Glanbia Plc Ord

Good day and thank you for standing by. Welcome to the Granby 2025 half year results presentation. At this time all participants are in a listen only mode. After the speakers presentation there will be a question and answer session. To ask a question during the session you will need to press star 1 and 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question please press star 1 and 1 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.

Thank you. Good morning and welcome to the Glanbia 2025 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 on the information available to them up to the time of their approval of the Glanbia half-year 2025 results announcement. 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 made on today's call, whether it's a result of new information, future events, or otherwise. I'm now handing the call over to Hugh Maguire, CEO, Flamby FPLV.

Thank you, Liam. Good morning, everyone, and welcome to the Lambia Half Year 2025 results call and presentation. I'm joined on today's call by Mark Garvey. I provide an overview of our performance for the first half, and Mark will then cover the financials and outlook. And at the end of the call, we will be happy to take your questions. Overall, we delivered a resilient performance in the first half of the year with adjusted earnings per share of 63.03 cents. This is driven by strong growth in our health and nutrition and dairy nutrition divisions, offset by anticipated declines in performance nutrition. The group delivered revenues of 1.9 billion, representing an increase of 6% on a constant currency basis. In healthy nutrition, we continue to see good momentum, with strong demand from end-use markets, and saw like-for-like revenue growth of 6.5% in period, with volume growth of 6.9%, driven by growth in both our nutritional premix and flavour solution businesses. In dairy nutrition, we saw strong growth in protein solutions, and an increase in pricing driven by favorable dairy markets and strong whey protein demand. And in performance nutrition, revenue was ahead of expectations, albeit against a challenging backdrop, with volume and pricing growth in the second quarter, excluding the impact of slim fast and body and fit, showing a sequential improvement in performance. The group delivered pre-exceptionally EBITDA of 241.3 million, representing a decrease of 7.5%, and EBITDA margins of 12.5%, representing a decrease of 180 basis points with margin expansion across H and N and dairy nutrition offset by contraction and margin in performance nutrition as a result of elevated whey protein costs. We continue to progress our strategic agenda and have made good progress on our group-wide transformation programme with dairy nutrition now established as a standalone business, continued progress on our key work streams and the announcement today of the agreement to sell body and fish our Benelux direct-to-consumer e-commerce business, which we expect to complete in quarter four. We are also today announcing the acquisition of SweetMix, a Brazil-based nutritional premix and ingredient solutions business within our health and nutrition division, which I will speak more to shortly. We continued our strong track record of delivering returns to shareholders by raising the interim dividend by 10% and returning approximately 63 million to shareholders via our share buyback programs in the first half of the year. We currently have a 50 million program ongoing and have additional 50 million program authorized, which we expect to deploy before the end of the year. As a result of the strong performance in health and nutrition and dairy nutrition and the improving trends in performance nutrition, we are today upgrading our full year adjusted earnings per share guidance to 130 to 133 cents, representing a decline of approximately minus seven to minus 5% constant currency. This is based on the current framework for US tariffs. We will be hosting a capital markets day on the 19th of November in London, where we look forward to outlining the group strategy for the next three years. We're also today announcing that independent non-executive director, Paul Duffy, will be appointed as chair-designate with Effections Day, and he will succeed Donald Gaynor as chair of the company on 1st of January, 2026. Donald will retire as chair and from the board of the company on 31st of December, 2025. On behalf of the board, I would like to thank Donnard for the significant contributions he's made during his 12-year service on the board. He has made a substantial impact during a time of significant evolution for Glambia. For performance nutrition, like-for-like revenue was down 3.8%, driven by a 3.5% decrease in volume and a 0.3% decrease in price. Excluding slim fast and body and fit, like-for-like revenue declined by 1.5%. The volume decline was driven predominantly by lower revenues in the US club and specialty channels, a reduction in margin diluted promotions, and the impact of SlimFast, offset by strong growth in the online channel and continued growth in international. We're pleased to see volume and pricing growth in the second quarter, excluding impact of SlimFast and Body & Fit. We implemented price increases across our international markets in the period, and this was offset by some tactical price reductions on higher margin products in the energy category, which delivered a very strong volume uplift during the first half. From a regional perspective, Performance Nutrition Americas, which represents 61% of revenue, was down 8.7% versus last year due to the aforementioned headwinds. Our global brand footprint continues to be a key strength, and our international business, which represents 39% of revenue, delivered like-for-like revenue growth of 4.9%. driven by strong volume and pricing growth in the Optimum Nutrition brand across priority markets, particularly in the UK, Oceania, China and India. We're pleased with the trajectory in our flagship brand, Optimum Nutrition, which showed a sequential improvement through the period, delivering revenue growth of 2% in the second quarter, comprising 1.5% volume growth and 0.5% pricing growth. EBITDA in the first half of the year declined by 13.5%, with an EBITDA margin of 12.7%. The contraction in margin is entirely as a result of the higher way input costs as previously disclosed. With EBITDA margins expected to improve in the second half of 2025. Whey protein has remained elevated due to continued strong demand and the group has contracted supply through most of quarter one 2026. We continue to expect approximately 15 to 20% of new global supply of high end whey commencing at the end of 2025 and expanding across 2026. We continue to take decisive action to mitigate the impact as much as possible, including revenue growth management initiatives, product reformulation, group-wide cost savings, and working with key suppliers on further capacity. As a result of the improved performance we are seeing in performance nutrition, particularly across our growth brands of Optimal Nutrition and IsoPure, we are upgrading our full-year guidance for like-for-like revenue growth to 2% to 3%. excluding the impact of StemFast and Body & Fit. We continue to expect EBITDA margins in the range of 13% to 14% for the performance nutrition division in 2025, with margins higher in the second half versus the first half. In terms of brand performance, Optimum Nutrition, our largest brand with 67% of performance nutrition revenue, delivered a like-for-like revenue decline of 0.5%, but saw sequential improvement during the period. with revenue growth of 2% in the second quarter compared to the prior year. U.S. consumption grew by 1%, with double-digit growth in the food drug mass channel growing ahead of the category and continued strong growth in the online channel, offset by declines in the club and specialty channels. The protein powder category is growing strongly, with the value proposition resonating with consumers. We're also seeing strong consumption growth across many international regions, and we continue to increase our retail distribution with gains for Optimal Nutrition across retailers in Europe and Asia Pacific. I'm also pleased to see Optimal Nutrition deliver double-digit growth in household penetration and TDP in the US. We have a world-leading portfolio of high-quality products within the Optimal Nutrition brand, and we continue to focus on innovation, in particular by expanding our usage occasions. And we've launched a number of products in the first half of the year across our protein and energy offerings, including multiple creation offerings, clear whey collagen, electrolyte hydration powder, and additional smaller pack sizes across our protein brands, addressing affordability through opening price points. We're particularly pleased with the performance of Optimum Nutrition Creatine, which is delivering very strong growth globally, driven by distribution gains across all channels as energy continues to expand. From a marketing perspective, our focus continues to be on driving recruitment and conversion and broadening the brand's appeal through increased campaign reach and education. The AI-powered coach Optimum is now live in several markets with early results showing excellent engagement rates. Consumers can now benefit from two personalized digital tools after the successful launch of the protein calculator last year. We saw increased brand visibility and higher social reach and engagement in the Optimum nutrition brand via its partnership with the McLaren Formula One team. And the partnership has been activated at retail in the UK via the Golden Scoop promotion, driving increased feature and display among a range of retailers. Our healthy lifestyle portfolio, which represents 19% of performance-sufficient revenue, delivered life-for-life revenue growth of 0.6%, driven by growth in Isopure, offset by declines in Think and Amazing Grass, building on a strong comparative period. We saw sequential improvement during the period, with revenue growth of 9.5% in the second quarter compared to the prior year. Isopure, our high-protein, low-carb brand, grounded in purity, continues to enjoy strong growth across all channels. Our new look design and formula has been rolled out in key markets with increased brand visibility and a new and improved flavor. U.S. consumption for the healthy lifestyle portfolio declined by 5.8%, predominantly as a result of certain promotion activities undertaken in 2024, not repeated this year as we navigate high weight prices. We continue to see double-digit U.S. consumption growth in online and food drug mass channels for isopure and will continue to gain market share in the protein powder category in U.S. measure channels, growing ahead of the category. Isofure also delivered strong growth in household penetration and TDP. We launched Isofure whey protein isolates and collagen products into the U.K. market for the first time in the second quarter, and we will be rolling out our More of What Matters creative campaign in the third quarter. As previously mentioned, we're launching a new exciting innovation this month in the U.S., ICPR protein water, which comprises 15 grams of premium protein, 20 ounces of refreshing water with electrolytes, zero grams of sugar, and only 60 calories. Our Think Protein Bar business competes in a highly competitive high-protein bar category with a large addressable market, and during the second quarter, we launched our great, tasty, new format Think Crispy Squares, which has had good initial retail listings, supported by our new marketing campaign, Don't Think Think, which went live at the beginning of the year. Turning to our new segment of healthy nutrition, which comprises the nutritional pre-mix solutions and flavors businesses and focuses on priority high growth end-use markets, such as vitamins, minerals, and supplements, functional beverages, active lifestyle nutrition. This segment delivered a strong performance in the first half, delivering like-for-like revenue growth of 6.5%. This was driven by a 6.9% increase in volume and a 0.4% decrease in price. Some of the volume growth was timing-related to customer offtake in quarter two. Total revenue increased by 18% as a result of an 11.1% increase from the acquisition of Flavour Producers, which we completed in April 2024. The Flavour Producers business is performing well, and the integration is largely complete at this stage. We're pleased with the strong volume performance in the quarter, which was driven by good growth across vitamin and mineral supplements and functional beverage markets, particularly across international. and we continue to see good broad-based demand. Pricing was broadly flat and in line with expectations. Health and nutrition EBITDA was 60.9 million, up 35.9% constant currency. EBITDA margins are strong at 19.5%, an increase of 260 basis points versus half year 2024. Margin expansion was driven by the addition of flavor producers to the portfolio and strong volume growth from existing customers. In terms of guidance, We're reiterating our guidance of mid-single-digit life-for-life revenue growth in 2025, which will be programmatically volume-led, and we are increasing our ABTA margin guidance to 18% to 19% in 2025. We have a strong position in key ingredients, targeting functional and efficient end-use markets across a broad range of customers. Through our platforms and pre-mix and flavor solutions, we have a collaborative one-face-to-customer approach to deploying expertise and technologies in these growing end-use markets. We have the number two global position in customized pre-mixed solutions and have a strong position in natural and organic flavors within our flavor solutions business. Our key end markets have good growth with innovative customers and comprise vitamins, minerals, and supplements, functional beverages, and active lifestyle and sports nutrition with additional clean labeling opportunities. We have a strong team in place driving the growth within health and nutrition, and I'm delighted to announce the appointment of Arno Shrew as CEO for the division. Arno most recently served as president of Nourish Ingredients at International Flavors and Fragrances and brings a proven track record of driving growth and execution across the B2B industry. We continue to invest in innovation, capacity, and new capabilities to ensure we have the best solutions to meet the growing demand for functional tastes and macronutrient needs across a broad range of formats. We have today announced the acquisition of SweetMix, a high-quality Brazil-based nutritional premix and ingredient solutions business which would allow continued expansion of the Latin America region. In 2024, SweetMix had revenue of approximately $17.3 million. In terms of capacity, we've approved capital expenditure to substantially expand our spray drying capabilities, which will enable us to capture a larger opportunity in powdered flavour applications. We have also approved plans to more than double our Asian nutritional pre-mix capacity. Dairy Nutrition, which combines our previous US cheese and nutritional solutions dairy proteins portfolios, has been established as a standalone business with a dedicated leadership team since July 1st. This platform is largely one integrated manufacturing footprint with a high supply and operational interdependency and is also the route to market for our joint venture partners, supply of whey and cheese ingredients. This business provides a scale leadership position in dairy as a leading producer of whey protein isolate, and American-style cheddar cheese in the US. We also hold exciting positions in dairy bioactives with strong demands, particularly for colostrum, targeting gut and immunity health. In the first half of the year, dairy nutrition delivered like-for-like revenue growth of 14.1% in the period, driven by a 4.3% increase in volume and a 9.8% increase in pricing. The increase in volume was across cheese and protein solutions, and the pricing increase was driven by favorable dairy market pricing and strong whey protein demand. Our guidance for full year 25 remains unchanged. As I referenced earlier, we're making good progress on our group-wide transformation program to drive efficiencies across our new operating model and support the next phase of growth through three focus divisions. Overall, the transformation program is a three-year initiative. And as well as supporting future growth, the program is expected to generate annual cost savings of at least $50 million by 2027, which will be utilized across reinvestment in the business and profitability improvement. The program will deliver across four areas. The first is operating model optimization, with Dairy Nutrition now established as a standalone business, Performance Nutrition America's reorganization completed, and Health and Nutrition leadership team established to drive future growth. The second pillar is to unlock efficiencies, and we have substantially completed the outsourcing of certain finance and HR functions. We're also accelerating procurement savings and progressing the centralization of the group supply chain model to deliver synergies and support growth through optimizing our footprint and simplifying our organization. The third pillar is about accelerating our digital transformation, which has been underway since the middle of last year. We have expedited the transformation of our back office functions and continue to focus on automation and the implementation of AI and analytics to enable front office growth initiatives. The final pillar is our ongoing portfolio evaluation. We're focused on simplifying our group structure and optimizing our overall margins. We have today announced that an agreement has been reached for the sale of Body and Fit, our direct consumer e-commerce business in the Benelux region. We expect this disposal to complete in quarter four and be accretive to margins from 2026 onwards. Our weight management brand, Synfast, has been designated as a non-core, and we are pursuing exit options for this brand. As I mentioned earlier, we will continue to look at strategic acquisitions within our health and nutrition division in particular, and the acquisition of SweetMix, which we announced today, is a good example of improving our overall capability. And with that, I will hand over to Mark to take you through the financials.