Glanbia revenues rise to €2.88 billion

Food group Glanbia has reported revenues of €2.88 billion for 2012, a 4.8 per cent increase on the previous year, driven by a strong performance in its global nutritionals division.

Pretax earnings for 2012 rose 9 per cent to €198.8 million, while the company also reported a better than expected 14.2 per cent jump in adjusted earnings per share to 52.9 cent.

This is the third consecutive year Glanbia has achieved double-digit earnings growth.

The company said the improved numbers came on the back of a strong performance in its global nutritionals division which saw revenue grow by 20 per cent on the back of “positive markets and strong operational performances in each business unit”.

"We are in a stronger position than ever to drive the business forward and capitalise on our competitive advantage in both business-to-business and business-to-consumer nutritional products and solutions," group managing director John Moloney said.

Higher costs
The company's US cheese and global nutritionals business grew 11 per cent to €1.4 billion, up from €1.3 billion in 2011 despite a 6 per cent decline in US cheese prices. Some 52 per cent of Glanbia's revenues come from the US cheese and global nutritionals division.

The Dairy Ireland revenue increased 2.4 per cent to €631 million, despite a "challenging year in both consumer products and agribusiness". Higher input cost prices in both the feed and fertiliser product categories contributed to margin pressure across the sector.

Glanbia undertook a complex restructuring last year which meant the establishment a joint venture between the plc and Glanbia co-op which will be known as Glanbia Ingredients Ireland. The enterprise – which means the co-op’s share in the plc is reduced to 41.3 per cent – will be the largest dairy processing business in the country.

The company said the restructuring was part of its strategic approach to the potential opportunity for expansion in Irish dairy processing, which will arise due to the abolition of EU milk quotas in 2015.

The group also invested in capital projects and acquisitions in 2012, which amounted to €115 million, including the €45 million purchase of Aseptic Solutions in the US to enhance its nutritional ingredient technologies division.

Acquisitions
In its outlook for 2013, Glanbia indicated that it expected adjusted earnings per share growth, on a constant currency basis, of between 8 and 10 per cent for the full year from a base of 51.02 cents.

Mr Moloney said the company had the capacity to spend up to €200 million on acquisitions in 2013, while still having a prudent balance sheet.

However, he remained cautious about the global environment.

“There are some headwinds with an uncertain global economic environment and challenging Irish retail environment, but the Group is well positioned to maintain its growth momentum,” said Mr Moloney.

The board is proposing a final dividend of 5.43 cent per share, bringing the total dividend for the year to 9.09 cent per share, representing an increase of 10 per cent.