Glanbia plc Half Year 2020 Results presentation Group Managing Director Group Finance Director
2 Glanbia plc | Half Year 2020 presentation Important notice 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.
3 Glanbia plc | Half Year 2020 presentation Covid-19 – Delivering against our priorities Protecting Maintaining Maintain financial our people food supply position Managed health and safety Maintained production Net debt: Adjusted EBITDA of employees rigorously across the Group 1.95x throughout the crisis Strong position from outset of the crisis
4 Glanbia plc | Half Year 2020 presentation Evolving market dynamics Consumers Customers Our Communities • Increased focus on health and • Acceleration in growth in • Our values came to life with wellness brands and ingredients ecommerce and decline of multiple examples of community specialty channels in GPN support across the Group • Consumers loyal to established • Retailers simplifying • Business sustainability and the brands in performance nutrition and weight management assortment and shelf space health and wellbeing of employees paramount • Disproportionate impact to certain • Strong demand for functional • Strong liquidity and cash demographics ingredients management meant no drawdowns of Governmental supports Portfolio well positioned
5 Glanbia plc | Half Year 2020 presentation Implications for Glanbia in H1 2020 Trends improving Resilient through Covid-19 Joint Ventures – GPN YoY revenue progression 10% 2020 overall staple food demand good Sports & Fortified Food -10% Lifestyle & Beverage Nutrition -30% New JV projects -50% on track Q1 Apr May Jun Jul Supplements/ Specialised Immunity Nutrition Significant volatility in Q2 International & North America Specialty channel primary drivers of decline US Cheese Improving trends into H2
6 Glanbia plc | Half Year 2020 presentation Our strategy is aligned to the new environment Glanbia Glanbia Performance Group Nutritionals Nutrition • • Streamline products, prioritise Grow solutions capability across Existing • Maintain prudent capital ON and SlimFast brands key platforms deployment policy strategy • • Reorganise and optimise Expand into complementary • on track Continue JV developments route-to-market & supply chain adjacencies - Foodarom acquisition • • • Further recalibration of Maintain customer relationships with Lean into Glanbia purpose Covid-19 International business new forms of engagement to navigate crisis response • • • Deepen NA review across Support immediate customer needs Evolve longer term ways of demand & productivity for health & wellness products working to new environment
7 Glanbia plc | Half Year 2020 presentation Glanbia structured well to capture opportunities Trends driving our business have grown more powerful Health and wellness Digital Our Categories of GPN sales now Protein category resilient online Brand in Producer of protein Weight management in growth performance nutrition solutions for convenient & Brand in weight nutrition category in US Immune enhancing ingredients Now in management in and brands very ‘on - trend’ markets + hosting the US Essential micro ON DTC websites nutrients ingredients Reduced ‘food -to-go ’ demand ON & SlimFast supplier Globally Food staples demand strong of GPN sales
Glanbia Performance Nutrition HY20 review
9 Glanbia plc | Half Year 2020 presentation GPN Half Year review EBITA MARGIN €19.6m 3.7% -59.1% cc -390 bps North America Performance Nutrition Revenue progression • Strong underlying branded performance in online and FDMC channels offset by weak specialty and distributor channels in Q2 1.7% North America Lifestyle (14.9%) • Pantry loading at the outset of Q2 stabilised by the end of the period. RTE* category weak but improving as the period progressed (0.7%) • Delivered volume growth overall in H1 due to a strong performance from SlimFast and Amazing Grass International €620.1m • Severe disruption to demand as a result of lockdowns €532.4m • As lockdowns eased at the end of Q2 markets began to reopen DTC • Positive volume performance and expansion in H1 with dedicated teams now servicing 10 markets HY19 FX Volume Price HY20 EBITA • International market disruption created negative operating leverage • Underlying margins in line with PY pre-Covid-19 impact *RTE – ready-to-eat Improving trends and margins into Q3
10 Glanbia plc | Half Year 2020 presentation GPN transformation focused on revenue and margin growth International Channel focus Portfolio streamlined – route-to-market Supply chain consolidation 35% of SKUs removed underway Demand and ON & SlimFast now 69% of sales NA Contract exit on track Revenue growth Brand focus management Scope increased as a result GPN reorganised of Covid-19 into 4 focus areas • Recalibration of International Supply Global footprint • chain Deepen review in NA across demand & productivity Efficiency New RTM partners in leveraging FDMC & online place in International acceleration markets SKUs and Productivity contract exit Targeting EBITA margins of 12% to 13% by 2022
11 Glanbia plc | Half Year 2020 presentation Significant position in growth channels – online and FDMC Revenue by channel Specialty Specialty 20% 14% FDMC 34% FDMC Channel HY 20 Growth* 40% Distributors FDMC +1% 12% Online +11% Distributors (46%) Specialty (41%) Distributors *Reported currency 20% Online Online 26% 34%
12 Glanbia plc | Half Year 2020 presentation GPN has a scale business in North America Revenue by market DTC DTC 7% 6% North America North America Performance Market HY 20 Growth Performance Nutrition Nutrition NA PN* (11%) 38% 37% NA Lifestyle +2% International International (33%) 21% International DTC (5%) 27% *LFL Branded North America North America Lifestyle Lifestyle 29% 35%
13 Glanbia plc | Half Year 2020 presentation North America Performance Nutrition • LFL Branded revenue declined by 11.4% in H1 due to challenging Q2 • ON measured consumption -4% in H1 with the trend sequentially improving during Q2 • Headwinds in H1 primarily due to challenges ON net promoter score increased in the specialty and distributor channels which and is the highest in the category impacted branded and contract sales • Majority of this business now oriented around online and club channels with growing presence in FDM and consumption trends improved at the end of Q2 • ON has a stronger competitive position in online and club versus specialty
14 Glanbia plc | Half Year 2020 presentation North America Lifestyle 98% Brand awareness • Revenue grew 2% in H1 • SlimFast consumption growth of 13.0% in H1 Household penetration • Majority of this business in FDM channels with a up 60 bps to 5.0% growing presence online • Volatility in sales as a result of pantry loading in Q2 which stabilised by the end of the period • Headwinds in RTE category expected to remain as long as mobility in NA remains below normal levels • Strong alignment with consumer needs around weight management (SlimFast) as well as natural immunity (Amazing Grass)
15 Glanbia plc | Half Year 2020 presentation International • Revenue declined 33% in H1 • Route-to-market disrupted in many territories: • Lockdowns shut down operations in some countries entirely • Footfall in high street specialty stores down significantly • Gym closures impacted demand • Sales very volatile leading to significant negative operating leverage in H1 • Conditions improved in June/July as lockdowns eased • Remain optimistic on selective growth opportunities • Key route-to-market changes outlined in February now complete with clear brand focus, new team and new in-market partners in certain regions • Covid-19 has further informed the business review; aim is to right size the organisation to the opportunity, scaling back footprint in certain markets while leveraging ecommerce capability across all markets
16 Glanbia plc | Half Year 2020 presentation DTC – eCommerce opportunity Existing markets New markets entered in 2020 • DTC revenue declined 5% in H1 Sweden • Revenue trajectory improving Russia • H1 declines in key Benelux market as a result of gym UK closures Poland Benelux Germany • Dedicated teams covering 10 markets in Europe and RoW France Italy • DTC team commencing Spain Portugal management of ON brand DTC website DTC Brand.com
Glanbia Nutritionals HY20 review
18 Glanbia plc | Half Year 2020 presentation Glanbia Nutritionals Half Year review MARGIN REVENUE EBITA €1,304.3m €65.4m 5.0% -70 bps +12.0% cc -0.9% cc Resilient performance in H1
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