Poor Performance In Some Segments Impacts HY Growth For Glanbia
Wholly-owned revenue increased to €1.8 billion for Glanbia in the first half of 2019, increasing by over 12% on a constant currency (up 19% on a reported basis).
However, the group’s EBITA was down by 15.3% and its EBITA margins fell by 210 basis points as the group’ Glanbia Performance Nutrition (EBITA down by 30.2%) and Glanbia Nutritional (EBITA down by 1.4%) segments underperformed.
Glanbia said that the increase in revenue was driven primarily by the impact of the SlimFast and Watson acquisitions, which were partially offset by negative pricing.
The group also added that these acquisitions also increased the group’s net financing costs, which increased to over €13 million as the group is trying to reduce its debt.
First Half Performance
In the first half of 2019 GPN revenues increased 13.4% to €0.6 billion, driven by the SlimFast acquisition which delivered 24.3% of the growth, partially offset by a volume decline of 8.2% and price decline of 2.7%.
For its Nutritional Solutions segment, revenues increased by 27% in the first half of the year, driven by a 12% increase in volume, a 3.5% increase in price and the Watson acquisition delivering 11.5% of the revenue growth.
In the US, Glanbia’s cheese business increased its revenues by almost 5% to €768.7 million, driven by positive volume and price increases.
Siobhán Talbot, Group Managing Director, said that this underperformance reflected a number of factors, “including business seasonality, consumer channel shift in Europe, and difficult global trade dynamics in key international markets”.
“Overall while we have positive momentum across many parts of the Group, this has increased our caution for the remainder of the year,” she explained.
Talbot added that, for the full year 2019, the group now expects to deliver adjusted earnings per share (on a reported basis) of between 88 to 92 cents, assuming foreign exchange rates remain at current levels.
© 2019 Checkout – your source for the latest Irish retail news. Article by Aidan O’Sullivan. Click sign-up to subscribe to Checkout.