Glanbia announced its interim results today, saying its overall performance in line with expectations. It reiterated its 2014 guidance of 8%-10% growth in adjusted earnings per share on a constant currency basis.
Siobhán Talbot, Group Managing Director said Glanbia had delivered a good performance in the first nine months of the year. “This was driven primarily by Global Performance Nutrition while Global Ingredients and our other businesses performed in line with expectations.
“Overall, the outlook for full year 2014 is positive and we maintain our guidance of 8% to 10% growth in adjusted earnings per share on a constant currency basis.”
Total Group revenue, including Joint Ventures and Associates, grew 8% in the nine months to October 4, compared to the same period in 2013.
Global Performance Nutrition
Global Performance Nutrition had a strong performance for the first nine months of the year, it says, as revenues increased 14% versus the prior year. Excluding the impact of the Nutramino acquisition in January 2014, revenue growth was 12%, with the majority of this volume driven.
Global Ingredients
Global Ingredients delivered a satisfactory performance in the first nine months in the context of milk procurement challenges in Idaho earlier in the year, it said, with revenues increased 11% reflecting a 15% impact from higher pricing offset by an organic volume decline of 4%. Global Ingredients performance for the full year is expected to be broadly in line with the prior year. Our €60 million investment in new high-end whey and lactoferrin capacity in Idaho is progressing well and is on schedule for full commissioning by the end of 2015.
US Cheese
US Cheese revenues increased in the period as stronger cheese pricing more than offset the volume decline that resulted from some challenging milk procurement conditions earlier in the year. However, overall performance was behind the prior year as the impact of lower volumes and higher input costs was not fully offset by operational efficiency measures and pricing changes. While milk procurement conditions have improved over recent months and we expect our plants to operate at full capacity in the fourth quarter, performance for the full year is expected to be below the prior year.
Ingredient Technologies
Ingredient Technologies’ performance for the first nine months of the year was behind the prior year. Revenues were broadly in line as slightly lower volumes were offset by higher pricing. The decline in volumes related primarily to base whey and reflected reduced throughput in our cheese plants. Margins declined in the period as base whey prices, which are a key driver of milk input costs, increased relative to high‐end whey prices. This dynamic is improving and, combined with improved milk procurement conditions in Idaho, performance for the full year is expected to be broadly in line with the prior year
Dairy Ireland
Dairy Ireland delivered a satisfactory performance in the period. While revenues were 9% behind reflecting a 7% decline in volumes and a 2% decline in pricing, margins were ahead of the prior year driven primarily by the rationalisation and efficiency programmes currently underway in both business units. We expect to incur exceptional costs of approximately €11 million over 2014 and 2015 to complete these programmes.
Consumer Products
While the market backdrop remains challenging, Consumer Products delivered an improved performance in the period reflecting a combination of modest revenue growth and improved margins. Margin expansion was driven largely by cost savings associated with our efficiency programme. While dairy input costs for the first nine months of the year were above the prior year, input costs have started to decline in recent months in line with global dairy prices. This, combined with our ongoing focus on costs and efficiencies, is expected to result in a somewhat improved performance for the full year versus the prior year.
Agribusiness
Agribusiness had a difficult first nine months of the year relative to a strong prior year period. Revenues were behind the prior year as favourable conditions for grass growth resulted in a significant decline in animal feed demand. Performance for the full year is expected to be broadly in line with the prior year as the benefits of the cost savings and operational efficiency measures being taken across the business offset the expected decline in revenues.
2014 outlook
The overall outlook for 2014 is positive and we maintain our full year 2014 guidance of 8% to 10% growth in adjusted earnings per share, on a constant currency basis. Based on the Euro/US dollar exchange rate of €1 = US$1.2616 as at 4 October 2014 prevailing for the remainder of the year, growth in adjusted earnings per share on a reported basis is expected to be broadly in line with constant currency growth.
