Glanbia Plc Ord

Good morning and welcome to the Glambia Q3 2025 interim management statement 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 this interim management statement. 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 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 going to hand the call over to Hugh Maguire, CEO of Glanbia PLC.

Thank you, Liam. Good morning, everyone, and welcome to the Glanbia Quarter 3 2025 Interim Management Statement call and presentation. On today's call, I will provide an overview of our performance for the first nine months of the year, And I'm joined by my colleague, Mark Garvey, who will cover the financials and outlook. At the end of the presentation, we will be very happy to take your questions. Overall, quarter three year-to-date performance for the group was ahead of our expectations. Group revenue increased by 3.3%, with strong performances in our performance nutrition and health and nutrition segments in the third quarter, and continued good growth in our dairy nutrition segments. In performance nutrition, like-for-like revenue increased by 2.5% year-to-date, excluding the impact of SlimFast and Body & Fit. We continue to see strong consumer demand, with double-digit volume growth in the third quarter in our priority growth brands, Optimum Nutrition and Isofure. In health and nutrition, we continue to see good momentum, with strong demand from end-use markets, with like-for-like revenue growth of 6.1% year-to-date. And in dairy nutrition, we saw strong volume growth across proteins and cheese and an increase in pricing driven by protein solutions. We continue to make good progress on our group-wide transformation program to simplify our business and drive efficiencies across our new operating model, supporting the next phase of growth. We've completed the sale of non-core brands Body & Fit and SlimFast in our performance nutrition division, and we acquired SweetMix within our health and nutrition division. We continue to focus on shareholder returns by leveraging our strong cash flow. And in the year to date, we repurchased and canceled over 15 million Landvia shares at a cost of 197 million euro, which represented an average purchase price of 13 euro 10. I'm pleased to say that based on the continued momentum within our performance nutrition segment, we are upgrading our like-for-like revenue guidance for the full year to 3% to 4%, excluding the impact of SlimFast and Body & Fit. And we now expect full-year adjusted earnings per share to be at the upper end of our full-year guidance range of $1.30 to $1.33. We look forward to meeting investors and analysts at our capital market today in London on the 19th of November, where we will have an opportunity to develop more into the growth strategy for the group and associated financial targets. Performance nutrition delivered a better than expected performance during the period, with like-for-like revenue increasing by 2.5%, excluding the impact of SlimFast and Body & Fit, which have now been sold. In the third quarter, we delivered a sequential improvement, growing like-for-like revenue by double digits, excluding the impact of disposed brands. Year-to-date, the volume performance was driven predominantly by strong category growth, with good growth in food drug mass and e-commerce channels in both the U.S. and international markets. somewhat offset by low revenue in the club and specialty channels in the US, and a reduction in margin dilutive promotions. We continue to scale our international business, which delivered strong like-for-like growth of 8.8% year-to-date, excluding slim, fast, and body and fit, particularly in Asia Pacific. Pricing was broadly in line with expectations with marginally negative year-over-year impact as a result of tactical price changes, primarily relating to higher margin products in the energy category, which are delivering a strong volume uplift. We continue to navigate ongoing elevated whey prices driven by strong category demand and have responded to this inflation by increasing prices in our international markets in the first quarter of the year. Pricing in the US markets comes into effect in the fourth quarter. We continue to expect approximately 15 to 20% of new whey protein isolates supply from the back end of 2025 and through 2026. In terms of brand performance, Optimum Nutrition, our largest brand at 68% of performance nutrition revenue, delivered like-for-like revenue growth of 4.6% and U.S. consumption growth of 8.8%. We saw strong double-digit growth in the U.S. food drug mass channel, growing ahead of the category, and continued strong growth in the online channel. We continue to grow our household penetration and expand the brand's distribution. We have a world-leading portfolio of high-quality products within the Optimum Nutrition and iSphere brands, and we continue to focus on innovation and education. We've launched a number of products this year, such as Optimum Nutrition ProQuench, ClearWay Collagen, and new products across our creating platform, plus the extension of our iSphere proposition into gut health and immune system support. And we're seeing good growth in our non-Huey innovation products for both brands. Our education effort continues to pace, including the Optimum Insiders event we hosted at the McLaren Technology Center, the launch of the Optimum Nutrition Academy program in the U.S., and the continued rollout of Coach Optimum, our AI-powered virtual coach into new markets. Our healthy lifestyle portfolio delivered like-for-like revenue growth of 2.6% and U.S. consumption growth of 6.8%. Our priority growth lifestyle brand, Isopure, continues to enjoy strong growth across all our channels. We introduced a new look and formula for Isopure improving brand visibility and flavor, and we also launched our new creative campaign, More of What Matters, driving continued growth in household and TDP. We'll continue to roll out and mark the test of our new ready-to-drink innovation, ice to pure protein water. As stated already, due to the momentum in the third quarter, which we see continuing in the fourth quarter, we are pleased to upgrade our full-year like-for-like revenue guidance to 3% to 4% growth, excluding the impact of slim fast and body and fist. Turning to our health and nutrition segment, which comprises the pre-mixed solutions and flavors platforms, and focuses on priority high-growth end-use markets, such as vitamins, minerals, and supplements, active lifestyle nutrition, and foundation of beverages. This segment delivered a strong performance in the year to date, delivering like-for-like revenue growth of 6.1%. This was driven by a 6.9% increase in volume and a 0.8% decrease in price. Total revenue increased by 11.5% as a result of a 7.6% increase in the acquisitions of flavor producers and sweet mix, somewhat offset by a decrease of negative 2.2% as a result of the impact of the 53rd week in the prior year. We are pleased with the strong performance in the quarter, which is driven by good growth across BMS and functional beverage markets, and we continue to see good broad-based demand, with strong growth particularly in EMEA and Asia-Pacific. Pricing was slightly negative as a result of certain pass-through pricing with customers. During the third quarter, we completed the acquisition of SweetMix, a high-quality Brazil-based nutritional premix and ingredient solutions business, which will allow continued expansion in the Latin America region. We'll continue to invest in innovation and new capabilities and are building out our new powder flavor capability We're planning a capital investment in flavor spray drying that allows us to capture additional opportunities across a broader B2B customer base. In terms of guidance, we are reiterating our full year guidance of mid-single-digit like-for-like revenue growth in 2025, which will be predominantly volume-led and is currently tracking towards the upper end of the range. Dairy Nutrition combines our U.S. cheese and dairy protein portfolios and has largely one integrated manufacturing footprint with a high supply and operational interdependency. And it's also the route to market for our joint venture supply of whey and cheese ingredients. This business provides a scale leadership position in dairy as a leading producer of whey protein isolate and the number one producer of American-style cheddar cheese. In the year to date, like-for-like revenue increased by 6.1%, driven by a 3.5% increase in volume and a 2.6% increase in price. Total revenue increased by 3.2% as a result of a negative 2.9% decrease from the impact of the 53rd week in the prior year. The volume increase was seen across cheese and protein solutions with strong whey protein demand particularly targeting the high protein ready-to-eat category. And we continue to see good demand for colostrum targeting gut health and immunity. Pricing increase was largely driven by favorable dairy market pricing in the first half of the year, with strong protein markets in particular. Broader dairy market pricing turned negative during the third quarter. Portfolio 25 will continue to expect profit growth across dairy nutrition and our joint venture combined. And with that, I will hand over to Mark.

Thank you, and good morning to everyone on the call. The group has a strong balance sheet, and at the end of the third quarter, net debt was just under $719 million. We have committed facilities of approximately $1.4 billion with an average maturity of three years. At year-end, we expect net debt to adjust to EBITDA to be approximately 1.25 times. The acquisition of SweetMix in Brazil closed in August for $41 million. The disposals of SlimFast US, SlimFast UK, and Body & Fit have now been completed. as of September 22nd, October 20th, and October 31st, respectively. Prior to completion, these businesses had generated approximately $105 million of revenue in 2025. Total consideration for these transactions, including working capital transfers, was approximately $63 million, of which $14 million has been deferred up to 15 months. Following these transactions, a further charge of approximately $30 million is expected to be taken related to the sale of the Stimpass brand, which will be confirmed with our annual accounts. Capital expenditure, both strategic and business-sustaining initiatives for the year, is expected to be between $80 million and $90 million. with investments primarily related to ongoing capacity enhancements, business integrations, and IT investments to drive further efficiencies in operations. During the first nine months of the year, the group repurchased approximately €197 million worth of ordinary shares via our share buyback program. which equated to over 15 million Glambia shares as an average purchase price of €13.10. Shares repurchased represented over 5% of the weighted average number of ordinary shares in issue at the beginning of the year. Approximately €103 million in dividends were also returned to shareholders this year in line with our dividend payout ratio of 25% to 35%, of adjusted earnings per share. We look forward to the opportunity to review our capital allocation framework with you at our upcoming Capital Markets Day on the 19th of November. Now let me turn to our outlook on, firstly, revenue growth. We are pleased to upgrade performance nutrition revenue growth expectations. We now expect performance nutrition life-for-life revenue growth, excluding slim, fast, and body and fit, to be 3% to 4%, previously 2% to 3%. We continue to see strong growth in the category, which is supporting growth of the second half, alongside distribution gains and planned innovation. Providing further confidence, in the third quarter, we saw strong sequential improvements particularly in our option nutrition brand, which increased like-for-like revenue by 14.3% in the quarter. Health and nutrition has delivered good performance year-to-date across pre-mixed solutions and flavors platforms. While we continue to expect like-for-like mid-single-digit revenue growth for the full year, the business is currently tracking towards the upper end of this range. Moving on then to earnings expectations. In performance nutrition, we continue to navigate elevated weigh costs, and we have now procured our weigh needs through the first half of 2026, with weigh costs remaining elevated due to strong end market demand. As previously discussed, we have line of sight to approximately 15% to 20% of new whey protein isolate supply coming to market late 2025 through 2026, which has been somewhat delayed from expectations earlier in the year. We have implemented pricing in our international markets in Q2 and in the Americas in Q4, and we anticipate further pricing actions in 2026 as demand for protein is expected to remain strong. Performance nutrition EVA-DA margins are tracking towards the lower end of the 13% to 14% guide range for the full year as we manage some dis-synergies for the remainder of the year related to the disposals I've mentioned earlier. Health and nutrition EBITDA margins are expected to be between 18% and 19% for the year. Dairy nutrition delivered a strong performance year-to-date on the back of good volume growth in protein solutions and strong dairy market pricing in the first half of the year. We continue to expect profitability growth and our joint venture operations combined as previously guided. Operating cash flow conversion is expected to be over 80% for the year. Finally, we are also pleased to update adjusted earnings per share expectations to the upper end of the previously guided range of 130 to 133 cents. And with that, I will turn it back to Hugh.