Glanbia considers further price hikes after delivering its highest ever annual earnings

In addition to publishing its annual earnings today, Glanbia announced Leprino Foods will acquire full ownership of Glanbia Cheese, a leading mozzarella maker in Europe. Picture Dylan Vaughan

Nutrition giant Glanbia is poised to further increase prices for customers this year as it battles volume declines and inflationary pressures.

The company, which sells Optimum Nutrition protein powder, posted its "highest ever annual earnings" following price increases of 16.4% last year across products in its Glanbia Performance Nutrition division, despite volume declines of 3% driven mainly by lack of demand for its SlimFast drinks.

“Further increases may be required in 2023 which may disrupt demand due to price elasticity,” the company said.

In its financial results for last year, Glanbia said revenues jumped to €5.6bn, up more than 21% on a constant currency basis compared to 2021.

It also reported its profit after tax reached €257m compared to €167m in 2021.

“Looking forward, our strategic focus on better nutrition growth platforms is clear and we are confident that it will drive sustained growth in the coming years, delivering the targets set out at our recent capital markets event,” said Siobhán Talbot, Glanbia group managing director.

The company’s overall positive results was boosted by by the strong performance of its Optimum Nutrition brand. US consumption of these products grew by 31% last year.

Glanbia returned €173m to shareholders in the year through share buybacks. A further €50m share buyback programme was announced by Glanbia, reflecting its “strong cash flow and financial position”.

The company’s board is recommending a final dividend of 19.28 cent per share which brings the total dividend for the year to 32.21 cent per share, a 10% increase on prior year. The final dividend will be paid on May 5.

"In 2023, we expect adjusted earnings per share growth of 5% to 10% constant currency, which will be driven by a strong operating performance in the better nutrition businesses," said Ms Talbot.

Meanwhile, the company said it is prepared to face other headwinds this year including supply chain shocks.

Glanbia said it is some "safety stocks" but a prolonged impact to supply chains due to another pandemic or geo-political tensions could have “negative consequences from both a supply and pricing perspective”.

In addition to publishing its annual earnings today, Glanbia announced Leprino Foods will acquire full ownership of Glanbia Cheese, a leading mozzarella maker in Europe.

It is expected that Glanbia will receive more than €160m for the sale of its stake in its cheese business, with the possibility of an additional €25m over the next three years, dependent on business performance.