan € 45.3m Cheese Ireland JV EU A-Ware +7.1% € 130m mozzarella € 140m continental $470m cheese & whey facility facility cheese plant Cash Dividends received USA Ireland Ireland € 32m PLC’s total commitments to projects set -out above: € 105m Capital efficient model for Glanbia to leverage its leading positions in dairy Ring-fenced financing model using non-recourse bank funding 20
Balance Sheet FY 2018 FY 2017 € 576.7m € 367.7m Net Debt Net Debt / Adj. EBITDA 1.55x 1.07x Adj. EBIT / Net Financing Costs 14.8x 11.2x* Net debt increased by € 209m, raising the Net Debt to Adjusted EBITDA ratio to 1.55 times, mainly due Strong financing cost cover at 14.8 times to the acquisition of SlimFast Total available Banking Facilities € 1.1bn with average Net pension obligations of € 38.5m at year end, down from € 41.9m in 2017 maturity of 3.8 years (2017: 2.2 years) *Pre-exceptional costs (7.0x reported) 21
Pro-forma impact on 2018 results €’m 2018 IFRS 15 2018 Glanbia Nutritionals Reported impact Pro-forma IFRS 15 will be effective for FY 2019 € 527m € 50m € 577m Nutritional Solutions Recognition of 100% of € 680m € 734m € 1,414m US Cheese Southwest Cheese sales within Glanbia Nutritionals € 1,207m € 784m € 1,991m Total Revenue Impacts Glanbia Nutritionals reported revenue and EBITA € 112m € 112m EBITA margin percentage. No impact to EBITA EBITA margins 9.3% 5.6% 22
Updated for IFRS 15 Average 5 year Revenue ambition by 2022 EBITA Margin** € 6 billion* 2018 to 2022 WHOLLY OWNED € 1.8bn 13% - 15% GPN Nutritional Solutions € 1.0bn 13% - 15% US Cheese € 2.0 bn Low-to- mid REVENUE SHARE OF single digits € 1.2bn Joint Ventures *Glanbia held a Capital Markets Day on 23 May 2018 where it set out its revenue and margin ambition to 2022. The table above updates this for the adoption of IFRS 15 which will take place in 2019. It is also retranslated based on current foreign exchange rates **As a result of the adoption of IFRS 15, margin ambition in Nutritional Solutions has been reduced from 14% - 16% to 13% - 15% and in US Cheese from mid-single digits to 23 low-to-mid single digits. There is no change to GPN margin
Recommend
More recommend
