Glanbia Plc · EURONEXT:GL9
Glanbia — CAGE Conference 2015
28 slides from Glanbia's conference presentation, Mar 17, 2015
Slide 1: CAGE Conference 2015
CAGE CONFERENCE 2015 SIOBHÁN TALBOT MARK GARVEY GROUP MANAGING DIRECTOR 17 MARCH 2015 GROUP FINANCE DIRECTOR
Slide 2: Cautionary Statement
CAUTIONARY STATEMENT 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 economic and
Slide 3: Glanbia at a Glance
GLANBIA AT A GLANCE LEADING GLOBAL PERFORMANCE TOTAL GROUP REVENUE NUTRITION AND INGREDIENTS GROUP €3.5bn Market Capitalisation +6.9% €5bn + 55%* Countries 34 TOTAL GROUP EBITA €245m Employees +7.9% 5,800 77%* *Contribution of Global Performance Nutrition and Global Ingredients CAGE 2015 www.glanbia
Slide 4: Our EBITA Margin Journey
OUR EBITA MARGIN JOURNEY Sale of majority control of Irish dairy processing assets to our Streamlining the business largest shareholder to create GII JV 8.2% NUTRITION identified as growth focus Focus on higher margin, lower volatility, value add sectors Organic investment, complementary JVs, and st
Slide 5: Our Business Model
OUR BUSINESS MODEL OUR END MARKETS PLAY … CAPTURED BY TWO INTO A NUMBER OF MEGATRENDS… GLOBAL GROWTH PLATFORMS BENEFITS OF #1 B2C GLOBAL FOOD GLOBAL SPORTS EXERCISE & PERFORMANCE TRACEABILITY NUTRITION HEALTHY NUTRITION & TRUST BRAND FAMILY LIFESTYLE B2B INGREDIENTS CONVENIENT HIGHER GLOBAL PORTFOLI
Slide 6: Global Performance Nutrition
GLOBAL PERFORMANCE NUTRITION
Slide 7: Our Brand Portfolio
OUR BRAND PORTFOLIO #1 GLOBAL SPORTS NUTRITION BRAND FAMILY $1BN GLOBAL BUSINESS1 IN 23 COUNTRIES PROTEIN PRE- WORKOUT MUSCLE GAINERS & BUILDERS GENERAL HEALTH 1. Pro-forma 2014 revenue CAGE 2015 www.glanbia.com 7
Slide 8: Where We Play
WHERE WE PLAY LAPAC, 18% N. America, 63% $10.1BN BY REGION2 12% GLOBAL MARKET SHARE DOUBLE DIGIT INTERNATIONAL GROWTH GLOBAL MARKET 1 (ex. US) EMEA, 19% Other, 19% Specialty, 50% RTD, 10% Caps & Tabs, 5% $4.5BN BY CHANNEL3 BY FORMAT3 MID-SINGLE DIGIT GROWTH IN THE US US MARKET 3 Mass, 15% 1. Euromon
Slide 9: How We Win
HOW WE WIN Leading brands: Education & Advocacy: 1 5 - Sports nutrition is an assisted sell 45m 2.6m 200k+ views fans followers NPS*: 85 NPS: 74 NPS: 81 sports 160+ Primary channel focus in US: 2 - - Large SPECIALTY channel Fast growing INTERNET channel nutrition school sponsored athletes Continue i
Slide 10: International Expansion Case Study: United Kingdom
INTERNATIONAL EXPANSION CASE STUDY UNITED KINGDOM POPULATION MARKET SIZE PER CAPITA SPEND 64m $464m $7.3 GROWTH IN SPORTS READERS OF LEADING PARTICIPATION HEALTH MAGAZINE 12% 13m UK sales out of USA Manufacturing transferred Established BSN manufacturing UK launch of Local distribution to local faci
Slide 11: Global Ingredients
“GLOBAL INGREDIENTS / i j Ss . . St. / | —. ———————— Ee i 4 ——s" Zh a Eee
Slide 12: Global Scale and Leadership Positions
GLOBAL SCALE AND LEADERSHIP POSITIONS $1.2bn B2B INGREDIENT DAIRY SYSTEMS & SOLUTIONS INGREDIENTS INGREDIENTS BESPOKE SYSTEMS FOR BUSINESS CUSTOMERS ACROSS DAIRY; NUTRITIONAL BARS, BEVERAGES & #1 PROVIDER OF WHEY BASED NUTRITIONAL SOLUTIONS SUPPLEMENTS; BAKERY; GLOBALLY NUTRITION GLUTEN-FREE; CEREAL
Slide 13: Where We Play
WHERE WE PLAY CAPABILITIES END MARKETS NUTRITIONAL & FUNCTIONAL SPORTS INGREDIENT NUTRITION SYSTEMS MAINSTREAM & SPECIALTY QSRs & RETAIL FUNCTIONAL CHEESE BEVERAGES WHEY PROTEIN NUTRITION NUTRITION INFANT & FRESH DAIRY CLINICAL MICRONUTRIENT BEVERAGE NUTRITION PREMIX SOLUTIONS SOLUTIONS HEALTH & BAR
Slide 14: How We Win
HOW WE WIN NUTRITION VALUE CHAIN ADDING VALUE TO INNOVATION LEADING THE IS AT OUR CORE OUR INGREDIENT PORTFOLIO BY INNOVATION AGENDA IN CHEESE, DAIRY MOVING UP THE PROTEINS, AND SOLUTIONS VALUE NUTRITIONAL & WE DELIVER A SUITE OF CHAIN FUNCTIONAL BLENDS NUTRITIONAL INGREDIENT SYSTEMS & SOLUTIONS OPT
Slide 15: Strategy Overview
cathy mm a. STRATEGY OVERVIEW TEG | Ww | a
Slide 16: Our Strategy
OUR STRATEGY OUR GROWTH PLATFORMS OVERALL GROUP 1. Drive further market B2C GLOBAL PERFORMANCE NUTRITION leadership positions within both global growth • Grow branded revenue globally ahead of market growth rates platforms • Drive growth in existing markets across current and new channels and consum
Slide 17: Finance Overview
FINANCE OVERVIEW
Slide 18: Strategic Financial Targets: 2014-2018
STRATEGIC FINANCIAL TARGETS: 2014 – 2018 ORGANIC EARNINGS1 ROCE 8% 10% TO 12% + • In first year through our five year guidance we delivered: ― 10.1% growth in adjusted EPS in 2014 on a constant currency basis ― 13.4% ROCE in 2014 • Guiding 9% to 11% growth in adjusted EPS, constant currency, for 201
Slide 19: Financial Track Record
FINANCIAL TRACK RECORD Adjusted earnings per share EBITA margin 12.6% CAGR from 2000 to 2014 +480bps from 2000 to 2014 70c 9.0% 60c 8.0% 50c 7.0% 40c 6.0% 30c 5.0% 20c 10c 4.0% 0c 3.0% CAGE 2015 www.glanbia.com 19
Slide 20: Growth Through Investment
GROWTH THROUGH INVESTMENT €m Significant strategic investment programme... • €654m investment over last 4 years 300 Bus. Sustaining ― €310m on acquisitions 250 Strategic 200 Acquisitions ― €344m on capital expenditure 150 • €120m - €130m capex for 2015 100 50 • Disciplined approach to both M&A - 201
Slide 21: M&A Capability
M&A CAPABILITY • Strong track record of good returns from acquisitions ― Focus on global growth platforms • Dedicated Corporate Development team with vast experience & sector knowledge • Integration of 2014 acquisitions on track PRE - 2014 2014 OPTIMUM NUTRITION & BSN NUTRAMINO GLOBAL PERFORMANCE NU
Slide 22: Strategic Capital Expenditure to Fund Future Growth
STRATEGIC CAPITAL EXPENDITURE TO FUND FUTURE GROWTH • Two major strategic capex projects currently underway • Policy to keep business sustaining capex at level of depreciation • Rigorous diligence of all large capex projects by internal investment committee PRE - 2014 2015 SPECIALTY GRAIN PROCESSING
Slide 23: Financial Flexibility
FINANCIAL FLEXIBILITY Favourable debt maturity profile • Healthy balance sheet €m RCF 750 €712m • Net debt €510 million at 2014 year-end 650 550 €362m • Net debt / adj. EBITDA < 2x Undrawn 450 • Current committed debt facilities of 350 PDP €270m €982 million 250 €350m Drawn 150 • Favourable debt mat
Slide 24: Free Cash Flow
FREE CASH FLOW FREE CASH FLOW +74% IN 2014; NOW CONVERTING 73% OF EBITA TO CASH €m FOCUSED ON WORKING CAPITAL 300 8 (57) 13 250 32 209 (43) 200 (9) 153 150 100 88 65 50 0 2014 EBITA Depreciation Dividends Working Net Interest Business Other 2014 FCF 2013 FCF 2012 FCF from JV&As Capital & Tax Sustain
Slide 25: 2014 Financial Highlights
2014 FINANCIAL HIGHLIGHTS SOLID FINANCIAL METRICS FOR 2014 CONSTANT CURRENCY CHANGE CHANGE WHOLLY OWNED REVENUE €2.5bn +6.6% +6.4% WHOLLY OWNED EBITA €208.6m +11.1% +11.1% WHOLLY OWNED EBITA % 8.2% +30bps +30bps ADJUSTED EPS 61.16c +10.3% +10.1% FREE CASH FLOW €153m +74% ROCE 13.4% -80bps CAGE 2015
Slide 26: 2015 Outlook
2015 OUTLOOK • 2015 guidance of 9% to 11% in adjusted EPS, constant currency, with growth weighted towards 2H15 • Outlook for Global Performance Nutrition is positive and continued investment will ensure we remain in leading position in key markets and channels • Expecting growth in Global Ingredien
Slide 27: Questions & Answers
QUESTIONS & ANSWERS www.glanbia.com 27
Slide 28: Investor Relations Contact
Liam Hennigan Head of Investor Relations Glanbia plc Glanbia House Kilkenny Ireland Email: ir@glanbia.ie Tel: +353 56 777 2308 Tel: +353 56 777 2200