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Glanbia: solid performance, positive outlook

Glanbia has announced its financial results for the three month period to 4 April 2015. Wholly owned revenue was up 10.5% on a reported basis. On a constant currency basis, wholly owned revenue declined 3.6% when compared to the same period in 2014. This was comprised of 3.9% volume growth, a 2.5% increase from acquisitions […]

Glanbia has announced its financial results for the three month period to 4 April 2015.

Wholly owned revenue was up 10.5% on a reported basis. On a constant currency basis, wholly owned revenue declined 3.6% when compared to the same period in 2014. This was comprised of 3.9% volume growth, a 2.5% increase from acquisitions and a pricing decline of 10.0% as a result of lower market prices for US cheese and dairy ingredients. Total revenue, including joint ventures and asociates, was up 3.7% on a reported basis and declined 8.8% on a constant currency basis. This was comprised of 2.2% volume growth, 2.2% growth from acquisitions and a 13.2% pricing decline as a result of reduced dairy market prices.

“Glanbia delivered a solid performance in the first three months of 2015,” said Siobhán Talbot, Group Managing Director. “On a reported basis, performance benefited from the positive translation effect of a strong US dollar while on a constant currency basis the Group delivered a satisfactory performance against a high comparator in 2014. We reiterate our full year guidance of adjusted earnings per share growth of 9% to 11% on a constant currency basis with a reported result of over 20% if exchange rates remain at current levels for the rest of the year. We expect growth to be weighted to the second half of the year.”

Global Performance Nutrition  delivered a good performance in the first three months of the year when compared against a particularly strong first quarter in 2014. Revenues increased 2.2% driven by a 1.5% price increase, an 8.0% increase from acquisitions and a 7.3% volume decline related to contract manufacturing and specific international markets.

Global Ingredients  recorded a revenue decline in the first quarter of 13.3% as volume growth of 10.7% was offset by a pricing decline of 24.0% predominately relating to lower US cheese market prices.

US Cheese increased volumes when compared to the same period in the prior year as supply conditions improved relative to a challenging first quarter in 2014. There was a decrease in revenues as a result of reduced US cheese market prices which were down by 32% compared to the same period last year.

Ingredient Technologies revenues were behind the prior year driven to a large degree by the decline in price due to softer dairy market conditions across a number of product categories. While performance for the first half is likely to be impacted by these factors, the expectation is for an overall improved volume trend over the course of the year and outlook for the full year is positive.

The outlook for the remainder of 2015 is positive, the company said, as Glanbia continues to execute its growth strategy. Full year guidance is reiterated for adjusted earnings per share growth of 9% to 11% on a constant currency basis with a reported result of over 20% if current exchange rates remain at current levels throughout 2015. Underlying growth in the business is said to be solid and is expected to be weighted to the second half of the year.