Strong performance in Kilkenny's Glanbia plc 2024 Half Year Results

 Glanbia plc  announces its half year results for the six month period ended 29 June 2024.

Commenting today Hugh McGuire, Chief Executive Officer, said: “I am pleased to report that Glanbia delivered a strong performance in the first half of the year with adjusted EPS growth of 12.4%. This was driven by volume growth of 3.1% across both our Better Nutrition growth platforms. Optimum Nutrition, our flagship global brand, continues to strengthen its leadership position and delivered double-digit volume growth in the period, supported by increased marketing investment.

"Our earnings growth was driven by a strong performance in GPN, with volume growth, earnings and margin reflecting strong consumer demand. NS’s first half performance was on track, led by good customer demand for premix and protein solutions. Our strong operational and financial performance continues to support our capital allocation framework, with the interim dividend increased by 10% and €50 million returned to shareholders via share buybacks. Today we are launching a further €50 million share buyback programme.

"Looking ahead, we continue to focus on driving growth across our portfolio of great brands and ingredients. The category trends remain positive, and with the continued consumer and customer demand for our Better Nutrition brands and ingredients we will see a sequential improvement in volumes across GPN and NS in the second half of the year. Today we are reiterating our full year guidance of 5% to 8% growth in adjusted EPS”.

2024 half year overview

Glanbia delivered a strong financial and operating performance in HY 2024. Group revenue was $1,815.6 million (HY 2023: $1,836.8 million), down 1.1% constant currency. Group EBITDA (before exceptional items) was $261.6 million (HY 2023: $232.2 million) up 12.8% constant currency (up 12.7% reported). Group profit after tax was $143.3 million (HY 2023: $193.4 million) down $51.1 million constant currency (down $50.1 million reported). 

Adjusted EPS was 68.20 $cent (HY 2023: 60.78 $cent) up 12.4% constant currency (up 12.2% reported).

Balance sheet and financing

Glanbia's net debt at 29 June 2024 was $645.4 million (HY 2023: $450.8 million) which represents an increase of $194.6 million driven largely by the acquisition of Flavor Producers which closed in the second quarter of 2024. Net debt to adjusted EBITDA was 1.22 times (HY 2023: 0.99 times). At the end of the period the Group had committed debt facilities of $1.3 billion (HY 2023: $1.3 billion). Glanbia’s ability to generate cash and its available debt facilities ensure the Group has considerable capacity to finance future investments. 

Capital investment

Glanbia’s total investment in capital expenditure (strategic and maintenance) was $44.9 million in the first half of 2024 (HY 2023: $36.8 million). Strategic investment totalled $30.3 million and included ongoing capacity enhancement, business integrations, and IT investments to drive further efficiencies in operations. Total capital expenditure for the year is expected to be between $80 million and $90 million.

Dividend per share

The Board is recommending an interim dividend of 15.64 €cent per share (HY 2023: 14.22 €cent per share) representing a 10% increase on the prior year interim dividend. Glanbia’s overall dividend policy remains unchanged at a target annual dividend payout ratio of between 25% and 35% of adjusted EPS. The interim dividend will be paid on 4 October 2024 to shareholders on the register of members as at 23 August 2024. Irish withholding tax will be deducted at the standard rate where appropriate. The Company’s primary dividend payment currency remains Euro.

Share buyback

On 28 February 2024, the Group announced a €100 million share buyback programme and immediately commenced €50 million of the announced buyback. This initial €50 million programme was completed on 26 June 2024. Between 28 February 2024 and 26 June 2024, Glanbia deployed €50 million, repurchasing 2,785,366 ordinary shares on Euronext Dublin at an average price of €17.95. Glanbia is announcing the commencement of the remaining €50 million share buyback today and this is subject to a separate announcement published today.

Board update

In line with the Company’s relationship agreement with Tirlán Co-operative Society Limited, Gerard O’Brien and Thomas Phelan were appointed to the Board of Glanbia with effect from 1 June 2024, in place of Patrick Murphy and Brendan Hayes, who retired on 1 May 2024 and 31 May 2024, respectively. Additionally, on 1 May 2024, Paul Duffy and Kimberly Underhill were appointed as members to the Nomination and Governance Committee.

2024 Outlook 

Today, the Group is reiterating its guidance for adjusted EPS growth of 5% to 8% in FY 2024 on a constant currency basis. This is expected to be driven by:

• GPN revenue growth of 2.0% to 5.0%;
• GPN EBITDA margins of 16.0% to 16.5%;
• GN NS volume growth of 3.0% to 5.0%; and
• GN NS EBITDA margins of 18.0% to 19.0%.

Glanbia also expects to deliver an operating cash flow conversion rate of 80%+ in FY 2024.