Glanbia 2016 earnings up 11%, new entity announced

Remigio Civitarese
Febbraio 22, 2017

Glanbia Performance Nutrition had an EBITA of €162.6m for 2016, a 20% increase on the previous year while Glanbia Nutritionals saw increase by 4.5% to €111.8m.

Separately, Glanbia plc and Glanbia Co-operative Society Limited have announced they have signed a non-binding memorandum of understanding for the sale of a 60% interest in Glanbia's Dairy Ireland segment to Glanbia Co-op.

Commenting today Siobhan Talbot, Group Managing Director, said that she is pleased that Glanbia had a strong Group-wide performance in 2016 delivering its seventh year of double digit earnings growth coupled with strong cash conversion. Glanbia will own 50% of the project, and Dairy Farmers of America Inc., Michigan Milk Producers Association and Foremost Farms US will own the other half of the venture.

Glanbia Ireland would build on the "successful partnership" of Glanbia and Glanbia Co-op, after the two manufacturers created Glanbia Ingredients Ireland in 2012, Glanbia said.

"It has been an exciting start to 2017 with a number of key strategic initiatives progressing which will shape the future direction of the group". Glanbia will hold a 40 percent stake in the joint venture, to be renamed Dairy Ireland, and the co-op will own 60 percent.

At 10:45 GMT, shares in Glanbia were up 1.61% to 17.63p each.

The new entity will continue the "significant" investment programme which has "the ambition to leverage the benefits of the significant growth plans of the Irish dairy supply base with an ownership structure more aligned to the needs of that supply base", and will invest approximately €250 - €300 million to that end between 2017 and 2020.

"ICMSA will consult with its members and officers in the Glanbia region and, depending on their reaction and what we view as being in the interests of farmer-suppliers, we will then take a position regarding the proposal", he said.

The Glanbia Ireland joint venture will be an enterprise of scale, with a 2.4 billion litre milk pool, revenue of €1.5 billion, 11 processing plants and over 1,800 employees, according to the co-op. Glanbia Ireland would acquire 100% of the working capital in Dairy Ireland at completion financed by banking facilities. The Dairy Ireland transaction is expected to be 5%-7% adjusted EPS dilutive in a full-year.

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