Kilkenny-headquartered food group Glanbia is targeting annual growth of 7-11 per cent in earnings per share out to 2028, the company told investors on Wednesday.
Glanbia is holding a capital markets day, which is focusing on its growth strategy and associated financial targets from 2026 to 2028.
The group is also targeting operating cash conversion of at least 85 per cent of Ebitda (earnings before interest, taxes, depreciation, and amortisation), and a return on capital employed of 10-13 per cent.
It also pledged a “progressive dividend” with a target payout ratio range of 30 per cent to 40 per cent.
READ MORE
In the group’s performance nutrition division, which makes a suite of protein powders including top selling brand Optimum Nutrition, it is targeting annual organic revenue growth of 5-7 per cent.
Davy analysts said the midpoint of growth over the cycle implies sales of $2 billion (€1.7 billion) in this division in 2028, anchored by Optimum Nutrition and Isopure. The group is also targeting a three-year Ebitda margin progression of 250 basis points in from 2025.
Irish business grandee Gary McGann on working with Michael Smurfit, the fall of Anglo Irish and the current state of the Irish economy
“Based on our model, the implied margin in 2028 would be 15.6 per cent, which is a healthy return in the context of advertising and promotion investment and elevated whey costs,” Davy said.
In its health and nutrition division, Glanbia is targeting annual organic revenue growth of 4-6 per cent, which Davy said was “on a par with the sector leaders”. The group is also targeting an Ebitda margin range of 17-19 per cent.
Finally, in its dairy nutrition arm, it is targeting annual Ebitda range of approximately $150 million (€129.6 million) to $160 million.
Glanbia chief executive Hugh McGuire said the company is “well positioned to deliver on our ambition to drive growth and shareholder returns”.
The company endured a difficult few months at the start of the year on the back of a spike in the cost of whey proteins, a key input, and a loss in investor confidence, which triggered a slide in the share price and culminated in the sale of its underperforming brands, Slimfast and Body & Fit.
Davy analysts described the headline targets as “an enterprising set ... that strike a good balance between ambition and achievability”.
Goodbody analyst Patrick Higgins said that while there are “some moving parts”, the headline guidance “is a touch in advance of my and consensus expectations” as he estimated growth of about 8 per cent in annual earnings per share out to 2028.
“For full year 2028, we currently model group revenue of £4.1 billion (€4.7 billion), up 2.1 per cent, driven by 6 per cent annual organic growth, 5 per cent growth in health and nutrition and dairy nutrition broadly flat.
“We currently model about 6 per cent Ebitda growth driven by a 150 basis point group margin improvement to 14.4 per cent with performance nutrition up 180 basis points to 15 per cent and health and nutrition flat at about 19 per cent.”
Mr Higgins said Goodbody retains its “positive stance” on the stock and sees scope for the group to achieve the top-end of this guide over time given its “strong positioning” for key secular consumer growth trends pivoting around health and wellness categories.
