Glanbia Regulatory News (GLB)

17 August 2016 - Glanbia plc ("Glanbia", the "Group", the "plc"), the global nutrition group, announces its results for the six months ended 02 July 2016.

Results highlights for the half year 2016

· Adjusted earnings per share 44.87 cent, up 10.8% on prior half year, constant currency (up 10.5% reported);

· EBITA from wholly owned business €157.4 million, up 13.7% on prior half year, constant currency (up 13.6% reported);

· EBITA margins from wholly owned business 11.0%, up 130 bps on prior half year, constant currency and reported;

· Strong result from Glanbia Performance Nutrition with EBITA of €81.7 million, a 35.0% increase on prior half year, constant currency (up 34.6% reported);

· Glanbia Nutritionals1 delivered a satisfactory result with EBITA of €58.0 million, a 4.0% decrease on prior half year, constant currency (down 3.8% reported);

· Dairy Ireland in line with expectations with EBITA of €17.7 million, a 1.1% increase on prior half year;

· Joint Ventures & Associates EBITA declined 4.5%, constant currency, (down 5.4% reported) in the first half ; and

· Recommended interim dividend of 5.37 cent per share, an increase of 10% on prior year.

Commenting today Siobhán Talbot, Group Managing Director, said:

"Glanbia delivered a strong performance in the first six months of 2016 driven by Glanbia Performance Nutrition. Total Group earnings before interest, tax and amortisation for the half year grew by over 11%. Sales of performance nutrition brands and value-added nutritional ingredients showed good growth in the first half of 2016 delivering on our vision to be a leading nutrition business. Global dairy markets remain weak and continue to be a challenge for parts of the business, however the diversity of the Glanbia portfolio has enabled us to navigate this and we reiterate guidance for the full year of adjusted earnings per share growth of 8% to 10% on a constant currency basis."

1. Global Ingredients has been rebranded Glanbia Nutritionals. The operations of the segment are unchanged.

2. 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 the first half of 2016 was €1 = $1.116 (HY 2015: €1 = $1.115).

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

4. Total Group includes Glanbia's share of Joint Ventures & Associates.

5. Adjusted earnings per share is reconciled in Note 10 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 at the end of this document.

2016 half year overview and outlook

Glanbia delivered a strong performance in the first half of 2016. Wholly owned revenue was €1,434.8 million, an increase of 0.4% constant currency (up 0.2% reported). Wholly owned EBITA was €157.4 million, up 13.7% constant currency (up 13.6% reported). Wholly owned EBITA margin was 11.0%, up 130 bps, constant currency and reported. Total Group revenue for the period, including the Group's share of Joint Ventures & Associates, was €1,837.1 million, a decrease of 1.7% constant currency (down 2.1% reported). Total Group EBITA was €176.5 million, up 11.4% constant currency (up 11.2% reported). Total Group EBITA margin was 9.6%, up 110 bps, constant currency and reported. Adjusted earnings per share for the half year were 44.87 cent, up 10.8%, constant currency (up 10.5% reported).

Capital investment and corporate development

Glanbia's total investment in capital expenditure was €41.7 million in the first half of 2016, of which €27.8 million was strategic investment reflecting the on-going focus on the organic growth potential of the business. Key strategic projects undertaken in the period were the investments in value-added ingredient processing technologies at the Glanbia Nutritionals sites in Idaho and California, USA.

Board changes

On 09 May 2016, Tom Grant, Brendan Hayes, Patrick Hogan and Eamon Power retired from the plc Board as part of the agreement in place with Glanbia Co-operative Society Limited to reduce its director representation on the plc Board by four in 2016.

Glanbia Nutritionals

The Global Ingredients segment has been reshaped to improve its positioning with customers and target growth opportunities. The overall portfolio has been integrated into one global organisation to deliver to customers the full suite of Glanbia's capabilities across its cheese and nutritional ingredients platforms. This new organisation is consumer insight driven, has regionally focused sales teams, and is enabled by centres of excellence across areas such as product supply, innovation and strategy. The segment contains the prior operations of Global Ingredients and has been rebranded "Glanbia Nutritionals". It will continue to report revenue, EBITA and EBITA margin.

2016 outlook

Glanbia reiterates its guidance for 2016 of 8% to 10% growth in adjusted earnings per share, constant currency. If the full year 2016 average Euro US dollar exchange rate remains at similar levels to the first half of 2016, Glanbia expects the 2016 reported adjusted earnings per share growth to be broadly in line with the constant currency result.

Glanbia Performance Nutrition ('GPN') is expected to be the main driver of 2016 earnings per share growth. GPN continues to focus on like for like branded revenue progression and is currently expecting full year growth in line with the first half. Favourable input costs, mix improvement and operational leverage are expected to drive margin improvement and earnings for 2016 versus prior year. Glanbia Nutritionals expects to deliver modest EBITA improvement versus prior year. This will be driven by increased sales of value-added nutritional ingredients offset somewhat by reduced performance from US Cheese as a result of weak markets. Dairy Ireland and Joint Ventures & Associates are expected to be broadly in line with prior year.

HY 2016 operations review

Segmental analysis (as reported)

Glanbia Performance Nutrition

Commentary is on a constant currency basis throughout

Glanbia Performance Nutrition ('GPN') delivered a strong performance in the first half of 2016 against the same period in 2015. Revenues increased 12.0% to €505.3 million. Drivers of revenue growth were an 8.0% improvement in volume and a 10.7% revenue contribution from the thinkThin acquisition offset by a 6.7% decline in price, due to promotional investment.

Like for like branded revenue growth for H1 2016 was 4.4% as good branded volume growth across all regions was somewhat offset by promotional investment. The strong US Dollar remains a headwind in certain non US markets. The thinkThin acquisition performed well in the period maintaining its historically strong growth rate. Innovation continues to be a focus and the recent launch of BSN N.O.-XPLODE XE has performed well with a strong pipeline of new product launches planned for H2 2016.

EBITA grew strongly by 35.0% in the period driven by revenue growth and EBITA margin progression of 280 bps to 16.2%. The margin increase was driven by a reduction in input cost, mix improvement from increased branded sales relative to contract and continued gains in operating leverage.

Glanbia Nutritionals

Commentary is on a constant currency basis throughout

Glanbia Nutritionals ('GN') performance was in line with expectations in the first half of 2016 and delivered a satisfactory result in the context of on-going challenging dairy markets. Revenues decreased by 5.9% to €572.6 million as volume growth of 2.2% was more than offset by weaker dairy markets which reduced pricing by 8.1%. Overall margins progressed to 10.1% driven by a strong performance from the Nutritional Ingredients portfolio.

Nutritional Ingredients improved performance was driven by volume growth of value-added dairy and non-dairy ingredients, including bar systems and high-end whey ingredients following investment in increased capacity in 2015.

US Cheese volumes were broadly in line in the first half of 2016 as plants operated close to full capacity. Cheese demand remains solid across the US retail and foodservice markets although pricing in the overall US market was weak. On-going challenging dairy market dynamics led to a reduced performance in this part of the business.

Dairy Ireland

Dairy Ireland had a satisfactory performance in the first half of 2016. Revenues decreased 3.3% reflecting a 1.1% increase in volumes, a 4.9% decline in price and a 0.5% revenue contribution from acquisitions. A 30 bps improvement in margin drove an increase in EBITA of 1.1% versus the prior half year.

Consumer Products delivered an improved performance versus prior year. This was driven by an improvement in sales of value-added branded products and input cost reductions. Consumer Products continues to focus on improving its cost base.

Agribusiness delivered a somewhat reduced performance in the period. Increased animal feed sales volume was more than offset by lower pricing across animal feed and fertiliser which led to a decline in margin.

Joint Ventures & Associates (Glanbia Share)

Commentary is on a constant currency basis throughout

Joint Ventures & Associates revenue reduced by 8.8% in the period as a result of the challenging dairy environment. The key driver of the revenue movement was a 12.8% decline in pricing reflecting weaker global dairy markets which was partially offset by a 6.6% increase in volumes. The disposal of Glanbia's interest in Nutricima in April 2015 led to an additional 2.6% decline in revenues compared to the prior half year. All Joint Ventures & Associates grew volumes in the period with a focus on costs, off-setting some of the price challenges which generated a 20 bps improvement in margin.

Half year 2016 finance review

Income statement

For the first half of 2016, wholly owned revenue increased 0.4%, constant currency (up 0.2% reported) to €1,434.8 million (HY 2015: €1,431.7 million). EBITA grew by 13.7%, constant currency (up 13.6% reported) to €157.4 million (HY 2015: €138.5 million). EBITA margin increased by 130 bps to 11.0%, both constant currency and reported.

Net financing costs of €11.6 million increased versus prior year (HY 2015: €10.7 million) due to an increase in average net debt. The Group's average interest rate for the period was 3.6% (HY 2015: 3.9%). Glanbia operates a policy of fixing a significant amount of its interest exposure, with 85% of projected 2016 debt currently contracted at fixed rates for 2016.

The HY 2016 pre-exceptional tax charge increased by €2.6 million to €21.7 million (HY 2015: €19.1 million). This represents an effective rate, excluding Joint Ventures & Associates, of 17.1% (HY 2015: 17.0%).

The Group's share of results of Joint Ventures & Associates decreased by €1.0 million to €12.3 million (HY 2015: €13.3million). Share of results of Joint Ventures & Associates is an after tax and interest amount.

Adjusted earnings per share

* Adjusted earnings per share is reconciled in note 10 of the financial statements. A full glossary of terms used throughout this release can be found in the financial statements section at the end of this document.

Total adjusted earnings per share grew 10.8% (up 10.5% reported), driven by growth in EBITA. Adjusted earnings per share is believed to be more reflective of the Group's underlying performance than basic earnings per share 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.

Dividend per share

The Board is recommending an interim dividend of 5.37 cent per share (HY 2015: interim dividend 4.88 cent per share). This represents an increase of 10% on the prior year interim dividend. The dividend will be paid on 07 October 2016 to shareholders on the register of members as at 26 August 2016. Irish withholding tax will be deducted at the standard rate where appropriate.

Exceptional items

Exceptional items incurred in the first half of 2016 resulted in a post-tax exceptional charge of €7.3 million compared to an equal charge of €7.3 million for the same period in 2015. Details of the exceptional items incurred in the period are as follows:

1. The organisation redesign costs relate to the on-going programme announced in 2015 in Glanbia Nutritionals to fundamentally reorganise the business to leverage future market opportunities. It is envisaged that this programme will continue until H1 2017 and will involve a total cost of approximately €20 million across 2015, 2016 and 2017.

2. Acquisition integration costs comprise of costs relating to the integration, restructuring and redesign of route to market capabilities within acquired businesses in the Glanbia Performance Nutrition segment.

3. Rationalisation costs primarily relate to the current redundancy and rationalisation programme in the Dairy Ireland segment.

4. Relates to the disposal in April 2015 of Glanbia's investment in Milk Ventures (UK) Limited which is the parent company of Nutricima Limited, a non-core Joint Venture business involved in the supply and distribution of evaporated and powdered milk, based in Nigeria.

Group financing and cash flow

1. Definition of net debt, adjusted EBITDA and adjusted EBIT are as per financing agreements which include dividends from Joint Ventures & Associates and the pro forma effect of acquisitions. A detailed glossary of the key performance indicators and non-IFRS performance measures can be found at the end of this document.

The Group's financial position continues to be strong. Net debt at the end of HY 2016 was €644 million. This is an increase of €67 million relative to the end of HY 2015. Net debt to adjusted EBITDA was 1.83 times and interest cover was 11.4 times, both metrics remaining well within financing covenants. Relative to the year end of 2015, net debt has increased by €60 million. The key drivers of the net debt increase from year end 2015 have been a seasonal increase in working capital and capital expenditure.

Pension

On 02 July 2016, the Group's net pension liability under IAS 19 (revised) 'Employee Benefits', before deferred tax, increased by €44.8 million to €132.1 million versus year end 2015 (FY 2015 pension liability €87.3 million). A significant driver of this was the decrease in the discount rate driven by the decline in interest rates on high quality corporate bonds. See note 17 for further details on the retirement benefit obligation at the reporting date.

Principal risks and uncertainties affecting the Group's performance in 2016

The Board of Glanbia plc has the ultimate responsibility for the Group's systems of risk management and internal control. The Group's risk management framework outlines the key stakeholder risk management responsibilities. It is designed to ensure that there is input across all levels of the business to the management of risk and to enable the Group to remain responsive to the ever changing environment in which it operates. This framework, together with the processes to identify, manage and mitigate potential material risks to the achievement of the Group's strategic objectives are set out in detail on pages 32-34 of the plc's 2015 Annual Report.

The Group's principal risks and uncertainties are summarised in the risk profile table below, according to the strategic objective to which they relate, together with an overview of the risk trend identified for the year ended 02 January 2016, issued on 03 March 2016 which the plc Board believes to still remain applicable. There may be other risks and uncertainties that are not yet considered material or not yet known to the Group and this list will change if these risks assume greater importance in the future.

Key risk factors and uncertainties with the potential to impact on the Group's financial performance in the second half of the year include:

· Economic, industry and political risk. Macroeconomic uncertainty continues to increase, partly as a result of the United Kingdom (UK) electorate voting to leave the European Union. While the 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;

· The continued impact on the competitive landscape for Glanbia Performance Nutrition, recognising the impact of a stronger US dollar on the purchasing power of consumers in certain international markets; and

· The overall impact on margins of movements in dairy pricing particularly in whey markets.

The Group actively manages these and all other risks through its risk management and internal control processes. Full details of the principal risk exposures and the related mitigation actions are outlined on pages 35-38 of the plc 2015 Annual Report.

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.

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:

Ireland: 01 2465605

UK / International: +44 20 3427 1925

USA: 646 254 3375

The access code for all participants is: 9767248

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

Siobhán Talbot, Group Managing Director

Mark Garvey, Group Finance Director

Liam Hennigan, Head of Investor Relations +353 86 046 8375

Martha Kavanagh, Head of Media Relations +353 87 646 2006

Responsibility statement

The Directors are responsible for preparing the half yearly financial report in accordance with the Transparency (Directive 2004/109/EC) Regulations 2007 as amended, the related Transparency Rules of the Central Bank of Ireland and with IAS 34 'Interim Financial Reporting', as adopted by the European Union.

The Directors of Glanbia plc confirm that, to the best of their knowledge:

• The Group condensed interim financial statements for the half year ended 02 July 2016 have been prepared in accordance with the international accounting standard applicable to interim financial reporting (IAS34) adopted pursuant to the procedure provided for under Article 6 of the Regulation (EC) No. 1606/2002 of the European Parliament and of the Council of 19 July 2002;

• The half yearly financial report includes a fair review of the development and performance of the business and the position of the Group;

• The half yearly financial report includes a fair review of the important events that have occurred during the first six months of the financial year, and their impact on the Group condensed financial statements for the half year ended 02 July 2016, and a description of the principal risks and uncertainties for the remaining six months; and

• The half yearly financial report includes a fair review of related party transactions that have occurred during the first six months of the current financial year that have materially affected the financial position or the performance of the Group during that period and any changes in the related party transactions described in the last Annual Report that could have a material effect on the financial position or the performance of the Group in the first six months of the current financial year.

The Directors of Glanbia plc are as listed in the Glanbia plc 2015 Annual Report, with the exception of the following changes in the period:

· Tom Grant, Brendan Hayes, Patrick Hogan and Eamon Power retired as Directors of Glanbia plc on 09 May 2016.

A list of current directors is maintained on the Glanbia plc website: www.glanbia.com

On behalf of the Board

Siobhán Talbot Mark Garvey

Group Managing Director Group Finance Director

16 August 2016

Condensed income statement

for the half year ended 02 July 2016

Condensed statement of comprehensive income

for the half year ended 02 July 2016

Condensed balance sheet

As at 02 July 2016

Condensed statement of changes in equity

for the half year ended 02 July 2016

Other reserves

for the half year ended 02 July 2016