Glanbia Plc Ord

Good day and thank you for standing by. Welcome to the Glambia 2024 Half Year Results webcast. At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, you will need to press star one and one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one and one again. Please be advised that today's conference is being recorded. I will now hand over to Liam Hennigan, Group Secretary and Head of Investor Relations, to open the presentation. Please go ahead, sir.

Thank you, operator. Good morning and welcome to the Glambia 2024 half-year results call. During today's call, the directors may make forward-looking statements. These statements have been made by the directors in good faith based upon the information available to them up to the time of their approval of the Columbia half-year 2024 results announcement published earlier today. 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 those forward-looking statements. The directors undertake no obligation to update any forward-looking statements made on today's call, whether as a result of new information, future events, or otherwise. I'm now handing the call over to Hugh Maguire, CEO, Glambia PLC.

Thank you, Liam. Good morning, everybody, and welcome to the Glambia half-year 2024 results call. On today's call, I will provide an overview of our performance for the first half of the year. I'm joined by my colleague, Mark Garvey, who will cover the financials and outlook. At the end of the presentation, we will be happy to take your questions. I'm pleased to report that the group delivered a strong performance in the first half of 2024. with adjusted earnings per share growing by 12.4% to 68.2%. This was driven by strong consumer demand for our better nutrition brands and ingredients, with Glambia Performance Nutrition and Glambia Nutritional Solutions both delivering volume growth of 3.1% in the first half. In GPN, we continue to see good global consumer demand for optimum nutrition and our healthy lifestyle brand portfolio, with volumes accelerating during the second quarter. We are particularly pleased with the performance of the Optum Nutrition brand, continuing its growth momentum, delivering 11.8% volume growth in the first half. In Nutrition Solutions, we saw good customer demand across the end markets we participated in, with the volume growth in the half driven by a good performance in our pre-mixed solutions business. Volume trends in our protein solutions business continue to improve, with sequential growth in quarter two driven by healthy snacking demand. We also continue to progress our strategic agenda with the flavor producers acquisition, which was completed in April. Integration is on track and this acquisition significantly expands our flavor offerings with revenue in excess of $120 million, largely from the North American markets. The business is an attractive and growing natural organic flavors market and it's performing well to date. We remain focused on shareholder returns and in the first six months of the year, returned 50 million to shareholders via share buybacks. Today, we are commencing a further 50 million share buyback program and announcing a 10% increase in our interim dividend, reflecting our confidence in the underlying earnings progression of the business. Looking ahead, we continue to focus on driving growth across our portfolio of great brands and ingredients. Based on current market environment and expectations for the remainder of the year, we reiterate our full year guidance of 5% to 8% growth in adjusted earnings per share. Mark will speak to the moving parts of this in a moment. Turning to GPN, we are pleased with volume growth of 3.1%. This was driven by our performance in healthy lifestyle nutrition brands, offsetting a headwind from Slimfast. Like-for-like revenue declined 0.8% with pricing negative 3.9%, which was largely driven by our planned promotional activity and some tactical pricing initiatives. Optimal Nutrition, which now represents 65% of GPN revenues, continues its strong momentum, delivering like-for-like growth of 7.7% and strong volume growth. The brand continues to strengthen its leadership position, supported by increased marketing investment and activation, and I will speak more to that shortly. Our Healthy Lifestyle brands, which represent 18% of GPN revenue, delivered like-for-like growth of 0.7%, building on a strong comparative period. From a regional perspective, America was down 3% and international grew 3.3%. But worth noting, the SlimFast drag is entirely impacting the America's performance. We also saw continued specialty channel decline and combined impact of SlimFast and specialty channel decline was negative 5.5% revenue. SlimFast, which now represents 7% of GPN revenue, has continued to face headwinds due to ongoing dive category challenges. Like-for-like revenue declined by 34% in the first half, which was a drag of just over 3.5% on GPN revenue. While this was broadly in line with our expectations, the diet category continues to be challenged, which would result in further reduced shelf space as expected with U.S. retailers as we go into 2025. Financially, we've right-sized our investment in the brand and have prioritized our investment in our protein grow brands in our portfolios. As a result of the reduced scale of the brand, we believe it fits more appropriately within our other portfolio brands. International growth was driven by good volume growth in optimal nutrition, with volume growth across key markets of Asia-Pacific and Latin America, offsetting some competitive dynamics in the online channel in Europe. We're pleased with the continued EBITDA progression in GPN, which delivered just over $156 million, an increase of 30.3% constant currency over prior year. This was driven by lower dairy input costs and a continued focus on revenue growth management initiatives, enabling us to increase marketing investment in the period. Overall, EBITDA margins were very strong at 17.7%, an increase of 420 basis points over prior year. Turning then to our largest brand of optimal nutrition, the brand is built on authenticity and trust, and we continue to broaden and deepen our consumer reach and relevance for a wider range of consumers. As you know, optimum nutrition is anchored both in protein and energy, and the powder format has a really strong value proposition that continues to resonate with consumers. The brand grew like-for-like revenue by 7.7% in the first half, which was driven by volume growth of 11.8%, with a strong performance across both the Americas and international regions, driven by increased velocities, distribution gains, and marketing activations. From a consumption perspective, our U.S. consumption is in line with the prior year, which is a very strong comparative period. We've continued to gain market share in the protein powder category and U.S. measure channels, growing ahead of the category. We've seen good growth in household penetration and making good progress driving distribution, with more than 30% increase in points of distribution across FDM with new shelf sets as we head into half two. Our marketing execution continues to be strong, with longer-term brand equity indicators of growth very positive, as we recruit new consumers, with 67% of consumers in the U.S. new to brand in the last year, with 38% new to category. A new pack design will start rolling out, first into U.S. retail from August, our latest evolution of our design in more than five years. The new design features an enlarged Optimum Nutrition logo, the call-out of protein in the product descriptor highlighting the product benefit, and a bigger flavor call-out on Front of Pack. We continue to roll out more creative assets under the More of You and You campaign as we expand our partnerships across social, digital, and retail media. We're very happy with the impact of the McLaren Formula One partnership, which has provided excellent brand visibility. We continue to expand our distribution and on-shelf visibility as Caterpie leader across multiple FDM retailers, displaying our full product portfolio as one brand rock. We continue to expand in usage occasions with innovation, whether new flavor extensions, new pack sizes, or more premium innovation for our more committed consumers. And lastly, I would like to congratulate our seven optimum nutrition-sponsored athletes, who between them won a total of six medals at the Olymp Games in Paris. Turning to our lifestyle brands, we continue to see good growth as consumers are focused on products that support a healthy and active lifestyle. IsoPure, our high-protein, low-carb brand grounded in purity, continues to do well with good volume growth in the first half. We continue to drive reach as we invest behind the brand with our Add Less, Do More campaign. I'm pleasing to see household penetration grow strongly as we see new consumers enter the category. We continue to drive distribution with a 50% increase in points of distribution as we're going to have to, albeit off a lower base of ACV. Our Think Protein bar business continues to gain momentum in a competitive category. Innovation in this category is important, and we've just launched Think Mini's 100-calorie, 6-gram protein healthy snacking offering, leveraging Girl Scout Cookies partnership. Plus, we've launched three new flavors in our core high-protein line. In addition, we've increased investment in shopper and retail marketing to support in-store and improve findability and visibility in a busy category. Amazing Grass Green Superfoods, the smallest part of the portfolio, delivered softer volumes in the quarter against heavy promotional spending from new entrants to the category. Second half, the brand will return to growth behind investments in our latest marketing campaign, Feel Amazing Every Day, with heavier emphasis on social influencers, new listings, and product renovation that provides improved taste and nutritional benefits. Moving to our second growth platform of nutritional solutions, revenue grew by 3.5% in the first half on a pro forma basis. This was driven by a 3.1% increase in volume, a 3.9% decline in price, and a 4.3% increase driven by the impact of acquisitions. The price decline was driven by lower year-over-year market pricing. The volume growth was driven largely by a good performance in the pre-mix solutions business, where we continue to see improving demand for vitamin and mineral fortification. We also saw good demand for protein solutions with strong demand for our healthy snacking solutions in quarter two. The recently acquired flavors and dairy bioactive businesses continue to perform well with the integrations on track. Nutrition Solutions' EBITDA was 82.9 million down 0.5% constant currency. EBITDA margins are good at 17.7%, in line with full year 2023 pro forma. We have three platforms targeting three priority end-use markets across a broad range of customers. To our platforms and pre-mixed solutions, protein solutions, and flavor solutions, we have a collaborative one-face-to-customer approach to deploying expertise and technologies in these growing end-use markets. Our first platform, where we continue to build on our core strengths and customize pre-mixed solutions, that's a number two global leader, had good volume growth in half one. We continue to scale our extensive protein solution capability with strong demand for healthy snacking. And finally, our flavor solution platform, where flavor produces integration and performance is on track. And we have sight to good growth opportunities as we integrate across our flavor business. We continue to invest in innovation and capacity to ensure we have the best solutions to meet the growing needs of consumers and customers that meet their functional taste and micronutrient needs across a broad range of formats. Our end-use markets have good growth with innovative growth customers. Firstly, the vitamin, minerals, and supplements, or VMS category, which encompasses a wide range of products designed to provide nutritional support and enhance overall health. We have expertise and technical capabilities across all formats in VMS, such as gummies, tablets, and powders, including a portfolio of functionally optimized nutrients designed to perform better within gummy applications. We're encouraged by the growth trends and underlying demand we're seeing in this category, supported by a recent survey which found approximately a third of U.S. consumers over the age of 18 plan to increase their usage of vitamin, minerals, and supplements. Secondly, the active lifestyle and sports nutrition market, where 41% of consumers want to increase their protein intake. Clearly, we have market-leading positions here through our branded consumer business in GPN, but Nutrition Solutions also has market-leading expertise in this area, underpinned by proprietary solutions and ingredients, where we've seen the high-protein bar segment growing approximately in a single digit. And finally, in functional beverages, which is a growing segment within the beverage industry and includes products enhanced with vitamins, minerals, and other solutions, providing multiple health benefits in a convenient format. According to a recent survey, 49% of consumers cite food and beverage and physical exercise as the top contributors to well-being, highlighting the importance of functional products as consumers take ownership of their health and wellness. With that, I will hand to Mark for the finance review.