Glan­bia MD un­fazed by spectre of June Brexit

Irish Independent - Business Week - - NEWS - John Mulligan

GLAN­BIA boss Siob­han Tal­bot said she would like to see the UK re­main part of the EU, but stressed that the UK ac­counts for less than 10pc of the group’s €3.6bn in rev­enue and so is not a ma­te­rial mar­ket for the com­pany.

How­ever, speak­ing to the Ir­ish In­de­pen­dent as Glan­bia re­leased a set of strong full-year re­sults, Ms Tal­bot said sta­bil­ity re­mains es­sen­tial for busi­nesses.

“Like any cor­po­rate, un­cer­tainty is some­thing we’d pre­fer not to have,” said the group man­ag­ing di­rec­tor.

“But ul­ti­mately the peo­ple in the UK will de­cide what de­ci­sion they want to make about par­tic­i­pa­tion in Europe. We will han­dle what­ever comes out of that de­ci­sion-mak­ing process.”

“Be­cause we have a pres­ence across 34 ge­ogra­phies, we’re al­ways man­ag­ing var­i­ous geopo­lit­i­cal and eco­nomic en­vi­ron­ments.

“In terms of the core Glan­bia pres­ence, the UK is not a par­tic­u­larly sig­nif­i­cant mar­ket for us,” she added. “Our pri­mary en­gage­ment in the UK is through our joint ven­tures and as­so­ciates.”

Glan­bia Cheese, which is a joint ven­ture be­tween Glan­bia and US firm Leprino Foods, pro­cesses about 20pc of all milk pro­duced in Wales. It also ac­counts for about one-third of all UK cheese ex­ports. The joint ven­ture also has a plant in North­ern Ire­land.

Ms Tal­bot said that Glan­bia also re­mains ac­quis­i­tive, af­ter gen­er­at­ing strong op­er­at­ing cash flow of €281.4m in 2015. That was €75.2m higher than in 2014. Glan­bia paid $217m last year to buy US en­ergy bar busi­ness Think­Thin.

“We’re con­tin­u­ing to be ac­quis­i­tive,” she said. “We ex­ited the year with a strong bal­ance sheet. We’re al­ways look­ing across the land­scape of in­gre- di­ents, and branded con­sumer prod­ucts to see if there’s in­ter­est­ing propo­si­tions to bring into our port­fo­lio. But it’s al­ways about try­ing to find the right fit at the right price.”

Group sales at Glan­bia rose 4.1pc to €3.66bn last year, with wholly-owned sales climb­ing 9.3pc to €2.7bn.

Its group earn­ings be­fore in­ter­est, tax and amor­ti­sa­tion (EBITA) were 26.8pc higher at €310.7m, while EBITA from wholly-owned op­er­a­tions jumped 29.9pc to €271m.

The 2015 per­for­mance also ben­e­fited sig­nif­i­cantly from favourable for­eign ex­change rates. The EBITA from wholly-owned op­er­a­tions was 10.5pc higher on a con­stant cur­rency ba­sis.

On a con­stant cur­rency ba­sis, the ad­justed earn­ings per share last year was up 10.6pc. Glan­bia ex­pects to achieve an 8pc to 10pc in­crease in that fig­ure on the same ba­sis this year.

The re­sults were ahead of an­a­lyst ex­pec­ta­tions, and shares in the group were rel­a­tively muted by mid-af­ter­noon, barely un­changed at €18.39.

At its per­for­mance nutri­tion unit, sales were 6.7pc higher at €923.1m, and EBITA was up 52pc at €135.6m. It was 28.3pc higher on a con­stant cur­rency ba­sis.

In its in­gre­di­ents divi­sion, Glan­bia was more chal­lenged due to de­fla­tion­ary di­ary mar­kets. Ms Tal­bot said the two fun­da­men­tals of sup­ply and de­mand for milk have been go­ing in op­po­site di­rec­tions, de­press­ing prices.

“The weak­ness in global de­mand is be­ing driven by China in par­tic­u­lar. I think sup­ply will fall back in re­sponse to lower prices and de­mand will be stim­u­lated by lower prices,” said Ms Tal­bot.

“We would ex­pect things to re­bal­ance. It’s very dif­fi­cult to be defini­tive about when that will hap­pen.

“At best, you’re talk­ing about the back end of 2016.”

Nutri­tion brand am­bas­sador Rob Kear­ney

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