Irish dairy firm Glanbia has seen its wholly owned revenue increase 7.0% on a reported basis in the first quarter of its financial year. Revenue was up 4.7% on a constant currency basis when compared to the same period in 2016.
The company said the increase was driven by pricing growth of 2.1%, mainly as a result of improved dairy markets versus prior year, volume growth of 1.7% and a contribution from acquisitions of 0.9%.
Total group revenue, including Glanbia’s share of Joint Ventures and Associates, increased 9.6% on a reported basis and 7.7% on a constant currency basis in the three month period to 1 April.
Dairy Ireland
Its Dairy Ireland division saw revenue for the period increase by 2.3%, which was driven by a volume increase of 7.2%, offset by a price decline of 4.9%.
Its Agribusiness division delivered improved volumes from sales of animal feed and fertiliser which was offset somewhat by commodity related price declines.
Glanbia's Consumer Foods business delivered an improvement in overall product mix as continued growth in value-added-milks offset a reduction in private label business.
Glanbia Nutritionals
Glanbia Nutritionals (‘GN’) showed revenue growth of 10.3%. This was driven by a price increase of 7.6%, mainly as a result of improved dairy markets, versus prior year and volume growth of 2.7%, primarily driven by Nutritional Solutions.
Nutritional Solutions delivered price and volume increases in the period as sales growth of value added systems was broad based across a range of formats and sectors. Product mix continues to improve within the Nutritional Solutions portfolio increasing exposure to higher growth end markets, the Q1 management statement reported.
Glanbia Performance Nutrition (‘GPN’) delivered in line with expectations in the first three months of the year, the company said. Revenues decreased by 0.2%, as a 0.3% increase in pricing and 2.6% growth from the acquisition of Amazing Grass was offset by a 3.1% volume decrease
Joint Ventures & Associates
The company reported revenues from Joint Ventures & Associates (“JVAs”) increased by 19.2% in the first three months of 2017 versus prior year. Pricing increased by 17.7% as a result of improved dairy markets. Volume increased by 1.5% as growth in Glanbia Ingredients Ireland more than offset some volume declines in other JVAs.
The management statement said the project to expand production capacity by 25% at the South West Cheese facility in the US is progressing to plan with commissioning expected in 2018.
In addition, the statement reported the proposed creation of a new joint venture in Michigan, US to build a large scale cheese facility is on track.
Financing
Glanbia's net debt at 1 April 2017 was €735 million, which represents an increase of €297 million versus the net debt position at year end 2016.
This increase was primarily driven by the acquisitions of Amazing Grass and Body & Fit which closed in the period, and seasonal working capital requirements, the interim management statement explained.
The company expects total 2017 capital expenditure to be approximately €90 million to €100 million.
Full Year Outlook
Glanbia reiterated its guidance that on a pro-forma basis adjusted earnings per share for the continuing group is expected to grow between 7% - 10% constant currency for full year 2017 with growth evenly balanced across Glanbia Performance Nutrition and Glanbia Nutritionals.
© 2017 European Supermarket Magazine – your source for the latest retail news. Article by Gavin Ryan. Click subscribe to sign up to ESM: The European Supermarket Magazine.
