Strong growth pushed 2021 profits higher at Glanbia

Global nutrition company Glanbia said revenue growth and earnings were ahead of expectations last year as the company bounced back from the impact of Covid-19.

Sales of its performance nutrition products – which are focused on in its Optimum Nutrition and Slimfast brands – were hit hard in 2020 by restrictions aimed at reducing the impact of the pandemic, with gyms shut, sporting activity restricted and non-essential retail curtailed.

However, the division bounced back last year. Group revenue was up almost 10 per cent to just under €4.2 billion, as its Glanbia Performance Nutrition and Glanbia Nutrition Nutritional Solutions (GNNS) divisions rose 14.5 per cent and 17.5 per cent respectively.

GNNS includes Glanbia’s US cheddar cheese business and supplies dairy-based and plant-based proteins to food companies.

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Russia exit

Managing director Siobhán Talbot said the group was also ceasing the “relatively small” branded sales it had in Russia with immediate effect. The group has limited trade activity with Russia, Ms Talbot said. Glanbia is pledging €100,000 to support the humanitarian response on the ground in Ukraine and will match employee contributions to this fund.

The year saw the disposal of the company’s 40 per cent interest in the Glanbia Ireland dairy joint venture for €307 million. The deal is expected to conclude in the second quarter of 2022. Ms Talbot said Glanbia plc, which is retaining the name, would remain “very much Irish headquartered” after the sale is complete.

The sale sees Glanbia exit the dairy industry in Ireland, with the venture – which includes 11 processing dairy plants and brands such as Avonmore and Kilmeaden – taken over by its partner in the joint venture Glanbia Co-op.

“In truth , the strategy of Glanbia won’t really alter that much,” Ms Talbot said. “The plc has been very much focused on driving forward the global platforms around sports and performance, nutrition, and ingredients. We have some ventures in the US that are very linked in with our business.

Momentum

Ms Talbot said the company had seen good momentum during the year, achieving not only its financial metrics, but non-financial goals such as its environmental, social and governance targets.

“During 2022, we anticipate the effects of Covid-19 will further abate, however the ongoing impact of cost inflation, especially dairy-related, will need to continue to be actively managed as it was in 2021,” she said.

In a statement on Thursday, the group said profit after tax rose to €167.4 million, up from €143.8 million a year earlier. The group also recorded exceptional items of €42.1 million as it invested in the transformation of GPN and de-risking of pension liabilities.

Adjusted earnings per share rose 18.1 per cent to 87.15 cent, with continuing operations reaching 77.84 cent.

Glanbia has recommended a final dividend per share of 17.53 cent; leaving its total 2021 dividend at 29.28 cent, a 10 per cent increase on last year. It also launched a new €50 million share buyback programme.

The group said it was expecting earnings per share growth from continuing operations of between 2 and 8 per cent on a constant currency basis, with the reported growth rate estimated to be 5 per cent higher than the constant currency result, based on current foreign exchange rates.