Glanbia Confident on First Half Performance

10/07/08 Glanbia has reported a good first half performance overall. All divisions performed broadly to expectations, as market conditions remained relatively positive. Global dairy prices and demand are somewhat weaker when compared with the exceptional growth of 2007 but look set to remain above historical trends.

In the first six months of the year, Consumer Foods Ireland's performance benefited from margin recovery, redressing the impact of significant raw material cost increases that were a feature of this business in the second half of 2007. Agribusiness delivered a satisfactory result, notwithstanding the effects of record increases in the price of feed and fertiliser input costs. The contribution of the Property business unit is broadly in line with the first half of 2007. Consumer Foods Ireland is continuing its marketing and innovation programme to retain a strong brand and market position in a challenging Irish retail environment. Together with the benefits of efficiency and cost recovery initiatives, a satisfactory performance is expected from this business for 2008. Against a backdrop of ongoing rationalisation and cost reduction, Agribusiness is forecast to deliver a stable performance for the full year. The Property business unit is forecast to deliver a full year result broadly in line with 2007.

International Food Ingredients & Nutritionals had a strong first half relative to 2007. Food Ingredients Ireland had a better performance in the first six months of the year compared with the same period in 2007. Food Ingredients USA continued to grow as a result of positive demand and Nutritionals experienced good organic growth. International joint ventures recovered well in the first half of the year and delivered significantly improved performances.

For the full year, the time lag between market price and milk price movements is expected to result in a weaker margin in Food Ingredients Ireland compared with 2007. Food Ingredients USA is benefiting from strong demand and volume growth, and this business unit is expected to deliver a good result for the full year. The global Nutritionals business is performing well and is also forecast to deliver a good result for 2008. International joint ventures are expected to deliver a significantly improved full year contribution with a strong performance from Southwest Cheese; a satisfactory result from Glanbia Cheese; and continued development of the Nutricima (Nigerian) business.

Commenting on the results, John Moloney, Group Managing Director said: “A good first half performance and a relatively positive market environment supports the outlook for the remainder of the year for Glanbia. As a Group we are on target to meet current full year market expectations and look forward to delivering another year of double digit growth in 2008.”