Mark Garvey and Siobhan Talbot of Glanbia
Profits are up and earnings per share show a 9% increase as Glanbia announces its results for the financial year ended 29 December 2018
Glanbia delivered a good performance in 2018. Wholly-owned revenue from continuing operations was €2,386.3 million, which was in line with prior year on a reported basis (up 4.1% constant currency). The drivers of revenue growth were a 6.7% growth in volume, a 4.7% decrease in price and a 2.1% revenue contribution from acquisitions. Wholly-owned EBITA from continuing operations was €284.9 million, up 0.6% reported (up 5.2% constant currency). Wholly-owned EBITA margin from continuing operations was 11.9%, which was flat on a reported basis (up 10 basis points constant currency).
Glanbia’s reported share of profit after tax (before exceptional items) from JVs increased by €2.5 million to €45.3 million in 2018.
Total Group profit in 2018 was €234.0 million. The prior year Group profit of €329.4 million included €98.0 million of net exceptional gains in 2017 relating to a profit on disposal of discontinued operations and a tax credit arising on the reduction of the US federal corporate tax rate.
Adjusted earnings per share was 91.01 cent. Comparing to prior year on a pro-forma basis, eliminating the impact of discontinued operations, this was an increase of 4.5% on a reported basis (up 9.0% constant currency).
Dividend and total shareholder return
The Board is recommending a final dividend of 14.49 cent per share which brings the total dividend for the year to 24.20 cent per share, a 10% increase on prior year. This total dividend represents a return of €71.6 million to shareholders from 2018 earnings and a pay-out of 26.6% of 2018 adjusted earnings per share. The final dividend will be paid on 26 April 2019 to shareholders on the share register on 15 March 2019. Glanbia’s total shareholder return (“TSR”) in 2018 was 11.4%.
Results highlights for the full year 2018
· Adjusted earnings per share 91.01 cent, up 9.0% constant currency on prior year on a pro-forma basis, (up 4.5% reported);
· Wholly-owned revenue €2,386.3 million (2017: €2,387.1 million) up 4.1% on prior year, constant currency (in line with prior year on a reported basis);
· Wholly-owned EBITA €284.9 million (2017: €283.2 million) up 5.2% on prior year, constant currency (up 0.6% reported);
· Wholly-owned EBITA margin up 10 bps constant currency on prior year (in line with prior year on a reported basis);
· Glanbia Performance Nutrition (“GPN”) delivered revenue growth of 9.5% constant currency (up 5.2% reported) with like-for-like branded volume growth of 9.2% and EBITA of €173.1 million, a 6.7% increase on prior year, constant currency (up 2.0% reported);
· Glanbia Nutritionals (“GN”) revenue declined 0.6% constant currency (down 4.7% reported) and delivered EBITA of €111.8 million, a 3.0% increase on prior year, constant currency (down 1.5% reported). Volume growth in GN Nutritional Solutions was 8.5% in 2018;
· Completed the acquisition of SlimFast for $350 million in November 2018, a complementary brand within the GPN portfolio;
· Glanbia announces that it has agreed to acquire Watson, a US based non-dairy ingredient solutions business, for $89 million;
· Joint Ventures reported share of profits after tax (before exceptional items) of €45.3 million up €2.5 million on prior year. A number of JV investments announced during 2018;
· Reported profit for the year €234.0 million up €2.6 million on prior year on a pre-exceptional basis;
· Operating cash flow of €301.7 million representing an operating cash conversion rate of 92%;
· Recommended final dividend of 14.49 cent per share. Full year dividend of 24.20 cent, a 10% increase on prior year and representing a pay-out ratio of 26.6% of adjusted earnings per share; and
· Glanbia announces plans to reorganise the composition of its Board of Directors during 2019 with appointment of three new Independent non-executive Directors to its Board.
Commenting today Siobhán Talbot, Group Managing Director, said: “I am pleased to announce 9.0% growth in pro-forma adjusted earnings per share, constant currency, for Glanbia for 2018. This was largely driven by strong volume growth across our business, in particular in the branded portfolio of GPN and the Nutritional Solutions component of GN. Consumer demand for our brands and nutritional ingredients remains strong underpinned by positive long-term global health and wellness trends. Glanbia also delivered a strong cash performance with an operating cash conversion rate in 2018 of 92%. We continue to invest in expanding our business and its capabilities and we completed the acquisition of SlimFast in November 2018. Today, I am happy to announce that we have agreed to acquire Watson for $89 million. Watson is a non-dairy ingredient solutions business headquartered in Connecticut, USA. It is a highly complementary addition to our Nutritional Solutions business and will help broaden our capabilities in the ingredients sector.
We continue to drive sustainable growth and are on track to deliver our 2022 strategic ambitions. The outlook for 2019 is positive and Glanbia expects to deliver 5% to 8% growth in adjusted earnings per share, constant currency. If the Euro : US Dollar exchange rate remains at current levels, the reported 2019 result will be 3% higher than the constant currency outlook.”