Glanbia published financial results for 2024 this week and while the numbers for last year were broadly in line with expectations, the outlook for 2025 shows a decline in performance in the key Performance Nutrition division. CEO Hugh McGuire said that the record prices of high-end whey, which he said are 20% higher than even the level seen during Covid-19, mean the company faces an unprecedented level of input cost inflation.
Glanbia published financial results for 2024 this week and while the numbers for last year were broadly in line with expectations, the outlook for 2025 shows a decline in performance in the key Performance Nutrition division.
CEO Hugh McGuire said that the record prices of high-end whey, which he said are 20% higher than even the level seen during Covid-19, mean the company faces an unprecedented level of input cost inflation.
The outlook obviously came as a disappointment to shareholders with the company’s shares dropping more than 18% in the wake of the announcement, falling below €12 a share at one point.
The results for 2024 were in line with expectations, with adjusted earnings per share at 140.03 $cent (133.55 €cent) and revenue increased by 5.8% to $3.8bn (€3.6bn) and adjusted earnings before interest tax and depreciation was $551.3m (€525m).
The earnings are adjusted to account for the impairment of non-core assets and intangible assets.
These impairments arise from the performance of SlimFast and the decision to sell the Body & Fit direct-to-consumer business.
For SlimFast the impairment of intangible assets amounted to $91.4m (€87m) and for Body & Fit the impairment was $46m (€43.8m).
The company said it decided after year end to sell the SlimFast business.
Glanbia announced a final dividend of 23.33 €cent, putting the total 2024 dividend at 38.97 €cent per share. Glanbia also announced a new €100m share buyback programme, expected to commence in the second quarter of this year, once the current €50m buyback programme completes.
Hugh McGuire
The Irish Farmers Journal sat down and talked to Glanbia CEO Hugh McGuire in the wake of the results and he said that the earnings guidance for 2025 “is entirely driven by the significant and unprecedented whey inflation”.
He said that the company’s share price performance since the middle of last year has been exclusively driven by input costs.
“The frustrating thing for us is that this [whey price] is too volatile, the peaks to troughs and troughs to peaks across the past three years has been too volatile.
We know, and we have verified, that there is additional supply coming on stream later this year and into 2026 and 2027,” he added, confirming that the fresh supply would be coming from the increased production of cheese in the US.
He said on the outlook for dairy production in the US that they are seeing milk production increasing at the start of the year, but that dairy markets are a difficult one to call as there are so many variables.
Glanbia announced late last year that it was dividing itself into three divisions, with the newly-formed Dairy Nutrition division operating as a stand-alone business with a dedicated leadership team from July 1 this year. McGuire confirmed that Glanbia has no interest in selling its dairy business, saying “It is absolutely a core part of the business”.
The forming of the new divisions is part of a wider transformation programme aimed at driving efficiencies across the business.
As an organisation we have to make sure we are investing in the right growth opportunities
As part of that efficiency drive, there were up to 60 job losses announced for Glanbia’s Irish operations last month. McGuire said that “there are no plans for additional job reduction within the organisation”.
“As an organisation, we have to make sure we are investing in the right growth opportunities and as a result, there will be some that are less in out focus in terms of growth and that’s why we made the decision to exit Body & Fit and SlimFast.”
On SlimFast, he said it “did very well for the first couple of years post-acquisition and then Covid hit.
We saw consumer diet behaviours change, first because of Covid and then because of GLP1 drugs [such as Ozempic].
Consumers don’t want or don’t need the kind of restriction of calorie reduction, which is what the SlimFast diet is all about.”
As Glanbia reports in US dollars and has no manufacturing facility left in Ireland, there is a question about how much longer the company will maintain its share listing in Dublin.
Asked about any plans to list on the US market McGuire said “There are no plans at present, it is certainly something we keep under evaluation as you’d expect and it is an on going board discussion”.
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