Irish ingredients major Glanbia has made a shock announcement in splitting its business in two – Health & Nutrition and Dairy Nutrition – as it also upgrades its full year financial outlook from 5% to 8% growth in its third-quarter update.
Year to date Glanbia Nutritional has performed in line with expectations, showing group revenues up 6%.
Volumes were up across the board for Nutritional Solutions (+5%), Performance Nutrition (+3.2%) and Glanbia Nutritionals (+2%). US cheese dropped 0.7%, though overall volumes were up 1.6%.
Volume growth at Glanbia
Cheese revenues in the States rose 6.1% despite the volume decline, due to a 3.9% price increase.
“Volume growth was driven by our protein growth brands Optimum Nutrition and Isopure, as well as premix protein solutions,” said CEO Hugh McGuire.
Group net debt rose from $284.8m to $619.7m within the third quarter reporting period, though debt facilities of $1.3bn have been committed to.
The new structure would streamline the business and “sharpen our focus on our end use markets, and position ourselves for the next phase of growth”, McGuire added.
Glanbia Nutritionals currently operates as two segments – US Cheese and Nutritional solutions. Next year, the two segments will be refocused as Dairy Nutrition and Health & Nutrition. The branded Glanbia Performance Nutrition business will not change.
Glanbia’s new structure
Its Health & Nutrition unit will incorporate the premix solutions and flavours formats, while the Dairy Nutrition unit will focus on cheese and dairy ingredients, comprising protein solutions as well as US Cheese.
It is expected the new model will be rolled out during the 2025 financial year, with operational updates given throughout the year.
“In order to maximise the benefit of this operating model change, Glanbia is commencing a group-wide transformation programme designed to fund and enable the next phase of growth,” a statement read.
“The programme will focus on identifying opportunities to enhance productivity and drive efficiencies across operations, accelerating digital transformation and ensuring the group is well positioned to capitalise on future market growth opportunities.”