Half-year Report

RNS Number : 3656H

Glanbia PLC

17 August 2016

Strong performance in first half driven by Glanbia Performance Nutrition

Guidance reiterated of 8% to 10% constant currency adjusted EPS growth in 2016

17 August 2016 - Glanbia plc ("Glanbia", the "Group", the "plc"), the global nutrition group, announces its results for the six months ended 02 July 2016.

Results highlights for the half year 2016

· Adjusted earnings per share 44.87 cent, up 10.8% on prior half year, constant currency (up 10.5% reported);

· EBITA from wholly owned business €157.4 million, up 13.7% on prior half year, constant currency (up 13.6% reported);

· EBITA margins from wholly owned business 11.0%, up 130 bps on prior half year, constant currency and reported;

· Strong result from Glanbia Performance Nutrition with EBITA of €81.7 million, a 35.0% increase on prior half year, constant currency (up 34.6% reported);

· Glanbia Nutritionals¹ delivered a satisfactory result with EBITA of €58.0 million, a 4.0% decrease on prior half year, constant currency (down 3.8% reported);

· Dairy Ireland in line with expectations with EBITA of €17.7 million, a 1.1% increase on prior half year;

· Joint Ventures & Associates EBITA declined 4.5%, constant currency, (down 5.4% reported) in the first half ; and

· Recommended interim dividend of 5.37 cent per share, an increase of 10% on prior year.

Commenting today Siobhán Talbot, Group Managing Director, said:

"Glanbia delivered a strong performance in the first six months of 2016 driven by Glanbia Performance Nutrition. Total Group earnings before interest, tax and amortisation for the half year grew by over 11%. Sales of performance nutrition brands and value-added nutritional ingredients showed good growth in the first half of 2016 delivering on our vision to be a leading nutrition business. Global dairy markets remain weak and continue to be a challenge for parts of the business, however the diversity of the Glanbia portfolio has enabled us to navigate this and we reiterate guidance for the full year of adjusted earnings per share growth of 8% to 10% on a constant currency basis."

2016 half year results		Reported		Constant Currency
€m	HY 2016	HY 2015	Change	Change²
Wholly-owned business
Revenue	1,434.8	1,431.7	+0.2%	+0.4%
EBITA³	157.4	138.5	+13.6%	+13.7%
EBITA margin	11.0%	9.7%	+ 130 bps	+130 bps
Joint Ventures & Associates
Revenue	402.3	445.3	-9.7%	-8.8%
EBITA	19.1	20.2	-5.4%	-4.5%
EBITA margin	4.7%	4.5%	+20bps	+20bps
Total Group⁴
Revenue	1,837.1	1,877.0	-2.1%	-1.7%
EBITA	176.5	158.7	+11.2%	+11.4%
EBITA margin	9.6%	8.5%	+110bps	+110bps

Adjusted earnings per share⁵	44.87c	40.60c	+10.5%	+10.8%

1. Global Ingredients has been rebranded Glanbia Nutritionals. The operations of the segment are unchanged.

2. To arrive at the Constant Currency Change, the average FX rate for the current period is applied to the relevant reported result from the same period in the prior year. The average Euro US Dollar FX rate for the first half of 2016 was €1 = $1.116 (HY 2015: €1 = $1.115).

3. EBITA is defined as earnings before interest, tax and amortisation and is stated before exceptional items.

4. Total Group includes Glanbia's share of Joint Ventures & Associates.

5. Adjusted earnings per share is reconciled in Note 10 of the financial statements.

This release contains certain alternative performance measures. A detailed glossary of the key performance indicators and non-IFRS performance measures can be found at the end of this document.

2016 half year overview and outlook

Glanbia delivered a strong performance in the first half of 2016. Wholly owned revenue was €1,434.8 million, an increase of 0.4% constant currency (up 0.2% reported). Wholly owned EBITA was €157.4 million, up 13.7% constant currency (up 13.6% reported). Wholly owned EBITA margin was 11.0%, up 130 bps, constant currency and reported. Total Group revenue for the period, including the Group's share of Joint Ventures & Associates, was €1,837.1 million, a decrease of 1.7% constant currency (down 2.1% reported). Total Group EBITA was €176.5 million, up 11.4% constant currency (up 11.2% reported). Total Group EBITA margin was 9.6%, up 110 bps, constant currency and reported. Adjusted earnings per share for the half year were 44.87 cent, up 10.8%, constant currency (up 10.5% reported).

Capital investment and corporate development

Glanbia's total investment in capital expenditure was €41.7 million in the first half of 2016, of which €27.8 million was strategic investment reflecting the on-going focus on the organic growth potential of the business. Key strategic projects undertaken in the period were the investments in value-added ingredient processing technologies at the Glanbia Nutritionals sites in Idaho and California, USA.

Board changes

On 09 May 2016, Tom Grant, Brendan Hayes, Patrick Hogan and Eamon Power retired from the plc Board as part of the agreement in place with Glanbia Co-operative Society Limited to reduce its director representation on the plc Board by four in 2016.

Glanbia Nutritionals

The Global Ingredients segment has been reshaped to improve its positioning with customers and target growth opportunities. The overall portfolio has been integrated into one global organisation to deliver to customers the full suite of Glanbia's capabilities across its cheese and nutritional ingredients platforms. This new organisation is consumer insight driven, has regionally focused sales teams, and is enabled by centres of excellence across areas such as product supply, innovation and strategy. The segment contains the prior operations of Global Ingredients and has been rebranded "Glanbia Nutritionals". It will continue to report revenue, EBITA and EBITA margin.

2016 outlook

Glanbia reiterates its guidance for 2016 of 8% to 10% growth in adjusted earnings per share, constant currency. If the full year 2016 average Euro US dollar exchange rate remains at similar levels to the first half of 2016, Glanbia expects the 2016 reported adjusted earnings per share growth to be broadly in line with the constant currency result.

Glanbia Performance Nutrition ('GPN') is expected to be the main driver of 2016 earnings per share growth. GPN continues to focus on like for like branded revenue progression and is currently expecting full year growth in line with the first half. Favourable input costs, mix improvement and operational leverage are expected to drive margin improvement and earnings for 2016 versus prior year. Glanbia Nutritionals expects to deliver modest EBITA improvement versus prior year. This will be driven by increased sales of value-added nutritional ingredients offset somewhat by reduced performance from US Cheese as a result of weak markets. Dairy Ireland and Joint Ventures & Associates are expected to be broadly in line with prior year.

HY 2016 operations review

Segmental analysis (as reported)

		HY 2016			HY 2015
€m	Revenue	EBITA	EBITA %	Revenue	EBITA	EBITA %
Glanbia Performance Nutrition	505.3	81.7	16.2%	453.5	60.7	13.4%
Glanbia Nutritionals	572.6	58.0	10.1%	609.3	60.3	9.9%
Dairy Ireland	356.9	17.7	5.0%	368.9	17.5	4.7%
Total wholly-owned businesses	1,434.8	157.4	11.0%	1,431.7	138.5	9.7%
Joint Ventures & Associates	402.3	19.1	4.7%	445.3	20.2	4.5%
Total Group	1,837.1	176.5	9.6%	1,877.0	158.7	8.5%

Glanbia Performance Nutrition

		Reported		Constant Currency
€m	HY 2016	HY 2015	Change	Change
Revenue	505.3	453.5	+11.4%	+12.0%
EBITA	81.7	60.7	+34.6%	+35.0%
EBITA margin	16.2%	13.4%	+280bps	+280bps

Commentary is on a constant currency basis throughout

Glanbia Performance Nutrition ('GPN') delivered a strong performance in the first half of 2016 against the same period in 2015. Revenues increased 12.0% to €505.3 million. Drivers of revenue growth were an 8.0% improvement in volume and a 10.7% revenue contribution from the thinkThin acquisition offset by a 6.7% decline in price, due to promotional investment.

Like for like branded revenue growth for H1 2016 was 4.4% as good branded volume growth across all regions was somewhat offset by promotional investment. The strong US Dollar remains a headwind in certain non US markets. The thinkThin acquisition performed well in the period maintaining its historically strong growth rate. Innovation continues to be a focus and the recent launch of BSN N.O.-XPLODE XE has performed well with a strong pipeline of new product launches planned for H2 2016.

EBITA grew strongly by 35.0% in the period driven by revenue growth and EBITA margin progression of 280 bps to 16.2%. The margin increase was driven by a reduction in input cost, mix improvement from increased branded sales relative to contract and continued gains in operating leverage.

Glanbia Nutritionals

		Reported		Constant Currency
€m	HY 2016	HY 2015	Change	Change
Revenue	572.6	609.3	-6.0%	-5.9%
EBITA	58.0	60.3	-3.8%	-4.0%
EBITA margin	10.1%	9.9%	+20bps	+20bps

Commentary is on a constant currency basis throughout

Glanbia Nutritionals ('GN') performance was in line with expectations in the first half of 2016 and delivered a satisfactory result in the context of on-going challenging dairy markets. Revenues decreased by 5.9% to €572.6 million as volume growth of 2.2% was more than offset by weaker dairy markets which reduced pricing by 8.1%. Overall margins progressed to 10.1% driven by a strong performance from the Nutritional Ingredients portfolio.

Nutritional Ingredients improved performance was driven by volume growth of value-added dairy and non-dairy ingredients, including bar systems and high-end whey ingredients following investment in increased capacity in 2015.

US Cheese volumes were broadly in line in the first half of 2016 as plants operated close to full capacity. Cheese demand remains solid across the US retail and foodservice markets although pricing in the overall US market was weak. On-going challenging dairy market dynamics led to a reduced performance in this part of the business.

Dairy Ireland

		Reported
€m	HY 2016	HY 2015	Change
Revenue	356.9	368.9	-3.3%
EBITA	17.7	17.5	+1.1%
EBITA margin	5.0%	4.7%	+30bps

Dairy Ireland had a satisfactory performance in the first half of 2016. Revenues decreased 3.3% reflecting a 1.1% increase in volumes, a 4.9% decline in price and a 0.5% revenue contribution from acquisitions. A 30 bps improvement in margin drove an increase in EBITA of 1.1% versus the prior half year.

Consumer Products delivered an improved performance versus prior year. This was driven by an improvement in sales of value-added branded products and input cost reductions. Consumer Products continues to focus on improving its cost base.

Agribusiness delivered a somewhat reduced performance in the period. Increased animal feed sales volume was more than offset by lower pricing across animal feed and fertiliser which led to a decline in margin.

Joint Ventures & Associates (Glanbia Share)

		Reported		Constant Currency
€m	HY 2016	HY 2015	Change	Change
Revenue	402.3	445.3	-9.7%	-8.8%
EBITA	19.1	20.2	-5.4%	-4.5%
EBITA margin	4.7%	4.5%	+20bps	+20bps

Commentary is on a constant currency basis throughout

Joint Ventures & Associates revenue reduced by 8.8% in the period as a result of the challenging dairy environment. The key driver of the revenue movement was a 12.8% decline in pricing reflecting weaker global dairy markets which was partially offset by a 6.6% increase in volumes. The disposal of Glanbia's interest in Nutricima in April 2015 led to an additional 2.6% decline in revenues compared to the prior half year. All Joint Ventures & Associates grew volumes in the period with a focus on costs, off-setting some of the price challenges which generated a 20 bps improvement in margin.

Half year 2016 finance review

HY 2016 results summary pre-exceptional				Constant Currency
€m	HY 2016	HY 2015	Change	Change
Revenue	1,434.8	1,431.7	+0.2%	+0.4%
EBITA	157.4	138.5	+13.6%	+13.7%
EBITA margin	11.0%	9.7%	+130bps	+130bps
- Amortisation of intangible assets	(19.4)	(15.6)
- Net finance costs	(11.6)	(10.7)
- Share of results of Joint Ventures Associates	12.3	13.3
- Income tax	(21.7)	(19.1)
Profit for the half year	117.0	106.4

Income statement

For the first half of 2016, wholly owned revenue increased 0.4%, constant currency (up 0.2% reported) to €1,434.8 million (HY 2015: €1,431.7 million). EBITA grew by 13.7%, constant currency (up 13.6% reported) to €157.4 million (HY 2015: €138.5 million). EBITA margin increased by 130 bps to 11.0%, both constant currency and reported.

Net financing costs of €11.6 million increased versus prior year (HY 2015: €10.7 million) due to an increase in average net debt. The Group's average interest rate for the period was 3.6% (HY 2015: 3.9%). Glanbia operates a policy of fixing a significant amount of its interest exposure, with 85% of projected 2016 debt currently contracted at fixed rates for 2016.

The HY 2016 pre-exceptional tax charge increased by €2.6 million to €21.7 million (HY 2015: €19.1 million). This represents an effective rate, excluding Joint Ventures & Associates, of 17.1% (HY 2015: 17.0%).

The Group's share of results of Joint Ventures & Associates decreased by €1.0 million to €12.3 million (HY 2015: €13.3million). Share of results of Joint Ventures & Associates is an after tax and interest amount.

Adjusted earnings per share

	HY 2016	HY 2015	Change	Constant Currency Change
Adjusted earnings per share^*	44.87c	40.60c	+10.5%	+10.8%

* Adjusted earnings per share is reconciled in note 10 of the financial statements. A full glossary of terms used throughout this release can be found in the financial statements section at the end of this document.

Total adjusted earnings per share grew 10.8% (up 10.5% reported), driven by growth in EBITA. Adjusted earnings per share is believed to be more reflective of the Group's underlying performance than basic earnings per share and is calculated based on the net profit attributable to equity holders of the parent before exceptional items and amortisation of intangible assets, net of related tax.

Dividend per share

The Board is recommending an interim dividend of 5.37 cent per share (HY 2015: interim dividend 4.88 cent per share). This represents an increase of 10% on the prior year interim dividend. The dividend will be paid on 07 October 2016 to shareholders on the register of members as at 26 August 2016. Irish withholding tax will be deducted at the standard rate where appropriate.

Exceptional items

€ m	HY 2016	HY 2015
1. Organisation redesign costs	(6.2)	(3.1)
2. Acquisition integration costs	(1.9)	-
3. Rationalisation costs	(0.8)	(1.1)
4. Disposal of interest in Joint Venture	-	(3.6)
Exceptional (charge) pre-tax	(8.9)	(7.8)
Taxation credit	1.6	0.5
Total exceptional (charge)	(7.3)	(7.3)

Exceptional items incurred in the first half of 2016 resulted in a post-tax exceptional charge of €7.3 million compared to an equal charge of €7.3 million for the same period in 2015. Details of the exceptional items incurred in the period are as follows:

1. The organisation redesign costs relate to the on-going programme announced in 2015 in Glanbia Nutritionals to fundamentally reorganise the business to leverage future market opportunities. It is envisaged that this programme will continue until H1 2017 and will involve a total cost of approximately €20 million across 2015, 2016 and 2017.

2. Acquisition integration costs comprise of costs relating to the integration, restructuring and redesign of route to market capabilities within acquired businesses in the Glanbia Performance Nutrition segment.

3. Rationalisation costs primarily relate to the current redundancy and rationalisation programme in the Dairy Ireland segment.

4. Relates to the disposal in April 2015 of Glanbia's investment in Milk Ventures (UK) Limited which is the parent company of Nutricima Limited, a non-core Joint Venture business involved in the supply and distribution of evaporated and powdered milk, based in Nigeria.

Group financing and cash flow

Financing key performance indicators	HY 2016	HY 2015	FY 2015
Net debt €m	644	577	584
Net debt : adjusted EBITDA¹	1.83 times	1.97 times	1.75 times
Adjusted EBIT¹ : net finance cost	11.4 times	9.8 times	10.8 times

1. Definition of net debt, adjusted EBITDA and adjusted EBIT are as per financing agreements which include dividends from Joint Ventures & Associates and the pro forma effect of acquisitions. A detailed glossary of the key performance indicators and non-IFRS performance measures can be found at the end of this document.

The Group's financial position continues to be strong. Net debt at the end of HY 2016 was €644 million. This is an increase of €67 million relative to the end of HY 2015. Net debt to adjusted EBITDA was 1.83 times and interest cover was 11.4 times, both metrics remaining well within financing covenants. Relative to the year end of 2015, net debt has increased by €60 million. The key drivers of the net debt increase from year end 2015 have been a seasonal increase in working capital and capital expenditure.

Pension

On 02 July 2016, the Group's net pension liability under IAS 19 (revised) 'Employee Benefits', before deferred tax, increased by €44.8 million to €132.1 million versus year end 2015 (FY 2015 pension liability €87.3 million). A significant driver of this was the decrease in the discount rate driven by the decline in interest rates on high quality corporate bonds. See note 17 for further details on the retirement benefit obligation at the reporting date.

Principal risks and uncertainties affecting the Group's performance in 2016

The Board of Glanbia plc has the ultimate responsibility for the Group's systems of risk management and internal control. The Group's risk management framework outlines the key stakeholder risk management responsibilities. It is designed to ensure that there is input across all levels of the business to the management of risk and to enable the Group to remain responsive to the ever changing environment in which it operates. This framework, together with the processes to identify, manage and mitigate potential material risks to the achievement of the Group's strategic objectives are set out in detail on pages 32-34 of the plc's 2015 Annual Report.

The Group's principal risks and uncertainties are summarised in the risk profile table below, according to the strategic objective to which they relate, together with an overview of the risk trend identified for the year ended 02 January 2016, issued on 03 March 2016 which the plc Board believes to still remain applicable. There may be other risks and uncertainties that are not yet considered material or not yet known to the Group and this list will change if these risks assume greater importance in the future.

Group strategic priorities

Maintain and grow Glanbia's global leadership in performance nutrition and nutritional and functional ingredients

Grow through organic investment programme and acquisition/ partner with complementary businesses

Develop talent, culture and values in line with Glanbia's growing global scale

Other risks

Risks where trend is increasing

Economic, industry and political risk

IT and cyber security risks

Risks which are stable

Strategy risk

Market risk

Customer

concentration risk

Supplier risk

Acquisition risk

Talent management risk

Site compliance risk and environment, health & safety regulation risk

Product safety and compliance risk

Key risk factors and uncertainties with the potential to impact on the Group's financial performance in the second half of the year include:

· Economic, industry and political risk. Macroeconomic uncertainty continues to increase, partly as a result of the United Kingdom (UK) electorate voting to leave the European Union. While the direct impacts of this decision are limited, currency volatility, further movement in discount rates and other economic uncertainties will require on-going monitoring by the Group;

· The continued impact on the competitive landscape for Glanbia Performance Nutrition, recognising the impact of a stronger US dollar on the purchasing power of consumers in certain international markets; and

· The overall impact on margins of movements in dairy pricing particularly in whey markets.

The Group actively manages these and all other risks through its risk management and internal control processes. Full details of the principal risk exposures and the related mitigation actions are outlined on pages 35-38 of the plc 2015 Annual Report.

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 report. Due to the inherent uncertainties, including both economic and business risk factors underlying such forward looking information, actual results may differ materially from those expressed or implied by these forward-looking statements. The Directors undertake no obligation to update any forward-looking statements contained in this announcement, whether as a result of new information, future events, or otherwise.

Results webcast and dial-in details

There will be a webcast and presentation to accompany this results announcement at 8.30 a.m. BST today. Please access the webcast from the Glanbia website at http://www.glanbia.com/investors/results-centre, where the presentation can also be viewed or downloaded. In addition, a dial-in facility is available using the following numbers:

Ireland: 01 2465605

UK / International: +44 20 3427 1925

USA: 646 254 3375

The access code for all participants is: 9767248

A replay of the call will be available for 30 days approximately two hours after the call ends.

For further information contact

Glanbia plc +353 56 777 2200

Siobhán Talbot, Group Managing Director

Mark Garvey, Group Finance Director

Liam Hennigan, Head of Investor Relations +353 86 046 8375

Martha Kavanagh, Head of Media Relations +353 87 646 2006

Responsibility statement

The Directors are responsible for preparing the half yearly financial report in accordance with the Transparency (Directive 2004/109/EC) Regulations 2007 as amended, the related Transparency Rules of the Central Bank of Ireland and with IAS 34 'Interim Financial Reporting', as adopted by the European Union.

The Directors of Glanbia plc confirm that, to the best of their knowledge:

• The Group condensed interim financial statements for the half year ended 02 July 2016 have been prepared in accordance with the international accounting standard applicable to interim financial reporting (IAS34) adopted pursuant to the procedure provided for under Article 6 of the Regulation (EC) No. 1606/2002 of the European Parliament and of the Council of 19 July 2002;

• The half yearly financial report includes a fair review of the development and performance of the business and the position of the Group;

• The half yearly financial report includes a fair review of the important events that have occurred during the first six months of the financial year, and their impact on the Group condensed financial statements for the half year ended 02 July 2016, and a description of the principal risks and uncertainties for the remaining six months; and

• The half yearly financial report includes a fair review of related party transactions that have occurred during the first six months of the current financial year that have materially affected the financial position or the performance of the Group during that period and any changes in the related party transactions described in the last Annual Report that could have a material effect on the financial position or the performance of the Group in the first six months of the current financial year.

The Directors of Glanbia plc are as listed in the Glanbia plc 2015 Annual Report, with the exception of the following changes in the period:

· Tom Grant, Brendan Hayes, Patrick Hogan and Eamon Power retired as Directors of Glanbia plc on 09 May 2016.

A list of current directors is maintained on the Glanbia plc website: www.glanbia.com

On behalf of the Board

Siobhán Talbot Mark Garvey

Group Managing Director Group Finance Director

16 August 2016

Condensed income statement

for the half year ended 02 July 2016

Half year 2016

Half year 2015

Year 2015

		Pre- exceptional	Exceptional	Total	Pre- exceptional	Exceptional	Total	Pre- exceptional	Exceptional	Total
		2016	2016	2016	2015	2015	2015	2015	2015	2015
		€'000	€'000	€'000	€'000	€'000	€'000	€'000	€'000	€'000
	Notes		(note 6)			(note 6)			(note 6)

Revenue	4	1,434,764	-	1,434,764	1,431,590	-	1,431,590	2,774,326	-	2,774,326

Earnings before interest, tax and amortisation (EBITA)		157,389	(8,885)	148,504	138,473	(7,838)	130,635	271,003	(26,342)	244,661
Intangible asset amortisation		(19,424)	-	(19,424)	(15,566)	-	(15,566)	(31,125)	-	(31,125)

Operating profit		137,965	(8,885)	129,080	122,907	(7,838)	115,069	239,878	(26,342)	213,536

Finance income	7	1,160	-	1,160	885	-	885	1,706	-	1,706
Finance costs	7	(12,732)	-	(12,732)	(11,588)	-	(11,588)	(22,816)	-	(22,816)
Share of results of Joint Ventures & Associates		12,328	-	12,328	13,267	-	13,267	26,270	-	26,270

Profit before taxation		138,721	(8,885)	129,836	125,471	(7,838)	117,633	245,038	(26,342)	218,696
Income taxes	8	(21,664)	1,629	(20,035)	(19,075)	533	(18,542)	(37,322)	2,543	(34,779)


Profit for the period		117,057	(7,256)	109,801	106,396	(7,305)	99,091	207,716	(23,799)	183,917


Attributable to:
Equity holders of the Parent				109,364			98,674			183,271
Non-controlling interests				437			417			646
				109,801			99,091			183,917


Earnings per share attributable to the equity holders of the Parent
Basic earnings per share (cent)	10			37.06			33.43			62.08

Diluted earnings per share (cent)	10			36.92			33.18			61.87

Condensed statement of comprehensive income

for the half year ended 02 July 2016

			Half year	Half year	Year
			2016	2015	2015
	Notes		€'000	€'000	€'000

Profit for the period			109,801	99,091	183,917

Other comprehensive income
Items that are not reclassified subsequently to the Group income statement:
Remeasurements - defined benefit schemes	17		(51,379)	18,178	20,856
Deferred tax credit/(charge) on remeasurements			4,866	(2,430)	(2,334)
Share of remeasurements - Joint Ventures & Associates		14	(10,480)	4,811	4,254
Deferred tax credit/(charge) on remeasurements - Joint Ventures & Associates			1,310	(600)	(612)

Items that may be reclassified subsequently to the Group income statement:
Currency translation differences			(33,036)	75,654	91,102
Net investment hedge			2,015	(6,980)	(8,684)
Revaluation of available for sale financial assets			(617)	1,052	1,273
Fair value movements on cash flow hedges			(506)	2,476	145
Recycle of currency reserve to the Group income statement on disposal of Investment in Joint Venture			-	5,037	5,037
Deferred tax on cash flow hedges and revaluation of available for sale financial assets			63	(444)	(480)
Other comprehensive (expense)/income for the period, net of tax			(87,764)	96,754	110,557

Total comprehensive income for the period			22,037	195,845	294,474

Total comprehensive income attributable to:
Equity holders of the Parent			21,600	195,428	293,828
Non-controlling interests			437	417	646

Total comprehensive income for the period			22,037	195,845	294,474

Condensed balance sheet

As at 02 July 2016

		Half year	Half year	Year
		2016	2015	2015
	Notes	€'000	€'000	€'000
ASSETS
Non-current assets
Property, plant and equipment		579,258	551,860	586,190
Intangible assets		921,721	704,663	951,527
Investments in Associates		95,994	91,564	97,897
Investments in Joint Ventures		59,243	62,665	60,585
Trade and other receivables		14,654	1,850	1,850
Derivative financial instruments		15	-	-
Deferred tax assets		42,711	26,152	36,474
Available for sale financial assets		10,105	10,522	10,754
		1,723,701	1,449,276	1,745,277
Current assets
Inventories		331,435	350,819	344,353
Trade and other receivables		447,554	412,954	350,020
Derivative financial instruments		997	1,686	414
Cash and cash equivalents	13	94,909	94,400	210,889
		874,895	859,859		905,676

Total assets		2,598,596	2,309,135	2,650,953

EQUITY
Issued capital and reserves attributable to equity holders of the Parent
Share capital and share premium	16	105,393	105,370	105,370
Other reserves		272,400	294,073	306,425
Retained earnings		673,900	572,965	642,763
		1,051,693	972,408	1,054,558
Non-controlling interests		8,952	8,313	8,515
Total equity		1,060,645	980,721	1,063,073

LIABILITIES
Non-current liabilities
Borrowings	13	672,408	634,015	752,963
Derivative financial instruments		-	-	47
Deferred tax liabilities		201,860	135,153	201,646
Retirement benefit obligations	17	132,075	93,971	87,288
Provisions	15	16,578	19,816	18,984
Capital grants		2,697	2,121	2,787
		1,025,618	885,076	1,063,715
Current liabilities
Trade and other payables		399,321	369,681	442,713
Current tax liabilities		24,183	21,350	18,969
Borrowings	13	66,841	37,448	42,169
Derivative financial instruments		3,896	408	902
Provisions	15	17,850	14,451	19,128
Capital grants		242	-	284
		512,333	443,338	524,165

Total liabilities		1,537,951	1,328,414	1,587,880

Total equity and liabilities		2,598,596	2,309,135	2,650,953

Condensed statement of changes in equity

for the half year ended 02 July 2016

Attributable to equity holders of the Parent

		Share capital and share premium	Other reserves	Retained earnings	Total	Non -controlling interests	Total
Half year 2016	Notes	€'000	€'000	€'000	€'000	€'000	€'000

Balance at 02 January 2016		105,370	306,425	642,763	1,054,558	8,515	1,063,073

Profit for the period		-	-	109,364	109,364	437	109,801

Other comprehensive income/(expense)
Remeasurements - defined benefit schemes	17	-	-	(51,379)	(51,379)	-	(51,379)
Deferred tax on remeasurements		-	-	4,866	4,866	-	4,866
Share of remeasurements - Joint Ventures & Associates (net of deferred tax)		-	-	(9,170)	(9,170)	-	(9,170)
Fair value movements		-	(1,123)	-	(1,123)	-	(1,123)
Deferred tax on fair value movements		-	63	-	63	-	63
Currency translation differences		-	(33,036)	-	(33,036)	-	(33,036)
Net investment hedge		-	2,015	-	2,015	-	2,015
Total comprehensive income for the period		-	(32,081)	53,681	21,600	437	22,037
Dividends paid during the period	9	-	-	(21,374)	(21,374)	-	(21,374)
Cost of share based payments		-	5,693	-	5,693	-	5,693
Transfer on exercise, vesting or expiry of share based payments		-	2,681	(2,681)	-	-	-
Deferred tax on share based payments		-	-	1,511	1,511	-	1,511
Shares issued	16	1	-	-	1	-	1
Premium on shares issued	16	22	-	-	22	-	22
Purchase of own shares		-	(10,318)	-	(10,318)	-	(10,318)

Balance at 02 July 2016		105,393	272,400	673,900	1,051,693	8,952	1,060,645

Attributable to equity holders of the Parent

		Share capital and share premium	Other reserves	Retained earnings	Total	Non -controlling interests	Total
Half year 2015	Notes	€'000	€'000	€'000	€'000	€'000	€'000

Balance at 03 January 2015		104,728	218,581	473,573	796,882	7,896	804,778

Profit for the period		-	-	98,674	98,674	417	99,091

Other comprehensive income/(expense)
Remeasurements - defined benefit schemes	17	-	-	18,178	18,178	-	18,178
Deferred tax on remeasurements		-	-	(2,430)	(2,430)	-	(2,430)
Share of remeasurements - Joint Ventures & Associates (net of deferred tax)		-	-	4,211	4,211	-	4,211
Fair value movements		-	3,528	-	3,528	-	3,528
Deferred tax on fair value movements		-	(444)	-	(444)	-	(444)
Currency translation differences		-	75,654	-	75,654	-	75,654
Recycle of currency reserve to the Group income statement on disposal of Investment in Joint Venture		-	5,037	-	5,037	-	5,037
Net investment hedge		-	(6,980)	-	(6,980)	-	(6,980)
Total comprehensive income for the period		-	76,795	118,633	195,428	417	195,845
Dividends paid during the period	9	-	-	(19,449)	(19,449)	-	(19,449)
Cost of share based payments		-	3,565	-	3,565	-	3,565
Transfer on exercise, vesting or expiry of share based payments		-	(208)	208	-	-	-
Shares issued	16	9	-	-	9	-	9
Premium on shares issued	16	633	-	-	633	-	633
Purchase of own shares		-	(4,660)	-	(4,660)	-	(4,660)

Balance at 04 July 2015		105,370	294,073	572,965	972,408	8,313	980,721

Attributable to equity holders of the Parent

		Share capital and share premium	Other reserves	Retained earnings	Total	Non -controlling interests	Total
Year 2015	Notes	€'000	€'000	€'000	€'000	€'000	€'000

Balance at 03 January 2015		104,728	218,581	473,573	796,882	7,896	804,778

Profit for the period		-	-	183,271	183,271	646	183,917

Other comprehensive income/(expense)
Remeasurements - defined benefit schemes	17	-	-	20,856	20,856	-	20,856
Deferred tax on remeasurements		-	-	(2,334)	(2,334)	-	(2,334)
Share of remeasurements - Joint Ventures & Associates (net of deferred tax)		-	-	3,642	3,642	-	3,642
Fair value movements		-	1,418	-	1,418	-	1,418
Deferred tax on fair value movements		-	(480)	-	(480)	-	(480)
Currency translation differences		-	91,102	-	91,102	-	91,102
Recycle of currency reserve to the Group income statement on disposal of Investment in Joint Venture		-	5,037	-	5,037	-	5,037
Net investment hedge		-	(8,684)	-	(8,684)	-	(8,684)
Total comprehensive income for the period		-	88,393	205,435	293,828	646	294,474
Dividends paid during the period	9	-	-	(33,895)	(33,895)	(427)	(34,322)
Cost of share based payments		-	8,724	-	8,724	-	8,724
Transfer on exercise, vesting or expiry of share based payments		-	4,078	(4,078)	-	-	-
Deferred tax on share based payments		-	-	1,728	1,728	-	1,728
Shares issued	16	9	-	-	9	-	9
Premium on shares issued	16	633	-	-	633	-	633
Purchase of own shares		-	(13,351)	-	(13,351)	-	(13,351)
Additions during the year		-	-	-	-	400	400

Balance at 02 January 2016		105,370	306,425	642,763	1,054,558	8,515	1,063,073

Other reserves

for the half year ended 02 July 2016

	Capital and merger reserve	Currency reserve	Hedging reserve	Available for sale financial asset reserve	Own shares	Share based payment reserve	Total
Half year 2016	€'000	€'000	€'000	€'000	€'000	€'000	€'000

Balance at 02 January 2016	115,973	186,251	(660)	3,391	(13,238)	14,708	306,425
Currency translation differences	-	(33,036)	-	-	-	-	(33,036)
Net investment hedge	-	2,015	-	-	-	-	2,015
Revaluation of interest rate swaps - gain in period	-	-	27	-	-	-	27
Foreign exchange contracts - loss in period	-	-	(657)	-	-	-	(657)
Transfers to income statement:
Foreign exchange contracts - gain in period	-	-	(307)	-	-	-	(307)
Forward commodity contracts - loss in period	-	-	360	-	-	-	360
Revaluation of forward commodity contracts - gain in period	-	-	71	-	-	-	71
Revaluation of available for sale financial assets - loss in period	-	-	-	(617)	-	-	(617)
Deferred tax on fair value movements	-	-	(141)	204	-	-	63
Cost of share based payments	-	-	-	-	-	5,693	5,693
Transfer on exercise, vesting or expiry of share based payments	-	-	-	-	8,166	(5,485)	2,681
Purchase of own shares	-	-	-	-	(10,318)	-	(10,318)

Balance at 02 July 2016	115,973	155,230	(1,307)	2,978	(15,390)	14,916	272,400

	Capital and merger reserve	Currency reserve	Hedging reserve	Available for sale financial asset reserve	Own shares	Share based payment reserve	Total
Half year 2015	€'000	€'000	€'000	€'000	€'000	€'000	€'000

Balance at 03 January 2015	115,973	98,796	(745)	2,538	(7,965)	9,984	218,581
Currency translation differences	-	75,654	-	-	-	-	75,654
Recycle of currency reserve to the Group income statement on disposal of Investment in Joint Venture	-	5,037	-	-	-	-	5,037
Net investment hedge	-	(6,980)	-	-	-	-	(6,980)
Revaluation of interest rate swaps - gain in period	-	-	35	-	-	-	35
Foreign exchange contracts - gain in period	-	-	2,955	-	-	-	2,955
Transfers to income statement:
Foreign exchange contracts - gain in period	-	-	(771)	-	-	-	(771)
Forward commodity contracts - loss in period	-	-	700	-	-	-	700
Revaluation of forward commodity contracts - loss in period	-	-	(443)	-	-	-	(443)
Revaluation of available for sale financial assets - gain in period	-	-	-	1,052	-	-	1,052
Deferred tax on fair value movements	-	-	(97)	(347)	-	-	(444)
Cost of share based payments	-	-	-	-	-	3,565	3,565
Transfer on exercise, vesting or expiry of share based payments	-	-	-	-	486	(694)	(208)
Purchase of own shares	-	-	-	-	(4,660)	-	(4,660)

Balance at 04 July 2015	115,973	172,507	1,634	3,243	(12,139)	12,855	294,073

	Capital and merger reserve	Currency reserve	Hedging reserve	Available for sale financial asset reserve	Own shares	Share based payment reserve	Total
Year 2015	€'000	€'000	€'000	€'000	€'000	€'000	€'000

Balance at 03 January 2015	115,973	98,796	(745)	2,538	(7,965)	9,984	218,581
Currency translation differences	-	91,102	-	-	-	-	91,102
Recycle of currency reserve to the Group income statement on disposal of Investment in Joint Venture	-	5,037	-	-	-	-	5,037
Net investment hedge	-	(8,684)	-	-	-	-	(8,684)
Revaluation of interest rate swaps - gain in period	-	-	248	-	-	-	248
Foreign exchange contracts - loss in period	-	-	(294)	-	-	-	(294)
Transfers to income statement:
Foreign exchange contracts - gain in period	-	-	(149)	-	-	-	(149)
Forward commodity contracts - loss in period	-	-	701	-	-	-	701
Revaluation of forward commodity contracts - loss in period	-	-	(361)	-	-	-	(361)
Revaluation of available for sale financial assets - gain in period	-	-	-	1,273	-	-	1,273
Deferred tax on fair value movements	-	-	(60)	(420)	-	-	(480)
Cost of share based payments	-	-	-	-	-	8,724	8,724
Transfer on exercise, vesting or expiry of share based payments	-	-	-	-	8,078	(4,000)	4,078
Purchase of own shares	-	-	-	-	(13,351)	-	(13,351)

Balance at 02 January 2016	115,973	186,251	(660)	3,391	(13,238)	14,708	306,425

Condensed statement of cash flows

for the half year ended 02 July 2016

		Half year	Half year	Year
		2016	2015	2015
	Notes	€'000	€'000	€'000
Cash flows from operating activities
Cash generated from operating activities	20	53,616	25,463	307,865
Interest received		615	417	1,773
Interest paid		(11,710)	(13,164)	(22,939)
Tax (paid)/refunded		(11,762)	1,360	(9,987)
Net cash inflow from operating activities		30,759	14,076	276,712

Cash flows from investing activities
Acquisition of subsidiaries - purchase consideration	21	(8,724)	(544)	(195,579)
Net cash flow relating to previous acquisitions		(6,942)	-	-
Acquisition of subsidiaries - liabilities settled at completion		-	(802)	(1,296)
Acquisition of subsidiaries - cash and cash equivalents acquired		-	-	6,991
Disposal of Investment in Joint Venture		-	28,511	28,516
Capital grants received		-	-	1,132
Purchase of property, plant and equipment	11	(34,471)	(52,241)	(103,792)
Purchase of intangible assets	11	(7,223)	(6,523)	(19,798)
Interest paid in relation to property, plant and equipment		(500)	(1,250)	(2,403)
Dividends received from Joint Ventures & Associates		2,248	3,237	14,924
Loans advanced to Associate	18	(12,800)	-	-
Net redemption and additions in available for sale financial assets		32	1,151	1,140
Proceeds from property, plant and equipment		98	132	428
Net cash outflow from investing activities		(68,282)	(28,329)	(269,737)

Cash flows from financing activities
Proceeds from issue of ordinary shares	16	23	608	642
Net outflow from derivative financial instruments		(1,815)	-	-
Purchase of own shares		(10,318)	(4,660)	(13,351)
(Decrease)/increase in borrowings		(67,197)	(21,471)	91,577
Finance lease payments		(169)	(203)	(468)
Dividends paid to Company shareholders	9	(21,374)	(19,449)	(33,895)
Dividends paid to non-controlling interests		-	-	(427)
Net cash (outflow)/inflow from financing activities		(100,850)	(45,175)	44,078

Net (decrease)/increase in cash and cash equivalents		(138,373)	(59,428)	51,053

Cash and cash equivalents at the beginning of the period		169,125	110,370	110,370
Effects of exchange rate changes on cash and cash equivalents		(2,333)	6,418	7,702
Cash and cash equivalents at the end of the period	13	28,419	57,360	169,125

		Half year	Half year	Year
		2016	2015	2015
Reconciliation of net cash flow to movement in net debt		€'000	€'000	€'000

Net (decrease)/increase in cash and cash equivalents		(138,373)	(59,428)	51,053
Cash movements from debt financing		67,366	21,675	(91,109)

		(71,007)	(37,753)	(40,056)
Exchange translation adjustment		10,910	(28,947)	(33,824)

Movement in net debt in the period		(60,097)	(66,700)	(73,880)
Net debt at the beginning of the period		(584,243)	(510,363)	(510,363)

Net debt at the end of the period		(644,340)	(577,063)	(584,243)

Net debt comprises:
Borrowings	13	(672,759)	(634,423)	(753,368)
Cash and cash equivalents	13	28,419	57,360	169,125

		(644,340)	(577,063)	(584,243)

Notes to the condensed financial statements

for the half year ended 02 July 2016

1. General information

Glanbia plc (the "Company") and its subsidiaries (together the "Group") is a leading global nutrition group with its main operations in Europe, USA, Middle East, Asia Pacific and Latin America.

The Company is a public limited company incorporated and domiciled in Ireland. The address of its registered office is Glanbia House, Kilkenny, Ireland. Glanbia Co-operative Society Limited (the "Society"), together with its subsidiaries, holds 36.5% of the issued share capital of the Company. The Board of Directors as at 02 July 2016 is comprised of 18 members, of which up to 10 are nominated by the Society. In accordance with IFRS 10 'Consolidated Financial Statements', the Society controls the Group and is the ultimate parent of the Group.

The Company's shares are quoted on the Irish and London Stock Exchanges.

These condensed interim financial statements were approved for issue by the Board of Directors on 16 August 2016.

2. Summary of significant accounting policies

a) Basis of preparation

The Group's condensed interim financial statements for the six months ended 02 July 2016 have been prepared in accordance with the Transparency (Directive 2004/109/EC) Regulations 2007 as amended, the related Transparency Rules of the Central Bank of Ireland and with IAS 34 'Interim Financial Reporting', as adopted by the European Union. The condensed interim financial statements should be read in conjunction with the financial statements for the year ended 02 January 2016, which have been prepared in accordance with International Financial Reporting Standards ("IFRS").

The condensed interim financial statements for the six months ended 02 July 2016 and for the six months ended 04 July 2015 have not been audited or reviewed by the Group's auditors.

b) Statutory information

The condensed interim financial statements are considered non-statutory financial statements for the purposes of the Companies Act 2014 and in compliance with section 340(4) of that Act we state that:

· the condensed interim financial statements for the half year to 02 July 2016 have been prepared to meet our obligation to do so under the Transparency (Directive 2004/109/EC) Regulations 2007 as amended (Statutory Instrument No. 277);

· the condensed interim financial statements for the half year to 02 July 2016 do not constitute the statutory financial statements of the Group;

· the statutory financial statements for the financial year ended 02 January 2016 have been annexed to the annual return and filed with the Companies Registration Office;

· the statutory auditors of the Group have made a report under section 391 in the form required by section 336 Companies Act 2014 in respect of the statutory financial statements of the Group; and

· the matters referred to in the statutory auditors' report were unqualified, and did not include a reference to any matters to which the statutory auditors drew attention by way of emphasis without qualifying the report.

c) Going Concern

The Group meets its day-to-day working capital requirements through its bank facilities. The Group's forecasts and projections, taking account of changes in trading performance, show that the Group expects to be able to operate within the level of its current facilities. After making enquiries, the Directors have a reasonable expectation that the Group has sufficient resources to continue in operational existence for the foreseeable future. In forming this view, the Directors have reviewed the Group's budget for 2016 and the medium term plans as set out in the three year strategic plan, and have taken into account the cash flow implications of the plans, including proposed capital expenditure, and compared these with the Group's committed borrowing facilities and Group financing key performance indicators ("KPIs"). The Group therefore continues to adopt the going concern basis in preparing its condensed interim financial statements for the six months ended 02 July 2016.

d) Foreign currency translation

The Group's condensed interim financial statements are presented in euro, which is the Group's presentation currency.

The principal exchange rates used for the translation of results and balance sheets into euro are as follows:

		Average			Period end
	Half year	Half year	Year	Half year	Half year	Year
	2016	2015	2015	2016	2015	2015
euro 1 =
US dollar	1.1161	1.1150	1.1092	1.1135	1.1096	1.0887
Pound Sterling	0.7795	0.7316	0.7259	0.8383	0.7102	0.7340
Danish Kroner	7.4497	7.4567	7.4589	7.4380	7.4607	7.4626

Following the result of the UK referendum on EU membership on 23 June 2016, the Group reviewed its methodology for determining the average rates and concluded that due to the trading profile of the Group, it remained appropriate to use an average rate as an approximation of the actual Pound Sterling exchange rate when translating income and expenses.

e) Changes in accounting policies

The methods of computation, presentation and accounting policies adopted in the preparation of the Group's condensed interim financial statements are consistent with those applied in the Annual Report for the year ended 02 January 2016 ("2015 Annual Report"). The Group's accounting policies are set out in the financial statements in the 2015 Annual Report.

The following standards, issued by the International Accounting Standards Board ("IASB") and the International Financial Reporting Interpretations Committee ("IFRIC"), are effective for the Group for the first time in the period ended 02 July 2016 and have been adopted by the Group.

Amendments to IFRS 11 'Joint Arrangements' on acquisition of an interest in a joint operation (effective on or after 01 January 2016).

Amendments to IAS 16 'Property, Plant and Equipment' and IAS 38, 'Intangible Assets', on depreciation and amortisation (effective on or after 01 January 2016).

Amendments to IAS 27 'Consolidated and Separate Financial Statements' on the equity method (effective on or after 01 January 2016).

Amendments to IFRS 10 'Consolidated Financial Statements' and IAS 28, 'Investments in Associates and Joint Ventures' (effective on or after 01 January 2016 - not yet endorsed).

Amendment to IAS 1 'Presentation of Financial Statements' on the disclosure initiative (effective on or after 01 January 2016).

Annual Improvements 2012-2014 on IFRS 7 'Financial Instruments: Disclosures', IAS 19 'Employee Benefits' and IAS 34 'Interim Financial Reporting' (effective on or after 01 January 2016).

The above standards did not have a significant impact on the results or the financial position of the Group during the six months ended 02 July 2016.

The following standards, amendments and interpretations have been published. The Group will apply the relevant standards from their effective dates and is currently assessing their impact on the Group's financial statements. The standards are mandatory for future accounting periods but are not yet effective and have not been early adopted by the Group.

IFRS 15 'Revenue from Contracts with Customers' (effective on or after 01 January 2018 - not yet endorsed).

IFRS 15 is a converged standard from the IASB and the Financial Accounting Standards Board ("FASB") on revenue recognition. The standard will improve the financial reporting of revenue and improve comparability of the top line in financial statements globally.

IFRS 9 'Financial Instruments' (effective on or after 01 January 2018 - not yet endorsed).

This standard replaces the guidance in IAS 39 'Financial Instruments: Recognition and Measurement'. It includes requirements on the classification and measurement of financial assets and liabilities; it also includes an expected credit losses model that replaces the current incurred loss impairment model.

Amendments to IAS 12 'Income Taxes' on the recognition of deferred tax assets for unrealised losses (effective on or after 01 January 2017 - not yet endorsed).

These amendments clarify the recognition of deferred tax assets for unrealised losses on debt instruments.

Amendments to IAS 7 'Statement of Cash Flows' under its disclosure initiative (effective on or after 01 January 2017 - not yet endorsed).

These amendments are intended to improve the information provided to users of financial statements about an entity's financing activities.

IFRS 16 'Leases' (effective on or after 01 January 2019 - not yet endorsed).

IFRS 16 supersedes IAS 17 'Leases'. The new standard provides a single lessee accounting model, requiring lessees to recognise assets and liabilities for all leases unless the lease term is 12 months or less or the underlying asset has a low value. Lessors continue to classify leases as operating or finance, with IFRS 16's approach to lessor accounting substantially unchanged from IAS 17.

3. Changes in critical accounting estimates and assumptions

Having considered the result of the UK referendum on EU membership, the Group concluded that no indicator of impairment existed at the reporting date with respect to intangible assets and property, plant and equipment. In valuing the retirement benefit obligation at the reporting date, the loss from changes in financial assumptions was €64.7 million offset by the return on plan assets of €13.3 million. A significant driver of the movement in the discount rate (based on high quality corporate bonds) was the result of the UK referendum on EU membership. See note 17 for further details on the retirement benefit obligation at the reporting date.

With the exception of those outlined above, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements for the year ended 02 January 2016.

4. Segment information

In accordance with IFRS 8 'Operating Segments', the Group has four segments, as follows: Glanbia Performance Nutrition, Glanbia Nutritionals (previously Global Ingredients), Dairy Ireland and Joint Ventures & Associates. These segments align with the Group's internal financial reporting system and the way in which the Chief Operating Decision Maker assesses performance and allocates the Group's resources. A segment manager is responsible for each segment and is directly accountable for the performance of that segment to the Glanbia Operating Executive which acts as the Chief Operating Decision Maker for the Group. There has been no change in the basis of segmentation or in the basis of measurement of segment profit or loss in the period.

Each segment derives its revenues as follows: Glanbia Performance Nutrition earns its revenue from performance nutrition products; Glanbia Nutritionals earns its revenue from the manufacture and sale of cheese, dairy and non dairy nutritional ingredients; Dairy Ireland earns its revenue from the manufacture and sale of a range of consumer products and farm inputs and Joint Ventures & Associates revenue arises from the manufacture and sale of cheese and dairy ingredients.

Each segment is reviewed in its totality by the Chief Operating Decision Maker. The Glanbia Operating Executive assesses the trading performance of operating segments based on a measure of earnings before interest, tax, amortisation and exceptional items.

Amounts stated for Joint Ventures & Associates represents the Group's share.

4.1 The segment results for the period ended 02 July 2016 are as follows:

	Gross segment revenue	Inter-segment revenue	Total Group revenue	EBITA
	€'000	€'000	€'000	€'000
Glanbia Performance Nutrition	505,370	(115)	505,255	81,675
Glanbia Nutritionals	586,413	(13,856)	572,557	57,984
Dairy Ireland	357,383	(431)	356,952	17,730
Joint Ventures & Associates	402,257	-	402,257	19,135
Group including Joint Ventures & Associates	1,851,423	(14,402)	1,837,021	176,524
Joint Ventures & Associates			(402,257)	(19,135)
Reported Group			1,434,764	157,389

Amortisation				(19,424)
Operating profit				137,965
Exceptional items				(8,885)
Share of results of Joint Ventures & Associates				12,328
Finance income				1,160
Finance costs				(12,732)
Reported profit before taxation				129,836
Income taxes				(20,035)
Reported profit for the period				109,801

Included in external revenue are related party sales between Dairy Ireland and Joint Ventures & Associates of €4.5 million and related party sales between Glanbia Nutritionals and Joint Ventures & Associates of €6.6 million. Inter-segment transfers or transactions are entered into under the normal commercial terms and conditions that would also be available to unrelated third parties.

Amortisation and exceptional items are not allocated to segments as they are not reported by segment to the Glanbia Operating Executive. Finance income, finance costs and income taxes are not allocated to segments as this type of activity is driven by central treasury and taxation functions which manage the cash and taxation position of the Group.

Segment assets and liabilities:

	Segment assets	Segment liabilities
	€'000	€'000
Glanbia Performance Nutrition	1,128,231	247,784
Glanbia Nutritionals	803,838	198,333
Dairy Ireland	362,541	216,398
Joint Ventures & Associates	169,891	-
Group including Joint Ventures & Associates	2,464,501	662,515
Unallocated	134,095	875,436
Reported Group	2,598,596	1,537,951

Unallocated assets primarily include taxation, cash and cash equivalents, available for sale financial assets and derivatives. Unallocated liabilities include taxation, borrowing and derivatives.

4.2 The segment results for the period ended 04 July 2015 are as follows:

	Gross segment revenue	Inter-segment revenue	Total Group revenue	EBITA
	€'000	€'000	€'000	€'000
Glanbia Performance Nutrition	453,818	(346)	453,472	60,686
Glanbia Nutritionals	626,732	(17,476)	609,256	60,342
Dairy Ireland	368,862	-	368,862	17,445
Joint Ventures & Associates	445,327	-	445,327	20,204
Group including Joint Ventures & Associates	1,894,739	(17,822)	1,876,917	158,677
Joint Ventures & Associates			(445,327)	(20,204)
Reported Group			1,431,590	138,473

Amortisation				(15,566)
Operating profit				122,907
Exceptional items				(7,838)
Share of results of Joint Ventures & Associates				13,267
Finance income				885
Finance costs				(11,588)
Reported profit before taxation				117,633
Income taxes				(18,542)
Reported profit for the period				99,091

Included in external revenue are related party sales between Dairy Ireland and Joint Ventures & Associates of €8.0 million and related party sales between Glanbia Nutritionals and Joint Ventures & Associates of €7.6 million. Inter-segment transfers or transactions are entered into under the normal commercial terms and conditions that would also be available to unrelated third parties.

Segment assets and liabilities:

	Segment assets	Segment liabilities
	€'000	€'000
Glanbia Performance Nutrition	867,221	153,560
Glanbia Nutritionals	816,024	219,648
Dairy Ireland	342,088	188,241
Joint Ventures & Associates	156,079	-
Group including Joint Ventures & Associates	2,181,412	561,449
Unallocated	127,723	766,965
Reported Group	2,309,135	1,328,414

Unallocated assets primarily include taxation, cash and cash equivalents, available for sale financial assets and derivatives. Unallocated liabilities include taxation, borrowing and derivatives.

4.3 The segment results for the year ended 02 January 2016 are as follows:

	Gross segment revenue	Inter-segment revenue	Total Group revenue	EBITA
	€'000	€'000	€'000	€'000
Glanbia Performance Nutrition	924,165	(1,050)	923,115	135,610
Glanbia Nutritionals	1,272,795	(54,814)	1,217,981	106,642
Dairy Ireland	633,787	(557)	633,230	28,751
Joint Ventures & Associates	893,089	-	893,089	39,690
Group including Joint Ventures & Associates	3,723,836	(56,421)	3,667,415	310,693
Joint Ventures & Associates			(893,089)	(39,690)
Reported Group			2,774,326	271,003

Amortisation				(31,125)
Operating profit				239,878
Exceptional items				(26,342)
Share of results of Joint Ventures & Associates				26,270
Finance income				1,706
Finance costs				(22,816)
Reported profit before taxation				218,696
Income taxes				(34,779)
Reported profit for the year				183,917

Included in external revenue are related party sales between Dairy Ireland and Joint Ventures & Associates of €17.0 million and related party sales between Glanbia Nutritionals and Joint Ventures & Associates of €15.3 million. Inter-segment transfers or transactions are entered into under the normal commercial terms and conditions that would also be available to unrelated third parties.

Segment assets and liabilities:

	Segment assets	Segment liabilities
	€'000	€'000
Glanbia Performance Nutrition	1,150,637	257,148
Glanbia Nutritionals	794,155	237,853
Dairy Ireland	302,000	181,146
Joint Ventures & Associates	160,332	-
Group including Joint Ventures & Associates	2,407,124	676,147
Unallocated	243,829	911,733
Reported Group	2,650,953	1,587,880

Unallocated assets primarily include taxation, cash and cash equivalents, available for sale financial assets and derivatives. Unallocated liabilities include taxation, borrowing and derivatives.

5. Seasonality

Elements of the Dairy Ireland segment reflect the seasonal nature of the Irish agricultural industry.

6. Exceptional items

		Half year	Half year	Year
		2016	2015	2015
	Notes	€'000	€'000	€'000
Organisation redesign costs	(a)	(6,207)	(3,099)	(6,945)
Acquisition integration costs	(b)	(1,850)	-	(2,919)
Rationalisation costs	(c)	(828)	(1,162)	(7,841)
Irish defined benefit pension schemes	(d)	-	-	(5,006)
Disposal of Joint Venture	(e)	-	(3,577)	(3,631)

Total exceptional charge before tax		(8,885)	(7,838)	(26,342)
Exceptional tax credit		1,629	533	2,543

Total exceptional charge		(7,256)	(7,305)	(23,799)

The nature of the total exceptional charge before tax is as follows:

	Half year	Half year	Year
	2016	2015	2015
	€'000	€'000	€'000
Employee benefit expense	(3,385)	(1,162)	(7,416)
Defined benefit pension scheme settlement loss	-	-	(4,306)
Other operating costs	(5,500)	(6,676)	(14,620)
Total exceptional charge before tax	(8,885 )	(7,838)	(26,342)

The total cash outflow during the period in respect of exceptional charges was €10.5 million (HY 2015: €3.0 million) of which €6.4 million (HY 2015: €0.6 million) was in respect of prior year exceptional charges.

a) The organisation redesign costs relate to the on-going programme announced in 2015 in Glanbia Nutritionals to fundamentally reorganise the business to leverage future market opportunities. Costs of €6.2 million include consultancy of €2.3 million, employee benefit expense (directly attributable employee costs and redundancy) of €1.7 million and other costs of €2.2 million.

b) Acquisition integration costs comprise of costs relating to the integration, restructuring and redesign of route to market capabilities within acquired businesses in the Glanbia Performance Nutrition segment. Costs of €1.9 million include consultancy of €0.7 million, employee benefit expense (directly attributable payroll costs and redundancy) of €0.9 million and other costs of €0.3 million.

c) Rationalisation costs primarily relate to the current redundancy and rationalisation programme in the Dairy Ireland segment. Costs of €0.8 million include employee benefit expense (redundancy) of €0.8 million.

d) The Group undertook a review of its pension arrangements in 2015 and agreed with the pension trustees to wind up three of its smaller Irish defined benefit pension schemes. This transaction resulted in an exceptional charge in the year of €5.0 million. This charge relates to gains and losses on settlement of €4.3 million, in accordance with IAS 19 'Employee Benefits', and professional fees of €0.7 million in relation to the transaction. This settlement reduced the gross retirement benefit obligation by €60.2 million.

e) On 01 April 2015, the Group disposed of its investment in Milk Ventures (UK) Limited which is the parent company of Nutricima Limited, a non-core Joint Venture business involved in the supply and distribution of evaporated and powdered milk based in Nigeria, resulting in a non cash loss of €3.6 million.

7. Finance income and costs

	Half year	Half year	Year
	2016	2015	2015
	€'000	€'000	€'000
Finance income
Interest income	1,160	885	1,706

Total finance income	1,160	885	1,706

Finance costs
Bank borrowing costs	(3,632)	(2,233)	(4,109)
Facility fees	(1,325)	(1,414)	(2,761)
Unwinding of discounts	(73)	(74)	(142)
Finance lease costs	(38)	(72)	(127)
Finance cost of private debt placement	(7,664)	(7,795)	(15,677)

Total finance costs	(12,732)	(11,588)	(22,816)

Net finance costs	(11,572)	(10,703)	(21,110)

Net finance costs do not include borrowing costs of €0.5 million (HY 2015: €1.25 million) attributable to the acquisition, construction or production of a qualifying asset, which have been capitalised, as disclosed in note 11. Borrowing costs are capitalised at the Group's average interest rate for the period of 3.6% (HY 2015: 3.9%).

8. Income taxes

The Group's income tax charge after exceptional items of €20.0 million (HY 2015: €18.5 million) has been prepared based on the Group's best estimate of the weighted average tax rate that is expected for the full financial year.

9. Dividends

	Half year	Half year	Year
	2016	2015	2015
	€'000	€'000	€'000
Dividends paid per ordinary share are as follows:
Final dividend for the year ended 02 January 2016 of 7.22 cent per share paid on 29 April 2016	21,374	-	-
Final dividend for the year ended 03 January 2015 of 6.57 cent per share paid on 15 May 2015	-	19,449	19,449

Interim dividend for the year ended 02 January 2016 of 4.88 cent per share paid on 16 October 2015	-	-	14,446
	21,374	19,449	33,895

The Directors have recommended the payment of an interim dividend of 5.37 cent per share on the ordinary shares which amounts to €15.9 million. This dividend will be paid on 07 October 2016 to shareholders on the register of members at 26 August 2016, the record date. These condensed financial statements do not reflect this interim dividend. There are no income tax consequences for the Company in respect of dividends proposed prior to issuance of the condensed interim financial statements.

10. Earnings per share

Basic

Basic earnings per share is calculated by dividing the net profit attributable to the equity holders of the Parent by the weighted average number of ordinary shares in issue during the period, excluding ordinary shares purchased by the Group and held as own shares.

	Half year	Half year	Year
	2016	2015	2015

Profit attributable to equity holders of the Parent (€'000)	109,364	98,674	183,271
Weighted average number of ordinary shares in issue	295,127,674	295,124,380	295,196,003
Basic earnings per share (cent)	37.06	33.43	62.08

Diluted

Diluted earnings per ordinary share is calculated by adjusting the weighted average number of ordinary shares in issue to assume conversion of all potential dilutive ordinary shares. Share options and share awards are the Company's only potential dilutive ordinary shares. Share awards, which are performance based, are treated as contingently issuable shares because their issue is contingent upon satisfaction of specified performance conditions in addition to the passage of time. These contingently issuable ordinary shares are excluded from the computation of diluted earnings per share where the exercise conditions have not been satisfied as at the end of the reporting period.

	Half year	Half year	Year
	2016	2015	2015

Weighted average number of ordinary shares in issue	295,127,674	295,124,380	295,196,003
Adjustments for share awards	1,090,798	2,182,723	1,002,678
Adjustments for share options	34,191	42,162	42,617
Adjusted weighted average number of ordinary shares	296,252,663	297,349,265	296,241,298

Diluted earnings per share (cent)	36.92	33.18	61.87

Adjusted

Adjusted earnings per share is calculated on the net profit attributable to equity holders of the Parent, before net exceptional items and intangible asset amortisation (net of related tax). Adjusted earnings per share is considered to be more reflective of the Group's overall underlying performance, and reflects the metrics used by the Group to measure profitability and financial performance.

	Half year	Half year	Year
	2016	2015	2015

Profit attributable to equity holders of the Parent (€'000)	109,364	98,674	183,271
Amortisation of intangible assets (net of related tax) (€'000)	15,531	13,620	26,126
Amortisation of Joint Ventures & Associates intangible assets (net of related tax) (€'000)	270	208	417
Exceptional items (net of related tax) (€'000)	7,256	7,305	23,799
Adjusted net income (€'000)	132,421	119,807	233,613

Adjusted earnings per share (cent)	44.87	40.60	79.14

Diluted adjusted earnings per share (cent)	44.70	40.29	78.86

11. Property, plant and equipment, intangible assets and capital commitments

During the six month period to 02 July 2016 the Group spent €41.7 million (HY 2015: €58.8 million) on additions to property, plant and equipment and intangible assets. There were no significant disposals during the period.

As part of the business combination during the period (note 21), the Group acquired intangible assets, comprising customer relationships and goodwill, amounting to €2.5 million and property, plant and equipment amounting to €0.2 million.

At 02 July 2016 the Group had entered into contractual commitments for the acquisition of property, plant and equipment amounting to €11.3 million (HY 2015: €24.6 million). During the six month period the Group capitalised borrowing costs amounting to €0.5 million (HY 2015: €1.25 million) on qualifying assets (note 7).

12. Inventories

The amount written off as an expense to the condensed income statement in respect of inventories carried at net realisable value was €2.5 million (HY 2015: €0.7 million).

13. Net debt

	Half year	Half year	Year
	2016	2015	2015
	€'000	€'000	€'000
Non-current
Bank borrowings	380,187	340,393	453,978
Private debt placement	291,872	292,898	298,521
Finance lease liabilities	349	724	464
	672,408	634,015	752,963

Current
Bank overdraft and borrowings	66,490	37,040	41,764
Finance lease liabilities	351	408	405
	66,841	37,448	42,169

Total borrowings	739,249	671,463	795,132
Less: cash and cash equivalents	(94,909)	(94,400)	(210,889)

Net debt	644,340	577,063	584,243

The maturity of non-current borrowings is €0.3 million (HY 2015: €0.4 million, 2015: €0.4 million) in 1 to 2 years, €672.1 million (HY 2015: €340.7 million, 2015: €454.1 million) in 2 to 5 years and €nil (HY 2015: €292.9 million, 2015: €298.5 million) in more than 5 years.

Cash and cash equivalents include the following for the purposes of the condensed statement of cash flows at the reporting date:

	Half year	Half year	Year
	2016	2015	2015
	€'000	€'000	€'000

Cash and cash equivalents	(94,909)	(94,400)	(210,889)
Bank overdraft	66,490	37,040	41,764
	(28,419)	(57,360)	(169,125)

Borrowings include the following for the purposes of the condensed statement of cash flows at the reporting date:

	Half year	Half year	Year
	2016	2015	2015
	€'000	€'000	€'000

Borrowings	739,249	671,463	795,132
Bank overdraft included as part of cash and cash equivalents	(66,490)	(37,040)	(41,764)

	672,759	634,423	753,368

The Group has the following undrawn borrowing facilities at the reporting date:

	Half year	Half year	Year
	2016	2015	2015
	€'000	€'000	€'000

Expiring within 1 year	97,790	76,113	80,701
Expiring beyond 1 year	337,781	377,473	265,652

	435,571	453,586	346,353

Movement in net borrowings in the period is analysed as follows:

	Half year 2016 €'000	Half year 2015 €'000	Year 2015 €'000

At the beginning of the period	584,243	510,363	510,363

Net drawdown of borrowings	71,007	37,753	40,056
Exchange translation adjustment	(10,910)	28,947	33,824

At the end of the period	644,340	577,063	584,243

14. Financial risk management

The Group's activities expose it to a variety of financial risks as follows: currency risk, interest rate risk, price risk, liquidity risk, cash flow risk and credit risk. The condensed interim financial statements do not include all financial risk management information and disclosures required in the annual financial statements, and should be read in conjunction with the Group's 2015 Annual Report.

There have been no changes to the risk management procedures or policies since 2015 year end.

Fair value estimation

The condensed interim financial statement fair value estimation disclosures below should be read in conjunction with the Group's 2015 Annual Report.

Fair value of financial assets and liabilities measured at fair value

The table below analyses the Group's financial instruments measured at fair value by valuation method. The different levels have been defined as follows:

· quoted prices (unadjusted) in active markets for identical assets and liabilities (level 1);

· inputs, other than quoted prices included in level 1, that are observable for the asset and liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (level 2); and,

· inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level 3).

The following table presents the Group's financial assets and liabilities that are measured at fair value at the reporting dates:

	Fair Value	Half year	Half year	Year
	Hierarchy	2016	2015	2015
		€'000	€'000	€'000
Assets
Non hedging derivatives	Level 2	-	649	-
Derivatives used for hedging	Level 2	1,012	1,037	414
Available for sale financial assets - equity securities	Level 1	132	212	161
Available for sale financial assets - equity securities	Level 2	6,111	5,360	5,666

Total assets		7,255	7,258	6,241

Liabilities
Non hedging derivatives	Level 2	(3,299)	-	(666)
Derivatives used for hedging	Level 2	(597)	(408)	(283)

Total liabilities		(3,896)	(408)	(949)

There were no transfers between levels 1 and 2 during the period. There were no changes in valuation techniques during the periods. The Group did not hold any level 3 financial assets or liabilities at the reporting dates.

Valuation techniques used to derive level 2 fair values

Level 2 equities are fair valued using the latest prices quoted in the grey market as at the reporting dates.

Level 2 derivatives comprise mainly of foreign exchange contracts and commodity futures. These foreign exchange contracts and commodity futures have been fair valued using forward rates that are quoted in active markets. The effects of discounting are generally insignificant for level 2 derivatives.

Group's valuation process

The Group's finance department includes a team that performs the valuations of financial assets and financial liabilities required for financial reporting purposes, including level 3 fair values. The Group did not hold any level 3 financial assets or liabilities at 02 July 2016, 04 July 2015 or 02 January 2016. The valuation team reports directly to the Group Finance Director who in turn reports to the Audit Committee. Discussions of valuation processes and results are held between the Group Finance Director and the Audit Committee.

Changes in level 2 and level 3 fair values are analysed at each reporting date. As part of this discussion, the valuation team presents a report that explains the reasons for the fair value movements.

Fair value of financial assets and liabilities measured at amortised cost

The fair value of the Group's trade and other receivables, cash and cash equivalents and trade and other payables approximate their carrying value.

The following table presents the fair value of the Group's financial assets and liabilities that are measured at amortised cost at the reporting dates:

	Half year	Half year	Year
	2016	2015	2015
	€'000	€'000	€'000
Non-current borrowings
Carrying value	672,408	634,015	752,963
Fair value	705,814	658,058	776,931

The carrying value of current borrowings approximates to their fair value.

15. Provisions

	Restructuring €'000	UK pension €'000	Legal claims €'000	Lease commitments €'000	Operational €'000	Total €'000
	note (a)	note (b)	note (c)	note (d)	note (e)

At 02 January 2016	5,692	18,898	6,928	992	5,602	38,112
Provided for in the period	828	-	-	-	-	828
Utilised in the period	(1,747)	(94)	(199)	(64)	(3)	(2,107)
Exchange differences	-	(2,348)	(112)	-	(18)	(2,478)
Unwinding of discounts	-	70	-	3	-	73

At 02 July 2016	4,773	16,526	6,617	931	5,581	34,428

Non-current	-	15,776	-	802	-	16,578
Current	4,773	750	6,617	129	5,581	17,850
	4,773	16,526	6,617	931	5,581	34,428

a) The restructuring provision relates to rationalisation programmes in Dairy Ireland. The provision, which relates to redundancy payments, is expected to be utilised during the year. The amount provided in the period is recognised in the income statement as an exceptional item.

b) The UK pension provision relates to administration and certain costs associated with pension schemes attached to businesses disposed of in prior years. This provision is expected to be fully utilised over the next 27.5 years.

c) The legal claims provision represents legal claims brought against the Group. Due to the nature of these items, there is some uncertainty around the amount and timing of payments. In the opinion of the Directors, after taking appropriate legal advice, the outcome of these legal claims is not expected to give rise to any significant loss beyond the amounts provided for at 02 July 2016.

d) The lease commitments provision relates to onerous leases in respect of two properties where the Group has present and future obligations to make lease payments. It is expected that €0.1 million will be utilised during the year and the balance will be fully utilised in 2017.

e) The operational provision represents provisions relating to certain insurance claims, property remediation works and product returns. Due to the nature of these items, there is some uncertainty around the amount and timing of payments.

16. Share capital and share premium

	Number of shares (thousands)	Ordinary shares €'000	Share premium €'000	Total €'000

At 03 January 2015	295,876	17,752	86,976	104,728
Shares issued	155	9	633	642
At 04 July 2015 and 02 January 2016	296,031	17,761	87,609	105,370
Shares issued	10	1	22	23
At 02 July 2016	296,041	17,762	87,631	105,393

The total authorised number of ordinary shares is 350 million shares (HY 2015 and 2015: 350 million shares) with a par value of €0.06 per share (HY 2015 and 2015: €0.06 per share). All issued shares are fully paid.

During the period ended 02 July 2016 10,000 (HY 2015 and 2015: 155,000) of the 2002 Long Term Incentive Plan shares were exercised with exercise proceeds of €0.02 million (HY 2015 and 2015: €0.6 million). The exercise price was €2.29 (HY 2015 and 2015 average exercise price: €4.14) per share.

17. Retirement benefit obligations

The movement in the liability recognised in the Group condensed balance sheet is as follows:

	Half year	Half year	Year
	2016	2015	2015
	€'000	€'000	€'000

At the beginning of the period	(87,288)	(114,808)	(114,808)
Exchange differences	2,584	(2,362)	(1,557)
Service cost and net interest cost	(3,699)	(4,299)	(8,512)
Loss on settlement	-	-	(4,306)
Remeasurements - defined benefit schemes	(51,379)	18,178	20,856
Contributions paid/payable by employer	7,707	9,320	21,039

At the end of the period	(132,075)	(93,971)	(87,288)

The amounts recognised in the Group condensed balance sheet are determined as follows:

	Half year	Half year	Year
	2016	2015	2015
	€'000	€'000	€'000

Fair value of plan assets	360,877	416,691	352,789
Present value of funded obligations	(492,952)	(510,662)	(440,077)

Liability in the Group condensed balance sheet	(132,075)	(93,971)	(87,288)

The following actuarial assumptions have been made in determining the Group's retirement benefit obligations for the half years ended 02 July 2016 and 04 July 2015 and full year ended 02 January 2016:

Half year 2016

Half year 2015

Year 2015

	IRL	UK	IRL	UK	IRL	UK
Discount rate	1.40%	2.60%	2.40%	3.65%	2.25%	3.70%
Inflation rate	1.10% - 1.20%	1.75% - 2.75%	1.50% - 1.60%	2.15% - 3.15%	1.30% - 1.40%	2.00% - 3.00%
Future salary increases	2.20%	3.50%	2.60%	3.90%	2.40%	3.75%
Future pension increases	0.00%	1.90% - 2.65%	0.00%	2.20% - 2.95%	0.00%	2.10% - 2.80%

The following table analyses for the Group's pension schemes, the estimated impact in the plan liabilities resulting from a 0.25% change in the discount rate:

	Half year	Half year	Year
	2016	2015	2015
	€'000	€'000	€'000

Discount rate - increase/decrease 0.25%	Decrease/increase by €21.8 million	Decrease/increase by €23.6 million	Decrease/increase by €19.4 million

Mortality rates

The mortality assumptions are consistent with those applied in the 2015 Annual Report.

18. Related party transactions

The Group is controlled by the Society, which holds 36.5% of the issued share capital of Glanbia plc and is the ultimate parent of the Group. During the period, dividends of €7.8 million (HY 2015: €8.0 million) were paid to the Society and its wholly owned subsidiaries based on their shareholding in Glanbia plc.

During the six months to 02 July 2016, sales to related parties amounted to €16.6 million (HY 2015: €18.1 million), purchases from related parties amounted to €35.2 million (HY 2015: €39.5 million) and net balances owed to related parties were €39.9 million (HY 2015: €54.3 million). During 2016 the Group advanced a loan of €12.8 million at arms length to Glanbia Ingredients Ireland Limited (Associate), which is repayable on 03 July 2018. The related party transactions relate primarily to trading between the Group, Southwest Cheese Company, LLC, Glanbia Ingredients Ireland Limited and the Society.

In the opinion of the Directors, there have been no related party transactions, or changes therein, since the year ended 02 January 2016, that have materially affected the Group's financial position or performance during the six months ended 02 July 2016.

19. Contingent liabilities

Group bank guarantees amounting to €4.9 million (HY 2015: €3.6 million) are outstanding at 02 July 2016. The Group does not expect any material loss to arise from these guarantees.

The Group has contingent liabilities in respect of legal claims arising in the ordinary course of business. It is not anticipated that any material liability will arise from these contingent liabilities other than those provided for.

20. Cash generated from operations

	Half year	Half year	Year
	2016	2015	2015
	€'000	€'000	€'000

Profit before taxation	129,836	117,633	218,696

Non cash element of exceptional charge	4,785	5,386	18,299
Share of results of Joint Ventures & Associates	(12,328)	(13,267)	(26,270)
Write off of property, plant and equipment	183	-	-
Depreciation	24,588	21,209	43,137
Amortisation	19,424	15,566	31,125
Cost of share based payments	5,693	3,565	8,724
Difference between pension charge and cash contributions	(4,008)	(5,023)	(6,027)
Loss on disposal of property, plant and equipment	87	96	209
Finance income	(1,160)	(885)	(1,706)
Finance expense	12,732	11,588	22,816
Amortisation of government grants received	(121)	(103)	(282)

Cash generated before changes in working capital	179,711	155,765	308,721
Changes in net working capital:
- Decrease in inventory	9,309	7,184	20,287
- (Increase) in short term receivables	(100,690)	(88,962)	(12,187)
- (Decrease)/increase in short term liabilities	(32,607)	(38,114)	846
- (Decrease) in provisions	(2,107)	(10,410)	(9,802)

Cash generated from operating activities	53,616	25,463	307,865

21. Business combinations

For the acquisitions completed in 2015 there have been no material revisions, as at the reporting date, of the provisional fair value adjustments since the initial values were established.

On 29 February 2016, the Group acquired 100% of the business and operating assets of EMI Nutrition Distributors Pty Limited ("EMI"). EMI's principal activity is the distribution and marketing of performance nutrition products. The acquisition will allow the Group to expand and further enhance Glanbia Performance Nutrition distribution channels. Goodwill is attributable to the profitability and development opportunities associated with complementing and enhancing existing distribution channels. Goodwill is not deductible for tax purposes.

Acquisition related costs charged to the condensed income statement, included within other expenses, during the period ended 02 July 2016 amounted to €0.2 million (HY 2015: €nil).

Details of the net assets acquired and goodwill arising from the acquisition are as follows:

				Half year 2016 €'000
Purchase consideration				10,318
Less: Fair value of assets acquired				(9,355)
Goodwill				963

Prior to the acquisition, EMI was a distributor of the Group's product in Australia. As at the acquisition date, EMI's trade payable balance to the Group amounted to €1.6 million, being the contractual value. This balance was effectively settled on the acquisition date and is excluded from the liabilities acquired.

The total purchase consideration is as follows:

				Half year 2016 €'000
Purchase consideration - cash paid				8,724
Pre-existing relationship payable balance				1,594
Purchase consideration				10,318

The fair value of assets and liabilities arising from the acquisition are as follows:

				Half year 2016 €'000
Property, plant and equipment				165
Intangible assets - customer relationships				1,508
Inventories				3,686
Trade and other receivables				4,225
Trade and other payables				(41)
Deferred tax liability				(188)
Fair value of assets acquired				9,355

The fair value of EMI's trade and other receivables at the acquisition date amounted to €4.2 million, which equates to the gross contractual amount.

The revenue and profit (net of transaction costs) of the Group including the impact of the acquisition during the period ended 02 July 2016 were as follows:

	2016	Group excluding	Consolidated Group including
	Acquisition	acquisition	acquisition
	€'000	€'000	€'000

Revenue	1,761	1,433,003	1,434,764
(Loss)/profit before taxation and exceptional items	(1,228)	139,949	138,721

The revenue and profit (net of transaction costs) of the Group for the period ended 02 July 2016 determined in accordance with IFRS 3 as though the acquisition date for all business combinations effected during the period had been at the beginning of the period would be as follows:

	2016	Group excluding	Pro Forma Consolidated
	Acquisition	acquisition	Group
	€'000	€'000	€'000

Revenue	2,612	1,433,003	1,435,615
(Loss)/profit before taxation and exceptional items	(798)	139,949	139,151

22. Events after the reporting period

There have been no material events subsequent to the end of the interim period 02 July 2016 which require disclosure in this report.

23. Information

Copies of this half yearly financial report are available for download from the Group's website at www.glanbia.com.

Glossary

Key performance indicators and non-IFRS performance measures

Non-IFRS performance measures

The Group reports certain performance measures that are not defined under IFRS but which represent additional measures used by the Board of Directors and the Glanbia Operating Executive in assessing performance and for reporting both internally and to shareholders and other external users. The Group believes that the presentation of these non-IFRS performance measures provides useful supplemental information which, when viewed in conjunction with our IFRS financial information, provides readers with a more meaningful understanding of the underlying financial and operating performance of the Group.

None of these non-IFRS performance measures should be considered as an alternative to financial measures drawn up in accordance with IFRS.

The principal non-IFRS performance measures used by the Group for the half year results are consistent with those presented in the Group's 2015 Annual Report and there have been no changes to the basis of calculation. The full list of key performance indicators and non-IFRS performance measures used by the Group are set out in the 2015 Annual Report.

Constant currency

While the Group reports its results in euro, it generates a significant proportion of its earnings in currencies other than euro, in particular US dollar. Constant currency reporting is used by the Group to eliminate the translational effect of foreign exchange on the Group's results. To arrive at the constant currency change, the results for the prior period are retranslated using the average exchange rates for the current period and compared to the current period reported numbers.

The principal average exchange rates used to translate results as at the reporting dates were as follows:

	Half year 2016	Half year 2015	Year 2015
euro 1 =
US dollar	1.1161	1.1150	1.1092
Pound Sterling	0.7795	0.7316	0.7259
Danish Kroner	7.4497	7.4567	7.4589

Total Group

The Group has a number of strategically important Joint Ventures & Associates which when combined with the Group's wholly owned businesses give an important indication of the scale and reach of the Group's operations. Total Group is used to describe certain financial metrics such as Revenue and EBITA when they include both the wholly owned businesses and the Group's share of Joint Ventures & Associates.

Revenue

Revenue comprises sales of goods and services of the wholly owned businesses to external customers net of value-added tax, rebates and discounts. Revenue is one of the Group's Key Performance Indicators.

Total Group Revenue

Total Group Revenue comprises the revenue of the wholly owned businesses and the Group's share of the revenue of its Joint Ventures & Associates.

	Notes	Half year 2016 €'000	Half year 2015 €'000	Year 2015 €'000
Revenue per the Group condensed income statement		1,434,764	1,431,590	2,774,326
Group's share of revenue of Joint Ventures & Associates	4	402,257	445,327	893,089

Total Group Revenue		1,837,021	1,876,917	3,667,415

EBITA

EBITA is defined as earnings before interest, tax and amortisation excluding exceptional items.

EBITA is one of the Group's Key Performance Indicators. Business Segment EBITA growth on a constant currency basis is one of the performance conditions in Glanbia's Annual Incentive Plan for Executive Directors with Business Unit responsibility.

Total Group EBITA

Total Group EBITA comprises EBITA of the wholly owned businesses and the Group's share of its Joint Ventures & Associates EBITA.

	Notes	Half year 2016 €'000	Half year 2015 €'000	Year 2015 €'000
EBITA per the Group condensed income statement		157,389	138,473	271,003
Group's share of EBITA of Joint Ventures & Associates	4	19,135	20,204	39,690

Total Group EBITA		176,524	158,677	310,693

Reconciliation of the Group's share of Joint Ventures & Associates EBITA to the share of results of Joint Ventures & Associates per the Group condensed income statement is as follows:

	Notes	Half year 2016 €'000	Half year 2015 €'000	Year 2015 €'000
EBITA of Joint Ventures & Associates	4	19,135	20,204	39,690
Amortisation		(309)	(238)	(476)
Finance costs		(2,799)	(2,574)	(5,037)
Income tax		(3,699)	(4,125)	(7,907)

Share of results of Joint Ventures & Associates per the Group condensed income statement		12,328	13,267	26,270

EBITA margin

EBITA margin is defined as EBITA as a percentage of the revenue of the wholly owned businesses.

	Half year 2016 €'000	Half year 2015 €'000	Year 2015 €'000
EBITA per the Group condensed income statement	157,389	138,473	271,003
Revenue per the Group condensed income statement	1,434,764	1,431,590	2,774,326

EBITA margin	11.0%	9.7%	9.8%

Total Group EBITA margin

Total Group EBITA margin is defined as Total Group EBITA as a percentage of Total Group Revenue.

	Notes	Half year 2016 €'000	Half year 2015 €'000	Year 2015 €'000
Total Group EBITA	4	176,524	158,677	310,693
Total Group Revenue	4	1,837,021	1,876,917	3,667,415

Total Group EBITA margin		9.6%	8.5%	8.5%

Adjusted Earnings per share (EPS)

Adjusted EPS is defined as the net profit attributable to the equity holders of Glanbia plc, before exceptional items and intangible asset amortisation, net of related tax, divided by the weighted average number of ordinary shares in issue during the period. The Group believes that Adjusted EPS is a better measure of underlying performance than Basic EPS as it excludes exceptional items that are not related to on-going operational performance and intangible asset amortisation, which allows better comparability of segments and companies that grow by acquisition to those that grow organically.

Adjusted EPS is one of the Group's Key Performance Indicators. Adjusted EPS growth on a constant currency basis is one of the performance conditions in Glanbia's Annual Incentive Plan. Adjusted EPS growth on a reported basis is one of the performance conditions in Glanbia's Long-term Incentive Plan.

	Notes	Half year 2016 €'000	Half year 2015 €'000	Year 2015 €'000
Profit attributable to equity holders of the Parent		109,364	98,674	183,271
Amortisation of intangible assets (net of related tax)	10	15,531	13,620	26,126
Amortisation of Joint Venture & Associates intangible assets (net of related tax)	10	270	208	417
Exceptional items (net of related tax)	6	7,256	7,305	23,799

Adjusted net income		132,421	119,807	233,613

Weighted average number of ordinary shares in issue	10	295,127,674	295,124,380	295,196,003

Adjusted earnings per share (cent)		44.87	40.60	79.14

Financing Key Performance Indicators

The following are the financing key performance indicators defined as per the Group's financing agreements and are for a rolling 12 month period.

Net debt : adjusted EBITDA is calculated as net debt at the end of the period divided by adjusted EBITDA. Net debt is calculated as total borrowings less cash and cash equivalents. Adjusted EBITDA is calculated as EBITDA for the wholly owned businesses (earnings before interest, taxation, depreciation and amortisation) plus dividends received from Joint Ventures & Associates, and in the event of an acquisition in the period, includes pro-forma EBITDA as though the acquisition date had been at the beginning of the period.

	Notes	Half year 2016 €'000	Half year 2015 €'000	Year 2015 €'000
Rolling 12 month EBITDA		336,135	278,060	313,858
Rolling 12 month dividends received from Joint Ventures & Associates		13,935	12,714	14,924
Acquisition pro-forma EBITDA		2,088	2,180	5,188
Adjusted EBITDA		352,158	292,954	333,970

Net Debt	13	644,340	577,063	584,243

Net debt : adjusted EBITDA		1.83	1.97	1.75

Adjusted EBIT : net finance cost is calculated as earnings before interest and tax plus dividends received from Joint Ventures & Associates divided by net finance cost. Net finance cost comprises finance costs less finance income per the Group condensed income statement plus capitalised borrowing costs.

	Half year 2016 €'000	Half year 2015 €'000	Year 2015 €'000
Rolling 12 month operating profit	254,936	212,280	239,878
Rolling 12 month dividends received from Joint Ventures & Associates	13,935	12,714	14,924
Adjusted EBIT	268,871	224,994	254,802
Rolling 12 month net finance cost	23,629	22,932	23,510

Adjusted EBIT : net finance cost	11.4	9.8	10.8

Operating cashflow

Operating cashflow is defined as earnings before interest, taxation, depreciation and amortisation (EBITDA) of the wholly owned businesses net of business sustaining capital expenditure and working capital movements, excluding exceptional cash flows. EBITDA represents pre-exceptional EBITA of the wholly owned businesses plus depreciation, net of grant amortisation.

Operating cashflow is one of the Group's Key Performance Indicators. Operating cashflow on a constant currency basis is one of the performance conditions in Glanbia's Annual Incentive Plan.

Reconciliation of Operating cashflow to the condensed statement of cash flows in the condensed interim financial statements:

	Notes	Half year 2016 €'000	Half year 2015 €'000	Year 2015 €'000
Cash generated from operating activities	20	53,616	25,463	307,865
Add back exceptional costs paid in period - note 1		10,505	3,040	15,090
Add back non operating working capital movements in period		1,517	512	(1,295)
Less business sustaining capital expenditure - note 2		(13,926)	(13,868)	(37,391)
Non cash items not adjusted in computing Operating Cash Flow:
Cost of share options	20	(5,693)	(3,565)	(8,724)
Difference between pension charge and cash contributions	20	4,008	5,023	6,027
Loss on disposal of property, plant and equipment	20	(87)	(96)	(209)
Operating cashflow		49,940	16,509	281,363


Exceptional costs paid in the period

Pre-tax exceptional charge for period	6	8,885	7,838	26,342
Non-cash element of exceptional charge	20	(4,785)	(5,386)	(18,299)
Current period exceptional costs paid in the period		4,100	2,452	8,043
Prior period exceptional costs paid in the period		6,405	588	7,047
Total exceptional costs paid in the period		10,505	3,040	15,090

Capital expenditure analysis

Business sustaining capital expenditure		13,926	13,868	37,391
Strategic capital expenditure		27,768	44,896	86,199
Total capital expenditure		41,694	58,764	123,590

Capital expenditure reconciled to condensed statement of cash flows:
Purchase of property plant and equipment		34,471	52,241	103,792
Purchase of intangible assets		7,223	6,523	19,798
Total capital expenditure per the condensed statement of cash flows		41,694	58,764	123,590

Business sustaining capital expenditure

The Group defines business sustaining capital expenditure as the expenditure required to maintain/replace existing assets with a high proportion of expired useful life. This expenditure does not attract new customers or create the capacity for a bigger business. It enables the company to keep running at current throughput rates but also keep pace with regulatory and environmental changes as well as complying with new requirements from existing customers.

Strategic capital expenditure

The Group defines strategic capital expenditure as the expenditure required to facilitate growth and generate additional returns for the Group. This is generally expansionary expenditure beyond what is necessary to maintain the Group's current competitive position.

This information is provided by RNS

The company news service from the London Stock Exchange

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