Glanbia Regulatory News (GLB)

2016

Glanbia plc

Full year results

Delivering better nutrition for every step of life's journey

Wednesday, 22 February 2017

22 February 2017 - Glanbia plc ("Glanbia", the "Group", the "plc"), the global nutrition group, announces its results for

the financial year ended 31 December 2016.

Results highlights for the full year 2016

· Adjusted Earnings Per Share 87.66 cent, up 11.2% on prior year, constant currency (up 10.8% reported);

· EBITA from wholly owned business €305.1 million, up 12.5% on prior year, constant currency (up 12.6%

reported)

· EBITA margins from wholly owned business 10.7%, up 90 bps on prior year, constant currency and reported;

· Glanbia Performance Nutrition ("GPN") EBITA €162.6 million, a 20% increase on prior year, constant currency (up

19.9% reported);

· Glanbia Nutritionals ("GN") EBITA €111.8 million, a 4.5% increase on prior year, constant currency (up 4.9%

reported);

· Strong cash conversion with free cash flow of €311.0 million representing 87.6% of EBITDA; and

· Recommended final dividend of 7.94 cent per share, an increase of 10% on prior year.

Commenting today Siobhán Talbot, Group Managing Director, said:

"I am pleased that Glanbia had a strong Group-wide performance in 2016 delivering our seventh year of double digit

earnings growth coupled with strong cash conversion. It has been an exciting start to 2017 with a number of key

strategic initiatives progressing which will shape the future direction of the Group. Today Glanbia is announcing that it

has signed a non-binding memorandum of understanding for the sale of 60% of the Dairy Ireland segment to Glanbia

Co-operative Society Limited. Also as recently announced Glanbia Performance Nutrition has made two acquisitions

within the plant based nutrition category and direct to consumer channel further expanding our channel and consumer

reach. In addition Glanbia is also in advanced discussions to form a new Joint Venture (JV) in the US to build a large

scale cheese and whey facility. All of these initiatives demonstrate a desire to play to our strategic strengths and are

aligned to our vision to be one of the world's top performing nutrition companies."

1. To arrive at the Constant Currency Change, the average FX rate for the current period is applied to the relevant reported result from the same period in the prior year. The average

Euro US Dollar FX rate for 2016 was €1 = $1.107 (FY 2015: €1 = $1.109).

2. EBITA is defined as earnings before interest, tax and amortisation and is stated before exceptional items.

3. Glanbia's share of Joint Ventures & Associates.

4. Total Group comprises wholly-owned business plus Glanbia's share of Joint Ventures & Associates.

5. Adjusted Earnings Per Share is reconciled in Note 13 of the financial statements.

This release contains certain alternative performance measures. A detailed glossary of the key performance indicators and non-IFRS performance measures can be found on pages 33 to 39.

2016 full-year overview

Glanbia delivered a strong performance in 2016. Wholly owned revenue was €2,847.9 million, an increase of 2.8%

constant currency (up 2.7% reported). Wholly owned EBITA was €305.1 million, up 12.5% constant currency (up

12.6% reported). Wholly owned EBITA margin was 10.7%, up 90 bps, constant currency and reported. Total Group

revenue for the period, including the Group's share of Joint Ventures & Associates, was €3,697.0 million, an increase of

1.3% constant currency (up 0.8% reported). Total Group EBITA was €349.8 million, up 12.8% constant currency (up

12.6% reported). Total Group EBITA margin was 9.5%, up 100 bps, constant currency and reported. Adjusted earnings

per share for the year were 87.66 cent, up 11.2%, constant currency (up 10.8% reported).

Dividend and Total Shareholder Return

The Board is recommending a final dividend of 7.94 cent per share, bringing the total dividend for the year to 13.31

cent per share, representing an increase of 10% and returning almost €40 million to shareholders. Subject to

shareholder approval, the final dividend will be paid on 28 April 2017 to shareholders on the share register on 17

March 2017. In 2016, the share price decreased 6.9% from €16.95 to €15.78 compared to the Stoxx 600 Food and

Beverage Index which declined 5.4% for the year. Glanbia's Total Shareholder Return (TSR) in 2016 was a negative

6.2%; TSR for the 3 years to the end of 2016 was 46.1%.

Board and management changes

On 21 February 2017, Jim Gilsenan and Matthew Merrick informed the Board that they will retire at the Company's

AGM in April 2017. Their replacements will be appointed by 30 June 2017.

Capital investment

In 2016 capital expenditure amounted to €89.5 million of which €57.1 million was strategic capital expenditure which

was focused on GPN and GN. The majority of the capital spend related to enhancing our innovation capabilities,

finalising additions in our high-end cheese and whey facilities in Idaho, and various systems implementations.

Strategic initiatives

In 2017 Glanbia has made progress on a number of key strategic initiatives. Delivery of these initiatives is consistent

with the ambition of the Group to build on its existing strengths and drive future sustainable growth across its growth

platforms.

Sale of 60% of Dairy Ireland segment to Glanbia Co-operative Society Limited

Today Glanbia has announced that it has signed a non-binding memorandum of understanding ("MOU") with Glanbia

Co-operative Society Limited (the "Society") to sell to the Society a 60% interest in the Dairy Ireland segment (the

"Proposed Transaction"). Under the Proposed Transaction the Dairy Ireland businesses will be integrated with Glanbia

Ingredients Ireland and this new entity, renamed "Glanbia Ireland", will be 60% owned by the Society and 40% owned

by Glanbia. The total enterprise value agreed for Dairy Ireland is approximately €340 million. As detailed in today's

announcement the proposed transaction is structured such that the Society will acquire a 60% interest in the Dairy

Ireland segment net of pension obligations and excluding working capital for €112 million. The working capital on

completion will be paid directly to Glanbia by Glanbia Ireland. While discussions are at an advanced stage, the Proposed

Transaction is subject to the negotiation of final transaction related agreements and an approval vote of the

shareholders of both Glanbia and the Society, with completion expected by mid-2017.

In creating a new Glanbia Ireland business the shareholders will create a strong organisation having the ambition to

leverage the benefits of the significant growth plans of the Irish dairy supply base with an ownership structure more

aligned to the needs of that supply base. Glanbia Ireland will build on the significant investment programme to date

with plans for further strategic investment of approximately €250 million - €300 million between 2017 and 2020 to

increase processing capacity and drive value. This investment will largely be funded by debt facilities within Glanbia

Ireland.

Acquisitions of Amazing Grass and Body & Fit

On 6 January 2017, Glanbia acquired Grass Advantage LLC ("Amazing Grass") in the US. Amazing Grass has a portfolio

of organic and non GMO plant-based nutrition brands. On 3 February 2017, Glanbia agreed to acquire B&F

VastgoedB.V. ("Body & Fit") in the Netherlands, a leading direct to consumer ("DTC") online branded business

focusedon performance nutrition. The Body & Fit acquisition is expected to close in the first half of 2017.

Existingmanagement teams will remain with their respective businesses and integration will largely be related to

installing Glanbia support systems. The combined consideration for both acquisitions will be approximately €181

million inclusive of expected contingent consideration. The 2016 full-year combined net revenue of both companies

was €99 million. Both acquisitions have a strong strategic fit and will enable Glanbia Performance Nutrition extend its

reach to new consumers and channels. The acquisitions will be marginally earnings accretive in 2017 and financed

from available banking facilities.

Strategic Joint Venture

On 27 January 2017, Glanbia announced it was in advanced discussions to create a new Joint Venture to build a large

scale cheese and whey plant in the State of Michigan, USA (the "JV"). Glanbia will own 50% of the JV and Dairy Farmers

of America Inc., Michigan Milk Producers Association and Foremost Farms US will collectively own the remaining 50%

share (the "JV Partners"). The total project cost is anticipated to be approximately $400 million - $425 million with the

majority of the cost expected to be financed through debt facilities within the JV. The plant is expected to be

commissioned in late 2019. This represents an important development in the Glanbia Nutritionals strategy to maintain

its leadership position in the US American style cheddar cheese and value-added dairy ingredients markets.

2017 Outlook

On a pro-forma* basis Glanbia expects the adjusted EPS of the continuing Group to grow between 7% - 10% constant

currency in 2017. The Dairy Ireland transaction is expected to be 5%-7% adjusted EPS dilutive in a full-year. Growth in

2017 is expected to be more evenly balanced across Glanbia Performance Nutrition (GPN) and Glanbia Nutritionals

(GN). GPN growth will be driven by organic brand development and innovation as well as a contribution from recent

acquisitions. GPN expects like-for-like branded revenues to grow in the mid-single digit range with EBITA margins

expected to be in the mid-teen range. GN expects EBITA growth in 2017 to be driven by continued growth in the value

added portfolio of Nutritional Solutions.

Operations review

Reported performance

Glanbia Performance Nutrition

Commentary is on a constant currency basis throughout

*Pro-forma adjusted EPS of the continuing Group has been calculated assuming the Dairy Ireland transaction took place at the start of FY 2016.

Glanbia Performance Nutrition ('GPN') delivered a strong performance in 2016 delivering EBITA of €162.6 million

which was a 20.0% increase on the prior year. Revenues increased by 9.7% reflecting a volume increase of 5.0% and a

contribution of 9.5% from the acquisition of thinkThin. This was offset by a net price decline of 4.8%. Margins increased

by 130 basis points versus the prior year to 16.1%.

Volume growth was broad based across all geographic regions with like-for-like branded volume growth of 6.1%.

Overall like-for-like branded revenue growth was 2.6% with volume growth offset by price declines as a result of the

increased promotional environment in 2016. Core performance nutrition consumers continue to drive growth globally

with GPN augmenting this through innovation which targets new formats and consumers in existing and new channels.

The thinkThin acquisition performed well in 2016 with growth achieved through market share and distribution gains.

GPN margin increase was as a result of raw material price deflation and improved product mix, as contract sales as a

proportion of total GPN sales declined further in 2016.

Amazing Grass and Body & Fit acquisitions

Amazing Grass participates in the fast growing plant-based nutrition, "Greens" and "Super food" categories. The brand

portfolio offers plant-based organic, GMO free products to lifestyle consumers in the natural, online, food, drug and

mass channels in North America. The brand is complementary to the current portfolio and positions GPN well in the

plant-based nutrition market. Amazing Grass is based in California and the existing management team plan to remain

with the business. Integration will largely be related to installing Glanbia support systems which is expected to be

completed by the end of 2017.

Body & Fit is an online Direct to Consumer ("DTC") brand based in the Netherlands. Body & Fit's consumer base is

largely the Netherlands, Belgium and Germany. This acquisition enables GPN to have a direct presence in the rapidly

growing DTC online channel. The Body & Fit management team plan to remain with the business. The transaction is

subject to Dutch competition clearance and is expected to close in the first half of 2017.

Glanbia Nutritionals

Commentary is on a constant currency basis throughout

Glanbia Nutritionals ('GN') delivered a good performance in a volatile dairy market environment in 2016 reporting a

4.5% improvement in EBITA. Revenues increased by 0.4% to €1,224.2 million as volume growth of 3.2% offset pricing

declines of 2.8%. The volume increase was driven by continued growth in Nutritional Solutions, while price declines

resulted primarily from weak dairy markets. Overall margins grew by 30 basis points to 9.1% driven by the positive

mix effect from the continued growth in Nutritional Solutions. The project to create one customer facing GN organisation

was implemented in 2016.

Nutritional Solutions

Nutritional Solutions is a leading marketer of advanced-technology whey protein, specialist vitamin & mineral blends,

plant based ingredients and functional beverages. Nutritional Solutions delivered a good performance in 2016 with

revenue of €488.3 million a 2.8% increase on prior year. This was driven by volume improvement which more than

offset price declines primarily relating to relatively weak dairy markets. Nutritional Solutions volume growth

benefitted from the capacity increase in high end whey protein production which came on stream in the fourth quarter

of 2015. In addition sales of value-added systems and blends continued to grow with key customers across mainstream

food & beverage, infant & clinical nutrition, and performance nutrition & supplements categories. GN remains focused

on growing this element of the business as these markets continue to see strong consumer demand for improved

functional and nutritional products.

US Cheese

GN is the number one marketer of American-style cheddar cheese in the US supplying to leading brand owners and

other food processors. US Cheese had revenue of €735.9 million in 2016. Revenue declined by 1.2% versus 2015

mainly driven by dairy market related price declines with relatively flat volume year-on-year as plants operated

broadly at full capacity. Overall demand remains solid.

Strategic Joint Ventures

A core strength of GN is the capability to develop, operate and commercialise large scale cheese and whey facilities. In

2016 GN marketed a total of 420,000 metric tonnes (MT) of cheese and 30,000MT of advanced-technology whey

protein. This was mainly sourced from its wholly owned facilities and Glanbia's JV Partner Southwest Cheese (SwC).

Future increases in cheese and whey supply have been secured through investments in SwC where a 25% capacity

increase is scheduled to be commissioned in 2018 representing an additional 50,000MT of cheese and 3,000MT of

advanced-technology whey protein.

Additionally, Glanbia is in advanced discussions on a proposed new JV to construct a new large scale cheese and whey

plant in the State of Michigan, which is expected to be commissioned in late 2019. This proposed plant would produce

140,000MT of cheese and 9,000MT of advanced technology whey protein at full capacity. The total project cost will be

$400 million - $425 million with the majority of the costs expected to be financed through debt facilities within the JV.

GN has a strong track record as an effective partner in JVs providing operational, technical and commercial expertise

alongside producer organisations that provide a long term secure milk supply. These investments will underpin GN's

leadership positions in American style cheddar cheese and advanced technology whey proteins.

Dairy Ireland

Dairy Ireland delivered a satisfactory performance in 2016 growing EBITA by 6.6% on prior year to €30.7 million. This

was driven by margin expansion of 50 basis points on revenue which declined by 2.7% year-on-year. The revenue

decline was driven by a price decrease of 5.1% offset somewhat by a volume increase of 2.1% and a small contribution

from an acquisition of 0.3%.

Consumer Foods Ireland delivered a good performance in the year growing value-added milk sales, further reducing

costs as well as developing exports of branded long-life dairy products. This more than offset a decline in volume

resulting from the loss of a private label contract during the year.

Agribusiness delivered a performance in line with expectations growing volumes of feed and fertiliser. However this

was offset by price declines associated with raw material price decreases.

Joint Ventures & Associates (Glanbia Share)

Commentary is on a constant currency basis throughout

Joint Ventures & Associates delivered a good performance in 2016 with Glanbia's share of EBITA growing by 14.9%

year-on-year. This was as a result of volume growth across the businesses, improved operating efficiencies and some

improvement in market dynamics in the second half of the year.

Revenue was 3.4% lower in 2016 versus the prior year. This was driven by a price decline of 4.9% as a result of the

relatively weak dairy market environment in the first half of 2016. The disposal of Glanbia's interest in Nutricima in

April 2015 led to an additional 1.3% decline in revenue compared to the prior year. All Joint Ventures and Associates

contributed to overall year on year volume growth of 2.8%.

Glanbia Ingredients Ireland (GII)

GII delivered a solid performance in 2016 in a challenging market environment. Milk volume processed grew by 5.4%.

GII continues to invest in higher-value processing technology to serve a range of ingredient customers across the infant

nutrition, performance, and clinical nutrition sectors. The recently launched 'Truly Grass Fed' campaign highlights

Ireland's natural advantage in pasture-based dairy production by family-farm suppliers.

Southwest Cheese (SwC)

SwC delivered a good performance in 2016 growing earnings as a result of an increase in production volumes and

recovering cheese prices in the second half of 2016. The project to expand production capacity by 25% is on track with

commissioning expected in 2018.

Glanbia Cheese UK

Glanbia Cheese UK delivered a satisfactory performance; growing its earnings on flat revenues. Robust demand

underpinned volume growth however pricing was reduced as a result of lower market pricing.

2016 Finance review

2016 Group Income Statement

Income statement

Wholly owned revenues increased by 2.8% constant currency (up 2.7% reported) in 2016 to €2.8 billion. Volume

increases of 3.5% across all segments were more than offset by price declines of 4.0% primarily due to lower dairy

markets and increased promotional activity. Acquisitions, in particular thinkThin, accounted for a 3.3% increase in

revenues.

Wholly owned EBITA before exceptional items grew by 12.5% constant currency (up 12.6% reported) to €305.1

million (2015: €271.0 million). Wholly owned EBITA margins increased by 90 basis points to 10.7%. Increased EBITA

and EBITA margins were reported from each wholly owned segment as a result of higher branded sales in GPN,

improved value-added nutritional sales in GN, lower input costs across all businesses, and the full-year contribution of

the thinkThin acquisition.

Net financing costs increased by €1.7 million to €22.8 million (2015: €21.1 million). This was largely driven by

increased debt due to the impact of the thinkThin acquisition which completed in December 2015. The Group's average

interest rate in 2016 was 3.8% (2015: 4.0%). Glanbia operates a policy of fixing a significant amount of its interest

exposure, with 75% of projected 2017 debt currently contracted at fixed rates.

The 2016 pre-exceptional tax charge increased by €6.0 million to €43.3 million (2015: €37.3 million). This represents

an effective tax rate, excluding Joint Ventures & Associates, of 17.8% (2015: 17.1%). The Group anticipates an effective

tax rate in 2017 of between 17.5% and 18.5% representing the geographic mix of income.

The Group's share of results of Joint Ventures & Associates increased by €1.3 million to €27.6 million (2015: €26.3

million). Share of results of Joint Ventures & Associates is an after tax and interest amount.

Earnings Per Share

Basic EPS grew by 15.8% constant currency (15.6% reported). Adjusted EPS grew 11.2% constant currency (10.8%

reported), driven by growth in EBITA. Adjusted EPS is believed to be more reflective of the Group's underlying

performance than basic EPS and is calculated based on the net profit attributable to equity holders of the parent before

exceptional items and amortisation of intangible assets, net of related tax.

Exceptional items

The total cash outflow during the year in respect of exceptional charges was €19.4 million (2015: €15.1 million) of

which €9.1 million (2015: €7.1 million) was in respect of prior year exceptional charges.

Details of the exceptional items are as follows:

1. Organisation redesign costs relate to the project to create one integrated GN organisation. It is anticipated this

project will conclude during 2017 with the deployment of supporting IT systems.

2. Acquisition integration costs comprise costs incurred by GPN relating to the restructuring and the redesign of route

to market capabilities in acquired businesses.

3. Rationalisation costs primarily relate to the completion of the restructuring programme in the Dairy Ireland

segment.

4. The Group undertook a review of its pension arrangements in 2015 and agreed with the pension trustees to wind up

three of its smaller Irish defined benefit pension schemes. This transaction resulted in an exceptional charge in the

year of €5.0 million. This charge relates to net losses on settlement of €4.3 million, in accordance with IAS 19, and

professional fees of €0.7 million in relation to the transaction. This settlement reduced the gross retirement benefit

obligations by €60.2 million.

5. On 1 April 2015 the Group disposed of its investment in Milk Ventures (UK) Limited, which is the parent company of

Nutricima Limited, a JV business involved in the supply and distribution of evaporated and powdered milk, based in

Nigeria. The disposal of the Group's interest resulted in a loss of €3.6 million.

Dividend per share

The Board is recommending a final dividend of 7.94 cent per share (2015: final dividend 7.22 cent per share). This

represents an increase of 10% in the year and brings the total dividend for the year to 13.31 cent per share (2015:

12.10 cent per share) and a return of almost €40 million to shareholders.

Cash flow

Operating cash flow increased from €281.4 million to €354.4 million, representing an increase of 25.6% when the

impact of currency is excluded. Free Cash flow was €311.0 million in 2016, an increase of €55.0 million, reflecting the

increase in operating cash flow offset by increased corporation tax payments.

Corporation tax payments in 2016 were €19.0 million higher than 2015, primarily due to the utilisation of accelerated

capital allowances on capital expenditure in 2015.

Operating working capital

During 2016 Glanbia continued to focus on working capital management and has implemented a number of initiatives

focusing on payables, receivables and inventory. Total operating working capital at the end of 2016 was €233.3 million,

a decrease of €18.4 million compared to the prior year. Excluding the impact of currency movements, acquisitions and

other non-operational movements, this represents a decrease in year-on-year operating working capital of €27.2

million.

Investing for growth

In 2016 capital expenditure amounted to €89.5 million of which €57.1 million was strategic capital expenditure

focused on GPN and GN. The majority of the capital spend related to enhancing our innovation capabilities, finalising

additions in our high-end cheese and whey facilities in Idaho, US and various systems implementations.

In December 2015 Glanbia acquired thinkThin for €202 million which provided an important entry point into the high

protein bar sector. This business has performed well in 2016. Glanbia is also adding two businesses to its performance

nutrition portfolio in early 2017. Amazing Grass and Body & Fit will provide platforms for GPN in the strategically

important plant-based nutrition category and the direct to consumer channel. The combined revenue of these two

businesses in 2016 was approximately €99 million and they are being acquired for a combined consideration of

approximately €181 million inclusive of expected contingent consideration. The Group has also recently announced

that it is in advanced discussions with three partners in the US to invest in a cheese and whey facility in the State of

Michigan. Glanbia anticipates that this facility will cost approximately $400 million - $425 million, with the majority of

the cost expected to be financed through debt facilities in the JV. The plant is expected to be commissioned by late 2019.

Glanbia also has entered into a non-binding memorandum of understanding agreement with Glanbia Co-operative

Society Limited (The "Society") to divest 60% of Glanbia plc's share in the Dairy Ireland segment. This transaction is

expected to be completed by mid-2017, subject to the negotiation of final transaction related agreements and an

approval vote of the shareholders of both Glanbia and the Society. Under the Proposed Transaction the Dairy Ireland

businesses will be integrated with Glanbia Ingredients Ireland and this new entity, renamed "Glanbia Ireland", will be

60% owned by the Society and 40% owned by Glanbia. The total enterprise value agreed for Dairy Ireland is

approximately €340 million. The proposed transaction is structured such that the Society will acquire a 60% interest in

the Dairy Ireland segment net of pension obligations and excluding working capital for €112 million. One hundred per

cent of the actual working capital on completion in Dairy Ireland will be paid directly to Glanbia by Glanbia Ireland.

Glanbia Ireland will build on investment programmes to date with a further investment of €250 million - €300 million

which will be largely financed through the debt facilities of the Associate.

Group financing

The Group's financial position continues to be strong. Net debt at the end of 2016 was €437.6 million. This is a decrease

from €584.2 million in 2015 and can be primarily attributed to strong free cash flow and lower capital investment in

the year. Net debt to adjusted EBITDA was 1.19 times and interest cover was 11.5 times, both metrics remaining well

within financing covenants. At year end 2016 Glanbia had available bank facilities of €722 million which will mature in

January 2020 and private placement debt of $325 million which will mature in June 2021.

Glanbia's capital structure has considerable capacity to finance future investments.

Return on Capital Employed (ROCE)

ROCE decreased in 2016 by 100 basis points to 12.9% (2015: 13.9%). This was driven primarily by the growth in

reported EBITA, being more than offset by the near-term dilutive effect of recent acquisitions. The Group has a strategic

target to maintain a minimum ROCE of 12%.

Following a review and peer benchmark of the ROCE metric, it has been decided to update the methodology used to

calculate ROCE to include the impact of net deferred taxes in capital employed from 2017. If this revised calculation had

been applied in 2016, ROCE would have been reported as 13.9%; (2015: 14.8%)

Pension

The Group's net pension liability under IAS 19 (revised) 'Employee Benefits', before deferred tax, increased in 2016 by

€23.2 million to €110.5 million (2015: €87.3 million). A significant driver of this increase was the decrease in the

discount rates used in valuing the net pension obligation, reflecting the decline in AA Corporate Bond yields during the

year. On completion of the Dairy Ireland transaction, it is anticipated that approximately €60 million* of net pension

liabilities will transfer to Glanbia Ireland on an IAS 19 basis.

Shareholders Returns

Total Shareholder Return (TSR) for the year was a negative 6.2% following positive returns of 33.2% in 2015 and

16.9% in 2014. TSR over the three-year period 2014 to 2016 was 46.1%. Glanbia's share price at the end of the

financial year was €15.78 compared to €16.95 at the 2015 year end. The STOXX Europe 600 Food & Beverage Index

decreased by 5.4% in 2016. Five-year TSR was 257.1%.

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 principal risks facing the Group, including

those that may threaten the business model, future performance, solvency or liquidity. In 2017 the principal risks and

uncertainties affecting the Group's performance continue to be:

· Economic, industry, political and tax risk:

o Macro-economic and global trade uncertainty continues to increase, partly as a result of Brexit (the United

Kingdom (UK) electorate voting to leave the European Union). While the immediate direct impacts of this

decision are limited, currency volatility, further movement in discount rates and other economic uncertainties

will require on-going monitoring by the Group.

· Market Risk:

o The overall impact on margins of movements in dairy pricing particularly in whey markets. This includes the

extent to which low whey market pricing supports a heavily promotion led, price deflationary competitive

environment for GPN, particularly in the US market.

The Group's approach to financial risks, including currency risk, interest rate risk, liquidity and cash flow risk, price risk

and credit risk is to centrally manage these risks against comprehensive policy guidelines details of which are outlined

further in the 2016 Annual Report.

Financial strategy

Glanbia's financial strategy is very much aligned with its overall strategy of ensuring the Group delivers on its key

financial goals.

Specific financial goals to enable this strategy include:

· Assessing both external and organic investment opportunities against a minimum benchmark of 12% return

after tax by end of year three;

· Focusing the organisation on cash conversion through improved working capital management and disciplined

business sustaining capital expenditure;

· Leveraging the Group's activities to enable improved cost structures utilising shared services, procurement, IT,

and a continuous improvement mind-set; and

· Maintaining the capital structure of the Group within an implicit investment-grade credit profile.

*Net Pension liabilities related to Dairy Ireland as at December 31 2016 on a IAS19 basis

Investor relations

The Group hosted a successful Capital Markets Day in London in May 2016 which was focused on the GPN segment. In

addition to overviews by the CEO and CFO of the GPN business there were presentations from sales, marketing,

operations and regional management as well as a review of upcoming innovations. The event was attended by over 100

investors, analysts and interested parties. Presentations made at the event are available in the Investor section of the

Glanbia.com website.

The Group Managing Director, Group Finance Director, Executive Directors and Head of Investor Relations presented at

16 investor conferences globally and conducted over 350 meetings with the investor community in 2016. Glanbia's

dedicated investor relations team engages with investors on a daily basis, outside of closed periods, and travels to

various financial centres around the world to meet with shareholders and potential shareholders alike. Glanbia is now

covered by equity analysts from 11 leading stockbroking firms who regularly publish detailed independent research

reports on Glanbia for their clients.

Annual General Meeting (AGM)

Glanbia plc's AGM will be held on Wednesday, 26 April 2017, in the Lyrath Estate Hotel, Old Dublin Road, Kilkenny,

Ireland.

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

22 February 2017

Results webcast and dial-in details

There will be a webcast and presentation to accompany this results announcement at 8.30 a.m. BST today. Please access

the webcast from the Glanbia website at http://www.glanbia.com/investors/results-centre, 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: 4954988

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 31 December 2016

Group statement of comprehensive income

for the financial year ended 31 December 2016

Group balance sheet

as at 31 December 2016

On behalf of the Board

H Corbally S Talbot M Garvey

Directors

Group statement of changes in equity

for the financial year ended 31 December 2016

Group statement of changes in equity - Continued

for the financial year ended 31 December 2016

Group statement of cashflows

for the financial year ended 31 December 2016

Notes to the Financial Statements Continued

for the financial year ended 31 December 2016

1. Basis of preparation

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 31 December 2016 (referred to as the 2016 Financial Statements). The Group Financial Statements are

prepared under EU adopted International Financial Reporting Standards (IFRS). The 2016 Financial Statements have been audited and have

received an unqualified audit report. Amounts are stated in euro thousands (€'000) unless otherwise stated. The financial information is prepared for

a 52 week period ending on 31 December 2016. Comparatives are for the 52 week period ending on 2 January 2016. The balance sheets for 2016

and 2015 have been drawn up as at 31 December 2016 and 2 January 2016 respectively. After making enquiries, the Directors have a reasonable

expectation that the Group has adequate resources to continue operating for the foreseeable future. For this reason, they continue to adopt the

going concern basis in preparing the Group Financial Statements.

The financial information has been prepared under the historical cost convention as modified by use of fair values for available for sale financial

assets, share based payments, derivative financial instruments and retirement benefit obligations. The Group's accounting policies which will be

included in the 2016 Financial Statements are broadly consistent with those as set out in the 2015 Financial Statements. The adaptation of new

standards and interpretations (as set out in the 2015 Annual report) that become effective for the Group's Financial Statements for the year ended

31 December 2016 did not have any significant impact on the Group Preliminary Full Year Results Statement.

Re-presentation

Certain comparative amounts in the balance sheet have been reclassified or re-presented, to achieve a more appropriate presentation. These

include the reclassification of retirement benefit assets; the presentation of current and deferred tax assets and liabilities where the offset criteria in

IAS 12 'Income taxes' are met; and the offset of certain trade payables and receivables where the Group is acting as agent in the collection of

receivables.

The Financial Statements were approved by the Board of Directors on 21 February 2017 and signed on its behalf by H Corbally, S Talbot, and M

Garvey.

2. Segment information

In accordance with IFRS 8 'Operating Segments', the Group has four segments as follows: Glanbia Performance Nutrition, Glanbia Nutritionals

(previously Global Ingredients), Dairy Ireland and Joint Ventures & Associates. These segments align with the Group's internal financial reporting

system and the way in which the Chief Operating Decision Maker assesses performance and allocates the Group's resources.

Each segment derives its revenues as follows: Glanbia Performance Nutrition earns its revenue from performance nutrition products; Glanbia

Nutritionals earns its revenue from the manufacture and sale of cheese, dairy and non-dairy nutritional ingredients and vitamin and mineral premixes,

Dairy Ireland earns its revenue from the manufacture and sale of a range of consumer products and farm inputs and Joint Ventures & Associates

revenue arises from the manufacture and sale of cheese and dairy ingredients.

Each segment is reviewed in its totality by the Chief Operating Decision Maker. The Glanbia Operating Executive assesses the trading performance

of operating segments based on a measure of earnings before interest, tax, amortisation and exceptional items.

Amounts stated below for Joint Ventures & Associates represents the Group's share.

2.1 The segment results are as follows:

Included in external revenue are related party sales between Glanbia Nutritionals and Joint Ventures of €13.5 million (2015: €18.3 million) and related

party sales between Dairy Ireland and Joint Ventures & Associates of €11.3 million (2015: €9.7 million). Inter-segment transfers or transactions are

entered into under the normal commercial terms and conditions that would also be available to unrelated third parties.

2.1 (a) Segment earnings before interest, tax, amortisation and exceptional items are reconciled to reported profit before tax and

profit after tax as follows:

2.2 Income statement disclosures

Other segment items included in the pre-exceptional income statement are as follows:

2.3 Balance sheet and other disclosures

The segments assets and liabilities and segment capital expenditure and acquisitions are as follows: