Glanbia Performance Nutrition (GPN) led the way with revenues of €505.3m ($572.1m), and an EBITA of €81.7m ($92.5m), a 35% increase on the first half of 2015. Glanbia Nutritionals delivered EBITA of €58m ($65.7m), a 4% decrease on the prior half year.
Wholly-owned business revenue rose 0.2% compared to the first half of 2015, at €1.43bn ($1.62bn), while EBITA from wholly-owned business was €157.4m ($178.2m), up 13.7% on the previous half year.
Glanbia Performance Nutrition
Drivers of revenue growth for GPN were an 8% 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.
Glanbia said that the strong US dollar remains a headwind in certain non US markets. Innovation continues to be a focus with new product launches planned for H2 2016.
The company said that 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.
Ongoing challenging dairy market dynamics led to a reduced performance in this part of the business.
The company says that GPN is expected to be the main driver of 2016 earnings per share growth. It notes that favorable 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 2015.
Siobhán Talbot, group managing director, said that 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,” she said.
Glanbia says that 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, it said, partly as a result of the UK voting to leave the European Union. It said that 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.
The continued impact on the competitive landscape for Glanbia Performance Nutrition, the company said, will also be a factor, recognizing the impact of a stronger US dollar on the purchasing power of consumers in certain international markets.
Another factor the company outlined is the overall impact on margins of movements in dairy pricing, particularly in whey markets.