Glanbia Regulatory News (GLB)

Glanbia Full Year 2023 results

Strong performance with adjusted EPS1 growth of 20.5% constant currency

28 February 2024 - Glanbia plc ("Glanbia", the "Group", the "Company", the "plc"), the 'Better Nutrition company', announces its preliminary results for the 2023 financial year ended 30 December 2023 ("2023" or "FY23").

As announced on 1 March 2023, the Group has changed its presentation currency from euro to US dollar. All figures presented are in US dollar unless stated otherwise, with comparative figures also restated in US dollar.

Summary:

· Group Financial Performance:

o  Adjusted earnings per share ("EPS")1 of 131.37 $cent (2022: 109.57 $cent) representing growth of 20.5% constant currency (up 19.9% reported);

o  Group revenues of $5.4 billion (2022: $5.9 billion) representing a decline of 8.7%, constant and reported currency;

o  Group EBITA pre-exceptional $424.0 million (2022: $365.7 million), an increase of 16.4% constant currency (up 15.9% reported);

o  Basic EPS of 129.21 $cent (2022: 98.40 $cent);

o  Operating Cash Flow ("OCF") conversion of 90.4% (2022: 85.7%) and year end net debt to adjusted EBITDA ratio of 0.5 times (2022: 1.13 times);

· Glanbia Performance Nutrition ("GPN"):

o  Like-for-like ("LFL") branded revenue growth of 5.1% with pricing +5.4% and volume -0.3%;

o  Optimum Nutrition ("ON") brand delivered LFL revenue growth of 17.0% with both volume and price growth; US consumption growth2 of 13.7% for the 52 week period;

o  Increased brand and marketing investment, prioritising the protein growth brands of Optimum Nutrition, Isopure and think!;

o  EBITA margin of 14.2% (2022: 11.2%), an increase of 300bps;

· Glanbia Nutritionals ("GN") - Nutritional Solutions ("GN NS"):

o  LFL revenue decrease of 12.3% with pricing -9.0% and volume -3.3%;

o  Volume trends continued to improve through the second half of FY23 with volume growth in Q3 and Q4;

o  EBITA margin of 12.5% (2022: 11.4%), an increase of 110bps;

· Capital allocation:

o  Recommended final dividend per share of 21.21 ?cent; representing a total 2023 dividend of 35.43 ?cent; a 10% increase on prior year, representing a payout ratio of 29.2%;

o  Returned ?100 million to shareholders in the year via share buybacks. Reflecting the Group's strong cash flow and financial position, the Group is today announcing its intention to return a further ?100 million via share buybacks in FY 2024, starting initially with a ?50m buyback programme;

· 2024 Outlook:

o  Glanbia expects to deliver adjusted EPS growth of 5% to 8% constant currency in FY 2024.

1 Adjusted earnings per share ("EPS") for continuing operations.

2 Consumption growth is US measured in channels and includes Online, FDMC (Food, Drug, Mass, Club) and Specialty channels. Data compiled from published external sources and Glanbia estimates for the 52 week period to 31 December 2023.

Commenting today Hugh McGuire, Chief Executive Officer, said:

"On behalf of the Glanbia team, I am pleased to report that the Group delivered an excellent performance in 2023 with adjusted EPS1 growing by 20.5% to 131.37c. This was driven by strong global consumer demand, with Optimum Nutrition continuing its growth momentum, delivering volume and price growth in the period. In our Nutritional Solutions business, overall volume trends continued to improve through the year, with a sequential improvement in volume growth in the fourth quarter.

Our strong operational and financial performance continued to generate excellent cash flow, with 90.4% cash conversion in the year. We continued to evolve our portfolio with the acquisition of a bioactive ingredients business and the sale of our share of Glanbia Cheese joint ventures. We increased the dividend by 10% and returned ?100 million to shareholders via our share buyback programme.

Glanbia is a company with very strong fundamentals - a clear strategy, a portfolio of great brands and ingredients playing into strong underlying consumer health and wellness trends with a team of talented people. Looking ahead, we will focus on driving growth and shareholder value by stepping up awareness and distribution of our great brands, with a robust innovation pipeline across both our growth platforms. In 2024, we expect adjusted EPS growth of 5% to 8% constant currency, which will be driven by a strong operating performance across both GPN and GN NS."

Summary financials1 - continuing operations

1. This release contains certain alternative performance measures. Detailed explanation of the key performance indicators and non-IFRS performance measures can be found in the glossary on pages 35 to 43.

2. To arrive at the constant currency change, the average exchange rate for the current period is applied to the relevant reported result from the same period in the prior year. The average US dollar euro exchange rate for 2023 was $1 = ?0.9247 (2022: $1 = ?0.9493). Reported and constant currency movements are on a pre-exceptional basis.

3. EBITA (pre-exceptional) is defined as earnings before interest, tax and amortisation.

FY23 results summary

2023 full year overview

Glanbia delivered a strong financial and operating performance in 2023. Group revenue was $5,425.4 million (2022: $5,943.7 million), down 8.7% constant and reported currency, primarily driven by dairy pricing. Group EBITA (before exceptional items) was $424.0 million (2022: $365.7 million), up 16.4% constant currency (up 15.9% reported). Group pre-exceptional profit after tax for continuing operations was $298.1 million (2022: $248.0 million), up 21.1% constant currency (up 20.2% reported).

Adjusted earnings per share ("EPS") was 131.37 $cent (2022: 109.57 $cent), up 20.5% constant currency (up 19.9% reported).

Balance sheet and financing

The Group's continued focus on cash management delivered a strong performance with an Operating Cash Flow of $445.9 million (2022: $374.3 million), which represents an OCF conversion of 90.4% (2022: 85.7%). At year end, the Group had a net debt position of $248.7 million (2022: $490.0 million) with the decrease driven by strong cash generation, the sale of the Group's interest in the Glanbia Cheese UK and EU joint ventures and a disciplined approach to capital allocation. Net debt to adjusted EBITDA was 0.5 times (2022: 1.13 times). At year end, the Group had committed debt facilities of $1.3 billion (2022: $1.3 billion) with a weighted average maturity of 4.7 years (2022: 5.8 years).

Capital investment

Glanbia's total investment in capital expenditure (tangible and intangible assets) was $74.2 million in 2023 (2022: $72.5 million). Strategic investment totalled $51.7 million and included ongoing capacity enhancement, business integrations, and IT investments to drive further efficiencies in operations. Total capital expenditure for 2024 is expected to be $75 million to $85 million. Glanbia's ability to generate cash and its available debt facilities ensure the Group has considerable capacity to finance future investments.

Dividend per share

The Board is recommending a final dividend of 21.21 ?cent per share which brings the total dividend for the year to 35.43 ?cent per share, a 10% increase on prior year. This total dividend represents a payout ratio of 29.2% of 2023 adjusted EPS, which is within the Company's target payout ratio of 25% to 35%. The final dividend will be paid on 3 May 2024 to shareholders on the share register on 22 March 2024. Irish withholding tax will be deducted at the standard rate where appropriate. The Company's primary dividend payment currency remains euro.

Share buyback

During 2023 Glanbia purchased and cancelled 7,215,827 million ordinary shares, representing 2.7% of total issued ordinary shares at the beginning of 2023, at a total cost of ?100 million (2022: ?173.5 million). The Company's Board has approved a further ?100 million share buyback authority in 2024 as part of its capital allocation policy. Today, the Group will launch an initial ?50 million share buyback programme under this authority. Further details on the share buyback programme will be provided in a separate announcement today.

Sustainability

The Group remains on track to meet its commitment to reduce Scope 1 and 2 carbon emissions by 50% by 2030 from a 2018 base, delivering a 15.9% reduction of Scope 1 and 2 carbon emissions in 2023 versus the previous year. In addition, the Group demonstrated continued progress across our other environmental commitments relating to climate, water, waste and consumer packaging.

Strategy

During 2023 the Group continued to sharpen its focus on its core better nutrition growth platforms and simplify it's reporting structure. This included the following initiatives:

· Portfolio evolution:

o  Q1 2023 - divested Aseptic Solutions.

o  Q2 2023 - divested Glanbia Cheese UK and EU joint ventures.

o  Q4 2023 - acquired a bioactive nutritional ingredients business.

· Simplification of reporting:

o  Q1 2023 - announced change of presentation currency to US dollar.

o  Q3 2023 - announced amendment of commercial arrangements associated with US joint ventures.

The Group remains confident in delivering the financial ambition outlined at the Capital Markets event in November 2022, which was as follows:

* All Group metrics are average annual metrics for the three years 2023-2025 and include M&A activity.

Change in commercial arrangements associated with US joint venture and change to EBITDA in 2024

As announced on 16 August 2023, the Group has amended the commercial arrangements associated with its US joint venture effective 1 January 2024. Under the new commercial terms, in accordance with IFRS 15 Glanbia will recognise commissions earned on the sale of joint venture products, whereas previously Glanbia recorded the gross value of revenues and corresponding cost of sales on joint venture products sold. The change in commercial terms will impact the recognition and presentation of revenues and cost of sales from 2024 onwards only.

The Group has also decided to adopt EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) as a key performance measure from 2024. This aligns with industry standards.

The table below re-presents the pro-forma revenue for 2023 and 2022 to reflect the change in the Group's commercial arrangements associated with its US joint venture as if the terms were effective from the beginning of 2022. The impact is to decrease revenue; there is no change to EBITDA. The table also provides EBITDA by segment, in line with future reporting.

Board changes

The following Board changes have taken place at the Company since the beginning of 2023.

Siobhán Talbot stepped down from her position as Group Managing Director of the Company and Executive Director on the Glanbia Board on 31 December 2023 and retired from the Group in January 2024. Hugh McGuire, was appointed Chief Executive Officer of the Company and joined the Glanbia Board as an Executive Director on 1 January 2024.

In line with the relationship agreement with Tirlán Co-operative Society Limited (the "Society") Patsy Ahern and John Murphy retired at the Company's annual general meeting ("AGM") held on 4 May 2023, reducing the Society's representation on the Board to three directors. On the same date, the Group announced the appointment of Gabriella Parisse to its Board as an Independent Non-Executive Director effective 1 June 2023.

Róisín Brennan succeeded Dan O'Connor as Senior Independent Director of the Company on 30 December 2023. Dan O'Connor succeeded Donard Gaynor as Chair of the Environmental, Social and Governance ("ESG") Committee on 30 December 2023. Mr O'Connor has informed the Board that it is his intention to retire from the Board at the Company's AGM in 2025.

Mark Garvey, Chief Financial Officer and Executive Director of the Company, was appointed a member of the ESG Committee on 30 December 2023.

The Glanbia Board is comprised of 13 members: the Chairman, two Executive Directors, ten Non-Executive Directors including three representatives from Tirlán Co-operative Society Limited.

2024 Outlook

The Group's strong performance in 2023, despite the challenging global environment, highlights the strength of its consumer focused Better Nutrition portfolio, which is expected to drive growth in 2024 and beyond.

Based on the current market environment and expectations for the remainder of the year the Group outlines the following guidance for FY 2024:

· GPN expects to deliver 4% to 7% revenue growth*.

· GN NS expects to deliver 3% to 5% volume growth.

· EBITDA margins for GPN and GN NS to be sustained at least at the same level as 2023.

· The Group is targeting an operating cash flow conversion rate of 80%+.

Glanbia expects to deliver adjusted EPS growth of 5% to 8% constant currency in 2024.

* on a constant currency basis and includes the impact of the 53rd week in 2024.

2023 operations review

(Commentary on percentage movements is on a constant currency basis throughout)

Glanbia Performance Nutrition

· Like-for-like ("LFL") branded revenue growth of +5.1% with volume -0.3% and pricing +5.4%.

· Optimum Nutrition, the number 1 global brand in the sports nutrition sector, delivered LFL revenue growth of 17.0% with both volume and price growth.

· EBITA margin of 14.2%, an increase of 300bps versus 2022.

GPN revenue increased by 4.8% in 2023. This was driven by price increases of 5.4% partly offset by a volume decline of 0.6%. Pricing was positive following the execution of price increases in 2022. The price increases implemented to offset inflation have largely been maintained across the portfolio with consumer elasticity within the performance nutrition category better than expected. The volume decline was largely driven by the SlimFast brand, which represents 9% of GPN revenue, with the previously highlighted challenges in the diet category impacting the brand's performance. ON, which represents 62% of GPN revenue, delivered both volume and price growth in the period as the strength of the brand continues to drive global distribution and velocities, supported by increased marketing activation and brand investment.

GPN EBITA increased by 33.7% versus prior year to $255.4 million and EBITA margin increased by 300 basis points to 14.2%. This was driven by continued focus on revenue growth management initiatives, operating efficiencies and margin optimisation. The positive phasing of input costs in the second half of 2023 supported both further brand investment and margin improvement.

Americas

GPN Americas grew LFL revenue by 0.9% in 2023, with strong growth in the ON and Isopure brands offset by anticipated declines in the SlimFast brand.

The ON brand continues to strengthen its strong consumer position and delivered US consumption growth of 13.7%1 in 2023, building on a strong comparative period. This was driven by strong growth in the club and online channels and was supported by the successful activation of the 'More of You in You' brand campaign. Trends in the healthy lifestyle portfolio remained robust, with US consumption growth of 11.2%1 across the think!, Isopure and Amazing Grass brands. The strong growth in the ON and Isopure brands in the period was driven largely by the powders format, which continues to resonate as a value offering with consumers.

International

GPN International, which represents 35% of GPN global revenue portfolio, grew LFL revenue by 12.8% in 2023. Growth across the region was broad based and driven by both volume and price growth of the ON brand, which was supported by increased brand investment and expanded distribution.

Glanbia Nutritionals

1 Consumption growth is US measured in channels and includes Online, FDMC (Food, Drug, Mass, Club) and Specialty channels. Data compiled from published external sources and Glanbia estimates for the 52 week period to 31 December 2023.

Nutritional Solutions

· LFL revenue decline of 12.3% with volumes -3.3% and pricing -9.0%.

· EBITA margin of 12.5%, an increase of 110 basis points versus 2022.

· Sequential volume improvement as the period progressed, with positive volumes in Q3 and Q4.

GN NS revenue decreased by 14.9% in 2023. This was driven by a 3.3% decrease in volume, 9.0% decrease in price and a decrease of 2.6% driven by the net impact of acquisitions and disposals. The volume decline was driven largely by customer supply chain rebalancing in the custom premix solutions business in the first half of the year, which sequentially improved as the year progressed. Volumes in the protein business were positive and underpinned by good demand for protein. The price decline was driven by the decline in dairy market pricing, with positive pricing in the custom premix solutions business.

GN NS continues to support customers across a broad range of categories, ultimately seeking to address growing consumer health and wellness trends. While 2023 saw a period of customer inventory rebalancing in the custom premix business, the demand at a consumer level remains fundamentally unchanged.

As announced on 1 November 2023, Glanbia acquired a B2B bioactive nutritional ingredients business. This is an exciting addition to our portfolio of nutritional ingredients, building out our dairy bioactive platform in colostrum-enriched nutraceuticals that support gut health and immunity.

GN NS EBITA was $126.2 million, a 6.2% decline versus prior year, primarily as a result of the volume decline in the first half of 2023. EBITA margins increased by 110 basis points versus prior year to 12.5% as a result of both operating efficiencies and the mathematical impact of lower dairy pricing.

US Cheese

US Cheese revenue declined by 13.9% in 2023. This was driven by a 0.7% increase in volume and a 14.6% decline in price, with the pricing decline aligned to the lower year-on-year cheese market pricing.

US Cheese EBITA increased by 9.6% to $42.4 million as a result of strong operating efficiencies and some procurement benefits. US Cheese operates a pass-through pricing model which broadly protects earnings from changes in market pricing.

Joint Ventures (Glanbia share) - continuing operations

The Group's share of joint ventures' profit after tax pre?exceptional items decreased by $3.8 million to $12.5 million, largely driven by the sale of its shareholdings in the Glanbia Cheese Limited and Glanbia Cheese EU Limited joint ventures on 28 April 2023. On completion, the Group received initial proceeds of ?178.9 million, which included repayment of shareholder loans. The memorandum of understanding for the sale was signed on 14 February 2023 and the Group ceased to apply the equity method of accounting for its interest in these joint ventures from that date.

As announced on 1 March 2023, the Group has changed the currency in which it presents its financial results from euro to US dollar. Unless stated otherwise, the figures in this finance review are stated in US dollar. Comparative figures have been restated in US dollar.

2023 Group income statement

Revenue

Revenue decreased in 2023 by 8.7% versus prior year (constant and reported currency basis) to $5.4 billion. Like-for-like wholly-owned revenue decreased by 8.2%, driven by volume and pricing declines of 0.5% and 7.7% respectively. Detailed analysis of revenue is set out within the operations review.

EBITA (pre-exceptional)

EBITA before exceptional items increased 16.4% constant currency (+15.9% reported) to $424.0 million (2022:

$365.7 million) with strong EBITA delivery in GPN and with GN marginally down primarily due to supply chain destocking. EBITA margin in FY 2023 was 7.8%, compared to 6.2% in 2022, representing an increase of 160 basis points.

GPN pre-exceptional EBITA increased by 33.7% constant currency to $255.4 million (2022: $191.9 million), an increase of 33.1% on a reported basis. GPN pre-exceptional EBITA margin at 14.2% was 300 basis points higher than prior year (2022: 11.2%).

GN pre-exceptional EBITA declined 2.7% constant currency to $168.6 million (2022: $173.8 million), a decrease of 3.0% on a reported basis. GN pre-exceptional EBITA margin was 4.6%, an increase of 50 basis points from 2022 (2022: 4.1%).

Net finance costs (pre-exceptional)

Net finance costs (pre-exceptional items) decreased by $9.5 million to $12.3 million (2022: $21.8 million). The decrease was primarily driven by a reduction in the Group's average net financial indebtedness during 2023 compared to 2022, as well as strong returns on gross cash balances as variable interest rates rose in the period. The Group's average interest rate was 2.0% (2022: 2.3%). Glanbia operates a policy of fixing a significant amount of its interest exposure, with 95% of projected 2024 debt currently contracted at fixed rates.

Share of results of joint ventures (all continuing operations)

The Group's share of results of joint ventures is stated after tax and before exceptional items. The Group's share of joint venture profits from continuing operations decreased by $3.8 million to $12.5 million (2022: $16.3 million), primarily as a result of disposals in the year (see below), somewhat offset by an improvement in the performance of the retained US joint venture operations.

Following the agreement reached to sell the Group's share of its investments in the Glanbia Cheese UK and Glanbia Cheese EU joint venture operations on 14 February 2023, equity accounting ceased to apply from this date and the investments were considered held-for-sale. This sales transaction was completed on 28 April 2023.

Income taxes

The 2023 pre-exceptional tax charge increased by $13.4 million to $46.5 million (2022: $33.1 million). This represents an effective tax rate, excluding joint ventures, of 14.0% (2022: 12.5%). The tax credit related to exceptional items is $1.8 million (2022: $6.0 million). The Group currently expects that its effective tax rate for 2024 will increase as a result of global tax legislation changes in the jurisdictions in which the Group operates.

Exceptional items

Details of the exceptional items are as follows:

1. Net exceptional gain on disposal/exit of operations primarily relates to the net gains on disposal of the UK and EU Glanbia Cheese joint venture operations and a small US bottling facility (Aseptic Solutions) which was designated as held-for-sale at 31 December 2022 (note 5 below). Both transactions concluded during 2023 and the net gain represents the difference between proceeds received, net of costs associated with the divestment and exit of these non-core businesses and the carrying value of the investments.

2. Pension related costs relate to the restructure of legacy defined benefit pension schemes associated with the Group and joint ventures, which included initiating a process for the ultimate buyout and wind up of these schemes and a further simplification of schemes that remain. Costs incurred relate to the estimated cost of the settlement loss as a result of acquiring bulk purchase annuity policies to mirror and offset movements in known liabilities of the schemes ('buy-in' transaction), as well as related advisory and execution costs, net of gains from risk reduction activities. The restructuring effort involved the careful navigation of external market factors, with final wind up of schemes anticipated in 2024.

3. Portfolio related re-organisation costs relate to indirect one off costs as a result of recent portfolio changes. Following these divestment decisions related to non-core businesses, the Group launched a programme to realign Group-wide support functions and optimise structures of the remaining portfolio, to more efficiently support business operations and growth. This strategic multi-year programme continues in 2024. Costs incurred to date relate to advisory fees and people related costs.

4. Prior year changes in fair value of contingent consideration relate to contingent payments associated with the 2021 LevlUp acquisition that reduced following an assessment of conditions that gave rise to the additional payments.

5. Prior year non-core assets held-for-sale relate to fair value adjustments to reduce the carrying value of certain assets to recoverable value. The assets relate to the Aseptic Solutions business which was successfully divested during 2023 (see note 1 above).

6. Exceptional (charge)/gain from discontinued operations relates to the divestment of Tirlán Limited (formerly known as Glanbia Ireland DAC) ("Tirlán"). The prior year gain represents the initial gain on disposal of the Group's interest in this entity. The current year charge relates to the crystallisation of certain contingent costs associated with the divestment transaction following the conclusion of negotiations on separation of the common infrastructure of both organisations.

Profit after tax

Profit after tax for the year was $344.5 million compared to $270.6 million in 2022, comprising continuing operations of $347.7 million (2022: $210.3 million) and a loss on discontinued operations of $3.2 million (2022: profit of $60.3 million). Profit after tax from continuing operations comprises pre-exceptional profit of $298.1 million (2022: $248.0 million) and a net exceptional gain of $49.6 million (2022: charge of $37.7 million). The $50.1 million increase in pre-exceptional profit after tax from continuing operations is driven by the continued growth in profitability of wholly-owned businesses net of reduced profitability of joint ventures following the disposal of the UK and EU cheese joint venture operations in April 2023.

Profit after tax from discontinued operations relates entirely to the divestment of the Group's interest in Tirlán which completed in April 2022, with further costs associated with the transaction crystallising in 2023.

Earnings Per Share (EPS)

Basic EPS increased by 31.3% reported versus prior year, driven by a year-on-year increase in pre-exceptional profitability and the exceptional one off gains on portfolio related adjustments.

Adjusted EPS is a Key Performance Indicator ("KPI") of the Group, a key metric guided to the market and a key element of Executive Director and senior management remuneration. Adjusted EPS increased by 20.5% constant currency (19.9% reported) in the year, all from continuing operations.

Cash flow

The principal cash flow KPIs of the Group and Business Units are Operating Cash Flow ("OCF") and Free Cash Flow ("FCF"). OCF represents EBITDA of the wholly-owned businesses net of business-sustaining capital expenditure and working capital movements, excluding exceptional cash flows. FCF is calculated as the cash flow in the year before the following items: strategic capital expenditure, equity dividends paid, expenditure on share buyback, acquisition spend, proceeds received on disposal, exceptional costs paid, loans/equity invested in joint ventures and foreign exchange movements. These metrics are used to monitor the cash conversion performance of the Group and Business Units and identify available cash for strategic investment. OCF conversion, which is OCF as a percentage of EBITDA is a key element of Executive Director and senior management remuneration. OCF and FCF results for the Group are outlined below.

OCF was $445.9 million in the year (2022: $374.3 million) and represents a strong cash conversion on EBITDA of 90.4% (2022: 85.7%). The OCF conversion target for the year was 80%. The increase in OCF since prior year was due primarily to the increased profitability across the business, combined with a reduced investment in working capital as pricing and inventory volumes returned to more normalised levels following a level of significant inflation supply chain disruption throughout 2022.

FCF was $389.8 million versus $283.0 million in 2023, with the movement since prior year primarily as a result of movements in OCF (outlined above), as well as reduction in net interest cost and increased dividend returns from joint venture operations.

Capital allocated for the benefit of shareholders includes regular dividend payments of $97.2 million (2022: $88.9 million) and the execution of a share buyback programme of ?100 million (2022: ?173.5 million). The Board continues to review buyback programmes as part of the Group's capital allocation strategy as they provide an opportunity to allocate capital to the benefit of shareholders.

Acquisition spend relates primarily to the acquisition of the B2B bioactive ingredients business of PanTheryx, for an initial consideration of $45.1 million and the final contingent payment in respect of the 2022 Sterling Technology acquisition of $26.8 million. Divestment proceeds relate primarily to the disposal of the Group's interest in Glanbia Cheese UK and EU joint ventures in April 2023.

Loans to/equity in joint ventures during 2023 includes the full repayment of outstanding loans to Glanbia Cheese EU, in advance of completing the disposal of the UK and EU cheese businesses in April 2023.

Group financing

The Group's financial position continues to be strong. At year-end 2023, net debt was $248.7 million (2022: $490.0 million), a decrease of $241.3 million from prior year and the Group had committed debt facilities of $1.3 billion (2022: $1.3 billion) with a weighted average maturity of 4.7 years (2022: 5.8 years). Glanbia's ability to generate cash, as well as its available debt facilities ensures the Group has considerable capacity to finance future investments. Net debt to adjusted EBITDA was 0.5 times (2022: 1.13 times) and interest cover was 38.1 times (2022: 17.0 times), both metrics remaining well within financing covenants.

Use of capital

Capital expenditure

Cash outflow relating to capital expenditure for the year amounted to $74.2 million (2022: $72.5 million) including

$22.5 million of business-sustaining capital expenditure and $51.7 million of strategic capital expenditure. Key strategic projects completed in 2023 include ongoing capacity enhancement, business integrations, and IT investments to drive further efficiencies in operations.

Investments in Joint Ventures

During 2023, a further $3.5 million was advanced to the Glanbia Cheese EU operations which were subsequently divested along with the Glanbia Cheese UK operations. In advance of the divestment of UK and EU joint venture operations, which completed in April 2023, outstanding loans of $71.3 million were repaid in full.

Return on Capital Employed ("ROCE")

Return on Capital Employed increased in 2023 by 150 basis points to 12.2%. This increase was primarily due to the continued growth in profitability of the wholly-owned business, as well as the successful execution of strategy through pricing and efficiency improvements to improve margin and drive sustainable long term returns. Acquisitions remain a key part of the growth strategy of the Group with investments assessed against a target benchmark of 12% return after tax by the end of year three.

Dividends

The Board is recommending a final dividend of 21.21 ?cent per share which brings the total dividend for the year to

35.43 ?cent per share, a 10% increase over 2022. This total dividend represents a return of ?93.9 million to shareholders from 2023 earnings and a payout ratio of 29.2% of 2023 adjusted Earnings Per Share which is in line with the Board's target dividend payout ratio of 25% to 35%. The final dividend will be paid on 3 May 2024 to shareholders on the share register on 22 March 2024.

Total Shareholder Return

Total Shareholder Return (TSR) for 2023 was +28.04%. The STOXX Europe 600 Food & Beverage Index (F&B Index), a benchmark for the Group, decreased by 0.73% in 2023. The three-year period 2021 to 2023 Glanbia TSR was +54.16% versus the F&B Index which increased by 8.03%. The five-year Glanbia TSR to 2023 was +2.28% versus the F&B Index of +31.79%. Glanbia's share price at the end of the financial year was ?14.91 compared to ?11.92 at the 2022 year end, representing an increase of 25.1%.

Impact of new and amended accounting standards

Adoption of new standards and amendments to existing standards during the year did not have a material impact on the Group.

Pension

The Group's net pension position under IAS 19 (revised) 'Employee Benefits', before deferred tax, improved by $5.5 million since 2022, resulting in a net pension asset of $7.2 million at 30 December 2023 (2022: asset of $1.7 million). The defined benefit pension position is calculated by discounting the estimated future cash outflows using appropriate corporate bond rates. During 2023, the Company progressed the restructuring of UK pension schemes, successfully completing the "buy-out" of two legacy schemes and further reducing the Group's exposure to liabilities on these schemes. It is anticipated that these UK schemes will ultimately be wound up in 2024.

Foreign exchange

Glanbia generates the majority of its earnings in US dollar currency and has significant assets and liabilities denominated in US dollars. As a result, from 2023 Glanbia changed the currency in which it presents its financial results from euro to US dollar to reduce (but not eliminate) the impact to reported numbers arising from currency movements year-on-year and on retranslation of non-monetary assets and liabilities in the preparation of the consolidated financial statements. Commentary continues to be provided on a constant currency basis to provide a better reflection of the underlying operating results in the year, removing the translational currency impact. To arrive at the constant currency change, the average foreign exchange rate for the current period is applied to the relevant reported result from the same period in the prior year. Key non-US dollar currencies for the Group over the period were euro and pound sterling, for which average and year-end rates were as follows: Average and year end euro to US dollar rates were as follows:

Investor relations

Glanbia has a proactive approach to shareholder engagement with the Annual General Meeting ("AGM") being a key event annually. In 2023, an in person AGM was held on 4 May at the Lyrath Hotel in Kilkenny. All details relating to the AGM were published on the Company's website: www.glanbia.com/agm.

The Group Chairman consulted directly with a number of shareholders during the year. In addition, the Chair of the Remuneration Committee consulted with shareholders on the Company's Remuneration Policy. Feedback from these engagements was shared with and discussed with the Board.

In 2023, Glanbia attended 11 international equities investor conferences. In May 2023, the Group held an analyst event in London, UK, providing a deep dive on the GPN business, its strategy and key growth drivers.

In addition to full year and half year results, Glanbia publishes interim management statements after the first and third quarters to provide investors with a regular update on performance and expectations throughout the year. All releases, reports and presentations are made available immediately on publication on the Group's investor relations website.

Looking ahead

From 2024, the Group is adopting new commercial terms associated with our US joint venture operations, changing the recognition and presentation of revenues and cost of sales, without any material impact on profits. In addition, the Group will move to presentation of Earnings Before Interest, Tax, Depreciation and Amortisation ("EBITDA"). These presentational changes will continue the Group's ambition to simplify reporting to be more in line with our peers. Further pro-forma detail on the impact of these changes is provided earlier in the release.

Principal Risks and Uncertainties

The Board of Glanbia plc has the ultimate responsibility for the Group's systems of risk management and internal control. The Directors of Glanbia have carried out a robust assessment of the Group's principal risks, including those that may threaten Glanbia's business model, future performance, solvency or liquidity. The risk categorisation recognises the external risks associated with the operating environment, which are typically considered and managed through strategic processes, and the mainly internal risks associated with people, processes and systems which are managed through Glanbia's internal controls. Emerging risks with the potential to impact longer term success are also considered to ensure appropriate plans are in place to respond to them over time.

The Group's principal risks and uncertainties are summarised in the risk profile table below. The principal risk Economic, Industry and Political risk, reported in 2022, has been split into two principal risks with the political narrative now captured within a new Geopolitical principal risk and the Economic and industry risk remaining as a standalone risk. No new emerging principal risks were identified in 2023 while some fluctuation in the principal risk trends did arise including:

· Geopolitical risk: As geopolitical tensions escalated and became more widespread globally, the Directors have determined that this risk area now warrants a standalone principal risk. The market consequences of the war in Ukraine and tensions in the Middle East continue to create volatility.

· Economic and industry: the macroeconomic environment continues to show volatility with recessionary conditions which impacted some countries in 2023 looking set to continue in 2024.

· Market disruption risk continues to trend upwards. Adverse changes in economic conditions, persistent inflation, energy and interest rate pressures have continued to increase the cost of living and could result in reduced consumer spending which may disrupt demand and further increase operational and financial costs.

· Climate change risk continues to trend upwards due to the evolving climate landscape, expected future developments in ESG regulations, and the increasing stakeholder reporting expectations.

· Cyber security and data protection risks continue to trend upwards due to rapidly accelerating technological changes in areas such as Artificial Intelligence ("AI") and growing global cybersecurity control threats.

· Supply chain and Talent management risks have stabilised as supply chain risk mitigation measures have been successfully deployed, and labour market conditions continue to normalise.

There may be other risks and uncertainties that are not yet considered material or not yet known to Glanbia and this list will change if these risks assume greater importance in the future. Likewise, some of the current risks will drop off the key risks schedule as management actions are implemented or changes in the operating environment occur.

Key risk factors and uncertainties with the potential to impact on the Group's financial performance in 2024 include:

· Geopolitical risk - geopolitical tensions in the regions where we operate, may pose potential challenges that could adversely affect our pursuit of growth objectives. The Board is closely monitoring tensions in key trading regions, particularly between China and Taiwan, where any potential conflict, economic sanctions or trade rulings could impact Glanbia's growth objectives. The upcoming US presidential election also has the potential to create short-term uncertainty.

· Economic and industry risk - the macroeconomic environment continued to be uncertain as some markets entered recession in 2023. There is continuing pressure from high interest rates, monetary tightening by central banks, and currency fluctuations which the Group continues to navigate and mitigate where possible.

· Market disruption risk - while energy prices have shown signs of stabilising, food prices remain elevated and further shocks from geopolitical tensions may contribute to further inflationary pressures. The Group will continue to monitor this and any other adverse changes in economic conditions, such as the heightened cost of living and increased interest rates that could result in reduced consumer spending and a slowdown in consumer demand.

· Supply chain risk - Glanbia is actively monitoring a number of supply chain and inflationary pressures including:

o  The overall impact on margins of movements in dairy pricing, particularly in whey markets. The impact of any potential future price increases will continue to be assessed for price elasticity effects and will be managed against the Group's ambition to continue to drive revenue growth;

o  The ability of governments and medical agencies to suppress the spread of global pandemics. This is important in preventing unexpected supply chain disruptions which could result in restrictions on the importation of key raw materials and/or negative impacts on the Group's international sales channels; and

o  The Group is holding appropriate safety stocks of core raw materials however the potential prolonged impact from a geopolitical event in a key trading region, a material shift in the ESG regulatory landscape or heightened inflationary impacts to supply chains would have negative consequences from both a supply and pricing perspective.

· Customer concentration risk - while strategically the Group aims to build strong customer relationships with major customers, material disruption with, or loss of, one or more of these customers, or a significant deterioration in commercial terms, could materially impact profitability. This risk can also expose the Group to credit exposure and other balance sheet risks. The Board is focused on utilising available mitigation to limit such exposures where possible.

· Health and safety risk - a failure to maintain good health and safety practices or the risk of a global pandemic, in Glanbia's core markets, may adversely impact performance. A wide range of additional measures and mitigations have been introduced as a result of the pandemic which build on the existing strong controls across the Group.

The Group actively manages these and all other risks through its risk management and internal control processes.

Cautionary statement

This announcement contains 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 report. 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 contained in this announcement, whether as a result of new information, future events, or otherwise.

On behalf of the Board

Hugh McGuire Mark Garvey

Chief Executive Officer Chief Financial Officer

27 February 2024

Annual General Meeting (AGM)

Glanbia plc's AGM will be held on Wednesday 1 May 2024, in the Newpark Hotel, Kilkenny, Ireland.

Results webcast and dial-in details:

There will be a webcast and presentation to accompany this results announcement at 8.30 a.m. GMT today. Please access the webcast from the Glanbia website at https://www.glanbia.com/investors/results-reports-and-presentations where the presentation can also be viewed or downloaded. In addition, a dial-in facility is available using the following numbers:

The access code for all participants is: 513573

A replay of the call will be available for 30 days approximately two hours after the call ends.

For further information contact

Glanbia plc +353 56 777 2200

Group income statement

for the financial year ended 30 December 2023

Group statement of comprehensive income

for the financial year ended 30 December 2023

Group balance sheet

as at 30 December 2023

Group statement of changes in equity

for the financial year ended 30 December 2023

Group statement of cash flows

for the financial year ended 30 December 2023

Notes to the financial statements

for the financial year ended 30 December 2023

1. Accounting policies

The financial information set out in this document does not constitute full statutory financial statements but has been derived from the Group financial statements for the year ended 30 December 2023 (referred to as the 2023 financial statements). The Group financial statements have been prepared in accordance with EU adopted International Financial Reporting Standards ("IFRS"), IFRIC interpretations and those parts of the Companies Act 2014, applicable to companies reporting under IFRS. The 2023 financial statements have been audited and have received an unqualified audit report. Amounts are stated in US Dollar millions ($m) unless otherwise stated. These financial statements are prepared for the 52?week period ended 30 December 2023. Comparatives are for the 52?week period ended 31 December 2022. The balance sheets for 2023 and 2022 have been drawn up as at 30 December 2023 and 31 December 2022 respectively.

The financial statements have been prepared under the historical cost convention as modified by use of fair values for certain other financial assets, contingent consideration, put option liability, and derivative financial instruments.

All notes to the financial statements include amounts for continuing operations, unless indicated otherwise.

The Group's accounting policies which will be included in the 2023 financial statements are consistent with those as set out in the 2022 financial statements other than the change of presentation currency as detailed below.

There are no new IFRS standards or amendments effective for the Group in 2023 which had a material impact on the financial statements.

The financial statements were approved and authorised for issue by the Board of Directors on 27 February 2024 and signed on its behalf byD Gaynor, H McGuire, and M Garvey.

Change of presentation currency

Glanbia generates the majority of its revenue and earnings, and has significant assets and liabilities denominated in US Dollar. To reduce the potential for foreign exchange volatility in current and future reported earnings, the Group decided to change its presentation currency from euro to US Dollar effective from 1 January 2023.

A change of presentation currency represents a change in accounting policy under IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors which is accounted for retrospectively. The reported financial information for the year ended 31 December 2022 and Group balance sheet as at 1 January 2022 have been translated from euro to US Dollar using the following procedures:

? Assets and liabilities denominated in non-US Dollar currencies were translated into US Dollar at the relevant closing rates of exchange;

? Non-US Dollar trading results were translated into US Dollar at the relevant average rates of exchange;

? Share capital, share premium, own shares, dividends and movements in capital and merger account were translated at the historic rates prevailing on the date of each transaction. Movements in other equity accounts were translated into US Dollar at the relevant average rates of exchange; and

? The cumulative translation reserve was set to nil at 4 January 2004, the date of transition to IFRS, and has been restated as if the Group has reported in US Dollar since that date.

The principal exchange rates used for the translation of results and balance sheets into US Dollar are as follows:

Going concern

After making appropriate enquiries, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for a period of at least 12 months from the date of approval of the financial statements. The Group therefore considers it appropriate to adopt the going concern basis in preparing its financial statements.

Adoption of new and amended standards

The following changes to IFRS became effective for the Group during the financial year but did not result in material changes to the Group's financial statements:

? IFRS 17 Insurance Contracts

? Definition of Accounting Estimates - Amendments to IAS 8

? Disclosure of Accounting Policies - Amendments to IAS 1

? Deferred Tax related to Assets and Liabilities arising from a Single Transaction - Amendments to IAS 12

? International Tax Reform - Pillar Two Model Rules - Amendments to IAS 12

New and amended standards that are not yet effective

The Group has not applied new standards and amendments to existing standards that have been issued but are not yet effective. The Group intends to adopt these amended standards, if applicable, when they become effective.

Classification of Liabilities as Current or Non-current - Amendments to IAS 1 (EU effective date: on or after 1 January 2024)

The amendments clarify that liabilities are classified as either current or non-current, depending on the rights that exist at the end of the reporting period. Classification is unaffected by the expectations of the entity or events after the reporting date (e.g. the receipt of a waiver or a breach of covenant). The amendments also clarify what IAS 1 means when it refers to the 'settlement' of a liability. The Group is currently evaluating the impact of the amendments on future periods.

Other changes to IFRS have been issued but are not yet effective for the Group. However, they are either not expected to have a material impact on the Group or they are not currently relevant for the Group.

2. Segment information

In accordance with IFRS 8 'Operating Segments', the Group has identified Glanbia Performance Nutrition and Glanbia Nutritionals as reportable segments as at 30 December 2023. Glanbia Performance Nutrition manufactures and sells sports nutrition and lifestyle nutrition products through a variety of channels including specialty retail, online, Food, Drug, Mass, Club (FDMC), and gyms in a variety of formats, including powders, Ready-to-Eat (bars and snacking foods) and Ready-to-Drink beverages. Glanbia Nutritionals manufactures and sells cheese, dairy and non-dairy nutritional and functional ingredients, and vitamin and mineral premixes targeting the increased market focus on health and nutrition.

Following the disposal of Tirlán Limited in the prior year (note 13), it was no longer reported as a segment.

All other segments and unallocated include both the results of joint ventures who manufacture and sell cheese and dairy ingredients and unallocated corporate costs. These investees did not meet the quantitative thresholds for reportable segments in 2023 or 2022. Amounts stated for joint ventures represents the Group's share.

These segments align with the Group's internal financial reporting system and the way in which the CODM assesses performance and allocates the Group's resources. Each segment is reviewed in its totality by the CODM. The CODM assesses the trading performance of operating segments based on a measure of earnings before interest, tax, amortisation and exceptional items. Given that net finance costs and income tax are managed on a centralised basis, these items are not allocated between operating segments for the purposes of the information presented to the CODM and are accordingly omitted from the detailed segmental analysis below.