SlimFast acquisition powers Glanbia performance in nutrition segment

31-Oct-2019 - Last updated on 31-Oct-2019 at 15:27 GMT

istock | Droits d'auteur peshkov

Glanbia Performance Nutrition (GPN) has enjoyed increased revenue so far this year thanks to its €300 million SlimFast acquisition but importing difficulties led to a 'disappointing' like-for-like volume performance, the firm's nine-month Interim Management Statement reveals.

Overall revenues were up 16.9% driven by volume up 2.4%, price up 3.2% and acquisitions up 11.3%, according to the firm's Interim Management Statement for the nine month period ending 5 October 2019.

GPN suffered like-for-like revenue decline due to currency and tariff challenges overseas as well as a lower activity in the US Club channel but weight-management megabrand SlimFast, which Glanbia acquired at the end of last year, enjoyed strong growth and pro-forma like-for-like sales up 34.8%.

Siobhán Talbot, group managing director said: "In GPN while we are very pleased with the performance of the SlimFast acquisition our like-for-like volume performance is disappointing. This is largely driven by specific challenges in key non-US markets.

"We are actively addressing the issues in these markets as they represent a compelling long term growth opportunity for the Group.

"We reiterate our full year guidance of adjusted earnings per share on a reported basis of being in a range of 88 cent to 92 cent, assuming foreign exchange rates remain at current levels.”

For full year 2019, GPN expects like-for-like branded revenue to decline by mid-to-high single digits predominantly as a result of continued challenges in non-US markets and a lower level of activity in the Club channel.

Revenue decline is expected to be all volume related with pricing flat on a full year basis as a result of price increases which were implemented in Q3.

Global strategy

In order to address the issues in Europe, where there has been a channel shift to online, the direct-to-consumer online platform has been enhanced and the Body & Fit brand is being rolled out across the region.

The firm reports that market conditions for imported brands remain difficult in Brazil, Middle East and India as a result of currency and tariff headwinds.

Glanbia says its actions will focused on moving further down the value chain to ensure that GPN’s brands are supported by the right infrastructure and resources to compete locally.

In the Middle East and Brazil the route to market is currently being assessed to drive further optimisation while in India GPN is well advanced in developing alternate supply chain options, reports the firm.