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Glanbia PLC  -  GLB   

Glanbia plc Half Year Results 2017

Released 07:00 10-Aug-2017

RNS Number : 5896N
Glanbia PLC
10 August 2017
 

Good performance in first half driven by Glanbia Nutritionals

FY guidance reiterated of 7% to 10% constant currency pro forma EPS growth1

 

10 August 2017 - Glanbia plc ("Glanbia", the "Group", the "plc"), the global nutrition group, announces its results for the six months ended 1 July 2017.

 

Results highlights for the half year 2017

·      Sale of 60% of Dairy Ireland and related assets completed on 2 July 2017 and a new joint venture, "Glanbia Ireland",  established encompassing the businesses of Glanbia Ingredients Ireland DAC and Dairy Ireland;

·      On a pro forma basis Adjusted Earnings Per Share1 grew 13.2% reported (10.1% constant currency);

·      Wholly owned revenues from continuing operations of €1,185.7 million (2016: €1,077.9 million) up 10.0% on prior half year (7.3% constant currency);

·      Wholly owned EBITA from continuing operations of €148.3 million (2016:€139.1 million) up 6.6% on prior half year (3.5% constant currency);

·      Glanbia Performance Nutrition delivered reported revenue growth of 7.6% (5.4% constant currency) and reported EBITA growth of 3.1% (0.2% constant currency);

·      Glanbia Nutritionals delivered reported revenue growth of 12.2% (9.0% constant currency) and reported EBITA growth of 11.6% (8.1% constant currency); and

·      Joint Ventures and Associates delivered strong revenue and EBITA growth of 23.1% (23.2% constant currency) and 84.8% (83.8% constant currency) respectively.

 

Commenting today Siobhán Talbot, Group Managing Director, said:

"Glanbia delivered a good performance in the first six months of 2017 with wholly owned revenues from continuing operations growing 7.3%, constant currency, when compared to the same period in 2016. Pro-forma Adjusted Earnings Per Share1 was up 10.1%, constant currency. The sale of 60% of Dairy Ireland and related assets was completed on 2 July 2017 and this business together with Glanbia Ingredients Ireland have formed a new Joint Venture named Glanbia Ireland.  Glanbia Nutritionals and Joint Ventures were the main drivers of growth in the first half and we believe second half earnings progression will also be driven by Glanbia Performance Nutrition where good organic growth is expected for the remainder of the year. Overall, we reiterate guidance for the full year of pro-forma Adjusted Earnings Per Share1 growth of 7% to 10% on a constant currency basis."

 

2017 half year results

 

Reported

 

Constant

€m

HY 2017

HY 2016

Change

Currency Change2

Wholly-owned business (Continuing operations)

 

 

 

 

Revenue

1,185.7

1,077.9

+10.0%

+7.3%

EBITA3

148.3

139.1

+6.6%

+3.5%

EBITA margin

12.5%

12.9%

- 40 bps

- 50 bps 

JVs and Associates (Continuing operations)

 

 

 

 

Revenue

475.7

386.3

+23.1%

+23.2%

EBITA

32.9

17.8

+ 84.8%

+ 83.8%

EBITA margin

6.9%

4.6%

+ 230bps

+ 230bps

Discontinued ops (Dairy Ireland & related investments)

 

 

 

 

Revenue

386.5

372.9

+ 3.6%

 

EBITA

11.6

19.6

- 40.8%

 

EBITA margin

3.0%

5.3%

- 230bps

 

Total Group4

 

 

 

 

Revenue

2,047.9

1,837.1

+ 11.5%

+ 9.9%

EBITA

192.8

176.5

+9.2%

+ 6.6%

EBITA margin

9.4%

9.6%

- 20bps

- 30bps

Total Group profit for the period

114.9

109.8

+4.6%

-

Reported basic Earnings Per Share

38.96c

37.06c

+5.1%

 

Adjusted Earnings Per Share (Reported)5

48.04c

43.96c

+9.3%

+6.5%

 

 

Pro - Forma

 

 

Pro-forma Adjusted Earnings Per Share1

46.09c

40.71c

+ 13.2%

+ 10.1%

 

1.         Pro-forma Adjusted Earnings Per Share from continuing operations calculation assumes the Dairy Ireland segment and related assets were disposed of at the beginning of  the 2016 financial year.  A reconciliation is set out on pages 47 and 48 of the glossary to the financial statements

2.         To arrive at the Constant Currency Change, the average FX rate for the current period is applied to the relevant reported result from the same period in the prior year.  The average Euro US Dollar FX rate for the first half of 2017 was €1 = $1.083 (HY 2016:  €1 = $1.116).

3.         EBITA is defined as earnings before interest, tax and amortisation and is stated before exceptional items.

4.         Total Group includes Wholly Owned business and Glanbia's share of Joint Ventures & Associates from both continuing and discontinued operations.

5.         Adjusted Earnings Per Share has been amended to exclude the cost of software amortisation within the earnings calculation and also includes the contribution from the Dairy Ireland segment and related assets.

This release contains certain alternative performance measures. A detailed glossary of the key performance indicators and non-IFRS performance measures can be found on pages 42 to 51.

 

2017 half year overview and outlook

Glanbia delivered a good performance in the first half of 2017. As a result of the sale of 60% of Dairy Ireland and related assets subsequent to the period end, the results of Dairy Ireland and related assets have been classified as discontinued operations for these first half results, with prior year comparatives amended accordingly. Wholly owned revenue from continuing operations was €1,185.7 million, an increase of 10% reported (up 7.3% constant currency).  The drivers of wholly owned continuing operations revenue growth on a constant currency basis were a 3.1% increase in price, a 1.3% volume improvement and a 2.9% contribution from acquisitions. Wholly owned EBITA from continuing operations was €148.3 million, up 6.6% reported (up 3.5% constant currency).  Wholly owned EBITA margins from continuing operations were 12.5%, down 40 basis points reported (down 50bps constant currency). Total profit for the period was €114.9 million, up 4.6% on a reported basis compared to prior year.

 

Total Group revenue for the period for continuing and discontinued operations and including the Group's share of Joint Ventures and Associates was €2,047.9 million an increase of 11.5% reported (up 9.9% constant currency).  Total Group EBITA on the same basis was €192.8 million an increase of 9.2% on a reported basis (up 6.6% constant currency). Total Group EBITA margin was 9.4% down 20bps reported (down 30bps constant currency).

 

Adjusted Earnings Per Share for the half year was 48.04c representing a reported increase of 9.3% (up 6.5% constant currency).  On a pro-forma basis assuming the Dairy Ireland transaction had occurred at the beginning of FY 2016 Adjusted Earnings Per Share growth was 13.2% on a reported basis (up 10.1% constant currency).

 

Sale of Dairy Ireland and creation of Glanbia Ireland

The sale of 60% of Dairy Ireland and related assets was completed on 2 July 2017.  Total net cash proceeds from the transaction is expected to be in excess of €200 million. Of the total net cash proceeds, €112 million representing the sale of the 60% equity stake in Dairy Ireland and related assets, was received by Glanbia immediately prior to the end of the first half of 2017 and is included in the financial statements for HY 2017.  The balance of the cash proceeds to be received are dependent on the value of working capital in Dairy Ireland at 1 July 2017 and are subject to the final agreement of completion accounts.  All proceeds are expected to be received in full by 31 October 2017. 

 

The operations of Dairy Ireland are being integrated with Glanbia Ingredients Ireland DAC, and the combined business has been renamed Glanbia Ireland DAC ("Glanbia Ireland").  Glanbia Ireland is a joint venture which is 60% owned by Glanbia Co-operative Society Limited and 40% owned by Glanbia plc. Glanbia Ireland is the largest dairy and agri business in Ireland with 2016 pro-forma revenues in excess of €1.5 billion.  Glanbia Ireland is well positioned to support the growth ambitions of its suppliers in the coming years producing a diverse range of value added dairy ingredients and consumer products.

 

Capital investment and corporate development

Glanbia's total investment in capital expenditure was €33.3 million in the first half of 2017, of which €19.1 million was strategic investment. The key strategic project completed in the period was a new innovation centre in Glanbia Performance Nutrition in Illinois, USA. Glanbia also completed two acquisitions in the period, Grass Advantage LLC ("Amazing Grass") a plant based nutrition brand in the US and B&F Vastgoed B.V. ("Body & Fit") in the Netherlands, a leading direct to consumer ("DTC") online branded business focused on performance nutrition. The combined cost of both businesses was approximately €168 million.

 

2017 outlook

Glanbia reiterates its full year 2017 guidance of 7% to 10% growth in pro-forma Adjusted Earnings Per Share from continuing operations, constant currency. If the average Euro US dollar exchange rate remains at similar levels to the average over the past month for the remainder of 2017, Glanbia expects the FY 2017 reported pro-forma Adjusted Earnings Per Share growth from continuing operations to be marginally lower than the constant currency result.

 

Glanbia expects growth to be more evenly balanced in FY 2017 between Glanbia Nutritionals ("GN") and Glanbia Performance Nutrition ('GPN'). GN expects growth to continue to be driven by sales of value-added products from Nutritional Solutions to existing customers. GPN expects to have a strong second half of 2017 with full year like-for-like branded revenue growth in the mid-single-digit range.  Full year margins in GPN are expected to be broadly in line with the first half of 2017. Joint Ventures & Associates are expected to deliver an improved performance versus prior year as a result of improved dairy markets with growth first half weighted.

Half year 2017 operations review

Segmental analysis (as reported)

 

 

 

 

Re-presented*

 

 

HY 2017

 

 

HY 2016

 

 

€m

Revenue

EBITA

EBITA %

Revenue

EBITA*

EBITA %

 

Glanbia Performance Nutrition

543.5

83.9

15.4%

505.3

81.4

16.1%

 

Glanbia Nutritionals

642.2

64.4

10.0%

572.6

57.7

10.1%

 

Total wholly-owned businesses

1,185.7

148.3

12.5%

1,077.9

139.1

12.9%

 

Joint Ventures & Associates

475.7

32.9

6.9%

386.3

17.8

4.6%

 

Total continuing Group

1,661.4

181.2

10.9%

1,464.2

156.9

10.7%

 

 

 

 

 

 

 

 

 

Total discontinued operations

386.5

11.6

3.0%

372.9

19.6

5.3%

 

Total Group reported

2,047.9

192.8

9.4%

1,837.1

176.5

9.6%

 

* 2016 EBITA numbers for the segments have been re-presented due to a reallocation of certain central overheads following the reclassification of Dairy Ireland and related investments in Associated Companies as discontinued operations to ensure a like for like comparison with current year. Overall EBITA for the Group is unchanged.

 

Glanbia Performance Nutrition

 

Re-presented

Constant Currency

€m

HY 2017

HY 2016

Change

Change

Revenue

543.5

505.3

+7.6%

+5.4%

EBITA

83.9

81.4

+3.1%

+0.2%

EBITA margin

15.4%

16.1%

- 70bps

- 80bps

 

Commentary is on a constant currency basis throughout

 

Glanbia Performance Nutrition ('GPN') delivered a satisfactory result in the first half of 2017 in the context of challenging comparatives for the same period in 2016. Revenues increased 5.4% to €543.5 million. The key drivers of revenue growth was a 6.2% contribution from the combined acquisitions of Amazing Grass and Body & Fit offset by a 0.8% volume decrease as a result of contract revenue declines.  Overall, year on year pricing was neutral on a comparative basis.

 

Like-for-like branded revenue growth in the period was 0.7% primarily driven by a good performance in EMEA and LAPAC markets and improved momentum in the US market during the second quarter, a dynamic which is anticipated to continue into the second half of 2017.  GPN remains focused on innovation as a core element of sustainable branded growth with the launches of ON Cake Bites and thinkThin plant based bars performing well in the period. GPN also completed development of a new innovation facility in Illinois, USA to further support new product development across the portfolio.

 

The integration of the Amazing Grass and Body & Fit acquisitions completed in the period is on track with targeted investment plans being developed to fuel growth.  Amazing Grass via its portfolio of plant based, organic and GMO free nutrition products participates in a high growth category and further expands GPN's reach with lifestyle consumers in the natural, online and specialty channels in North America.  Body & Fit provides GPN with a presence in the European direct to consumer online channel.

 

EBITA grew by 0.2% in the period as revenue growth was offset by EBITA margin compression of 80 basis points to 15.4%. The margin decrease was primarily as a result of a year on year increase in input costs. GPN expects EBITA growth to be weighted to the second half of 2017 with full year like-for-like branded revenue growth in the mid-single-digit range and margins in line with the half year.

 

 

 

Glanbia Nutritionals

 

Re-presented

Constant Currency

€m

HY 2017

HY 2016

Change

Change

Revenue

642.2

572.6

+12.2%

+9.0%

EBITA

64.4

57.7

+11.6%

+8.1%

EBITA margin

10.0%

10.1%

-10bps

-10bps

 

Commentary is on a constant currency basis throughout

 

Glanbia Nutritionals ('GN') delivered a good performance in the first half of 2017 versus the same period in 2016. Revenues increased by 9.0% to €642.2 million and this was driven by positive pricing of 5.9% and a volume increase of 3.1%.  Price improvement was primarily related to higher dairy markets.  The main driver of volume growth was increased sales of dairy and non-dairy value added systems by Nutritional Solutions. Margins were 10.0% which was a 10 basis point reduction versus the same period in the prior year.

 

GN expects the current momentum in the Nutritional Solutions business to continue into the second half of 2017 which is expected to be the primary driver of EBITA growth in FY 2017.

 

Nutritional Solutions

Nutritional Solutions is a leading marketer of advanced‐technology whey protein, specialist vitamin &

mineral blends, plant based ingredients and functional beverages. Nutritional Solutions delivered a strong

performance in H1 2017 with revenue of €285.6 million, an 18.6% increase on H1 2016. This was mainly driven by volume growth of value-added dairy and non-dairy ingredients, including bar systems, ready to mix and ready to drink solutions in addition to vitamin & mineral blends across a range of customers, categories and geographies. Higher dairy markets drove additional price improvement within Nutritional Solutions.

 

US Cheese

US Cheese is a leading producer of American‐style cheddar cheese in the US supplying a range of customers. US Cheese customers predominantly participate in the food service, retail, consumer branded and private label end markets. US Cheese had revenue of €356.7 million in H1 2017. Revenue increased by 2.4% versus the same period in 2016 as higher cheese pricing was offset by some volume declines.

 

Dairy Ireland - Discontinued operations

 

Re-presented

€m

HY 2017

HY 2016

Change

Revenue

357.9

356.9

+0.3%

EBITA

11.1

18.3

- 39.3%

EBITA margin

3.1%

5.1%

- 200bps

 

The sale of 60% of Dairy Ireland and related assets was completed on 2 July 2017 and the segment has been classified as discontinued operations.

 

In the first half of 2017, Dairy Ireland revenues increased by 0.3% reflecting a 2.5% increase in volumes, a 3.7% decline in price and a 1.5% revenue contribution resulting from the consolidation of a subsidiary previously included in Joint Ventures. A 200 bps reduction in margin drove an EBITA decline of 39.3% versus the prior half year.

 

Consumer Products delivered continued growth in sales of value added milk in the period.  However margins were reduced due to increased milk and dairy product costs which resulted in a reduced performance.

 

Agribusiness delivered a reduced performance in the period. Increased animal feed and fertiliser volume was more than offset by lower pricing which led to a decline in margin.

 

Joint Ventures & Associates (Glanbia Share)

 

Re-presented*

Constant Currency

€m

HY 2017

HY 2016

Change

Change

Revenue*

475.7

386.3

+23.1%

+23.2%

EBITA*

32.9

17.8

+84.8%

+83.8%

EBITA margin

6.9%

4.6%

+230bps

+230bps

* 2016 Joint Ventures and Associates results have been represented to reflect the removal of discontinued operations related to investments in Associated Companies which were sold as part of the Dairy Ireland transaction. 

 

Commentary is on a constant currency basis throughout

 

Joint Ventures & Associates delivered a strong performance in the first half of 2017 with revenue increasing by 23.2% in the period. The driver of the revenue growth was a 21.8% improvement in pricing as a result of improved global dairy markets and a 1.4% increase in volumes primarily driven by Glanbia Ingredients Ireland DAC. Margin improved by 230 basis points to 6.9% and this coupled with revenue growth drove an 83.8% increase in EBITA in the first half of 2017.  Due to the timing of dairy market movements the result for Joint Ventures and Associates in FY 2017 will be ahead of FY 2016 with growth weighted towards H1 2017.

 

Joint Ventures and Associates (Glanbia Share) - Discontinued operations

A number of investments in certain Associated Companies were included in the Dairy Ireland disposal. A list of the main Associated Companies included in the disposal was set out in the Circular published on 28 April 2017 ahead of the Extraordinary Shareholders Meeting to approve the transaction.  These Associated Companies are mainly involved in agribusiness related activities in Ireland. These investments were previously reported under Joint Ventures and Associates.  They are now classified as discontinued operations. The table below summarises Glanbia's share of the revenue and EBITA from these Associated Companies which was previously reported within Joint Ventures and Associates.

 

 

Reported

€m

HY 2017

HY 2016

Change

Revenue

28.6

16.0

+78.8%

EBITA

0.5

1.3

- 61.5%

 

 

 

 

Half year 2017 finance review

HY 2017 results summary pre-exceptional

 

Re-presented*

Constant Currency

 €m

HY 2017

HY 2016

Change

Change

Continuing operations:

 

 

 

 

Revenue

1,185.7

1,077.9

+10.0%

+7.3%

EBITA

148.3

139.1

+6.6%

+3.5%

EBITA margin

12.5%

12.9%

-40bps

-50bps

- Amortisation of intangible assets

(21.8)

(18.2)

 

 

- Net finance costs

(11.8)

(11.6)

 

 

- Share of results of Joint Ventures Associates

22.3

11.1

 

 

- Income tax

(20.5)

(19.4)

 

 

Profit for the half year - continuing operations

116.5

101.0

 

 

Discontinued operations:

 

 

 

 

Profit after tax from discontinued operations

9.3

16.0

-41.9%

-41.9%

 

 

 

 

 

Profit for the half year - Group

125.8

117.0

 

 

* 2016 results have been re-presented to reflect the impact of discontinued operations resulting from the Dairy Ireland transaction.

 

Dairy Ireland transaction

The disposal of 60% of Dairy Ireland and related assets was completed on 2 July 2017. As a result, Dairy Ireland reported numbers for the first half of 2017 are classified as discontinued operations (with 2016 comparatives changed accordingly) and all related Dairy Ireland Assets and Liabilities have been reclassified on the Group balance sheet as held for sale. Continuing activities referred to above exclude Dairy Ireland results. Costs incurred in respect of the transaction have been treated as exceptional items in the period and are described further below.

 

Income statement

For the first half of 2017, wholly owned revenue from continuing operations increased 7.3%, constant currency (up 10% reported) to €1,185.7 million (HY 2016: €1,077.9 million). EBITA from continuing operations grew by 3.5%, constant currency (up 6.6% reported) to €148.3 million (HY 2016: €139.1 million). EBITA margin decreased by 50 bps, constant currency (decreased 40bps reported) to 12.5%.

 

Net financing costs of €11.8 million increased versus prior year (HY 2016: €11.6 million) due to an increase in average net debt arising from the acquisitions of Body & Fit and Amazing Grass and a seasonal increase in working capital. The Group's average interest rate for the period was 3.5% (HY 2016: 3.6%). Glanbia operates a policy of fixing a significant amount of its interest exposure, with 85% of projected 2017 debt currently contracted at fixed rates.

 

The Group's share of results of Joint Ventures & Associates increased by €11.2 million to €22.3 million (HY 2016: €11.1million) driven by strong performances from Glanbia Cheese and Glanbia Ingredients Ireland. Share of results of Joint Ventures & Associates is stated after tax and interest.

 

The HY 2017 pre-exceptional tax charge increased by €1.1 million to €20.5 million (HY 2016: €19.4 million). This represents an effective tax rate, excluding Joint Ventures & Associates, of 17.9% (HY 2016: 17.7%).

 

Profit after tax from discontinued operations relates to the results of Dairy Ireland and related assets after tax and pre-exceptional costs. Profit for the period decreased by €6.7 million to €9.3 million on a reported currency basis.

 

 

Reported basic Earnings Per Share

 

HY 2017

HY 2016

Change

 

Basic Earnings Per Share

38.96c

37.06c

+5.1%

 

 

Basic Earnings Per Share grew by 5.1% on prior year driven by higher Group profit for the period.

 

Adjusted Earnings Per Share

 

HY 2017

HY 2016

Change

Constant Currency Change

Adjusted Earnings Per Share

48.04c

43.96c

+9.3%

+6.5%

 

During the current year the calculation of Adjusted Earnings Per Share was amended to exclude the cost of software amortisation within the earnings calculation. Prior year numbers have been amended accordingly. Full reconciliation is included in Note 13 to the financial statements and the glossary on page 46. Full year 2016 Adjusted Earnings Per Share is 86.02 cent when calculated on this basis.

 

Adjusted Earnings Per Share has been provided as it is more reflective of the Group's underlying performance than basic Earnings Per Share and is calculated based on the net profit attributable to equity holders of the parent before exceptional items and amortisation of intangible assets (excluding software amortisation), net of related tax. Total Adjusted Earnings Per Share grew 6.5% (up 9.3% reported), driven by growth in EBITA.

 

Pro-forma Adjusted Earnings Per Share from continuing operations

 

HY 2017

HY 2016

Change

Constant Currency Change

Pro-forma Adjusted Earnings Per Share*

46.09c

40.71c

+13.2%

+10.1%

* Pro-forma Adjusted Earnings Per Share from continuing operations calculation, including reconciliation of the comparatives, is set out on pages 47 and 48 of the glossary to the financial statements. 

 

Pro-Forma calculation of Adjusted Earnings Per Share from continuing operations has been provided as it represents the revised and on-going structure of the Group following the disposal of 60% of Dairy Ireland and related assets. Pro-forma Adjusted Earnings Per Share assumes the Dairy Ireland disposal was completed at the beginning of the 2016 financial year and is calculated based on the net profit attributable to equity holders of the parent from continuing activities plus 40% of the share of profits after tax for Dairy Ireland and related assets, before exceptional items and amortisation of intangible assets, net of related tax. In HY 2017, total pro-forma Adjusted Earnings Per Share grew 10.1% (up 13.2% reported), driven by growth in EBITA.

 

Full year 2016 pro-forma Adjusted Earnings Per Share is 80.40 cent when calculated on the same basis as described above.

 

Dividend per share

The Board is recommending an interim dividend of 5.91 cent per share (HY 2016: interim dividend of 5.37 cent per share). This represents an increase of 10% on the prior year interim dividend. The dividend will be paid on 6 October 2017 to shareholders on the register of members as at 25 August 2017. Irish withholding tax will be deducted at the standard rate where appropriate.

 

 

 

Exceptional items

€m

HY 2017

HY 2016

Organisation redesign costs (note 2)

-

(6.2)

Acquisition integration costs (note 3)

-

(1.9)

Exceptional (charge) pre-tax - continuing operations

-

(8.1)

Taxation credit - continuing operations

-

1.5

Total exceptional (charge) - continuing operations

-

(6.6)

Dairy Ireland - transaction related costs (note 1)

(13.0)

-

Rationalisation costs (note 4)

-

(0.8)

Exceptional (charge) pre-tax - discontinued operations

(13.0)

(0.8)

Taxation credit - discontinued operations

2.1

0.1

Total exceptional (charge) - discontinued operations

(10.9)

(0.7)

Total exceptional (charge)

(10.9)

(7.3)

 

Exceptional items incurred in the first half of 2017 resulted in a post-tax exceptional charge of €10.9 million compared to a charge of €7.3 million for the same period in 2016. Details of the exceptional items incurred in the period are as follows:

 

1.     Dairy Ireland - transaction related costs relates to the costs in respect of the sale of 60% of Dairy Ireland and related assets to Glanbia Co-operative Society Limited, completed on 02 July 2017 and amounted to €10.9 million net after tax. These costs include impairment of tangible fixed assets, professional fees, EGM meeting costs, employee benefit expenses and other related costs. As the transaction completed after the period end, the gain arising on the disposal has not been reflected in the H1 results. This will be reported in the 2017 full year financial statements.

2.     The organisation redesign costs relate to the programme announced in 2015 in Glanbia Nutritionals to fundamentally reorganise the business to leverage future market opportunities.

3.     Acquisition integration costs comprise of costs relating to the integration, restructuring and redesign of route to market capabilities within acquired businesses in the Glanbia Performance Nutrition segment.

4.     Rationalisation costs primarily relate to the redundancy and rationalisation programme in the Dairy Ireland segment.

 

Group financing and cash flow

Financing key performance indicators

HY 2017

HY 2016

FY 2016

Net debt €m

608

644

438

Net debt : adjusted EBITDA1

1.63 times

1.83 times

1.19 times

Adjusted EBIT1 : net finance cost

11.4 times

11.4 times

11.5 times

1. Definition of net debt, adjusted EBITDA and adjusted EBIT are as per financing agreements which include dividends from Joint Ventures & Associates and the pro forma effect of acquisitions. A detailed glossary of the key performance indicators and non-IFRS performance measures can be found on pages 42 to 51 of the financial statements.

 

The Group's financial position continues to be strong.  Net debt at the end of HY 2017 was €608 million. This is a decrease of €36 million relative to the end of HY 2016. Net debt to adjusted EBITDA was 1.63 times and interest cover was 11.4 times, both metrics remaining well within financing covenants.  Relative to the year end of 2016, net debt has increased by €170 million. The key drivers of the net debt increase from year end 2016 have been the acquisition of Body & Fit and Amazing Grass, increase in working capital, particularly investment in inventory, and capital expenditure. The Group expects to receive in excess of €200 million total net cash proceeds from the disposal of 60% of Dairy Ireland and related assets. Of the total expected net cash proceeds, €112 million representing the 60% equity stake in Dairy Ireland and related assets, was received by Glanbia immediately prior to the end of H1 2017 and contributed to the reduction in net debt since prior half year. The remaining proceeds are subject to agreement of completion accounts and are expected to be received in full by 31 October 2017. 

 

 

 

Pension

On 1 July 2017, the Group's net pension liability under IAS 19 (revised) 'Employee Benefits', before deferred tax, decreased by €64.9 million to €45.6 million versus year end 2016 (FY 2016 pension liability €110.5 million). A significant driver of this was the transfer of €44.2 million to liabilities held for sale which reflects the portion of the pension liabilities relating to Dairy Ireland which has been disposed. See note 8 for further details on the retirement benefit obligation at the reporting date.

 

Principal risks and uncertainties

The Board of Glanbia plc has the ultimate responsibility for the Group's systems of risk management and internal control. The Group's risk management framework outlines the key stakeholder risk management responsibilities. It is designed to ensure that there is input across all levels of the business to the management of risk and to enable the Group to remain responsive to the ever changing environment in which it operates. This framework, together with the processes to identify, manage and mitigate potential material risks to the achievement of the Group's strategic objectives are set out in detail on pages 12-16 of the plc's 2016 Annual Report.

 

The Group's principal risks and uncertainties are summarised in the risk profile table below, together with the strategic objective to which they relate, and an overview of the risk trend identified for the year ended 31 December 2016, issued on 22 February 2017 which the plc Board believes to still remain applicable. There may be other risks and uncertainties that are not yet considered material or not yet known to the Group and this list will change if these risks assume greater importance in the future.

 

Glanbia risk profile

Group

Strategic

Priorities

 

Grow Performance Nutrition and Sustain and drive nutritional solutions

Organic and acquisition derived growth

Develop talent, culture and values

 

Other risks

Risk where trend is increasing

Economic, industry and political risk

 

Tax risk

 

 

IT and cyber security risks

Risks which are stable

Strategy risk

 

Market risk

 

Customer concentration risk

 

Supplier risk

Acquisition risk

Talent management risk

Site compliance risk and environmental, health & safety regulation risk.

 

Product safety and compliance risk

 

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, political and tax risk. Macroeconomic and global trade uncertainty continues to increase, partly as a result of Brexit (the United Kingdom (UK) electorate voting to leave the European Union). While the immediate direct impacts of this decision are limited, currency volatility, further movement in discount rates and other economic uncertainties will require on-going monitoring by the Group;  

·      Market risk. The overall impact on margins of movements in dairy pricing particularly in whey markets.

 

The Group actively manages these and all other risks through its risk management and internal control processes. Full details of the principal risk exposures and the related mitigation actions are outlined on pages 12-16 of the plc 2016 Annual Report.

 

 

 

Cautionary statement

This announcement 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 report. 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 announcement, whether as a result of new information, future events, or otherwise.

 

Results webcast and dial-in details

There will be a webcast and presentation to accompany this results announcement at 9.00 a.m. BST today. Please access the webcast from the Glanbia website at http://www.glanbia.com/investors/results-centre, where the presentation can also be viewed or downloaded. In addition, a dial-in facility is available using the following numbers:

 

Ireland:                                  +353 (0)1 2465621

UK / International:              +44 (0) 330 336 9411

USA:                                        +1 719 457 1036

 

The access code for all participants is: 3416969

A replay of the call will be available for 30 days approximately two hours after the call ends.

 

For further information contact

Glanbia plc +353 56 777 2200 

Siobhán Talbot, Group Managing Director

Mark Garvey, Group Finance Director

Liam Hennigan, Head of Investor Relations                  +353 86 046 8375

Mark Garrett, Director of Communications & Public Affairs:   +353 86 601 9655

 

 

 

 

Responsibility statement

The Directors are responsible for preparing the half yearly financial report in accordance with the Transparency (Directive 2004/109/EC) Regulations 2007 as amended, the related Transparency Rules of the Central Bank of Ireland and with IAS 34 'Interim Financial Reporting', as adopted by the European Union.

 

The Directors of Glanbia plc confirm that, to the best of their knowledge:

·      The condensed Group interim financial statements for the half year ended 1 July 2017 have been prepared in accordance with the international accounting standard applicable to interim financial reporting (IAS 34) adopted pursuant to the procedure provided for under Article 6 of the Regulation (EC) No. 1606/2002 of the European Parliament and of the Council of 19 July 2002;

·      The half yearly financial report includes a true and fair review of the development and performance of the business and the position of the Group;

·      The half yearly financial report includes a true and fair review of the important events that have occurred during the first six months of the financial year, their impact on the condensed Group financial statements for the half year ended 1 July 2017, and a description of the principal risks and uncertainties for the remaining six months; and

·      The half yearly financial report includes a true and fair review of related party transactions that have occurred during the first six months of the current financial year that have materially affected the financial position or the performance of the Group during that period and any changes in the related party transactions described in the last Annual Report that could have a material effect on the financial position or the performance of the Group in the first six months of the current financial year.

 

The Directors of Glanbia plc are as listed in the Glanbia plc 2016 Annual Report, with the exception of the following changes in the period:

·      James Gilsenan and Mathew Merrick retired on 26 April 2017

·      Jeremiah Doheny retired on 2 June 2017

·      Brendan Hayes, Eamon Power and Tom Grant were appointed on 2 June 2017.

 

·      Following a review of the membership of the Audit, Remuneration and Nomination & Governance Committees of the Board, it has been decided that in line with best practice the Group Chairman and Group Vice-Chairmen will retire as Committee members, as appropriate, effective immediately.  Paul Haran has been appointed as Chairman of the Nomination & Governance Committee.

 

A list of current Directors is maintained on the Glanbia plc website: www.glanbia.com.

 

 

On behalf of the Board

 

 

Siobhán Talbot

Group Managing Director

Mark Garvey

Group Finance Director

 

 

10 August 2017

 

 

 

Condensed Group Income statement

for the half year ended 1 july 2017

 

 

 

 

 

 

Re-presented*

 

Half year 2017

 

Half year 2016

 

Year 2016

 

Notes

Pre-exceptional  €'000

 

 

Exceptional €'000

(note 7)

Total

€'000

 

 

Pre-

exceptional

€'000

 

Exceptional

€'000

(note 7)

Total

€'000

 

 

Pre-

exceptional

€'000

 

Exceptional

€'000

(note 7)

Total

€'000

 

 

Continuing operations

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

4

1,185,706

-

1,185,706

 

1,077,812

-

1,077,812

 

2,231,685

-

2,231,685

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings before interest, tax and amortisation (EBITA)

4

148,308

-

148,308

 

139,132

(8,057)

131,075

 

273,285

(14,412)

258,873

 

Intangible asset amortisation

 

(21,835)

-

(21,835)

 

(18,233)

-

(18,233)

 

(37,410)

-

(37,410)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating profit

6

126,473

-

126,473

 

120,899

(8,057)

112,842

 

235,875

(14,412)

221,463

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Finance income

10

1,545

-

1,545

 

1,160

-

1,160

 

2,377

-

2,377

 

Finance costs

10

(13,296)

-

(13,296)

 

(12,732)

-

(12,732)

 

(25,172)

-

(25,172)

 

Share of results of Equity accounted investees

 

22,312

-

22,312

 

11,083

-

11,083

 

26,032

-

26,032

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit before taxation

 

137,034

-

137,034

 

120,410

(8,057)

112,353

 

239,112

(14,412)

224,700

 

Income taxes

11

(20,489)

-

(20,489)

 

(19,352)

1,525

(17,827)

 

(39,297)

2,277

(37,020)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit from continuing operations

 

116,545

-

116,545

 

101,058

(6,532)

94,526

 

199,815

(12,135)

187,680

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Discontinued operations

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit/(loss) from discontinued operations

9

9,268

(10,879)

(1,611)

 

15,999

(724)

15,275

 

27,132

(2,657)

24,475

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit for the period

 

125,813

(10,879)

114,934

 

117,057

(7,256)

109,801

 

226,947

(14,792)

212,155

 

 

 

 

 

 

 

 

 

 

 

 

Attributable to:

 

 

 

 

 

 

 

 

 

 

Equity holders of the Company - Continuing operations

116,545

 

 

 

94,526

 

 

 

187,680

 

Equity holders of the Company - Discontinued operations

(1,613)

 

 

 

14,838

 

 

 

24,144

 

Non-controlling interests - Discontinued operations

2

 

 

 

437

 

 

 

331

 

 

 

 

 

 

 

 

 

 

 

 

 

114,934

 

 

 

109,801

 

 

 

212,155

 

Earnings Per Share from continuing and discontinued operations
 attributable to the equity holders of the Company

 

 

 

 

 

 

 

 

 

 

Basic Earnings Per Share (cent)

13

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

 

 

39.50

 

 

 

32.03

 

 

 

63.59

 

Discontinued operations

 

 

 

(0.54)

 

 

 

5.03

 

 

 

8.18

 

 

 

 

 

38.96

 

 

 

37.06

 

 

 

71.77

 

Diluted Earnings Per Share (cent)

13

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

 

 

39.39

 

 

 

31.91

 

 

 

63.38

 

Discontinued operations

 

 

 

(0.54)

 

 

 

5.01

 

 

 

8.15

 

 

 

 

 

38.85

 

 

 

36.92

 

 

 

71.53

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                               

 

* As re-presented  to reflect the impact of discontinued operations. See note 9 for further information.

 

 

 

 

 

Condensed Group Statement of comprehensive Income

for the half year ended 1 july 2017

 

 

Notes

Half year

2017

€'000

Half year

2016

€'000

Year

2016

€'000

 

 

 

 

 

Profit for the period

 

114,934

109,801

212,155

 

 

 

 

 

Other comprehensive income/(expense)

 

 

 

 

Items that will not be reclassified subsequently to the Group income statement:

 

 

 

 

Remeasurements - defined benefit schemes

 

 

 

 

- Continuing operations

8

4,397

(26,086)

(22,793)

- Discontinued operations

8

12,055

(25,293)

(9,007)

Deferred tax on remeasurements

 

 

 

 

- Continuing operations

 

(614)

1,704

713

- Discontinued operations

 

(1,507)

3,162

1,126

Share of remeasurements - defined benefit plans - Equity accounted investees

 

 

 

 

- Continuing operations

 

3,490

(10,480)

(7,093)

Deferred tax on remeasurements - defined benefit plans- Equity accounted investees

 

 

 

 

- Continuing operations

 

(194)

1,310

1,087

 

 

 

 

 

Items that may be reclassified subsequently to the Group income statement:

 

 

 

 

Currency translation differences

 

 

 

 

- Continuing operations

 

(93,520)

(32,788)

27,323

- Discontinued operations

 

(45)

(248)

(284)

Net investment hedge

 

7,132

2,015

(2,970)

Revaluation of available for sale financial assets

 

2,820

(617)

(1,310)

Deferred tax on revaluation of available for sale financial assets

 

(1,097)

204

432

Net fair value movements on cash flow hedges

 

(438)

(100)

834

Deferred tax on cash flow hedges

 

100

(141)

(222)

Net fair value movements on cash flow hedges - Equity accounted investees

 

118

(406)

2,343

Deferred tax on cash flow hedges - Equity accounted investees

 

388

-

(1,261)

Other comprehensive expense for the period, net of tax

 

(66,915)

(87,764)

(11,082)

 

 

 

 

 

Total comprehensive income for the period

 

48,019

22,037

201,073

 

 

 

 

 

Total comprehensive income attributable to:

 

 

 

 

Equity holders of the Company - Continuing operations

 

39,195

29,141

184,763

Equity holders of the Company - Discontinued operations

 

8,890

(7,541)

15,979

Non-controlling interests - Discontinued operations

 

(66)

437

331

 

 

 

 

 

Total comprehensive income for the period

 

48,019

22,037

201,073

 

 

 

Condensed Group Balance sheet

as at 1 july 2017

 

Notes

1 July

2017

€'000

2 July

2016

€'000

31 December

2016

€'000

ASSETS

 

 

 

 

Non-current assets

 

 

 

 

Property, plant and equipment

14

471,942

579,258

628,245

Intangible assets

14

1,019,711

921,721

966,203

Equity accounted investees

 

173,940

155,237

166,298

Available for sale financial assets

 

11,945

10,105

9,935

Trade and other receivables

 

13,123

14,654

14,650

Deferred tax assets

 

1,627

1,528

1,818

Derivative financial instruments

17

-

15

-

Retirement benefit assets

8

2,530

2,085

2,578

Non-current assets

 

1,694,818

1,684,603

1,789,727

Current assets

 

 

 

 

Current tax assets

 

161

8,969

5,234

Inventories

15

411,114

331,435

366,532

Trade and other receivables

 

320,341

399,259

327,132

Derivative financial instruments

17

1,459

997

1,182

Cash and cash equivalents

16

129,314

94,909

218,855

 

 

862,389

835,569

918,935

Assets held for sale

9

525,256

-

-

Current assets

 

1,387,645

835,569

918,935

 

 

 

 

 

Total assets

 

3,082,463

2,520,172

2,708,662

 

 

 

 

 

EQUITY

 

 

 

 

Issued capital and reserves attributable to equity holders of the Company:

 

 

 

 

Share capital and share premium

19

105,404

105,393

105,393

Other reserves

20

245,849

272,400

331,617

Retained earnings

 

887,295

673,900

778,986

 

 

1,238,548

1,051,693

1,215,996

Non-controlling interests

 

11,007

8,952

11,073

Total equity

 

1,249,555

1,060,645

1,227,069

 

 

 

 

 

LIABILITIES

 

 

 

 

Non-current liabilities

 

 

 

 

Financial liabilities

16

842,096

672,408

624,173

Deferred tax liabilities

 

155,136

160,677

158,206

Retirement benefit obligations

8

48,150

134,160

113,026

Provisions

18

17,368

16,578

15,558

Capital grants

 

162

2,697

3,006

Non-current liabilities

 

1,062,912

986,520

913,969

Current liabilities

 

 

 

 

Trade and other payables

 

325,826

351,026

460,349

Current tax liabilities

 

59,025

33,152

54,083

Financial liabilities

16

60,637

66,841

32,240

Derivative financial instruments

17

245

3,896

1,180

Provisions

18

9,826

17,850

19,520

Capital grants

 

34

242

252

 

 

455,593

473,007

567,624

Liabilities directly associated with the assets held for sale

9

314,403

-

-

Current liabilities

 

769,996

473,007

567,624

Total liabilities

 

1,832,908

1,459,527

1,481,593

 

 

 

 

 

Total equity and liabilities

 

3,082,463

2,520,172

2,708,662

 

 

Condensed Group Statement of changes in equity

For the half year ended 1 july 2017

 

 

Attributable to equity holders of the Parent

 

 

Half year 2017

Share capital  and share premium

€'000

Other

 reserves

€'000

Retained earnings

€'000

Total

€'000

Non-

controlling

interests

€'000

Total

€'000

Balance at 31 December 2016

105,393

331,617

778,986

1,215,996

11,073

1,227,069

Profit for the period

-

-

114,932

114,932

2

114,934

 

 

 

 

 

 

 

Other comprehensive income/(expense):

 

 

 

 

 

 

Remeasurements - defined benefit plans

-

-

16,520

16,520

(68)

16,452

Deferred tax on remeasurements - defined benefit plans

-

-

(2,121)

(2,121)

-

(2,121)

Share of remeasurements - defined benefit plans - Equity accounted investees

-

-

3,490

3,490

-

3,490

Deferred tax on remeasurements - defined benefit plans - Equity accounted investees

-

-

(194)

(194)

-

(194)

Currency translation differences

-

(93,565)

-

(93,565)

-

(93,565)

Net investment hedge

-

7,132

-

7,132

-

7,132

Fair value movements

-

2,500

-

2,500

-

2,500

Deferred tax on fair value movements

-

(609)

-

(609)

-

(609)

Total comprehensive income for the period

-

(84,542)

132,627

48,085

(66)

48,019

 

 

 

 

 

 

 

Transactions with equity holders of the Company

Contributions and distributions:

 

 

 

 

 

 

Dividends

-

-

(23,506)

(23,506)

-

(23,506)

Cost of share based payments

-

5,156

-

5,156

-

5,156

Transfer on exercise, vesting or expiry of share based payments

-

1,054

(1,054)

-

-

-

Deferred tax on share based payments

-

-

242

242

-

242

Shares issued and premium on shares issued

11

-

-

11

-

11

Purchase of own shares

-

(7,436)

-

(7,436)

-

(7,436)

Total contributions and distributions

11

(1,226)

(24,318)

(25,533)

-

(25,533)

 

 

 

 

 

 

 

Balance at 1 July 2017

105,404

245,849

887,295

1,238,548

11,007

1,249,555

 

 

 

 

Condensed Group Statement of changes in equity    Continued

For the half year ended 1 july 2017

 

 

Attributable to equity holders of the Parent

 

 

Half year 2016

Share capital  and share premium

€'000

Other

 reserves

€'000

Retained earnings

€'000

Total

€'000

Non-

controlling

interests

€'000

Total

€'000

Balance at 2 January 2016

105,370

306,425

642,763

1,054,558

8,515

1,063,073

Profit for the period

-

-

109,364

109,364

437

109,801

 

 

 

 

 

 

 

Other comprehensive income/(expense):

 

 

 

 

 

 

Remeasurements - defined benefit plans

-

-

(51,379)

(51,379)

-

(51,379)

Deferred tax on remeasurements - defined benefit plans

-

-

4,866

4,866

-

4,866

Share of remeasurements - defined benefit plans - Equity accounted investees

-

-

(10,480)

(10,480)

-

(10,480)

Deferred tax on remeasurements - defined benefit plans- Equity accounted investees

-

-

1,310

1,310

-

1,310

Currency translation differences

-

(33,036)

-

(33,036)

-

(33,036)

Net investment hedge

-

2,015

-

2,015

-

2,015

Fair value movements

-

(1,123)

-

(1,123)

-

(1,123)

Deferred tax on fair value movements

-

63

-

63

-

63

Total comprehensive income for the period

-

(32,081)

53,681

21,600

437

22,037

 

 

 

 

 

 

 

Transactions with equity holders of the Company

Contributions and distributions:

 

 

 

 

 

 

Dividends

-

-

(21,374)

(21,374)

-

(21,374)

Cost of share based payments

-

5,693

-

5,693

-

5,693

Transfer on exercise, vesting or expiry of share based payments

-

2,681

(2,681)

-

-

-

Deferred tax on share based payments

-

-

1,511

1,511

-

1,511

Shares issued and premium on shares issued

23

-

-

23

-

23

Purchase of own shares

-

(10,318)

-

(10,318)

-

(10,318)

Total contributions and distributions

23

(1,944)

(22,544)

(24,465)

-

(24,465)

 

 

 

 

 

 

 

Balance at 2 July 2016

105,393

272,400

673,900

1,051,693

8,952

1,060,645

 

 

 

 

Condensed Group Statement of changes in equity    Continued

For the half year ended 1 july 2017

 

 

Attributable to equity holders of the Parent

 

 

Year 2016

Share capital  and share premium

€'000

Other

 reserves

€'000

Retained earnings

€'000

Total

€'000

Non-

controlling

interests

€'000

Total

€'000

Balance at 2 January 2016

105,370

306,425

642,763

1,054,558

8,515

1,063,073

Profit for the period

-

-

211,824

211,824

331

212,155

 

 

 

 

 

 

 

Other comprehensive income/(expense):

 

 

 

 

 

 

Remeasurements - defined benefit plans

-

-

(31,800)

(31,800)

-

(31,800)

Deferred tax on remeasurements - defined benefit plans

-

-

1,839

1,839

-

1,839

Share of remeasurements - defined benefit plans - Equity accounted investees

-

-

(7,093)

(7,093)

-

(7,093)

Deferred tax on remeasurements - defined benefit plans - Equity accounted investees

-

-

1,087

1,087

-

1,087

Currency translation differences

-

27,039

-

27,039

-

27,039

Net investment hedge

-

(2,970)

-

(2,970)

-

(2,970)

Fair value movements

-

1,867

-

1,867

-

1,867

Deferred tax on fair value movements

-

(1,051)

-

(1,051)

-

(1,051)

Total comprehensive income for the period

-

24,885

175,857

200,742

331

201,073

 

 

 

 

 

 

 

Transactions with equity holders of the Company

Contributions and distributions:

 

 

 

 

 

 

Dividends

-

-

(36,780)

(36,780)

(933)

(37,713)

Cost of share based payments

-

7,712

-

7,712

-

7,712

Transfer on exercise, vesting or expiry of share based payments

-

3,008

(3,008)

-

-

-

Deferred tax on share based payments

-

-

154

154

-

154

Shares issued and premium on shares issued

23

-

-

23

-

23

Purchase of own shares

-

(10,413)

-

(10,413)

-

(10,413)

Total contributions and distributions

23

307

(39,634)

(39,304)

(933)

(40,237)

Changes in ownership interests

 

 

 

 

 

 

Non-controlling interests arising on gain in control

 

 

 

 

 

 

- Continuing operations

-

-

-

-

-

-

- Discontinued operations

-

-

-

-

3,160

3,160

 

 

 

 

 

 

 

Balance at 31 December 2016

105,393

331,617

778,986

1,215,996

11,073

1,227,069

 

 

 

Condensed Statement of cashflows

For the half year ended 1 july 2017

 

 

Notes

Half year

2017

€'000

Half year

2016

€'000

Year

2016

€'000

Cash flows from operating activities:

 

 

 

 

Cash (absorbed by)/generated from operating activities

23

(61,161)

53,616

374,303

Interest received

 

1,662

615

2,367

Interest paid

 

(13,414)

(11,710)

(24,772)

Tax paid

 

(13,722)

(11,762)

(28,989)

Net cash (outflow)/inflow from operating activities

 

(86,635)

30,759

322,909

Cash flows from investing activities:

 

 

 

 

Acquisition of subsidiaries - purchase consideration

24

(162,440)

(15,666)

(15,725)

Acquisition of subsidiaries - liabilities settled at completion

24

(7,358)

-

-

Acquisition of subsidiaries - cash and cash equivalents acquired

24

1,646

-

1,065

Capital grants received

 

-

-

578

Purchase of property, plant and equipment

14

(23,902)

(34,471)

(65,398)

Purchase of intangible assets

14

(9,406)

(7,223)

(24,084)

Interest paid in relation to property, plant and equipment

10

(500)

(500)

(1,479)

Dividends received from Equity accounted investees

 

2,732

2,248

13,825

Loans advanced to Equity accounted investees

21

-

(12,800)

(12,800)

Amounts received in connection with the Dairy Ireland transaction

9

112,000

-

-

Net redemption and additions in available for sale financial assets

 

1,028

32

(491)

Proceeds from property, plant and equipment

 

150

98

358

Net cash outflow from investing activities

 

(86,050)

(68,282)

(104,151)

Cash flows from financing activities:

 

 

 

 

Proceeds from issue of ordinary shares

19

11

23

23

Purchase of own shares

20

(7,436)

(10,318)

(10,413)

Increase/(decrease) in borrowings

 

257,376

(69,012)

(154,501)

Finance lease payments

 

(115)

(169)

(315)

Dividends paid to Company shareholders

12

(23,506)

(21,374)

(37,163)

Dividends paid to non-controlling interests

 

-

-

(933)

Net cash inflow/(outflow) from financing activities

 

226,330

(100,850)

(203,302)

Net (decrease)/increase in cash and cash equivalents

 

53,645

(138,373)

15,456

Cash and cash equivalents at the beginning of the period

 

187,217

169,125

169,125

Effects of exchange rate changes on cash and cash equivalents

 

(4,081)

(2,333)

2,636

 

 

 

 

 

Cash and cash equivalents at the end of the period

16

236,781

28,419

187,217

 

* See note 9 for further information on the cashflows arising within the discontinued operations.

 

 

Condensed Statement of cashflows Continued

For the half year ended 1 july 2017

 

Reconciliation of net cash flow to movement in net debt

Notes

Half year

2017

€'000

Half year

2016

€'000

Year

2016

€'000

Net increase/(decrease) in cash and cash equivalents

 

53,645

(138,373)

15,456

Cash movements from debt financing

 

(257,261)

69,181

154,816

New finance leases

 

-

-

(1,902)

Debt acquired on acquisition

 

-

-

(848)

 

 

(203,616)

(69,192)

167,522

Exchange translation adjustment on net debt

 

32,811

9,095

(20,837)

Movement in net debt in the period

 

(170,805)

(60,097)

146,685

Net debt at the beginning of the period

16

(437,558)

(584,243)

(584,243)

 

 

 

 

 

Net debt at the end of the period

16

(608,363)

(644,340)

(437,558)

 

 

 

 

 

Net debt comprises:

 

 

 

 

Borrowings

16

(845,144)

(672,759)

(624,775)

Cash and cash equivalents net of bank overdrafts

16

236,781

28,419

187,217

 

 

 

 

 

 

 

(608,363)

(644,340)

(437,558)

 

 

 

Notes to the financial statements

For the half year ended 1 july 2017

 

1.     General information

Glanbia plc (the Company) and its subsidiaries (together the Group) is a leading global nutrition group with its main operations in Europe, USA, Middle East, Asia Pacific and Latin America.

The Company is a public limited company incorporated and domiciled in Ireland. The address of its registered office is Glanbia House, Kilkenny, Ireland. Glanbia Co-operative Society Limited (the Society), together with its subsidiaries, holds 33.5% of the issued share capital of the Company. The Board of Directors as at 1 July 2017 is comprised of 18 members, of which up to 10 are nominated by the Society. In accordance with IFRS 10 'Consolidated Financial Statements', the Society controls the Group and is the ultimate parent of the Group.

The Company's shares are quoted on the Irish and London Stock Exchanges.

These condensed consolidated interim financial statements (interim financial statements) as at and for the 26 week period ended 1 July 2017 were approved for issue by the Board of Directors on 9 August 2017.

 

2.     Summary of significant accounting policies

 

(a)   Basis of preparation

The interim financial statements as at and for the six months ended 1 July 2017 have been prepared in accordance with the Transparency (Directive 2004/109/EC) Regulations 2007 as amended, the related Transparency Rules of the Central Bank of Ireland and with IAS 34 'Interim Financial Reporting', as adopted by the European Union. The interim financial statements should be read in conjunction with the financial statements as at and for the year ended 31 December 2016 (2016 Annual Report), which have been prepared in accordance with International Financial Reporting Standards (IFRS). The interim financial statements do not include all of the information required for a complete set of IFRS financial statements. However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Group's financial position and performance since the last annual report.

The interim financial statements as at and for the six months ended 1 July 2017 and, as at and for the six months ended 2 July 2016, have neither been audited nor reviewed by the Group's auditors.

 

Re-presentation

Certain comparative amounts in the balance sheet as at 2 July 2016 have been reclassified or re-presented, to be consistent with the presentation in the 2016 Annual Report. These include the reclassification of retirement benefit assets (note 8); the presentation of current and deferred tax assets and liabilities where the offset criteria in IAS 12 'Income Taxes' are met; and the offset of certain trade payables and receivables where the Group is acting as agent in the collection of receivables.

 

(b)   Statutory information

The interim financial statements are considered non-statutory financial statements for the purposes of the Companies Act 2014 and in compliance with section 340(4) of that Act the Group states that:

·      the interim financial statements for the half year to 1 July 2017 have been prepared to meet our obligation to do so under the Transparency Directive (2004/109/EC) Regulations 2007 as amended (Statutory Instrument No. 277);

·      the interim financial statements as at and for the half year to 1 July 2017 do not constitute the statutory financial statements of the Group and are unaudited;

·      the statutory financial statements as at and for the financial year ended 31 December 2016 have been annexed to the annual return and filed with the Companies Registration Office;

·      the statutory auditors of the Group have made a report under section 391 in the form required by section 336 Companies Act 2014 in respect of the statutory financial statements of the Group; and

·      the matters referred to in the statutory auditors' report were unqualified, and did not include a reference to any matters to which the statutory auditors drew attention by way of emphasis without qualifying the report.

 

(c)   Going Concern

The Group's business activities, together with the main factors likely to affect its future development and performance, are described in the Strategic Report on pages 1 to 40 of the 2016 Annual Report. As outlined in note 9, on 2 July 2017 the Group disposed of 60% of its shareholding in Dairy Ireland and related assets to the Society. There has been no other significant change to the activities and factors as outlined in the 2016 Annual Report.

After making enquiries, the Directors have reasonable expectation that the Group has adequate resources to continue in operational existence for a period of at least 12 months from the date of approval of the interim financial statements. The Group therefore continue to adopt the going concern basis in preparing its interim financial statements.

In reaching this conclusion the Directors have given due regard to:

·      Available cash resources, cash generated from operations, committed bank facilities and their maturities which taken together provide confidence that Glanbia will be able to meet its obligations as they fall due; and

·      The Group's financial risk management policies which are described in the 2016 Annual Report, the nature of business activities and the factors likely to impact operating performance and future growth.

 

(d)   Discontinued operations and non-current assets held for sale

Discontinued operations and non-current assets held for sale are defined as follows: a component of an entity that either has been disposed of, abandoned or is classified as held for sale and:

·      represents a separate major line of business or geographical area of operation; or

·      is part of a single coordinated plan to dispose of a separate major line of business or geographical area of operation; or

·      is a subsidiary acquired exclusively with a view to resale.

Classification as a discontinued operation occurs upon disposal, abandonment or when the operations meet the criteria to be classified as held for sale.

Non-current assets and disposal groups classified as held for sale are measured at the lower of the carrying value and the fair value less costs to sell.

Non-current assets and disposal groups are classified as held for sale if their carrying amounts will be recovered through a sale transaction rather than continued use. This condition is regarded as satisfied only when the sale is highly probable and the asset or disposal group is available for immediate sale in its present condition.

Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year of the date of classification. Property, plant and equipment and intangible assets, once classified as held for sale, are not depreciated or amortised.

When the Group ceases to have control, any retained interest in the entity is re-measured to its fair value at the date when control is lost with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an Associate, Joint Venture or financial asset.

In addition, any movements previously recognised in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss.

In determining the amount to be presented as discontinued operations, all intercompany items are eliminated on consolidation. These items are eliminated against continuing operations when an arrangement will not continue and are eliminated against discontinued operations where an arrangement will continue.

(e)   Foreign currency translation

The interim financial statements are presented in euro, which is the Group's presentation currency.

The principal exchange rates used for the translation of results and balance sheets into euro are as follows:

Average

Euro 1=

Half year 2017

Half year

2016

Year

2016

US dollar

1.0827

1.1161

1.1068

Pound sterling

0.8603

0.7795

0.8194

Danish krone

7.4368

7.4497

7.4452

 

Period end

Euro 1=

Half year 2017

Half year

2016

Year

2016

US dollar

1.1412

1.1135

1.0541

Pound sterling

0.8793

0.8383

0.8562

Danish krone

7.4366

7.4380

7.4344

 

(f)    Changes in accounting policies

The methods of computation, presentation and accounting policies adopted in the preparation of the interim financial statements are consistent with those applied in the 2016 Annual Report. The Group's accounting policies are set out in note 2 to the financial statements in the 2016 Annual Report.

There were no new standards effective for the Group for the first time in the 26 week period ended 1 July 2017.

The following standards, amendments and interpretations have been published. The Group will apply the relevant standards from their effective dates and is currently assessing their impact on the Group's financial statements. The standards are mandatory for future accounting periods but are not yet effective and have not been early adopted by the Group.

 

Annual improvements to IFRSs 2014-2016 cycle (IASB effective date: on or after 1 January 2017 and 1 January 2018 - not yet endorsed).

A number of small amendments to IFRS 12 'Disclosure of Interests in Other entities' (effective 1 January 2017) and IAS 28 'Investments in Associates and Joint Ventures' (effective 1 January 2018).

 

Amendments to IAS 12 'Income Taxes' on the recognition of deferred tax assets for unrealised losses (IASB effective date: on or after 1 January 2017 - not yet endorsed).

These amendments clarify the recognition of deferred tax assets for unrealised losses on debt instruments.

 

Amendments to IAS 7 'Statement of Cash Flows' under its disclosure initiative (IASB effective date: on or after 1 January 2017 - not yet endorsed).

These amendments are intended to improve the information provided to users of financial statements about an entity's financing activities.

 

 

IFRS 17 Insurance Contracts (IASB effective date: on or after 1 January 2021 - not yet endorsed)

This standard replaces IFRS 4 and establishes the principles for the recognition, measurement, presentation and disclosure of insurance contracts within the scope of the standard. The objective of IFRS 17 is to ensure that an entity provides relevant information that faithfully represents those contracts.

 

IFRS 15 'Revenue from Contracts with Customers' (EU effective date: on or after 1 January 2018, clarifications to the standard not yet endorsed).

IFRS 15 is a converged standard from the IASB and the Financial Accounting Standards Board ('FASB') on revenue recognition. The standard will improve the financial reporting of revenue and improve comparability of the top line in Financial Statements globally.

The Group is currently performing a detailed assessment of the impact of the application of IFRS 15 and expects to disclose additional quantitative information in the annual report for the year ended 30 December 2017 (2017 Annual Report) before it adopts IFRS 15.

 

IFRS 9 'Financial Instruments' (EU effective date: on or after 1 January 2018).

This standard replaces the guidance in IAS 39 'Financial Instruments: Recognition and Measurement'. It includes requirements on the classification and measurement of financial assets and liabilities; it also includes an expected credit losses model that replaces the current incurred loss impairment model.

The Group is currently performing a detailed assessment of the impact of the application of IFRS 9 and expects to disclose additional quantitative information in the 2017 Annual Report before it adopts IFRS 9.

 

IFRS 16 'Leases' (IASB effective date: on or after 1 January 2019 - not yet endorsed).

IFRS 16 supersedes IAS 17 'Leases'. The new standard provides a single lessee accounting model, requiring lessees to recognise assets and liabilities for all leases unless the lease term is 12 months or less or the underlying asset has a low value. Lessors continue to classify leases as operating or finance, with IFRS 16's approach to lessor accounting substantially unchanged from IAS 17.

The Group is currently performing a detailed assessment of the impact of adoption of IFRS 16 however the Group has not yet quantified the impact on its reported assets and liabilities of the adoption of IFRS 16. The Group expects to disclose its transition approach and quantitative information before adoption.

 

Amendments to IFRS 2 'Classification and Measurement of Share-based payment Transactions' (IASB effective date: on or after 1 January 2018 - not yet endorsed).

These amendments clarify that only market and non-vesting conditions are taken into account in the measurement of the fair value of the liability in a cash-settled share-based payment transaction. Vesting conditions (other than market conditions) are considered when estimating the number of awards expected to vest.

 

IFRIC Interpretation 22 'Foreign Currency Transactions and Advance Consideration' (IASB effective date: on or after 1 January 2018 - not yet endorsed).

IFRIC 22 clarifies the accounting for transactions that include the receipt or payment of advance consideration in a foreign currency.

 

IFRIC Interpretation 23 'Uncertainty over Income Tax Treatments' (IASB effective date: on or after 1 January 2019 - not yet endorsed).

IFRIC 23 clarifies the accounting for uncertainties in income taxes.

 

 

 

Amendments to IAS 40 'Transfers of Investment Property' (IASB effective date: on or after 1 January 2018 - not yet endorsed).

This amendment provides guidance on transfers to, or from, investment properties.

 

3.     Changes in critical accounting estimates and judgements

In preparing these interim financial statements, management has made judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results.

The significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as at and for the year ended 31 December 2016.

 

4.     Segment information

In accordance with IFRS 8 'Operating Segments', the Group has four segments, as follows: Glanbia Performance Nutrition, Glanbia Nutritionals, Dairy Ireland and Equity accounted investees (Joint Ventures & Associates). These segments align with the Group's internal financial reporting system and the way in which the Chief Operating Decision Maker assesses performance and allocates the Group's resources. As a result of the disposal of 60% of Dairy Ireland and related assets (note 9), the structure of the internal reporting to the Chief Operating Decision Maker will be reviewed in the second half of the year. Any changes to segment reporting will be reflected in the 2017 Annual Report with details of any changes, if applicable.

Each segment derives its revenues as follows: Glanbia Performance Nutrition earns its revenue from the manufacture and sale of performance nutrition products; Glanbia Nutritionals earns its revenue from the manufacture and sale of cheese, dairy and non-dairy nutritional ingredients; Dairy Ireland earns its revenue from the manufacture and sale of a range of consumer products and farm inputs; and Joint Ventures & Associates revenue arises from the manufacture and sale of cheese and dairy ingredients.

Each segment is reviewed in its totality by the Chief Operating Decision Maker. The Glanbia Operating Executive assesses the trading performance of operating segments based on a measure of earnings before interest, tax, amortisation and exceptional items.

Amounts stated for Joint Ventures & Associates represents the Group's share.

 

4.1 The segment results for the period ended 1 July 2017 are as follows:

 

Half Year 2017

 

Glanbia Performance Nutrition

€'000

Glanbia Nutritionals

€'000

Total -Continuing operations

€'000

*Dairy

 Ireland

€'000

*Joint Ventures & Associates

€'000

 

 

Group

€'000

Total gross segment revenue

 

543,547

663,814

1,207,361

358,429

 

1,565,790

Inter-segment revenue

 

-

(21,655)

(21,655)

(484)

 

(22,139)

 

 

 

 

 

 

 

 

Revenue

 

543,547

642,159

1,185,706

357,945

 

1,543,651

 

 

 

 

 

 

 

 

Total Group earnings before interest, tax, amortisation and exceptional items (EBITA)

(a)

83,869

64,439

148,308

11,076

33,387

192,771

 

Half Year 2016

 

Glanbia Performance Nutrition

€'000

Glanbia Nutritionals

€'000

Total - Continuing operations

€'000

*Dairy

 Ireland

€'000

*Joint

Ventures &  Associates

€'000

 

 

Group

€'000

Total gross segment revenue

 

505,370

586,413

1,091,783

357,383

 

1,449,166

Inter-segment revenue

 

(115)

(13,856)

(13,971)

(431)

 

(14,402)

 

 

 

 

 

 

 

 

Revenue

 

505,255

572,557

1,077,812

356,952

 

1,434,764

 

 

 

 

 

 

 

 

Total Group earnings before interest, tax, amortisation and exceptional items (EBITA)

(a)

81,411

57,721

139,132

18,257

19,135

176,524

 

Year 2016

 

Glanbia Performance Nutrition

€'000

Glanbia Nutritionals

€'000

Total - Continuing operations

€'000

*Dairy

 Ireland

€'000

*Joint

 Ventures & Associates

€'000

 

 

Group

€'000

Total gross segment revenue

 

1,007,499

1,250,368

2,257,867

616,843

 

2,874,710

Inter-segment revenue

 

-

(26,182)

(26,182)

(636)

 

(26,818)

 

 

 

 

 

 

 

 

Revenue

 

1,007,499

1,224,186

2,231,685

616,207

 

2,847,892

 

 

 

 

 

 

 

 

Total Group earnings before interest, tax, amortisation and exceptional items (EBITA)

(a)

162,028

111,257

273,285

31,800

44,673

349,758

 

 

Included in external revenue are related party sales between Glanbia Nutritionals and Joint Ventures of €7.0 million (HY 2016: €6.8 million, FY 2016: €13.5 million) and related party sales between Dairy Ireland and Joint Ventures & Associates of €6.9 million (HY 2016: €4.4 million, FY 2016 €11.3 million). Inter-segment transfers or transactions are entered into under the commercial terms and conditions that would also be available to unrelated third parties.

*On 2 July 2017 the Group disposed of 60% of its shareholding in Dairy Ireland and related assets to the Society (note 9). The results of these discontinued operations are included within the Dairy Ireland segment and Joint Ventures & Associates segment. Other non-significant trading operations, not subject to the transaction, were previously included within the Dairy Ireland segment and have been re-presented .

 

4.1 (a) Segment earnings before interest, tax, amortisation and exceptional items are reconciled to reported profit before tax and profit after tax - Continuing operations as follows:

 

Notes

Half year

2017

€'000

 Half year

2016

€'000

Year

2016

€'000

Total Group earnings before interest, tax, amortisation and exceptional items

 

192,771

176,524

349,758

Joint Venture & Associates earnings before interest, tax, amortisation and exceptional items

 

(33,387)

(19,135)

(44,673)

Discontinued operations earnings before interest, tax, amortisation and exceptional items

 

(11,076)

(18,257)

(31,800)

Earnings before interest, tax and amortisation  - Continuing operations

 

148,308

139,132

273,285

Intangible asset amortisation

14

(21,835)

(18,233)

(37,410)

Exceptional items

7

-

(8,057)

(14,412)

Share of results of Equity accounted investees

 

22,312

11,083

26,032

Finance income

10

1,545

1,160

2,377

Finance costs

10

(13,296)

(12,732)

(25,172)

Reported profit before tax - Continuing operations

 

137,034

112,353

224,700

Income taxes - Continuing operations

11

(20,489)

(17,827)

(37,020)

 

 

 

 

 

Reported profit after tax - Continuing operations

 

116,545

94,526

187,680

 

4.2 Balance sheet and other disclosures

The segments assets and liabilities are as follows:

At 1 July 2017

 

Glanbia Performance Nutrition

€'000

Glanbia Nutritionals

€'000

Dairy Ireland

Held for sale

€'000

Joint Ventures & Associates

€'000

 

 

Group

€'000

Segment assets

(a)

1,349,158

739,406

525,256

187,063

2,800,883

Segment liabilities

(b)

231,595

165,089

314,403

-

711,087

 

At 2 July 2016

 

Glanbia Performance Nutrition

€'000

Glanbia Nutritionals

€'000

Dairy Ireland

€'000

Joint Ventures & Associates

€'000

 

 

Group

€'000

Segment assets

(a)

1,128,231

755,543

362,541

169,891

2,416,206

Segment liabilities

(b)

247,784

150,038

216,398

-

614,220

 

At 31 December 2016

 

Glanbia Performance Nutrition

€'000

Glanbia Nutritionals

€'000

Dairy Ireland

€'000

Joint Ventures & Associates

€'000

 

 

Group

€'000

Segment assets

(a)

1,157,205

772,631

307,350

180,948

2,418,134

Segment liabilities

(b)

264,585

212,446

179,821

-

656,852

 

4.2 (a) Segment assets are reconciled to reported assets as follows:

 

 

 

 

 

1 July

2017

€'000

2 July

 2016

€'000

31 December

2016

€'000

Segment assets

 

 

 

2,800,883

2,416,206

2,418,134

Unallocated assets

 

 

 

281,580

103,966

290,528

 

 

 

 

 

 

 

Reported assets

 

 

 

3,082,463

2,520,172

2,708,662

 

Unallocated assets primarily include taxation, cash and cash equivalents, available for sale financial assets and derivatives.

 

 

4.2 (b) Segment liabilities are reconciled to reported liabilities as follows:

 

 

 

 

 

1 July

2017

€'000

2 July

 2016

€'000

31 December

2016

€'000

Segment liabilities

 

 

 

711,087

614,220

656,852

Unallocated liabilities

 

 

 

1,121,821

845,307

824,741

 

 

 

 

 

 

 

Reported liabilities

 

 

 

1,832,908

1,459,527

1,481,593

 

Unallocated liabilities primarily include items such as taxation, borrowings and derivatives.

 

5.     Seasonality

Elements of the Dairy Ireland segment reflect the seasonal nature of the Irish agricultural industry. Following the disposal of 60% of Dairy Ireland and related assets (note 9) the Group will no longer be exposed to the seasonal nature of the Irish agricultural industry within its wholly owned subsidiaries.

 

6.     Operating profit - Continuing operations

 

 

 

Re-presented *

 

Half year 2017

 

Half year 2016

 

Year 2016

 

Pre-exceptional

€'000

Exceptional

€'000

Total

€'000

 

Pre-

exceptional  

€'000

Exceptional

€'000

Total

€'000

 

Pre-

exceptional  

€'000

Exceptional

€'000

 

Total

€'000

 

 

(note 7)

 

 

 

(note 7)

 

 

 

(note 7)

 

 

Revenue

1,185,706

-

1,185,706

 

1,077,812

-

1,077,812

 

2,231,685

-

 

2,231,685

Cost of goods sold

(851,801)

-

(851,801)

 

(757,642)

-

(757,642)

 

(1,596,608)

(1,005)

 

(1,597,613)

Gross profit

333,905

-

333,905

 

320,170

-

320,170

 

635,077

(1,005)

 

634,072

Selling and distribution expenses

(109,036)

-

(109,036)

 

(100,084)

-

(100,084)

 

(198,221)

-

 

(198,221)

Administration expenses

(76,561)

-

(76,561)

 

(80,954)

(8,057)

(89,011)

 

(163,571)

(13,407)

 

(176,978)

Earnings before interest tax and amortisation (EBITA)

148,308

-

148,308

 

139,132

(8,057)

131,075

 

273,285

(14,412)

 

258,873

Intangible asset amortisation

(21,835)

-

(21,835)

 

(18,233)

-

(18,233)

 

(37,410)

-

 

(37,410)

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating profit

126,473

-

126,473

 

120,899

(8,057)

112,842

 

235,875

(14,412)

 

221,463

 

 

 

 

 

Re-presented *

 

Half year 2017

 

Half year 2016

 

Year 2016

Operating profit - Continuing operations is stated after (charging)/crediting:

Pre-exceptional

€'000

Exceptional

€'000

Total

€'000

 

Pre-

exceptional  

€'000

Exceptional

€'000

Total

€'000

 

Pre-

exceptional  

€'000

Exceptional

€'000

 

Total

€'000

 

(note 7)

 

 

 

(note 7)

 

 

 

(note 7)

 

 

Raw materials and consumables used

(707,677)

-

(707,677)

 

(629,096)

-

(629,096)

 

(1,337,402)

(1,005)

 

(1,338,407)

Depreciation of property, plant and equipment

(22,825)

-

(22,825)

 

(20,005)

-

(20,005)

 

(41,063)

-

 

(41,063)

Amortisation of capital grants received

17

-

17

 

18

-

18

 

182

-

 

182

Employee benefit expense

(156,421)

-

(156,421)

 

(154,906)

(2,572)

(157,478)

 

(301,226)

(7,091)

 

(308,317)

Research and development costs

(5,094)

-

(5,094)

 

(4,080)

-

(4,080)

 

(7,730)

-

 

(7,730)

Net foreign exchange (loss)/gain

(299)

-

(299)

 

381

-

381

 

880

-

 

880

Intangible asset amortisation

(21,835)

-

(21,835)

 

(18,233)

-

(18,233)

 

(37,410)

-

 

(37,410)

Loss/(gain) on disposal of property, plant and  equipment

(119)

-

(119)

 

(87)

-

(87)

 

338

-

 

338

Impairment of intangible assets

-

-

-

 

-

-

-

 

(479)

(617)

 

(1,096)

Impairment of property, plant and equipment

-

-

-

 

-

-

-

 

(520)

-

 

(520)

 

* As re-presented  to reflect the impact of discontinued operations. See note 9 for further information.

 

 

7.     Exceptional items

 

 

 

Re-presented *

 

Notes

Half year

2017

€'000

Half year

2016

€'000

Year

2016

€'000

Continuing operations

 

 

 

 

Organisation redesign costs

(b)

-

(6,207)

(11,342)

Acquisition integration costs

(c)

-

(1,850)

(3,070)

Total exceptional charge before tax - Continuing operations

 

-

(8,057)

(14,412)

Tax credit on exceptional items - Continuing operations

 

-

1,525

2,277

 

 

 

 

 

Total exceptional charge - Continuing operations

 

-

(6,532)

(12,135)

 

 

 

 

 

Discontinued operations

 

 

 

 

Dairy Ireland transaction related costs

(a)

(12,991)

-

-

Rationalisation costs

(d)

-

(828)

(3,038)

Total exceptional charge before tax - Discontinued operations

9

(12,991)

(828)

(3,038)

Tax credit on exceptional items - Discontinued operations

 

2,112

104

381

 

 

 

 

 

Total exceptional charge - Discontinued operations

9

(10,879)

(724)

(2,657)

 

 

 

 

 

Total exceptional charge

 

(10,879)

(7,256)

(14,792)

 

The nature of the total exceptional charge before tax from continuing and discontinued operations is as follows:

 

 

Re-presented *

 

Half year

2017

€'000

Half year

2016

€'000

Year

2016

€'000

Employee benefit expense

-

(2,557)

(7,091)

Other operating costs

-

(5,500)

(7,321)

 

 

 

 

Total exceptional charge before tax - Continuing operations

-

(8,057)

(14,412)

 

 

 

 

Impairment of tangible assets

(8,113)

-

-

Professional fees

(3,573)

-

-

Extraordinary General Meeting costs

(557)

-

-

Employee benefit expense

(543)

(828)

(3,038)

Other operating costs

(205)

-

-

 

 

 

 

Total exceptional charge before tax - Discontinued operations

(12,991)

(828)

(3,038)

 

The total cash outflow during the period in respect of exceptional charges was €5.8 million (HY 2016: €10.5 million) of which €5.4 million (HY 2016: €6.4 million) was in respect of prior year exceptional charges.

(a)   In February 2017 the Group announced it had signed non-binding legal agreements, subject to certain approvals and conditions, to dispose of 60% of its shareholding in Dairy Ireland and related assets to Glanbia Co-operative Society Limited (the Society), its ultimate parent. Subsequent to half year, on 2 July 2017, the transaction was completed creating a new joint venture, together with Glanbia Ingredients Ireland DAC, called Glanbia Ireland. Costs incurred in relation to this transaction include impairment of tangible assets of €8.1 million, consultancy costs of €3.6 million, extraordinary general meetings costs of €0.6 million, employee benefit expense of €0.5 million and other operating costs of €0.2 million.

(b)   The 2016 organisation redesign costs related to the programme announced in 2015 in Glanbia Nutritionals to fundamentally reorganise the business to leverage future market opportunities. Half year 2016 costs of €6.2 million included consultancy of €2.3 million, employee benefit expense (directly attributable employee costs and redundancy) of €1.7 million and other costs of €2.2 million. Full year 2016 costs of €11.3 million include consultancy of €2.9 million, employee benefit expense of €5.0 million, of which redundancy was €1.4 million, travel and expenses of €1.7 million, impairment of development costs and product line of €1.6 million and other costs of €0.1 million.

(c)   Acquisition integration costs in 2016 comprised of costs relating to the integration, restructuring and redesign of route to market capabilities within acquired businesses in the Glanbia Performance Nutrition segment. Half year 2016 costs of €1.9 million included consultancy of €0.7 million, employee benefit expense (directly attributable payroll costs and redundancy) of €0.9 million and other costs of €0.3 million. The full year 2016 costs of €3.1 million include consultancy of €0.7 million, employee benefit expense comprising redundancy of €2.1 million and other costs of €0.3 million.

(d)   The rationalisation costs incurred in 2016 primarily related to the redundancy and rationalisation programme in the Dairy Ireland segment. Costs of €0.8 million included employee benefit expense (redundancy) of €0.8 million. 2016 costs of €3.0 million relate to redundancy.

*As re-presented to reflect the impact of discontinued operations. Refer to note 9.

 

8.     Retirement benefit obligations

The Group operates a number of defined benefit pension plans.

 

Principal assumptions used in the defined benefit pension plans

The principal assumptions used for the purposes of the actuarial valuations were as follows:

 

 

Half year 2017

 

Half year 2016

 

Year 2016

 

ROI

 

UK

 

ROI

 

UK

 

ROI

 

UK

Discount rate

2.00%

 

2.45%

 

1.40%

 

2.60%

 

1.80%

 

2.50%

Inflation rate

1.30%-1.40%

 

2.20%-3.20%

 

1.10% - 1.20%

 

1.75% - 2.75%

 

1.40%-1.50%

 

2.20%-3.20%

Future salary increases*

2.40%

 

0.00%

 

2.20%

 

0.00%

 

2.50%

 

0.00%

Future pension increases

0.00%

 

2.25%-2.95%

 

0.00%

 

1.90% - 2.65%

 

0.00%

 

2.25-2.95%

 

*The ROI defined benefit pension plans are on a career average structure therefore this assumption does not have a material impact. The UK defined benefit pension plans comprise solely pensioners and deferred pensioners.

 

Mortality rates

The mortality assumptions used at half year 2017 are consistent with those applied in the 2016 Annual Report.

 

Recognition in the condensed Group income statement and in the condensed Group statement of comprehensive income

The following amounts have been recognised in the condensed Group income statement and condensed Group statement of comprehensive income in relation to defined benefit pension plans:

 

Recognition in the condensed Group income statement:

 

 

Half year 2017

 

Half year 2016

 

Year 2016

 

Continuing operations

€'000

Discontinued operations

€'000

Total

€'000

 

Continuing operations

€'000

Discontinued operations

€'000

Total

€'000

 

Continuing operations

€'000

Discontinued operations

€'000

Total

€'000

Current service cost

(1,086)

(2,006)

(3,092)

 

(931)

(1,737)

(2,668)

 

(2,045)

(3,283)

(5,328)

(550)

(472)

(1,022)

 

(507)

(524)

(1,031)

 

(789)

(1,202)

(1,991)

Total expense recognised in the condensed Group income statement in employee benefit expense

(1,636)

(2,478)

(4,114)

 

(1,438)

(2,261)

(3,699)

 

(2,834)

(4,485)

(7,319)

 

Recognition in the Condensed Group statement of comprehensive income:

 

 

Half year 2017

 

Half year 2016

 

Year 2016

 

Continuing operations

€'000

Discontinued operations

€'000

Total

€'000

 

Continuing operations

€'000

Discontinued operations

€'000

Total

€'000

 

Continuing operations

€'000

Discontinued operations

€'000

Total

€'000

Return of plan assets in excess of interest income

943

(856)

87

 

7,682

5,637

13,319

 

11,817

5,911

17,728

Actuarial (loss)/gain arising from experience adjustments

(331)

(7)

(338)

 

-

-

-

 

874

2,576

3,450

Actuarial loss arising from changes in demographic assumptions

-

-

-

 

(20)

-

(20)

 

(1,573)

-

(1,573)

Actuarial gain/(loss) arising from changes in financial assumptions

3,785

12,918

16,703

 

(33,748)

(30,930)

(64,678)

 

(33,911)

(17,494)

(51,405)

 

 

 

 

 

 

 

 

 

 

 

 

Total income/ (expense) recognised in the condensed Group statement of comprehensive income

4,397

12,055

16,452

 

(26,086)

(25,293)

(51,379)

 

(22,793)

(9,007)

(31,800)

 

 

Recognition in the condensed Group balance sheet:

 

 

 

 

1 July

2017

€'000

2 July

 2016

€'000

31 December

2016

€'000

Fair value of plan assets

 

 

 

182,218

360,877

366,802

Present value of funded obligations

 

 

 

(227,838)

(492,952)

(477,250)

 

 

 

 

 

 

 

Net defined pension plan liability

 

 

 

(45,620)

(132,075)

(110,448)

 

Reconciliation of net defined benefit pension plan liability to the amounts recognised in the condensed Group balance sheet:

 

1 July

2017

€'000

2 July

 2016

€'000

31 December

2016

€'000

Non-current assets

 

 

 

Surplus on defined benefit pension plan

2,530

2,085

2,578

Non-current liabilities

 

 

 

Deficit on defined benefit pension plan

(48,150)

(134,160)

(113,026)

 

 

 

 

Net defined benefit pension plan liability

(45,620)

(132,075)

(110,448)

 

The net liability disclosed above all relates to funded plans.

 

Recognition in the condensed Group balance sheet within assets and liabilities classified as held for sale:

 

1 July

2017

€'000

Fair value of plan assets

179,187

Present value of funded obligations

(223,375)

 

 

Net defined benefit pension plan liability in the condensed Group balance sheet within assets
and liabilities classified as held for sale

(44,188)

 

       

 

Reconciliation of net defined benefit pension plan liability to the amounts recognised in the condensed Group balance sheet within assets and liabilities classified as held for sale:

 

Notes

1 July

2017

€'000

Assets held for sale

 

 

Surplus on defined benefit pension plan

9

359

Liabilities directly associated with assets held for sale

 

 

Deficit on defined benefit pension plan

9

(44,547)

 

 

 

Net defined benefit pension plan liability in the condensed Group balance sheet within assets
and liabilities classified as held for sale

 

(44,188)

 

The movement in the net defined benefit pension plan liability recognised in the condensed Group balance sheet is as follows:

 

Half year

2017

€'000

Half year

2016

€'000

Year

2016

€'000

At the beginning of the period

(110,448)

(87,288)

(87,288)

Exchange differences

754

2,584

2,719

Service cost and net interest cost

(4,114)

(3,699)

(7,319)

Remeasurements -  defined benefit schemes

16,452

(51,379)

(31,800)

Contributions paid/payable by employer

7,548

7,707

13,240

Recognised within assets and liabilities classified as held for sale

44,188

-

-

 

 

 

 

At the end of the period

(45,620)

(132,075)

(110,448)

 

 

 

Sensitivity analysis

The following table analyses for the Group's pension schemes (both continuing operations and those classified within assets and liabilities held for sale), the estimated impact in the plan liabilities resulting from a 0.25% change in the discount rate:

 

 

ROI plans

 

UK plans

Half year 2017

Assumption

Change in assumption

Increase

€'000

Decrease

€'000

 

Increase

€'000

Decrease

€'000

Discount rate

0.25% movement

(15,663)

14,946

 

(5,345)

5,082

 

 

 

ROI plans

 

UK plans

Half year 2016

Assumption

Change in assumption

Increase

€'000

Decrease

€'000

 

Increase

€'000

Decrease

€'000

Discount rate

0.25% movement

(17,417)

16,606

 

(5,316)

4,970

 

 

 

ROI plans

 

UK plans

Year 2016

Assumption

Change in assumption

Increase

€'000

Decrease

€'000

 

Increase

€'000

Decrease

€'000

Discount rate

0.25% movement

(16,773)

16,007

 

(5,136)

4,843

 

9.     Discontinued operations and assets and liabilities classified as held for sale

On 21 February 2017, the Group announced that it had signed non-binding legal agreements to dispose of 60% of its shareholding in Dairy Ireland and related assets to Glanbia Co-operative Society Limited (the Society), its ultimate parent. Dairy Ireland is comprised of two business units, Glanbia Consumer Foods Ireland and Glanbia Agribusiness.

The disposal was approved by Society members at a Special General Meeting (SGM) on 18 May 2017 and by Group shareholders at an Extraordinary General Meeting (EGM) on 22 May 2017.

Following the approval by Group shareholders on 22 May 2017, all related assets and liabilities on the Group balance sheet were reclassified as assets held for sale in accordance with IFRS 5 'Non-current Assets Held for Sale and Discontinued Operations'. The Dairy Ireland activities have been disclosed as discontinued operations in the condensed Group income statement and condensed Group statement of comprehensive income and the comparative information has been re-presented to show the discontinued operations separately from continuing operations.

Subsequent to the half year, on 2 July 2017, the transaction was completed, creating a new joint venture, together with Glanbia Ingredients Ireland DAC, called Glanbia Ireland.

In consideration for the Society acquiring the 60% interest, Glanbia plc will receive €112 million and an amount equal to 100% of the working capital in Dairy Ireland at completion.

The disposal will be recognised in the Glanbia plc financial statements for the year ended 30 December 2017. The transaction will be accounted for as a 100% disposal of Dairy Ireland in consideration for the cash payments outlined above and a 40% investment in Dairy Ireland.

 

 

Results of discontinued operations

The following table details the results of discontinued operations included within the condensed Group income statement:

 

 

Notes

Half year

2017

€'000

Half year

2016

€'000

Year

2016

€'000

Revenue

 

358,429

357,383

616,843

Cost of goods sold

 

(284,945)

(278,287)

(469,604)

Gross profit

 

73,484

79,096

147,239

Selling and distribution expenses

 

(41,766)

(43,974)

(83,368)

Administration expenses

 

(20,642)

(16,865)

(32,071)

Earnings before interest tax and amortisation (EBITA)

 

11,076

18,257

31,800

Intangible asset amortisation

 

(693)

(1,191)

(2,277)

Operating profit

 

10,383

17,066

29,523

Finance costs

10

(72)

-

(6)

Share of results of Equity accounted investees

 

349

1,245

1,615

Exceptional items

7

(12,991)

(828)

(3,038)

(Loss)/profit before tax

 

(2,331)

17,483

28,094

Income tax credit/(charge) on discontinued operations (including exceptional items)

 

720

(2,208)

(3,619)

 

 

 

 

 

(Loss)/profit from discontinued operations for the period, net of tax

 

(1,611)

15,275

24,475

 

 

 

 

 

Exceptional items from discontinued operations for the period, net of tax

7

(10,879)

(724)

(2,657)

 

 

 

 

 

(Loss)/profit from discontinued operations after tax attributable to:

 

 

 

 

Equity holders of the Parent

 

(1,613)

14,838

24,144

Non-controlling interests

 

2

437

331

 

 

 

 

 

 

 

(1,611)

15,275

24,475

 

Details of the discontinued operation's comprehensive income is included in the condensed Group statement of comprehensive income on page 13.

At 1 July 2017, the disposal group was stated in the Group balance sheet at the lower of its carrying amount and fair value less costs to sell. The valuation technique used in measuring the fair value of the disposal group was based on the contractually agreed terms for the disposal.

 

The following table details the assets and liabilities classified as held for sale in the condensed Group balance sheet:

 

 

 

Notes

1 July

2017

€'000

Assets

 

 

 

 

Property, plant and equipment

 

 

14

113,239

Intangible assets

 

 

14

16,471

Equity accounted investees

 

 

 

12,301

Available for sale financial assets

 

 

 

360

Retirement benefit assets

 

 

8

359

Inventories

 

 

15

42,180

Trade and other receivables

 

 

 

171,751

Cash and cash equivalents

 

 

16

168,595

Assets held for sale

 

 

 

525,256

Liabilities

 

 

 

 

Trade and other payables

 

 

 

243,785

Accruals and sundry creditors

 

 

 

22,532

Financial liabilities

 

 

16

3,539

Retirement benefit obligations

 

 

8

44,547

Liabilities directly associated with the assets held for sale

 

 

 

314,403

 

 

 

 

 

Net assets held for sale

 

 

 

210,853

 

 

 

 

 

The net cash flows of the Group's discontinued operations are as follows:

 

 

Half year

2017

€'000

Half year

2016

€'000

Year

2016

€'000

Operating net cash (outflow)/inflow

 

(32,058)

(32,287)

22,637

Investing cash inflow/(outflow)

 

149,448

(6,561)

(11,369)

Financing cash outflow

 

(1,382)

-

(933)

 

 

 

 

 

Cash generated/(absorbed) during the period

 

116,008

(38,848)

10,335

 

10.   Finance income and costs

 

Notes

Half year

2017

€'000

Half year

2016

€'000

Year

2016

€'000

Finance income

 

 

 

 

Interest income

 

1,545

1,160

2,377

 

 

 

 

 

Total finance income

 

1,545

1,160

2,377

 

 

 

 

 

Finance costs

 

 

 

 

Bank borrowing costs

 

(4,038)

(3,616)

(6,048)

Facility fees

 

(1,274)

(1,325)

(2,698)

Unwinding of discounts

18

(66)

(73)

(271)

Finance lease costs

 

(103)

(38)

(35)

Net interest expense on currency swaps

 

(180)

(16)

(126)

Finance cost of private debt placement

 

(7,707)

(7,664)

(16,000)

 

 

 

 

 

Total finance costs

 

(13,368)

(12,732)

(25,178)

 

 

 

 

 

Net finance costs

 

(11,823)

(11,572)

(22,801)

Net finance costs - Continuing operations

 

(11,751)

(11,572)

(22,795)

Net finance costs - Discontinued operations

9

(72)

-

(6)

 

Net finance costs do not include borrowing costs of €0.5 million (HY 2016: €0.5 million, FY 2016: €1.5 million) attributable to the acquisition, construction or production of a qualifying asset which have been capitalised.

Interest is capitalised at the Group's average interest rate for the period of 3.5% (HY 2016: 3.6%). Interest income includes the interest on loans to related parties of €0.3 million (HY 2016: €0.3 million, FY 2016 €0.7 million, note 21).

 

Discontinued operations

Finance costs of €0.1 million were incurred within discontinued operations (note 9).

No borrowing costs attributable to the acquisition, construction or production of a qualifying asset have been capitalised within discontinued operations (note 9) in HY 2017, (FY 2016 €0.2 million).

 

11.   Income taxes

Continuing operations

The Group's income tax charge after exceptional items of €20.5 million (HY 2016: €17.8 million) for continuing operations has been prepared based on the Group's best estimate of the weighted average tax rate that is expected for the full financial year.

 

Discontinued operations

The Group's income tax credit after exceptional items of €0.7 million (HY 2016: €2.2 million charge) for discontinued operations is outlined in note 9.

 

 

12.   Dividends

 

Notes

Half year

2017

€Cent

 per share

Half year

2016

€Cent per

share

Full year

2016

€Cent per

share

Dividends per ordinary share are as follows:

 

 

 

 

Final dividend for the year ended 31 December 2016

(a)

7.94

-

7.94

 

 

 

 

 

Interim dividend for the year ended 30 December 2017

(b)

5.91

-

-

Interim dividend for the year ended 31 December 2016

(c)

-

5.37

5.37

 

 

 

 

 

 

 

13.85

12.59

13.31

 

(a)   On 28 April 2017 a final dividend for the year ended 31 December 2016 of 7.94 cent per share (total €23.5 million) was paid.

(b)   An interim dividend of 5.91 cent per share, which amounts to €17.5 million, will be paid on 6 October 2017 to shareholders on the register of members at 25 August 2017, the record date. If a shareholder's registered address is in the UK, the payment will be in GBP unless the shareholder elects otherwise. All other payments will be in euro. These interim financial statements do not reflect this interim dividend. There are no income tax consequences for the Company in respect of dividends proposed prior to issuance of the interim financial statements.

(c)   On 7 October 2016 an interim dividend for the year ended 31 December 2016 of 5.37 cent per share (total €15.9 million) was paid.

        On 29 April 2016 a final dividend for the year ended 2 January 2016 of 7.22 cent per share (total €21.3 million) was paid.

 

13.   Earnings Per Share

Basic

Basic Earnings Per Share is calculated by dividing the net profit attributable to the equity holders of the Company by the weighted average number of ordinary shares in issue during the period, excluding ordinary shares purchased by the Group and held as own shares.

 

 

 

Re-presented *

 

Half year

2017

Half year

2016

Year

2016

Profit after tax attributable to equity holders of the Company (€'000) - Continuing operations

116,545

94,526

187,680

Weighted average number of ordinary shares in issue

295,021,165

295,127,674

295,130,809

 

 

 

 

Basic Earnings Per Share (cent) - Continuing operations

39.50

32.03

63.59

 

 

 

 

(Loss)/profit after tax attributable to equity holders of the Company (€'000) - Discontinued operations

(1,613)

14,838

24,144

Weighted average number of ordinary shares in issue

295,021,165

295,127,674

295,130,809

 

 

 

 

Basic Earnings Per Share (cent) - Discontinued operations

(0.54)

5.03

8.18

 

 

 

 

Total Basic Earnings Per Share (cent)

38.96

37.06

71.77

 

Diluted

Diluted Earnings Per Ordinary Share is calculated by adjusting the weighted average number of ordinary shares in issue to assume conversion of all potential dilutive ordinary shares. Share options and share awards are the Company's only potential dilutive ordinary shares. Share awards, which are performance based, are treated as contingently issuable shares because their issue is contingent upon satisfaction of specified performance conditions in addition to the passage of time. These contingently issuable ordinary shares are excluded from the computation of diluted Earnings Per Share where the exercise conditions have not been satisfied as at the end of the reporting period.

 

 

Re-presented *

 

Half year

2017

Half year

2016

Year

2016

Weighted average number of ordinary shares in issue

295,021,165

295,127,674

295,130,809

Shares deemed to be issued for no consideration in respect of:

 

 

 

Share awards

817,796

1,090,798

955,421

Share options

29,992

34,191

33,896

Weighted average number of shares used in the calculation of diluted Earnings Per Share

295,868,953

296,252,663

296,120,126

 

 

 

 

Diluted Earnings Per Share (cent)

 

 

 

Continuing operations

39.39

31.91

63.38

Discontinued operations

(0.54)

5.01

8.15

 

 

 

 

 

38.85

36.92

71.53

 

 

 

Adjusted Earnings Per Share (Non- IFRS information)

Adjusted Earnings Per Share is a non- IFRS performance measure and is calculated on the profit after tax attributable to equity holders of the Company, before net exceptional items and intangible asset amortisation (excluding software amortisation) net of related tax. Adjusted Earnings Per Share is considered to be more reflective of the Group's overall underlying performance, and reflects the metrics used by the Group to measure profitability and financial performance. Refer to Glossary of KPI's and non-IFRS performance measures.

Pro-forma Adjusted Earnings Per Share (Non- IFRS information)

Pro-forma Adjusted Earnings Per Share is a non- IFRS performance measure and is calculated on the profit attributable to equity holders of the Company from continuing operations plus the Group's share (40%) of the profits after tax for Dairy Ireland and related assets before exceptional items and amortisation of intangible assets (excluding software amortisation) net of related tax. Refer to Glossary of KPI's and non-IFRS performance measures.

 

14.   Property, plant and equipment, intangible assets & capital committments

Property, plant and equipment

During the six month period to 1 July 2017 the Group spent €23.9 million (HY 2016: €34.5 million) on additions to property, plant and equipment. In addition €7.5 million was recognised as part of business combinations during the period (note 24).

 

Discontinued operations and assets held for sale:

The Group classified the following assets within assets held for sale:

 

Notes

Land and buildings

€'000

Plant and equipment

€'000

Motor vehicles

€'000

Total

€'000

Cost

 

82,179

169,649

7,137

258,965

Accumulated depreciation and impairment

 

(27,993)

(110,968)

(6,765)

(145,726)

 

 

 

 

 

 

Carrying amount classified within assets held for sale

9

54,186

58,681

372

113,239

 

Included in the carrying amount classified within assets held for sale was:

·      Depreciation expense of €4.0 million charged to the condensed Group income statement - Discontinued operations during the period.

·      Impairment charge of €8.1 million charged to the condensed Group income statement - Discontinued operations during the period.

·      Assets under construction at the reporting date amounted to €3.1 million.

 

The net carrying amount in respect of assets held under finance leases and accordingly capitalised to property, plant and equipment and classified within assets held for sale was:

 

 

 

 

Plant and equipment

€'000

Total

€'000

Cost

 

 

1,718

1,718

Accumulated depreciation

 

 

(32)

(32)

 

 

 

 

 

Carrying amount classified within assets held for sale

 

 

1,686

1,686

 

Intangible assets

During the six month period to 1 July 2017, as part of the business combinations (note 24), the Group acquired intangible assets, comprising customer relationships, brands and goodwill amounting to €158.6 million (note 24). In addition further amounts of €9.4 million were capitalised during the period (HY 2016: €7.2 million).

 

Discontinued operations and assets held for sale

The Group classified the following assets within assets held for sale:

 

 

Notes

Goodwill

€'000

Brands & other intangibles

€'000

Software

costs

€'000

Total

€'000

Cost

 

 

10,764

12,500

28,838

52,102

Accumulated amortisation and impairment

 

 

-

(8,397)

(27,234)

(35,631)

 

 

 

 

 

 

 

Carrying amount classified within assets held for sale

 

9

10,764

4,103

1,604

16,471

 

Brands and other intangibles

 

 

Brands

€'000

Customer relationships

€'000

Total brands

and other

intangibles

€'000

Cost

 

 

9,900

2,600

12,500

Accumulated amortisation and impairment

 

 

(6,077)

(2,320)

(8,397)

 

 

 

 

 

 

Carrying amount classified within assets held for sale

 

 

3,823

280

4,103

 

 

Included in the carrying amount of intangible assets classified within assets held for sale was:

·      Amortisation expense of €0.7 million charged to the condensed Group income statement - Discontinued operations during the period.

·      The average remaining amortisation period for software costs is 2 years.

·      There were no internally generated costs capitalised in software costs during the period.

·      There were no staff costs capitalised in development costs during the period.

·      There was no impairment charged to the condensed Group income statement - Discontinued operations during the period.

 

Capital commitments

Continuing operations

At 1 July 2017 the Group had entered into contractual commitments for the acquisition of property, plant and equipment amounting to €3.3 million (HY 2016: €11.3 million). During the six month period the Group capitalised borrowing costs amounting to €0.5 million (HY 2016: €0.5 million) on qualifying assets (note 10).

 

15.   Inventories

The cost of inventories recognised as an expense includes €2.0 million (HY 2016: €1.1 million), being the write-downs of inventory to net realisable value €2.4 million and reversal of such write downs of €0.4 million (HY 2016: write-downs of net realisable value €2.5 million and reversal of such write downs €1.4 million).

Discontinued operations and assets held for sale

Included in the amount classified within assets held for sale is inventories of €42.2 million (note 9). Inventories carried at net realisable value is €16.5 million.

The amount written off as an expense to the condensed Group income statement - Discontinued operations in respect of inventories carried at net realisable value was €0.02 million (HY 2016: €0.03 million).

The cost of inventories recognised as an expense during the period in cost of goods sold in respect of discontinued operations was €252.3 million, (HY 2016: €247.4 million).

 

16.   Financial liabilities

 

 

1 July

2017

€'000

2 July

2016

€'000

31 December

2016

€'000

Non-current

 

 

 

 

Bank borrowings

 

558,015

380,187

313,999

Private debt placement

 

284,788

291,872

308,320

Finance lease liabilities

 

1,876

349

1,854

 

 

844,679

672,408

624,173

 

 

 

 

 

Current

 

 

 

 

Bank overdraft and borrowings

 

61,128

66,490

31,638

Finance lease liabilities

 

465

351

602

 

 

61,593

66,841

32,240

 

 

 

 

 

Total financial liabilities

 

906,272

739,249

656,413

 

The financial liabilities are recognised on the condensed Group balance sheet as follows:

 

 

Continuing

operations

€'000

Held

for sale

€'000

Total

€'000

Non-current liabilities

 

842,096

2,583

844,679

Current liabilities

 

60,637

956

61,593

 

 

 

 

 

Total financial liabilities

 

902,733

3,539

906,272

 

Cash and cash equivalents are recognised on the condensed Group balance sheet as follows:

 

 

Continuing

operations

€'000

Held

for sale

€'000

Total

€'000

Cash and cash equivalents

 

129,314

168,595

297,909

 

The maturity of non-current borrowings is €0.3 million (HY 2016: €0.3 million, 2016: €0.3 million) in 1 to 2 years, €843.2 million (HY 2016: €672.1  million, 2016: €622.7 million) in 2 to 5 years and €1.2 million (HY 2016: €nil, 2016: €1.2 million) in more than 5 years.

 

 

Cash and cash equivalents include the following for the purposes of the condensed statement of cash flows at the reporting date:

 

1 July

2017

€'000

2 July

2016

€'000

31 December

2016

€'000

Cash and cash equivalents

297,909

94,909

218,855

Bank overdraft

(61,128)

(66,490)

(31,638)

 

 

 

 

 

236,781

28,419

187,217

 

Financial liabilities include the following for the purposes of the condensed statement of cash flows at the reporting date:

 

1 July

2017

€'000

2 July

2016

€'000

31 December

2016

€'000

Borrowings

906,272

739,249

656,413

Bank overdraft included as part of cash and cash equivalents

(61,128)

(66,490)

(31,638)

 

 

 

 

 

845,144

672,759

624,775

 

The Group has the following undrawn borrowing facilities at the reporting date:

 

1 July

2017

€'000

2 July

2016

€'000

31 December

2016

€'000

Expiring within 1 year

98,313

97,790

105,707

Expiring beyond 1 year

158,182

337,781

406,226

 

 

 

 

 

256,495

435,571

511,933

 

Movement in net borrowings in the period is analysed as follows:

 

1 July

2017

€'000

2 July

2016

€'000

31 December

2016

€'000

At the beginning of the period

437,558

584,243

584,243

Net drawdown of borrowings

203,616

69,361

(167,522)

Exchange translation adjustment

(32,811)

(9,264)

20,837

 

 

 

 

At the end of the period

608,363

644,340

437,558

 

17.   Financial risk management

The conduct of its ordinary business operations necessitates the Group holding financial instruments. The Group has exposure to the following risks arising from financial instruments: currency risk, interest rate risk, price risk, liquidity risk, cashflow risk, and credit risk. The interim financial statements do not include all financial risk management information and disclosures required in the annual financial statements, and should be read in conjunction with the 2016 Annual Report.

There have been no changes to the risk management procedures or policies since 31 December 2016.

Fair value and fair value estimation

The following table below analyses the carrying value and fair values of the Group's financial assets and liabilities as at the reporting date.

The amounts presented at 1 July 2017 include the financial assets and financial liabilities classified as held for sale.

 

 

Notes

1 July 2017

 

2 July 2016

 

31 December 2016

 

 Carrying value

€'000

Fair value

€'000

 

 Carrying value

€'000

Fair value

€'000

 

 Carrying value

€'000

Fair value

€'000

Financial assets

 

 

 

 

 

 

 

 

 

Trade receivables - net

 

384,805

-

 

351,162

-

 

288,258

-

Receivables from Equity accounted investees

 

86,781

-

 

8,042

-

 

7,174

-

Receivables from other related parties

 

366

-

 

712

-

 

402

-

Loans to Equity accounted investees

 

14,973

-

 

14,650

-

 

14,650

-

Available for sale financial assets at amortised cost

 

749

-

 

884

-

 

734

-

Available for sale financial assets at fair value

 

11,556

11,556

 

9,221

9,221

 

9,201

9,201

Derivative financial instruments

 

1,459

1,459

 

1,012

1,012

 

1,182

1,182

Cash and cash equivalents

16

297,909

-

 

94,909

-

 

218,855

-

 

 

 

 

 

 

 

 

 

 

Total financial assets

 

798,598

 

 

480,592

 

 

540,456

 

 

 

 

 

 

Notes

1 July 2017

 

2 July 2016

 

31 December 2016

 

 Carrying value

€'000

Fair value

€'000

 

 Carrying value

€'000

Fair value

€'000

 

 Carrying value

€'000

Fair value

€'000

Financial liabilities

 

 

 

 

 

 

 

 

 

Trade payables

 

(234,300)

-

 

(190,673)

-

 

(266,794)

-

Amounts due to Equity accounted investees

 

(199,907)

-

 

(15,068)

-

 

(8,561)

-

Amounts due to other related parties

 

(21)

-

 

(29)

-

 

(798)

-

Financial liabilities - non-current

16

(844,679)

(863,177)

 

(672,408)

(705,814)

 

(624,173)

(644,173)

Financial liabilities - current

16

(61,593)

-

 

(66,841)

-

 

(32,240)

-

Derivative financial instruments

 

(245)

(245)

 

(3,896)

(3,896)

 

(1,180)

(1,180)

 

 

 

 

 

 

 

 

 

 

Total financial liabilities

 

(1,340,745)

 

 

(948,915)

 

 

(933,746)

 

 

Group's fair valuation process

The Group's finance department includes a team that performs the valuations of financial assets and liabilities required for financial reporting purposes, including level 3 fair values.

The valuation team reports directly to the Group Finance Director who in turn reports to the Audit Committee. Discussions of valuation processes and results are held between the Group Finance Director and the Audit Committee.

Changes in level 2 and level 3 fair values are analysed at each reporting date. As part of this discussion, the valuation team presents a report that explains the reasons for fair value movements.

 

Fair value of financial assets and liabilities carried at fair value

In accordance with IFRS 13 'Fair Value Measurements', the Group has disclosed the fair value of instruments by the following fair value measurement hierarchy:

·      quoted prices (unadjusted) in active markets for identical assets and liabilities (level 1);

·      inputs, other than quoted prices included in level 1, that are observable for the asset and liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (level 2); and

·      inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level 3).

 

The following table presents the Group's assets and liabilities, which are measured at fair value:

 

Notes

Fair value hierarchy

1 July

2017

€'000

2 July

2016

€'000

31 December

2016

€'000

Assets

 

 

 

 

 

Cross currency swap - fair value through income statement

(a)

Level 2

757

-

-

Foreign exchange contracts - cashflow hedges

(b)

Level 2

385

-

499

Foreign exchange contracts - fair value through income statement

(a)

Level 2

27

-

-

Commodity futures - cashflow hedges

(c)

Level 2

33

84

180

Commodity futures - fair value hedges

(c)

Level 2

257

928

503

Available for sale financial assets - equity securities - listed

(d)

Level 1

183

132

162

Available for sale financial assets - equity securities - One51 plc

(e)

Level 2

5,816

5,071

4,027

Available for sale financial assets - equity securities - The BDO Development Capital Fund

(f)

Level 2

3,660

1,040

2,034

Available for sale financial assets - Ornua Co-Operative Ltd

(g)

Level 2

1,897

2,978

2,978

 

 

 

 

 

 

Total assets

 

 

13,015

10,233

10,383

 

 

 

 

 

 

Liabilities

 

 

 

 

 

Cross currency swap - fair value through income statement

(a)

Level 2

-

(3,299)

(1,113)

Foreign exchange contracts - cashflow hedges

(b)

Level 2

(219)

(593)

(63)

Commodity futures - cashflow hedges

(c)

Level 2

(26)

(4)

(4)

 

 

 

 

 

 

Total liabilities

 

 

(245)

(3,896)

(1,180)

 

 

(a)   Fair value is determined by reference to the current foreign exchange rates at the end of the reporting period.

(b)   The fair value is estimated by discounting the difference between the contractual forward exchange rate and the current forward exchange rate (from observable forward exchange rates at the end of the reporting period). The effect of discounting was insignificant in 2017 and 2016.

(c)   The fair value is estimated by discounting the difference between the contractual forward commodity price and the current forward commodity price (from observable commodity forward prices at the end of the reporting period) and contract forward prices. The effect of discounting was insignificant in 2017 and 2016.

(d)   Fair value is determined by reference to the stock exchange quoted bid prices at the end of the reporting period.

(e)   The unlisted equity shares in One51 plc are currently traded on an informal 'grey' market. Fair value is determined by reference to these published prices.

(f)    The unlisted investment in the BDO Development Capital Fund is fair valued by reference to the latest quarterly report available to the limited partners.

(g)   The fair value is estimated by discounting the expected future cashflows using current interest rates.

 

There were no transfers between levels 1 and 2 during the period. There were no changes in valuation techniques during the periods. The Group did not hold any level 3 financial assets or liabilities at the reporting dates.

 

Fair value of financial assets and liabilities carried at amortised cost

With the exception of those financial liabilities outlined below, it is considered that the carrying amounts of financial assets and financial liabilities recognised at amortised cost in the interim financial statements approximate their fair value.

 

The following table shows the fair value hierarchy of the financial liabilities not measured at fair value in the condensed Group balance sheet but for which fair value disclosures are required:

 

 

 

1 July 2017

 

2 July 2016

 

31 December 2016

 

Notes

Fair value hierarchy

Carrying amount

€'000

Fair value

€'000

 

Carrying

 amount

€'000

Fair value

€'000

 

Carrying

 amount

€'000

Fair value

€'000

Non-current financial liabilities

(a)

Level 2

844,679

863,177

 

672,408

705,814

 

624,173

644,173

 

(a)   Fair value is estimated by discounting future contractual cashflows using current market interest rates (from observable interest rates at the end of the reporting period) that are available to the Group for similar financial instruments.

 

18.   Provisions

 

Restructuring

€'000

note (b)

Legal

claims

€'000

note (c)

Property & lease commitments

€'000

note (d)

Operational

 €'000

note (e)

Regulatory

 and related provisions

€'000

note (f)

Total

€'000

 

At 31 December 2016

5,523

7,507

5,078

16,970

-

35,078

 

 

 

 

 

 

 

Reclassification (a)

-

-

-

(15,558)

15,558

-

Provided for in the year (g)

55

210

250

-

2,394

2,909

Utilised in the year

(2,570)

(7)

-

-

-

(2,577)

Unused amounts reversed

(38)

(4,271)

-

(337)

-

(4,646)

Exchange differences

(79)

(316)

-

(45)

(16)

(456)

Unwinding of discounts

-

-

(66)

-

-

(66)

Classified within liabilities held for sale

(1,488)

(510)

(1,050)

-

-

(3,048)

 

 

 

 

 

 

 

At 1 July 2017

1,403

2,613

4,212

1,030

17,936

27,194

 

 

 

 

 

 

 

Non-current

-

-

-

-

17,368

17,368

Current

1,403

2,613

4,212

1,030

568

9,826

 

 

 

 

 

 

 

 

1,403

2,613

4,212

1,030

17,936

27,194

 

(a)   Certain reclassifications have taken place in the period to better reflect the nature of the provisions.

(b)   The restructuring provision relates mainly to termination payments agreed as part of the rationalisation programme in Dairy Ireland, the organisation redesign programme in Glanbia Nutritionals and the acquisition integration project in Glanbia Performance Nutrition. The provision is expected to be fully utilised during 2017. The amount provided in the period is recognised as an exceptional item in the condensed Group income statement. 

(c)   The legal claims provision represents legal claims brought against the Group, none of which are individually material to the Group. The balance at 1 July 2017 is expected to be utilised during 2018. In the opinion of the Directors, after taking appropriate legal advice, the outcome of these legal claims is not expected to give rise to any significant loss beyond the amounts provided for at 1 July 2017.

(d)   The property and lease commitment provision relates to property remediation works and is based on the estimated cost of re-instating two properties to their original condition. It is expected that the provision will be fully utilised within one year.

(e)   The operational provision represents provisions relating to certain insurance claims, product returns and other items. Due to the nature of these items, there is some uncertainty around the amount and timing of payments.

(f)    The regulatory and related provision represents provisions relating to the interest and penalties element of uncertain tax positions and the UK pension provision.

(g)   The total amount provided for in the year of €2.9 million includes €0.5 million in relation to discontinued operations.

 

19.   Share capital and share premium

 

 

 

Number of

shares

(thousands)

Ordinary

shares

€'000

Share

premium

€'000

Total

€'000

At 2 January 2016

 

 

296,031

17,761

87,609

105,370

Shares issued

 

 

10

1

22

23

 

 

 

 

 

 

 

At 2 July 2016 and 31 December 2016

 

 

296,041

17,762

87,631

105,393

 

 

 

 

 

 

 

At 1 January 2017

 

 

296,041

17,762

87,631

105,393

Shares issued

 

 

5

-

11

11

 

 

 

 

 

 

 

At 1 July 2017

 

 

296,046

17,762

87,642

105,404

 

The total authorised number of ordinary shares is 350 million shares (HY 2016 and FY 2016: 350 million shares) with a par value of €0.06 per share (HY 2016 and FY 2016: €0.06 per share). All issued shares are fully paid, carry one vote per share and a right to dividends.

During the period ended 1 July 2017 5,000 (HY 2016 and FY 2016: 10,000) of the 2002 Long Term Incentive Plan shares were exercised with exercise proceeds of €0.01 million (HY 2016 and FY 2016: €0.02 million). The exercise price was €2.29 (HY 2016 and FY 2016: €2.29) per share.

 

20.   Other reserves

Half year 2017

Capital and merger reserve

€'000

Currency reserve

€'000

Hedging reserve

€'000

Available for sale financial asset reserve

€'000

Own

 Shares

€'000

Share based payment reserve

€'000

Total

€'000

Balance at 31 December 2016

115,973

210,320

1,034

2,513

(15,185)

16,962

331,617

Currency translation differences

 

 

 

 

 

 

 

- Continuing operations

-

(93,520)

-

-

-

-

(93,520)

- Discontinued operations

-

(45)

-

-

-

-

(45)

Net investment hedge

-

7,132

-

-

-

-

7,132

Revaluation of interest rate swaps

-

-

(1,131)

-

-

-

(1,131)

Foreign exchange contracts

-

-

110

-

-

-

110

Revaluation of forward commodity contracts

-

-

(145)

-

-

-

(145)

Revaluation of available for sale financial assets

-

-

-

2,820

-

-

2,820

Deferred tax on fair value movements

-

-

488

(1,097)

-

-

(609)

Transfers to income statement:

 

 

 

 

 

 

 

Foreign exchange contracts

-

-

873

-

-

-

873

Forward commodity contracts

-

-

(27)

-

-

-

(27)

Cost of share based payments

-

-

-

-

-

5,156

5,156

Transfer on exercise, vesting or expiry of share based payments

-

-

-

-

4,071

(3,017)

1,054

Purchase of own shares

-

-

-

-

(7,436)

-

(7,436)

 

 

 

 

 

 

 

 

Balance at 1 July 2017

115,973

123,887

1,202

4,236

(18,550)

19,101

245,849

 

 

Half year 2016

Capital and merger reserve

€'000

Currency reserve

€'000

Hedging reserve

€'000

Available for sale financial asset reserve

€'000

Own

 Shares

€'000

Share based payment reserve

€'000

Total

€'000

Balance at 2 January 2016

115,973

186,251

(660)

3,391

(13,238)

14,708

306,425

Currency translation differences

 

 

 

 

 

 

 

- Continuing operations

-

(32,788)

-

-

-

-

(32,788)

- Discontinued operations

-

(248)

-

-

-

-

(248)

Net investment hedge

-

2,015

-

-

-

-

2,015

Revaluation of interest rate swaps

-

-

27

-

-

-

27

Foreign exchange contracts - change in fair value

-

-

(657)

-

-

-

(657)

Forward commodity contracts - change in fair value

-

-

71

-

-

-

71

Revaluation of available for sale financial assets

-

-

-

(617)

-

-

(617)

Deferred tax on fair value movements

-

-

(141)

204

-

-

63

Transfers to income statement:

 

 

 

 

 

 

 

Foreign exchange contracts

-

-

(307)

-

-

-

(307)

Forward commodity contracts

-

-

360

-

-

-

360

Cost of share based payments

-

-

-

-

-

5,693

5,693

Transfer on exercise, vesting or expiry of share based payments

-

-

-

-

8,166

(5,485)

2,681

Purchase of own shares

-

-

-

-

(10,318)

-

(10,318)

 

 

 

 

 

 

 

 

Balance at 2 July 2016

115,973

155,230

(1,307)

2,978

(15,390)

14,916

272,400

 

 

Year 2016

Capital and merger reserve

€'000

Currency reserve

€'000

Hedging reserve

€'000

Available for sale financial asset reserve

€'000

Own

 Shares

€'000

Share based payment reserve

€'000

Total

€'000

Balance at 2 January 2016

115,973

186,251

(660)

3,391

(13,238)

14,708

306,425

Currency translation differences

 

 

 

 

 

 

 

- Continuing operations

-

27,323

-

-

-

-

27,323

- Discontinued operations

-

(284)

-

-

-

-

(284)

Net investment hedge

-

(2,970)

-

-

-

-

(2,970)

Revaluation of interest rate swaps

-

-

3,393

-

-

-

3,393

Foreign exchange contracts - change in fair value

-

-

(488)

-

-

-

(488)

Forward commodity contracts - change in fair value

-

-

(111)

-

-

-

(111)

Revaluation of available for sale financial assets

-

-

-

(1,310)

-

-

(1,310)

Deferred tax on fair value movements

-

-

(1,483)

432

-

-

(1,051)

Transfers to income statement:

 

 

 

 

 

 

 

Foreign exchange contracts

-

-

24

-

-

-

24

Forward commodity contracts

-

-

359

-

-

-

359

Cost of share based payments

-

-

-

-

-

7,712

7,712

Transfer on exercise, vesting or expiry of share based payments

-

-

-

-

8,466

(5,458)

3,008

Purchase of own shares

-

-

-

-

(10,413)

-

(10,413)

 

 

 

 

 

 

 

 

Balance at 31 December 2016

115,973

210,320

1,034

2,513

(15,185)

16,962

331,617

 

(a)   Capital reserve

Within the capital and merger reserve is a capital reserve of €2.8 million which comprises of a capital redemption reserve and a capital reserve which arose on the re-nominalisation of the Company's share capital on conversion to the euro.

 

(b)   Merger reserve

The merger reserve (€113.2 million) arose on the merger of Waterford Foods plc now named Waterford Foods DAC and Avonmore Foods plc now named Glanbia plc in 1997. The merger reserve adjustment represents the difference between the nominal value of the issued share capital of Waterford Foods DAC and the fair value of the shares issued by Glanbia plc.

 

(c)   Currency reserve

The currency reserve reflects the foreign exchange gains and losses arising from the translation of the net investment in foreign operations and on borrowings designated as hedges of the net investment which are taken to equity. When an entity is sold the accumulated foreign currency gains and losses are recycled to the income statement.

 

(d)   Hedging reserve

The hedging reserve reflects the effective portion of changes in the fair value of derivatives that are designated and qualify as cashflow hedges. Amounts accumulated in the hedging reserve are recycled to the income statement in the periods when the hedged item affects income or expense. The hedging reserve also reflects the Group's share of the effective portion of changes in the fair value of derivatives that are entered into by the Group's Equity accounted investees.

 

The following table analyses the movements in the hedging reserve:

 

 

Half year 2017

 

Half year 2016

 

Year 2016

 

Equity accounted investees €'000

Group

€'000

Total hedging reserve

€'000

 

Equity accounted investees €'000

Group

€'000

Total hedging reserve

€'000

 

Equity accounted investees €'000

Group

€'000

Total hedging reserve

€'000

Balance at the beginning of the period

546

488

1,034

 

(536)

(124)

(660)

 

(536)

(124)

(660)

Revaluation of interest rate swaps

(1,131)

-

(1,131)

 

27

-

27

 

3,393

-

3,393

Foreign exchange contracts - change in fair value

380

(270)

110

 

(293)

(364)

(657)

 

(924)

436

(488)

Revaluation of forward commodity contracts - change in fair value

24

(169)

(145)

 

22

49

71

 

(287)

176

(111)

Transfer to income statement

 

 

 

 

 

 

 

 

 

 

 

- Foreign exchange contracts

872

1

873

 

(273)

(34)

(307)

 

58

(34)

24

- Forward commodity contracts

(27)

-

(27)

 

111

249

360

 

103

256

359

Deferred tax on fair value movements

388

100

488

 

-

(141)

(141)

 

(1,261)

(222)

(1,483)

 

 

 

 

 

 

 

 

 

 

 

 

Balance at the end of the period

1,052

150

1,202

 

(942)

(365)

(1,307)

 

546

488

1,034

 

(e)   Available for sale financial asset reserve

Unrealised gains and losses arising from changes in the fair value of available for sale financial assets are recognised in the available for sale financial asset reserve. When such available for sale financial assets are sold or impaired, the accumulated fair value adjustments are recycled to the condensed Group income statement.

 

(f)    Own Shares

The own shares reserve reflects the ordinary shares of Glanbia plc which are held in trust for employee incentive plans.

 

(g)   Share based payment reserve

During 2017 846,961 share awards were granted under the 2008 Long Term Incentive Plan to Executive Directors and certain senior managers in the form of a provisional allocation of shares for which no exercise price is payable.

The share based payment reserve reflects the equity settled share based payment plans in operation by the Group.

Please refer to the 2016 Annual Report for further details.

 

21.   Related party transactions

The Group is controlled by the Society, which holds 33.5% of the issued share capital of Glanbia plc and is the ultimate parent of the Group.

As part of the Dairy Ireland transaction the Society reduced its interest in the Company by approximately 3% and will further reduce its interest to 31.5% of the issued share capital through a spin out.

During the period, dividends of €8.6 million (HY 2016: €7.8 million) were paid to the Society and its wholly owned subsidiaries based on their shareholding in Glanbia plc.

During the six months to 1 July 2017, sales to related parties amounted to €21.4 million (HY 2016: €16.6 million), purchases from related parties amounted to €46 million (HY 2016: €35.2 million). Receivables from related parties were €102.1 million (HY 2016: €23.4 million) and payables to related parties were €199.9 million (HY 2016: €15.1 million). Included in receivables from related parties is €76.7 million and in payables to related parties is €188.7 million both in relation to the Dairy Ireland transaction (note 9). The remaining related party transactions relate primarily to trading between the Group, Southwest Cheese Company LLC, Glanbia Ireland DAC (formerly known as Glanbia Ingredients Ireland DAC) and the Society.

In the opinion of the Directors, other than that disclosed above and in note 9 in respect of the disposal of 60% of Dairy Ireland, there have been no related party transactions, or changes therein, since the year ended 31 December 2016, that have materially affected the Group's financial position or performance during the six months ended 1 July 2017.

 

 

22.   Contingent liabilities

Group bank guarantees amounting to €4.3 million (HY 2016: €4.9 million) are outstanding at 1 July 2017. The Group does not expect any material loss to arise from these guarantees.

The Group has contingent liabilities in respect of legal claims arising in the ordinary course of business. It is not anticipated that any material liability will arise from these contingent liabilities other than those provided for.

 

23.   Cash (absorbed by)/generated from operations

 

 

Notes

Half year

2017

€'000

Half year

2016

€'000

Year

2016

€'000

Profit after tax

 

 

114,934

109,801

212,155

Income taxes

 

 

19,769

20,035

40,639

Net write down of inventories

 

14

2,000

1,100

2,473

Impairment of tangible assets

 

 

-

183

520

Impairment of intangible assets

 

 

-

-

479

Non cash element of exceptional charge

 

 

12,531

4,785

7,051

Share of results of Equity accounted investees

 

 

(22,661)

(12,328)

(27,647)

Depreciation

 

 

26,863

24,588

50,235

Amortisation

 

 

22,528

19,424

39,687

Cost of share based payments

 

20

5,156

5,693

7,712

Difference between pension charge and cash contributions

 

8

(3,434)

(4,008)

(5,921)

Profit/(loss) on disposal of property, plant and equipment

 

 

119

87

(338)

Insurance proceeds

 

 

-

-

1,945

Finance income

 

10

(1,545)

(1,160)

(2,377)

Finance costs

 

10

13,368

12,732

25,178

Amortisation of government grants received

 

 

(128)

(121)

(378)

Cash generated before changes in working capital

 

 

189,500

180,811

351,413

Change in net working capital:

 

 

 

 

 

- (Increase)/decrease in inventory

 

 

(96,506)

8,209

(23,808)

- Increase in short term receivables

 

 

(96,663)

(100,690)

(4,327)

- (Decrease)/increase in short term liabilities

 

 

(50,729)

(32,607)

55,335

- Decrease in provisions

 

 

(6,763)

(2,107)

(4,310)

 

 

 

 

 

 

Cash (absorbed by)/generated from operating activities

 

 

(61,161)

53,616

374,303

 

See note 9 for further information on the cashflows arising within discontinued operations.

 

24.   Business combinations

For the acquisitions completed in 2016 there have been no material revisions, as at the reporting date, of the provisional fair value adjustments since the initial values were established.

The acquisitions completed by the Group during the period were as follows:

On 6 January 2017, the Group acquired 100% of the equity of Grass Advantage LLC (Amazing Grass). Amazing Grass offers plant based organic, GMO free products to lifestyle consumers in the natural, online, food, drug and mass channels in North America. The brand complements the product portfolio of Glanbia Performance Nutrition and offers a strong position in the plant based nutrition market. The goodwill reflects the expectation that the business will continue to generate new customers and new products over time. Goodwill of €40.1 million is not deductible for tax purposes.

On 31 March 2017, the Group acquired 100% of the equity of B&F Vastgoed B.V. (Body & Fit). Body & Fit is a leading direct to consumer online branded business focused on performance nutrition. This acquisition offers Glanbia Performance Nutrition a direct presence in the rapidly growing direct to consumer channel and the goodwill attributable to this acquisition is reflective of this. Goodwill of €31.5 million is not deductible for tax purposes.  

 

 

Details of the net assets acquired and goodwill arising from the acquisition are as follows:

 

 

 

 

Amazing Grass

€'000

Body&Fit

€'000

Total

€'000

Purchase consideration

 

 

 

124,541

43,571

168,112

Less: Fair value of assets acquired

 

 

 

(84,396)

(12,058)

(96,454)

 

 

 

 

 

 

 

Goodwill

 

 

 

40,145

31,513

71,658

 

The total purchase consideration is as follows:

 

 

 

 

Amazing Grass

€'000

Body&Fit

€'000

Total

€'000

Purchase consideration - cash paid

 

 

 

125,133

44,665

169,798

Refund due from vendor

 

 

 

(592)

(1,094)

(1,686)

 

 

 

 

 

 

 

Purchase consideration

 

 

 

124,541

43,571

168,112

 

The fair value of assets and liabilities arising from the acquisition are as follows:

 

 

 

Notes

Amazing Grass

€'000

Body&Fit

€'000

Total

€'000

Property, plant and equipment

 

 

14

181

7,287

7,468

Intangible assets - customer relationships

 

 

14

38,748

695

39,443

Intangible assets - brands

 

 

14

38,717

8,773

47,490

Inventories

 

 

 

7,466

10,957

18,423

Trade and other receivables

 

 

 

6,350

1,095

7,445

Trade and other payables

 

 

 

(3,866)

(7,027)

(10,893)

Liabilities settled at completion

 

 

 

-

(7,358)

(7,358)

Cash and cash equivalents

 

 

 

1,643

3

1,646

Deferred tax liability

 

 

 

(4,843)

(2,367)

(7,210)

 

 

 

 

 

 

 

Fair value of assets acquired

 

 

 

84,396

12,058

96,454

 

The fair value of Amazing Grass's trade and other receivables at the acquisition date amounted to €6.4 million. The gross contractual amount for trade receivables due is €6.6 million.

The fair value of Body & Fit's trade and other receivables at the acquisition date amounted to €1.1 million which equates to the gross contractual amount.

The initial assignment of fair values to identifiable net assets acquired has been performed on a provisional basis. Any amendments to these fair values within the 12 month timeframe from the date of acquisition will be disclosed in the 2017 Annual Report as stipulated by IFRS 3 'Business Combinations'.

Total revenue from acquisitions in the period amounted to €32 million. Total revenue for the Group excluding acquisitions from continuing operations for the period amounts to €1,153.7 million. There has been no material change to the Group profit as a result of acquisitions. Due to the timing of the acquisitions close to the start of the period there is no material difference between the numbers set out above and the impact to the group if these acquisitions had been at the beginning of the period.

 

25.   Events after the reporting period

As outlined in note 9 'Discontinued operations and assets and liabilities classified as held for sale', the Group completed its disposal of Dairy Ireland to Glanbia Co-operative Society Limited on 2 July 2017.

On 9 August 2017, the Directors declared an interim dividend of 5.91 cent per share amounting to €17.5 million approximately (note 12).

Other than as described above there have been no material events subsequent to the end of the interim period 1 July 2017 which require disclosure in this report.

 

26.   Information

Copies of this half yearly financial report are available for download from the Group's website at www.glanbia.com.

 

 

glossary  

Key peRformance indicators and non- ifrs performance measures

 

Glossary of KPI's and Non- IFRS performance measures

The Group reports certain performance measures that are not defined under IFRS but which represent additional measures used by the Board of Directors and the Glanbia Operating Executive in assessing performance and for reporting both internally and to shareholders and other external users. The Group believes that the presentation of these non-IFRS performance measures provides useful supplemental information which, when viewed in conjunction with our IFRS financial information, provides readers with a more meaningful understanding of the underlying financial and operating performance of the Group.

None of these non-IFRS performance measures should be considered as an alternative to financial measures drawn up in accordance with IFRS.

The principal non-IFRS performance measures used by the Group are:

 

Relevant for

HY 2017

Relevant for

FY 2017

Glossary reference

Constant currency

G 1

Total Group

G 2

Revenue

G 3

EBITA

G 4

EBITA margin

G 5

Adjusted Earnings Per Share

G 6

Pro-forma Adjusted Earnings Per Share

G 7

Financing Key Performance Indicators

G 8

Exceptional items

G 9

Volume growth/decline

 

G 10

Pricing growth/decline

 

G 11

Like for like branded revenue growth/decline

 

G 12

Effective tax rate

G 13

Capital expenditure - Business sustaining and strategic

G 14

EBITDA

 

G 15

Average interest rate

 

G 16

Operating working capital

 

 

Total shareholder return

 

 

Return on capital employed

 

 

Operating cashflow and free cashflow

 

 

 

The principal non-IFRS performance measures relevant to the interim period are defined below with a reconciliation of these measures to IFRS measures where applicable. Certain performance measures are not considered relevant by the Group for the interim period and therefore these reconciliations have been excluded from the interim glossary.

 

G 1. Constant currency

While the Group reports its results in euro, it generates a significant proportion of its earnings in currencies other than euro, in particular US dollar. Constant currency reporting is used by the Group to eliminate the translational effect of foreign exchange on the Group's results. To arrive at the constant currency year-on-year change, the results for the prior year are retranslated using the average exchange rates for the current year and compared to the current year reported numbers.

The principal average exchange rates used to translate results for as at the reporting dates are set out below:

 

 

USD

 

GBP

Danish

Krone

Exchange rate Euro 1 =

 HY 2017

1.0827

 

0.8603

7.4368

Exchange rate Euro 1 =

 HY 2016

1.1161

 

0.7795

7.4497

Exchange rate Euro 1 =

2016

1.1068

 

0.8194

7.4452

 

All non-IFRS performance measures have been presented on a constant currency basis, where relevant, within this glossary.

Please note that constant currency is not applicable to the Discontinued operations.

 

G 2. Total Group

The Group has a number of strategically important Equity accounted investees (Joint Ventures & Associates) which when combined with the Group's wholly owned businesses give an important indication of the scale and reach of the Group's operations. Total Group is used to describe certain financial metrics such as Revenue and EBITA when they include both the wholly owned businesses and the Group's share of Joint Ventures & Associates.

 

G 3. Revenue

Revenue comprises sales of goods and services of the wholly owned businesses to external customers net of value added tax, rebates and discounts. Revenue is one of the Group's Key Performance Indicators and is an IFRS measure.

 

G 3.1 Glanbia Performance Nutrition (GPN) Revenue

HY 2016 vs HY 2017

Reference to the interim financial statements

/glossary

USD

€'m

Euro

€'m

GBP

€'m

Danish

Krone

€'m

Other

€'m

Total

€'m

HY 2016 - as reported - euro equivalent

Note 4.1

417.7

35.7

26.4

9.2

16.3

505.3

HY 2016 - retranslated - euro equivalent

 

430.5

35.7

24.0

9.2

16.3

515.7

 

 

 

 

 

 

 

 

HY 2017 - Actual

Note 4.1

 

 

 

 

 

543.5

Constant currency growth

 

 

 

 

 

 

5.4%

 

G 3.2 Glanbia Nutritionals (GN) Revenue

HY 2016 vs HY 2017

Reference to the interim financial statements

/glossary

USD

€'m

Euro

€'m

GBP

€'m

Danish

Krone

€'m

Other

€'m

Total

€'m

HY 2016 - as reported - euro equivalent

Note 4.1

537.6

28.6

-

-

6.4

572.6

HY 2016 - retranslated - euro equivalent

 

554.1

28.6

-

-

6.4

589.1

 

 

 

 

 

 

 

 

HY 2017 - Actual

Note 4.1

 

 

 

 

 

642.2

Constant currency growth

 

 

 

 

 

 

9.0%

 

        G 3.2.1 US Cheese (Division within GN) Revenue

HY 2016 vs HY 2017

 

USD

€'m

Euro

€'m

GBP

€'m

Danish

Krone

€'m

Other

€'m

Total

€'m

HY 2016 - as reported - euro equivalent

 

337.9

-

-

-

-

337.9

HY 2016 - retranslated - euro equivalent

 

348.3

-

-

-

-

348.3

 

 

 

 

 

 

 

 

HY 2017 - Actual

 

 

 

 

 

 

356.7

Constant currency growth

 

 

 

 

 

 

2.4%

 

        G 3.2.2 Nutritional Solutions (Division within GN) Revenue

HY 2016 vs HY 2017

 

USD

€'m

Euro

€'m

GBP

€'m

Danish

Krone

€'m

Other

€'m

Total

€'m

HY 2016 - as reported - euro equivalent

 

199.7

28.6

-

-

6.4

234.7

HY 2016 - retranslated - euro equivalent

 

205.8

28.6

-

-

6.4

240.8

 

 

 

 

 

 

 

 

HY 2017 - Actual

 

 

 

 

 

 

285.5

Constant currency growth

 

 

 

 

 

 

18.6%

 

G 3.3 Revenue - Continuing operations - wholly owned

HY 2016 vs HY 2017

Reference to the interim financial statements

/glossary

 

 

 

GPN

€'m

GN

€'m

Total

€'m

HY 2016 - as reported - euro equivalent

Note 4.1

 

 

 

505.3

572.6

1,077.9

HY 2016 - retranslated - euro equivalent

G3.1/G3.2

 

 

 

515.7

589.1

1,104.8

 

 

 

 

 

 

 

 

HY 2017 - Actual

Note 4.1

 

 

 

543.5

642.2

1,185.7

Constant currency growth

 

 

 

 

 

 

7.3%

 

G 3.4 Joint Ventures & Associates Revenue

HY 2016 vs HY 2017

 

USD

€'m

Euro

€'m

GBP

€'m

Total Continuing operations

€'m

Total Discontinued operations

€'m

Total

€'m

HY 2016 - as reported - euro equivalent

 

171.2

158.4

56.7

386.3

16.0

402.3

HY 2016 - retranslated - euro equivalent

 

176.4

158.4

51.4

386.2

16.0

402.2

 

 

 

 

 

 

 

 

HY 2017 - Actual

 

 

 

 

475.7

28.6

504.3

Constant currency growth

 

 

 

 

23.2%

-

-

 

 

G 3.5 Discontinued operations Revenue

HY 2016 & HY 2017

Reference to the interim financial statements/glossary

 

Discontinued operations

€'m

 Discontinued operations

Joint Ventures & Associates

€'m

Total Discontinued operations

€'m

HY 2016 - Actual

Note 4.1/ G3.4

 

356.9

16.0

372.9

 

 

 

 

 

 

 

HY 2017 - Actual

 

 

 

357.9

28.6

386.5

 

G 3.6 Total Group Revenue

HY 2016 vs HY 2017

Reference to the interim financial statements/glossary

 

Continuing operations

 - wholly owned

€'m

Discontinued operations

€'m

Joint Ventures & Associates

€'m

Total Group

€'m

HY 2016 - as reported - euro equivalent

G3.3/ Note 4.1/G3.4

 

1,077.9

356.9

402.3

1,837.1

HY 2016 - retranslated - euro equivalent

G3.3/ Note 4.1/G3.4

 

1,104.8

356.9

402.2

1,863.9

 

 

 

 

 

 

 

 

HY 2017 - Actual

Note 4.1

 

1,185.7

357.9

504.3

2,047.9

Constant currency growth

 

 

 

 

 

 

9.9%

 

G 4. EBITA

EBITA is defined as earnings before interest, tax and amortisation excluding exceptional items.

EBITA is one of the Group's Key Performance Indicators. Business Segment EBITA growth on a constant currency basis is one of the performance conditions in Glanbia's Annual Incentive Plan for Executive Directors with Business Unit responsibility.

 

G 4.1 GPN EBITA:

HY 2016 vs HY 2017

Reference to the interim financial statements

/glossary

USD

€'m

Euro

€'m

GBP

€'m

Danish

Krone

€'m

Other

€'m

Total

€'m

HY 2016 - as reported - euro equivalent

Note 4.1

83.8

9.1

1.9

-

(13.4)

81.4

HY 2016 - retranslated - euro equivalent

 

86.4

9.1

1.7

-

(13.5)

83.7

 

 

 

 

 

 

 

 

HY 2017 - Actual

Note 4.1

 

 

 

 

 

83.9

Constant currency growth

 

 

 

 

 

 

0.2%

 

G 4.2 GN EBITA:

HY 2016 vs HY 2017

Reference to the interim financial statements

/glossary

USD

€'m

Euro

€'m

GBP

€'m

Danish

Krone

€'m

Other

€'m

Total

€'m

HY 2016 - as reported - euro equivalent

Note 4.1

60.2

5.6

-

-

(8.1)

57.7

HY 2016 - retranslated - euro equivalent

 

62.1

5.6

-

-

(8.1)

59.6

 

 

 

 

 

 

 

 

HY 2017 - Actual

Note 4.1

 

 

 

 

 

64.4

Constant currency growth

 

 

 

 

 

 

8.1%

 

G 4.3 EBITA - Continuing operations - wholly owned:

HY 2016 vs HY 2017

 

Reference to the interim financial statements

/glossary

 

GPN

€'m

GN

€'m

Total

€'m

HY 2016 - as reported - euro equivalent

 

Note 4.1

 

81.4

57.7

139.1

HY 2016 - retranslated - euro equivalent

 

G4.1/G4.2

 

83.7

59.6

143.3

 

 

 

 

 

 

 

HY 2017 - Actual

 

Note 4.1

 

83.9

64.4

148.3

Constant currency growth

 

 

 

 

 

3.5%

 

Refer to note 6 to the financial statements for the reconciliation of EBITA.

 

 

G 4.4 Joint Ventures & Associates - EBITA:

HY 2016 vs HY 2017

 

USD

€'m

Euro

€'m

GBP

€'m

Total Continuing Operations

€'m

Total Discontinued Operations

€'m

Total

€'m

HY 2016 - as reported - euro equivalent

 

7.8

8.2

1.8

17.8

1.3

19.1

HY 2016 - retranslated - euro equivalent

 

8.1

8.2

1.6

17.9

1.3

19.2

 

 

 

 

 

 

 

 

HY 2017 - Actual

 

 

 

 

32.9

0.5

33.4

Constant currency growth

 

 

 

 

83.8%

-

-

 

G 4.4.1 Reconciliation of the Group's share of Joint Ventures & Associates EBITA to the share of results of Joint Ventures & Associates per the condensed Group income statement is as follows:

 

Reference to the interim financial statements/glossary

Half year

 2017

€'m

Half year

 2016

€'m

EBITA of Joint Ventures & Associates

Note 4.1

33.4

19.1

Amortisation

 

(0.4)

(0.3)

Finance costs

 

(3.1)

(2.8)

Income tax

 

(7.2)

(3.7)

 

 

 

 

Share of results of Equity accounted investees per the condensed Group income statement

 

22.7

12.3

Share of results of Equity accounted investees per the condensed Group income statement - Continuing operations

 

22.3

11.1

Share of results of Equity accounted investees per the condensed Group income statement - Discontinued operations

Note 9

0.4

1.2

 

G 4.5 Discontinued operations EBITA:

HY 2016 & HY 2017

Reference to the interim financial statements

/glossary

Discontinued operations

€'m

 Discontinued operations

Joint Ventures & Associates

€'m

Total Discontinued operations

€'m

HY 2016 - Actual

Note 4.1/G4.4

18.3

1.3

19.6

 

 

 

 

 

HY 2017 - Actual

Note 4.1/G4.4

11.1

0.5

11.6

 

G 4.6 Total Group EBITA:

Total Group EBITA comprises EBITA of the wholly owned businesses and the Group's share of its Joint Ventures & Associates EBITA.

HY 2016 vs HY 2017

Reference to the interim financial statements/glossary

Continuing operations

 - wholly owned

€'m

Discontinued operations

€'m

Joint Ventures & Associates €'m

 Total

 Group

 €'m

HY 2016 - as reported - euro equivalent

Note 4.1

139.1

18.3

19.1

176.5

HY 2016 - retranslated - euro equivalent

G4.3/G4.4

143.3

18.3

19.2

180.8

 

 

 

 

 

 

HY 2017 - Actual

Note 4.1

148.3

11.1

33.4

192.8

Constant currency growth

 

 

 

 

6.6%

 

G 5. EBITA margin

EBITA margin is defined as EBITA before exceptional items as a percentage of the revenue of the wholly owned businesses.

Total Group EBITA margin is defined as Total Group EBITA as a percentage of Group revenue.

 

G 5.1 2017 EBITA margin

HY 2017 Actual

Reference to the interim financial statements

/glossary

GPN

€'m

GN

€'m

Continuing operations

 - wholly owned

€'m

Continuing operations

  - Joint Ventures & Associates €'m

Discontinued operations €'m

Total

Group

 €'m

HY 2017 EBITA

Note 4.1

83.9

64.4

148.3

32.9

11.6

192.8

HY 2017 Revenue

Note 4.1

543.5

642.2

1,185.7

475.7

386.5

2,047.9

 

 

 

 

 

 

 

 

EBITA margin

 

15.4%

10.0%

12.5%

6.9%

3.0%

9.4%

 

 

 

G 5.2 2017 EBITA margin growth on constant currency basis

HY 2016 vs HY 2017

Reference to the interim financial statements

/glossary

GPN

€'m

GN

€'m

Continuing operations

 - wholly owned

€'m

Continuing operations

 - Joint Ventures & Associates

€'m

Discontinued operations

€'m

Total Group

€'m

G4.1/G4.2/

G4.3/G4.4

83.7

59.6

143.3

17.9

19.6

180.8

HY 2016 Revenue - retranslated - euro equivalent

G3.1/G3.2/G3.3/G3.4

515.7

589.1

1,104.8

386.2

372.9

1,863.9

EBITA margin

 

16.2%

10.1%

13.0%

4.6%

5.3%

9.7%

 

 

 

 

 

 

 

 

HY 2017 Actual

G5.1

15.4%

10.0%

12.5%

6.9%

3.0%

9.4%

Constant currency growth

 

-80 bps

-10 bps

-50 bps

+230 bps

 

-30 bps

 

G 6. Adjusted Earnings Per Share (EPS)

Adjusted EPS is defined as the net profit attributable to the equity holders of Glanbia plc, before exceptional items and intangible asset amortisation (excluding amortisation of software costs), net of related tax, divided by the weighted average number of ordinary shares in issue during the year. During the current year the calculation of Adjusted Earnings Per Share was amended to exclude the cost of software amortisation within the earnings calculation. The Group believes that adjusted EPS is a better measure of underlying performance than Basic EPS as it excludes exceptional items that are not related to on-going operational performance and intangible asset amortisation, which allows better comparability of companies that grow by acquisition to those that grow organically.

Adjusted EPS is one of the Group's Key Performance Indicators. Adjusted EPS growth on a constant currency basis is one of the performance conditions in Glanbia's Annual Incentive Plan. Adjusted EPS growth on a reported basis is one of the performance conditions in Glanbia's Long-term Incentive Plan.

 

 

 

 

Re-presented *

 

 

Total Continuing and Discontinued operations

Reference to the interim financial statements/glossary

Half year

 2017

€'m

Half year

 2016

€'m

Constant currency

Half year

 2016

€'m

Year

 2016

€'m

 

Profit attributable to equity holders of the Company

Condensed Group income statement

114.9

109.4

112.1

211.8

 

Amortisation and impairment of intangible assets (excluding software amortisation and net of related tax) of €3.8 million (2016: €3.6 million)

 

15.9

13.1

13.5

27.3

 

Exceptional items (net of related tax)

Note 7

10.9

7.2

7.5

14.8

 

 

 

 

 

 

 

 

Adjusted net income

 

141.7

129.7

133.1

253.9

 

 

 

 

 

 

 

 

Weighted average number of ordinary shares in issue

Note 13

295,021,165

295,127,674

295,127,674

295,130,809

 

 

 

 

 

 

 

 

Adjusted Earnings Per Share (cent)

 

48.04

43.96

45.10

86.02

 

 

 

 

 

 

 

 

Constant currency growth

 

 

 

6.5%

 

 

Weighted number of ordinary shares in issue for calculation of diluted EPS

 

295,868,953

296,252,663

295,120,126

296,120,126

 

 

 

 

 

 

 

 

Diluted Adjusted Earnings Per Share (cent)

 

47.9

43.79

45.1

85.73

 

 

G 6.1 Profit attributable to equity holders of the Company:

HY 2016 vs HY 2017

 

USD

€'m

EUR

€'m

GBP

€'m

Danish

 Krone

€'m

Other

€'m

Total

€'m

HY 2016 Profit attributable to equity holders of the Company: - retranslated - euro equivalent

99.6

11.1

2.9

(0.3)

(3.9)

109.4

HY 2016 Profit attributable to equity holders of the Company:- retranslated - euro equivalent

102.7

11.1

2.6

(0.3)

(4.0)

112.1

 

 

 

 

 

 

 

 

HY 2017 Actual

 

 

 

 

 

 

114.9

 

*As represented to reflect the impact of discontinued operations (note 9) and the exclusion of software amortisation net of related tax.

 

 

G 6.2 Amortisation excluding software amortisation (net of related tax):

HY 2016 vs HY 2017

 

USD

€'m

EUR

€'m

GBP

€'m

Danish

 Krone

€'m

Other

€'m

Total

€'m

HY 2016 Amortisation excluding software amortisation (net of related tax) - retranslated - euro equivalent

12.3

0.5

-

0.3

-

13.1

HY 2016 Amortisation excluding software amortisation (net of related tax)- retranslated - euro equivalent

12.7

0.5

-

0.3

-

13.5

 

 

 

 

 

 

 

 

HY 2017 Actual

 

 

 

 

 

 

15.9

 

G 6.3 Exceptional items (net of related tax):

HY 2016 vs HY 2017

 

USD

€'m

EUR

€'m

GBP

€'m

Danish

 Krone

€'m

Other

€'m

Total

€'m

 

6.6

0.7

-

-

-

7.3

HY 2016 Exceptional items (net of related tax)- retranslated - euro equivalent

 

6.8

0.7

-

-

-

7.5

 

 

 

 

 

 

 

 

HY 2017 Actual

 

 

 

 

 

 

10.9

 

G 7. Pro-forma Adjusted Earnings Per Share

Pro-forma Adjusted Earnings Per Share is defined as the net profit from continuing operations attributable to the equity holders of Glanbia plc, before exceptional items and intangible asset amortisation (excluding amortisation of software costs) net of related tax plus the Group's share (40%) of the profits after tax of Dairy Ireland and related assets, before exceptional items and intangible asset amortisation (excluding amortisation of software costs) net of related tax.

 

The Group believes that pro-forma Adjusted Earnings Per Share is more reflective of the revised structure of the Group following the disposal of 60% of Dairy Ireland and related assets.

 

G 7.1 Reconciliation of prior year Adjusted Earnings Per Share to pro-forma Adjusted Earnings Per Share

Adjusted EPS on a pro forma basis has been calculated to set out the EPS on the basis that the Dairy Ireland transaction had taken place on 1 January 2016 reflecting the revised structure of the Group following the sale of Dairy Ireland. The impact of the exclusion of software amortisation net of related tax has also been included.

 

Reference to the interim financial statements/glossary

 

Half year

 2016

€'m

Year

 2016

€'m

Profit attributable to equity holders of the Parent

Condensed Group income statement