Final Results

Glanbia PLC 7 March 2001 Glanbia plc Preliminary Announcement of Results Year Ended 30 December 2000 __________________________________________________________________ Highlights - EURO Y/E 30 Dec Y/E 31 Dec 2000 1999 Euro Euro Turnover - 2,401.74m 2,324.65m continuing operations Operating Profit* - 82.71m 81.65m continuing operations Profit before Exceptional Items 53.69m 58.51m and Tax Profit / (Loss) before Tax 79.53m (34.77m) Adjusted Earnings per Share 11.55c 11.43c Dividend 4.317109c 7.110533c Net Borrowings 293.96m 336.58m Debt / Capital Employed 93.1% 123% __________________________________________________________________ *Including share of operating profit of joint ventures & associates. Summary * Strong second half performance, offsetting slow first half. * Full year operating profit from continuing operations marginally ahead of 1999 result. * Continued reduction in Group's net borrowings - down Eur42.62m. * Debt to capital employed now 93.1% (1999: 123%). * Strong performance achieved in Food Ingredients and Agribusiness Divisions and in Irish consumer foods businesses. * Performance in UK cheese and fresh pork businesses satisfactory. * Overall result impacted by losses in UK food service and UK consumer meats - recovery underway. 'Glanbia has made good progress in the second half of 2000 with profits 25% ahead of the same period in 1999,' said Group Managing Director Ned Sullivan. 'Improved results across the rest of the Group largely offset the impact of difficulties in our British food service and consumer meats businesses. Glanbia has maintained overall performance compared to 1999 for continuing operations. The Group's net borrowings have reduced by over Eur42m and the Balance Sheet has been further strengthened. The improved performance is continuing into 2001.' Results (i) Profit and Loss Account Operating profit (including share of operating profit of joint ventures & associates) from continuing operations increased to Eur82.71m (1999: Eur81.65m), reflecting strong performances in the Food Ingredients, Irish Consumer Foods and Agribusiness operations, which offset disappointing results in the UK food service and consumer meats businesses. Operating profit from discontinued operations (1999: Eur10.9m) relates to the UK liquid milk business which was sold in June 1999. Overall, operating profit decreased by 10.7% to Eur82.71m (1999: Eur92.60m). The operating margin was 3.4% (1999 continuing operations: 3.5%). Turnover of continuing operations grew by 3.3% to Eur2,401.74m (1999: Eur2,324.65m). Group turnover declined by 4.1% (1999: Eur2,503.90m). This mainly reflected the disposal of the UK liquid milk and Irish beef operations in mid 1999, the sale of the Irish sheepmeat operations in Camolin, Co Wexford in June 2000 and the effect of the Glanbia Cheese joint venture with Leprino Foods which commenced in August 2000. Profit before exceptional items and tax declined by 8.2% to Eur53.69m (1999: Eur58.51m). Profit before tax (after exceptional items) increased to Eur79.53m compared to a loss before tax (after exceptional items) of Eur34.77m in 1999. The net gain on exceptional items for the year is Eur25.84m compared to a net charge of Eur93.28m in 1999. A gain of Eur28.63m was realised on the sale of the 49% interest in Glanbia Cheese Limited to Leprino Foods, the sale of the sheepmeat business at Camolin and the disposal of various assets and investments. A net exceptional charge of Eur2.78m was incurred relating to merger and re-organisation costs. Adjusted earnings per share increased marginally to Eur11.55c (1999: Eur11.43c). FRS3 earnings per share were Eur20.35c (1999 loss per share: Eur19.58c). Fully diluted earnings per share were Eur20.35c. (ii) Cash Flow Cash flow (PBT pre Exceptional Items + Depreciation + Grants) was Eur106.77m compared with Eur104.42m in 1999. Net capital expenditure reduced to Eur44.74m (1999: Eur89.82m), reflecting completion of the heavy investment programme which took place during merger integration and in the USA. The depreciation charge in 2000 was Eur55.83m (1999: Eur49.91m). Acquisition payments, primarily deferred payments relating to Beni Foods, were Eur23.34m (1999: Eur20.54m). (iii) Financing The Group interest charge for the year declined by 15% to Eur28.87m (1999: Eur33.97m), reflecting disposals, lower overall borrowings and a year on year decrease in working capital utilisation. Interest cover was 2.9 times. Non-equity minority interest, which relates to Preferred Securities and Preference Shares, amounted to Eur13.88m (1999: Eur12.78m). The Group redeemed Preference shares totalling Eur13.62m in July 2000. Equity shareholders funds grew by 46.8% to Eur142.60m (1999: Eur97.15m). Net bank borrowings decreased by 12.6% to Eur293.96m (1999: Eur336.58m). Borrowings to capital employed was 93.1% compared to 123% in 1999. (iv) Dividend A final dividend of Eur2.539476c is proposed, giving a total dividend for the year of Eur4.317109c (1999: Eur7.110533c). Irish dividend withholding tax will be deducted at the standard rate where applicable. Review of Operations Food Ingredients The Food Ingredients Division comprises the USA and Irish cheese businesses and dairy ingredient operations, which supply the international nutritional and food processing sectors. Due to strengthened international dairy product prices and increased sales in the USA following the expansion of facilities, operating profit increased by 58.4% to Eur56.50m (1999: Eur35.68m). Turnover in 2000 increased by 21.7% to Eur928.29m (1999: Eur762.82m). The division accounted for 38.7% of Group turnover and 68.3% of Group operating profit. USA Glanbia Foods operates three facilities in Idaho, USA, and is a leading supplier of American cheese for the food service, food processing and retail sectors. It is also a major producer of dairy-based ingredients for domestic and international nutrition and food processing sectors. It benefits from significant scale of operations in cheese and a good positioning in value added nutritional products. Turnover was Eur414.07m (1999: Eur324.20m) This business performed very well in 2000 with increased cheese volumes following commissioning of the new Gooding facility and strong demand for dairy proteins. This offset lower than expected US cheese prices during the year. Demand continued to exceed supply for advanced technology dairy proteins, where the Group has a leading position, and additional capacity was added by the Group in late 2000. Ireland Glanbia Ingredients is Ireland's largest dairy processor, utilising over 30% of the national manufacturing milk pool. Modern facilities at Ballyragget, Virginia and Kilmeaden export over 95% of output to European, North and South American, African and Asian markets. Turnover in 2000 increased to Eur514.22m (1999: Eur438.62m). This business performed well in 2000, benefiting from strong international demand for dairy proteins and formulated milk products, and had an excellent operational performance. Consumer Foods The Consumer Foods Division consists of businesses engaged in the processing and marketing of dairy and meat products primarily through retail and food service channels in the UK and Ireland. Despite satisfactory results particularly in Irish consumer food operations, this division performed well below its potential due to an under-performance in the UK food service and consumer meats businesses. Consequently, operating profit was down to Eur12.08m compared to Eur30.55m in 1999 (excluding discontinued operations). Turnover declined to Eur1,254.86m (1999: Eur1,510.01m), reflecting disposals in 1999 and 2000. An improved performance, which is continuing, was achieved in the second half of the year compared to losses in the first half. The division accounted for 52.3% of Group turnover and 14.6% of Group operating profit in 2000. Ireland Turnover in Ireland was Eur508.40m (1999: Eur547.90m). The Irish liquid milk business recovered significantly following the integration problems in 1999. The underlying strength of the Group's brands has proved important in defending market share in a challenging market environment. The chilled foods business also improved its performance compared to 1999. It is market leader in a number of categories including fresh dairy products, cheese and fresh soups, and volume growth was achieved in major product categories. Continued progress was made in brand development and range extensions. The Irish pork products business consolidated its position as the country's leading pigmeat processor. It had a stronger performance in the second half of the year, following a difficult first half, and had a satisfactory overall result. The Camolin lamb plant was sold in June 2000. United Kingdom In the UK, consumer foods comprises cheese, fresh pork, cooked meats and food service operations, having disposed of the liquid milk business in June 1999. Turnover was Eur746.46m (1999: Eur962.11m). Glanbia Cheese is the largest supplier of functional pizza cheese in the European Union. This business continued to build its sales volumes in a growing market and had a satisfactory operating performance, although the strength of sterling impacted margins somewhat. It recently received the Pizza Hut Europe Supplier of the Year Award for 2000. In August the Group completed a joint venture agreement with Leprino Foods (USA) to strongly grow market leadership and penetration in the expanding European pizza cheese market. As part of the joint venture, Leprino has taken a 49% interest in Glanbia Cheese Limited and has licensed exclusive use of Leprino's patented and proprietary mozzarella production technology in Europe to Glanbia Cheese. A major investment programme to implement this technology transfer is underway in 2001. Glanbia Foods UK is the No2 producer of cheddar and territorial cheeses in the UK, supplying consumer cheese products to the UK retail sector, food service and export markets. This business improved its operating performance in 2000 and, importantly, continued its outstanding record for the quality of its products. Glanbia's fresh pork business supplies the UK retail sector and other processors as well as a European customer base. This business performed well overall and continued to grow market share and strengthen key customer relationships, particularly in the value added and convenience sectors. However, reduced availability of pigs and consequent higher prices somewhat impacted margins. The UK sliced cooked meats business, in tandem with the sector generally, had an extremely difficult year due to significant sector over-capacity, intense competition and high raw material prices which were not reflected in market returns. Despite an excellent performance in new product development and overall operating efficiencies, losses were incurred as a result of market conditions. An improvement in performance was achieved in the second half of 2000 and further recovery is expected in 2001. The UK food service business experienced serious difficulties and was loss making during 2000 arising from adverse market conditions and the changeover to new facilities. An improved performance is being achieved in 2001 due to enhanced operating efficiencies and sales. Agribusiness The Agribusiness Division is Glanbia's primary link with its farmer supply base in Ireland. It is engaged in milk assembly, animal feed production, the supply of farm inputs via a comprehensive branch network, grain assembly and marketing and pig production. The division performed well in 2000 as a result of efficiency gains and increased market share. Turnover declined to Eur218.59m (1999: Eur231.07m), because of reduced volumes of feed and fertiliser arising from weather conditions. Operating profit was Eur14.13m (1999: Eur15.42m). The division accounted for 9.1% of Group turnover and 17.1% of Group operating profit in 2000. Business Strategy Glanbia is committed to maximising the underlying potential of its current business portfolio to grow profits and earnings. Therefore the Group's immediate focus is on further strengthening performance, improving operating efficiencies and reducing borrowings. During 2000 the Group achieved some key objectives of its core international cheese and nutrition strategy. The formation of the joint venture with Leprino Foods provides access to leading edge proprietary pizza cheese technology and further capital is being invested in Glanbia Cheese this year to further enhance market share in a dynamic European market. The successful commissioning and operation of the expanded cheese and ingredients facility in Gooding, Idaho, USA, strengthens Glanbia's position in the growing American cheese market. Additional further investment was made in quarter four to expand output of advanced technology dairy proteins to meet demand in the nutrition sector and further expansion is planned in 2001. Board Mr Ned Sullivan is to retire as Group Managing Director on 30 June 2001. He will be succeeded by Mr John Moloney, who is currently Chief Operating Officer. Mr John Duggan, former Chairman, has informed the Board of his intention to retire as a Director with effect from 9 May 2001, after 13 years of service to the Company. Euro Glanbia is well advanced in its arrangements for full conversion to the Euro on January 1 2002. The Group is currently trading in Euros where appropriate with key customers and preparation for conversion of accounting, management information and treasury systems is almost completed. The incremental cost of updating the Group's systems and associated procedures is in the order of Euro 1.3 million. Outlook Following a difficult first half of 2000, an improved performance was achieved in the second half of the year and is continuing into 2001. Based on current market conditions, an improved year on year performance is expected in 2001. Foot & Mouth Disease In late February an outbreak of Foot and Mouth Disease occurred in Great Britain and subsequently in Northern Ireland. All possible measures are being taken by the Group to minimise the effect of the outbreak on the business. The financial impact to-date is not material. However, the situation is changing daily and at this stage it is not possible to quantify the future financial impact, if any, on the Group in 2001. Annual Report / AGM / Dividends The Annual Report and Financial Statements will be published in April. The Annual General Meeting will take place in the Newpark Hotel, Kilkenny on 23 May 2001. The final dividend, if approved, will be paid on 28 May 2001 to all shareholders on the register on 27 April 2001. Ends 7 March 2001 Enquiries to: Ireland: Michael Patten, Director of Communications Glanbia plc. Tel: 056-72200 or 087-2414502 (m) Jim Milton, Murray Consultants Tel: 01-6326400 or 086-2558400 (m) UK: Iain Leslie, Communique PR Tel: 0161-228 6677 or 0976 206672 (m) Glanbia plc Consolidated Profit and Loss Account for the Year ended 30 December 2000 Pre Pre Exception Exceptio Total Exception Exceptio Total al nal al nal 2000 2000 2000 1999 1999 1999 Euro'000 Euro'000 Euro'000 Euro'000 Euro'000 Euro'000 Turnover 2,429,811 2,429,811 2,503,903 2,503,903 Less share (28,070) (28,070) - - of turnover of joint venture 2,401,741 2,401,741 2,503,903 2,503,903 Group Turnover: Continuing 2,401,741 2,401,741 2,324,645 2,324,645 Operations Discontinued - - 179,258 179,258 Operations 2,401,741 2,401,741 2,503,903 2,503,903 Cost of (2,091,999) (2,091,999)(2,133,313) (2,133,313) Sales Gross 309,742 309,742 370,590 370,590 Profit - - Distribution (133,028) (133,028) (177,352) (177,352) costs Administrat (94,889) (94,889) (101,085) (101,085) ive expenses 81,825 81,825 92,153 92,153 Group Operating Profit Continuing 81,825 81,825 81,195 81,195 Operations Discontinued - - 10,958 10,958 Operations 81,825 81,825 92,153 92,153 Share of 884 884 451 451 operating profit of joint ventures & associates Operating 82,709 82,709 92,604 92,604 profit including joint ventures & associates Profit / 23,126 23,126 (84,225) (84,225) (loss) on sale of operations Profit on 5,502 5,502 - - sale of fixed assets Reorganisat (2,785) (2,785) (9,051) (9,051) ion and merger costs Group (28,871) - (28,871) (33,965) - (33,965) Interest Share of (152) - (152) (135) - (135) interest of joint ventures and associates Profit / 53,686 25,843 79,529 58,504 (93,276) (34,772) (loss) before taxation Taxation (5,652) 171 (5,481) (11,609) 2,769 (8,840) Profit / 48,034 26,014 74,048 46,895 (90,507) (43,612) (loss) after taxation Equity (622) (887) minority interest Non-equity (13,876) (12,781) minority interest Profit / 59,550 (57,280) (loss) for the year Dividends (12,627) (20,800) Profit retained / 46,923 (78,080) (loss absorbed) for the year Earnings per share 20.35 (19.58) Fully diluted 20.35 (19.58) earnings per share Adjusted earnings per 11.55 11.43 share Consolidated Balance Sheet as at 30 December 2000 Notes 2000 1999 Euro'000 Euro'000 Assets employed Fixed assets Tangible assets 533,428 551,026 Goodwill 4,958 3,606 Financial assets: Investments in joint ventures: Share of gross assets 22,476 - Share of gross liabilities (9,763) - 12,713 - Investments in associates 8,091 6,097 Other investments 14,119 13,835 34,923 19,932 573,309 574,564 Current assets Stocks 197,386 227,505 Debtors 295,223 334,709 Cash and bank balances 113,828 117,965 606,437 680,179 Creditors - amounts falling due within one year 427,932 463,778 Net current assets 178,505 216,401 Total assets less current liabilities 751,814 790,965 Less non-current liabilities Creditors - amounts falling due after more than one 418,823 501,969 year Provision for liabilities and charges Deferred taxation 17,238 16,300 315,753 272,696 Capital and reserves Called up equity share capital 17,551 18,571 Share premium account 80,005 80,005 Merger reserve 113,148 113,148 Revenue reserves (70,922) (116,375) Capital reserves 2,825 1,804 Equity shareholders' funds 142,607 97,153 Equity minority interests 6,052 6,454 Non-equity minority interests 141,064 140,706 Capital grants 26,030 28,383 315,753 272,696 Glanbia plc Summary Cash Flow Statement for the year ended 30 December 2000 2000 1999 Euro'000 Euro'000 Profit before tax and exceptionals 53,686 58,504 Less non-cash profits (2,075) (2,298) Depreciation 55,827 49,913 Grants amortised (2,717) (3,038) Grants received 2,052 1,337 Trading Cash Flow 106,773 104,418 Working Capital Decrease 29,825 9,444 Divestment receipts 37,226 163,481 Proceeds on disposal of investments 4,963 0 Total Cash Inflow 178,787 277,343 Less Expenditure: Capital Expenditure (net of disposals) 44,739 89,816 Tax payment/(refund) 4,393 (2,030) Dividends paid - Equity 17,271 20,242 Dividends paid - Minority Interest 13,499 12,399 Merger Cash Costs 20,127 47,319 Acquisition payments 23,342 20,539 Loans acquired with subsidiaries 0 3,954 Preference Share Redemption 13,622 0 Bank balances in divestments (653) 0 Net Inflow of Funds 42,447 85,104 Currency translation impact 174 (38,341) Decrease in Borrowings 42,621 46,763 Glanbia plc Notes to the Financial Statements 1. Segmental Analysis 2000 1999 Euro'000 Euro'000 CLASS OF BUSINESS Turnover Consumer Foods 1,254,861 1,510,013 Food Ingredients 928,288 762,821 Agribusiness 218,592 231,069 2,401,741 2,503,903 Operating Profit - Continuing Operations (including share of profits of joint venture and associates) Consumer Foods 12,079 30,547 Food Ingredients 56,496 35,682 Agribusiness 14,134 15,417 82,709 81,646 GEOGRAPHICAL SEGMENTS Turnover by Market Destination Ireland 692,820 745,129 UK / Rest of Europe 1,032,193 1,231,317 USA / Other 676,728 527,457 2,401,741 2,503,903 2. Profit on sale of operations Mozzarella Lamb Cheese Other Total Euro Euro'000 Euro'000 Euro'000 '000 Profit on disposal of net assets 2,175 22,132 1,836 26,143 Goodwill transferred to profit and loss 686 (3,472) (231) (3,017) account on disposal 2,861 18,660 1,605 23,126 3. Profit on sale of fixed assets 2000 1999 Euro'000 Euro'000 On disposal of quoted investments 4,662 - Profit on disposal of tangible assets 840 - 5,502 - 4. Reorganisation and merger costs 2000 1999 Euro'000 Euro'000 Merger milk commitment 8,335 - Decrease in fixed asset write-down (8,713) (7,700) Redundancy costs 3,163 14,994 Other reorganisation costs - 1,757 2,785 9,051 5. Dividends 2000 1999 Interim dividend paid per share (cents) 1.78 2.98 Final dividend proposed per share (cents) 2.54 4.13 4.32 7.11 Total dividend (Euro'000) 12,627 20,800 6. Earnings per ordinary share 2000 1999 Euro'000 Euro'000 Profit / (Loss) after taxation and minority 59,550 (57,280) interest Weighted average number of ordinary shares in issue 292,514,184 292,514,184 Euro Euro cents cents Earnings per share 20.35 (19.58) Adjustments: Goodwill amortisation 0.09 0.06 Profit / (Loss) on sale of operations (7.81) 28.07 Profit on sale of fixed assets (1.71) - Reorganisation and merger costs 0.63 2.88 Adjusted Earnings per Share 11.55 11.43 2000 1999 7. Group Borrowings Euro'000 Euro'000 Borrowings due with one year 3,290 4,614 Borrowings due after one year 404,497 449,930 Less: Cash and bank balances (113,828) (117,964) Net borrowings 293,959 336,580 8. Share Capital The renominalisation of the company's share capital from IR£0.05 to Euro0.06 has resulted in a transfer from Called Up Equity Share Capital to Capital Reserve of Euro1,019,969.

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