Glanbia Plc · EURONEXT:GL9
Glanbia — Investor Day (May 2018)
97 slides from Glanbia's investor day presentation, May 23, 2018
Slide 1: Capital Markets Day: Focus on Growth
1 Glanbia Group lanbia Performance Nutrition GROUP Glanbia Nutritionals Glanbia Financials Group MD May 23rd 2018 Siobhán Talbot Focus Capital Markets Day on Growth
Slide 2: Important Notice
Important Notice 2 | Group This presentation contains forward-looking statements. These statements have been made by the Directors in good faith based on the information available to them up to the time of their approval of this presentation. Due to the inherent uncertainties, including both economi
Slide 3: Speaker Topic Timing
Speaker Topic Timing Siobhan Talbot Group Managing Director, Glanbia Strategy and ambition 8:00am to 8.45am Brian Phelan CEO, Glanbia Nutritionals GN overview and growth drivers 8.45am to 9.30am Break 10 minutes Hugh McGuire CEO, Glanbia Performance Nutrition GPN overview and growth drivers 9.40am t
Slide 4: At a glance
At a glance Market cap 2017 Total Group revenues €4.3bn €3.6bn Employees 2017 Total Group EBITA 6,600 €351m Countries Products sold or distributed in over 32 130 countries 4 GROUP
Slide 5: 2022 Ambition
2022 AMBITION Average 5 year Total Group adjusted EPS growth Constant revenue Constant Currency Currency €5 bn* 5 % to 10 %* Future journey- a mix of *Constant Currency organic and M&A enabled growth 5 GROUP
Slide 6: Our purpose
Our purpose Delivering better nutrition for every step of life’s journey 6 GROUP
Slide 7: Leading positions in nutrition
Leading positions in nutrition #1 #1 Global whey Global Performance protein, nutritional nutrition brand solutions portfolio #1 #1 Producer of in Irish Dairy and American style EU Mozzarella in cheddar cheese strategic partnerships 7 GROUP
Slide 8: Trends driving our business
Trends driving our business Aligning our business to consumer and customer needs Health and On-the-go food Digitally Clean wellness and beverages connected labelling $1tr 94% $4.5 tr 93% online retail sales of US households have Global health and of American consumers expected to have a purchased a
Slide 9: Our business in 2017
Our business in 2017 Total Group Revenues EBITA €3.6bn* Activity Margin GPN Performance & lifestyle consumer branded €1.1bn portfolio Mid WHOLLY OWNED teens Nutritional Solutions Value added formulations €0.5bn GN US Cheese €0.7bn Mid Dairy single SHARE OF REVENUE Joint Ventures digits €1.3bn *Pro f
Slide 10: Strong record of delivery
Strong record of delivery 10 Year Earnings wholly-owned wholly- per share margin owned revenues 2007- 2017 2007 - 2017 +630 bps 11.9% CAGR Wholly-owned margin Adjusted Earnings per share 14% 100.00c 90.00c 12% 80.00c 10% 70.00c 8% 60.00c 50.00c 6% 40.00c 4% 30.00c 20.00c 2% 10.00c 0% 0.00c 2007 2008
Slide 11: Focused strategic execution
Focused strategic execution ASEPTIC SOLUTIONS USA Disciplined M&A 2008 2011 2012 2013 2014 2015 2017 2018 Organic growth projects and strategic alliances Premix Specialty New GPN High end GPN Cheese & facility grain production whey innovation whey Germany ingredients plant expansion centre expansion
Slide 12: Our growth strategy
Our growth strategy Our Purpose Our Vision To deliver better To be one of world’s top nutrition for every step performing nutrition companies of life’s journey trusted to enrich lives every day Global Macro Trends Health and On-the-go food Digitally Clean wellness and beverages connected labelling S
Slide 13: Our growth strategy
Our growth strategy Embed enablers Selectively build beyond Scalable model across GPN, GN and Dairy the core Protect Invest in insights, technology and GPN innovation and grow • Innovate for the Active consumer the core • Direct to Consumer and digital capabilities Develop powerful digital capabilit
Slide 14: Talent Focus
Talent Focus A pipeline of highly engaged staff with the capabilities and performance to execute Group strategy Talent Organisational Effectiveness • Source • New Capabilities • Grow • Strategic Alignment • Retain • Competitiveness • Agility Constant Currency Leadership Culture & Engagement • Select
Slide 15: Our ambition by 2022 to be a €5bn+ Group
Our ambition by 2022 to be a €5bn+ Group Average 5 year EBITA Margin Revenue ambition by 2022 2018 to 2022 €1.6bn 13% - 15% WHOLLY OWNED GPN Average 5 year Nutritional Solutions €0.8bn 14% - 16% adjusted EPS growth, Constant constant currency, Currency 2018 to 2022 US Cheese €0.7bn 5% to 10% Mid sin
Slide 16: Glanbia Nutritionals
Glanbia Nutritionals Capital Markets Day 2018 Brian Phelan CEO Glanbia Nutritionals
Slide 17: Glanbia Nutritionals (GN): at a glance
Glanbia Nutritionals (GN): at a glance 2017 Revenue #1 2,000 €1,266m Global supplier of whey protein isolate Employees #1 #2 Sales presence in Producer of American style cheddar cheese Global micro nutrient premix 19 countries 2 GLANBIA NUTRITIONALS
Slide 18: Glanbia Nutritionals: a global footprint
Glanbia Nutritionals: a global footprint 19 Country sales presence 11 Production locations 8 Innovation centers 3 GLANBIA NUTRITIONALS
Slide 19: GN - at the centre of powerful consumer trends
GN - at the centre of powerful consumer trends Health and On-the-go food Clean wellness and beverages labelling 4 GLANBIA NUTRITIONALS
Slide 20: Key trends enabling GN growth
Key trends enabling GN growth Trend Dairy Shortening of Growing New Brand On the go Clean consumption product populations & Growth convenience label expected to lifecycles urbanisation double by 2050 GN Opportunity Quality, natural Applications Capital efficient, Increasing Formulation Proactive ing
Slide 21: GN financials
GN financials Revenue (€m) 1,075 1,175 1,218 1,224 1,266 2017 Revenue US Cheese €734m 2013 2014 2015 2016 2017 EBITA (€m) 111 114 107 102 100 Nutritional Solutions €532m 2013 2014 2015 2016 2017 US Cheese Nutritional Solutions 6 GLANBIA NUTRITIONALS
Slide 22: Operating model
An integrated vision, culture strategy One face to Fuelled by Operating the customer top talent model Insights- Scalable led Centres of Efficient, excellence Agile 7 GLANBIA NUTRITIONALS
Slide 23: International
International 8 GLANBIA NUTRITIONALS
Slide 24: Cheese
Cheese 9 GLANBIA NUTRITIONALS
Slide 25: Cheese overview
Cheese overview 2017 Revenue #1 Producer of American style cheddar cheese €1.5bn 20% Share of US Cheddar Cheese Market Wholly Owned Southwest Cheese 10 GLANBIA NUTRITIONALS
Slide 26: US Cheese footprint
US Cheese footprint 2018 2021 Michigan 470k 602k Central Michigan 2021 Idaho Cheese volume (tonnes) Gooding Twin Falls / Blackfoot Key attributes: Cheese Innovation Centre Clovis Largest player Most efficient producer Incubation plants for Innovations New Mexico Customer Categories: Brands Foodservi
Slide 27: Unique operating model
Unique operating model Pioneered at SWC, building upon that in Michigan JV operating model Impact on Plc Consistent income stream Strategic Milk Outlet • Dividends • Commissions • Our share of Profit After Tax Competitive milk price Strong returns on equity Share in business invested Strategic Milk
Slide 28: Cheese: Our Ambition
Cheese: Our Ambition Solidify our #1 position Deepen our strategic relationships • Customers / Milk Suppliers • Innovative partnership model Continue market leading innovation 13 GLANBIA NUTRITIONALS
Slide 29: Nutritional Solutions
Nutritional Solutions 14 GLANBIA NUTRITIONALS
Slide 30: Nutritional Solutions, our structure for growth
Nutritional Solutions, our structure for growth 19 Country sales presence 9 Production locations 7 Innovation centers 15 GLANBIA NUTRITIONALS
Slide 31: NS Overview
NS Overview 2017 #1 #2 Revenue Whey protein Global Isolate Premix 61% €325m €532m 39% €207m NS 6% Volume Average Growth Non-dairy Dairy (5 yr average) 16 GLANBIA NUTRITIONALS
Slide 32: What makes us unique
What makes us unique 17 GLANBIA NUTRITIONAL
Slide 33: Nutritional Solutions: Our portfolio & differentiators
Nutritional Solutions: Our portfolio & differentiators Protein Custom Bioactives Plant Aseptic beverage Flavours Micronutrient solutions nutrient premixes nutrition manufacturing straights Deep Accelerated Trusted Quality formulation Innovation Supply Chain Assurance expertise Capability Integrated
Slide 34: Where we play
Where we play Sports & Supplements Mainstream Clinical Infant Lifestyle food nutrition nutrition nutrition & beverage End–market growth rate in the mid-single digit range Source: Euromonitor 19 GLANBIA NUTRITIONALS
Slide 35: Innovation video
Innovation video 20 GLANBIA NUTRITIONALS
Slide 36: Category Quarterback
Category Quarterback 21 GLANBIA NUTRITIONALS
Slide 37: Sports & lifestyle nutrition
Sports & lifestyle GN sample nutrition capabilities Provon Barpro Barflex Pepform Sample customer profiles #1 global brand family US active lifestyle brand We collaborate with most EU sports retail chain leading Sports Nutrition Formats expanding in Asia brands to provide an unrivaled Ready to Eat s
Slide 38: Mainstream food & beverage
Mainstream food & GN sample beverage capabilities Provon Optisol Bevedge Bevgrad Sample customer profiles Global functional beverage company We enhance the nutrition, Nutritional taste, texture and Formats foodservice provider appearance of healthy, Ready to Eat convenient, food & Ready to Drink bev
Slide 39: Supplements
Supplements GN sample capabilities Bioactives Vits & Minerals We’re always innovating Conditioned new formulations and Ingredients Sample customer formats - from capsules and profiles gummies to tablets - targeting US gummy multivitamin brand a broad spectrum of health benefits Formats Capsules Tabl
Slide 40: Customer testimonial
Customer testimonial 25 GLANBIA NUTRITIONALS
Slide 41: Clinical nutrition
Clinical nutrition GN sample capabilities Vits & Minerals Medical Foods Sample customer Our solutions are designed to profiles meet the unique nutritional Global adult & clinical needs of aging populations nutrition company and support healthy active Formats lifestyles Capsules Tablets Powders 26 GL
Slide 42: Early life nutrition
Early life nutrition GN sample capabilities Macro Dairy Ingredients Vits & Minerals Bioactives Sample customer From infants, to toddlers, profiles to preschoolers and beyond, Multinational infant formula we offer safe, quality- companies assured, science-based Regional (Aspac & Emea) solutions you c
Slide 43: Our Ambition
Our Ambition 28 GLANBIA NUTRITIONALS
Slide 44: Our NS 2022 Ambition
Our NS 2022 Ambition Constant Nutritional Solutions Currency Revenue $1bn by 2022 Build on core Leverage Scale Scale plant strength in premix extensive protein flavours nutrition & bioactives capability into Constant healthy snacking – 2022 average 2018 Currency EBITA margin 14% - 16% 29 GLANBIA NUT
Slide 45: Just add Glanbia
Strong ambition Unique capability set Expert & engaged Team Scaled for growth See what’s possible Just add Glanbia
Slide 46: Glanbia Performance Nutrition
Glanbia Performance Nutrition Hugh McGuire CEO Glanbia Performance Nutrition
Slide 47: Video: Brands
Video: Brands 2 GPN
Slide 48: Global sports nutrition brand family
We are Global sports nutrition # Brand family …with an emerging presence in lifestyle nutrition 3 GPN
Slide 49: Education, Advocacy, Quality, Authenticity
Inspiring people everywhere to achieve their performance and healthy lifestyle goals Education Advocacy Quality Authenticity 4 GPN
Slide 50: Who we are
Who we are €1.1Bn 7.3% average volume growth 2013-2017 1,800 SKUs +1,500 2,350 & 4 formats: people worldwide 5 GPN
Slide 51: Global presence
Global presence 25 In-market teams 7 Innovation centers 5 Manufacturing sites D2C full service distribution center Sold in 100+ countries 6 GPN
Slide 52: Business builders
Business builders $185Mn* Revenue $135Mn* Revenue $93Mn* Revenue $84Mn* Revenue $116Mn* Revenue Total acquisition revenue Organic growth $687m $1.3 Bn Revenue $614m 2008 2011 2014 2015 2017 *Annual revenue at the point of acquisition 7 GPN
Slide 53: GPN financials
GPN financials Revenue growth (€m) 1121 1008 923 746 655 Constant Average Volume Currency Growth 7.3% 2013 2014 2015 2016 2017 Note: Revenue on a reported basis. 162 170 EBITA growth (€m) 136 89 Constant 71 Currency Average Margin 13.7% 2013 2014 2015 2016 2017 Note: EBITA on a reported basis 8 GPN
Slide 54: Our market
Our market 2017 Performance Nutrition addressable market ROW Constant GPN market Currency 34% share 13% North $13bn America in value (RSP) 66% Constant Global market Currency growth rate MSD% Source: Euromonitor/Glanbia estimates 9 GPN
Slide 55: 2017 Revenue
2017 Revenue By Region, by Channel and Format Regional Mix Channel Mix Format Mix 100% 100% 100% 100% 100% 100% CAPS/TABS 4% 5% FDMC 10% 16% RTD 5% 4% RTE 5% 16% Online 22% Energy 15% North 62% 26% 65% 15% America RTM Distributor 32% 30% Protein 71% 60% Rest of the 35% 38% Specialty 36% World 28% 20
Slide 56: Our Consumers
Our Consumers Core sports Active lifestyle Healthy lifestyle nutrition user consumer consumer Characteristics: Characteristics: Characteristics: • Young male • Adult male or female • Mature female (18-44) (25-54) (35-64) • Wants to build muscles • Wants to live an overall healthy lifestyle • Wants t
Slide 57: Committed to our brands
Committed to our brands Consumer segment size by category Consumer Type Younger 18-34 yrs Wealthier $75k plus 16% 18% 57% 50% Core 36% 35% 35% $ $ GPN All respondents GPN All respondents Average monthly spend: 76% 71% GPN consumers spend over twice 150 as much on supplements and healthy snacks vs ov
Slide 58: Consumer growth
Consumer growth Consumer Consumers Net Promoter Score Constant Constant base is Category Currency penetration rate our ON 62 (+3) Currency broadening increased from brands BSN 63 (+8) ISO 59 (+3) 17% to 21% Consumers are Education & increasingly Constant endorsement Constant 95% “I don’t know how co
Slide 59: Video: SNS
Video: SNS 14 GPN
Slide 60: Performance Nutrition & Lifestyle Brand Portfolio
Performance Nutrition & Lifestyle Brand Portfolio 15 GPN
Slide 61: GPN strategy
GPN strategy Drive global awareness Lean into regional Accelerate growth Continue to pursue Redefine consumer and penetration with consumer needs to internationally by healthy lifestyle engagement by core SN consumer scale brands to full selectively scaling adjacencies to meet developing powerful an
Slide 62: Omnichannel Innovation Digital International People
Omnichannel Innovation Digital International People 17 GPN
Slide 63: Strategic priority: Omnichannel
Strategic priority @ Omnichannel.
Slide 64: Winning in omnichannel
Winning in omnichannel Specialty Internet Club Price pack architecture Premium products Broad assortment Unique SKUs New Innovation Packaging conducive to shipping Large pack size Performance-focused Search optimisation Value per serving SKU differentiation across channels FDM Natural / Specialty Gr
Slide 65: Strategic priority: Innovation
Strategic priority Innovation.
Slide 66: Innovation in numbers
Innovation in numbers 15 % Target sales from 80 People working in products launched in innovation previous 3 years 28K Custom-built lab facility co-located 317 sqft with NA commercial teams SKUs launched across all Brands in 2017 21 GPN
Slide 67: Innovation
glanbia Nimione is NUTRA-GO Innovation
Slide 68: Building a $200m RTE business
Building a $200m RTE business 3 additional Cake Whipped protein 3 ON Cake Bite SKUs 4-pack developed for Bite flavours technology launched US Mass Channel launched 2 thinkThin Protein Cakes SKUs launched EU Whipped Bites Launched Strategic RTE Intent • Ambition defined 2 new BSN Protein • Significan
Slide 69: Strategic priority: Digital
Strategic priority Digital.
Slide 70: Digital Focus: Reach and Engagement
Digital Focus: Reach and Engagement Increasing Reach Omni Platform* Engaging Consumers Throught Content Innovation 450k +63% Followers VERTICAL VIDEO Shift to mobile-friendly vertical video. 1.1m +126% Followers MICRO STORYTELLING To reflect consumer attention spans. 4.6m +48% Likes GEO TARGETING 64
Slide 71: E Commerce
E Commerce Routes to market Pureplay Omni Market Direct 2 Retailers Place Consumer 4,500 SKUs 20m visits 1.7m orders 50% male: 50% female 26 GPN
Slide 72: Video: B&F
Video: B&F 27 GPN
Slide 73: Strategic priority: International
Strategic priority @ international:
Slide 74: Video: Scale of international business Aus
Video: Scale of international business Aus 29 GPN
Slide 75: Strategic priority: International
Strategic priority @ international:
Slide 76: Video: Scale of international business India
Video: Scale of international business India 31 GPN
Slide 77: Strategic priority: People
Strategic priority 32 GPN
Slide 78: Hiring and developing the best people
Hiring and developing the best people Aligning our operating Attracting the best… …Fostering their passion model for growth 164 experienced new hires in 2017 Pulse survey results show Unleashing our Business strong commitment to our Builders Values across our teams • Clarifying accountabilities acro
Slide 79: Growth drivers and 2022 Ambition
Growth drivers 2017 2022 Innovation Win in omni- Invest in Accelerate Selective channel digital International M&A Ambition Constant 2022 Revenue Currency $2 Billion Constant 2018 to 2022 Currency average EBITA margin Constant 15% Currency of annual sales from new products launched in the last 3 13%
Slide 80: Financial Overview
Financial Overview Mark Garvey Group Finance Director
Slide 81: On track to deliver 2014 – 2018 commitment
On track to deliver 2014 – 2018 commitment Constant Constant 1 Sales volume Adjusted EPS Currency growth 10.5% Currency growth 8% - 10% Margin expansion Portfolio Constant Constant 2 evolution Currency ROCE 14.1% Currency 12%+ 1. Average adjusted EPS as reported on a constant currency basis over 4 y
Slide 82: Focus on Growth
Focus on Growth Adjusted EPS as reported* Adjusted EPS Growth (cc) as reported** 90c 11.4% 87.7c 87.1c 11.2% 11.2% 11.0% 80c 79.1c 10.8% 10.6% 10.6% Constan 10.4% t 70c Adjusted EPS 10.2% Currenc average growth 10.2% 2014 - 2017 10.1% y 10.5% 10.0% 61.2c 60c 9.8% 9.6% 9.4% 50c 2014 2015 2016 2017 20
Slide 83: GPN & GN revenue growth
Glanbia Performance Nutrition & Glanbia Nutritionals revenue growth Average volume growth 2013 - 2017 Wholly-owned Revenue €3,000m 2014 – 2017 CAGR: 4.2% (cc)* €2,500m Constant Currency GPN €2,000m GN 7% €1,266m €1,500m GN €1,000m €1,075m GPN €500m €1,121m GPN €655m Constant €0m Nutritional Currency
Slide 84: GPN and GN margin & EBITA progression
Glanbia Performance Nutrition and Glanbia Nutritionals margin & EBITA progression Margin expansion +170 bps (cc) EBITA CAGR +8.4% (cc) €300m GPN & GN EBITA margin 14% €250m 12.2% 12% 11.3% 114 11.9% 9.9% €200m 111 Margin 10% 107 management 8% €150m 100 6% Improved mix €100m Cost efficiencies 4% 162
Slide 85: Strong contribution from Joint Ventures
Strong contribution from Joint Ventures €60m €20m Joint Ventures contribution to Group earnings Dividends received €16m €15m €43m €14m €40m €13m €28m €10m €26m €24m €20m €0m €0m 2014 2015 2016 2017 2014 2015 2016 2017 Share of JV profit after tax Dividends received * Joint Ventures are accounted for
Slide 86: Robust Joint Venture model
Robust Joint Venture model Southwest Cheese Glanbia Ireland Glanbia Cheese UK JV Partner (50% share) (40% share) (51% share) 2017 revenue: €738m 2017 revenue: €1,765m* 2017 revenue: €317m Large-scale producer of American- Created on 2 July 2017 Largest EU manufacturer and Key activities style chedda
Slide 87: Strong focus on cash conversion
Strong focus on cash conversion Average cash conversion 2014 - 2017 83%* Working capital 2018 – 2022 optimisation Operating Cash Flow generation to exceed €1.5bn Disciplined approach 2014 – 2017 to capital expenditure Operating Cash Flow generation €1bn Average cash conversion 2018 - 2022 80%+ *Oper
Slide 88: Uses of capital to drive growth
Uses of capital to drive growth M&A Strategic Capex 2014 – 2017 2014 – 2017 Total: €500m Total: €265m 5 acquisitions enhancing Investment for future growth Constan GPN portfolio in GPN and GN t Currenc Average ROCE 2014 - 2017 y 14.1% 9 GROUP
Slide 89: Financial flexibility
Financial flexibility Strong balance sheet 2.5 €700m €584m Net Debt Investment of €765m in €600m 2.0 acquisitions and strategic 2 €510m capex over 2014 – 2017 1.7 €500m €438m 1.5 €368m €400m Disciplined approach to both 1.2 M&A and capital expenditure 1.1 €300m 1 €200m 0.5 Capacity to leverage €100m
Slide 90: Capital Allocation focus areas
Capital Allocation focus areas M&A Strategic Capex Adjacent technologies/capabilities Digital capabilities Portfolio enhancement Regional manufacturing & innovation capabilities Complementary businesses Customer or product-specific opportunities Focus on Nutritional Solutions & Performance Nutrition
Slide 91: Returning cash to shareholders
Returning cash to shareholders Progressive dividend policy €70m €65m Dividends payable €60m €50m 2014 – 2017 €39m €40m €36m Total: €173m €33m €30m Dividend raised €20m substantially in 2017 €10m Future pay-out ratio 25% - 35% €0m 2014 2015 2016 2017 12 GROUP
Slide 92: Management remuneration & KPI's
Management remuneration & KPI’s Short-term Business Unit specific Earnings Per share* Operating Cash Flow* (revenue/innovation/EBITA) Long-term Total Shareholder Return Earnings Per Share* ROCE v STOXX 600 (F&B) Focused on sustainable value creation * Growth calculated on a constant currency basis 1
Slide 93: Other considerations
Other considerations Operational Constant Taxation Taxation excellence Currency Dairy Taxation Geo-politics Currency markets 14 GROUP
Slide 94: Our growth ambition by 2022 to be a €5bn Group
Our growth ambition by 2022 to be a €5bn Group Average EBITA Margin 2022 revenue 2018 to 2022 €1.6bn 13% - 15% WHOLLY OWNED GPN Nutritional Solutions €0.8bn 14% - 16% US Cheese €0.7bn Mid single SHARE OF REVENUE digits Joint Ventures €1.9bn 15 GROUP
Slide 95: 2018 to 2022: Growth, Cash conversion & Returns
2018 to 2022: Growth, Cash conversion & Returns Constant EPS1 Currency 5% - 10% Constant Cash Constant ROCE conversion Currency Currency 10% - 13% >80% Constant Dividend pay-out Currency 25% - 35% 1 Average adjusted EPS on a constant currency basis over the 2018 – 2022 period 16 GROUP
Slide 96: Focus on growth
Focus on growth Powerful consumer trends driving business Group focused and aligned to drive growth Strong track record of delivery Ambition for future growth Significant financial resources to invest 17 GROUP
Slide 97: Questions?
Questions? glanbia