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LONDON (Alliance News) - Sports nurtition firm and cheese maker Glanbia PLC said Wednesday, at constant currency, its revenue increased 4.8% in the first quarter of 2018, leaving it positioned for earnings growth in the full year.
The biggest reasons for the revenue increase in the three months to March 31, Glanbia said, was volume growth of 7.2% from both Glanbia Performance Nutrition and Glanbia Nutritionals. Acquisitions contributed 3.6% growth in revenue. Pricing declined by 6.0% year on year because of the "relatively weaker" dairy markets and brand investment in Glanbia Performance Nutrition.
The Irish company's US Cheese business increased revenue by 5% in the first quarter. Glanbia said this was due to 14% volume growth, which resulted from the timing of customer off-take compared to the year before. Pricing however declined by 8.7% as a result of the weaker market year-on-year.
Glanbia's net debt at the end of the quarter was EUR385 million, a EUR350 million decrease compared to the net debt position at the end of the first quarter of 2017. According to the company, this improvement has been primarily driven by the disposals made in 2017.
Glanbia said it expects to deliver over 80% operating cash conversion of earning before income, taxation, depreciation and amortisation in 2018. Total 2018 capital expenditure is expected to be approximately EUR75 million to EUR85 million, up from EUR72.5 million the previous year.
Glanbia reiterated its guidance that adjusted earnings per share are expected to grow by between 5% and 8% at constant currency in all of 2018. The company expects earnings growth to be delivered in the second half of 2018. The comparative dairy market pricing and planned investments will deliver a "reduced performance" in the first half of the year, it said.
If the average euro-dollar foreign exchange rate remains at similar levels for the full year as the average rate for the first quarter of 2018, Glanbia said it expects about 8% "translational headwind" to annual reported results.
Managing Director Siobhan Talbot said: "Glanbia delivered positive revenue growth of 4.8%, constant currency, in the first quarter of 2018 from wholly owned continuing operations. Glanbia Performance Nutrition was the main driver of revenue growth with continued good volume momentum across key markets. Glanbia Nutritionals also delivered volume growth across its portfolio. The year has started as planned, and we reiterate our full year guidance of 5% to 8% growth in adjusted earnings per share, constant currency, from the continuing group in 2018 with growth to be delivered in the second half of the year."
Shares in Glanbia were down 3.2% to EUR13.71 each in London on Wednesday morning.
