HALF YEAR RESULTS 2014 20 AUGUST 2014 www.glanbia.com
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. 2014 HALF YEAR RESULTS www.glanbia.com 2
HALF YEAR 2014 PERFORMANCE SUMMARY Total Group Total Group Total Group Adjusted Interim Revenue EBITA EBITA margin EPS Dividend € 1.8bn € 129.5m 7.2% 32.45c 4.43c +10.7% +10.3% +0 bps +11.5% +10.0% • Good performance with 11.5% growth in adjusted EPS • Global Performance Nutrition strong driven by revenue growth and margin expansion • Global Ingredients satisfactory in context of challenging market backdrop • Dairy Ireland behind prior year with good performance for Joint Ventures & Associates • 10.0% increase in dividends to 4.43c per share • Reiterating 2014 guidance of 8% to 10% growth in adjusted EPS on a constant currency basis Note: (i) Metrics for the Total Group include both the wholly owned businesses and the Group’s share of Joint Ventures & Associates. (ii) All growth figures shown are on a constant currency basis 2014 HALF YEAR RESULTS www.glanbia.com 3
OPERATIONAL OVERVIEW GLOBAL PERFORMANCE NUTRITION REVENUE • Strong revenue performance driven by growth in both branded and contract revenues € 374.6m +21.8% • Continued strong international revenue growth • Focus remains on specialty and internet retail; EBITA expanded presence in US club channel € 42.9m • Good EBITA margin progression reflecting +33.6% positive mix & operational leverage • Acquisition of Nutramino in January 2014 EBITA margin • Growth trends expected to moderate in H2 2014 11.5% +110bps • Overall good performance expected for FY 2014 All growth figures shown are on a constant currency basis 2014 HALF YEAR RESULTS www.glanbia.com 4
MARKET LEADING INNOVATION GLOBAL PERFORMANCE NUTRITION BSN BSN OPTIMUM NUTRITION PRO SERIES SYNTHA-6 BAR N.O.-XPLODE April 2014 May 2014 July 2014 Premium muscle building Launched in select European Pre-workout igniter with product targeting elite athletes markets. High protein bars advanced ingredient technology and goal-driven weight lifters designed for on-the-go and best in class flavour 2014 HALF YEAR RESULTS www.glanbia.com 5
GPN: DEVELOPMENT UPDATE www.glanbia.com 6 2014 HALF YEAR RESULTS
MANUFACTURING EXPANSION GLOBAL PERFORMANCE NUTRITION • Phase I of new manufacturing facility commissioned in May 2014 • Offers increased efficiency and facilitates internal production of almost all products • Phase II due for completion in Q1 2015 • Combined cost c. € 50 million • Supports growth targets for next 3-4 years 2014 HALF YEAR RESULTS www.glanbia.com 7
OPERATIONAL OVERVIEW GLOBAL INGREDIENTS REVENUE • Satisfactory performance overall € 565.8m • Underlying market demand trends remain +10.7% positive • Challenging milk procurement environment EBITA in Idaho € 53.9m • Innovation agenda in US Cheese and +0.5% Ingredient Technologies progressing • Announcing € 60 million investment EBITA margin programme in Idaho whey facilities 9.5% • Outlook for FY 2014 is for performance -100bps broadly in line with prior year All growth figures shown are on a constant currency basis 2014 HALF YEAR RESULTS www.glanbia.com 8
€ 60 MILLION DEVELOPMENT PROGRAM ANNOUNCEMENT GLOBAL INGREDIENTS • Comprised of two key elements: ― Expansion of high end whey capacity ― Expansion of lactoferrin capacity, a specialty milk component used in infant formula and supplements sectors • Project is fully aligned with our strategy of adding further value to our whey stream • Also supports growth ambitions of GPN • Full commissioning expected by end 2015 2014 HALF YEAR RESULTS www.glanbia.com 9
OPERATIONAL OVERVIEW DAIRY IRELAND REVENUE • Performance behind the prior year € 353.8m • Consumer Products’ market backdrop remains -7.7% challenging • Agribusiness’ performance versus prior year EBITA impacted by particularly strong H1 2013 € 10.5m • Cost efficiency measures ongoing across both -13.2% businesses • Outlook for improved performance for FY 2014 EBITA margin 3.0% -20bps All growth figures shown are on a constant currency basis 2014 HALF YEAR RESULTS www.glanbia.com 10
OPERATIONAL OVERVIEW JOINT VENTURES & ASSOCIATES REVENUE • Good performance overall € 503.4m • Glanbia Ingredients Ireland and Glanbia Cheese +19.3% benefited from favourable dairy market environment EBITA • Development of new € 150 million dairy facility in Glanbia Ingredients Ireland progressing well; € 22.2m long term supply contracts agreed with 94% of +13.3% suppliers • FY 2014 performance expected to be broadly in EBITA margin line with 2013 reflecting more challenging dairy 4.4% market conditions in H2 2014 -20bps All growth figures shown are on a constant currency basis 2014 HALF YEAR RESULTS www.glanbia.com 11
2014 HALF YEAR RESULTS FINANCE REVIEW www.glanbia.com 12
FINANCIAL HIGHLIGHTS GOOD PERFORMANCE WITH 11.5% GROWTH IN ADJUSTED EPS* CONSTANT CURRENCY CHANGE HY 2014 CHANGE TOTAL GROUP REVENUE € 1.8bn +8.1% +10.7% TOTAL GROUP EBITA € 129.5m +6.0% +10.3% TOTAL GROUP EBITA % 7.2% -10 bps +0 bps ADJUSTED EPS 32.45c +6.8% +11.5% * Constant currency 2014 HALF YEAR RESULTS www.glanbia.com 13
SEGMENTAL OVERVIEW GROWTH DRIVEN PRIMARILY BY GLOBAL PERFORMANCE NUTRITION HY 2014 Constant currency change € m Revenue EBITA Margin Revenue EBITA Margin Global Performance Nutrition 374.6 42.9 11.5% +21.8% +33.6% +110 bps Global Ingredients 565.8 53.9 9.5% +10.7% +0.5% -100 bps Dairy Ireland 353.8 10.5 3.0% -7.7% -13.2% -20 bps Total wholly-owned businesses 1,294.2 107.3 8.3% +7.7% +9.7% +20 bps Joint Ventures & Associates 503.4 22.2 4.4% +19.3% +13.3% -20 bps +0 bps Total Group 1,797.6 129.5 7.2% +10.7% +10.3% 2014 HALF YEAR RESULTS www.glanbia.com 14
REVENUE ANALYSIS Total Group Revenue Growth +10.7%* € m 1,850 5.0% -2.7% 1,798 1,800 3.4% -1.8% 1,750 4.1% 1,700 1,663 1,650 1,600 HY 2013 GPN GI DI JV&As FX HY 2014 * Constant currency 2014 HALF YEAR RESULTS www.glanbia.com 15
SEGMENTAL REVENUE ANALYSIS Global Performance Nutrition +21.8%* Global Ingredients +10.7%* 1.6% 2.5% -4.8% -4.5% 13.9% 19.6% -0.3% Volume Price Volume Price Acq/Disp FX -4.8% Volume Price Acq/Disp FX Joint Ventures & Associates +19.3%* Dairy Ireland -7.7%* 13.0% -1.4% Volume Volume Price FX 6.3% -4.9% -2.8% 0% Volume Price FX * Constant currency 2014 HALF YEAR RESULTS www.glanbia.com 16
EBITA ANALYSIS Total Group EBITA Growth +10.3%* € m 140 2.2% -4.3% 135 0.2% -1.4% 9.3% 129.5 130 125 122.2 120 115 110 HY 2013 GPN GI DI JV&As FX HY 2014 * Constant currency 2014 HALF YEAR RESULTS www.glanbia.com 17
SUMMARY INCOME STATEMENT HY 2014 results summary pre exceptional Reported currency Constant currency € m HY 2014 HY 2013 Change Change Revenue 1,294.2 1,263.3 +4.7% +7.7% EBITA 107.3 102.3 +4.9% +9.7% EBITA margin 8.3% 8.3% No change +20bps Amortisation of intangibles (10.6) (10.0) Net finance costs (10.5) (10.8) Share of results of JV&As 15.3 13.6 Income tax (14.7) (13.9) Profit for the period 86.8 81.2 Adjusted earnings per share 32.45c 30.39c +6.8% +11.5% 2014 HALF YEAR RESULTS www.glanbia.com 18
CASHFLOW & FINANCING NET DEBT • Working capital efficiency programme ongoing HY 2013: € 444.7m • YTD capex € 57 million. € 130 million expected € 471.8m for FY 2014 ( € 90 million strategic) • Redemption of € 39.1 million of preference NET DEBT / ADJ. EBITDA 1 shares in July 2014 HY 2013: 2.0x • Group now has two sources of committed debt 2.0x finance totalling € 705.9 million; ― € 466.8 million revolving loan facilities maturing INTEREST COVER 1 January 2018 HY 2013: 8.6x ― € 239.1 million ($325 million) private placement of 8.1x senior loan notes maturing June 2021 1.The definition of adjusted EBITDA and adjusted EBIT is as per our financing agreements and includes dividends from Joint Ventures & Associates. 2014 HALF YEAR RESULTS www.glanbia.com 19
2014 HALF YEAR RESULTS SUMMARY & OUTLOOK www.glanbia.com 20
SUMMARY • Good performance for H1 2014 • Strong growth in Global Performance Nutrition with Global Ingredients broadly in line • Ongoing focus on strategic capital investment with a new € 60 million capacity expansion in Global Ingredients • Overall outlook for 2014 is positive • Reiterating guidance of 8% to 10% in adjusted EPS on a constant currency basis 2014 HALF YEAR RESULTS www.glanbia.com 21
2014 HALF YEAR RESULTS SUPPLEMENTARY INFORMATION www.glanbia.com 22
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