Glanbia plc 2017 Half Year Results Presentation 10 August 2017 Siobhan Talbot Mark Garvey Group Managing Director Group Finance Director
Cautionary Statement
Half Year 2017 Performance Summary 48.04c Adjusted EPS 3 +6.5% (cc ) +9.3% (rc) Dairy Ireland Glanbia Transaction completed on 2 July 2017 and transaction Ireland Glanbia Ireland is now operational Pro-forma adjusted EPS 46.09c Pro-forma 2 guidance of 7-10% reiterated Adjusted EPS 3 +10.1% (cc ) for full year +13.2% (rc) 1. CC denotes constant currency; RC denotes reported currency 2. Pro-forma adjusted EPS for continuing operations assumes that the Dairy Ireland transaction occurred at the beginning of FY 2016 3. To arrive at the constant currency change, the average FX rate for the current period is applied to the relevant reported result from the same period in the prior year. The average Euro US Dollar FX rate for the first half of 2017 was € 1 = $1.083 (HY 2016: € 1 = $1.116). • This presentation contains certain alternative performance measures. A detailed glossary of the key performance indicators and non-IFRS performance measures can be found in the appendix of this presentation. 2017 Half Year Results | Slide 3
Pro-forma Continuing Group progression Revenue EBITA € 37.3m € 618.9m +48.0% (cc) +17.0% (cc) +48.6% (rc) +17.0% (rc) € 1,805m € 186m € 1,185.7m € 148.3m +7.3% (cc) +10.0% (rc) +3.5% (cc) +6.6% (rc) JV&A’s Wholly owned • CC denotes constant currency; RC denotes reported currency • The figures displayed are on a pro forma basis which assumes that 40% of Dairy Ireland results are captured in JV&A’s from the beginning of 2016 • Wholly owned continuing operations include the Glanbia Performance Nutrition and Glanbia Nutritionals segments 2017 Half Year Results | Slide 4
Pro-forma Continuing Group EBITA margin profile Pro-forma continuing Group EBITA margin HY17 HY16 Growth Wholly owned 12.5% 12.9% -40 bps Joint Ventures & Associates 6.0% 4.7% +130 bps Pro-forma Total Group 10.3% 10.2% +10 bps • Pro-forma above assumes 40% of Dairy Ireland results are captured in JV&A’s from the beginning of 2016 2017 Half Year Results | Slide 5
Strategic Highlights – Acquisitions H1 2017 • Leading plant-based nutrition brand • Increases GPN’s position with lifestyle consumers • Leading European online brand • Opportunity to build DTC* platform in Europe *Direct-to-consumer 2017 Half Year Results | Slide 6
Strategic Highlights – Joint Ventures & Associates Glanbia Ireland • Creation of Glanbia Ireland on 02 July 2017 encompassing the businesses of Glanbia Ingredients Ireland and Dairy Ireland Southwest Cheese • 25% increase in capacity expected to be commissioned in H1 2018 Michigan JV – New US cheese/whey plant • Plans on track for 2020 2017 Half Year Results | Slide 7
Operational Review
Glanbia Performance Nutrition Lfl* branded Solid performance - Improved REVENUE Performance growth momentum in Q2 € 54 543.5m 3.5m +0 +0.7% .7% Good revenue growth in +5.4% (cc) Growth +7.6% (rc) LAPAC & EMEA Robust margins given Earnings increased input costs EBITA margin EBITA Strong performance in Innovation € 83 83.9m .9m 15.4% 15.4% ready-to-eat format +0.2% (cc) -80 bps (cc) +3.1% (rc) -70 bps (rc) *Lfl: Like-for-like Branded 2017 Half Year Results | Slide 9
Glanbia Nutritionals REVENUE Good revenue and EBITA Performance € 642.2m .2m progression +9.0% (cc) +12.2% (rc) 8.1% EBITA growth driven by Growth EBITA Nutritional Solutions € 64 64.4m .4m Good business development across Added-Value +8.1% (cc) dairy and non-dairy systems +11.6% (rc) EBITA margin Broad-based growth across Expansion 10 10.0% .0% customers & geographies -10 bps (cc) -10 bps (rc) 2017 Half Year Results | Slide 10
JVA’s & Dairy Ireland JOINT VENTURES & ASSOCIATES DAIRY IRELAND – (Glanbia share) (Discontinued Operations*) EBITA EBITA REVENUE EBITA margin REVENUE EBITA margin Strong performance driven by improved Sale of 60% of Dairy Ireland completed on dairy markets 2 July 2017 EBITA growth across all three strategic Margin compression as a result Joint Ventures & Associates of increased dairy input costs *Dairy Ireland and related assets are classified as discontinued operations as a result of disposal of 60% of Dairy Ireland 2017 Half Year Results | Slide 11
Finance Review
Pro-forma adjusted EPS progression Half Year Full Year +7-10% (cc) CC denotes constant currency; RC denotes reported currency *Pro-forma adjusted EPS for continuing operations assumes that the Dairy Ireland transaction occurred at the beginning of FY 2016 2017 Half Year Results | Slide 13
Summary Income Statement HY 2017 results summary Constant currency Reported currency pre-exceptional items € 'm HY 2017 HY 2016 Change Change Wholly owned Continuing* +7.3% Revenue 1,185.7 1,077.9 +10.0% EBITA 148.3 139.1 +6.6% +3.5% -50 bps EBITA margin 12.5% 12.9% -40 bps Amortisation of intangible assets (21.8) (18.2) Net finance costs (11.8) (11.6) Share of JV&As 22.3 11.1 Income tax (20.5) (19.4) Profit from continuing operations 116.5 101.0 *Profit after tax from discontinued operations 9.3 16.0 -41.9% -41.9% +6.5% Adjusted EPS 48.04c 43.96c +9.3% *Wholly-owned continuing operations exclude the results of Dairy Ireland and related assets. The results of Dairy Ireland are presented within the profit after tax from discontinued operations 2017 Half Year Results | Slide 14
Segmental Summary – wholly owned continuing operations Good performance driven by Glanbia Nutritionals HY 2017 Constant currency change € 'm Revenue EBITA Margin Revenue EBITA Margin Glanbia Performance Nutrition 543.5 83.9 15.4% +5.4% +0.2% -80 bps Glanbia Nutritionals 642.2 64.4 10.0% +9.0% +8.1% -10 bps Wholly owned continuing operations 1,185.7 148.3 12.5% +7.3% +3.5% -50 bps 2017 Half Year Results | Slide 15
Revenue Growth by Segment - GPN Glanbia Performance Nutrition Revenue growth +7.6% (+5.4% CC*) Million € 560 € 544m 6.2% € 540 (0.8)% 2.1% 0.0% € 520 € 505m € 500 € 480 € 460 € 440 € 420 € 400 FX Volume Price Acquisitions HY16 HY17 *Constant currency (CC) excluding the impact of FX 2017 Half Year Results | Slide 16
Revenue Growth by Segment - GN Glanbia Nutritionals Revenue growth +12.2% (+9.0% CC*) Million € 642m 5.9% 3.1% 2.9% € 573m € 600 Nutritional Solutions Nutritional Solutions € 286m € 400 € 235m US Cheese US Cheese € 200 € 338m € 357m € 0 HY16 HY17 HY16 FX Volume Price HY17 *Constant currency (CC) excluding the impact of FX 2017 Half Year Results | Slide 17
Dairy Ireland transaction update • Transaction closed on 02 July 2017 • Total proceeds expected to be c. € 200m: – € 112m received prior to half year – Working capital proceeds of € 90m - € 100m to be received by end October 2017* • Glanbia Ireland comprises Glanbia Ingredients Ireland and Dairy Ireland: – 40% owned by Glanbia plc – 60% owned by Glanbia Co-operative Society Limited *Final working capital amount subject to agreement of completion accounts 2017 Half Year Results | Slide 18
Exceptional Items Summary €’m Continuing Operations HY 2017 HY 2016 FY 2016 Organisation redesign costs - (6.2) (11.3) Acquisition integration costs - (1.9) (3.1) Exceptional (charge) pre-tax - (8.1) (14.4) Taxation credit - 1.5 2.3 Net exceptional (charge) - (6.6) (12.1) €’m Discontinued Operations Dairy Ireland transaction related costs (13.0) - Rationalisation costs - (0.8) (3.0) Exceptional (charge) pre-tax (13.0) (0.8) (3.0) Taxation credit 2.1 0.1 0.4 Net exceptional (charge) (10.9) (0.7) (2.7) Total exceptional (charge) (10.9) (7.3) (14.8) *The Dairy Ireland transaction completed after the period end. As a result the gain arising on disposal has not been reflected in the H1 results. This will be reported in the 2017 full year financial statements 2017 Half Year Results | Slide 19
Balance Sheet Financing KPI's HY 2017 HY 2016 FY 2016 € 608.4m € 644.3m € 437.5m Net Debt Net Debt / Adjusted EBITDA¹ 1.63 times 1.83 times 1.19 times Adjusted EBIT¹ / Net Finance Cost 11.4 times 11.4 times 11.5 times 1. The definition of adjusted EBITDA and adjusted EBIT are as per our financing agreements and include dividends from Joint Ventures & Associates • Available bank facilities of € 1bn • Increased investment in working capital expected to substantially unwind by year end • Capex of € 33.3m – € 19.1m strategic • Pension liabilities of € 45.6m – a reduction of € 64.9m on FY 2016 *on an IAS 19 basis 2017 Half Year Results | Slide 20
Summary & Outlook
Summary & Outlook Pro-forma adjusted EPS Half Year Full Year +7-10% (cc) CC denotes constant currency; RC denotes reported currency *Pro-forma adjusted EPS for continuing operations assumes that the Dairy Ireland 2017 Half Year Results | Slide 22 transaction occurred at the beginning of FY 2016
Questions & Answers
Appendix
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