Glanbia plc 2019 Half Year Results Presentation 31 st July 2019 - PowerPoint PPT Presentation

Glanbia plc 2019 Half Year Results Presentation 31 st July 2019

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

HY19 EPS 36.69c, down 10.8% cc versus prior Updated FY19 guidance of Reported Adj EPS of 88c to 92c year Challenging HY for Group driven by GPN Improving momentum in H2 Wholly-owned +12.0% cc Revenue growth driven by GN & acquisitions Total Group +11.1% cc Strong volume progression in NS +12% growth cc Acquisitions performing well Interim dividend increased by 10% 10.68 cent per share 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 Interim Financial 4 Statements and Glossary

Summary Challenging Half Year on organic Growth Performance revenue and EBITA margin SlimFast revenue growth of 21% on a LFL basis Revenue EBITA € 620.1m € 46.9m Body & Fit platform upgrade +13.4% cc -30.2% cc delivering good growth Innovation ahead of target Volume -8.2% EBITA margin Price -2.7% 7.6% Margin decline primarily related to Acq. +24.3% -470 bps negative operating leverage and brand/infrastructure investment Revenue & EBITA margin expected to improve significantly in H2 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 Interim Financial 6 Statements and Glossary

Full Year NA Branded Revenue expected to be broadly in-line with prior year H1 2019 GPN Revenue Sports Nutrition brands International 33% - Q1 seasonality rebalancing through the year North America - Challenges in Specialty channel, but good 67% consumption growth in Online & FDMC - Price increases implemented in Q3 Lifestyle brands H1 2019 - Strong momentum in SlimFast North America - think! re-launch in H2 Revenue - Good revenue growth in Amazing Grass Lifestyle Sports 43% Nutrition 57% Innovation focus 7

Full Year Revenue expected to decline low double digit Geopolitical and global trade disruption - Impacting markets in Middle East, India and LATAM - Loss of revenue in high margin markets - Further margin compression from tariffs and negative operating leverage Important long term growth opportunity Growing our DTC capability in Europe to address channel shift and diversifying portfolio Good overall growth in Asia region – ex India 8

Revenue Margin Priorities Priorities • • Re-establish growth in challenged international Drive volume growth to enable operating leverage in markets H2 • • Align EU omni-channel strategy behind growing Sustain focus on pricing channels • Optimise global supply chain • Build out D2C capability • Optimise organisational operating model • Investing for long-term sustainable growth 9

Revenue Margin GPN branded LFL revenue expected to Full year margin c.400 to 450 bps decline low-to-mid single-digits improvement on HY 2019 GPN revenue growth driven by acquisition Drivers Drivers • Price increases in place • Good consumption growth in key North American channels • Improved operational leverage • Improved momentum in H2 • Continue to grow the lifestyle brand portfolio • Continue to drive innovation targeting > 15% of sales from products launched in the last 3 years Long-term strategic growth ambitions intact 10

All numbers and prior year comparatives prepared on an IFRS 15 basis Nutritional Solutions (NS) delivered volume Growth Performance growth across its Dairy & Non-dairy platforms Nutritional Revenue Solutions EBITA € 369.6m NS margin decline related to product mix and € 50.5m tariff costs +27.0% cc -1.4% cc Volume +12.0% Margin 13.7% Price +3.5% Watson acquisition performing to plan Acquisition +11.5% Revenue US Cheese EBITA US Cheese growth driven by capacity € 768.7m € 14.0m expansion +4.9% cc +6.1% cc Nutritional Solutions expects to deliver full Volume +4.8% Margin 1.8% year EBITA growth Price +0.1% US Cheese EBITA expected to be broadly in- line with prior year 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 Interim Financial 11 Statements and Glossary

Ready-to-eat snacks Beverages  Additional supply chain Ready-to-mix products capacity Capsules & tablets  Added capability Gummies  Oral Hygiene With global customers  Film Technology Oral hygiene &  Encapsulation local & regional players 12

HY 2019 results summary Pre-exceptional Constant €’m Reported currency currency HY 2019 HY 2018 Change Change Revenue (Wholly-owned) 1,758.4 1,477.8 +19.0% +12.0% EBITA (Wholly-owned) 111.4 123.7 -9.9% -15.3% EBITA margin 6.3% 8.4% -210 bps -210 bps Amortisation (28.9) (21.5) Net Finance Costs (13.3) (7.6) Share of Joint Ventures 26.8 17.8 Income Tax (9.2) (14.2) Profit for the period (pre-exceptional) 86.8 98.2 Adjusted EPS* 36.69c 38.83c -5.5% -10.8% Definitions and reconciliations of non-IFRS metrics can be found in the Appendix of this presentation and further information can be found in the Interim Financial Statements and Glossary 14

HY 2019 Wholly Owned Revenue Constant €’m Reported currency currency HY 2019 HY 2018 % Change % Change Glanbia Performance Nutrition 620.1 519.6 +19.3% +13.4% Nutritional Solutions 369.6 274.6 +34.6% +27.0% US Cheese 768.7 683.6 +12.4% +4.9% Glanbia Nutritionals 1,138.3 958.2 +18.8% +11.2% Wholly Owned Revenue 1,758.4 1,477.8 +19.0% +12.0% Definitions and reconciliations of non-IFRS metrics can be found in the Appendix of this presentation and further information can be found in the Interim Financial Statements and Glossary 15

€ 18.9m € 16.1m € 37.0m 10.68c Strategic +10% € 30.0m Operating Cash Flow Dividends from JVs Capital Expenditure Interim Dividend FY19 OCF on track for >80% conversion of adjusted EBITDA OCF – Operating Cash Flow Definitions and reconciliations of non-IFRS metrics can be found in the Appendix of this presentation and further information can be found in the Interim Financial Statements and Glossary 16

Balance Sheet HY 2019 HY 2018 FY 2018 € 778m € 402m € 577m Net Debt Net Debt / Adj. EBITDA 2.1x 1.2x 1.5x Adj. EBIT / Net Financing Costs 10.5x 7.3x 14.8x Net debt increased by € 376m on prior year, raising Net pension obligations of € 36.8m at HY 2019, the Net Debt to Adjusted EBITDA ratio to 2.1 times, decreasing from € 38.7m at HY 2018 mainly due to the acquisitions of SlimFast & Watson Total available Banking Facilities € 1.1bn with average 2019 ROCE expected to be in the range of 10% maturity of 3.3 years (HY 2018: 2.0 years) to 13% ROCE – Return on Capital Employed Definitions and reconciliations of non-IFRS metrics can be found in the Appendix of this presentation and further information can be found in the Interim Financial Statements and Glossary 17

2019 – Full year adjusted EPS expected to be 88c to 92c Positive momentum in H2 Clear initiatives in place to address challenges in certain markets in GPN Long term ambitions to 2022 remain in place - Average growth in adjusted EPS of 5% to 10% - Operating cash conversion > 80% of EBITDA - ROCE 10% to 13% - Dividend payout ratio 25% to 35% 19