Glanbia shares rise on results as food company assesses coronavirus impact
Irish nutrition group Glanbia said it is impossible to fully assess the impact of the coronavirus but said there has already been some disruption which it has factored into its outlook for the year.
Companies across the globe are attempting to gauge the impact on supply lines and consumer demand as the number of countries impacted by the virus increases.
The Kilkenny-based company published its financial results for 2019, reporting an 8.2% fall in profit on the back of disappointing earnings in the nutrition sector.
However, Glanbia reported revenues of €3.8bn, up 16.6% on 2018.
“Like all companies, we are taking a very watchful brief on it. China is just about 2% of our revenue,” said Glanbia’s group managing director Siobhán Talbot.
But to the extent of how the coronavirus impacts consumer demand or indeed supply chain, it is impossible to fully assess at this time. We do see some disruption in the first quarter and we have factored that into our outlook for the year.
“Like everybody we just don’t know the scale or reach of this,” she said.
The fall in profit for the Global Performance Nutrition (GPN) part of Glanbia led to a comprehensive review in the second half of last year.
As a result, GPN will now be streamlined, prioritising the Optimum Nutrition and SlimFast brands in North America.
“We have taken the opportunity of 2019 to really sit back to think about our performance across brands and how we think about our business in terms of how we organise it and in how we think about our route to market and supply chain,” Ms Talbot told the .
“Our focus now is clear in terms of driving Optimum Nutrition and SlimFast. Together they are a billion-dollar brand of our $1.4bn portfolio," she said.
Optimum Nutrition is a brand that’s around for more than 30 years at this point. SlimFast is a leading brand in North America, so our brands are very strong in their space.
Glanbia said GPN margins will be improved through simplification and rationalisation of the lowest-performing products, supply chain optimisation globally, and driving demand for higher-margin opportunities across the branded portfolio.
“You could see it as a streamlining and giving us options to do other things in terms of our footprint and route to market,” said Ms Talbot
“With the focus that we have, with the strength of the brands, and with the fact that we are playing into some key consumer trends in terms of health and nutrition, I think that will underpin the long-term growth momentum for us,” she said.
Glanbia’s share price rose today on the back of the company’s announcement, reaching a high of €11.
