Dairy firm Glanbia has posted a 4.1% increase in revenue for full-year 2018, of €2.24 billion.
In a statement, Siobhán Talbot, the group's managing director, said that its performance was largely driven by "strong volume growth across our business, in particular in the branded portfolio of Glanbia Performance Nutrition (GPN) and the Nutritional Solutions component of Glanbia Nutritionals (GN)."
Here's how industry analysts viewed its performance.
Cathal Kenny, Davy
"Glanbia’s FY results confirm a strong finish to 2018 and were ahead of forecasts at the revenue, EBITA and EPS reporting lines. Net debt was lower than expected. The results attest to the strength of Glanbia’s growth algorithm. The outlook statement, allied with the base effect, gives rise to a c.5% upgrade to our FY2019 EPS forecasts.
"As highlighted previously, Glanbia has an evolving set of building blocks in place to drive future growth. We reiterate our ‘Outperform’ call."
Jason Molins, Goodbody
"Glanbia achieved an excellent outturn in cashflow generation, with an operating cash conversion rate of 92%. Net debt of €576.7m (GBY €599m) was up €209m yoy, primarily due to the acquisition of SlimFast (cost of $350m). Net debt/EBITDA at the end of FY18 came in at 1.55x. Separately, Glanbia has announced the acquisition of Watson, a US based non-dairy ingredient solutions business, for $89m, and as noted by Glanbia there is still 'capacity to make further acquisitions should an opportunity arise'.
"Overall, this is an encouraging set of results from Glanbia, with performance in the final quarter helping to drive the beat versus expectations. Looking ahead, Glanbia is guiding FY19 constant currency EPS growth of 5-8%. We currently forecast constant currency EPS growth of 8% (including c.1% from the recently acquired
SlimFast) to 99.1c, which is at the top end of consensus and we are likely to stay at the top end of the range."
David Fahy, Cantor Fitzgerald
"A strong set of results leading the stock to rise by 10% this morning. Management more than delivered on its H2/18 story with impressive volume growth. Group margins held up as guided, despite prices falling. GPN and Nutritional Solutions were impressive in the later part of the year as volume growth offset expected price declines. Despite the margin tightening in the GPN business it remains at the upper end of its medium term goals (13%-15%). Slimfast, which is proving to be a good fit, is performing well and the acquisition of Watson should add to the GN business. The strong balance ensures the capability to grow acquire more.
"These results should see Glanbia trade at a higher average valuation. From 2015 to 2018, it had derated from 24x12m forward P/E to 16x. The ability to show consistent growth and decent margins in line with its medium term goals should see it trade closer to the sector (19.5x 12m forward P/E). While it is expanding internationally, notably in Asia and Australia, its +80% exposure to the dollar will leave it correlated to the currency's strength/weakness.
"We continue to like Glanbia given its growth (both organically and inorganically) in a structurally expanding market. We maintain our Outperform rating."
© 2019 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.
