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A-Brands

Ireland's Glanbia Exits Dairy Processing To Focus On Nutrition

Glanbia has agreed to sell its 40% share in Ireland's largest dairy processor for €307 million to concentrate on making nutritional ingredients for food producers and protein supplements for body builders.

Shares in Glanbia rose after it said it was selling its stake in Glanbia Ireland to Glanbia Co-op, the majority shareholder and will use up to 50% of the proceeds for a share buyback next year.

It said the remainder would fund acquisitions.

Glanbia is looking at opportunities to add to its nutrition solutions portfolio, finance director Mark Garvey told Reuters, after it also announced the $52 million purchase of US health snack ingredients business PacMoore Process Technologies.


Earnings Forecast

The company said that it expected to hit the upper end of its 17% - 22% earnings per share forecast growth range for 2021, after a strong third quarter when it pushed through some price increases.

It said it plans further increases in early 2022 in response to the continued inflationary environment. Garvey said the price rises would be in the mid single digit-plus range after it upped prices by 4.4% in its Glanbia Performance Nutrition.

He added that he expected a spike in the price of dairy raw materials such as whey to continue into the first half of next year before beginning to moderate, but that increases in other areas such a labour would continue, particularly in the US.

Year-To-Date Performance

In the first nine months of its financial year, Glanbia’s wholly-owned revenues increased by 15.7% on a constant currency basis (up 9.7% reported basis) versus the same period last year, driven by good demand across both Glanbia Performance Nutrition (GPN) and Glanbia Nutritionals (GN).

GPN saw revenue growth of 23.2% on a constant currency basis in this period, with LFL branded revenue increasing by 25.2%.

The company attributed this growth to strong demand for performance nutrition across the Americas and International markets.

GN Nutritional Solutions (NS) reported volume growth of 15.7% on a constant currency basis, driven by ongoing solid customer demand for micro-nutrients and healthy snacking solutions.

In August, Glanbia reported strong revenue growth and margin improvements that were ahead of expectations in the first half of its financial year.

News by Reuters, additional reporting by ESM. For more A Brands news, click here. Click subscribe to sign up to ESM: European Supermarket Magazine.

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