Farm Ireland

Monday 18 December 2017

Nutrition division is Glanbia's new top performer

Conor Kane analyses the plc's latest results

Glanbia group managing director Siobhan Talbot.
Glanbia group managing director Siobhan Talbot.

The ever-evolving nature of the global agri-food business was emphasised at the AGM of Glanbia plc when shareholders learned that the Performance Nutrition sector of its operations is now its biggest earner.

During 2015, Performance Nutrition which comprises sports, health and other supplements and comes from food products such as whey, drew €135.6m globally for the Glanbia group.

That compared to the Global Ingredients business which earned €106.6m for the food giant last year.

What was once the foundation and core of Glanbia, dairy, accounted for €28.8m in earnings in 2015 while the group's joint ventures with other entities earned it €40m.

Last year was Glanbia's sixth consecutive year of double-digit share growth while early indications for the first quarter of 2016 pointed to another strong year on a global level.

Glanbia now employs over 6,000 people in 32 countries, many of them in the United States.

Board chairman Henry Corbally said the group has "transformed itself into a global leader" and become a €5bn business.

The group's aim is to maintain and grow its position as a global leader in Performance Nutrition, group MD Siobhan Talbot said, with the United States a key market.

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Glanbia has the number one position in the sector in the US while its recently-announced investment of $140m in Southwest Cheese in New Mexico, fully-funded by joint ventures, is set to consolidate its overall position across the Atlantic.

Many of the questions from the floor of the AGM concerned the ongoing low prices being achieved by dairy farmers for their milk, with Ms Talbot warning that "it might get a bit worse before it gets better," while expressing the belief that milk prices will start to improve next year.

Ms Talbot, who saw her remuneration increase by 16pc last year to €1.9m, was also asked about any possible implications for Glanbia of a potential Brexit that would see the UK depart the EU.

"There's a lot of uncertainty, for sure," the MD replied, "and I suppose like any large corporate, we don't like uncertainty."

The UK "wouldn't be our biggest market," she pointed out, particularly when compared to the scale of its operations in the USA, and the biggest impact of our neighbours leaving the EU would be on Glanbia's joint ventures.

"We'll plan and manage like we always do. We'll navigate that as we get greater clarity, but ultimately the people will decide."

Asked later by the Farming Independent if such a move by the UK is a worry for the group, Ms Talbot said: "It is of course. The potential for uncertainty, to the extent that that's there, is always a factor, but at the end of the day, though, it's one of a myriad of factors that we're always managing.

"There's lots of change, always, in today's world."

She was also asked about the long delay in forming a government in this country after the election and said that "like any corporate we like stability" and this was true for both the country and Glanbia.

Ms Talbot said that while the milk price situation is "very challenging" at the moment, the "totality" of the Glanbia situation is very strong, with recent investments in its facilities in Monaghan and Portlaoise and upcoming in Wexford.

It's important to have a "strong plc," she said, and the whole group is working hard to help milk suppliers through the current difficult period. "The reason we were able to give out €60m [to shareholders] in the last number of years was because the plc had such strong growth."

Upcoming developments are an important aspect of continuing the group's growth, according to the MD. "The Avonmore brand is fantastic so we want to bring that to more global consumers."

"Delivering Better Nutrition for Every Step of Life's Journey," is Glanbia's mission statement and Ms Talbot said it underpins activities at every level of the group.

"It's important to us how we do business and not just what we achieve. We put our customer front and centre," she told shareholders, adding that the group values its 6,000 employees who show creativity, innovation and curiosity throughout their work.

Indo Farming