Glanbia has posted a 13% increase in turnover, driven by its Global Performance Nutrition business, but admits that challenges remain in its Dairy Ireland division.
Total group revenues in the six months to 29 June 2013 increased to €1.7bn [constant currency basis] at the Irish dairy giant.
EBITA grew 6.4% to €123.9m but EBITA margin fell by 40 basis points, to 7.4%.
Global Nutrition and Global Ingredients together represented over 70% of group EBITA and were core platforms for growth, said group MD John Moloney. “Overall, Glanbia is in a strong position to capitalise on its unique portfolio of global business, development opportunities and strong balance sheet.”
Global Ingredients’ revenue performance was driven by underlying volume growth, higher pricing and an enhanced product mix, Glanbia said. Turnover increased 16.8% to €539.2m, with EBITA up by 7.2% to £57.5m, although EBITA margin fell by 90 basis points, to 10.7%.
Global Performance Nutrition benefitted from volume growth and branded revenues were also strong in the US and international markets. Turnover grew 13.7% to €324.4m, EBITA by 16.5% to €34m, and EBITA margin increased by 50 basis points, to 10.5%.
Although Dairy Ireland’s revenues increased by 8.5%, to €383.2m, EBITA decreased by 24.4% to €12.1m because of lower volumes and higher milk input costs in the consumer products division. EBITA margin fell by 140 basis points, to 3.2%.
With regards to Dairy Ireland’s performance, Glanbia reported that consumers were heavily focused on price while retailers were focused on costs. “As a result, promotional volumes continue to rise and private-label products continue to gain market share at the expense of branded products.”
Glanbia expected little change in the external operating environment in the second half, with “clear challenges” remaining in Dairy Ireland. It was maintaining its 2013 full-year guidance of adjusted earnings per share of between 8% and 10% on a constant currency basis, Moloney added.
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