Final Results

Glanbia PLC 6 March 2002 Glanbia plc Preliminary Announcement of Results Year Ended 29 December 2001 __________________________________________________________________ Highlights Y/E 29 Dec Y/E 30 Dec Change 2001 2000 Euro Euro Turnover 2,625.41m 2,401.74m +9.3% EBITDA 148.91m 138.81m +7.3% Operating Profit* 93.23m 82.71m +12.7% Profit before Tax / Exceptional Items 66.60m 53.69m +24.0% Adjusted EPS 15.85c 11.55c +37.2% Dividend 4.53c 4.32c +5.0% Net Borrowings 242.66m 293.96m -17.5% Debt / Capital Employed** 75.2% 101.5% __________________________________________________________________ *Including share of operating profit of joint ventures & associates **Excluding capital grants Summary - Glanbia continued to make steady progress in 2001 - Growth achieved in turnover, profits and earnings - Shareholders funds increased by 18.2%, net borrowings down by 17.5% - Strong performances achieved particularly in Irish and American operations - Difficult trading conditions persist for UK consumer meats as well as UK foodservice - Capacity expansion underway in nutritional ingredients and European pizza cheese operations Commenting on the results, John Moloney, Group Managing Director, said, 'We have made steady progress in building Glanbia's operating and financial performance and this work will continue into 2002. The Group continues to tighten its business focus and we will intensify our activities in cheese and nutrition during the coming year. We expect to continue making satisfactory progress in 2002'. Results The Board of Glanbia plc is pleased to announce the preliminary results for the year ended 29 December 2001. (i) Profit and Loss Account Glanbia's top-line trading performance improved significantly in 2001. Group turnover grew by 9.3% to Eur2,625.41m (2000: Eur2,401.74m), reflecting a satisfactory increase in sales, particularly in dairy food ingredients and Irish consumer foods. Operating profit (including share of operating profit of joint ventures & associates) increased by 12.7% to Eur93.23m (2000: Eur82.71m), reflecting strong performances in Dairy Food Ingredients, Irish Consumer Foods and satisfactory results in Agribusiness and UK cheese operations. The operating margin was 3.6% (2000: 3.4%). Profit before exceptional items and tax increased by 24% to Eur66.60m (2000: Eur53.69m), principally reflecting increased sales and lower interest costs. A net exceptional charge for the period of Eur5.53m arises primarily from continuing business refocusing around group strategy. It includes a loss on the sale of surplus distribution facilities in the UK, as well as a loss on the sale of the Irish 'Roscrea' consumer meats brand and associated assets in May 2001. This compares with a net gain on exceptional items in 2000 of Eur25.84m primarily arising from the sale of the 49% interest in Glanbia Cheese Limited to Leprino Foods in September 2000. After the impact of exceptional items, profit before tax was Eur61.07m compared to Eur79.53 in 2000. Adjusted earnings per share increased by 37.2% to 15.85c (2000: 11.55c). FRS3 earnings per share were 13.71c (2000: 20.35c). (ii) Cash Flow Glanbia benefited in 2001 from an improved net cash in-flow. The Group's free cash position will strengthen going forward as 2001 represented the last year of deferred acquisition payments and merger costs. 2001 cash flow (PBT pre Exceptional Items + Depreciation + Grants) increased by 12% to Eur119.54m (2000: Eur106.77m). Net capital expenditure decreased to Eur40.48m compared to Eur44.74m in 2000. The depreciation charge in 2001 was Eur55.41m (2000: Eur55.83m). Acquisition payments, primarily the final deferred payment relating to Beni Foods, were Eur24.24m (2000:Eur23.34m). (iii) Financing The Group's Balance Sheet continued to strengthen during the year. Equity shareholders funds increased by 18.2% to Eur168.55m (2000:Eur142.60m). Net bank borrowings decreased by 17.5% to Eur242.66m (2000:Eur293.96m). Borrowings to capital employed (excluding capital grants) were 75.2% compared to 101% in 2000. The interest charge for the year declined by 8.3% to Eur26.63m (2000: Eur29.02m), reflecting lower overall borrowings and further improvements in working capital utilisation. Interest cover was 3.5 times (2000: 2.9 times). Non-equity minority interest, which relates to Preferred Securities and Preference Shares, amounted to Eur13.04m (2000:Eur13.88m). (iv) Dividend A final dividend of 2.666450c is proposed, giving a total dividend for the year of 4.532965c (2000: 4.317109c). Irish dividend withholding tax will be deducted at the standard rate where applicable. Review of Operations Dairy Food Ingredients The Dairy Food Ingredients Division comprises the USA and Irish cheese and dairy ingredient operations, which supply the international nutritional and food processing sectors. This division achieved a very good performance. Turnover grew by 10.5% to Eur1,025.54m (2000: Eur928.29m). Operating profit increased by 5.2% to Eur59.41m (2000: Eur56.50m). The operating margin was 5.8%. The division accounted for 39% of Group turnover and 63.7% of Group operating profit. Turnover in the USA increased by 33.7% to Eur553.80m (2000: Eur414.07m), reflecting the full-year contribution from the highly efficient, expanded cheese and whey protein production facilities, which were commissioned in May 2000. Turnover in Ireland was Eur471.74m (2000:Eur514.22m). Glanbia Foods Inc is one of the USA's top four producers of American cheddar-type cheese, supplying the food service, food processing and retail sectors. It is also a leading producer of high value-added dairy nutritional ingredients for domestic, Asian and European markets. It had an excellent overall performance in 2001, with increased sales and profitability following the major investments in 1999 and 2000. Continuing the Group's strategy of building a leadership position in the global dairy nutraceutical arena, further capacity was added for ProvonTM whey protein isolate production during 2001. Investment is now also underway to significantly expand output of BioferrinTM, Glanbia's lactoferrin product, in response to growing global demand for bioactive ingredients. In Ireland, Glanbia Ingredients is the leading dairy processing business, utilising over 30% of the national manufacturing milk pool. Modern large-scale facilities in three strategic locations produce a wide portfolio of cheese, protein, butterfat-based and formulated products and export over 95% of output to European, North and South American, African and Asian markets. This business had a very satisfactory performance in 2001, benefiting from a broad value added product portfolio. This offset some of the impact of weaker international market conditions in the second half of the year, which have persisted into 2002. In particular the business had continuing strong sales in protein products, cheese, formulated products and cream base. Consumer Foods Consumer Foods 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. Consumer Foods had an improved overall performance compared to 2000. In particular, Irish consumer foods businesses performed strongly in 2001 and benefited from the launch of new functional food products in response to changing consumer needs. However the UK meat and food service businesses had a disappointing year. Turnover advanced by 8% to Eur1,358.05m (2000: Eur1,254.86m) and operating profit recovered somewhat to Eur20.39m (2000: Eur12.08m). The operating margin was 1.5%. Turnover in Ireland was Eur549.76m (2000:Eur508.40m) and in the UK was Eur808.28m (2000:Eur746.46m). Consumer Foods accounted for 51.7% of Group turnover and 21.9% of Group operating profit in 2001. The Irish liquid milk business had a good performance during 2001, benefiting from continuing operating efficiencies and market development. This business is market leader in sales, market reach, brand positioning, quality standards and production efficiencies. The Avonmore milk brand was recognised as the top grocery brand in Ireland while the three processing sites were jointly accredited by the NSAI for the first virtual, integrated food safety and quality management system in Ireland. The Irish chilled foods business also had a solid performance in a very competitive market environment, improving both sales and operating profits. A number of important new products were launched in the functional foods sector during the year which delivered incremental growth and grew market share. These included Everybody from Yoplait, a new probiotic yogurt drink containing LGG, vitamins and minerals. Overall, this business enjoys market leadership in fresh dairy products, branded cheese and fresh soups in Ireland. The UK retail cheese operations had a satisfactory year with improved sales and product mix, which assisted profitability and offset additional operational costs associated with the outbreak of Foot and Mouth Disease. This business has successfully positioned itself as the clear number two supplier to the UK retail cheese sector with a proven track record for product quality and market-leading service levels. Our associate pizza cheese operation also had a good year in terms of sales and volumes. This joint venture business continues to build its position as the number one supplier to the European pizza sector. However Sterling / Euro exchange rates impacted overall margins. A major capital investment programme to expand overall capacity and utilise proprietary Leprino technology in Europe is well advanced. Glanbia Food Service is a leading distributor of fresh and chilled food products to the UK foodservice sector. Despite improved operating efficiencies and the gain of a major new contract, the business had a disappointing year, driven by difficult market conditions in the food service distribution sector generally. An improved performance is now being achieved and is expected to continue in 2002. The Group's fresh pork operations in Ireland and Great Britain hold the number two position in the combined British and Irish markets, supplying fresh pork products to retail and food processing sectors as well as serving important export markets. The outbreak of Foot and Mouth Disease impacted operations in the UK and closed certain overseas markets. Despite this, a satisfactory overall performance was achieved with Irish operations playing an important role in ensuring continued, quality supply to key UK customers. UK consumer meats supplies a wide range of sliced cooked meats to the UK retail sector. While an improved year-on-year performance was achieved in 2001 compared to 2000, the business continued to be loss-making principally due to difficult market conditions generally, including sector over-capacity and intense competition. Since year-end the business has been informed that it will experience substantial volume loss, effective from mid-year. This development will potentially have a significant impact on the business unless replaced by other volume gains. Accordingly a major strategic review of UK consumer meats is currently underway. The financial costs of any restructuring that may be implemented following this review will be reflected in the 2002 financial statements. 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 overall in 2001, despite the operating challenges and additional costs associated with the outbreak of Foot and Mouth Disease. Turnover increased by 10.6% to Eur241.82m (2000: Eur218.59m) arising from increased sales of farm inputs. However operating profit declined marginally to Eur13.43m (2000: Eur14.13m) arising from difficult trading conditions in fertiliser and grain markets. The division accounted for 9.2% of Group turnover and 14.4% of Group operating profit in 2001. The operating margin was 5.6%. Outlook Glanbia continued to make solid progress in 2001 in improving overall performance and reducing borrowings. The primary focus in 2002 is to further strengthen Group performance and advance implementation of our strategy for growth in cheese and nutrition. The Group expects that it will continue to make satisfactory overall progress in 2002. 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 22 May 2002. The final dividend, if approved, will be paid on 27 May 2002 to all shareholders on the register on 26 April 2002. Save As You Earn Scheme The Board has decided to introduce a Save As You Earn Scheme for employees in Ireland and the UK, subject to approval at the AGM. To enable implementation, up to three million Glanbia plc shares may be purchased in the market by the trustees of the Scheme in due course. Ends 6 March 2002 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 Paul Carroll, Communique PR Tel: 0161-228 6677 or 077989852742 (m) __________________________________________________________________ Glanbia plc Consolidated Profit and Loss Account for the year ended 29 December 2001 Pre Pre Exceptional Exceptional Total Exceptional Exceptional Total 2001 2001 2001 2000 2000 2000 Notes Eur'000 Eur'000 Eur'000 Eur'000 Eur'000 Eur'000 Turnover 2,693,940 2,693,940 2,429,812 2,429,812 Less share (68,532) (68,532) (28,070) (28,070) of turnover of joint venture -------------- -------------- -------------- --------------- Group 1 2,625,408 2,625,408 2,401,742 2,401,742 Turnover -------------- -------------- -------------- --------------- Cost of (2,296,087) (2,296,087) (2,091,999) (2,091,999) Sales -------------- -------------- -------------- --------------- Gross Profit 329,321 329,321 309,743 309,743 Distribution (133,154) (133,154) (133,028) (133,028) costs Administrative (104,505) (104,505) (94,889) (94,889) expenses -------------- -------------- -------------- --------------- Group 91,662 91,662 81,826 81,826 Operating Profit Share of 1,568 1,568 884 884 operating profit of joint ventures & associates -------------- -------------- -------------- --------------- Operating 1 93,230 93,230 82,710 82,710 profit including joint ventures & associates (Loss) / 2 (2,046) (2,046) 23,126 23,126 profit on sale of operations (Loss) / 3 (3,486) (3,486) 5,502 5,502 profit on sale of fixed assets Reorganisation - (2,785) (2,785) and merger costs Group (26,413) - (26,413) (28,871) - (28,871) Interest Share of (218) - (218) (152) - (152) interest of joint ventures and associates -------------- -------------- -------------- -------------- -------------- --------------- Profit / 66,599 (5,532) 61,067 53,687 25,843 79,530 (loss) before taxation Taxation (6,972) (449) (7,421) (5,652) 171 (5,481) -------------- -------------- -------------- -------------- -------------- --------------- Profit / 59,627 (5,981) 53,646 48,035 26,014 74,049 (loss) after taxation Equity (492) (622) minority interest Non-equity (13,042) (13,876) minority interest -------------- --------------- Profit for 40,112 59,551 the year Dividends 4 (13,260) (12,627) -------------- --------------- Profit 26,852 46,924 retained for the year ========= ========= Earnings per 5 13.71c 20.35c share Adjusted 5 15.85c 11.55c earnings per share __________________________________________________________________ Glanbia plc Consolidated Balance Sheet as at 29 December 2001 2001 2000 Eur'000 Eur'000 Assets employed Fixed assets Tangible assets 511,720 533,428 Goodwill 5,042 4,958 Financial assets: Investments in joint ventures: Share of gross assets 26,638 22,476 Share of gross liabilities (13,859) (9,763) --------------- --------------- 12,779 12,713 Investments in associates 8,439 8,091 Other investments 11,805 14,119 --------------- --------------- 33,023 34,923 --------------- --------------- 549,785 573,309 --------------- --------------- Current assets Stocks 218,032 197,386 Debtors 259,875 295,222 Cash and bank balances 123,396 113,829 --------------- --------------- 601,303 606,437 Creditors - amounts falling due within one year 410,262 427,932 --------------- --------------- Net current assets 191,041 178,505 --------------- --------------- Total assets less current liabilities 740,826 751,814 Less non-current liabilities Creditors - amounts falling due after more than one year 376,757 418,823 Provision for liabilities and charges Deferred taxation 21,109 17,238 Capital grants 20,203 26,030 --------------- --------------- 322,757 289,723 ========= ========= Capital and reserves Called up equity share capital 17,551 17,551 Share premium account 80,005 80,005 Merger reserve 113,148 113,148 Revenue reserves (44,977) (70,922) Capital reserves 2,825 2,825 --------------- --------------- Equity shareholders' funds 168,552 142,607 Equity minority interests 6,428 6,052 Non-equity minority interests 147,777 141,064 --------------- --------------- 322,757 289,723 ========= ========= __________________________________________________________________ Glanbia plc Summary Cash Flow Statement For the year ended 29 December 2001 2001 2000 Eur'000 Eur'000 Profit before tax and exceptionals 66,599 53,687 Less non-cash profits (434) (2,075) Depreciation 55,409 55,827 Grants amortised (2,081) (2,717) Grants received 44 2,052 --------------- --------------- Trading cash flow 119,537 106,774 Working capital decrease 30,153 29,825 Divestment receipts 7,799 37,226 Proceeds on disposal of investments 1,763 4,963 --------------- --------------- Total cash inflow 159,252 178,788 Less expenditure: Capital expenditure (net of disposals) 40,482 44,739 Tax payment 2,057 4,393 Dividends paid - equity 12,888 17,271 Dividends paid - minority interest 12,277 13,499 Merger cash costs 10,244 20,127 Acquisition payments 24,244 23,342 Preference share redemption - 13,622 Bank balances in divestments - (653) --------------- --------------- Net inflow of funds 57,060 42,448 Currency translation impact (5,761) 174 --------------- --------------- Decrease in borrowings 51,299 42,622 ========= ========= __________________________________________________________________ Glanbia plc Notes to the Financial Statements 1. Segmental analysis 2001 2000 Eur'000 Eur'000 Analysis by class of business Turnover Consumer Foods 1,358,049 1,254,862 Food Ingredients 1,025,541 928,288 Agribusiness 241,818 218,592 --------------- --------------- 2,625,408 2,401,742 ========= ========= Operating profit (including share of profits of joint venture and associates) Consumer Foods 20,390 12,079 Food Ingredients 59,415 56,496 Agribusiness 13,425 14,135 --------------- --------------- 93,230 82,710 ========= ========= GEOGRAPHICAL SEGMENTS Turnover by market destination Ireland 792,824 692,820 UK / rest of Europe 1,117,329 1,032,194 USA / other 715,255 676,728 --------------- --------------- 2,625,408 2,401,742 ========= ========= 2. Loss on sale of operations Roscrea Consumer Other Total Meats Euro'000 Euro'000 Euro'000 Loss on disposal of net assets (760) (62) (822) Goodwill transferred to profit and loss account on (1,224) (1,224) disposal --------------- --------------- --------------- (1,984) (62) (2,046) ========= ========= ========= 3. (Loss) / profit on sale of fixed assets 2001 2000 Euro'000 Euro'000 On disposal of quoted investments - 4,663 (Loss) / profit on disposal of tangible assets (3,486) 839 --------------- --------------- (3,486) 5,502 ========= ========= 4. Dividends 2001 2000 Interim dividend paid per share (cent) 1.87 1.78 Final dividend proposed per share (cent) 2.66 2.54 --------------- --------------- 4.53 4.32 ========= ========= Total dividend (Euro'000) 13,260 12,627 ========= ========= 5. Earnings per ordinary share 2001 2000 Euro'000 Euro'000 Profit after taxation and minority interest 40,112 59,551 ========= ========= Weighted average number of ordinary shares in issue 292,514,184 292,514,184 cent cent Earnings per share 13.71 20.35 ========= ========= Adjustments: Goodwill amortisation 0.09 0.09 Loss / (profit) on sale of operations 0.86 (7.81) Loss / (profit) on sale of fixed assets 1.19 (1.71) Reorganisation and merger costs - 0.63 --------------- --------------- Adjusted earnings per share 15.85 11.55 ========= ========= 2001 2000 6. Group Borrowings Euro'000 Euro'000 Borrowings due with one year 1,006 3,290 Borrowings due after one year 365,049 404,497 Less: Cash and bank balances (123,396) (113,829) --------------- --------------- Net borrowings 242,659 293,958 ========= ========= END This information is provided by RNS The company news service from the London Stock Exchange

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