cage conference 2015 - glanbia/media/files...cage 2015 glanbia at a glance leading global...

SIOBHÁN TALBOT GROUP MANAGING DIRECTOR

MARK GARVEY GROUP FINANCE DIRECTOR

CAGE CONFERENCE 2015 17 MARCH 2015

CAGE 2015

CAUTIONARY STATEMENT

This presentation contains forward-looking statements. These statements have been

made by the Directors in good faith based on the information available to them up to

the time of their approval of this presentation. Due to the inherent uncertainties,

including both economic and business risk factors underlying such forward-looking

information, actual results may differ materially from those expressed or implied by

these forward-looking statements. The Directors undertake no obligation to update any

forward-looking statements contained in this presentation, whether as a result of new

information, future events, or otherwise.

www.glanbia.com 2

CAGE 2015

GLANBIA AT A GLANCE

LEADING GLOBAL PERFORMANCE NUTRITION AND INGREDIENTS GROUP

€245m +7.9%

€3.5bn +6.9%

TOTA

L G

RO

UP

REV

ENU

E TO

TAL

GR

OU

P E

BIT

A

77%*

55%*

Market Capitalisation

€5bn +

Employees

5,800

Countries

34

www.glanbia.com 3

*Contribution of Global Performance Nutrition and Global Ingredients

CAGE 2015

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

OUR EBITA MARGIN JOURNEY

www.glanbia.com 4

Focus on higher margin, lower volatility, value add sectors

Streamlining the business NUTRITION identified as growth focus

Organic investment, complementary JVs, and strategic M&A to unlock potential and build global market leading businesses

Sale of majority control of Irish dairy processing assets to our largest shareholder to create GII JV

3.4%

8.2%

CAGE 2015 www.glanbia.com 5

OUR BUSINESS MODEL

GLOBAL PERFORMANCE

NUTRITION

GLOBAL INGREDIENTS

… CAPTURED BY TWO GLOBAL GROWTH PLATFORMS

OUR END MARKETS PLAY INTO A NUMBER OF MEGATRENDS…

BENEFITS OF EXERCISE &

HEALTHY LIFESTYLE

FOOD TRACEABILITY

& TRUST

CONVENIENT & FUNCTIONAL

FOOD

HIGHER PROTEIN DIETS

#1 B2C GLOBAL SPORTS NUTRITION BRAND FAMILY

B2B INGREDIENTS PORTFOLIO WITH NUTRITION AT ITS CORE

GLOBAL PERFORMANCE NUTRITION

CAGE 2015

OUR BRAND PORTFOLIO

PROTEIN PRE- WORKOUT MUSCLE GAINERS & BUILDERS GENERAL HEALTH

GLOBAL SPORTS

NUTRITION BRAND FAMILY #1 GLOBAL

BUSINESS1 IN 23 COUNTRIES $1BN

1. Pro-forma 2014 revenue

www.glanbia.com 7


WHERE WE PLAY

EMEA, 19%

Mass, 15%

GLOBAL MARKET 1

$10.1BN

US MARKET 3

$4.5BN

LAPAC, 18% N. America, 63%

BY REGION2

BY CHANNEL3

BY FORMAT3

GLOBAL

MARKET SHARE

12%

Other, 19% Specialty, 50%

Internet, 18%

RTD, 10% Caps & Tabs, 5%

Powder, 85%

DOUBLE DIGIT INTERNATIONAL

GROWTH (ex. US)

MID-SINGLE DIGIT GROWTH

IN THE US

1. Euromonitor 2014 (RSP) 2. Euromonitor 2013 (RSP) 3. Nutrition Business Journal 2013 (RSP)


HOW WE WIN

2 Primary channel focus in US: - Large SPECIALTY channel - Fast growing INTERNET channel

3 Continue international roll-out: - Business builders in 22 countries ex-US - Tier 1 markets a priority

6 Innovation through insight - New categories, occasions and product

opportunities

5 Education & Advocacy: - Sports nutrition is an assisted sell

45m views

2.6m fans

200k+ followers

160+ sponsored

athletes

NPS*: 85

1 Leading brands:

4 Quality & Authenticity : - State-of-the-art in-house production - Rigorous quality assurance of product

NPS: 74 NPS: 81

sports nutrition

school

* Net Promoter Score (NPS) is a measure of consumer loyalty to brands ranging from -100 to 100


INTERNATIONAL EXPANSION CASE STUDY

UNITED KINGDOM

2008 2009 2010 2011 2013 2014

UK sales out of USA Local distribution

18 month project to reformulate products to local regulations

Manufacturing transferred to local facility

Localised website & e-commerce capability

Established commercial team

BSN portfolio integration

BSN manufacturing transferred

Trade marketing team & category management approach

UK launch of Nutramino

POPULATION

64m MARKET SIZE

$464m

GROWTH IN SPORTS PARTICIPATION

12%

PER CAPITA SPEND

$7.3

READERS OF LEADING HEALTH MAGAZINE

13m

GLOBAL INGREDIENTS

CAGE 2015

GLOBAL SCALE AND LEADERSHIP POSITIONS

LEADING PRODUCER OF AMERICAN-STYLE CHEESE

INDUSTRY-LEADING INNOVATION PARTNER

CHEESE Countries with direct presence

21

$1.2bn B2B INGREDIENTS BUSINESS

NUTRITION IS AT OUR CORE

www.glanbia.com 12

INGREDIENT SYSTEMS & SOLUTIONS

BESPOKE SYSTEMS FOR CUSTOMERS ACROSS DAIRY;

NUTRITIONAL BARS, BEVERAGES & SUPPLEMENTS; BAKERY; GLUTEN-FREE; CEREAL

DAIRY INGREDIENTS

#1 PROVIDER OF WHEY BASED NUTRITIONAL SOLUTIONS

GLOBALLY

#2 PROVIDER OF CUSTOMISED MICRONUTRIENT PREMIX

SOLUTIONS GLOBALLY

4 SITES – US, EU & CHINA

MICRONUTRIENT PREMIXES

CAGE 2015

SPORTS NUTRITION

MAINSTREAM & FUNCTIONAL BEVERAGES

INFANT & CLINICAL

NUTRITION

BARS, SNACKS & CEREALS

HEALTH & WELLNESS

SUPPLEMENTS

FRESH DAIRY

QSRs & RETAIL

www.glanbia.com 13

WHERE WE PLAY

NUTRITIONAL & FUNCTIONAL

INGREDIENT SYSTEMS

SPECIALTY WHEY PROTEIN

BEVERAGE SOLUTIONS

SPECIALTY GRAINS

MICRONUTRIENT PREMIX

SOLUTIONS

CHEESE

NUTRITION

CAPABILITIES END MARKETS

NUTRITION

CAGE 2015

ADDING VALUE TO OUR INGREDIENT

PORTFOLIO BY MOVING UP THE

SOLUTIONS VALUE CHAIN

www.glanbia.com 14

HOW WE WIN

WE DELIVER A SUITE OF NUTRITIONAL INGREDIENT SYSTEMS & SOLUTIONS OPTIMISED FOR:

Consumer benefit

Customer requirements

Functional performance in key applications and formats

NUTRITION IS AT OUR CORE

VALUE CHAIN

LEADING THE INNOVATION AGENDA

IN CHEESE, DAIRY PROTEINS, AND NUTRITIONAL &

FUNCTIONAL BLENDS

INNOVATION

COLLABORATION WITH CUSTOMERS IN THEIR

NEW PRODUCT DEVELOPMENT

PROCESS SETS US APART

CUSTOMER CENTRIC

GLOBAL REACH AND PROPRIETARY

TECHNOLOGIES IN NUTRITIONAL INGREDIENTS

GLOBAL LEADERSHIP

STRATEGY OVERVIEW

CAGE 2015

OUR STRATEGY

www.glanbia.com 16

B2B

B2C GLOBAL PERFORMANCE NUTRITION

• Leverage protein ingredient expertise to develop functional and nutritional solutions for customers

• Extend market position in customised solutions

• Look to scale dairy and non‐dairy ingredients platforms

• Grow branded revenue globally ahead of market growth rates

• Drive growth in existing markets across current and new channels and consumer segments

• Acquire complementary brands

OUR GROWTH PLATFORMS OVERALL GROUP

1. Drive further market

leadership positions within

both global growth

platforms

2. Deliver strategic capital

investment programme

3. Acquire or partner with

complementary businesses

to scale our current

portfolio

4. Develop talent, culture and

values, in line with our

growing global scale

GLOBAL INGREDIENTS

FINANCE OVERVIEW


STRATEGIC FINANCIAL TARGETS: 2014 – 2018

ORGANIC EARNINGS1

8% TO 10% ROCE

12% +

1. Five year adjusted earnings per share CAGR on a constant currency basis announced 12 March 2014.

• In first year through our five year guidance we delivered:

― 10.1% growth in adjusted EPS in 2014 on a constant currency basis

― 13.4% ROCE in 2014

• Guiding 9% to 11% growth in adjusted EPS, constant currency, for 2015


FINANCIAL TRACK RECORD

Adjusted earnings per share 12.6% CAGR from 2000 to 2014

EBITA margin +480bps from 2000 to 2014

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

0c

10c

20c

30c

40c

50c

60c

70c

CAGE 2015

• €654m investment over last 4 years

― €310m on acquisitions

― €344m on capital expenditure

• €120m - €130m capex for 2015

• Disciplined approach to both M&A and capex decisions

• Demonstrated history of strong returns from investment decisions

• 2014 ROCE: 13.4%

www.glanbia.com 20

GROWTH THROUGH INVESTMENT

-

50

100

150

200

250

300

2011 2012 2013 2014

Bus. Sustaining

Strategic

Acquisitions

... coupled with consistent delivery of good ROCE

Significant strategic investment programme... €m

12.8%

14.1% 14.2% 13.4%

11.5%

12.0%

12.5%

13.0%

13.5%

14.0%

14.5%

2011 2012 2013 2014

*12.0% ROCE hurdle


M&A CAPABILITY

• Strong track record of good returns from acquisitions

― Focus on global growth platforms

• Dedicated Corporate Development team with vast experience & sector knowledge

• Integration of 2014 acquisitions on track

PRE - 2014 2014


Cost: €213 million & €108 million

Acquisition date: 2008 & 2011

GLOBAL INGREDIENTS

Cost: €50 million

Acquisition date: 2012

ASEPTIC SOLUTIONS

OPTIMUM NUTRITION & BSN


Cost: €28 million

Acquisition date: January 2014

NUTRAMINO


Cost: €121 million

Acquisition date: October 2014

ISOPURE

http://www.nutramino.com/


STRATEGIC CAPITAL EXPENDITURE TO FUND FUTURE GROWTH

• Two major strategic capex projects currently underway

• Policy to keep business sustaining capex at level of depreciation

• Rigorous diligence of all large capex projects by internal investment committee

PRE - 2014 2015

GLOBAL INGREDIENTS

Cost: €22 million

Commissioned: Q4 2013

GLOBAL INGREDIENTS

Cost: €8 million

Commissioned: Q2 2013

SPECIALTY GRAIN PROCESSING FACILITY

CHEESE INNOVATION CENTRE


Cost: $75 million

Commissioning: Q4 2015 (Phase II)

NEW GPN MANUFACTURING PLANT

GLOBAL INGREDIENTS

Cost: $85 million

Commissioning: Q4 2015

VALUE ADDED WHEY AND LACTOFERRIN EXPANSION


FINANCIAL FLEXIBILITY

• Healthy balance sheet

• Net debt €510 million at 2014 year-end

• Net debt / adj. EBITDA < 2x

• Current committed debt facilities of €982 million

• Favourable debt maturity profile

• Strong support for equity financing

-150

-50

50

150

250

350

450

550

650

750

2015 2016 2017 2018 2019 2020 2021 2022

€350m Drawn

Favourable debt maturity profile €m

€110m cash

PDP €270m

RCF €712m

€362m Undrawn


FREE CASH FLOW

209

153

88

65

32 13 8 (57)

(43)

(9)

0

50

100

150

200

250

300

2014 EBITA Depreciation Dividendsfrom JV&As

WorkingCapital

Net Interest& Tax

BusinessSustaining

CapEx

Other 2014 FCF 2013 FCF 2012 FCF

Note:

(i) 2014 EBITA reflects the wholly owned business

FREE CASH FLOW +74% IN 2014; NOW CONVERTING 73% OF EBITA TO CASH

FOCUSED ON WORKING CAPITAL €m

CAGE 2015

2014 FINANCIAL HIGHLIGHTS

www.glanbia.com 25

WHOLLY OWNED REVENUE

WHOLLY OWNED EBITA

WHOLLY OWNED EBITA %

ADJUSTED EPS

FREE CASH FLOW

ROCE

€2.5bn

€208.6m

8.2%

61.16c

€153m

13.4%

CONSTANT CURRENCY CHANGE

+6.4%

+11.1%

+30bps

+10.1%

+6.6%

+11.1%

+30bps

+10.3%

+74%

-80bps

CHANGE

SOLID FINANCIAL METRICS FOR 2014


2015 OUTLOOK

• 2015 guidance of 9% to 11% in adjusted EPS, constant currency, with growth weighted towards 2H15

• Outlook for Global Performance Nutrition is positive and continued investment will ensure we remain in leading position in key markets and channels

• Expecting growth in Global Ingredients in 2015 with improvement in dairy market dynamics and solid underlying demand across key sectors

• Reiterate long term guidance to 2018 for organic growth of 8% to 10% in adjusted EPS, constant currency and a ROCE of 12% +

www.glanbia.com 27

QUESTIONS & ANSWERS

Liam Hennigan Head of Investor Relations Glanbia plc Glanbia House Kilkenny Ireland

Email: [email protected] Tel: +353 56 777 2308 Tel: +353 56 777 2200

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