The Irish food company, Glanbia, has reported a decline in revenue of over 5% in this year’s first quarter, largely due to a near 7% decrease in prices instigated by a drop in the dairy market. Despite this downturn, the first quarter results were in line with predictions, on account of a 1.5% growth in volume.
The information was unveiled in its interim management summary for the three-month period ending March 30th. Glanbia stated that year on year, a 5.4% drop in revenue from its wholly-owned divisions was experienced as prices reduced by 6.9%. There was a nearly 1.9% reduction in like-for-like revenue during the first quarter for Glanbia Performance Nutrition (GPN). This was however partially counterbalanced by a 1.4% increase in volume and a 3.3% price cut that Glanbia mainly attributed to promotional operations.
In the American division of GPN, the revenue dipped by 5.1%, with an expansion in performance nutrition and lifestyle unable to prevent a fall in weight management. Conversely, there was a 4.7% rise in revenue in the international division, led by promising volume growth.
Glanbia Nutritionals saw a substantial 8.5% fall in revenue, due to a 10.2% price decrease, but which was slightly counterbalanced by a 1.7% rise in volume. Glanbia Nutrition Solutions (NS) likewise reported a 1.7% drop in like-for-like revenue, despite a 3.8% growth in volumes, due to a decrease in prices by 5.5%.
Glanbia’s CEO, Hugh McGuire, remarked that the company had performed well in the first quarter. The company’s Better Nutrition brands were driving growth, thanks to strong demand.
McGuire’s comment also stressed the company’s strategy of acquiring businesses that complement Better Nutrition platforms. Their recent purchase of Flavor Producers is crystal clear evidence of this tactic, expanding their flavour contribution and increasing their capabilities in the burgeoning natural and organic flavours market.
McGuire confirmed the positive progress of the first quarter as planned, yet remained firm on the yearly forecast of 5 to 8% growth in adjusted earnings per share. A strong operating performance across GPN and NS is expected to drive this. Glanbia is also conducting a share buyback worth €100 million, already acquiring almost €30 million out of the initial €50 million tranche this year.