2014 FULL YEAR RESULTS 25 FEBRUARY 2015 ir@glanbia.com - - PowerPoint PPT Presentation

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2014 FULL YEAR RESULTS 25 FEBRUARY 2015 ir@glanbia.com - - PowerPoint PPT Presentation

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2014 FULL YEAR RESULTS 25 FEBRUARY 2015 ir@glanbia.com www.glanbia.com 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

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www.glanbia.com ir@glanbia.com www.glanbia.com

2014 FULL YEAR RESULTS

25 FEBRUARY 2015

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2014 FULL YEAR RESULTS

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.

www.glanbia.com 2

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2014 FULL YEAR RESULTS www.glanbia.com 3

FULL YEAR 2014 PERFORMANCE SUMMARY

  • 10.1% growth in adjusted EPS; fifth consecutive year of double digit growth
  • Global Performance Nutrition strong, driven by international growth, acquisitions and innovation
  • Global Ingredients satisfactory, in the context of challenging dairy market conditions
  • Dairy Ireland improved performance, benefits of cost improvement being realised
  • €222m strategic investment focused on global growth platforms
  • 74% year-over-year growth in free cash flow to €153 million
  • Positive outlook with guidance of 9% - 11% growth in adjusted EPS for 2015

Total Group Revenue

€3.5bn +6.9%

Total Group EBITA

€245m +7.9%

Total Group EBITA margin

7.0% +10bps

Adjusted EPS

61.16c +10.1%

Dividend

11.00c +10.0%

Note: (i) EBITA is defined as earnings before interest, tax and amortisation and is stated before exceptional items (ii) Total Group includes both the wholly owned businesses and the Group’s share of Joint Ventures & Associates. (iii) All growth figures (except dividend) in this presentation are on a constant currency basis. The average exchange rate for 2014 was €1 = $1.327

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2014 FULL YEAR RESULTS

Global Growth Platform Leader in Consumer Sports Nutrition

EBITA €89.2m

* Combined total of Global Performance Nutrition and Global Ingredients www.glanbia.com 4

SEGMENTAL SUMMARY

€245m

+7.9%

€3.5bn

+6.9%

TOTAL GROUP REVENUE TOTAL GROUP EBITA

55%* 77%*

Glanbia Share of Strategic Joint Ventures

EBITA €36.4m Global Growth Platform

Leading B2B Nutritional Ingredients Specialist

EBITA €100.4m

EBITA €19.0m

Leading Consumer & Agri business in Ireland

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2014 FULL YEAR RESULTS

OPERATIONAL REVIEW

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2014 FULL YEAR RESULTS

  • Strong performance in 2014
  • Double digit branded revenue growth
  • Margin expansion of 120bps
  • International development on track

www.glanbia.com 6

GLOBAL PERFORMANCE NUTRITION

OPERATIONAL OVERVIEW

Results include actual impact of acquisitions completed during the year

REVENUE

€746.2m

+13.5%

EBITA

€89.2m

+26.0%

EBITA margin

12.0%

+120bps

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2014 FULL YEAR RESULTS

  • €149 million in acquisitions executed in 2014
  • Isopure is a provider of premium sports nutrition products
  • Nutramino is the market leader in Scandinavia
  • Integration on track
  • 23 countries with direct market presence
  • Phase I of $75 million state-of-the-art manufacturing facility in

Aurora, IL commissioned in 2Q14

  • Phase II on track to be commissioned in 2015, supporting growth
  • ver next 3 – 4 years
  • Robust innovation pipeline
  • Extended ON Gold Standard brand to pre-workout
  • Created a new protein occasion with ON Protein Energy
  • Global launch of next generation BSN N.O. -Xplode

www.glanbia.com 7

GLOBAL PERFORMANCE NUTRITION

EXECUTION OF STRATEGY

ACQUISITIONS EXPANSION INNOVATION

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2014 FULL YEAR RESULTS www.glanbia.com 8

GLOBAL INGREDIENTS

OPERATIONAL REVIEW

  • Satisfactory performance overall
  • Strong operational performance across all plants
  • Improved milk volume performance in H2 vs H1
  • Challenging whey market dynamics impacted

performance in Ingredient Technologies

  • Customised Solutions performed well; increasing

revenues and cost management resulted in margin expansion

REVENUE

€1,175.4

+9.3%

EBITA

€100.4m

  • 1.4%

EBITA margin

8.5%

  • 100bps
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2014 FULL YEAR RESULTS

  • Enhanced customer collaboration through network of innovation

centres

  • 21 countries with direct market presence
  • $85m investment underway increasing our value added whey and

lactoferrin processing capacity

  • Fully commissioned by the end of 2015
  • Maximising the value derived from our whey pool
  • Strong pipeline of functional systems and blends in development
  • Further developed organic cheese platform
  • Leveraging expertise in dairy proteins into beverage formats

www.glanbia.com 9

GLOBAL INGREDIENTS

EXECUTION OF STRATEGY

CUSTOMER INNOVATION EXPANSION

WE ARE MARKET-LED AND TECHNOLOGY BACKED

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2014 FULL YEAR RESULTS www.glanbia.com 10

OPERATIONAL REVIEW

DAIRY IRELAND

  • Improved performance in 2014

driven by operational efficiency

  • Internationalisation strategy with

branded milk and oats showing good potential at an early stage of development

JOINT VENTURES & ASSOCIATES

  • Decline in dairy markets in second

half of the year led to a decline in performance

  • New Glanbia Ingredients Ireland

(GII) facility in Ireland completed

  • n time and on budget prior to

removal of EU milk quotas

REVENUE

€616.7m

  • 5.4%

EBITA

€19.0m

+25.8%

EBITA margin

3.1%

+80bps

REVENUE

€984.0m

+8.3%

EBITA

€36.4m

  • 7.6%

EBITA margin

3.7%

  • 60bps
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2014 FULL YEAR RESULTS

FINANCE REVIEW

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2014 FULL YEAR RESULTS www.glanbia.com 12

KEY FINANCIAL HIGHLIGHTS

TOTAL GROUP REVENUE TOTAL GROUP EBITA TOTAL GROUP EBITA % ADJUSTED EPS FREE CASH FLOW ROCE

€3.5bn €245.0m 7.0% 61.16c €153m 13.4%

CONSTANT CURRENCY CHANGE

+6.9% +7.9% +10bps +10.1% +7.3% +8.1% +10bps +10.3% +74%

  • 80bps

REPORTED CHANGE

STRONG FINANCIAL METRICS FOR 2014

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2014 FULL YEAR RESULTS www.glanbia.com 13

SEGMENTAL OVERVIEW

2014 Constant currency change €m Revenue EBITA Margin Revenue EBITA Margin Global Performance Nutrition 746.2 89.2 12.0% +13.5% +26.0% +120 bps Global Ingredients 1,175.4 100.4 8.5% +9.3%

  • 1.4%
  • 100 bps

Dairy Ireland 616.7 19.0 3.1%

  • 5.4%

+25.8% +80 bps Total wholly-owned businesses 2,538.3 208.6 8.2% +6.4% +11.1% +30 bps Joint Ventures & Associates 984.0 36.4 3.7% +8.3%

  • 7.6%
  • 60 bps

Total Group 3,522.3 245.0 7.0% +6.9% +7.9% +10bps

STRONG PERFORMANCE LED BY GLOBAL PERFORMANCE NUTRITION

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2014 FULL YEAR RESULTS

3,283 3,522 2.7% 3.0% (1.1)% 2.3% 0.4% 3,200 3,250 3,300 3,350 3,400 3,450 3,500 3,550 FY13 Global Performance Nutrition Global Ingredients Dairy Ireland Joint Ventures & Associates FX FY14

www.glanbia.com 14

REVENUE GROWTH BY SEGMENT

€m

TOTAL GROUP REVENUE GROWTH 7.3% (+6.9% CC*)

* Constant Currency (CC) excluding the impact of FX

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2014 FULL YEAR RESULTS

FY13 Price Volume M&A FX FY14 FY13 Price Volume M&A FX FY14

www.glanbia.com 15

GLOBAL GROWTH PLATFORMS REVENUE DRIVERS

Global Ingredients +9.4% (+9.3% cc*) Global Performance Nutrition +13.9% (+13.5 cc*)

7.4% 0.4% 5.0% 1.1% (1.6)% 0.1% 0.0% 10.9%

* Constant Currency (CC) excluding the impact of FX

€655m €746m €1,075m €1,175m

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2014 FULL YEAR RESULTS www.glanbia.com 16

EBITA PROGRESSION

€m

TOTAL GROUP EBITA GROWTH +8.1% (7.9% CC*)

227 245 8.1% (0.6)% 1.7% (1.3)% 0.2% 210 215 220 225 230 235 240 245 250 FY13 Global Performance Nutrition Global Ingredients Dairy Ireland Joint Ventures & Associates FX FY14

* Constant Currency (CC) excluding the impact of FX

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2014 FULL YEAR RESULTS www.glanbia.com 17

SUMMARY INCOME STATEMENT

2014 results summary pre exceptional Reported currency Constant currency €m 2014 2013 Change Change Revenue (Wholly owned) 2,538.3 2,382.1 +6.6% +6.4% EBITA (Wholly owned) 208.6 187.7 +11.1% +11.1% EBITA margin 8.2% 7.9% +30 bps +30 bps

  • Amortisation of intangibles

(22.5) (21.0)

  • Net finance costs

(20.3) (23.0)

  • Share of results of JV&As

23.7 26.5

  • Income tax

(28.3) (24.7) Profit for the year 161.2 145.5 Adjusted Earnings per Share 61.16c 55.46c +10.3% +10.1%

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2014 FULL YEAR RESULTS www.glanbia.com 18

EXCEPTIONAL ITEMS SUMMARY

€m 2014 2013 Rationalisation costs (6.4) (8.0) Transaction related costs (9.6)

  • Revision to Group pension schemes
  • 13.8

Pre-tax exceptional (charge) / credit (16.0) 5.8 Taxation credit / (charge) 1.9 (0.3) Total exceptional (charge) / credit (14.1) 5.5

  • Anticipated rationalisation costs of €12m in 2015
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2014 FULL YEAR RESULTS www.glanbia.com 19

CASH FLOW PROGRESSION

€m

IMPROVED FREE CASH FLOW +74%

209 153 88 65 32 13 8 (57) (43) (9) 50 100 150 200 250 300 2014 EBITA Depreciation Dividends from JV&As Working Capital Net Interest & Tax Business Sustaining CapEx Other 2014 FCF 2013 FCF 2012 FCF

Note: (i) 2014 EBITA reflects the wholly owned business

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2014 FULL YEAR RESULTS

  • 50

100 150 200 250 300

2011 2012 2013 2014

  • Bus. Sustaining

Strategic Acquisitions

www.glanbia.com 20

INVESTMENT AND RETURNS

  • Total CapEx and acquisitions

investment €265m in 2014; strengthening our global growth platforms

  • €149m in acquisitions; €73m

strategic CapEx in 2014

  • Strong track record of delivery of

return on investment

  • 2014 ROCE 13.4% (2013: 14.2%);

a result of capital investment profile over recent years

  • €120m - €130m total CapEx for

2015

... with strong track record for ROCE Significant strategic investment programme...

€m

12.8% 14.1% 14.2% 13.4% 11.5% 12.0% 12.5% 13.0% 13.5% 14.0% 14.5%

2011 2012 2013 2014

*12.0% ROCE hurdle

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2014 FULL YEAR RESULTS

  • €510 million net debt position at 3 January 2015 (4 January 2014: €374 million)
  • Current committed debt facilities of approximately €982 million:

― €713 million revolving credit facilities maturing January 2020 ― $325 million private debt placement of senior loan notes, due June 2021

  • 1. The definition of adjusted EBITDA and adjusted EBIT are as per our financing agreements and include dividends from Joint Ventures & Associates.

www.glanbia.com 21

FINANCING AT YEAR END

Financing KPIs 2014 2013 Net debt / Adjusted EBITDA1 1.97 times 1.66 times Adjusted EBIT1 / Net Finance Cost 8.9 times 7.8 times

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2014 FULL YEAR RESULTS

OUTLOOK

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2014 FULL YEAR RESULTS www.glanbia.com 23

OUR STRATEGY

B2B B2C

GLOBAL INGREDIENTS GLOBAL PERFORMANCE NUTRITION

  • Leverage protein ingredient expertise to develop functional and

nutritional solutions for customers

  • Extend market position in customised solutions
  • Look to scale dairy and non‐dairy ingredients platforms
  • Grow branded revenue globally ahead of market growth rates
  • Drive growth in existing markets across current and new channels

and consumer segments

  • Acquire complementary brands

OUR GROWTH PLATFORMS OVERALL GROUP

  • 1. Drive further market

leadership positions within both global growth platforms

  • 2. Deliver strategic capital

investment programme

  • 3. Acquire or partner with

complementary businesses to scale our current portfolio

  • 4. Develop talent, culture and

values, in line with our growing global scale

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2014 FULL YEAR RESULTS

STRATEGIC FINANCIAL TARGETS TO 2018

www.glanbia.com 24

OUTLOOK

  • Positive Group outlook for 2015
  • Targeting branded revenue growth

ahead of the market for Global Performance Nutrition

  • Global Ingredients to benefit from

continued development of value added ingredients

  • 2015 guidance of 9% - 11% growth in

adjusted EPS on a constant currency basis

2015 OUTLOOK ORGANIC EARNINGS1

8% TO 10%

RETURN ON CAPITAL EMPLOYED

12% +

  • 1. Five year adjusted earnings per share CAGR on a constant currency basis announced 12 March 2014.
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Liam Hennigan Head of Investor Relations Glanbia plc Glanbia House Kilkenny Ireland Email: ir@glanbia.ie Tel: +353 56 777 2308