Results Roundup: Glanbia, Corbion, Novozymes, Carbery and Hershey’s report latest financials

26 Apr 2019 --- Several companies in the food and drink industry have reported their first-quarter results this week. Global nutrition group Glanbia enjoyed sales growth of more than 8 percent, with a particularly strong performance from its Glanbia Nutritionals business and SlimFast acquisition. Corbion reported sales of €228.9 million (US$255 million) in Q1, an increase of 7.5 percent with bakery returning back to growth. Q1 presented a mixed picture for Novozymes’ Food & Beverages where sales declined by 2 percent organically and grew by 1 percent in DKK.

Glanbia on track, SlimFast adds weight to results
Glanbia says it is on track to deliver growth in the second half of the year.

Revenues were up 8.4 percent annually, while sales in Glanbia’s Performance Nutrition (GPN) division rose by about 5 percent.

Compared to the prior year, revenue increased by 4.9 percent and this was driven by the SlimFast acquisition delivering 24.8 percent offset by a volume decline of 16.5 percent and a price decline of 3.4 percent.

The SlimFast acquisition is also performing strongly with the integration of the business continuing as planned, notes Glanbia. Growth was driven by the core range and particularly strong consumer demand for recent innovations in the UK and US, in particular, the Keto range.

Volume decline in the first quarter reflects both the seasonality in the business following a strong Q4 2018 and specific supply chain initiatives in the period which impacted the phasing of sales in certain non-US markets. Price decline reflects a continuation of brand investment and pricing initiatives to negate the impact at consumer level of FX and tariff headwinds.

In February, Glanbia agreed to acquire Watson a non-dairy ingredient solutions business headquartered in Connecticut, US, for US$89 million (€78.65 million). Watson is presented as a highly complementary addition to Glanbia’s Nutritional Solutions (GNS) business and will help broaden their capabilities in the ingredients sector. The company is a manufacturer and supplier of high-quality custom nutrient premix, bakery ingredient, edible film and material conditioning solutions for the nutrition, F&B food and beverage, personal care and supplement industries.

“Glanbia Nutritionals was the main driver of revenue growth with a good performance in particular from the Nutritional Solutions business,” says Siobhán Talbot, Group Managing Director.

“Glanbia Performance Nutrition revenue growth in the first quarter was driven by a strong performance from the recently acquired SlimFast brand. Our strategy remains on track and we reiterate our full year guidance of 5 percent to 8 percent growth in adjusted earnings per share, constant currency, in 2019, with growth to be delivered in the second half of the year,” she notes."

GNS revenue increased by 22.1 percent, driven by volume growth of 16.1 percent, a price increase of 0.7 percent and the Watson acquisition delivering 5.3 percent.

Volume growth was driven by a strong performance in value-added dairy solutions against a relatively weak first quarter in 2018. Non-dairy solutions also performed well with good volume growth in the Asian region in particular, notes the company. The price increase was primarily driven by improved mix in dairy solutions.

Carbery reports solid performance
Cork-headquartered Carbery Group has reported a solid performance in 2018. The global manufacturer of specialty and nutritional dairy ingredients as well as flavors and cheeses, reported a turnover increase of 1.5 percent to €423.5 million (US$472 million), while operating profit also grew to €32.4 million (US$36.1 million), an increase of 4.5 percent.

Each of the group’s businesses; Dairy, Taste and Nutrition, performed in line with company expectations, allowing Carbery to continue to pay a leading milk price to its shareholders, while also extending support payments for longer periods to support farmers through the severe weather conditions at the start of 2018.

The company is about to enter a “significant period of expansion and investment,” investing €100 million (US$111 million) in the business over the next two years, as it seeks to diversify and grow its business internationally. Around €78 million (US$87 million) of this investment has been set aside for a new manufacturing facility at the Ballineen site in Ireland.

Mixed results for Novozymes
For Novozymes, the most significant growth contributors were food and nutrition together with beverages and oils and fats. Baking and starch declined as expected. The sales decline for starch-processing enzymes was due to adverse moves in commodity prices in Asia, notes the Denmark-headquartered company.

Baking was impacted by the planned price reductions in the US fresh keeping segment while emerging markets posted solid growth. There was good development for the grain-milling platform.

The solid growth in food and nutrition was largely driven by the company’s solution for low-lactose dairy products. Beverages and vegetable oil processing also posted solid growth. However, the Middle Eastern markets continued to create headwinds in Q1, according to Novozymes.

Corbion addresses input cost increases
At Corbion, net sales organic growth was 1.5 percent; volume growth was 6.3 percent, while Adjusted EBITDA was €34.9 million (US$39 million), an organic decrease of 6.7 percent.

“One of our key priorities going into 2019 was to address the input cost increases that negatively affected our margins in the second half of last year. Our measures have proven successful resulting in improved margins compared to H2 2018,” says Tjerk de Ruiter, CEO.

“It is also encouraging to see that Bakery returned to growth in Q1. The anticipated decline in Biochemicals was mostly due to phasing and we expect the Biochemicals sales growth rate to recover in the quarters to come. This was the first full operating quarter of our PLA joint venture plant and we are optimistic on the progress there,” he adds.

Hershey’s enjoys a strong start
At Hershey’s, company President and CEO, Michele Buck, says it has been a strong start to the year. “We remain committed to delivering balanced growth today while making key investments in our brands, capabilities and people to take the business to the next level in the future,” she says.

Hershey’s full-year reported net sales are expected to increase in the 1-3 percent range while full-year reported earnings per share-diluted are expected to be in the US$5.50 to US$5.66 range.

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