2014 HALF YEAR RESULTS 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 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
HALF YEAR 2014 PERFORMANCE SUMMARY Total Group Revenue Total Group EBITA Total Group EBITA margin Adjusted EPS Interim Dividend 1.8bn +10.7% 129.5m +10.3% 7.2% +0 bps 32.45c +11.5% 4.43c +10.0% 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 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 www.glanbia.com 3
OPERATIONAL OVERVIEW GLOBAL PERFORMANCE NUTRITION 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 REVENUE 374.6m +21.8% EBITA 42.9m +33.6% EBITA margin 11.5% +110bps All growth figures shown are on a constant currency basis www.glanbia.com 4
MARKET LEADING INNOVATION GLOBAL PERFORMANCE NUTRITION OPTIMUM NUTRITION PRO SERIES April 2014 Premium muscle building product targeting elite athletes and goal-driven weight lifters BSN SYNTHA-6 BAR May 2014 Launched in select European markets. High protein bars designed for on-the-go BSN N.O.-XPLODE July 2014 Pre-workout igniter with advanced ingredient technology and best in class flavour www.glanbia.com 5
GPN: DEVELOPMENT UPDATE www.glanbia.com 6
MANUFACTURING EXPANSION GLOBAL PERFORMANCE NUTRITION 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
OPERATIONAL OVERVIEW GLOBAL INGREDIENTS 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 REVENUE 565.8m +10.7% EBITA 53.9m +0.5% EBITA margin 9.5% -100bps All growth figures shown are on a constant currency basis www.glanbia.com 8
60 MILLION DEVELOPMENT PROGRAM ANNOUNCEMENT GLOBAL INGREDIENTS 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
OPERATIONAL OVERVIEW DAIRY IRELAND 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 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 www.glanbia.com 10
OPERATIONAL OVERVIEW JOINT VENTURES & ASSOCIATES 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 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 www.glanbia.com 11
FINANCE REVIEW www.glanbia.com 12
FINANCIAL HIGHLIGHTS GOOD PERFORMANCE WITH 11.5% GROWTH IN ADJUSTED EPS* HY 2014 CHANGE CONSTANT CURRENCY CHANGE TOTAL GROUP REVENUE 1.8bn +8.1% +10.7% TOTAL GROUP EBITA 129.5m +6.0% +10.3% TOTAL GROUP EBITA % 7.2% -10 bps +0 bps ADJUSTED EPS 32.45c +6.8% +11.5% * Constant currency www.glanbia.com 13
SEGMENTAL OVERVIEW GROWTH DRIVEN PRIMARILY BY GLOBAL PERFORMANCE NUTRITION 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 www.glanbia.com 14
REVENUE ANALYSIS m 1,850 Total Group Revenue Growth +10.7%* 5.0% -2.7% 1,800 3.4% -1.8% 1,798 1,750 4.1% 1,700 1,650 1,663 1,600 HY 2013 GPN GI DI JV&As FX HY 2014 * Constant currency www.glanbia.com 15
SEGMENTAL REVENUE ANALYSIS Global Performance Nutrition +21.8%* Global Ingredients +10.7%* 19.6% -0.3% 2.5% -4.8% 13.9% 1.6% -4.5% Volume Price Acq/Disp FX -4.8% Volume Price Acq/Disp FX Dairy Ireland -7.7%* Joint Ventures & Associates +19.3%* Volume Price FX 13.0% -1.4% -4.9% 6.3% -2.8% 0% Volume Price FX * Constant currency www.glanbia.com 16
EBITA ANALYSIS m Total Group EBITA Growth +10.3%* 140 135 9.3% 0.2% -1.4% 2.2% -4.3% 130 129.5 125 122.2 120 115 110 HY 2013 GPN GI DI JV&As FX HY 2014 * Constant currency www.glanbia.com 17
SUMMARY INCOME STATEMENT 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% www.glanbia.com 18
CASHFLOW & FINANCING 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. EBITDA 1 HY 2013: 2.0x 2.0x INTEREST COVER 1 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. www.glanbia.com 19
SUMMARY & OUTLOOK www.glanbia.com 20
SUMMARY 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 www.glanbia.com 21
SUPPLEMENTARY INFORMATION www.glanbia.com 22
SUMMARY CASH FLOW 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) www.glanbia.com 23
SUMMARY BALANCE SHEET 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 www.glanbia.com 24
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 www.glanbia.com 25
Glanbia plc Glanbia House Ring Road Kilkenny Ireland Email: ir@glanbia.ie Tel: +353 56 777 2200