Glanbia delivered a performance ahead of expectations in the first half of 2021 as strong revenue growth and margin improvements delivered adjusted earnings per share (“EPS”) growth of 85% on a constant currency basis (up 70.2% reported); the Group also delivered strong cash conversion in the period which has funded capital allocation towards an acquisition, increased dividend and a further share buyback programme.
Full year guidance is for adjusted EPS growth of 17% to 22% (constant currency) versus the prior year.
Highlights include:
- Wholly-owned revenues of €2,042.2 million (HY 2020: €1,836.7 million), up 20.3% constant currency on prior half year (up 11.2% reported);
- Glanbia Performance Nutrition (“GPN”) delivered revenue growth of 28.1% constant currency on prior half year (up 19.9% reported);
- Glanbia Nutritionals, Nutritional Solutions (“NS”) delivered like-for-like volume growth of 14.9% constant currency on prior half year;
- GPN delivered EBITA pre-exceptional of €90.2 million, up 418.4% constant currency on prior half year (up 360.2% reported) driven by strong revenue growth and margin improvement;
- Glanbia Nutritionals (“GN”) delivered EBITA pre-exceptional of €69.7 million, up 17.1% constant currency on prior half year (up 6.6% reported) driven by a strong performance in NS;
- Joint Ventures (“JVs”) delivered pre-exceptional share of profit after tax of €29.9 million, down €1.9 million on prior half year;
- Adjusted EPS of 52.86 cent, an increase of 85% constant currency (up 70.2% reported);
- Exceptional items in the first half of 2021 resulted in a charge of €52.2m (HY 2020: €14.6m) related to GPN transformation programme and legacy pension scheme restructuring;
- Basic EPS of 27.90 cent (HY 2020: 18.73 cent), up 49.0% reported on prior half year;
- Operating cash flow of €161.4 million, up €114.2m on prior half year and a cash conversion ratio of 84.4%;
- Net debt to adjusted EBITDA ratio of 1.51 times (HY 2020 1.95 times), a reduction on prior year due to strong cash flow;
- Acquisition completed in H1 2021 of a 60% stake in LevlUp, a European direct-to-consumer (DTC) gaming nutrition brand;
- Interim dividend of 11.75 cent per share (HY 2020: 10.68 cent) recommended by the Board, an increase of 10.0% on prior year; and
- Announcing the launch of a new share buyback programme of up to €50 million.
Commenting today Siobhán Talbot, Group Managing Director, said:
“I am delighted to announce that Glanbia has delivered a very strong performance in the first half of 2021 when compared to the prior year. The dedication of our people, supply chain partners and customers as we navigated the pandemic together, has positioned Glanbia well on its growth agenda.
In the first six months of 2021 wholly-owned revenues grew by 20.3%, on a constant currency basis. This was driven by very strong demand across our GPN branded business relative to the pandemic related challenges in 2020, and our NS ingredients business, which built on a very resilient 2020 performance. This performance drove a significant improvement in profit with adjusted earnings per share (“EPS”) of 52.86 cent in the period which was an increase of 85% on a constant currency basis versus the prior year. The Glanbia team has navigated the pandemic well to date keeping a clear focus on both tactical activity and key strategic initiatives. While the Group remains vigilant to the continued volatile and disruptive potential of the Covid-19 pandemic, this focused approach gives us the confidence to guide to delivery of full year 2021 adjusted EPS growth of 17% to 22% on a constant currency basis versus the prior year.
We made strong progress on our strategic agenda in the first half with significant progress on the GPN transformation programme driving revenue and margin growth, the acquisition of a 60% stake in LevlUp, a European gaming nutrition brand, commissioning of a $470 million JV plant in Michigan, the progression of our environmental, social and governance (“ESG”) strategy, and the restructure of legacy pension liabilities to de-risk our balance sheet.
In the first half, we generated over €160 million of operating cash flow and reduced our net debt by over €100 million. As a result of this strong performance we plan to increase returns to shareholders by raising our interim dividend by 10% as well as launching a share buyback programme today of up to €50 million.
Our compelling belief has always been that consumers increasing focus on health and wellbeing positions Glanbia well for the future, given our portfolio of nutrition brands and ingredient solutions. Our focused actions to drive demand coupled with the consumer response to market reopenings in the first half of 2021 has strengthened our belief that these trends will continue to deliver long-term growth for Glanbia.”
