Glanbia benefits from ‘protein mega-trend’ as profits surge

Glanbia is benefiting from a “protein mega-trend”, according to the company’s new chief executive Hugh McGuire.

The Kilkenny-based nutrition group announced a 20 per cent jump in after-tax profits to $298.1 million (€275 million) for 2023. Earnings per share were also up by 20 per cent to 131.37 cent, prompting a near 8 per cent jump in the company’s share price.

Glanbia is one of the world’s leading producers of protein powders for gym goers. The company’s leading Optimum Nutrition brand generated $1.1 billion in revenue last year, the latest results show.

Mr McGuire said the company’s “two main growth platforms” were Glanbia Performance Nutrition, which generated $1.8 billion in revenue last year on the back of strong-selling brands Optimum Nutrition and Isopure and its Nutritional Solutions division, which generated just over $1 billion.

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“We’re benefiting from increased consumer interest in protein supplementation, protein fortification. Protein is a mega-trend ... and Glanbia is a protein powerhouse,” Mr McGuire said.

Overall the company reported an 8.7 per cent decline in group revenue to $5.42 billion for the 2023 financial year.

This was mainly down to a fall-off in revenue at its US Cheese division, which decreased by 13.9 per cent to $2.6 billion from $3 billion the year before. “This was driven by a 0.7 per cent increase in volume and a 14.6 per cent decline in price, with the pricing decline aligned to the lower year-on-year cheese market pricing,” the company said.

Mr McGuire noted Glanbia’s cheese business was a high-volume, low-margin operation, which accounted for only 10 per cent of profits.

Glanbia’s board recommended a final dividend of 21.21 euro cent per share, which brings the total dividend for the year to 35.43 euro cent per share, a 10 per cent increase on the previous year.

As part of the results announcement, Glanbia also signalled a further €100 million share buyback this year.

During 2023 the company purchased and cancelled 7.2 million ordinary shares, representing 2.7 per cent of the total issued, at a total cost of €100 million.

Glanbia’s strong financials and additional share buyback announcement saw its shares jump by 7.7 per cent to €17.01 on Dublin’s Iseq. Mr McGuire said the company had no plans to seek a US listing similar to building materials giant CRH.

“Glanbia is a company with very strong fundamentals – a clear strategy, a portfolio of great brands and ingredients playing into strong underlying consumer health and wellness trends with a team of talented people,” he said.

“Looking ahead, we will focus on driving growth and shareholder value by stepping up awareness and distribution of our great brands, with a robust innovation pipeline across both our growth platforms. In 2024, we expect adjusted EPS growth of 5 per cent to 8 per cent constant currency, which will be driven by a strong operating performance.”

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