Glanbia PLC · EURONEXT:GL9
Glanbia — FY2006 Earnings Presentation
34 slides from Glanbia's earnings presentation, Mar 7, 2007
Slide 1: 2006 Results
2006 Results, March 7, 2007 2006 Results Page 0
Slide 2: 2006 Performance
2006 Results, March 7, 2007 2006 Performance • A good year overall in 2006 • Top line growth of 8% to €2.1 billion, including joint ventures • Profit after tax pre exceptional up 9% to €66.4 million • Adjusted EPS up 8% to 22.6 cent, in line with expectations • Dividends up by 5% to 5.79 cent per sh
Slide 3: 2007 Outlook
2006 Results, March 7, 2007 2007 Outlook • Ireland remains challenging, focus on productivity and costs • International operations well positioned for good growth • €50 million development investment planned (excluding possible acquisition) • On target to deliver double digit adjusted eps growth in
Slide 4: 2006 results
glanbia 2006 results
Slide 5: Results summary
2006 Results, March 7, 2007 Results summary € pre exceptional 2006 2005 Change Revenue1 1,853.4m 1,830.0m Up 1% Operating profit 85.6m 80.9m Up 6% Net financing costs (14.0m) (13.1m) Up €0.9m Share of results of joint ventures and associates1 2.8m 0.9m Up 205% Profit before tax 74.4m 68.7m Up 8% Tax
Slide 6: 2006 exceptional items
2006 Results, March 7, 2007 2006 exceptional items € Restructuring costs re Pigmeat Cannery closure in Ireland 3.3m The Cheese Company Holdings Limited 9.1m 12.4m Deferred tax asset relating to tax losses in former UK operations 12.3m 0.1 m • Continuing to improve operational efficiency and business
Slide 7: Operating margins
2006 Results, March 7, 2007 Operating margins 2006 2005 • 20 bps improvement in Group margin GROUP 4.6% 4.4% • Slight reduction (10 bps) on Irish margins IRELAND 4.3% 4.4% • Expansion of International margins INTERNATIONAL 5.3% 4.5% • Overseas business higher margin overall • Expect further Group im
Slide 8: Balance sheet and cash flow
2006 Results, March 7, 2007 Balance sheet and cash flow • Net debt amounted to €224.5 million, in line with restated 2005 level • Acquisition, capital and development expenditure amounted to €111.4 million • Disposal of final 25% in The Cheese Company Holdings in the UK netted €70.0 million • Pensio
Slide 9: Divisional review and outlook
Divisional review and outlook
Slide 10: Footprint 2006
2006 Results, March 7, 2007 Footprint 2006 • Excluding JVs, €1.85 Bn revenue and €85.6 m operating profit IRELAND INTERNATIONAL 64% revenue, 63% operating profit 36% revenue, 37% operating profit Consumer Agribusiness Food Ingredients Foods and Property and Nutritionals 28% revenue 14% revenue 58% r
Slide 11: Consumer Foods
2006 Results, March 7, 2007 Consumer Foods 2006 2005 • 2006 mixed year with offsetting factors Revenue up 3.5% €511.0m €493.6m • Satisfactory year in consumer Operating Profit down 10% €24.5m €27.1m • Difficulties in pigmeat Operating Margin down 70 bps 4.8% 5.5% • Profits/margins lower – driven by
Slide 12: Agribusiness & Property
2006 Results, March 7, 2007 Agribusiness & Property 2006 2005 • Uplift in results mainly driven by property Revenue up 15% €264.5m €229.1m Operating Profit up 58% €16.9m €10.7m Agribusiness Operating Margin up 170 bps 6.4% 4.7% • Key link to Farmer base; 61 locations Agribusiness: Feed milling, fert
Slide 13: Food Ingredients & Nutritionals
2006 Results, March 7, 2007 Food Ingredients & Nutritionals 2006 2005 Revenue down 3% €1,077.9m €1,107.3m • Satisfactory performance overall • Difficult H1, markets better in H2 Operating Profit up 3% €44.2m €43.1m Operating Margin up 20 bps 4.1% 3.9% • Ireland: further year-on-year downturn Food In
Slide 14: Joint Ventures & Associates
2006 Results, March 7, 2007 Joint Ventures & Associates Glanbia Share 2006 2005 • Located in the UK, USA and Nigeria Revenue up 100% €262.9m €131.4m Profit after interest and tax • Key element of Growth Strategy €2.8m €0.9m up 205% • UK: Glanbia Cheese Strong top line growth underway • Good performa
Slide 15: Strategy and Financial targets
2006 Results, March 7, 2007 » Strategy » Financial targets Vision Adjusted earnings per share Operating margin pre Joint Glanbia’s vision is to be the most growth Ventures relevant Group in international cheese, nutritional and dairy ingredients and selected consumer 10-14% 5%+ foods. We will achiev
Slide 16: Strategic imperatives and key initiatives
2006 Results, March 7, 2007 » Strategic imperatives » Key initiatives Consumer foods: expand beverages, food service and convenience offerings 1. Deliver growth and Pigmeat: maintain stable performance performance in the period Agribusiness: continue to reshape the business to fit changes in farming
Slide 17: Our capabilities
2006 Results, March 7, 2007 Our capabilities • World class manufacturing skills in a wide variety of dairy products and ingredients • Breadth, depth and strength of customer relations and contacts in all key beverage, dairy food and food ingredients segments • Strong technical and innovation skills
Slide 18: Transforming & Growing Glanbia
2006 Results, March 7, 2007 Transforming & Growing Glanbia Ireland UK Germany Wisconsin Idaho & Chicago California New Mexico China Mexico Nigeria Brazil Production Site Uruguay Sales Office Page 17
Slide 19: Positive outlook
2006 Results, March 7, 2007 Positive outlook • Ireland will remain challenging in light of MTR implementation • Irish operations focused on performance, productivity and cost competitiveness • Food Ingredients USA and Nutritionals are expected to perform well in 2007 • Strong top line growth forecas
Slide 20: Supplementary information
glanbia Supplementary information
Slide 21: About Us
2006 Results, March 7, 2007 About Us • Dairy-based food and nutritional ingredients Group • Operations in Ireland, Europe, USA • International Joint Ventures in the UK, USA and Nigeria • Listed Irish and London Stock Exchanges (Symbol: GLB) • C. €1 billion market capitalisation • Free float 45%; Co-
Slide 22: Consolidated Income Statement
2006 Results, March 7, 2007 Consolidated Income Statement € million 2006 2005 Revenue 1,853.4 1,830.0 Operating profit 85.6 80.9 Finance income and costs (14.0) (13.1) Share of results of associates and joint ventures 2.8 0.9 Profit before tax 74.4 68.7 Taxation (8.0) (7.6) Profit for the period 66.
Slide 23: Group Balance Sheet
2006 Results, March 7, 2007 Group Balance Sheet € million 2006 2005 Change Property, plant and equipment 335.2 340.5 -5.3 Investments 82.1 100.4 -18.3 Intangible assets 138.7 58.0 80.7 Non-current receivables 0.0 56.9 -56.9 Working capital 40.1 -3.3 43.4 Non-current liabilities -46.2 -39.6 -6.6 Reti
Slide 24: Group Cash Flow
2006 Results, March 7, 2007 Group Cash Flow € million 2006 2005 Operating profit (post exceptional costs) 73.1 75.9 Depreciation and amortisation 25.5 26.0 Exceptional Loss on repayment of Cheese Company loan note (non cash) 9.1 - Gain on disposal of assets and investments -9.0 -13.5 Interest and ta
Slide 25: Nutritionals Strategy
2006 Results, March 7, 2007 Nutritionals Strategy to be a key global provider of nutritional ingredients and nutritional solutions… building a scalable, sustainable business • Strong fit with Group strategy – Relevant to the customer – Technology and innovation focus – High operating margin achievab
Slide 26: Nutritionals Business Model
2006 Results, March 7, 2007 Nutritionals Business Model • Currently part of the Food Ingredients division • Natural fit because of whey – a valuable source of sugar, proteins, minerals • All business to business revenue and relationships • Branded or patented products • Growth business in a growth m
Slide 27: Current Range of Nutritional Solutions
2006 Results, March 7, 2007 Current Range of Nutritional Solutions • Protein Fortification • Health and Wellness Avonlac™ • Sports and Performance Nutrition • Nutrition Bar Solutions • Weight Management • Minerals and Vitamins Glanbia Nutritionals Germany Seltzer (USA) Developing nutritional solutio
Slide 28: Significant Step Change with Seltzer Acquisition
2006 Results, March 7, 2007 Significant Step Change with Seltzer Acquisition • Leading nutritionals solutions company; acquired 100%, US$105 m consideration – Long established, family run, owner entrepreneur business – HQ in San Diego CA; 94 employees, excellent facilities – Supplier of nutritional
Slide 29: Premix Market Overview
2006 Results, March 7, 2007 Premix Market Overview • Large market in the US; approximate value US$400 million pa • Projected to grow 8 to 10% pa 2006 to 2011 (HSC Report 2005) • Cereal products are the largest users of premixes, c. 30% of total market • Beverages are 2nd largest; emerging sector but
Slide 30: Glanbia Cheese UK
2006 Results, March 7, 2007 Glanbia Cheese UK Where: Wales & NI Partner: Leprino Foods • No. 1 Europe mozzarella Cheese • Technology driven business • Key customer relationships • Growing market share Page 29
Slide 31: Southwest Cheese USA
2006 Results, March 7, 2007 Southwest Cheese USA Where: Clovis New Mexico Partner: Great South West Milk Agency • US$190 million investment • Cheese and whey facility • 1.1 billion litres of milk • Full production by mid-2007 delivering annualised sales of US$350 million • Ramp up ahead of plan • Of
Slide 32: Nutricima Nigeria
2006 Results, March 7, 2007 Nutricima Nigeria Where: Lagos Partner: PZ Cussons; 100 years in Nigeria • US$25 million investment • 50:50 Joint Venture • Consumer Foods with dairy focus • Population of 140 million • Strong sales growth • 2007 annualised sales US$100 million • Further US$35 m expansion
Slide 33: Contact us
2006 Results, March 7, 2007 Contact us John Moloney, Group Managing Director Geoff Meagher, Deputy Group Managing Director / Group Finance Director Siobhán Talbot, Deputy Group Finance Director Glanbia plc Glanbia House Kilkenny Ireland + 353 56 777 2200 + 353 56 777 2222 Website www.glanbia.com Pag
Slide 34: 2006 Results, March 7, 2007 Page 33
2006 Results, March 7, 2007 Page 33