TIDMGLB
RNS Number : 4287J
Glanbia PLC
16 August 2023
Glanbia half year 2023 results
First half ahead of expectations, full year guidance upgraded to
12% to 15% growth in adjusted EPS(1)
16 August 2023 - Glanbia plc ("Glanbia", the "Group", the
"Company", the "plc"), the better nutrition company, announces its
financial results for the six month period ended 1 July 2023 ("Half
Year 2023", or "HY 2023").
As announced on 1 March 2023, the Group has changed its
presentation currency from Euro to US Dollar. All figures presented
are in US Dollar unless stated otherwise, with comparative figures
also restated in US Dollar.
Key highlights from HY 2023:
-- Earnings growth in the first half, positive outlook for the
remainder of 2023; full year guidance upgraded to between 12% and
15% growth in adjusted EPS reflecting improved outlook for GPN;
-- Group revenues of $2.8 billion (HY 2022: $3.1 billion)
representing a decrease of 10.0% constant currency (down 10.3%
reported);
-- Group EBITA pre-exceptional of $198.6 million (HY 2022:
$187.6 million), an increase of 6.1% constant currency (up 5.9%
reported);
-- Group EBITA pre-exceptional margins of 7.2% (HY 2022: 6.1%)
with margin growth across all business segments;
-- Adjusted earnings per share of 60.78 $cent (HY 2022: 57.17
$cent) representing growth of 6.6% constant currency (up 6.3%
reported);
-- Basic EPS from continuing operations of 71.90 $cent (HY 2022: 50.40 $cent);
-- Glanbia Performance Nutrition ("GPN"):
o Like-for-like ("LFL") branded revenue +3.7% with pricing
+10.9% and volume -7.2%;
o Optimum Nutrition ("ON") brand delivered LFL revenue growth of
+16.2% with volume and price momentum; ON sustained US consumption
growth(2) of 14.3%;
o EBITA margin 12.1% (HY 2022: 10.4%), an increase of
170bps;
-- Glanbia Nutritionals - Nutritional Solutions ("GN NS"):
o LFL revenue -15.2% with pricing -4.8% and volume -10.4%;
o EBITA margin 12.9% (HY 2022: 12.2%), an increase of 70bps;
o Sequential improvement in volumes through the period;
-- Capital allocation:
o Interim dividend increased by 10% to 14.22 EURcent per
share;
o Returned EUR64.5 million to shareholders in the period via
share buyback activity;
o Completed the sale of Glanbia Cheese joint ventures for
initial proceeds of EUR178.9 million (including the repayment of
shareholder loans);
-- Strong balance sheet with net debt to adjusted EBITDA ratio
of 0.99 times (HY 2022: 1.75 times); and
-- Siobhán Talbot to retire as Group Managing Director on 31
December 2023, Hugh McGuire to be appointed CEO on 1 January
2024.
1. Adjusted Earnings Per Share ("EPS") growth on a constant
currency basis
2. Consumption growth is US measured in channels and includes
Online, FDMC (Food, Drug, Mass, Club) and Specialty channels. Data
compiled from published external sources and Glanbia estimates for
the 12 week period to 16 July 2023
Commenting today Siobhán Talbot, Group Managing Director,
said:
"I am pleased to report that Glanbia's performance in the first
half of the year was ahead of our expectations as the Group
successfully navigated some continuing volatility in global market
conditions. This was driven by a strong operating performance,
continued demand for our better nutrition brands and ingredients
and the exceptional commitment of our people. We are upgrading our
guidance for FY 2023, with adjusted Earnings Per Share now expected
to grow by between 12% and 15% on a constant currency basis.
Our earnings momentum in the first half of 2023 was driven by a
good performance in GPN as growth in revenue, earnings and margin
reflected a strong global performance for our flagship Optimum
Nutrition brand. GN's first half performance was in line with
expectations, as customer supply chain rebalancing trends reduced
volumes, with progressive improvements in demand trends as the
period progressed which we expect to continue into the second half
of the year.
Our strategy is on track as we continue to reshape and simplify
our portfolio, invest to sustain consumer and customer relevance,
drive margin improvement and deliver strong operating returns and
cash conversion. In terms of returns to shareholders, the interim
dividend is raised by 10% and EUR64.5 million was returned in the
period via share buybacks. As we look to the second half of the
year, we believe that the combination of market opportunity and our
strong operating capabilities set us up for sustained delivery of
future growth.
Today I have announced my plans to retire as Group Managing
Director of Glanbia at the end of this year. My colleague, Hugh
McGuire will be appointed CEO of Glanbia on 1 January 2024. I want
to thank my colleagues right across the Group for their hard work,
commitment and friendship during my career with the Company. I
would like to wish Hugh well as he takes the helm in 2024 and I
look forward to working with him on the leadership transition over
the coming months."
Summary financials(1) - continuing operations(2)
2023 half year results Reported Constant
$m HY 2023 HY 2022 Change Currency Change(3)
======================================== ======= ======= ======== ==================
Wholly-owned business (pre-exceptional)
Revenue 2,771.4 3,091.3 -10.3% -10.0%
EBITA(4) 198.6 187.6 5.9% 6.1%
EBITA margin 7.2% 6.1%
Joint Ventures (pre-exceptional)
Share of profit after tax 6.5 12.5
Profit after tax 193.4 140.4
---------------------------------------- ------- ------- -------- ------------------
$
Adjusted earnings per share 60.78c 57.17c 6.3% 6.6%
Basic earnings per share 71.90c 50.40c
---------------------------------------- ------- ------- -------- ------------------
1. This release contains certain alternative performance
measures. Detailed explanation of the key performance indicators
and non-IFRS performance measures can be found in the glossary on
pages 37 to 45.
2. There was no profit or loss from discontinued operations in
the period. In HY 2022, an exceptional profit after tax from
discontinued operations of $61.1m arose, relating to the once-off
profit on disposal of the Group's interest in Tirlán Limited
(formerly known as Glanbia Ireland DAC) .
3. To arrive at the constant currency change, the average
exchange rate for the current period is applied to the relevant
reported result from the same period in the prior year. The average
US dollar euro exchange rate for HY 2023 was $1 = EUR0.9253 (HY
2022: $1 = EUR0.9151). Reported and constant currency movements are
on a pre-exceptional basis.
4. EBITA (pre-exceptional) is defined as earnings before interest, tax and amortisation.
HY 2023 results summary (pre-exceptional)
Revenue progression HY 2023 versus HY 2022
========================================================== =========
Reported
Constant currency movement movement
========================================================== =========
Total
Acquisition constant Total
Volume Price Like-for-like / (Disposals) currency reported
======= ======= ============= ============== ========= =========
Glanbia Performance
Nutrition (7.5%) 10.9% 3.4% - 3.4% 2.4%
------- ------- ------------- -------------- --------- ---------
Glanbia Nutritionals (2.8%) (11.7%) (14.5%) (0.7%) (15.2%) (15.3%)
------- ------- ------------- -------------- --------- ---------
Nutritional Solutions (10.4%) (4.8%) (15.2%) (2.6%) (17.8%) (18.3%)
US Cheese 0.4% (14.5%) (14.1%) - (14.1%) (14.1%)
---------------------- ------- ------- ------------- -------------- --------- ---------
Total wholly-owned
businesses (4.1%) (5.4%) (9.5%) (0.5%) (10.0%) (10.3%)
---------------------- ------- ------- ------------- -------------- --------- ---------
Revenue, EBITA and
margin
---------------------- ------------------------ ------------------------
HY 2023 HY 2022
------- ------- ------ ------- ------- ------
Margin Margin
$m Revenue EBITA % Revenue EBITA %
====================== ------- ------- ------ ------- ------- ------
Glanbia Performance
Nutrition 888.9 107.8 12.1% 867.8 89.9 10.4%
------- ------- ------ ------- ------- ------
Glanbia Nutritionals 1,882.5 90.8 4.8% 2,223.5 97.7 4.4%
------- ------- ------ ------- ------- ------
Nutritional Solutions 525.5 67.8 12.9% 643.4 78.4 12.2%
US Cheese 1,357.0 23.0 1.7% 1,580.1 19.3 1.2%
====================== ------- ------- ------ ------- ------- ------
Total wholly-owned
businesses 2,771.4 198.6 7.2% 3,091.3 187.6 6.1%
---------------------- ------- ------- ------ ------- ------- ------
2023 half year overview
Glanbia delivered a strong financial and operating performance
in HY 2023. Group revenue was $2,771.4 million (HY 2022: $3,091.3
million), down 10.0% constant currency (down 10.3% reported). Group
EBITA (before exceptional items) was $198.6 million (HY 2022:
$187.6 million) up 6.1% constant currency (up 5.9% reported). Group
profit after tax from continuing operations for the period was
$193.4 million (HY 2022: $140.4 million) up $53.6 million constant
currency (up $53.0 million reported).
Adjusted earnings per share ("EPS") was 60.78 $cent (HY 2022:
57.17 $cent) up 6.6% constant currency (up 6.3% reported).
Balance sheet and financing
Glanbia's net debt at 1 July 2023 was $450.8 million (HY 2022:
$675.6 million) which represents a decrease of $224.8 million
driven by strong cash generation, the sale of the Group's interest
in the Glanbia Cheese mozzarella joint ventures and a disciplined
approach to capital allocation. Net debt to adjusted EBITDA was
0.99 times (HY 2022: 1.75 times). At the end of the period the
Group had committed debt facilities of $1.3 billion. Glanbia's
ability to generate cash and its available debt facilities ensure
the Group has considerable capacity to finance future
investments.
Capital investment
Glanbia's total investment in capital expenditure (strategic and
maintenance) was $36.8 million in the first half of 2023 (HY 2022:
$32.0 million). Strategic investment totalled $27.3 million. Key
strategic projects include IT investments and new process
technologies in GN NS. Total capital expenditure for the year is
expected to be $75 to $85 million.
Dividend per share
The Board is recommending an interim dividend of 14.22 EURcent
per share (HY 2022: 12.93 EURcent per share) representing a 10%
increase on prior year interim dividend. Glanbia's overall dividend
policy remains unchanged at a target annual dividend payout ratio
of between 25% and 35% of adjusted EPS. The interim dividend will
be paid on 6 October 2023 to shareholders on the register of
members as at 25 August 2023. Irish withholding tax will be
deducted at the standard rate where appropriate. The Company's
primary dividend payment currency remains Euro.
Share buyback
Glanbia maintained share buyback activity through the first half
of 2023, deploying EUR64.5 million in the period (HY 2022: EUR127.1
million). On 4 May 2023, the Group announced a EUR50 million
increase and extension of the March 2023 share buyback programme,
bringing the total programme amount to EUR100 million.
Sale of share of Joint Ventures
On 28 April 2023, Glanbia completed the sale of its
shareholdings in its Glanbia Cheese Limited and Glanbia Cheese EU
Limited (collectively "Glanbia Cheese") mozzarella joint ventures
to its joint venture partner Leprino Foods Company. On completion,
Glanbia received initial proceeds of EUR178.9 million, which
included repayment of shareholder loans.
Board and management update
Today, the Glanbia plc board (the "Glanbia Board") announces
that Siobhán Talbot has notified it of her intention to retire from
Glanbia plc following ten successful years as Group Managing
Director. Siobhán will step down from her position and from the
Glanbia Board on 31 December 2023 and will retire from the Group in
January 2024. Hugh McGuire, currently Chief Executive Officer
("CEO") of Glanbia Performance Nutrition, will be appointed CEO of
Glanbia plc and join the Glanbia Board as an Executive Director
effective 1 January 2024.
In line with the relationship agreement with Tirlán Co-operative
Society Limited (the "Society") Patsy Ahern and John Murphy retired
at the AGM held on 4 May 2023, reducing the Society's
representation on the Board to three directors.
On the same date, the Group announced the appointment of Ms
Gabriella Parisse to its Board as an Independent Non-Executive
Director effective 1 June 2023.
Following Ms Parisse's appointment, the Board is comprised of 13
members including, the Chairman, two Executive Directors, three
representatives from Tirlán Co-operative Society Limited and seven
Independent Non-Executive Directors.
2023 Outlook
The Group is today upgrading its full year guidance to 12% to
15% growth in adjusted EPS constant currency, based on delivery of
the first half results and the continued momentum in GPN. The Group
outlines the following guidance for FY 2023:
-- GPN expects revenue to be at the lower end of the previously
guided 5% to 7% growth on a constant currency basis and has
upgraded full year EBITA margin expectations to be between 13.5%
and 14.5%.
-- GN NS expects a low double digit decline in like-for-like
revenue driven by lower dairy market pricing and a mid-single digit
volume decline. GN NS EBITA margins are expected to be between 12%
and 13%.
-- Group EBITA growth is expected to be driven largely by strong growth in GPN.
-- The performance in joint ventures is expected to be reduced
due to the disposal of the Glanbia Cheese joint ventures.
-- The Group continues to target an operating cash flow conversion rate of 80%+ for FY 2023.
Change in US Joint Venture Commercial Arrangements
Glanbia is in the process of amending the commercial agreements
associated with its US joint venture. Subject to the successful
completion of these amendments, under the new commercial terms,
which are expected to come into effect from 2024, Glanbia will only
recognise commissions earned on the sale of joint venture products.
Under existing commercial terms, Glanbia records the gross value of
revenues and corresponding cost of sales on joint venture products
sold. The change in commercial terms will only impact the
recognition and presentation of revenues and cost of sales from
2024 onwards, and will not have any material impact on profit.
For illustrative purposes, Group revenues will reduce by
approximately $2 billion and Group EBITA margins will increase by
approximately 300+ basis points.
Inside Information
This announcement contains inside information. The person
responsible for arranging for the release of this announcement on
behalf of Glanbia plc is Liam Hennigan, Group Secretary and Head of
Investor Relations. The time and date of this announcement is, at
7am BST, 16 August 2023.
Half year 2023 operations review
(Commentary on percentage movements is on a constant currency
basis throughout)
Glanbia Performance Nutrition
Reported Constant
$m - pre-exceptional HY 2023 HY 2022 change currency change
Revenue 888.9 867.8 2.4% 3.4%
EBITA 107.8 89.9 19.9% 20.4%
EBITA margin 12.1% 10.4%
===================== ======= ======= ======== ================
-- Like-for-like ("LFL") branded revenue growth of +3.7% with volume -7.2% and pricing +10.9%.
-- ON, the leading brand in the sports nutrition sector
globally, delivered LFL revenue growth of 16.2%.
-- EBITA margin of 12.1%, an increase of 170bps versus HY 2022.
GPN revenue increased by 3.4% in HY 2023 versus prior year. This
was driven by price increases of 10.9% offset by a volume decline
of 7.5%. Pricing was positive across all brands following the
execution of strategic price increases in 2022. The implemented
price increases have largely been maintained across the portfolio
with consumer elasticity within the performance nutrition category
better than expected. The volume decline was largely driven by the
SlimFast brand, with the previously highlighted challenges in the
diet category impacting brand performance. ON, which represents 60%
of the GPN portfolio, delivered both volume and price growth in the
period as the brand continues to drive global distribution and
velocities, supported by increased marketing activation and brand
investment.
GPN EBITA increased by 20.4% versus prior year to $107.8 million
and EBITA margin increased by 170 basis points to 12.1%. This was
driven by strong continued focus on revenue growth management
initiatives, operating efficiencies and margin optimisation. The
positive phasing of input costs in the second half of 2023 will
support both further brand investment and margin improvement.
Americas
GPN Americas revenue for HY 2023 was broadly in line with the
prior year, with strong growth in the ON and Isopure brands
offsetting the anticipated declines in the SlimFast brand. Pricing
was positive across all brands.
The ON brand continues its strong performance and delivered US
consumption growth in the 12 weeks to mid-July of 14.3% building on
a strong comparative period. Trends in the healthy lifestyle
portfolio remained robust, with US consumption growth in the 12
weeks to mid-July of 11.7% across the think!, Isopure and Amazing
Grass brands. The strong growth in the ON and Isopure brands in the
period was driven largely by the powders format, which continues to
resonate as a value offering with consumers.
The SlimFast brand, which now represents 11% of the GPN global
portfolio, continues to decline as ongoing challenges within the
diet and weight management category have resulted in reduced shelf
space and velocities. US consumption in the 12 weeks to mid-July
was down 33.0%. P ending a recovery of the diet and weight
management categories, GPN plans to prioritise investment and
resources behind the performance nutrition and healthy lifestyle
brands.
International
GPN International grew like-for-like revenues by 11.6% in HY
2023. This was driven by volume growth of the ON brand in key
priority markets which was supported by increased brand investment.
Pricing was positive across all regions due to the execution of the
2022 price increases.
Glanbia Nutritionals
HY 2023 HY 2022
Margin Margin
$m - pre-exceptional Revenue EBITA % Revenue EBITA %
=========================== ======= ======= ====== ======= ======= ======
Nutritional Solutions 525.5 67.8 12.9% 643.4 78.4 12.2%
US Cheese 1,357.0 23.0 1.7% 1,580.1 19.3 1.2%
=========================== ======= ======= ====== ======= ======= ======
Total Glanbia Nutritionals 1,882.5 90.8 4.8% 2,223.5 97.7 4.4%
=========================== ======= ======= ====== ======= ======= ======
Nutritional Solutions
Reported Constant
$m - pre-exceptional HY 2023 HY 2022 change currency change
===================== ======= ======= ======== ================
Revenue 525.5 643.4 (18.3%) (17.8%)
EBITA 67.8 78.4 (13.5%) (13.3%)
EBITA margin 12.9% 12.2%
===================== ======= ======= ======== ================
-- LFL revenue decline of 15.2% with volumes -10.4% and pricing -4.8%.
-- EBITA margin of 12.9%, an increase of 70 basis points versus HY 2022.
-- Sequential volume improvement as the period progressed.
GN NS revenue decreased by 17.8% in HY 2023. This was driven by
a 10.4% decrease in volume, 4.8% decrease in price and a decrease
of 2.6% driven by the net impact of acquisitions and disposals. The
volume decline was driven largely by the expected customer supply
chain rebalancing in the custom premix solutions business. The
price decline was driven by the decline in dairy market pricing,
with positive pricing in the custom premix solutions business.
Protein volumes were stable in the period and while customer
supply chain rebalancing reduced revenue in the custom premix
solutions business, overall GN NS saw a sequential improvement in
volumes as the period progressed. Based on customer engagements,
this improving volume trend is expected to continue with
year-on-year volume growth expected in the second half of the year
leading to an expectation of a mid-single digit decline in overall
GN NS volumes for FY 2023.
GN NS EBITA was $67.8 million, a 13.3% decline versus prior year
primarily as a result of the volume decline in the first half of
2023. EBITA margins increased by 70 basis points versus prior year
to 12.9% as a result of both operating efficiencies and the
accretive impact of lower dairy pricing.
US Cheese
Reported Constant
$m - pre-exceptional HY 2023 HY 2022 change currency change
Revenue 1,357.0 1,580.1 (14.1%) (14.1%)
EBITA 23.0 19.3 19.2% 18.6%
EBITA margin 1.7% 1.2%
===================== ======= ======= ======== ================
US Cheese revenue declined by 14.1% in HY 2023. This was driven
by a 0.4% increase in volume and a 14.5% decline in price, with the
pricing decline aligned to the lower year-on-year market
pricing.
US Cheese EBITA increased by 18.6% to $23.0 million as a result
of strong operating efficiencies. US Cheese operates a robust pass
through pricing model which protects earnings from changes in
market pricing.
Joint Ventures (Glanbia share)
$m - pre-exceptional HY 2023 HY 2022 Change
====================================== ======= ======= ======
Share of joint ventures' profit after
tax 6.5 12.5 (6.0)
====================================== ======= ======= ======
The Group's share of joint ventures' profit after tax pre --
exceptional items for continuing operations decreased by $6.0
million to $6.5 million.
Glanbia's only joint venture at the period end is MWC --
Southwest Holdings in the US.
The Group completed the sale of its shareholdings in Glanbia
Cheese Limited and Glanbia Cheese EU Limited (collectively "Glanbia
Cheese") joint ventures on 28 April 2023. On completion, the Group
received initial proceeds of EUR178.9 million, which included
repayment of shareholder loans. The memorandum of understanding for
the sale was signed on 14 February 2023 and the Group ceased to
apply the equity method of accounting for its interest in these
joint ventures from this date.
HALF YEAR 2023 Finance Review
As announced on 1 March 2023, the Group has changed the currency
in which it presents its financial results from euro to US Dollar.
Unless stated otherwise, the figures in this finance review are
stated in US Dollar. Comparative figures have been restated in US
Dollar.
Half year 2023 Group Income Statement
HY 2023 HY 2022
--------------- ----------- ------- -------------------------------------
$m Pre-exceptional Exceptional Total Pre-exceptional Exceptional Total
============================== =============== =========== ======= =============== =========== =======
Revenue 2,771.4 - 2,771.4 3,091.3 - 3,091.3
============================== =============== =========== ======= =============== =========== =======
Earnings before interest,
tax and amortisation
(EBITA) 198.6 55.9 254.5 187.6 (0.6) 187.0
EBITA margin 7.2% - 9.2% 6.1% - 6.1%
============================== =============== =========== ======= =============== =========== =======
Intangible asset amortisation (40.0) - (40.0) (39.5) - (39.5)
============================== =============== =========== ======= =============== =========== =======
Operating profit 158.6 55.9 214.5 148.1 (0.6) 147.5
Finance income 5.7 - 5.7 0.5 8.0 8.5
Finance costs (12.7) - (12.7) (11.1) - (11.1)
Share of results of
joint ventures 6.5 - 6.5 12.5 0.2 12.7
============================== =============== =========== ======= =============== =========== =======
Profit before taxation 158.1 55.9 214.0 150.0 7.6 157.6
Income taxes (21.2) 0.6 (20.6) (17.2) - (17.2)
============================== =============== =========== ======= =============== =========== =======
Profit from continuing
operations 136.9 56.5 193.4 132.8 7.6 140.4
============================== =============== =========== ======= =============== =========== =======
Discontinued operations
Profit after tax from
discontinued operations - - - - 61.1 61.1
============================== =============== =========== ======= =============== =========== =======
Profit for the half
year 136.9 56.5 193.4 132.8 68.7 201.5
============================== =============== =========== ======= =============== =========== =======
Revenue
Revenue decreased by 10% versus prior half year on a constant
currency basis to $2.8 billion, a decrease of 10.3% on a reported
basis. GPN revenues grew by 3.4% constant currency (2.4% reported)
on prior period driven by positive pricing of 10.9%, net of volume
decline of 7.5%. GN revenues declined 15.2% constant currency
(15.3% reported) on prior period driven by volume decreases of
2.8%, price decreases of 11.7% and M&A related reductions of
0.7% as the positive impact of recent acquisitions was more than
offset by divestment activity.
EBITA
EBITA before exceptional items increased by 6.1% constant
currency (5.9% reported) to $198.6 million (HY 2022: $187.6
million), with EBITA margin growth of 110 basis points to 7.2% (HY
2022: 6.1%).
GPN pre-exceptional EBITA increased by 20.4% constant currency
(19.9% reported) to $107.8 million (HY 2022: $89.9 million). GPN
pre-exceptional EBITA margin increased by 170 basis points to 12.1%
(HY 2022: 10.4%).
GN pre-exceptional EBITA decreased by 7.0% constant currency
(7.1% reported) to $90.8 million (HY 2022: $97.7 million). GN
pre-exceptional EBITA margin increased by 40 basis points to 4.8%
(HY 2022: 4.4%).
Net finance costs
Net finance costs before exceptional items decreased by $3.6
million to $7.0 million (HY 2022: $10.6 million). The decrease was
driven primarily by a reduction in the Group's average net
financial indebtedness during HY 2023 vs HY 2022. The Group's
average interest rate in HY 2023 was 2.1% (HY 2022: 2.2%). Glanbia
operates a policy of fixing a significant amount of its interest
exposure, with 95% of projected 2023 debt currently contracted at
fixed rates.
Share of results of Joint Ventures
The Group's pre-exceptional share of joint venture (continuing
operations) profits decreased by $6.0 million to $6.5 million (HY
2022: $12.5 million). The share of results of joint ventures is
stated after tax.
Following the agreement reached to sell the Group's share of its
investment in the Glanbia Cheese UK and Glanbia Cheese EU joint
venture operations on 14 February 2023, equity accounting ceased to
apply from this date and the investments were considered
held-for-sale. This sales transaction was completed on 28 April
2023.
Prior year discontinued operations relate to the Tirlán Limited
(formerly known as Glanbia Ireland DAC) joint venture operation
which was classified as an asset 'held-for-sale' in 2021. Following
the receipt of all shareholder approvals and regulatory clearances,
the disposal was completed in April 2022, with the related once off
gain on disposal treated as an exceptional item in the prior
period.
Income taxes
The half year 2023 pre-exceptional tax charge increased by $4.0
million to $21.2 million (HY 2022: $17.2 million). This represents
an effective tax rate, excluding joint ventures, of 14.0% (HY 2022:
12.5%) and is in line with expectation. The Group currently expects
that its effective tax rate for FY 2023 will be in the range of
13.5% to 14.5%.
Exceptional items
Exceptional items incurred in the first half of 2023 resulted in
a net post-tax exceptional gain of $56.5m (HY 2022: $68.7m).
Details of the exceptional items incurred in the period are as
follows:
$m - continuing operations HY 2023 HY 2022
===================================================== ======= =======
Net exceptional gain on disposal of operations
(note 1) 57.8 -
Pension related costs (note 2) (1.2) (0.6)
Portfolio related reorganisation costs (note
3) (0.7) -
Changes in fair value of contingent consideration
(note 4) - 8.0
Wholly-owned exceptional gain before tax 55.9 7.4
Share of results of equity accounted investees,
net of tax (note 2) - 0.2
Exceptional tax credit 0.6 -
----------------------------------------------------- ------- -------
Exceptional gain after tax 56.5 7.6
----------------------------------------------------- ------- -------
$m - discontinued operations
----------------------------------------------------- ------- -------
Exceptional gain from discontinued operations
(note 5) - 61.1
----------------------------------------------------- ------- -------
Exceptional gain after tax - discontinued operations - 61.1
----------------------------------------------------- ------- -------
Total exceptional gain in the period 56.5 68.7
===================================================== ======= =======
1. Net exceptional gain on disposal of operations relates to the
gain on disposal of the UK and Ireland Glanbia Cheese joint venture
operations and a small US based bottling facility (Aseptic
Solutions) which was designated as held-for-sale at 31 December
2022. Both transactions concluded during H1, 2023 and the gain
represents the difference between proceeds received (and contingent
consideration anticipated), net of costs associated with the
divestment and exit of these non-core businesses and the carrying
value of the investments.
2. Pension related costs relate to the restructure of legacy
defined benefit pension schemes associated with the Group and joint
ventures, which included initiating a process for the ultimate buy
out and wind up of these schemes and a further simplification of
the schemes that remain. Costs incurred relate to the cost of the
settlement loss as a result of acquiring bulk purchase annuity
policies to mirror and offset movements in known liabilities of the
schemes ('buy-in' transaction), as well as related advisory and
execution costs net of gains arising from risk reduction
activities. This restructuring effort involves the careful
navigation of external market factors, with final wind up of
schemes targeted by the end of 2023.
3. Portfolio related reorganisation costs relate to the one-off
costs as a result of recent portfolio changes. Following divestment
decisions related to non-core businesses, the Group launched a
programme to realign Group-wide support functions and optimise
structures of the remaining portfolio, to more efficiently support
business operations and growth. This programme continues into 2023,
with realisation of benefits from 2024 onwards. Costs incurred to
date relate to advisory fees and people related costs.
4. Prior year changes in fair value of contingent consideration
relate to contingent payments associated with the 2021 LevlUp
acquisition that reduced following an assessment of conditions that
gave rise to the additional payments.
5. Prior year exceptional gain from discontinued operations
relates to the gain arising on the completion of the disposal of
the Group's 40% interest in Tirlán Limited (formerly known as
Glanbia Ireland DAC) ("Tirlán") to Tirlán Co-operative Society
Limited (formerly known as Glanbia Co-operative Society Limited).
The gain represents the difference between proceeds received, net
of transaction related costs, and the carrying value of the Group's
investment in Tirlán. The transaction completed on 1 April
2022.
Profit after tax
Profit after tax for the half year was $193.4 million compared
to $201.5 million in HY 2022, comprising continuing operations of
$193.4 million (HY 2022: $140.4 million) and discontinued
operations of $nil (HY 2022: $61.1 million). Profit after tax from
continuing operations comprises pre-exceptional profit of $136.9
million (HY 2021: $132.8 million) and exceptional gains of $56.5
million (HY 2022: gain of $7.6 million). Pre-exceptional
profitability is relatively consistent period on period.
Profit after tax from discontinued operations in the prior
period relates entirely to the Group's share of Tirlán Limited
(formerly known as Glanbia Ireland DAC) which was disposed of in
April 2022, with the resulting gain on disposal being recognised as
an exceptional gain.
Earnings per share (EPS)
Constant
Reported currency
HY 2023 HY 2022 change change
--------------------------- ------- ------- --------- ---------
Basic EPS 71.90c 72.29c (0.5%) 0.0%
- continuing operations 71.90c 50.40c 42.7% 43.1%
- discontinued operations - 21.89c - -
--------------------------- ------- ------- --------- ---------
Adjusted EPS 60.78c 57.17c +6.3% +6.6%
- continuing operations 60.78c 57.17c +6.3% +6.6%
- discontinued operations - - - -
--------------------------- ------- ------- --------- ---------
Basic EPS remained consistent with the prior period, with the
reduction in profits from discontinued operations largely offset by
increased profitability from continuing operations.
Adjusted EPS is a key performance indicator ("KPI") of the Group
and a key metric guided to the market and a key element of
Executive Director and senior management remuneration. Adjusted EPS
increased by 6.6% constant currency (+6.3% reported), all from
continuing operations. Full year 2023 adjusted EPS is expected to
be in the range of 12% to 15% growth on a constant currency basis
versus prior year.
Cash flow
The principal cash flow KPIs of the Group and business segments
are Operating Cash Flow ("OCF") and Free Cash Flow ("FCF"). OCF
represents EBITDA of the wholly-owned businesses net of
business-sustaining capital expenditure and working capital
movements, excluding exceptional cash flows. FCF is calculated as
the cash flow in the period before the following items: strategic
capital expenditure, equity dividends paid, expenditure on share
buyback, acquisition spend, proceeds received on disposal,
exceptional costs paid, loans/equity invested in joint ventures,
and foreign exchange movements. These metrics are used to monitor
the cash conversion performance of the Group and Business Units and
identify available cash for strategic investment. OCF conversion,
which is OCF as a percentage of EBITDA, is a key element of the
Executive Directors and senior management remuneration. OCF and FCF
half year results for the Group are outlined below.
$m HY 2023 HY 2022
============================================== ======= =======
EBITDA pre-exceptional 232.2 222.9
Movement in working capital (pre-exceptional) (181.4) (246.2)
Business-sustaining capital expenditure (9.5) (8.0)
============================================== ======= =======
Operating cash flow 41.3 (31.3)
Net interest and tax paid (37.0) (34.8)
Dividends from joint ventures 19.5 2.9
Payment of lease liabilities (10.8) (8.1)
Other outflows (5.0) (2.1)
============================================== ======= =======
Free cash flow 8.0 (73.4)
Strategic capital expenditure (27.3) (24.0)
Dividend paid to Company shareholders (57.3) (53.5)
Share buyback (purchase of own shares) (69.3) (138.9)
Payment for acquisition of subsidiaries - (59.8)
Exceptional costs paid (8.5) (16.2)
Repayment of loans from joint ventures 67.8 27.6
Proceeds on disposal of non-core businesses 130.8 339.3
============================================== ======= =======
Net cash flow 44.2 1.1
Exchange translation (5.0) 4.9
Cash acquired on acquisition - 1.0
============================================== ======= =======
Net debt movement 39.2 7.0
Net debt at the beginning of the period (490.0) (682.6)
Net debt at the end of the period (450.8) (675.6)
============================================== ======= =======
OCF was an inflow of $41.3 million (HY 2022: outflow of $31.3
million) and represents a cash conversion on EBITDA of 17.8% (HY
2022: -14%) in the period. The increase in OCF versus prior period
was due primarily to a reduced investment in working capital as
pricing and inventory volumes returned to more normalised levels
following a period of significant inflation and supply chain
disruption throughout 2022. Full year OCF cash conversion expected
to be in line with the 80%+ target.
FCF was an inflow of $8.0 million (HY 2022: outflow of $73.4
million), with the movement since prior period primarily as a
result of movements in OCF outlined above, as well as an increase
in dividend income from Joint Ventures.
Capital allocated for the benefit of shareholders includes
regular dividend payments of $57.3 million (HY 2022: $53.5 million)
and the execution of share buyback programmes of $69.3 million (HY
2022: $138.9 million), with the most recent buyback programme that
launched in March 2023 and extended in May 2023 ongoing at HY
2023.
The prior year acquisition relates to the acquisition of
Sterling Technology, with no further acquisitions in the current
period. Divestment proceeds primarily related to the disposal of
the Group's interest in the UK and Ireland Glanbia Cheese joint
ventures and the prior year relates to the completion of the
disposal of the Group's 40% holding in Tirlán Limited (formerly
known as Glanbia Ireland DAC).
Group financing
Financing key performance indicators HY 2023 HY 2022
==================================== ========== ==========
Net debt: adjusted EBITDA 0.99 times 1.75 times
Adjusted EBIT: net finance cost 23.1 times 16.0 times
==================================== ========== ==========
The Group's financial position remains strong. Net debt at the
2023 half year was $450.8 million. This represents a decrease of
$224.8 million from the prior half year net debt of $675.6 million.
At half year 2023, Glanbia had committed debt facilities of $1.31
billion (HY 2022: $1.27 billion) with a weighted average maturity
of 5.2 years. Glanbia's ability to generate cash as outlined above
and available debt facilities ensures the Group has considerable
capacity to finance future investments. Net debt to adjusted EBITDA
was 0.99 times and interest cover was 23.1 times, with both metrics
remaining well within financing covenants.
Use of capital
Capital expenditure
The cash outflow relating to capital expenditure for half year
2023 amounted to $36.8 million (HY 2022: $32.0 million) which
includes $9.5 million of business-sustaining capital expenditure
and $27.3 million of strategic capital expenditure.
Investments in equity accounted investees
During half year 2023, a further $3.5 million was advanced to
Glanbia Cheese EU which was subsequently divested in the period. In
advance of the divestment of both Glanbia Cheese joint venture
operations in the UK and Ireland which completed in April 2023,
outstanding loans of $71.3 million were repaid in full.
Pension
The Group's net pension position under IAS 19 (revised)
'Employee Benefits', before deferred tax, improved by $5.0 million
since 1 January 2023, resulting in a net pension asset of $6.7
million at 1 July 2023. The defined benefit pension position is
calculated by discounting the estimated future cash outflows using
appropriate corporate bond rates. Restructuring of legacy defined
pension schemes which began in 2021 is ongoing. Favourable market
conditions resulted in actuarial gains in the period, which reduced
the net pension liability resulting in an increase in the net asset
position at period end.
Dividends
Glanbia's overall dividend policy remains unchanged at a target
annual dividend payout ratio of between 25% and 35% of adjusted
EPS. In line with this policy, the Board is recommending an interim
dividend of 14.22 EURcent per share (HY 2022: 12.93 EURcent per
share). The dividend will be paid on 6 October 2023 to shareholders
on the register of members as at 25 August 2023. Irish withholding
tax will be deducted at the standard rate where appropriate.
Share buyback
In March 2023, the Group commenced a share buyback programme of
EUR50 million, which was subsequently extended by a further EUR50
million in May 2023, and which was ongoing at half year 2023. A
total of $69.3 million (HY 2022: $138.9 million) was deployed under
this programme in the period, with the completion of this programme
expected over the second half of 2023.
Foreign exchange
Glanbia generates over 90% of its earnings in US Dollar currency
and has significant assets and liabilities denominated in US
Dollars. As a result, Glanbia has recently changed the currency in
which it presents its financial results from euro to US Dollar to
reduce (but not eliminate) the impact to reported numbers arising
from currency movements year-on-year and on retranslation of
non-monetary assets and liabilities in the preparation of the half
year consolidated financial statements. Commentary continues to be
provided within the income statement on a constant currency basis
to provide a better reflection of the underlying operating results
in the year, as this removes the translational currency impact. To
arrive at the constant currency change, the average foreign
exchange rate for the current period is applied to the relevant
reported result from the same period in the prior year. Key non-US
Dollar currencies for the Group over the period were euro and pound
sterling, for which period end exchange rates were as follows:
HY 2023 FY 2022 HY 2022
1 US Dollar converted to euro 0.9203 0.9376 0.9592
1 US Dollar converted to pound sterling 0.7899 0.8315 0.8312
---------------------------------------- ------- ------- --------
Financial strategy
Glanbia's financial strategy is very much aligned with its
overall strategy of ensuring the Group delivers on its key
financial goals. Specific financial goals to enable this strategy
include:
-- Assessing both external and organic investment opportunities
against a target benchmark of 12% return after tax by end of year
three;
-- Focusing the organisation on cash conversion through improved
working capital management and disciplined business-sustaining
capital expenditure, with a goal of greater than 80% cash
conversion as a percentage of EBITDA;
-- Leveraging the Group's activities to enable improved cost
structures utilising shared services, procurement, IT and a
continuous improvement mindset;
-- Maintaining the capital structure of the Group within an
implicit investment-grade credit profile; and
-- Capital allocation policy to return capital to shareholders
which includes a dividend policy with a payout ratio of between 25%
and 35% and the authorisation to implement a share buyback
programme.
Principal risks and uncertainties
The Board of Glanbia plc has the ultimate responsibility for the
Group's systems of risk management and internal control. The
Group's risk management framework outlines the key stakeholder risk
management responsibilities. It is strategically designed to foster
risk awareness and ensure active participation across all levels of
the business to the management of risk. A primary objective is to
enable the Group to remain responsive to the dynamic environment in
which it operates. This framework, together with the processes to
identify, manage and mitigate potential material key risks to the
achievement of the Group's strategic objectives are set out in
detail on pages 67-77 of Glanbia plc's 2022 Annual Report.
The Group's principal risks and uncertainties, which are
summarised in the risk profile table below, continue to remain
relevant and unchanged from the risks reported for the year ended
31 December 2022. While no new principal risks were identified
during the period, the underlying risk trend and potential impacts
of some of these risks has evolved including:
-- Supply Chain risks have stabilised during the period,
primarily due to the strategic purchasing of whey and where
required, the alternative sourcing of ingredients to ensure that
sufficient quantities are on hand to fulfil orders. While continued
inflationary pressures exist on non-whey ingredients there has been
a notable improvement in global supply chain performance and
significantly improved whey pricing.
-- Talent Management risks have also stabilised during the first
half of the year. While labour market remains strong, despite
several interest rate increases in our core operating regions, the
Group is seeing an improvement in the employee turnover trend
versus 2022 which is supported by improved employee engagement
scores, particularly for hourly employees. Given the potential for
a combination of external factors to influence this position, the
Group will remain cautious and continue to closely monitor
employment trends and adjust our recruitment and retention
practices as required.
-- Economic, Industry and Political risk, Market Disruption
risk, Climate Change risk and Cyber Security and Data Protection
risk continue to remain elevated risks.
There may be other risks and uncertainties that are not yet
considered material or not yet known to the Group and this list
will change if these risks assume greater importance in the
future.
Strategic/External Financial Technological Operational/Regulatory
----------- -------------------------------- ----------------------- ----------------------------------------- ------------------------------------
Risk where
trend is * Customer concentration * Taxation changes * Digital transformation * Health and safety
stable
* Product safety and compliance
* Acquisition/Integration
* Supply chain
* Talent management
----------- -------------------------------- ----------------------- ----------------------------------------- ------------------------------------
Risk where
trend is * Economic, Industry and Po * Cyber security and data protection
increasing litical
* Market disruption
* Climate change
----------- -------------------------------- ----------------------- ----------------------------------------- ------------------------------------
The Board is closely monitoring the key risks that could
materially and adversely affect the Group's ability to achieve its
strategic objectives, particularly those whose probability of
occurrence/extent of impact are elevated by the consequences of the
ongoing war in Ukraine, the global economic outlook and the
continued inflationary, energy and interest rate pressures.
Similar, to our previous disclosures, these risks have wide-ranging
consequences on our principal risks and uncertainties with the
consequences being captured in the relevant principal risks rather
than shown as stand-alone items. The key risk factors and
uncertainties with the potential to impact on the Group's financial
performance in the second half of 2023 include:
-- Economic, industry and political risk - the global
macroeconomic and market consequences of the war in Ukraine
continue to create volatility. The Board is also closely monitoring
tensions in other key trading regions, particularly between China
and Taiwan, where any potential conflict, economic sanctions or
trade rulings would impact Glanbia's growth objectives.
-- Market disruption risk - adverse changes in economic
conditions, persistent inflationary, energy rate and interest rate
pressures have continued to increase the cost of living and could
result in reduced consumer spending which may disrupt demand and
increase operational and financial costs.
-- Supply chain risk - while supply chain volatility has reduced
in the period, the ongoing geopolitical tensions and inflation
headwinds could potentially impact the importation of key raw
materials and/or negatively impact on the Group's international
sales channels. The Group is holding appropriate safety stocks of
core raw materials, however a prolonged impact to supply chains due
to a pandemic or geopolitical event in a key trading region would
have negative consequences from both a supply and pricing
perspective.
-- Customer concentration risk - while strategically the Group
aims to build strong customer relationships with major customers,
material disruption with, or loss of, one or more of these
customers, or a significant deterioration in commercial terms,
could materially impact profitability. This risk can also expose
the Group to credit exposure and other balance sheet risks. The
Board is focused on utilising available mitigation to limit such
exposures where possible.
-- Health and safety risk - a failure to maintain good health
and safety practices or the risk of a global pandemic, such as
Covid-19, in Glanbia's core markets, may adversely impact
performance. A wide range of additional measures and mitigations
have been introduced as a result of the Covid-19 pandemic and
remain in place which build on the existing strong controls across
the Group.
Management continues to identify, monitor, assess and embed our
climate related risks and opportunities (CROs). The CROs as
outlined in the 2022 Annual Report on pages 62 to 65 continue to
apply to the Group and are expected to remain the same for the
remainder of 2023. The key focus for 2023 is the completion of the
required scoping and feasibility assessment to fulfil the
transition plan, in order to remain on track to comply with the
Group's commitments. This is currently in progress together with
the plan to accelerate the modelling work to develop a
comprehensive roadmap to reduce Scope 3 emissions to meet the
Group's stated target.
The Group actively manages these and all other risks, inclusive
of emerging risks, through its risk management and internal control
processes.
Cautionary statement
Glanbia plc has made forward-looking statements in this document
that are based on management's beliefs and assumptions and on
information currently available to management. Forward-looking
statements include, but are not limited to, information concerning
the Group's possible or assumed future results of operations,
business strategies, financing plans, competitive position,
potential growth opportunities, potential operating performance
improvements, the effects of competition and the effects of future
legislation or regulations. Forward-looking statements include all
statements that are not historical facts and can be identified by
the use of forward-looking terminology such as the words 'believe',
'develop', 'expect', 'ensure', 'arrive', 'achieve', 'anticipate',
'maintain', 'grow', 'aim', 'deliver', 'sustain', 'should' or the
negative of these terms or similar expressions. Forward-looking
statements involve risks, uncertainties and assumptions. Actual
results may differ materially from those expressed in these
forward-looking statements. You should not place undue reliance on
any forward-looking statements. The risk factors included on pages
72 to 77 of the Group's 2022 Annual Report, could cause the Group's
results to differ materially from those expressed in
forward-looking statements. There may be other risks and
uncertainties that the Group is unable to predict at this time or
that the Group currently does not expect to have a material adverse
effect on its business. These forward-looking statements are made
as of the date of this document. The Group expressly disclaims any
obligation to update these forward-looking statements other than as
required by law. The forward-looking statements in this release do
not constitute reports or statements published in compliance with
any of Regulations 6 to 8 of the Transparency (Directive
2004/109/EC) Regulations 2007.
Results webcast and dial-in details
There will be a webcast and presentation to accompany this
results announcement at 8.30 a.m. BST today. Please access the
webcast from the Glanbia website at
https://www.glanbia.com/investors/results-reports-and-presentations,
where the presentation can also be viewed or downloaded. In
addition, a dial-in facility is available using the following
numbers:
+353 (0)1 691
Ireland 7842
+44 (0) 203 936
United Kingdom 2999
United States +1 646 787 9445
+44 (0) 203 936
Rest of the world 2999
The access code for all participants is: 767571
A replay of the call will be available for 30 days approximately
two hours after the call ends.
For further information contact
Glanbia plc +353 56 777 2200
Mark Garvey, Group Finance Director
Liam Hennigan, Group Secretary & Head of Investor
Relations +353 (0)86 046 8375
Donal O'Keeffe, Investor Relations Director +353 (0)86 047 2974
Martha Kavanagh, Director of Corporate Affairs +353 (0)87 646 2006
2023 half year financial report
Responsibility statement
Each of the Directors of Glanbia plc, whose names and functions
are listed on the Group's website ( www.glanbia.com ), confirms
that to the best of each person's knowledge and belief:
-- the 2023 Half Year Financial Report is in accordance with
International Accounting Standard (IAS) 34, 'Interim Financial
Reporting', as adopted by the European Union and the Transparency
(Directive 2004/109/EC) Regulations 2007, as amended, and the
Central Bank (Investment Market Conduct) Rules 2019; and
-- the 2023 Half Year Financial Report includes a fair review of:
o important events that have occurred during the first six
months of the year, and their impact on the condensed consolidated
interim financial statements;
o a description of the principal risks and uncertainties for the
remaining six months of the financial year;
o details of any related party transactions that have materially
affected the Group's financial position or performance in the six
months ended 1 July 2023, and material changes to related party
transactions described in the Annual Report for the year ended 31
December 2022; and
o any changes in the related parties' transactions described in
the last annual report that could have a material effect on the
financial position or performance of the Group in the first six
months of the current financial year.
On behalf of the Board
Siobhán Talbot Mark Garvey
Group Managing Director Group Finance Director
15 August 2023
Condensed Group Income statement
for the half year ended 1 JULY 2023
Restated*
Half Half
year year
2023 2022
=============== ============= ======= ============ ============= =======
Exceptional Exceptional
$m Pre- $m
Pre-exceptional (note Total Exceptional (note Total
Notes $m 7) $m $m 7) $m
============================== ===== =============== ============= ======= ============ ============= =======
CONTINUING OPERATIONS
Revenue 4 2,771.4 - 2,771.4 3,091.3 - 3,091.3
------------------------------ ----- --------------- ------------- ------- ------------ ------------- -------
Operating profit before
intangible
asset amortisation (earnings
before interest, tax and
amortisation
(EBITA)) 6 198.6 55.9 254.5 187.6 (0.6) 187.0
Intangible asset amortisation 6 (40.0) - (40.0) (39.5) - (39.5)
------------------------------ ----- --------------- ------------- ------- ------------ ------------- -------
Operating profit 6 158.6 55.9 214.5 148.1 (0.6) 147.5
Finance income 9 5.7 - 5.7 0.5 8.0 8.5
Finance costs 9 (12.7) - (12.7) (11.1) - (11.1)
Share of results of joint
ventures
accounted for using the
equity
method 4 6.5 - 6.5 12.5 0.2 12.7
------------------------------ ----- --------------- ------------- ------- ------------ ------------- -------
Profit before taxation 158.1 55.9 214.0 150.0 7.6 157.6
Income taxes 10 (21.2) 0.6 (20.6) (17.2) - (17.2)
------------------------------ ----- --------------- ------------- ------- ------------ ------------- -------
Profit from continuing
operations 136.9 56.5 193.4 132.8 7.6 140.4
DISCONTINUED OPERATIONS
Profit after tax from
discontinued
operations - - - - 61.1 61.1
------------------------------ ----- --------------- ------------- ------- ------------ ------------- -------
Profit for the period 136.9 56.5 193.4 132.8 68.7 201.5
------------------------------ ----- --------------- ------------- ------- ------------ ------------- -------
Attributable to:
Equity holders of the Company 12 193.6 201.8
Non-controlling interests (0.2) (0.3)
------------------------------ ----- --------------- ------------- ------- ------------ ------------- -------
193.4 201.5
------------------------------ ----- --------------- ------------- ------- ------------ ------------- -------
Earnings Per Share from continuing operations attributable to the equity holders
of the Company
Basic Earnings Per Share
(cent) 12 71.90 50.40
Diluted Earnings Per Share
(cent) 12 70.91 49.90
------------------------------ ----- --------------- ------------- ------- ------------ ------------- -------
Earnings Per Share attributable to the equity holders of the Company
Basic Earnings Per Share (cent) 12 71.90 72.29
Diluted Earnings Per Share (cent) 12 70.91 71.57
--------------------------------------------------- ---- ------- -------
* Restated throughout for presentation in US Dollar. See note 2
for further details.
Condensed Group Statement of comprehensive Income
for the half year ended 1 JULY 2023
Restated*
Half year Half year
2023 2022
Notes $m $m
========================================================== ===== ========= ==========
Profit for the period 193.4 201.5
Other comprehensive income
Items that will not be reclassified subsequently
to the Group income statement
Remeasurements on defined benefit plans, net of deferred
tax 2.3 15.0
Share of other comprehensive income of joint ventures,
net of deferred tax 19.2 0.1 0.7
Revaluation of equity instruments at FVOCI, net of
deferred tax 19.1 0.1 0.3
Items that may be reclassified subsequently to the
Group income statement
Currency translation differences 19.1 2.4 (14.0)
Currency translation difference arising on net investment
hedge 19.1 1.8 (8.2)
(Loss)/gain on cash flow hedges, net of deferred
tax (2.0) 2.4
Share of other comprehensive income of joint ventures,
net of deferred tax 0.1 10.6
Other comprehensive income for the period, net of
tax 4.8 6.8
---------------------------------------------------------- ----- --------- ----------
Total comprehensive income for the period 198.2 208.3
---------------------------------------------------------- ----- --------- ----------
Total comprehensive income attributable to:
Equity holders of the Company 198.4 208.6
Non-controlling interests (0.2) (0.3)
Total comprehensive income for the period 198.2 208.3
---------------------------------------------------------- ----- --------- ----------
* Restated throughout for presentation in US Dollar. See note 2
for further details.
Condensed Group Balance sheet
as at 1 JULY 2023
Restated*
1 July 31 December
2023 2022
Notes $m $m
====================================================== ===== ======= ============
ASSETS
Non-current assets
Property, plant and equipment 509.4 510.8
Right-of-use assets 94.4 100.7
Intangible assets 1,530.9 1,549.0
Interests in joint ventures 14 162.3 225.3
Other financial assets 2.4 2.3
Loans to joint ventures - 65.6
Deferred tax assets 4.3 5.0
Other receivables 0.2 0.3
Retirement benefit assets 8 7.4 3.2
------------------------------------------------------ ----- ------- ------------
2,311.3 2,462.2
------------------------------------------------------ ----- ------- ------------
Current assets
Inventories 582.5 750.5
Trade and other receivables 524.3 404.7
Current tax receivables 17.2 13.7
Derivative financial instruments 2.0 3.1
Cash and cash equivalents (excluding bank overdrafts) 251.0 467.9
------------------------------------------------------ ----- ------- ------------
1,377.0 1,639.9
Assets held for sale - 15.2
------------------------------------------------------ ----- ------- ------------
1,377.0 1,655.1
------------------------------------------------------ ----- ------- ------------
Total assets 3,688.3 4,117.3
------------------------------------------------------ ----- ------- ------------
EQUITY
Issued capital and reserves attributable to equity
holders of the Company
Share capital and share premium 18 129.9 130.2
Other reserves 19.1 180.1 168.0
Retained earnings 19.2 1,751.7 1,686.2
------------------------------------------------------ ----- ------- ------------
2,061.7 1,984.4
Non-controlling interests 8.2 8.4
------------------------------------------------------ ----- ------- ------------
Total equity 2,069.9 1,992.8
------------------------------------------------------ ----- ------- ------------
LIABILITIES
Non-current liabilities
Borrowings 15 578.9 682.5
Lease liabilities 96.4 103.5
Retirement benefit obligations 8 0.7 1.5
Deferred tax liabilities 119.8 138.3
Provisions 17 4.2 4.0
800.0 929.8
------------------------------------------------------ ----- ------- ------------
Current liabilities
Trade and other payables 595.5 826.5
Borrowings 15 122.9 275.4
Lease liabilities 18.1 19.0
Current tax liabilities 67.7 54.1
Derivative financial instruments 0.4 1.0
Provisions 17 13.8 12.0
------------------------------------------------------ ----- ------- ------------
818.4 1,188.0
Liabilities held for sale - 6.7
------------------------------------------------------ ----- ------- ------------
818.4 1,194.7
------------------------------------------------------ ----- ------- ------------
Total liabilities 1,618.4 2,124.5
------------------------------------------------------ ----- ------- ------------
Total equity and liabilities 3,688.3 4,117.3
------------------------------------------------------ ----- ------- ------------
* Restated throughout for presentation in US Dollar. See note 2
for further details.
Condensed Group Statement of changes in equity
For the half year ended 1 JULY 2023
Attributable to equity holders
of the Company
==================================================
Share capital
and share Other Retained Non-
premium reserves earnings controlling
$m $m $m Total interests Total
Half year 2023 (note 18) (note 19.1) (note 19.2) $m $m $m
============================== ============= ============ ============ ======= ============ =======
Balance at 1 January 2023 130.2 168.0 1,686.2 1,984.4 8.4 1,992.8
Profit for the period - - 193.6 193.6 (0.2) 193.4
Other comprehensive income - 2.4 2.4 4.8 - 4.8
Total comprehensive income
for the period - 2.4 196.0 198.4 (0.2) 198.2
------------------------------ ------------- ------------ ------------ ------- ------------ -------
Dividends - - (57.3) (57.3) - (57.3)
Purchase of own shares - (82.7) - (82.7) - (82.7)
Cancellation of own shares (0.3) 68.4 (68.1) - - -
Cost of share-based payments - 10.0 - 10.0 - 10.0
Transfer on exercise, vesting
or expiry of share-based
payments - 5.9 (5.9) - - -
Deferred tax on share-based
payments - - 0.8 0.8 - 0.8
Transfer to Group income
statement - 8.1 - 8.1 - 8.1
------------------------------ ------------- ------------ ------------ ------- ------------ -------
Balance at 1 July 2023 129.9 180.1 1,751.7 2,061.7 8.2 2,069.9
------------------------------ ------------- ------------ ------------ ------- ------------ -------
Restated*
Half year 2022
============================== ===== ======= ======= ======= ===== =======
Balance at 2 January 2022 131.1 161.8 1,669.0 1,961.9 9.2 1,971.1
Profit for the period - - 201.8 201.8 (0.3) 201.5
Other comprehensive income - (8.9) 15.7 6.8 - 6.8
Total comprehensive income
for the period - (8.9) 217.5 208.6 (0.3) 208.3
------------------------------ ----- ------- ------- ------- ----- -------
Dividends - - (53.5) (53.5) - (53.5)
Purchase of own shares - (149.3) - (149.3) - (149.3)
Cancellation of own shares (0.7) 138.6 (137.9) - - -
Cost of share-based payments - 8.3 - 8.3 - 8.3
Transfer on exercise, vesting
or expiry of share-based
payments - (2.4) 2.4 - - -
Deferred tax on share-based
payments - - 1.0 1.0 - 1.0
Changes in fair value of
put option liability - 6.8 - 6.8 - 6.8
Transfer to Group income
statement - 1.7 - 1.7 - 1.7
------------------------------ ----- ------- ------- ------- ----- -------
Balance at 2 July 2022 130.4 156.6 1,698.5 1,985.5 8.9 1,994.4
------------------------------ ----- ------- ------- ------- ----- -------
* Restated throughout for presentation in US Dollar. See note 2
for further details.
Condensed gROUP Statement of cash flows
For the half year ended 1 JULY 2023
Restated*
Half year Half year
2023 2022
Notes $m $m
============================================================ ===== ========= ==========
Cash flows from operating activities
Net cash flows from operating activities before exceptional
items 21 59.2 (15.3)
Cash outflow related to exceptional items (8.5) (7.4)
Interest received 5.2 1.1
Interest paid (including interest expense on lease
liabilities) (13.5) (10.3)
Tax paid (28.7) (25.6)
Net cash inflow/(outflow) from operating activities 13.7 (57.5)
------------------------------------------------------------ ----- --------- ----------
Cash flows from investing activities
Payment for acquisition of subsidiaries - (59.8)
Purchase of property, plant and equipment (18.3) (13.9)
Purchase of intangible assets (18.5) (18.1)
Dividends received from joint ventures 20 19.5 2.9
Proceeds from disposal/redemption from FVOCI financial
assets - 0.3
Proceeds from disposal of Glanbia Cheese (exceptional) 123.4 -
Proceeds on repayment of loans advanced to Glanbia
Cheese 3 71.3 -
Loans advanced to Glanbia Cheese 20 (3.5) (3.9)
Proceeds from disposal of assets and liabilities
held for sale (exceptional) 7.4 -
Net cash inflow from discontinued operations** - 362.0
Net cash inflow from investing activities 181.3 269.5
------------------------------------------------------------ ----- --------- ----------
Cash flows from financing activities
Purchase of own shares 19.1 (82.7) (149.3)
Drawdown of borrowings 15 140.8 464.1
Repayment of borrowings 15 (245.6) (424.6)
Payment of lease liabilities (10.8) (8.1)
Dividends paid to Company shareholders 19.2 (57.3) (53.5)
------------------------------------------------------------ ----- --------- ----------
Net cash outflow from financing activities (255.6) (171.4)
------------------------------------------------------------ ----- --------- ----------
Net (decrease)/increase in cash and cash equivalents 15 (60.6) 40.6
Cash and cash equivalents at the beginning of the
period 192.5 107.1
Cash and cash equivalents acquired on acquisition 15 - 1.0
Effects of exchange rate changes on cash and cash
equivalents (3.8) (3.5)
Cash and cash equivalents at the end of the period 15 128.1 145.2
------------------------------------------------------------ ----- --------- ----------
Cash and cash equivalents at the end of the period include:
1 July 2 July
2023 2022
$m $m
====================================================== ======= ======
Cash and cash equivalents (excluding bank overdrafts) 251.0 241.9
Bank overdrafts (122.9) (96.7)
------------------------------------------------------ ------- ------
15 128.1 145.2
------------------------------------------------------ ------- ------
* Restated throughout for presentation in US Dollar. See note 2
for further details.
** Relates to disposal of Tirlán Limited (formerly known as
Glanbia Ireland DAC). Comprised proceeds from disposal of $339.3
million (exceptional), proceeds on repayment of loans of $31.5
million (note 20), and cash outflow related to exceptional items of
$8.8 million.
Notes to the financial statements
For the half year ended 1 JULY 2023
1. General information
Glanbia plc (the "Company") and its subsidiaries (together the
"Group") is a leading global nutrition group with geographical
presence in regions that include North America, Europe and Asia
Pacific. The Company is a public limited company incorporated and
domiciled in Ireland, the number under which it is registered is
129933. The address of its registered office is Glanbia House,
Kilkenny, Ireland, R95 E866. The Company is the ultimate parent
company of the Group and its shares are quoted on the Euronext
Dublin and London Stock Exchange.
These condensed consolidated interim financial statements as at,
and for the period commencing 1 January 2023 and ended 1 July 2023
(half year/six months) ("interim financial statements") were
approved for issue by the Board of Directors on 15 August 2023.
2. Basis of preparation
The interim financial statements have been prepared in
accordance with IAS 34 Interim Financial Reporting as adopted by
the European Union, the Transparency (Directive 2004/109/EC)
Regulations 2007 as amended, and the Central Bank (Investment
Market Conduct) Rules 2019. The interim financial statements should
be read in conjunction with the financial statements as at, and for
the year ended 31 December 2022 ("2022 Annual Report"). The interim
financial statements do not include all of the information required
for a complete set of IFRS financial statements and have not been
audited or reviewed by the Group's auditor.
The methods of computation, presentation and accounting policies
adopted in the preparation of the interim financial statements are
consistent with those applied in the 2022 Annual Report other than
those noted below. The Group's accounting policies are set out in
note 2 to the financial statements in the 2022 Annual Report.
Change of presentation currency
Glanbia generates the majority of its revenue and earnings, and
has significant assets and liabilities denominated in US Dollar. To
reduce the potential for foreign exchange volatility in current and
future reported earnings, the Group has decided to change its
presentation currency from euro to US Dollar effective from 1
January 2023.
A change of presentation currency represents a change in
accounting policy under IAS 8 Accounting Policies, Changes in
Accounting Estimates and Errors which is accounted for
retrospectively. The reported results for the six months ended 2
July 2022 and for the year ended 31 December 2022 have been
translated from euro to US Dollar using the following
procedures:
-- Assets and liabilities denominated in non-US Dollar
currencies were translated into US Dollar at the relevant closing
rates of exchange;
-- Non-US Dollar trading results were translated into US Dollar
at the relevant average rates of exchange;
-- Share capital, share premium, own shares, dividends and
movements in capital and merger account were translated at the
historic rates prevailing on the date of each transaction.
Movements in other equity accounts were translated into US Dollar
at the relevant average rates of exchange; and
-- The cumulative translation reserve was set to nil at 4
January 2004, the date of transition to IFRS, and has been restated
as if the Group has reported in US Dollar since that date.
The principal exchange rates used for the translation of results
and balance sheets into US Dollar are as follows:
Average Period end
========= ========= ====== =============================
Half year Half year Year 1 July 2 July 31 December
1 US Dollar = 2023 2022 2022 2023 2022 2022
=============== ========= ========= ====== ====== ====== ===========
euro 0.9253 0.9151 0.9493 0.9203 0.9592 0.9376
Pound sterling 0.8110 0.7707 0.8095 0.7899 0.8312 0.8315
--------------- --------- --------- ------ ------ ------ -----------
Critical accounting judgements and estimates
The significant judgements made by management in applying the
Group's accounting policies and the key sources of estimation
uncertainty in preparing the interim financial statements were the
same as those that applied to the 2022 Annual Report other than the
judgement relating to the interest in Glanbia Cheese Limited which
is no longer applicable as the joint venture was disposed of during
the first half of 2023.
New and amended standards adopted in the current period
The following changes to IFRS became effective for the Group for
the current year but did not result in a material impact on the
Group's results.
-- IFRS 17 Insurance Contracts
-- Definition of Accounting Estimates - Amendments to IAS 8
-- Disclosure of Accounting Policies - Amendments to IAS 1
-- Deferred Tax related to Assets and Liabilities arising from a
Single Transaction - Amendments to IAS 12
Going concern
The time period that the Directors have considered in evaluating
the appropriateness of the going concern basis in preparing the
interim financial statements is a period of at least 12 months from
the date of approval of these interim financial statements (the
"period of assessment").
The Directors have given due regard to the Group's available
cash resources, borrowing facilities and related covenant
requirements which taken together, provide confidence that the
Group will be able to meet its obligations as they fall due; and
the Group's financial risk management policies as described in the
2022 Annual Report, the nature of business activities and the
factors likely to impact operating performance and future
growth.
Having assessed the relevant business risks identified and
discussed in the Principal risks and uncertainties on pages 14 to
15, the Directors believe that the Group is well placed to manage
these risks successfully and they have a reasonable expectation
that the Group has adequate resources to continue in operational
existence for the period of assessment. The Group therefore
considers it appropriate to adopt the going concern basis in
preparing its interim financial statements .
3. Assets and liabilities held for sale
The Group signed a memorandum of understanding for the sale of
its shareholding in the Glanbia Cheese EU and Glanbia Cheese UK
joint ventures ("Glanbia Cheese") to Leprino Foods Company on 14
February 2023. The Group treated the joint venture arrangements in
Glanbia Cheese as an asset held for sale and ceased to apply the
equity method of accounting to its interest in Glanbia Cheese from
this date (note 14). The transaction allowed the Group to focus on
its core better nutrition strategy and to allocate further capital
to its global growth businesses.
The sale was completed on 28 April 2023 for an initial cash
consideration of $125.2 million (EUR114.0 million) and repayment of
$71.3 million (EUR64.9 million) of shareholder loans, with further
contingent consideration of up to $27.2 million (EUR25.0 million),
dependent on the performance of Glanbia Cheese over the next three
years (see note 16). The gain of $59.9 million on disposal of
Glanbia Cheese (included in net exceptional gain on disposal of
operations (note 7)) is based on the $125.2 million received less
working capital adjustments of $1.8 million, carrying amount of the
asset held for sale at 28 April 2023 of $52.2 million, estimated
costs of $3.2 million, and associated cumulative debit amounts
recognised in other comprehensive income of $8.1 million (note
19.1) that were reclassified to the Group income statement.
The assets and liabilities held for sale at 31 December 2022
related to the non-core assets of a small US based bottling
facility (Aseptic Solutions USA Ventures, LLC). Following the
completion of a strategic portfolio review, these assets and
related liabilities which were part of the Glanbia Nutritionals
segment were determined to be non-core and a decision was made to
divest of them, resulting in the designation as held for sale at
2022 year end. The divestment was completed on 6 March 2023. The
gain on disposal of $0.4 million (included in net exceptional gain
on disposal of operations (note 7)) is based on $11.2 million
received, less the carrying amount of the net assets held for sale
of $9.3 million on the date of the transaction and costs associated
with the transaction of $1.5 million.
The above divestments are not regarded as discontinued
operations as they were not considered to be either separate major
lines of business or geographical areas of operations.
4. Segment information
Half year 2023 Half year 2022
=============================================== ===============================================
All other All other
Glanbia segments Glanbia segments
Performance Glanbia and Performance Glanbia and
Nutrition Nutritionals unallocated Total Nutrition Nutritionals unallocated Total
$m $m $m $m $m $m $m $m
================== =========== ============ =========== ======= =========== ============ =========== =======
Segment results
(pre-exceptional)
Total gross
segment revenue 889.0 1,929.3 - 2,818.3 867.9 2,276.7 - 3,144.6
Inter-segment
revenue (0.1) (46.8) - (46.9) (0.1) (53.2) - (53.3)
------------------ ----------- ------------ ----------- ------- ----------- ------------ ----------- -------
Revenue 888.9 1,882.5 - 2,771.4 867.8 2,223.5 - 3,091.3
Operating profit
before
intangible asset
amortisation
(EBITA) 107.8 90.8 - 198.6 89.9 97.7 - 187.6
------------------ ----------- ------------ ----------- ------- ----------- ------------ ----------- -------
Shares of results
of joint
ventures
accounted for
using
the equity method - - 6.5 6.5 - - 12.5 12.5
------------------ ----------- ------------ ----------- ------- ----------- ------------ ----------- -------
1 July 2023 31 December 2022
=============================================== ===============================================
All other All other
Glanbia segments Glanbia segments
Performance Glanbia and Performance Glanbia and
Nutrition Nutritionals unallocated Total Nutrition Nutritionals unallocated Total
$m $m $m $m $m $m $m $m
================== =========== ============ =========== ======= =========== ============ =========== =======
Segment assets and
liabilities
Segment assets 1,875.8 1,320.7 491.8 3,688.3 1,939.3 1,348.5 829.5 4,117.3
Segment
liabilities 357.6 359.1 901.7 1,618.4 461.9 503.3 1,159.3 2,124.5
------------------ ----------- ------------ ----------- ------- ----------- ------------ ----------- -------
Segment earnings before interest, tax, amortisation and
exceptional items are reconciled to reported profit before tax and
profit after tax in the Group income statement.
Geographical information
Revenue from external customers, and non-current assets, other
than financial instruments, deferred tax assets, and retirement
benefit assets attributable to the country of domicile and all
foreign countries of operation for which revenue/non-current assets
exceed 10% of total Group revenue/non-current assets are set out
below.
Revenue from external customers in the table below and in the
disaggregation of revenue by primary geographical markets table is
allocated to geographical areas based on the place of delivery or
collection of the products sold as agreed with customers as opposed
to the end use market where the product may be consumed.
Non-current
Revenue assets
==================== ====================
Half year Half year 1 July
31 December
2023 2022 2023 2022
$m $m $m $m
======================================= ========= ========= ======= ===========
Ireland (country of domicile) 10.6 5.9 806.0 818.4
US 2,192.9 2,532.6 1,290.1 1,316.8
Other
- North America (excluding US) 52.0 53.7 6.3 6.4
- Europe (excluding Ireland) 238.3 250.1 183.5 232.6
- Asia Pacific 200.6 188.4 11.2 11.9
- LATAM 52.5 37.9 0.1 -
- Rest of World 24.5 22.7 - -
--------------------------------------- --------- --------- ------- -----------
2,771.4 3,091.3 2,297.2 2,386.1
--------------------------------------- --------- --------- ------- -----------
Disaggregation of revenue
Revenue is disaggregated based on the Group's internal reporting
structures, the primary geographical markets in which the Group
operates, the timing of revenue recognition, and channel mix as set
out in the following tables:
Half year Half year
2023 2022
============ ============== ======= ============ ============== =======
Glanbia Glanbia
Performance Glanbia Performance Glanbia
Nutrition Nutritionals Total Nutrition Nutritionals Total
$m $m $m $m $m $m
============================== ============ ============== ======= ============ ============== =======
Internal reporting structures
Nutritional Solutions - 525.5 525.5 - 643.4 643.4
US Cheese - 1,357.0 1,357.0 - 1,580.1 1,580.1
GPN Americas 585.5 - 585.5 588.7 - 588.7
GPN International (including
Direct-to-Consumer) 303.4 - 303.4 279.1 - 279.1
Total 888.9 1,882.5 2,771.4 867.8 2,223.5 3,091.3
------------------------------- ------------ -------------- ------- ------------ -------------- -------
Primary geographical markets
North America 593.2 1,651.7 2,244.9 589.0 1,997.3 2,586.3
Europe 180.9 68.0 248.9 175.4 80.6 256.0
Asia Pacific 90.5 110.1 200.6 78.8 109.6 188.4
LATAM 7.7 44.8 52.5 9.1 28.8 37.9
Rest of World 16.6 7.9 24.5 15.5 7.2 22.7
Total 888.9 1,882.5 2,771.4 867.8 2,223.5 3,091.3
--------------------------------- ------ ------- ------- ----- ------- ---------
Timing of revenue recognition
Products transferred at point in
time 888.9 1,882.5 2,771.4 867.8 2,223.5 3,091.3
Products transferred over time - - - - - -
--------------------------------- ------ ------- ------- ----- ------- ---------
Total 888.9 1,882.5 2,771.4 867.8 2,223.5 3,091.3
--------------------------------- ------ ------- ------- ----- ------- ---------
Half year Half year
2023 2022
Channel mix for Glanbia Performance Nutrition $m $m
=============================================== ========== =========
Distributor 176.7 192.4
Food, Drug, Mass, Club (FDMC) 311.5 294.1
Online 281.8 274.4
Specialty 118.9 106.9
----------------------------------------------- ---------- ---------
Total 888.9 867.8
----------------------------------------------- ---------- ---------
The disaggregation of revenue by channel mix is most relevant
for Glanbia Performance Nutrition.
5. Seasonality
Due to the somewhat seasonal nature of the retail segment into
which the Glanbia Performance Nutrition segment sells, higher
revenues and operating profits are expected in the second half of
the year than in the first six months. Glanbia Nutritionals
revenues and operating profits, although impacted by dairy markets,
are typically more evenly spread throughout the year.
6. Operating profit
Half Half
year year
2023 2022
=============== ============= ========= =============== ============= =========
Exceptional Exceptional
$m $m
Pre-exceptional (note Total Pre-exceptional (note Total
Notes $m 7) $m $m 7) $m
======================= ===== =============== ============= ========= =============== ============= =========
Revenue 4 2,771.4 - 2,771.4 3,091.3 - 3,091.3
Cost of goods sold (2,246.6) - (2,246.6) (2,549.6) - (2,549.6)
----------------------- ----- --------------- ------------- --------- --------------- ------------- ---------
Gross profit 524.8 - 524.8 541.7 - 541.7
Selling and
distribution expenses (226.8) (0.6) (227.4) (241.9) - (241.9)
Administration expenses (100.7) 56.5 (44.2) (110.4) (0.6) (111.0)
Net impairment
reversal/(losses)
on financial assets 1.3 - 1.3 (1.8) - (1.8)
----------------------- ----- --------------- ------------- --------- --------------- ------------- ---------
Operating profit before
intangible
asset amortisation
(EBITA) 4 198.6 55.9 254.5 187.6 (0.6) 187.0
Intangible asset
amortisation 13 (40.0) - (40.0) (39.5) - (39.5)
----------------------- ----- --------------- ------------- --------- --------------- ------------- ---------
Operating profit 158.6 55.9 214.5 148.1 (0.6) 147.5
----------------------- ----- --------------- ------------- --------- --------------- ------------- ---------
7. Exceptional items
Half year Half year
2023 2022
Notes $m $m
======================================================== ===== ========= =========
Net exceptional gain on disposal of operations (a) (57.8) -
Pension related costs (b) 1.2 0.6
Portfolio related reorganisation costs (c) 0.7 -
Changes in fair value of contingent consideration (d) - (8.0)
Share of results of joint ventures accounted for
using the equity method (b) - (0.2)
-------------------------------------------------------- ----- --------- ---------
Total (55.9) (7.6)
Exceptional tax credit 10 (0.6) -
Total exceptional gain from continuing operations (56.5) (7.6)
Exceptional gain after tax from discontinued operations (e) - (61.1)
-------------------------------------------------------- ----- --------- ---------
Total exceptional gain for the period 21 (56.5) (68.7)
-------------------------------------------------------- ----- --------- ---------
(a) Net exceptional gain on disposal of operations relates to
the gain on disposal of the UK and Ireland Glanbia Cheese joint
venture operations and a small US based bottling facility (Aseptic
Solutions) which was designated as held-for-sale at 31 December
2022. Both transactions concluded during H1, 2023 and the gain
represents the difference between proceeds received (and contingent
consideration anticipated), net of costs associated with the
divestment and exit of these non-core businesses and the carrying
value of the investments.
(b) Pension related costs relate to the restructure of legacy
defined benefit pension schemes associated with the Group and joint
ventures, which included initiating a process for the ultimate buy
out and wind up of these schemes and a further simplification of
the schemes that remain. Costs incurred relate to the cost of the
settlement loss as a result of acquiring bulk purchase annuity
policies to mirror and offset movements in known liabilities of the
schemes ('buy-in' transaction), as well as related advisory and
execution costs net of gains arising from risk reduction
activities. This restructuring effort involves the careful
navigation of external market factors, with final wind up of
schemes targeted by the end of 2023.
(c) Portfolio related reorganisation costs relate to the one off
costs as a result of recent portfolio changes. Following divestment
decisions related to non-core businesses, the Group launched a
programme to realign Group-wide support functions and optimise
structures of the remaining portfolio, to more efficiently support
business operations and growth. This programme continues into 2023,
with realisation of benefits from 2024 onwards. Costs incurred to
date relate to advisory fees and people related costs.
(d) Prior year changes in fair value of contingent consideration
relate to contingent payments associated with the 2021 LevlUp
acquisition that reduced following an assessment of conditions that
gave rise to the additional payments.
(e) Prior year exceptional gain from discontinued operations
relates to the gain arising on the completion of the disposal of
the Group's 40% interest in Tirlán Limited (formerly known as
Glanbia Ireland DAC) ("Tirlán") to Tirlán Co-operative Society
Limited (formerly known as Glanbia Co-operative Society Limited).
The gain represents the difference between proceeds received, net
of transaction related costs, and the carrying value of the Group's
investment in Tirlán. The transaction completed on 1 April
2022.
8. Retirement benefit obligations
The Group has a number of defined benefit pension plans in the
Republic of Ireland ("Ireland") and the United Kingdom ("UK"). The
defined benefit pension plans in Ireland and the UK are
administered by independent Boards of Trustees through separate
trustee controlled funds.
During 2021, the Trustee Boards of the UK pension plans
completed a buy-in transaction whereby the assets of the plans were
invested in a bulk purchase annuity policy with a UK pension
insurance specialist. It is the intention of the Trustee Boards
that the plans will move to a full buy-out as soon as practical,
following which the insurance company will become responsible for
the UK pension plan obligations. On completion of the buy-out, the
defined benefit assets (comprising the annuity policy) and matching
defined benefit obligations will be derecognised from the
(condensed) Group balance sheet.
The majority of the net UK pension liabilities at 1 July 2023
and 31 December 2022 relates primarily to Guaranteed Minimum
Pension equalisation ("GMPe") of the UK pension plans. During the
first half of 2023, there was an additional contribution from the
Group of $1.6 million in respect of these GMPe liabilities which
resulted in a charge to the income statement of $0.7 million.
Reconciliation of the amounts recognised on the condensed Group
balance sheet to net defined benefit pension plans
asset/(liability):
1 July 31 December
2023 2022
$m $m
======================================================== ====== ===========
Non-current assets - Surplus on defined benefit pension
plan 7.4 3.2
Non-current liabilities - Deficit on defined benefit
pension plan (0.7) (1.5)
-------------------------------------------------------- ------ -----------
Net defined benefit pension plans asset 6.7 1.7
-------------------------------------------------------- ------ -----------
The net asset disclosed above relates to funded plans. The
movement in the net defined benefit pension plans asset is as
follows:
1 July 31 December
2023 2022
$m $m
====================================================== ====== ===========
At the beginning of the period 1.7 (16.1)
Current service cost (0.5) (1.9)
Interest income/(expense) 0.1 (0.2)
Settlement loss* (0.7) (0.2)
------------------------------------------------------ ------ -----------
Total amount recognised in profit or loss (1.1) (2.3)
Remeasurements
- Return of plan assets excluding interest income - (69.3)
- Gain/(loss) from experience adjustments 1.8 (4.9)
- Gain from demographic adjustments 0.4 -
- Gain from changes in financial assumptions 1.6 90.4
Effect of irrevocable plan surplus (1.2) (1.8)
------------------------------------------------------ ------ -----------
Total amount recognised in other comprehensive income 2.6 14.4
Exchange differences 0.1 1.2
Contributions paid/payable by the employer 3.4 4.5
At the end of the period 6.7 1.7
------------------------------------------------------ ------ -----------
During the current period the Group recognised an amount of the
total surplus on one of the plans based on the economic benefits
that the Group could gain from a reduction in future
contributions.
* Included in pension related costs (note 7).
The principal assumptions used for the purposes of the actuarial
valuations were as follows:
Half year 2023 Half year 2022 Year 2022
=================== ==================== ===================
ROI UK ROI UK ROI UK
============================= ====== =========== ====== =========== ====== =============
Discount rate 3.60% 5.40% 3.40% 3.85% 3.70% 5.00%
Inflation rate 2.40% 2.75%-3.35% 2.40% 2.65%-3.25% 2.50% 2.65%-3.30%
Future salary increases* 3.40% 0.00% 3.40% 0.00% 3.50% 0.00%
Future pension increases 0.00% 2.75%-3.30% 0.00% 2.65%-3.10% 0.00% 2.65%-3.15%
Mortality rates (years):
- Male - reaching 65 years
of age in 20 years' time 24.2 22.3 24.2 22.3 24.2 22.2
- Female - reaching 65 years
of age in 20 years' time 26.3 24.6 26.3 24.6 26.3 24.5
- Male - currently aged
65 years old 21.9 21.3 21.9 21.2 21.9 21.2
- Female - currently aged
65 years old 24.3 23.4 24.3 23.4 24.3 23.3
----------------------------- ------ ----------- ------ ----------- ------ -------------
*The ROI defined benefit pension plans are on a career average
structure therefore this assumption does not have a material
impact. The UK defined benefit pension plans comprise solely
pensioners and deferred pensioners.
9. Finance income and costs
Half year Half year
2023 2022
Notes $m $m
=========================================== ===== ========= =========
Finance income
Interest income on loans to joint ventures 1.0 0.5
Interest income on cash and deposits 1.6 -
Interest income on swaps 3.1 -
Remeasurements of contingent consideration 7 - 8.0
------------------------------------------- ----- --------- ---------
Total finance income 5.7 8.5
------------------------------------------- ----- --------- ---------
Finance costs
Bank borrowing costs (4.3) (2.7)
Facility fees (1.4) (0.9)
Finance cost of private placement debt (5.1) (5.3)
Interest expense on lease liabilities (1.4) (1.4)
Interest expense on swaps - (0.2)
Remeasurements of contingent consideration (0.5) (0.6)
------------------------------------------- ----- --------- ---------
Total finance costs (12.7) (11.1)
------------------------------------------- ----- --------- ---------
Net finance costs (7.0) (2.6)
------------------------------------------- ----- --------- ---------
10. Income taxes
The Group's income tax charge of $20.6 million (HY 2022: $17.2
million) net of an exceptional tax credit of $0.6 million (HY 2022:
nil) (note 7) has been prepared based on the Group's best estimate
of the weighted average tax rate that is expected for the full
financial year.
11. Dividends
Half
year Half year
2023 2022
$m $m
======================================================== ===== =========
Equity dividends to shareholders
Final - EUR 19.28c per ordinary share, paid on 5 May
2023 (FY 2022: EUR 17.53c, paid on 6 May 2022) 57.6 53.7
Interim - EUR 14.22c per ordinary share, payable on
6 October 2023 (HY 2022: EUR 12.93c, paid on 7 October
2022) 41.4 37.2
------------------------------------------------------------ ----- ---------
Of the $57.6 million (HY 2022: $53.7 million) dividends paid
during the half year ended 1 July 2023, $0.3 million (HY 2022: $0.2
million) are waived in relation to own shares.
These interim financial statements do not reflect the interim
dividends recommended for 2023. The amount of interim dividends
recommended is based on the number of issued shares at period end
(note 18). The actual amount will be based on the number of issued
shares on the record date. There are no income tax consequences for
the Company in respect of dividends proposed prior to issuance of
the interim financial statements.
12. Earnings per share
Basic
Basic Earnings Per Share is calculated by dividing profit after
tax attributable to the equity holders of the Company by the
weighted average number of ordinary shares in issue during the
period, excluding ordinary shares purchased by the Group and held
as own shares. The weighted average number of ordinary shares in
issue used in the calculation of Basic Earnings Per Share is
269,254,932 (HY 2022: 279,154,299).
Diluted
Diluted Earnings Per Share is calculated by adjusting the
weighted average number of ordinary shares in issue to assume
conversion of all potential dilutive ordinary shares. Share awards
are the Company's only potential dilutive ordinary shares.
The share awards, which are performance based, are treated as
contingently issuable shares because their issue is contingent upon
satisfaction of specified performance conditions as well as the
passage of time. Contingently issuable shares are included in the
calculation of Diluted Earnings Per Share to the extent that
conditions governing exercisability have been satisfied, as if the
end of the reporting period were the end of the vesting period.
Half year Half year
2023 2022
=========== ============ ===== =========== ============ =====
Continuing Discontinued Continuing Discontinued
operations operations Total operations operations Total
================================== =========== ============ ===== =========== ============ =====
Profit after tax attributable
to equity holders of the Company
($m) 193.6 - 193.6 140.7 61.1 201.8
Basic Earnings Per Share (cent) 71.90 - 71.90 50.40 21.89 72.29
----------------------------------- ----------- ------------ ----- ----------- ------------ -----
Diluted Earnings Per Share (cent) 70.91 - 70.91 49.90 21.67 71.57
----------------------------------- ----------- ------------ ----- ----------- ------------ -----
Half year Half year
2023 2022
=========================================================== =========== ===========
Weighted average number of ordinary shares in issue 269,254,932 279,154,299
Shares deemed to be issued for no consideration in respect
of share awards 3,761,216 2,822,926
Weighted average number of shares used in the calculation
of diluted Earnings Per Share 273,016,148 281,977,225
----------------------------------------------------------- ----------- -----------
13. Property, plant and equipment, right-of-use assets and intangible assets
Property, plant and equipment
During the six month period to 1 July 2023, there was an
increase of property, plant and equipment arising from additions of
$21.0 million (HY 2022: $14.4 million). Exchange differences gain
of $1.4 million (HY 2022: $5.6 million loss) and depreciation
charges of $23.8 million (HY 2022: $25.7 million) were also
recognised in the period.
Right-of-use assets
During the six month period to 1 July 2023, there was an
increase of right-of-use assets arising from additions of $2.4
million (HY 2022: $6.8 million), and remeasurements of $1.0 million
(HY 2022: nil). The increase was offset by depreciation charges of
$9.8 million (HY 2022: $9.6 million) and disposals of $0.1 million
(HY 2022: $2.0 million). Exchange differences gain of $0.2 million
(HY 2022: $1.2 million loss) were also recognised in the
period.
Intangible assets
During the six month period to 1 July 2023, there was an
increase of intangible assets arising from additions of $18.5
million (HY 2022: $17.8 million). Exchange differences gain of $3.4
million (HY 2022: $7.9 million loss) and amortisation charges of
$40.0 million (HY 2022: $39.5 million) were also recognised in the
period.
14. Interests in joint ventures
1 July 31 December
2023 2022
$m $m
================================================= ====== ===========
At the beginning of the period 225.3 209.3
Share of profit after tax (post-exceptional) 6.5 16.5
Share of OCI - remeasurements on defined benefit
plans, net of deferred tax 0.1 0.5
Share of OCI - fair value movement on cash flow
hedges, net of deferred tax 0.1 17.1
Dividends received (19.5) (15.3)
Income tax movement - 2.9
Transferred to held for sale* (51.0) -
Exchange differences 0.8 (5.7)
----------------------------------------------------- ------ -----------
At the end of the period 162.3 225.3
----------------------------------------------------- ------ -----------
* Relates to the carrying amount of Glanbia Cheese which was
translated using the exchange rate on 14 February 2023 when it was
reclassified as held for sale. The carrying amount of $52.2 million
in note 3 is based on the exchange rate on 28 April 2023 when the
sale transaction of Glanbia Cheese was completed.
15. Borrowings
1 July 31 December
2023 2022
$m $m
======================= ====== ===========
Non-current
Bank borrowings 203.9 307.5
Private placement debt 375.0 375.0
578.9 682.5
----------------------- ------ -----------
Current
Bank overdrafts 122.9 275.4
----------------------- ------ -----------
Total borrowings 701.8 957.9
----------------------- ------ -----------
Bank borrowings decreased due to repayments of borrowings during
the current period.
The maturity profile of borrowings, and undrawn committed and
uncommitted facilities is as follows:
1 July 2023 31 December 2022
=========================
Undrawn Undrawn Undrawn Undrawn
committed uncommitted committed uncommitted
Borrowings facilities facilities Borrowings facilities facilities
$m $m $m $m $m $m
============ ===== ========= ========== =========== ============ ========== =========== ============
12 months or
less 122.9 - 16.9 275.4 - 16.4
Between 1
and
2 years - - - - - -
Between 2 and
5 years 303.9 730.0 - 307.5 613.8 -
More than 5 years 275.0 - - 375.0 - -
------------------------------ ---------- ----------- ------------ ---------- ----------- ------------
701.8 730.0 16.9 957.9 613.8 16.4
---------------------------- ---------- ----------- ------------ ---------- ----------- ------------
Net debt is a non-IFRS measure which we provide to investors as
we believe they find it useful. Net debt comprises the
following:
1 July 2 July
2023 2022
$m $m
================================================= ======= =======
Bank borrowings and private placement debt 578.9 820.8
Cash and cash equivalents net of bank overdrafts (128.1) (145.2)
------------------------------------------------- ------- -------
450.8 675.6
------------------------------------------------- ------- -------
Net debt reconciliation is as follows:
1 July 2 July
2023 2022
$m $m
===================================================== ======= =======
Net debt at the beginning of the period 490.0 682.6
Drawdown of borrowings 140.8 464.1
Repayment of borrowings (245.6) (424.6)
Exchange translation adjustment on net debt 5.0 (4.9)
Net decrease/(increase) in cash and cash equivalents 60.6 (40.6)
Cash and cash equivalents acquired on acquisition - (1.0)
Net debt at the end of the period 450.8 675.6
--------------------------------------------------------- ------- -------
16. Fair value of financial instruments
There have been no changes to the risk management procedures or
policies since 31 December 2022. Refer to note 30 of the 2022
Annual Report for details on these risk management procedures and
policies.
Except as detailed in the following table, the Group deemed that
the carrying amounts of financial instruments measured at amortised
cost in the interim financial statements approximate their fair
value due to their short-term nature:
1 July 2023 31 December 2022
==================== ====================
Carrying Carrying
amount Fair value amount Fair value
$m $m $m $m
======================================== ======== ========== ======== ==========
Non-current borrowings payable (578.9) (508.6) (682.5) (605.0)
Non-current loans receivable from joint
ventures - - 65.6 65.6
---------------------------------------- -------- ---------- -------- ----------
Fair value is estimated by discounting future contractual cash
flows using current market interest rates from observable interest
rates at the end of the reporting period that are available to the
Group for similar financial instruments (classified as level 2 in
the fair value hierarchy).
The following table shows the fair values of financial
instruments measured at fair value:
1 July 31 December
2023 2022
Fair
value
hierarchy $m $m
================================================= =========== ====== ===========
Assets
Equity instrument designated at FVOCI - BDO Level
Development Capital Fund 2 1.5 1.4
Level
Foreign exchange contracts - cash flow hedges 2 0.3 0.1
Level
Interest rate swaps - cash flow hedges 2 1.7 3.0
Contingent consideration receivable - Glanbia Level
Cheese 3 - -
Liabilities
Level
Foreign exchange contracts - cash flow hedges 2 (0.2) (0.3)
Cross currency swaps - fair value through income Level
statement 2 (0.2) (0.7)
Contingent consideration payable - Sterling Level
Technology, LLC 3 (27.5) (27.0)
----------------------------------------------------- ---------- ------ -----------
The movement in carrying amounts associated with Level 3
financial instruments are as follows:
Contingent
consideration
payable
$m
==================== ==============
At 1 January 2023 (27.0)
Remeasurements (0.5)
At 1 July 2023 (27.5)
-------------------- --------------
Refer to note 29 of the 2022 Annual Report for details of the
valuation process of the financial assets and liabilities other
than contingent consideration receivable - Glanbia Cheese which is
described herein.
As described in note 3, the contingent consideration arrangement
relating to the disposal of Glanbia Cheese requires Leprino Foods
Company to pay the Group amounts over the next three years if
pre-defined earnings thresholds are met. The total of undiscounted
future payments receivable by the Group over the three years ranges
from nil to $27.2 million (EUR25.0 million translated at period end
exchange rate). The fair value of the contingent consideration was
estimated by calculating the present value of the future expected
payments and was nil at period end. The main significant
unobservable input in the calculation is the forecast EBITDA of the
disposed businesses over the relevant period. A 10%
increase/decrease in the forecast EBITDA would not have a material
effect on the fair value of the contingent consideration.
17. Provisions
Property
and lease Legal and
commitments operational Total
$m $m $m
====================================== ============ ============ =====
At 1 January 2023 - non-current 4.0 - 4.0
At 1 January 2023 - current 2.7 9.3 12.0
Amount provided for in the period 0.1 2.4 2.5
Utilised in the period (0.2) - (0.2)
Unused amounts reversed in the period - (0.7) (0.7)
Exchange differences 0.2 0.2 0.4
---------------------------------------- ------------ ------------ -----
At 1 July 2023 6.8 11.2 18.0
---------------------------------------- ------------ ------------ -----
Non-current 4.2 - 4.2
Current 2.6 11.2 13.8
---------------------------------------- ------------ ------------ -----
6.8 11.2 18.0
-------------------------------------- ------------ ------------ -----
18. Share capital and share premium
Number
of Ordinary Share
shares shares premium Total
(thousands) $m $m $m
============================= ============ ======== ======== =====
At 1 January 2023 272,287 20.3 109.9 130.2
Cancellation of own shares (4,637) (0.3) - (0.3)
----------------------------- ------------ -------- -------- -----
At 1 July 2023 267,650 20.0 109.9 129.9
----------------------------- ------------ -------- -------- -----
At 2 January 2022 287,169 21.2 109.9 131.1
Cancellation of own shares (10,831) (0.7) - (0.7)
----------------------------- -------- ----- ----- -----
At 2 July 2022 276,338 20.5 109.9 130.4
----------------------------- -------- ----- ----- -----
The total authorised number of ordinary shares in the current
and prior period is 350 million shares with a par value of EUR0.06
per share. All issued shares are fully paid, and carry one vote per
share and a right to dividends.
During the half year ended 1 July 2023, 4.6 million ordinary
shares (HY 2022: 10.8 million) were cancelled through the share
buyback programme. The amount paid to repurchase these shares was
initially recognised in the own shares reserve and was transferred
to retained earnings on cancellation.
19. Other reserves and retained earnings
19.1 Other reserves
Share
Capital Put option based
and merger Currency Hedging liability Own payment
reserve reserve reserve reserve shares reserve Other Total
Half year 2023 $m $m $m $'m $m $m $m $m
================================= =========== ======== ======== ========== ======= ======== ===== =======
Balance at 1 January 2023 136.3 12.7 9.7 - (22.1) 31.4 - 168.0
Currency translation differences - 2.4 - - - - - 2.4
Net investment hedge - 1.8 - - - - - 1.8
Revaluation - gross - - (1.3) - - - 0.1 (1.2)
Reclassification to profit
or loss - gross - - (0.9) - - - - (0.9)
Deferred tax - - 0.3 - - - - 0.3
- 4.2 (1.9) - - - 0.1 2.4
Purchase of own shares - - - - (82.7) - - (82.7)
Cancellation of own shares 0.3 - - - 68.1 - - 68.4
Cost of share-based payments - - - - - 10.0 - 10.0
Transfer on exercise, vesting
or expiry of share-based
payments - - - - 22.9 (17.0) - 5.9
Transfer to Group income
statement (note 3) - 7.9 0.2 - - - - 8.1
Balance at 1 July 2023 136.6 24.8 8.0 - (13.8) 24.4 0.1 180.1
--------------------------------- ----------- -------- -------- ---------- ------- -------- ----- -------
Half year 2022
================================= ===== ====== ====== ====== ======= ====== ===== =======
Balance at 2 January 2022 135.3 50.8 (12.0) (28.0) (7.0) 23.2 (0.5) 161.8
Currency translation differences - (14.0) - - - - - (14.0)
Net investment hedge - (8.2) - - - - - (8.2)
Revaluation - gross - - 17.8 - - - 0.4 18.2
Reclassification to profit
or loss - gross - - (0.7) - - - - (0.7)
Deferred tax - - (4.1) - - - (0.1) (4.2)
- (22.2) 13.0 - - - 0.3 (8.9)
Purchase of own shares - - - - (149.3) - - (149.3)
Cancellation of own shares 0.7 - - - 137.9 - - 138.6
Cost of share-based payments - - - - - 8.3 - 8.3
Transfer on exercise, vesting
or expiry of share-based
payments - - - - 7.9 (10.3) - (2.4)
Changes in fair value of
put option liability - - - 6.8 - - - 6.8
Transfer to Group income
statement - - 1.7 - - - - 1.7
--------------------------------- ----- ------ ------ ------ ------- ------ ----- -------
Balance at 2 July 2022 136.0 28.6 2.7 (21.2) (10.5) 21.2 (0.2) 156.6
--------------------------------- ----- ------ ------ ------ ------- ------ ----- -------
Refer to note 23 of the 2022 Annual Report for a description of
the components of other reserves.
19.2 Retained earnings
Half year Half year
2023 2022
Notes $m $m
======================================================= ===== ========= =========
At the beginning of the period 1,686.2 1,669.0
Profit for the period attributable to equity holders
of the Company 193.6 201.8
Other comprehensive income
- Remeasurements on defined benefit plans 8 2.6 16.9
- Deferred tax on remeasurements on defined benefit
plans (0.3) (1.9)
- Share of remeasurements on defined benefit plans
from joint ventures, net of deferred tax 0.1 0.7
------------------------------------------------------- ----- --------- ---------
2.4 15.7
Dividends (57.3) (53.5)
Cancellation of own shares 19.1 (68.1) (137.9)
Transfer on exercise, vesting or expiry of share-based
payments 19.1 (5.9) 2.4
Deferred tax on share-based payments 0.8 1.0
At the end of the period 1,751.7 1,698.5
------------------------------------------------------- ----- --------- ---------
20. Related party transactions
Refer to note 3 for the disposal of Glanbia Cheese, which were
joint ventures of the Group up to 28 April 2023. Accordingly
transactions with Glanbia Cheese before the disposal are included
within "Transactions with joint ventures". Transactions that
occurred with related parties during the period ended 1 July 2023
include:
Half year Half year
2023 2022
$m $m
=========================================================== ========= =========
Transactions with joint ventures
Dividend received* 19.5 2.9
Sales of services 9.6 15.9
Purchases of goods 957.0 1,146.9
Repayment of loans by Glanbia Cheese (HY 2022: Tirlán
Limited)** 71.3 31.5
Loans advanced to Glanbia Cheese** 3.5 3.9
Transactions with Tirlán Co-operative group
Dividends paid 16.0 16.8
Sales of services 15.4 9.5
Sales of goods 0.3 -
Purchases of goods 27.2 18.0
Purchases of services 0.8 -
--------------------------------------------------------------- --------- ---------
* $4.5 million (HY 2022: $2.9 million) relates to Glanbia
Cheese
** There were $65.6 million of loans receivable from Glanbia
Cheese as at 31 December 2022. The balance decreased to nil due to
a loan repayment of $71.3 million which was offset by loan advanced
of $3.5 million and exchange differences gain of $2.2 million
during the current period.
21. Net cash flows from operating activities before exceptional items
Half year Half year
2023 2022
Notes $m $m
======================================================== ===== ========= =========
Profit for the period 193.4 201.5
Exceptional items 7 (56.5) (68.7)
Income taxes 21.2 17.2
-------------------------------------------------------- ----- --------- ---------
Profit before taxation 158.1 150.0
Share of results of joint ventures accounted for
using the equity method 4 (6.5) (12.5)
Finance costs 12.7 11.1
Finance income (5.7) (0.5)
Amortisation of intangible assets 13 40.0 39.5
Depreciation of property, plant and equipment 13 23.8 25.7
Depreciation of right-of-use assets 13 9.8 9.6
Net movement in allowance for impairment of receivables (1.3) 2.3
Cost of share-based payments 19.1 10.0 8.3
Net write down of inventories 8.1 6.1
Other (3.8) 1.5
Operating cash flows before movement in working capital 245.2 241.1
Movement in working capital (186.0) (256.4)
-------------------------------------------------------- ----- --------- ---------
Net cash flows from operating activities before
exceptional items 59.2 (15.3)
-------------------------------------------------------- ----- --------- ---------
22. Contingent liabilities and commitments
Contingent liabilities
Guarantees provided by financial institutions amounting to $8.4
million (FY 2022: $8.3 million) are outstanding at 1 July 2023. The
Group does not expect any material loss to arise from these
guarantees. The Group has contingent liabilities in respect of
legal claims arising in the ordinary course of business. It is not
anticipated that any material liability will arise from these
contingent liabilities other than those provided for.
Commitments
At 1 July 2023 the Group had entered into contractual
commitments for the acquisition of property, plant and equipment
amounting to $9.3 million (FY 2022: $9.0 million) and software of
$0.7 million (FY 2022: $0.8 million). Following the disposal of
Glanbia Cheese (note 3), the Group is no longer committed to invest
in Glanbia Cheese EU Limited or provide a loan facility to the
former joint venture.
23. Events after the reporting period
See note 11 for the interim dividend, recommended by the
Directors, to be paid on 6 October 2023. Subsequent to the period
end, the Group took control of the remaining 40% shareholdings in
LevlUp GmbH with no material impact on the Group financial
statements.
Other than as described above, there have been no material
events subsequent to the end of the interim period ended 1 July
2023 which require disclosure in this report.
24. Information
The interim financial statements are considered non-statutory
financial statements for the purposes of the Companies Act 2014 and
in compliance with section 340(4) of that Act we state that:
-- the interim financial statements have been prepared to meet
our obligation under the Transparency (Directive 2004/109/EC)
Regulations 2007 as amended (Statutory Instrument No. 277 of
2007);
-- the interim financial statements do not constitute the
statutory financial statements of the Group and are unaudited;
-- the statutory financial statements as at, and for the
financial year ended 31 December 2022 will be annexed to the 2023
annual return and filed with the Companies Registration Office;
-- the statutory auditor of the Group have made a report under
section 391 in the form required by section 336 Companies Act 2014
in respect of the statutory financial statements of the Group;
and
-- the matters referred to in the statutory auditor's report
were unqualified, and did not include a reference to any matters to
which the statutory auditor drew attention by way of emphasis
without qualifying the report.
Copies of this half yearly financial report are available for
download from the Group's website at www.glanbia.com.
glossary
Key peRformance indicators and non-ifrs performance measures
Non-IFRS performance measures
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 believes that the
presentation of these non-IFRS performance measures provides useful
supplemental information which, when viewed in conjunction with our
IFRS financial information, provides readers with a meaningful
understanding of the underlying financial and operating performance
of the Group.
These non-IFRS performance measures may not be uniformly defined
by all companies and accordingly they may not be directly
comparable with similarly titled measures and disclosures by other
companies. None of these non-IFRS performance measures should be
considered as an alternative to financial measures drawn up in
accordance with IFRS.
The principal non-IFRS performance measures used by the Group
are:
Relevant
for Relevant
Half year for
2023 Year 2022
================================================== ========== ==========
G 1. Constant currency
G 2. Revenue
G 3. EBITA (pre-exceptional)
G 4. EBITA margin % (pre-exceptional)
G 5. EBITDA
G 6. Constant Currency Basic and Adjusted Earnings
Per Share ("EPS")
G 7. Net debt
G 8. Financing Key Performance Indicators
G 9. Volume and pricing increase/(decrease)
G 10. Like-for-like revenue increase/(decrease)
G 11. Effective tax rate
G 12. Average interest rate
G 13. Operating cash conversion
G 14. Operating cash flow and free cash flow
G 15. Dividend payout ratio
G 16. Compound annual growth rate ("CAGR")
G 17. Exceptional items
Total shareholder return
Return on capital employed
The principal non-IFRS performance measures relevant to the
interim period are defined below with a reconciliation of these
measures to IFRS measures where applicable.
Total shareholder return and return on capital employed are not
considered relevant by the Group for the interim period as they are
performance measures considered on an annual basis only as part of
the performance conditions in Glanbia's Long-term Incentive
Plan.
Half year 2022 results have been restated throughout for
presentation in US Dollar. See note 2 of the interim financial
statements for further details.
G 1. Constant currency
While the Group reports its results in US Dollar, it generates a
proportion of its earnings in currencies other than US Dollar, in
particular Euro. Constant currency reporting is used by the Group
to eliminate the translational effect of foreign exchange on the
Group's results. To arrive at the constant currency
period-on-period change, the results for the prior period are
retranslated using the average exchange rates for the current
period and compared to the current period reported numbers.
The principal average exchange rates used to translate results
as at the reporting dates are set out below:
Half year Half year Year
1 US Dollar = 2023 2022 2022
=============== ========= ========= ======
euro 0.9253 0.9151 0.9493
Pound sterling 0.8110 0.7707 0.8095
--------------- --------- --------- ------
G 2. Revenue
Revenue comprises sales of goods and services to external
customers net of value added tax, rebates and discounts. Revenue is
one of the Group's Key Performance Indicators and is an IFRS
performance measure.
G 2.1 Revenue
Reference Half year Half year Constant
to the 2022 2022 currency
Like-for-like
interim Half year Constant growth growth
financial 2023 Reported Reported currency (G 9.1) (G 10)
statements/glossary $m $m $'m % %
============================ ===================== ============== =========== ========== ========= =============
Nutritional Solutions Note 4 525.5 643.4 639.6 (17.8%) (15.2%)
US Cheese Note 4 1,357.0 1,580.1 1,580.1 (14.1%) (14.1%)
---------------------------- --------------------- -------------- ----------- ---------- --------- -------------
Glanbia Nutritionals Note 4 1,882.5 2,223.5 2,219.7 (15.2%) (14.5%)
---------------------------- --------------------- -------------- ----------- ---------- --------- -------------
Americas Note 4 585.5 588.7 588.0 (0.4%) (0.4%)
International (including
Direct-to-Consumer) Note 4 303.4 279.1 271.9 11.6% 11.6%
---------------------------- --------------------- -------------- ----------- ---------- --------- -------------
Glanbia Performance
Nutrition Note 4 888.9 867.8 859.9 3.4% 3.4%
---------------------------- --------------------- -------------- ----------- ---------- --------- -------------
Revenue Note 6 2,771.4 3,091.3 3,079.6 (10.0%) (9.5%)
---------------------------- --------------------- -------------- ----------- ---------- --------- -------------
G 3. EBITA (pre-exceptional)
EBITA (pre-exceptional) is defined as earnings before interest,
tax and amortisation. EBITA references throughout the half year
results are on a pre-exceptional basis unless otherwise indicated.
EBITA (pre-exceptional) is one of the Group's Key Performance
Indicators. Business Segment EBITA (pre-exceptional) growth on a
constant currency basis is one of the performance conditions in
Glanbia's Annual Incentive Plan for Senior Management. Refer to
note 6 of the interim financial statements for the reconciliation
of EBITA (pre-exceptional).
G 3.1 EBITA (pre-exceptional)
Reference Half year
to the Half year 2022 Constant
interim Half year 2022 Constant currency
financial 2023 Reported Reported currency growth
statements/glossary $m $'m $m %
============================== ===================== ============== ========== ========= =========
Nutritional Solutions 67.8 78.4 78.2 (13.3%)
US Cheese 23.0 19.3 19.4 18.6%
----------------------------------------------------- -------------- ---------- --------- ---------
Glanbia Nutritionals Note 4 90.8 97.7 97.6 (7.0%)
------------------------------ --------------------- -------------- ---------- --------- ---------
Glanbia Performance Nutrition Note 4 107.8 89.9 89.5 20.4%
------------------------------ --------------------- -------------- ---------- --------- ---------
EBITA (pre-exceptional) Note 6 198.6 187.6 187.1 6.1%
------------------------------ --------------------- -------------- ---------- --------- ---------
G 4. EBITA margin % (pre-exceptional)
EBITA margin % (pre-exceptional) is defined as EBITA
(pre-exceptional) as a percentage of revenue. Refer to G 2.1 and G
3.1 for revenue and EBITA (pre-exceptional) respectively. EBITA
references throughout the half year results are on a
pre-exceptional basis unless otherwise indicated.
G 5. EBITDA
EBITDA is defined as earnings before interest, tax, depreciation
(net of grant amortisation) and amortisation. EBITDA references
throughout the half year results are on a pre-exceptional basis
unless otherwise indicated.
Reference
to the Half year Half year
interim
financial 2023 2022
statements/glossary $m $m
========================= ===================== ========= =========
EBITA (pre-exceptional) G 3.1 198.6 187.6
Depreciation* 33.6 35.3
------------------------------------------------ --------- ---------
EBITDA (pre-exceptional) G 14 232.2 222.9
------------------------- --------------------- --------- ---------
*Includes depreciation of property, plant and equipment of $23.8
million (HY 2022: $25.7 million) and depreciation of right-of-use
assets of $9.8 million (HY 2022: $9.6 million).
G 6. Constant Currency Basic and Adjusted Earnings Per Share
("EPS")
G 6.1 Constant Currency Basic Earnings Per Share
Basic EPS is calculated by dividing the profit after tax
attributable to the equity holders of the Company by the weighted
average number of ordinary shares in issue during the period,
excluding ordinary shares purchased by the Group and held as own
shares (see note 12). Basic EPS has also been calculated on a
continuing basis (excluding Tirlán Limited (formerly known as
Glanbia Ireland DAC)) in line with the presentation of continuing
and discontinued operations in the Group income statement.
Reference Half year
to the Half year 2022
interim Half year 2022 Constant Year 2022
financial 2023 Reported Reported currency Reported
statements/glossary $m $m $m $m
====================================== ===================== ============== ========= ========= =========
Condensed
Profit after tax attributable Group income
to equity holders of the Company statement 193.6 201.8 200.6 271.4
Less Profit after tax attributable Condensed
to equity holders of the Company Group income
- discontinued operations statement - 61.1 60.4 60.3
-------------------------------------- --------------------- -------------- --------- --------- ---------
Profit after tax attributable
to equity holders of the Company
- continuing operations Note 12 193.6 140.7 140.2 211.1
-------------------------------------- --------------------- -------------- --------- --------- ---------
Weighted average number of ordinary
shares in issue (thousands) Note 12 269,255 279,154 279,154 275,761
-------------------------------------- --------------------- -------------- --------- --------- ---------
Basic Earnings Per Share (cent)
- continuing operations Note 12 71.90 50.40 50.23 76.55
Basic Earnings Per Share (cent) Note 12 71.90 72.29 71.88 98.40
-------------------------------------- --------------------- -------------- --------- --------- ---------
Constant currency change - continuing
operations 43.1%
Constant currency change 0.0%
------------------------------------------------------------- -------------- --------- --------- ---------
G 6.2 Constant Currency Adjusted Earnings Per Share
Adjusted EPS is defined as the profit after tax attributable to
the equity holders of the Company, before exceptional items and
intangible asset amortisation and impairment (excluding software
amortisation), net of related tax, divided by the weighted average
number of ordinary shares in issue during the period, excluding
ordinary shares purchased by the group and held as own shares (see
note 12). The Group believes that adjusted EPS provides useful
information of underlying performance as it excludes exceptional
items (net of related tax) that are not related to ongoing
operational performance and intangible asset amortisation, which
allows for comparability of companies that grow by acquisition to
those that grow organically. Adjusted Earnings Per Share has also
been calculated on a continuing basis (excluding Tirlán Limited
(formerly known as Glanbia Ireland DAC)) in line with the
presentation of continuing and discontinued operations in the Group
consolidated income statement.
Adjusted EPS is one of the Group's Key Performance Indicators.
Adjusted EPS growth on a constant currency basis is one of the
performance conditions in Glanbia's Annual Incentive Plan and in
Glanbia's Long-term Incentive Plan.
Reference Half year
to the Half year 2022
interim Half year 2022 Constant Year 2022
financial 2023 Reported Reported currency Reported
statements/glossary $m $m $m $m
======================================= ===================== ============== ========= ========= =========
Condensed
Profit after tax from continuing Group income
operations statement 193.4 140.4 139.8 210.3
Condensed
Exceptional (credit)/charge - Group income
continuing operations statement (56.5) (7.6) (7.5) 37.7
--------------------------------------- --------------------- -------------- --------- --------- ---------
Condensed
Profit after tax from continuing Group income
operations (pre-exceptional) statement 136.9 132.8 132.3 248.0
Condensed
Group income
Non-controlling interests statement 0.2 0.3 0.3 0.8
Amortisation and impairment of
intangible assets (excluding software
amortisation) net of related tax
of $4.0 million (HY 2022: $4.2
million, HY 2022 retranslated
$4.2 million, FY 2022: $8.4 million)
- continuing operations 26.6 26.5 26.5 53.4
-------------------------------------------------------------- -------------- --------- --------- ---------
Adjusted net income - continuing
operations 163.7 159.6 159.1 302.2
-------------------------------------------------------------- -------------- --------- --------- ---------
Condensed
Profit after tax from discontinued Group income
operations statement - 61.1 60.4 60.3
Condensed
Exceptional (credit) - discontinued Group income
operations statement - (61.1) (60.4) (60.3)
--------------------------------------- --------------------- -------------- --------- --------- ---------
Condensed
Profit from discontinued operations Group income
(pre-exceptional) statement - - - -
--------------------------------------- --------------------- -------------- --------- --------- ---------
Adjusted net income 163.7 159.6 159.1 302.2
-------------------------------------------------------------- -------------- --------- --------- ---------
Weighted average number of ordinary
shares in issue (thousands) Note 12 269,255 279,154 279,154 275,761
Adjusted Earnings Per Share (cent)
- continuing operations 60.78 57.17 57.01 109.57
-------------------------------------------------------------- -------------- --------- --------- ---------
Adjusted Earnings Per Share (cent) 60.78 57.17 57.01 109.57
-------------------------------------------------------------- -------------- --------- --------- ---------
Constant currency change- continuing
operations 6.6%
Constant currency change 6.6%
-------------------------------------------------------------- -------------- --------- --------- ---------
G 7. Net debt
Net debt is calculated as current and non-current borrowings
less cash and cash equivalents.
Reference to the Half year Half year Year
interim financial 2023 2022 2022
statements/glossary $m $m $m
========================== ===================== ========= ========= =======
Condensed Group
Cash and cash equivalents balance sheet (251.0) (241.9) (467.9)
Condensed Group
Current borrowings balance sheet 122.9 96.7 275.4
Condensed Group
Non-current borrowings balance sheet 578.9 820.8 682.5
-------------------------- --------------------- --------- --------- -------
Net debt Note 15, G 14 450.8 675.6 490.0
-------------------------- --------------------- --------- --------- -------
G 8. Financing Key Performance Indicators
The following are the financing key performance indicators
defined as per the Group's financing agreements.
G 8.1 Net debt: adjusted EBITDA
Net debt: adjusted EBITDA is calculated as net debt at the end
of the period divided by adjusted EBITDA. Net debt is calculated as
current and non-current borrowings less cash and cash equivalents.
Adjusted EBITDA is calculated in accordance with lenders' facility
agreements definitions which adjust EBITDA for items such as
exceptional items, dividends received from joint ventures,
acquisitions or disposals and to reverse the net impact on EBITDA
as a result of adopting IFRS 16 "Leases". Adjusted EBITDA is a
rolling 12 month measure (a period of 12 consecutive months
determined on a rolling basis with a new 12 month period beginning
on the first day of each month).
Reference
to the Half year Half year Year
interim
financial 2023 2022 2022
statements/glossary $m $m $m
=========================================== ===================== ========== ========== ==========
Note 15,
Net debt G 7 450.8 675.6 490.0
------------------------------------------- --------------------- ---------- ---------- ----------
Rolling EBITDA 446.0 378.5 436.7
Adjustments in line with lenders' facility
agreements 9.1 8.2 (2.7)
------------------------------------------------------------------ ---------- ---------- ----------
Rolling adjusted EBITDA 455.1 386.7 434.0
------------------------------------------------------------------ ---------- ---------- ----------
Net debt: adjusted EBITDA 0.99 times 1.75 times 1.13 times
------------------------------------------------------------------ ---------- ---------- ----------
G 8.2 Adjusted EBIT: adjusted net finance cost
Adjusted EBIT: adjusted net finance cost is calculated as
earnings before interest and tax adjusted for the IFRS 16 "Leases"
impact on operating profit plus dividends received from joint
ventures divided by adjusted net finance cost. Adjusted net finance
cost comprises finance costs plus borrowing costs capitalised into
assets less finance income/costs on changes in fair value of call
options and contingent consideration and interest expense on lease
liabilities. Adjusted EBIT and adjusted net finance cost are
rolling 12 month measures (a period of 12 consecutive months
determined on a rolling basis with a new 12 month period beginning
on the first day of each month).
Half year Half year Year
2023 2022 2022
$m $m $m
=========================================== ========== ========== ==========
Rolling operating profit 302.6 226.9 235.6
Rolling exceptional (credit)/charge (5.5) 5.1 51.0
----------------------------------------------- ---------- ---------- ----------
Rolling operating profit (pre-exceptional) 297.1 232.0 286.6
Rolling dividends received from related
parties 31.9 20.9 15.3
Rolling IFRS 16 adjustment - interest (2.7) (2.7) (2.7)
----------------------------------------------- ---------- ---------- ----------
Rolling adjusted EBIT 326.3 250.2 299.2
Rolling net finance cost 14.1 15.6 17.6
----------------------------------------------- ---------- ---------- ----------
Adjusted EBIT: net finance cost 23.1 times 16.0 times 17.0 times
----------------------------------------------- ---------- ---------- ----------
G 9. Volume and pricing increase/(decrease)
Volume increase/(decrease) represents the impact of sales
volumes within the revenue movement period-on-period, excluding
volume from acquisitions and disposals, on a constant currency
basis.
Pricing increase/(decrease) represents the impact of sales
pricing (including trade spend) within revenue movement
period-on-period, excluding acquisitions and disposals, on a
constant currency basis.
G 9.1 Reconciliation of volume and pricing increase/(decrease)
to constant currency revenue growth
Reference
to the
interim Volume Price Revenue
financial increase/ increase/ Acquisitions/ increase/
statements/glossary (decrease) (decrease) (disposals) (decrease)
============================== ===================== =========== =========== ============= ===========
Nutritional Solutions G 2.1 (10.4%) (4.8%) (2.6%) (17.8%)
US Cheese G 2.1 0.4% (14.5%) - (14.1%)
------------------------------ --------------------- ----------- ----------- ------------- -----------
Glanbia Nutritionals G 2.1 (2.8%) (11.7%) (0.7%) (15.2%)
Glanbia Performance Nutrition G 2.1 (7.5%) 10.9% - 3.4%
------------------------------ --------------------- ----------- ----------- ------------- -----------
HY 2023 decrease % - revenue G 2.1 (4.1%) (5.4%) (0.5%) (10.0%)
------------------------------ --------------------- ----------- ----------- ------------- -----------
G 10. Like-for-like revenue increase/(decrease)
G 10.1 Glanbia Performance Nutrition ("GPN") like-for-like
revenue
GPN like-for-like revenue represents the sales
increase/(decrease) period-on-period, excluding the incremental
revenue contributions from current period and prior period
acquisitions and disposals and the impact of a 53(rd) week (when
applicable), on a constant currency basis.
GPN like-for-like branded revenue represents the sales
increase/(decrease) period-on-period on branded sales, excluding
the incremental revenue contributions from current period and prior
period acquisitions and disposals and the impact of a 53(rd) week
(when applicable), on a constant currency basis. Like-for-like
branded revenue increase/(decrease) is one of the GPN segment's Key
Performance Indicators. Like-for-like branded revenue
increase/(decrease) is one of the performance conditions in
Glanbia's Annual Incentive Plan for GPN Senior Management.
G 10.2 Glanbia Nutritionals like-for-like revenue
This represents the sales increase/(decrease) period-on-period,
excluding the incremental revenue contributions from current period
and prior period acquisitions and disposals and the impact of a
53(rd) week (when applicable), on a constant currency basis.
G 11. Effective tax rate
The effective tax rate is defined as the pre-exceptional income
tax charge divided by the profit before tax less share of results
of joint ventures.
Half year Half year
Reference to the interim
financial 2023 2022
statements/glossary $m $m
========================================== ========================= ========= =========
Condensed Group income
Profit before tax - continuing operations statement 214.0 157.6
Condensed Group income
Exceptional credit statement (55.9) (7.6)
------------------------------------------ ------------------------- --------- ---------
Condensed Group income
Profit before tax (pre-exceptional) statement 158.1 150.0
Less share of results of joint ventures Condensed Group income
(pre-exceptional) statement (6.5) (12.5)
------------------------------------------ ------------------------- --------- ---------
151.6 137.5
-------------------------------------------------------------------- --------- ---------
Condensed Group income
Income tax statement 20.6 17.2
Condensed Group income
Exceptional tax credit statement 0.6 -
------------------------------------------ ------------------------- --------- ---------
Condensed Group income
Income tax (pre-exceptional) statement 21.2 17.2
Effective tax rate 14.0% 12.5%
--------------------------------------------------------------------- --------- ---------
G 12. Average interest rate
The average interest rate is defined as the rolling 12 month
adjusted net finance cost divided by average net debt.
Adjusted net finance cost comprises finance costs plus borrowing
costs capitalised into assets less finance income, finance
income/costs on changes in fair value of call options and
contingent consideration and interest expense on lease liabilities.
Average net debt and adjusted net finance cost are rolling 12 month
measures (a period of 12 consecutive months determined on a rolling
basis with a new 12 month period beginning on the first day of each
month).
G 13. Operating cash conversion
Operating cash conversion is defined as Operating Cashflow
("OCF") divided by pre-exceptional EBITDA. Cash conversion is a
measure of the Group's ability to convert trading profits into cash
and is an important metric in the Group's working capital
management programme.
G 14. Operating cash flow and free cash flow
Operating cash flow is defined as pre-exceptional EBITDA net of
business sustaining capital expenditure and working capital
movements, excluding exceptional cash flows.
Operating cash flow is one of the Group's Key Performance
Indicators and one of the performance conditions in Glanbia's
Annual Incentive Plan.
Free cash flow is calculated as the net cash flow in the year
before the following items: strategic capital expenditure,
dividends paid to Company shareholders, loans/investments in joint
ventures, exceptional costs paid, payment for acquisition of
subsidiaries, proceeds received on disposals and purchase of own
shares under share buyback.
Half year Half year
2023 2022
Reference to the interim
financial statements/glossary $m $m
============================================== =============================== ========= =========
Earnings before interest, tax, depreciation
and amortisation (pre-exceptional
EBITDA) G 5 232.2 222.9
Movement in working capital (pre-exceptional) G 14.2 (181.4) (246.2)
Business sustaining capital expenditure G 14.4 (9.5) (8.0)
---------------------------------------------- ------------------------------- --------- ---------
Operating cash flow G 14.1 41.3 (31.3)
Net interest and tax paid G 14.3 (37.0) (34.8)
Condensed Group statement
Dividends received from joint ventures of cash flows 19.5 2.9
Condensed Group statement
Payments of lease liabilities of cash flows (10.8) (8.1)
Other outflows G 14.5 (5.0) (2.1)
---------------------------------------------- ------------------------------- --------- ---------
Free cash flow 8.0 (73.4)
Strategic capital expenditure G 14.4 (27.3) (24.0)
Condensed Group statement
Dividends paid to Company shareholders of cash flows (57.3) (53.5)
Purchase of own shares under share
buyback G 14.8 (69.3) (138.9)
Loans/investments in joint ventures G 14.6 67.8 27.6
Cash outflow related to exceptional
items G 14.7 (8.5) (16.2)
Acquisitions/disposals G 14.9 130.8 279.5
Net cash flow 44.2 1.1
Exchange translation Note 15 (5.0) 4.9
Cash acquired on acquisition Note 15 - 1.0
Net debt movement 39.2 7.0
Opening net debt (490.0) (682.6)
------------------------------------------------------------------------------- --------- ---------
Closing net debt G 7, Note 15 (450.8) (675.6)
---------------------------------------------- ------------------------------- --------- ---------
G 14.1 Reconciliation of operating cash flow to the Condensed
Group statement of cash flows in the interim financial
statements
Half year Half year
2023 2022
Reference to the interim
financial statements/glossary $m $m
============================================= =============================== ========= =========
Net cash flows from operating activities
before exceptional items Note 21 59.2 (15.3)
Less business sustaining capital expenditure G 14.4 (9.5) (8.0)
Non-cash items not adjusted in computing
operating cash flow:
Cost of share-based payments Note 21 (10.0) (8.3)
Other reconciling items 1.6 0.3
------------------------------------------------------------------------------ --------- ---------
Operating cash flow G 14 41.3 (31.3)
--------------------------------------------- ------------------------------- --------- ---------
G 14.2 Movement in working capital
Half year Half year
2023 2022
Reference to the interim
financial statements/glossary $m $m
================================================ =============================== ========= =========
Movement in working capital (pre-exceptional) G 14 (181.4) (246.2)
Net write down of inventories (pre-exceptional) Note 21 (8.1) (6.1)
Net movement in allowance for impairment
of receivables Note 21 1.3 (2.3)
Other reconciling items 2.2 (1.8)
--------------------------------------------------------------------------------- --------- ---------
Total change in net working capital Note 21 (186.0) (256.4)
------------------------------------------------ ------------------------------- --------- ---------
G 14.3 Net interest and tax paid
Half year Half year
2023 2022
Reference to the interim
financial statements/glossary $m $m
================================== =============================== ========= =========
Condensed Group statement
Interest received of cash flows 5.2 1.1
Interest paid (including interest Condensed Group statement
expense on lease liabilities) of cash flows (13.5) (10.3)
Condensed Group statement
Tax paid of cash flows (28.7) (25.6)
Total net interest and tax paid G 14 (37.0) (34.8)
---------------------------------- ------------------------------- --------- ---------
G 14.4 Capital expenditure
Half year Half year
2023 2022
Reference to the interim
financial statements/glossary $m $m
========================================== =============================== ========= =========
Business sustaining capital expenditure G 14 9.5 8.0
Strategic capital expenditure G 14 27.3 24.0
------------------------------------------ ------------------------------- --------- ---------
Total capital expenditure 36.8 32.0
--------------------------------------------------------------------------- --------- ---------
Condensed Group statement
Purchase of property, plant and equipment of cash flows 18.3 13.9
Condensed Group statement
Purchase of intangible assets of cash flows 18.5 18.1
------------------------------------------ ------------------------------- --------- ---------
Total capital expenditure per the
Condensed Group statement of cash
flows 36.8 32.0
--------------------------------------------------------------------------- --------- ---------
Business sustaining capital expenditure
The Group defines business sustaining capital expenditure as the
expenditure required to maintain/replace existing assets with a
high proportion of expired useful life. This expenditure does not
attract new customers or create the capacity for a bigger business.
It enables the Group to keep operating at current throughput rates
but also keep pace with regulatory and environmental changes as
well as complying with new requirements from existing
customers.
Strategic capital expenditure
The Group defines strategic capital expenditure as the
expenditure required to facilitate growth and generate additional
returns for the Group. This is generally expansionary expenditure
beyond what is necessary to maintain the Group's current
competitive position.
G 14.5 Other outflows
Half year Half year
2023 2022
Reference to the interim
financial statements/glossary $m $m
=================================== =============================== ========= =========
Cost of share-based payments Note 21 10.0 8.3
Proceeds from disposal/redemption Condensed Group statement
from FVOCI financial assets of cash flows - 0.3
Purchase of own shares by Employee
Share (Scheme) Trust G 14.8 (13.4) (10.4)
Other reconciling items (1.6) (0.3)
Total other outflows G 14 (5.0) (2.1)
----------------------------------- ------------------------------- --------- ---------
G 14.6 Loans/investments in joint ventures
Half year Half year
2023 2022
Reference to the interim
financial statements/glossary $m $m
========================================= =============================== ========= =========
Condensed Group statement
Loans advanced to Glanbia Cheese of cash flows (3.5) (3.9)
Proceeds on repayment of loans advanced Condensed Group statement
to Glanbia Cheese of cash flows 71.3 -
Proceeds on repayments of loans advanced Condensed Group statement
to Tirlán Limited of cash flows - 31.5
Total loans/investments in joint
ventures G 14 67.8 27.6
----------------------------------------- ------------------------------- --------- ---------
G 14.7 Exceptional cash paid
Half year Half year
2023 2022
Reference to the interim
financial statements/glossary $m $m
==================================== =============================== ========= =========
Cash outflow related to exceptional Condensed Group statement
items - operating activities of cash flows (8.5) (7.4)
Cash outflow related to exceptional Condensed Group statement
items - investing activities of cash flows - (8.8)
Total exceptional cash paid G 14 (8.5) (16.2)
------------------------------------ ------------------------------- --------- ---------
G 14.8 Purchase of own shares
Half year Half year
2023 2022
Reference to the interim
financial statements/glossary $m $m
=================================== =============================== ========= =========
Purchase of own shares under share
buyback G 14 (69.3) (138.9)
Purchase of own shares by Employee
Share (Scheme) Trust G 14.5 (13.4) (10.4)
Condensed Group statement
Total purchase of own shares of cash flows (82.7) (149.3)
----------------------------------- ------------------------------- --------- ---------
G 14.9 Acquisitions/disposals
Half year Half year
2023 2022
Reference to the interim
financial statements/glossary $m $m
========================================= =============================== ========= =========
Proceeds from disposal of Glanbia Condensed Group statement
Cheese (exceptional) of cash flows 123.4 -
Proceeds from disposal of assets and Condensed Group statement
liabilities held for sale (exceptional) of cash flows 7.4 -
Proceeds from disposal of Tirlán
Ltd (formerly known as Glanbia Ireland Condensed Group statement
DAC) of cash flows - 339.3
Condensed Group statement
Payment for acquisition of subsidiaries of cash flows - (59.8)
Total acquisitions/disposals G 14 130.8 279.5
----------------------------------------- ------------------------------- --------- ---------
G 15. Dividend payout ratio
Dividend payout ratio is defined as the US Dollar equivalent
interim dividend per ordinary share divided by the Adjusted
Earnings Per Share. US Dollar equivalent dividend is based on the
actual dividend recommendation/payment in Euro, retranslated to US
Dollar at the average exchange rate for the period. The dividend
payout ratio provides an indication of the value returned to
shareholders relative to the Group's total earnings.
Reference to the interim
financial Half year Half year
statements/glossary 2023 2022
========================================= ========================= ========== ==========
Adjusted Earnings Per Share G 6.2 $ 60.78c $ 57.17c
Dividend recommended/paid per ordinary
share in Euro Note 11 EUR 14.22c EUR 12.93c
Equivalent US Dollar dividend translated
at average exchange rate for the period $ 15.37c $ 14.13c
-------------------------------------------------------------------- ---------- ----------
Dividend payout ratio 25.3% 24.7%
-------------------------------------------------------------------- ---------- ----------
G 16. Compound annual growth rate ("CAGR")
The compound annual growth rate is the annual growth rate over a
period of years. It is calculated on the basis that each year's
growth is compounded.
G 17. Exceptional items
The Group considers that items of income or expense which are
material by virtue of their scale and nature should be disclosed
separately if the Group financial statements are to fairly present
the financial performance and financial position of the Group.
Determining which transactions are to be considered exceptional in
nature is often a subjective matter. However, circumstances that
the Group believes would give rise to exceptional items for
separate disclosure are outlined in the accounting policy on
exceptional items in note 2 to the 2022 financial statements.
Exceptional items are included on the income statement line item to
which they relate. In addition, for clarity, separate disclosure is
made of all items in one column on the face of the Group income
statement. Refer to note 7 for an analysis of exceptional items
recognised in half year 2023.
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END
IR UVURROOUWAUR
(END) Dow Jones Newswires
August 16, 2023 02:00 ET (06:00 GMT)
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