Trading Statement

RNS Number : 7132Z

Glanbia PLC

19 January 2011

 

Press Corporate Communications Department Glanbia House Kilkenny Ireland

Release Telephone  + 353 56 7772200 Facsimile  + 353 56 7750834 www.glanbia.com

2010 FULL YEAR PRE CLOSE TRADING STATEMENT

Strong full year performance forecast

Reiterating guidance for circa 20% growth in adjusted earnings per share

19 January, 2011 - Glanbia plc, the international nutritional ingredients and cheese group, issues this pre close trading statement for the full year ended 1 January, 2011. In a separate press release today Glanbia announced the acquisition of Bio-Engineered Supplements and Nutrition (BSN®), a leading US performance nutrition business.

2010 performance

In the first half of 2010, Glanbia delivered excellent results, mainly due to a return to profitability in Irish Dairy Ingredients and a good performance by Global Nutritionals. In the second half of the year the positive trend continued, underpinned by stronger global dairy markets and solid demand across key nutritional sectors. Since the announcement of the Interim Management Statement in November 2010, the Group has performed broadly in line with expectations and Glanbia expects to deliver circa 20% growth in adjusted earnings per share for the full year. The full year impact of currency translation, relative to 2009, is largely neutral as expected.

Dairy Ireland

Dairy Ireland performed well in the second half with good revenue growth compared to the second half of 2009, primarily reflecting stronger dairy markets in Irish Dairy Ingredients. Operating profit performance continued to improve, underpinned by the sustained recovery in Irish Dairy Ingredients and the benefits of strategic cost reduction programmes in Ireland.  The economic difficulties in Ireland continued to create a very challenging trading environment for Consumer Products and overall results for this business unit are expected to be lower than 2009. Agribusiness is expected to achieve a broadly similar outcome to 2009. Full year operating profit and margin for Dairy Ireland are forecast to be well ahead of 2009, which was a difficult year for this division.

US Cheese & Global Nutritionals

Building on a good first half performance, revenue in both US Cheese and Global Nutritionals grew strongly in the second half.  This reflects improved US Cheese markets and strong volume growth in Global Nutritionals. Operating profit was comparable to the second half of 2009, as a good performance in Global Nutritionals was offset by a weaker performance in US Cheese. US Cheese' operating profit is expected to be lower than 2009, as performance was impacted by the refurbishment of the Twin Falls' cheese plant in the first half, higher milk price premiums during the course of the year and a sharp weakening in US cheese prices in the fourth quarter.  In Global Nutritionals, volume growth continues to outpace market growth rates. This is expected to underpin higher operating profits for US Cheese & Global Nutritionals for the full year.  Divisional operating margins are expected to be lower following higher input costs and significant brand and people investment by Global Nutritionals during the year.

Joint Ventures & Associates

Joint Ventures & Associates are expected to have a reasonable year with results forecast to be similar to 2009. The 40% expansion of Southwest Cheese was completed on time and on budget and was fully commissioned in 2010. Southwest Cheese is forecast to deliver a solid performance for the year despite the adverse effect of volatile cheese markets in the fourth quarter. Glanbia Cheese in the UK and Nutricima in Nigeria are expected to perform broadly in line with expectations.

2010 exceptional pension credit

The Group undertook a strategic review of pension arrangements during 2009 which resulted in a significant reduction in pension liabilities. In 2010, further revisions to the Group's pension arrangements for three additional Irish pension schemes have been finalised. This will give rise to a further net reduction in pension liabilities resulting in an exceptional credit of approximately €10 million in 2010.

2010 net debt

Glanbia is forecasting 2010 year-end net debt of approximately €420 million.

Outlook

In line with previous guidance, Glanbia reiterates its 2010 adjusted earnings per share growth, which is expected to be approximately 20%. 

Inclusive of the benefits of the BSN acquisition announced today, Glanbia is forecasting adjusted earnings per share growth (on a constant currency basis) for 2011 of 11% to 13%.

Glanbia expects to announce 2010 full year results at 07:00am on Wednesday, 2 March 2010.

ENDS

About Glanbia plc

Glanbia plc is an international nutritional ingredients and cheese group, headquartered in Ireland. Glanbia has over 4,000 employees worldwide, including Joint Ventures and Associates. The Group has three business segments - US Cheese & Global Nutritionals, Dairy Ireland and Other Business. Glanbia also has three principal international joint ventures - Southwest Cheese in the USA, Glanbia Cheese in the UK and Nutricima in Nigeria - as well as a number of small Irish-based joint ventures and associates. Glanbia is listed on the Irish and London Stock Exchanges (Symbol: GLB).

Cautionary statement

This announcement contains "forward-looking statements". These statements have been made by the directors in good faith based on the information available to them up to the time of their approval of this announcement. Due to the inherent uncertainties, including both economic and business risk factors, underlying such forward-looking information, actual results may differ from those expressed or implied by these forward-looking statements. Further no obligation is undertaken to update any forward-looking statements in this announcement.

For further information contact Glanbia plc on [phone]

Siobhan Talbot, Group Finance Director Geraldine Kearney, Corporate Communications Director + 353 87 231 9430

 

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