Glanbia Plc · EURONEXT:GL9
Glanbia — FY2018 Earnings Presentation
31 slides from Glanbia's earnings presentation, Feb 20, 2019
Slide 1: Glanbia plc 2018 Full Year Results Presentation
Glanbia plc 2018 Full Year Results Presentation 20th February, 2019 Siobhán Talbot, Mark Garvey, Group Managing Director Group Finance Director
Slide 2: Forward-looking statements
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 business risk factors
Slide 3: Glanbia 2018 Full Year Results Presentation
glanbia 2018 Full Year R Presentati
Slide 4: Delivering our financial ambition
Delivering our financial ambition 2018 – 2022 2018 Financial Metrics Achieved Summary Ambition* Result Total Group Total group Revenue by 2022 €5bn €3.7bn Revenue +4.6% Driven by Adj. EPS growth 5% - 10% +9% growth platforms Focused capital ROCE 10% - 13% 13.2% allocation OCF Conversion > 80% 92.0%
Slide 5: Powerful consumer trends driving our business
Powerful consumer trends driving our business Global Macro Trends Health and On-the-go food Digitally Clean wellness and beverages connected labelling Group focused and aligned to drive growth Strategic Pillars Protect and grow Selectively build and Embed enablers across the core scale beyond the co
Slide 6: Operational Review
glanbia Operational Review
Slide 7: Growth Performance
Growth Performance Strong demand driving growth in all regions Revenue EBITA €1,180m €173.1m Innovation ahead of target +9.5% +6.7% Margins in-line with long- LFL Branded EBITA margin term guidance volume 14.7% +9.2% -40 bps 7
Slide 8: Portfolio continues to evolve
Portfolio continues to evolve Regional Mix Channel Mix Format Mix Share of Revenue Share of Revenue Share of Revenue CAPS/TABS 4% 4% FDMC 10% RTD 5% 5% 21% RTE 5% 14% Online Energy 22% 15% North 14% America 65% 61% 28% RTM Distributor 32% 25% Protein 71% 63% Rest of the Specialty World 39% 36% 35% 2
Slide 9: Excellent addition to the portfolio
Excellent addition to the portfolio FY 2018 pro-forma revenue $247m +17% Great brand to participate in $8 billion weight management category Market leading position in RTD in the US & UK Further platform for innovation 9
Slide 10: Glanbia Nutritionals revenue and EBITA
Revenue EBITA Nutritional Solutions (NS) delivers 8.5% volume growth NS growth driven by customers €1,207m €111.8m seeking: Protein Functionality -0.6% +3.0% Convenience Clean Label Nutritional Solutions Revenue Nutritional Solutions EBITA margin US Cheese earnings largely +3.0% Mid-teens protected
Slide 11: Driving growth in Nutritional Solutions
Driving growth in Nutritional Solutions Agreed purchase price $89m Complementary technologies 2018 Revenue $101m & supply chain to Nutritional Solutions US based non-dairy Customers across personal ingredients solutions care and food sectors Global & Regional Expected to close by Q2 2019 customer ba
Slide 12: Financial Review
© glanbia Financial Reviev
Slide 13: Financial Metrics: Result vs Ambition
2014 – 2018 2018 – 2022 2018 Financial Metrics Achieved Result Ambition Result Adj. EPS growth 10.2%1 5% - 10% 9% ROCE 13.9%2 10% - 13% 13.2% OCF Conversion 84.7%3 > 80% 92.0% Dividend Payout Ratio 20.1%4 25% - 35% 26.6% 1. Average adjusted EPS as reported on a constant currency basis over the 5 yea
Slide 14: 2018 results summary
2018 results summary Pre-exceptional Constant €’m Reported currency currency 2018 2017 Change 2018 Revenue (Wholly-owned) 2,386.3 2,387.1 (0.8) +4.1% EBITA (Wholly-owned) 284.9 283.2 +1.7 +5.2% EBITA margin 11.9% 11.9% +0 bps +10 bps Amortisation (45.9) (43.1) Net Finance Costs (17.5) (23.0) Share o
Slide 15: Wholly Owned Revenue
Wholly Owned Revenue Constant €’m Reported currency currency 2018 2017 % Change % Change Glanbia Performance Nutrition 1,179.6 1,121.1 +5.2% +9.5% Nutritional Solutions 526.7 531.9 (1.0%) +3.0% US Cheese 680.0 734.1 (7.4%) (3.1%) Glanbia Nutritionals 1,206.7 1,266.0 (4.7%) (0.6%) Wholly Owned Revenu
Slide 16: Glanbia Performance Nutrition revenue bridge
€1,250m €1,150m (4.1%) 4.5% €1,180m 9.1% €1,121m (3.9%) €1,050m €950m €850m €750m FY17 FX Volume Price Acquisitions FY18 16
Slide 17: Nutritional Solutions and US Cheese revenue bridges
Nutritional Solutions €550m (5.5%) €530m 8.5% €532m (3.8%) €527m €510m €490m FY17 FX Volume Price FY18 €750m US Cheese €730m €734m (4.4%) €710m 1.7% (4.8%) €690m €670m €680m €650m €630m FY17 FX Volume Price FY18 17
Slide 18: Free cash flow
€340m €320m €328m (€10m) (€16m) €300m €302m €4m €295m €280m (€42m) €32m €260m €240m €220m €200m 2018 EBITDA Working Capital Business 2018 Operating Net Interest & Tax Dividends from Other FCF 2018 Sustaining Capex Cash Flow JV&A's 18
Slide 19: Investment and return on capital employed
€417m Total Investment Investments in JVs Investment in JV’s €42m Acquisitions Strategic Capex €241m Sustaining Capex SlimFast €313m Amazing Grass €104m & Body & Fit €168m €15m €57m €49m €46m €32m €24m €16m 2016 2017 2018 2018 Return on Capital Employed 13.2% 2018-2022 Ambition - Return on Capital E
Slide 20: Joint ventures update
2018 update Strategic update Share of JV PAT Glanbia Glanbia €45.3m Michigan Cheese Ireland JV +7.1% EU A-Ware $470m cheese & €130m mozzarella €140m continental whey facility facility cheese plant Cash Dividends received USA Ireland Ireland €32m PLC’s total commitments to projects set-out above: €10
Slide 21: Balance Sheet
Balance Sheet FY 2018 FY 2017 Net Debt €576.7m €367.7m Net Debt / Adj. EBITDA 1.55x 1.07x Adj. EBIT / Net Financing Costs 14.8x 11.2x* Net debt increased by €209m, raising the Net Debt to Adjusted EBITDA ratio to 1.55 times, mainly due Strong financing cost cover at 14.8 times to the acquisition of
Slide 22: Pro-forma impact on 2018 results
Pro-forma impact on 2018 results €’m 2018 IFRS 15 2018 Glanbia Nutritionals Reported impact Pro-forma IFRS 15 will be effective for FY 2019 Nutritional Solutions €527m €50m €577m US Cheese €680m €734m €1,414m Recognition of 100% of Southwest Cheese sales within Glanbia Nutritionals Total Revenue €1,
Slide 23: Revenue ambition by 2022 updated for IFRS 15
Updated for IFRS 15 Revenue ambition by 2022 Average 5 year EBITA Margin** €6 billion* 2018 to 2022 €1.8bn 13% - 15% WHOLLY OWNED GPN Nutritional Solutions €1.0bn 13% - 15% US Cheese €2.0bn Low-to- mid SHARE OF single REVENUE Joint Ventures €1.2bn digits *Glanbia held a Capital Markets Day on 23 May
Slide 24: Outlook
glanbia
Slide 25: Positive outlook for FY 2019
Positive outlook for FY 2019 Adjusted EPS is expected to grow by 5% - 8% constant currency FX tailwinds – up to 3% based on current rates Key financial metrics expected to be in-line with 2022 ambition 25
Slide 26: Questions
glanbia Questions
Slide 27: Non-IFRS performance measures definitions
The Group reports certain performance measures that are not defined under IFRS but which represent additional measures used by the Board of Directors and the Glanbia Operating Executive in assessing performance and for reporting both internally and to shareholders and other external users. The Group
Slide 28: Non-IFRS definitions (continued)
10. Adjusted EBIT: net finance cost is calculated as pre-exceptional earnings before interest and tax plus dividends received from Equity accounted investees divided by net finance cost. Net finance cost comprises finance costs less finance income per the Group income statement plus capitalised borr
Slide 29: Adjusted Earnings Per Share reconciliation
Constant €’m Reported Currency Adjusted Earnings Per Share* FY 2018 FY 2017 FY 2017 Profit attributable to the equity holders of the Company 234.0 231.4 221.8 Amortisation (net of tax)** 34.6 31.7 30.4 Discontinued operations adjusted net income (100%) 0.0 (10.1) (10.1) 40% share of discontinued ope
Slide 30: Glanbia Performance Nutrition and Glanbia Nutritionals results
€’m Reported Constant Currency Glanbia Performance Nutrition FY 2018 FY 2017 FY 2017 % Change Revenue 1,179.6 1,121.1 1,077.7 +9.5% EBITA 173.1 169.7 162.3 +6.7% EBITA margin 14.7% 15.1% 15.1% -40 bps €’m Reported Constant Currency Glanbia Nutritionals FY 2018 FY 2017 FY 2017 % Change Nutritional So
Slide 31: Joint Ventures and Total Group Revenue
€’m Reported Constant Currency Joint Ventures FY 2018 FY 2017 FY 2017 % Change Revenue 1,283.8 1,093.4 1,075.7 +19.3% EBITA 65.8 63.4 62.4 +5.4% EBITA margin 5.1% 5.8% 5.8% -70 bps Share of JVs PAT 45.3 42.8 42.3 +7.1% €’m Reported Constant Currency Total Group Revenue** FY 2018 FY 2017 FY 2017 % Ch