Latest news with #HughMcGuire
Irish Independent
01-05-2025
- Business
- Irish Independent
Glanbia shares surge as activist investor piles pressure on food group to split
Frankfurt-based Clearway tells shareholders at AGM that 'sprawling structure' is cause of share volatility Today at 21:30 A better-than-expected performance by food group Glanbia pushed its shares 10pc higher for a time on Wednesday, as an activist investor told its AGM that concerns about poor returns for shareholders are 'broadly shared' with the group's investor base. Shares jumped after Glanbia reported better than anticipated Q1 performance and retained its full-year earnings guidance. It reached a high of €11.80 before slipping back in later trading. Clearway Capital, an activist investor based in Frankfurt, is pushing for Glanbia to be split up and is trying to drum up support for the move. At Wednesday's meeting, it urged the Glanbia board to initiate a strategic review into potential disassembly. In response, Glanbia CEO Hugh McGuire told analysts there are 'no sacred cows' and that the company would listen to all shareholder proposals. Last week Clearway Capital issued a plea to Tirlán Co-op, urging it to support a plan to split up Glanbia. Tirlán is Glanbia's most influential shareholder by far. The co-op has a 28pc stake, but members control an additional 20pc-30pc of the stock. Addressing the AGM, Clearway founding partner Gianluca Ferrari said that the reasons for Glanbia's relatively weak share price, hovering around €11, had to be scrutinised. This was the price it had been at in 2013, and there was no gain since – despite a strong bull market. 'Over the past decade the shares have swung wildly,' he said. 'They've approached €20, only to fall back to €10 again. More than once. "Yet the underlying businesses, when taken separately, have always been worth more than what the share price at any given time would imply.' He said that analyst reports place a value of €21 on Glanbia shares and questioned why they have 'continuously and perpetually' traded at less than that. Mr Ferrari claimed that Glanbia is a 'sprawling and complex conglomerate' comprising three very different businesses. ADVERTISEMENT 'While successful in their own right, under the same corporate structure the moving parts make it complicated to understand, difficult for the market to value, and even harder to manage,' he said. 'The structure is the root cause of volatility,' Mr Ferrari insisted. 'The case for vertical integration has clearly not held true – it didn't help predict or manage whey price cycles. There is an obvious solution: separate the businesses.' Mr Ferrari said he has held meetings over the past two months with many of Glanbia's largest institutional shareholders. Mr McGuire told the AGM that the group delivered a 'resilient performance' during the first quarter of 2025, with a 4.5pc rise in like-for-like revenue while it navigated macroeconomic volatility and short-term headwinds in its performance-nutrition division. 'We have made good progress on our group-wide transformation programme, which is focused on delivering efficiencies, optimising our portfolio and maximising long-term value for shareholders,' he added. Revenue in its performance nutrition division declined by 6.6pc, with Optimum Nutrition revenues down by just over 3pc. The company said that excluding SlimFast and Body & Fit, which have been designated as non-core and following a decision to exit the businesses, revenue in the sector was down by 4.8pc.
Reuters
30-04-2025
- Business
- Reuters
Glanbia shares jump after 'better than feared' first quarter
Summary Companies Full year guidance reiterated following February profit warning Whey costs down from peak, keeps full year profit margin forecast Sees resilient protein product sales in US Shares up 10% DUBLIN, April 30 (Reuters) - Shares in nutrition supplement maker Glanbia (GL9.I), opens new tab jumped 10% on Wednesday after analysts pointed to a "better than feared" first quarter performance that allowed the Irish group to maintain its full year earnings guidance. Glanbia shares plummeted to a near two-year low in February when it forecast that earnings could fall by up to 11% this year due to a prolonged rise in the cost of whey - a key ingredient in the protein powders and shakes popular with gym goers. It said on Wednesday that while whey prices remain elevated, they had come off their peak and it had bought enough to see it through to the fourth quarter and retain its full year margin expectations for its performance nutrition business. While first quarter group revenue grew by 7.2% year-on-year, performance nutrition fell 6.6% with its large Optimum Nutrition protein powder brand down 3.1% due to lower sales in U.S. fitness clubs that Glanbia had flagged in advance. Analysts at Davy Stockbrokers had expected Optimum Nutrition sales to fall by 14% in the quarter and Goodbody Stockbrokers said the overall outcome was "better than feared." The analysts were also encouraged by a 0.4% increase in U.S. consumption of Optimum Nutrition. Glanbia CEO Hugh McGuire said while he was very aware consumer confidence was falling in the U.S., protein products remain a resilient category. Glanbia also said it had largely mitigated its exposure to tariffs through price increases and plans to sell U.S manufactured products earmarked for China into alternative markets. Shares in the company were 9.8% higher at 0830 GMT, trimming the year-to-date loss to 16.7%. Goodbody said a fuller recovery was unlikely until sustained improvement is seen at half year. Asked on an analyst call about activist investor Clearway Capital's call for a break up of the company, McGuire said Glanbia would listen to all shareholder proposals and that there were "no sacred cows" as it looks to continuously create value. McGuire added that the planned sale of its underperforming U.S. weight management brand SlimFast is at the early stages.
Agriland
30-04-2025
- Business
- Agriland
Glanbia Q1 2025 financial performance ‘in line with expectations'
Glanbia plc has said that its financial performance in the first quarter (Q1) of 2025 was 'in line with expectations' and has reiterated its full year guidance. In the three months ended April 5, 2025, wholly-owned revenue increased by 7.2% compared to the same period in 2024. The group said that the main drivers of the revenue increase were a price increase of 5.2% and an increase of 2.7% from acquisitions, partially offset by a volume decrease of -0.7%. Glanbia's net debt at April 5, 2025 was $578.8 million, an increase of $289.4 million compared to Q1 2024. This primarily relates to the acquisition of Flavor Producers, which closed in April 2024. At the end of the period the group had committed debt facilities of $1.3 billion. Glanbia Performance Nutrition (PN) revenue decreased by 6.6% in the first three months of 2025, driven by a volume decrease of 5.8% and a price decrease of 0.8%. 'Excluding SlimFast and Body & Fit, which have been designated as non-core and following a decision to exit the businesses, PN revenue declined by 4.8%,' Glanbia said. In February, the company announced that it that it was selling its weight management brand SlimFast and direct-to-consumer e-commerce business Body & Fit. The volume decrease primarily related to lower revenues in the club and specialty channels in the US as well as the continued negative impacts from non-core brands, with PN Americas revenue declining by -13.2% and PN International revenue increasing by 6.1%. 'Whey protein isolate has come off its peak pricing seen earlier this year and whilst pricing still remains elevated, the group has good visibility of input costs through the end of the year, in line with previous expectations,' Glanbia said. Source: Glanbia The Health & Nutrition division saw revenue increase by 24.9%, driven by a 6% increase in volume, a 0.4% decrease in price, and an increase of 19.3% from the impact of the acquisition of Flavor Producers. The volume growth was driven by a strong performance in both the premix and flavour solutions businesses. Dairy Nutrition, which is the number one producer of whey protein isolate and the number one producer of American-style cheddar cheese in the US, reported a revenue increased by 18.9%. This was driven by a 3.6% increase in volume and a 15.3% increase in price. Costs Glanbia said that it is focused on executing its three-year 'transformation programme' which is expected to generate annual cost savings of at least $50 million by 2027. The group said this will be achieved 'by driving efficiencies across the new operating model which will support the next phase of growth through three focused divisions'. Dairy Nutrition is on track to become a standalone business by July 1, 2025 with a new chief executive and leadership team. Hugh McGuire, chief executive officer Glanbia, said that the company had 'delivered a resilient performance during the first quarter by delivering group like-for-like revenue growth of 4.5%'. 'Our Health and Nutrition and Dairy Nutrition segments delivered a strong performance. 'As previously announced, Performance Nutrition is facing short-term challenges in the US club channel and we are offsetting this by delivering good growth in our online and food, drug and mass channels and international markets, which is supported by a strong innovation pipeline. 'We have made good progress on our group-wide transformation programme which is focused on delivering efficiencies, optimising our portfolio and maximising long-term value for shareholders. 'Significant efforts have been made to reduce the impact of input costs on the group. 'We now have good visibility of costs to the end of the year and we are reiterating our margin expectations for PN,' he said. 'With the first quarter having progressed as planned, and whilst noting the ongoing uncertainty in relation to direct tariffs, we are pleased to reiterate our 2025 full year guidance of adjusted EPS2 in the range of 124 $cent – 130 $cent (-11% to -7% constant currency),' McGuire added. Glanbia's sports nutrition business Source: Glanbia The group commenced an initial €50 million share buyback programme on December 16, 2024. Between December 16, 2024 and April 29, 2025, Glanbia said that it returned €42.7 million to shareholders, repurchasing 3,489,320 ordinary shares on Euronext Dublin at an average price of €12.23. The buyback will be temporarily paused as the percentage of the group's issued share capital held by a significant shareholder is approaching 29.99%. The group is expecting to recommence the share buyback programme during the second quarter of 2025. Glanbia is holding its annual general meeting (AGM) at 11:00a.m. today at the Killashee Hotel, Naas, Co. Kildare. Senan Murphy will join the group's board as a non-executive director. He will become chair of the sustainability committee on appointment. Earlier this week, an activist investment company, which is a shareholder in Glanbia, wrote to the board of Tirlán seeking support for a 'fundamental strategic review focused on separating Glanbia's distinct business units'. Clearway Capital, the German-based investment firm established in 2021 by Gianluca Ferrari, acquired a minority stake in Glanbia almost three years ago. Tirlán, the farmer owned dairy co-op, is the largest shareholder in Glanbia with a 29% stake in the global nutrition company.
Yahoo
27-02-2025
- Business
- Yahoo
Glanbia PLC (GLAPF) (FY 2024) Earnings Call Highlights: Strong Financial Performance Amidst ...
Revenue: $3.8 billion, an increase of 5.8% on a pro forma constant currency basis. Adjusted Earnings Per Share (EPS): $0.40, a growth of 6.8%. Pre-exceptional EBITDA: $551.3 million, up 11.8%. EBITDA Margin: 14.4%, an increase of 80 basis points. Dividend Increase: 10% increase, with EUR102 million returned via share buyback programs. Glanbia Performance Nutrition (GPN) Revenue Growth: 0.5%. GPN EBITDA Growth: 8.3%, with an EBITDA margin of 16.9%. Optimum Nutrition Revenue Growth: 7.5%, with volume growth of 10.4%. Nutritional Solutions Revenue Growth: 14% on a constant currency and pro forma basis. Nutritional Solutions EBITDA: $200 million, up 27.2%. Operating Cash Flow: $485 million, with a conversion rate of 88%. Net Debt: $436 million, with a net debt to EBITDA ratio of 0.8 times. Capital Expenditure: $58 million on strategic capital expenditure. Flavor Producers Acquisition: $300 million. Exceptional Items: Net after-tax charge of $145.6 million. 2025 Adjusted EPS Guidance: $0.124 to $0.130, second half weighted. Warning! GuruFocus has detected 3 Warning Signs with GLAPF. Release Date: February 26, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Glanbia PLC (GLAPF) reported a strong performance in 2024 with adjusted earnings per share growing by 6.8% to $0.40. The company delivered revenues of $3.8 billion, representing an increase of 5.8% on a pro forma constant currency basis. Glanbia PLC (GLAPF) raised its dividend by 10% and returned EUR102 million to shareholders via share buyback programs in 2024. The Nutritional Solutions segment saw revenue growth of 14% on a constant currency and pro forma basis, driven by strong demand in pre-mix and protein solutions. The company announced a further EUR100 million share buyback for 2025, indicating confidence in its financial position and future prospects. Glanbia PLC (GLAPF) faced significant headwinds from unprecedented high-end whey costs, impacting the GPN business. The company expects a double-digit increase in GPN's cost of goods sold, representing a headwind of almost $200 million in 2025. The decision to exit the SlimFast brand and Body & Fit direct-to-consumer e-commerce business indicates challenges in these areas. Competitive dynamics in the club channel and increased competition in the second half of the year negatively impacted revenue in the Americas. The company anticipates EBITDA margins to be lower in the first half of 2025 due to increased input costs, with only partial mitigation expected. Q: Could you discuss the performance in Q4, particularly regarding pricing and margins in the GPN segment? A: Hugh McGuire, CEO: We were optimistic about pricing in Q4, but the continued tactical pricing reduction, especially in the energy category, and competitive online promotions impacted it. However, we are pleased with the volume returns and ON performance. We plan to take price increases this year, especially in international markets, and will focus on trade promotions and marketing effectiveness to navigate the volatile input cost cycle. Q: Can you elaborate on the competitive environment and promotional activities in 2025? A: Hugh McGuire, CEO: The competitive environment remains intense, especially in growth categories. We expect a pullback on promotional spending due to unprecedented whey prices, focusing on promotional effectiveness. Marketing spend will be reduced to 2022 levels, emphasizing effectiveness as we navigate high input costs. Q: What are the mitigation strategies for the elevated whey costs, and how confident are you in offsetting the impact? A: Hugh McGuire, CEO: We plan to mitigate approximately three-quarters of the $200 million impact through pricing, marketing spend reduction, and SG&A efficiencies. We are cautious about pricing actions to maintain consumer engagement, especially in the US market. Q: Could you provide more detail on the club channel competition and private label impact? A: Hugh McGuire, CEO: The club channel has seen new private label entrants impacting our share. While this affects our business, we continue to see growth in food, drug, mass, and e-commerce channels. The club channel's distribution dynamics are different, and we are focused on navigating these challenges. Q: How do you view the long-term margin outlook for the GPN business? A: Mark Garvey, CFO: We see 2025 as a transitory year due to unprecedented whey costs. We expect margins to normalize as new supply comes online, balancing demand and supply. We anticipate returning to mid-teen margins as the market stabilizes. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Sign in to access your portfolio
