Glanbia Reports Strong First Half

Revenue was up 6.3%, with like-for-like revenue up 20%. Profit before tax pre exceptional up 37.6%, like-for-like profit before tax pre exceptional up 49%. There was a 10% increase in dividend per share.

29/08/08 Glanbia plc, the international cheese and nutritional ingredients Group, has reported strong results for the half year ended 28 June 2008. Revenue was up 6.3%, with like-for-like revenue up 20%. Profit before tax pre exceptional up 37.6%, like-for-like profit before tax pre exceptional up 49%. There was a 10% increase in dividend per share. Food Ingredients USA and Nutritionals delivered strong results.

International operations had a good first half driven mainly by a strong performance from Food Ingredients USA and Nutritionals. Revenue increased 11% to EUR688.5 million (HY 2007: EUR622.0 million). Operating profit pre exceptional grew 22% to EUR34.6 million (HY 2007: EUR28.4 million). Operating margin improved 40 basis points to 5.0% (HY 2007: 4.6%).

Food Ingredients Ireland had a marginally improved first half performance, compared with a weak first half of 2007. The business continues to invest capital in product diversification as well as seeking to benefit from further growth opportunities from quota expansion.

Glanbia said that the volatility in global dairy markets experienced in the first half, which led to a reduction in market pricing from the exceptional peak of 2007, has continued into the second half. This is creating a time lag in balancing milk input costs with
market returns. This timing issue, combined with increased energy costs, is leading to a reduction in the expected performance of Food Ingredients Ireland in the second half of the year compared to the corresponding period last year. As a consequence, overall results for Food Ingredients Ireland for the full year will be lower than 2007.

For Food ingredients USA, Glanbia’s leading scale position, in positive market conditions, drove revenue and operating profit growth for this business in the first half of 2008. Sales volume increased delivering good organic growth for cheese and whey ingredients, both domestically and internationally. In terms of outlook, milk production to date in 2008 in Idaho continues to grow. Domestic and export demand for American style cheddar cheese, where Glanbia is the number one producer, remains strong. In this market context, Food Ingredients USA is expected to deliver a good full year performance.

Revenues, profits and margins increased for Nutritionals with this business achieving good organic growth. Nutritionals also benefited from its innovation programme which is delivering products and solutions into the sports nutrition, health & wellness and weight management sectors in the USA, Europe and Asia. The Nutritionals business is expected to continue to perform strongly in the second half of the year, underpinning a positive full year performance and a growing contribution to the Group overall.

Earlier this week Glanbia plc, announced the acquisition of Illinois based Optimum Nutrition, Inc. Optimum is a leading manufacturer of nutritional supplements for the sports sector.