HALF YEAR RESULTS 2014 20 AUGUST 2014 www.glanbia.com CAUTIONARY - - PowerPoint PPT Presentation

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HALF YEAR RESULTS 2014 20 AUGUST 2014 www.glanbia.com CAUTIONARY - - PowerPoint PPT Presentation

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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

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www.glanbia.com

HALF YEAR RESULTS

2014

20 AUGUST 2014

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2014 HALF 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 HALF YEAR RESULTS www.glanbia.com 3

HALF YEAR 2014 PERFORMANCE SUMMARY

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

Total Group Revenue

€1.8bn +10.7%

Total Group EBITA

€129.5m +10.3%

Total Group EBITA margin

7.2% +0 bps

Adjusted EPS

32.45c +11.5%

  • 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

Interim Dividend

4.43c +10.0%

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2014 HALF YEAR RESULTS

  • Strong revenue performance driven by growth in

both branded and contract revenues

  • Continued strong international revenue growth
  • Focus remains on specialty and internet retail;

expanded presence in US club channel

  • Good EBITA margin progression reflecting

positive mix & operational leverage

  • Acquisition of Nutramino in January 2014
  • Growth trends expected to moderate in H2 2014
  • Overall good performance expected for FY 2014

www.glanbia.com 4

OPERATIONAL OVERVIEW

REVENUE

€374.6m

+21.8%

EBITA

€42.9m

+33.6%

EBITA margin

11.5%

+110bps

GLOBAL PERFORMANCE NUTRITION

All growth figures shown are on a constant currency basis

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2014 HALF YEAR RESULTS

BSN

SYNTHA-6 BAR

May 2014 Launched in select European

  • markets. High protein bars

designed for on-the-go

www.glanbia.com 5

MARKET LEADING INNOVATION

GLOBAL PERFORMANCE NUTRITION

BSN

N.O.-XPLODE

July 2014 Pre-workout igniter with advanced ingredient technology and best in class flavour OPTIMUM NUTRITION

PRO SERIES

April 2014 Premium muscle building product targeting elite athletes and goal-driven weight lifters

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2014 HALF YEAR RESULTS www.glanbia.com 6

GPN: DEVELOPMENT UPDATE

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2014 HALF YEAR RESULTS

  • 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

www.glanbia.com 7

MANUFACTURING EXPANSION

GLOBAL PERFORMANCE NUTRITION

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2014 HALF YEAR RESULTS www.glanbia.com 8

OPERATIONAL OVERVIEW

  • Satisfactory performance overall
  • Underlying market demand trends remain

positive

  • Challenging milk procurement environment

in Idaho

  • Innovation agenda in US Cheese and

Ingredient Technologies progressing

  • Announcing €60 million investment

programme in Idaho whey facilities

  • Outlook for FY 2014 is for performance

broadly in line with prior year

GLOBAL INGREDIENTS

All growth figures shown are on a constant currency basis

REVENUE

€565.8m

+10.7%

EBITA

€53.9m

+0.5%

EBITA margin

9.5%

  • 100bps
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2014 HALF YEAR RESULTS

  • 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

www.glanbia.com 9

€60 MILLION DEVELOPMENT PROGRAM ANNOUNCEMENT

GLOBAL INGREDIENTS

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2014 HALF YEAR RESULTS www.glanbia.com 10

OPERATIONAL OVERVIEW

  • Performance behind the prior year
  • Consumer Products’ market backdrop remains

challenging

  • Agribusiness’ performance versus prior year

impacted by particularly strong H1 2013

  • Cost efficiency measures ongoing across both

businesses

  • Outlook for improved performance for FY 2014

DAIRY IRELAND

REVENUE

€353.8m

  • 7.7%

EBITA

€10.5m

  • 13.2%

EBITA margin

3.0%

  • 20bps

All growth figures shown are on a constant currency basis

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2014 HALF YEAR RESULTS www.glanbia.com 11

OPERATIONAL OVERVIEW

  • Good performance overall
  • Glanbia Ingredients Ireland and Glanbia Cheese

benefited from favourable dairy market environment

  • Development of new €150 million dairy facility in

Glanbia Ingredients Ireland progressing well; long term supply contracts agreed with 94% of suppliers

  • FY 2014 performance expected to be broadly in

line with 2013 reflecting more challenging dairy market conditions in H2 2014

JOINT VENTURES & ASSOCIATES

REVENUE

€503.4m

+19.3%

EBITA

€22.2m

+13.3%

EBITA margin

4.4%

  • 20bps

All growth figures shown are on a constant currency basis

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www.glanbia.com 12

FINANCE REVIEW

2014 HALF YEAR RESULTS

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2014 HALF YEAR RESULTS

FINANCIAL HIGHLIGHTS

www.glanbia.com 13

TOTAL GROUP REVENUE TOTAL GROUP EBITA TOTAL GROUP EBITA % ADJUSTED EPS

€1.8bn €129.5m 7.2% 32.45c

CONSTANT CURRENCY CHANGE

+10.7% +10.3% +0 bps +11.5% +8.1% +6.0%

  • 10 bps

+6.8%

CHANGE

GOOD PERFORMANCE WITH 11.5% GROWTH IN ADJUSTED EPS*

* Constant currency

HY 2014

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2014 HALF YEAR RESULTS

SEGMENTAL OVERVIEW

www.glanbia.com 14

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

Total Group 1,797.6 129.5 7.2% +10.7% +10.3% +0 bps

GROWTH DRIVEN PRIMARILY BY GLOBAL PERFORMANCE NUTRITION

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2014 HALF YEAR RESULTS

REVENUE ANALYSIS

www.glanbia.com 15 * Constant currency

Total Group Revenue Growth +10.7%*

€m

1,600 1,650 1,700 1,750 1,800 1,850 HY 2013 GPN GI DI JV&As FX HY 2014

  • 2.7%

1,798 1,663 4.1% 3.4%

  • 1.8%

5.0%

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2014 HALF YEAR RESULTS

Volume Price Acq/Disp FX Volume Price Acq/Disp FX

Joint Ventures & Associates +19.3%* Global Ingredients +10.7%* Global Performance Nutrition +21.8%*

SEGMENTAL REVENUE ANALYSIS

www.glanbia.com 16

Dairy Ireland -7.7%*

* Constant currency

19.6%

  • 4.8%

2.5%

  • 0.3%
  • 4.8%
  • 4.5%

1.6% Volume Price FX 13.9%

  • 4.9%
  • 2.8%

0% Volume Price FX 13.0%

  • 1.4%

6.3% Volume Price Volume

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2014 HALF YEAR RESULTS

110 115 120 125 130 135 140 HY 2013 GPN GI DI JV&As FX HY 2014

EBITA ANALYSIS

www.glanbia.com 17 * Constant currency

Total Group EBITA Growth +10.3%*

€m

  • 4.3%

129.5 122.2 9.3% 0.2%

  • 1.4%

2.2%

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2014 HALF YEAR RESULTS

SUMMARY INCOME STATEMENT

www.glanbia.com 18

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%

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2014 HALF YEAR RESULTS

CASHFLOW & FINANCING

www.glanbia.com 19

  • Working capital efficiency programme ongoing
  • YTD capex €57 million. €130 million expected

for FY 2014 (€90 million strategic)

  • Redemption of €39.1 million of preference

shares in July 2014

  • Group now has two sources of committed debt

finance totalling €705.9 million;

― €466.8 million revolving loan facilities maturing January 2018 ― €239.1 million ($325 million) private placement of senior loan notes maturing June 2021

NET DEBT

HY 2013: €444.7m

€471.8m

NET DEBT / ADJ. EBITDA1

HY 2013: 2.0x

2.0x

INTEREST COVER1

HY 2013: 8.6x

8.1x

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

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www.glanbia.com 20

SUMMARY & OUTLOOK

2014 HALF YEAR RESULTS

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2014 HALF YEAR RESULTS

SUMMARY

www.glanbia.com 21

  • 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

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2014 HALF YEAR RESULTS www.glanbia.com 22

SUPPLEMENTARY INFORMATION

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2014 HALF YEAR RESULTS

SUMMARY CASH FLOW

www.glanbia.com 23

€m HY 2014 HY 2013 EBITDA 122.1 115.3 Dividends from Joint Ventures & Associates 3.2 1.5 Working capital movement (83.9) (94.1) Net interest and tax paid (24.6) (23.9) Business sustaining capital expenditure (23.6) (18.2) Other outflows (7.2) (4.5) Free cash flow (14.0) (23.9) Strategic capital expenditure (33.6) (28.3) Acquisitions (21.1)

  • Disposals

0.9 1.9 Restructuring costs (9.2) (1.9) Equity dividends (17.7) (16.0) Cash flow pre currency exchange/fair value adjustments/other (94.7) (68.2) Currency exchange/fair value adjustments/other (2.7) 0.1 Movement in net debt in the period (97.4) (68.1) Net debt at beginning of period (374.4) (376.6) Net debt at end of period (471.8) (444.7)

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2014 HALF YEAR RESULTS

SUMMARY BALANCE SHEET

www.glanbia.com 24

€m HY 2014 HY 2013 Property, plant and equipment 409.7 335.1 Investments 164.6 146.0 Intangible assets 471.9 475.2 Non-current receivables 9.7 16.4 Deferred tax/capital grants (76.6) (66.4) Working capital 316.4 287.8 Retirement benefit obligations (91.4) (84.9) Provisions (36.6) (42.0) 1,167.7 1,067.2 Net debt (471.8) (444.7) Shareholders equity 695.9 622.5

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2014 HALF YEAR RESULTS www.glanbia.com 25

2014 INVESTOR DAY

This event will focus solely on Glanbia’s Global Performance Nutrition segment. As well as learning about the long term strategy of the business, attendees will gain an in-depth understanding of our approach to marketing, operations and international expansion. There will also be a visit to our new state-of-the-art manufacturing facility. All of Glanbia’s executive management team will be in attendance as well as a number of senior Global Performance Nutrition management. Please register your interest by emailing investorday@glanbia.com

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Glanbia plc Glanbia House Ring Road Kilkenny Ireland Email: ir@glanbia.ie Tel: +353 56 777 2200