Glanbia's 2013 results beat expectations

Wednesday 12 March 2014 18.41
1 of 2
Glanbia predicting earnings growth of 8-10% up to 2018
Glanbia predicting earnings growth of 8-10% up to 2018
Siobhan Talbot, Glanbia's new group managing director
Siobhan Talbot, Glanbia's new group managing director

Dairy and nutritionals group Glanbia has reported results ahead of expectations with total group revenue rising by 8% to €3.28 billion.

Earnings for the year to the end of December - before the deduction of interest, taxes and other expenses - climbed 5.5% higher to €226.7m.

The company's pre-tax profits rose to €176m from €150m in 2012.

The growth was mainly driven by performance in two areas - global performance nutrition and global ingredients.

The group is guiding 8-10% EPS growth on a constant currency basis this year with similar growth predicted up to 2018.

Glanbia said it was recommending a final dividend of 5.97 cents per share. This brings the total dividend for the year to 10 cent per share, up 10% on 2012. 

"Glanbia had another year of double digit earnings growth in 2013 as the group delivered a 12% increase in adjusted earnings per share," commented the company's new group managing director Siobhan Talbot.

She said she expects this year to be another positive year for the group.

Shares in Glanbia closed 2% higher Dublin trade following the news.

Revenues at Glanbia's Dairy Ireland division rose by 3.4% to €652m while earnings dropped 29% to €15.1m as the division experienced a "difficult year". The company said its consumer products division underperformed, which offset a "solid" performance in the agribusiness. 

Glanbia noted that in line with trends worldwide, the average milk cost last year was significantly head of the previous year as Irish milk prices hit record levels. It said this resulted in margin pressures as its ability to pass on the input cost increases in the "difficult" Irish retail environment was limited. 

In an effort to counteract these challenges, the company recently announced a further phase of rationalisation to improve its competitiveness in the domestic market. This includes a reduction in the overall cost base through the redesign of its supply network and the restructuring of head office functions.

Glanbia said that revenues at its Global Performance Nutrition rose by 11.8% to €655.3m while earnings jumped by 23% to €70.6m as Glanbia continued to increase its market share within the US. It said it gained from its focus on the speciality and internet sports nutrition market sub-segments which remain the largest and among the fastest growing segments in the market.

Revenue at its Global Ingredients division rose by 8% to €1.074 billion while earnings grew by 4% to €102m. The growth in revenue reflected underlying organic volume growth, higher pricing, an enhanced product mix and the impact of acquisitions.

Earnings for the year at its Joint Ventures and Associates rose by 2.9% to €39m while revenues grew by 9% to stand at €900m. Glanbia noted that its €150m processing facility under construction in Co Kilkenny is progressing well and is expected to start operations at the end of the year.  

"Overall, the outlook for the group for 2014 is positive. While Global Performance Nutrition is expected to be the main driver of growth, we expect solid performance across all segments," commented the company's boss Siobhan Talbot.

"On that basis, we are guiding 8% to 10% growth in adjusted earnings per share on a constant currency basis for 2014," she added.