Glanbia Announces Dairy Ireland Sale, Q1 Total Group Revenue Up

26 April 2017 – Global nutrition group Glanbia released its first quarter results, with Total Group Revenue increasing 9.6% on a reported basis and 7.7% on a constant currency basis. The company has also signed binding transaction agreements with Glanbia Co-operative Society for the sale of a controlling stake in the Dairy Ireland segment and related associate businesses. Currently, Dairy Ireland is a wholly owned segment of Glanbia and comprises two business units, Glanbia Consumer Foods Ireland and Glanbia Agribusiness.

Q1 Results
The company’s Q1 revenue increase was driven mainly by improvements in dairy markets compared to the previous year, as well as an increased contribution from its acquisitions.

“Glanbia delivered good revenue growth in the first three months of 2017. Glanbia Nutritionals had a good performance and was the main driver of growth. Glanbia Performance Nutrition delivered in line with expectations, as a strong performance in non US markets countered some challenges in the US market,” says Siobhán Talbot, Group Managing Director.

Glanbia Performance Nutrition revenues decreased marginally by 0.2%, as a 0.3% increase in pricing and 2.6% growth from the acquisition of Amazing Grass was offset by a 3.1% volume decrease. Glanbia Nutritionals, meanwhile, delivered a good performance in the first three months of 2017 with revenue growth of 10.3%, driven by a price increase of 7.6%, mainly as a result of improved dairy markets, versus prior year and volume growth of 2.7%, primarily driven by Nutritional Solutions.

The full year 2017 outlook for Glanbia Nutritionals is good, the company reported, with revenue and EBITA growth “expected to be driven by the continued growth of Nutritional Solutions and improved dairy markets.”

Commenting on the company as a whole, Talbot says, “the outlook for the remainder of 2017 is positive and we reiterate our full year guidance of 7% to 10% growth in adjusted earnings per share, constant currency, from the continuing Group (pro-forma) with growth weighted to the second half of the year.”

Dairy Ireland Deal
Subject to certain approvals and conditions, Glanbia Co-op is to acquire a 60% interest in Dairy Ireland for €112 million, together with an amount equal to 100% of the amount of the working capital in Dairy Ireland at Completion, a company release states.

If approved by shareholders, Glanbia expects the deal to be completed by July. After completion of the proposed transaction, Glanbia’s Dairy Ireland consumer foods and agribusiness units are to be established as a separate company called Glanbia Ireland.

“I’m pleased to announce that Glanbia has signed binding legal agreements, subject to certain approvals and conditions, to sell a 60% interest in Dairy Ireland to Glanbia Co-op. This strategic initiative remains on track to be completed by mid-year. Once completed it is planned to integrate Dairy Ireland with our Associate, Glanbia Ingredients Ireland DAC to form ‘Glanbia Ireland,’ which will be a leading Irish food business. This will bring together Glanbia Group’s Irish dairy and agri-businesses under single ownership and will enable Glanbia to continue to focus on its two growth platforms of Glanbia Performance Nutrition and Glanbia Nutritionals,” Talbot says.

Glanbia’s Board has stated that the proposed transaction is in the best interests of Shareholders as a whole as “it will allow Glanbia to continue to focus on its global nutrition strategy through the platforms of Glanbia Performance Nutrition (GPN), Glanbia Nutritionals (GN) and Strategic Joint Ventures for the benefit of all shareholders; and creates an integrated Irish-based business of scale which is the largest dairy processor in Ireland,” among other reasons.

By Lucy Gunn