Glanbia has reported revenues up 20% and adjusted earnings per share up 22.1% for 2012 which, said the company, represents a record year. The results were driven by a strong performanace from the company’s Global Nutritionals business.
“The Group delivered strong organic revenue growth and a 22.1% increase in adjusted earnings per share; the third consecutive year of double digit progression,” said John Moloney, group managing director. “We also achieved a landmark agreement with our majority shareholder, Glanbia Co-operative Society, which restructured our Irish dairy processing business from a wholly owned operation to an associate. In addition, the Society’s ownership of the plc will reduce to 41.3% and the composition of the Board will evolve on a phased basis from 2016.”
“The prospects for 2013 are good, although we remain cautious given the global environment. We expect adjusted earnings per share growth, on a constant currency basis, of between 8% and 10% for the full year from a base of 51.02 cents. The Irish dairy processing transaction facilitates a concentrated focus on our international growth and the longer-term prospects for Glanbia are very positive. 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.”
The Group undertook a significant programme of investment in capital projects and acquisitions in 2012 amounting to €115 million. This included the €45 million acquisition of Aseptic Solutions in the USA to enhance Global Nutritionals’ Ingredient Technologies; the opening of a Customised Premix Solutions plant in Europe; capacity expansion in Performance Nutrition and a new cheese innovation centre in Idaho.
Glanbia’s Ingredient Technologies business markets a range of dairy and whey based ingredients, from whey protein concentrate 34 (WPC34) and lactose to whey protein concentrate 80 (WPC80) and whey protein isolate (WPI), and it also develops dairy and non-dairy functional and nutritional solutions.
Average pricing for most whey products in 2012 was significantly ahead of 2011, said the company, driven by strong demand across all key sectors. Whey prices stabilised and softened slightly towards the end of 2012 as new global supply started to come on stream.
Ingredient Technologies performed strongly in 2012. The significant increase in market pricing for whey products resulted in higher revenues as well as improved margins. In addition, the importance of functional and nutritional solutions capability within the business continued to grow. This, said Glanbia, is driven by the development of new food technologies and capabilities as well as the ongoing trend towards clean labels, reduced sugar, natural products and demand for protein.
Glanbia’s acquisition of California-based Aseptic Solutions (“AS”) expands Ingredient Technologies’ end-to-end solutions capability as an ingredients supplier, formulator and end product manufacturer and enhances its competitive position.
In addition, Ingredient Technologies has commenced construction on a new $29 million cereal ingredient plant in South Dakota, USA, with completion of the facility expected in the second half of 2013. This plant, which will focus exclusively on value-added cereal ingredients including flax, chia and other high nutrient ingredient products, will replace the Group’s Canadian flax facility which was destroyed by fire in March 2012.
For 2013, pricing for certain whey products such as WPC 34 is expected to remain relatively firm while incremental supplies of lactose and high end whey is forecast to reduce prices for these products. These market dynamics will, said Glanbia, adversely impact performance in Ingredient Technologies, relative to a strong 2012, but they will be partially offset by the continued development of functional and nutritional solutions offerings and the full year impact of the AS acquisition.
