2016/media/Files/G/Glanbia-Plc/2016-half-year-results.pdf · Revenues increased 12.0% to €505.3 million. Drivers of revenue growth were an 8.0% improvement in volume and a 10.7%

1 Glanbia plc 2013 half year results

Half year results

Delivering better nutrition for every step of life’s journey

2016

Wednesday, 17 August 2016

Glanbia plc – Delivering better nutrition for every step of life’s journey 2016 half year results Page | 2

Strong performance in first half driven by Glanbia Performance Nutrition Guidance reiterated of 8% to 10% constant currency adjusted EPS growth in 2016

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.”

2016 half year results

Reported Constant Currency

€m HY 2016 HY 2015 Change Change2

Wholly-owned business

Revenue 1,434.8 1,431.7 +0.2% +0.4%

EBITA3 157.4 138.5 +13.6% +13.7%

EBITA margin 11.0% 9.7% + 130 bps +130 bps

Joint Ventures & Associates

Revenue 402.3 445.3 -9.7% -8.8%

EBITA 19.1 20.2 -5.4% -4.5%

EBITA margin 4.7% 4.5% +20bps +20bps

Total Group4

Revenue 1,837.1 1,877.0 -2.1% -1.7%

EBITA 176.5 158.7 +11.2% +11.4%


Adjusted earnings per share5 44.87c 40.60c +10.5% +10.8% 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 on pages 36 to 39.


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)

HY 2016 HY 2015

€m Revenue EBITA EBITA % Revenue EBITA EBITA %

Glanbia Performance Nutrition 505.3 81.7 16.2% 453.5 60.7 13.4%

Glanbia Nutritionals 572.6 58.0 10.1% 609.3 60.3 9.9%

Dairy Ireland 356.9 17.7 5.0% 368.9 17.5 4.7%

Total wholly-owned businesses 1,434.8 157.4 11.0% 1,431.7 138.5 9.7%

Joint Ventures & Associates 402.3 19.1 4.7% 445.3 20.2 4.5%

Total Group 1,837.1 176.5 9.6% 1,877.0 158.7 8.5%


Glanbia Performance Nutrition


€m HY 2016 HY 2015 Change Change

Revenue 505.3 453.5 +11.4% +12.0%

EBITA 81.7 60.7 +34.6% +35.0%


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



Revenue 572.6 609.3 -6.0% -5.9%

EBITA 58.0 60.3 -3.8% -4.0%



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

Reported

€m HY 2016 HY 2015 Change

Revenue 356.9 368.9 -3.3%

EBITA 17.7 17.5 +1.1%

EBITA margin 5.0% 4.7% +30bps

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)



Revenue 402.3 445.3 -9.7% -8.8%

EBITA 19.1 20.2 -5.4% -4.5%



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

HY 2016 results summary pre-exceptional Constant Currency


Revenue 1,434.8 1,431.7 +0.2% +0.4%

EBITA 157.4 138.5 +13.6% +13.7%


- Amortisation of intangible assets (19.4) (15.6)

- Net finance costs (11.6) (10.7)

- Share of results of Joint Ventures Associates

12.3 13.3

- Income tax (21.7) (19.1)

Profit for the half year 117.0 106.4

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

HY 2016 HY 2015 Change Constant Currency

Change

Adjusted earnings per share* 44.87c 40.60c +10.5% +10.8%

* 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 on page 36-39.

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

€ m HY 2016 HY 2015

1. Organisation redesign costs (6.2) (3.1)

2. Acquisition integration costs (1.9) -

3. Rationalisation costs (0.8) (1.1)

4. Disposal of interest in Joint Venture - (3.6)

Exceptional (charge) pre-tax (8.9) (7.8)

Taxation credit 1.6 0.5

Total exceptional (charge) (7.3) (7.3)

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

Financing key performance indicators HY 2016 HY 2015 FY 2015

Net debt €m 644 577 584

Net debt : adjusted EBITDA1 1.83 times 1.97 times 1.75 times

Adjusted EBIT1 : net finance cost 11.4 times 9.8 times 10.8 times

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 on pages

36 to 39.

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.

Group

strategic

priorities

Maintain and grow

Glanbia’s global

leadership in

performance

nutrition and

nutritional and

functional

ingredients

Grow through

organic

investment

programme and

acquisition/

partner with

complementary

businesses

Develop talent,

culture and values

in line with

Glanbia’s growing

global scale

Other risks

Risks where

trend is

increasing

Economic, industry

and political risk

IT and cyber

security risks

Risks which

are stable

Strategy risk

Market risk

Customer

concentration risk

Supplier risk

Acquisition risk Talent management

risk

Site compliance risk

and environment,

health & safety

regulation risk

Product safety and

compliance risk

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


Half year 2016 Half year 2015 Year 2015 Pre-

exceptional Exceptional Total Pre-

exceptional Exceptional Total Pre-

exceptional Exceptional Total

2016 2016 2016 2015 2015 2015 2015 2015 2015

€'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000

Notes (note 6) (note 6) (note 6)

Revenue 4 1,434,764 - 1,434,764 1,431,590 - 1,431,590 2,774,326 - 2,774,326 Earnings before interest, tax and amortisation (EBITA) 157,389 (8,885) 148,504 138,473 (7,838) 130,635 271,003 (26,342) 244,661

Intangible asset amortisation (19,424) - (19,424) (15,566) - (15,566) (31,125) - (31,125)

Operating profit 137,965 (8,885) 129,080 122,907 (7,838) 115,069 239,878 (26,342) 213,536

Finance income 7 1,160 - 1,160 885 - 885 1,706 - 1,706

Finance costs 7 (12,732) - (12,732) (11,588) - (11,588) (22,816) - (22,816)

Share of results of Joint Ventures & Associates 12,328 - 12,328 13,267 - 13,267 26,270 - 26,270

Profit before taxation 138,721 (8,885) 129,836 125,471 (7,838) 117,633 245,038 (26,342) 218,696

Income taxes 8 (21,664) 1,629 (20,035) (19,075) 533 (18,542) (37,322) 2,543 (34,779)

Profit for the period 117,057 (7,256) 109,801 106,396 (7,305) 99,091 207,716 (23,799) 183,917

Attributable to:

Equity holders of the Parent

109,364 98,674 183,271

Non-controlling interests

437 417 646

109,801 99,091 183,917

Earnings per share attributable to the equity holders of the Parent

Basic earnings per share (cent) 10 37.06 33.43 62.08

Diluted earnings per share (cent) 10 36.92 33.18 61.87

Condensed statement of comprehensive income for the half year ended 02 July 2016


Half year Half year Year 2016 2015 2015 Notes €’000 €’000 €’000

Profit for the period 109,801 99,091 183,917

Other comprehensive income

Items that are not reclassified subsequently to the Group income statement:

Remeasurements – defined benefit schemes 17 (51,379) 18,178 20,856

Deferred tax credit/(charge) on remeasurements 4,866 (2,430) (2,334)

Share of remeasurements – Joint Ventures & Associates 14

(10,480) 4,811 4,254

Deferred tax credit/(charge) on remeasurements – Joint Ventures & Associates

1,310 (600) (612)

Items that may be reclassified subsequently to the Group income statement:

Currency translation differences (33,036) 75,654 91,102

Net investment hedge 2,015 (6,980) (8,684)

Revaluation of available for sale financial assets (617) 1,052 1,273

Fair value movements on cash flow hedges (506) 2,476 145 Recycle of currency reserve to the Group income statement on disposal of Investment in Joint Venture

- 5,037 5,037

Deferred tax on cash flow hedges and revaluation of available for sale financial assets 63 (444) (480)

Other comprehensive (expense)/income for the period, net of tax (87,764) 96,754 110,557

Total comprehensive income for the period 22,037 195,845 294,474

Total comprehensive income attributable to:

Equity holders of the Parent 21,600 195,428 293,828

Non-controlling interests 437 417 646

Total comprehensive income for the period 22,037 195,845 294,474

Condensed balance sheet As at 02 July 2016


Half year Half year Year 2016 2015 2015 Notes €'000 €'000 €'000

ASSETS

Non-current assets

Property, plant and equipment 579,258 551,860 586,190

Intangible assets 921,721 704,663 951,527

Investments in Associates 95,994 91,564 97,897

Investments in Joint Ventures 59,243 62,665 60,585

Trade and other receivables 14,654 1,850 1,850

Derivative financial instruments 15 - -

Deferred tax assets 42,711 26,152 36,474

Available for sale financial assets 10,105 10,522 10,754

1,723,701 1,449,276 1,745,277

Current assets

Inventories 331,435 350,819 344,353

Trade and other receivables 447,554 412,954 350,020

Derivative financial instruments 997 1,686 414

Cash and cash equivalents 13 94,909 94,400 210,889

874,895 859,859 905,676

Total assets 2,598,596 2,309,135 2,650,953

EQUITY

Issued capital and reserves attributable to equity holders of the Parent

Share capital and share premium 16 105,393 105,370 105,370

Other reserves 272,400 294,073 306,425

Retained earnings 673,900 572,965 642,763

1,051,693 972,408 1,054,558

Non-controlling interests 8,952 8,313 8,515

Total equity 1,060,645 980,721 1,063,073

LIABILITIES

Non-current liabilities

Borrowings 13 672,408 634,015 752,963

Derivative financial instruments - - 47

Deferred tax liabilities 201,860 135,153 201,646

Retirement benefit obligations 17 132,075 93,971 87,288

Provisions 15 16,578 19,816 18,984

Capital grants 2,697 2,121 2,787

1,025,618 885,076 1,063,715

Current liabilities

Trade and other payables 399,321 369,681 442,713

Current tax liabilities 24,183 21,350 18,969

Borrowings 13 66,841 37,448 42,169

Derivative financial instruments 3,896 408 902

Provisions 15 17,850 14,451 19,128

Capital grants 242 - 284

512,333 443,338 524,165

Total liabilities 1,537,951 1,328,414 1,587,880

Total equity and liabilities 2,598,596 2,309,135 2,650,953

Condensed statement of changes in equity for the half year ended 02 July 2016


Attributable to equity holders of the Parent

Share capital and

share premium

Other reserves

Retained earnings Total

Non –controlling

interests Total

Half year 2016 Notes €'000 €'000 €'000 €'000 €'000 €'000

Balance at 02 January 2016 105,370 306,425 642,763 1,054,558 8,515 1,063,073

Profit for the period - - 109,364 109,364 437 109,801

Other comprehensive income/(expense)

Remeasurements - defined benefit schemes 17 - - (51,379) (51,379) - (51,379)

Deferred tax on remeasurements - - 4,866 4,866 - 4,866 Share of remeasurements – Joint Ventures & Associates (net of deferred tax) - - (9,170) (9,170) - (9,170)

Fair value movements - (1,123) - (1,123) - (1,123)

Deferred tax on fair value movements - 63 - 63 - 63

Currency translation differences - (33,036) - (33,036) - (33,036)

Net investment hedge - 2,015 - 2,015 - 2,015

Total comprehensive income for the period - (32,081) 53,681 21,600 437 22,037

Dividends paid during the period 9 - - (21,374) (21,374) - (21,374)

Cost of share based payments - 5,693 - 5,693 - 5,693 Transfer on exercise, vesting or expiry of share based payments - 2,681 (2,681) - - -

Deferred tax on share based payments - - 1,511 1,511 - 1,511

Shares issued 16 1 - - 1 - 1

Premium on shares issued 16 22 - - 22 - 22

Purchase of own shares - (10,318) - (10,318) - (10,318)

Balance at 02 July 2016 105,393 272,400 673,900 1,051,693 8,952 1,060,645


Share capital and

share premium

Other reserves


Non –controlling

interests Total

Half year 2015 Notes €'000 €'000 €'000 €'000 €'000 €'000

Balance at 03 January 2015 104,728 218,581 473,573 796,882 7,896 804,778



Remeasurements - defined benefit schemes 17 - - 18,178 18,178 - 18,178

Deferred tax on remeasurements - - (2,430) (2,430) - (2,430) Share of remeasurements - Joint Ventures & Associates (net of deferred tax) - - 4,211 4,211 - 4,211

Fair value movements - 3,528 - 3,528 - 3,528

Deferred tax on fair value movements - (444) - (444) - (444)

Currency translation differences - 75,654 - 75,654 - 75,654 Recycle of currency reserve to the Group income statement on disposal of Investment in Joint Venture - 5,037 - 5,037 - 5,037

Net investment hedge - (6,980) - (6,980) - (6,980)

Total comprehensive income for the period - 76,795 118,633 195,428 417 195,845

Dividends paid during the period 9 - - (19,449) (19,449) - (19,449)

Cost of share based payments - 3,565 - 3,565 - 3,565

Transfer on exercise, vesting or expiry of share based payments - (208) 208 - - -




Balance at 04 July 2015 105,370 294,073 572,965 972,408 8,313 980,721

Condensed statement of changes in equity for the half year ended 02 July 2016



Share capital and

share premium

Other reserves


Non –controlling

interests Total

Year 2015 Notes €'000 €'000 €'000 €'000 €'000 €'000

Balance at 03 January 2015 104,728 218,581 473,573 796,882 7,896 804,778



Remeasurements - defined benefit schemes 17 - - 20,856 20,856 - 20,856

Deferred tax on remeasurements - - (2,334) (2,334) - (2,334) Share of remeasurements - Joint Ventures & Associates (net of deferred tax) - - 3,642 3,642 - 3,642

Fair value movements - 1,418 - 1,418 - 1,418

Deferred tax on fair value movements - (480) - (480) - (480)

Currency translation differences - 91,102 - 91,102 - 91,102 Recycle of currency reserve to the Group income statement on disposal of Investment in Joint Venture - 5,037 - 5,037 - 5,037

Net investment hedge - (8,684) - (8,684) - (8,684)

Total comprehensive income for the period - 88,393 205,435 293,828 646 294,474

Dividends paid during the period 9 - - (33,895) (33,895) (427) (34,322)

Cost of share based payments - 8,724 - 8,724 - 8,724

Transfer on exercise, vesting or expiry of share based payments - 4,078 (4,078) - - -

Deferred tax on share based payments - - 1,728 1,728 - 1,728




Additions during the year - - - - 400 400

Balance at 02 January 2016 105,370 306,425 642,763 1,054,558 8,515 1,063,073

Other reserves for the half year ended 02 July 2016


Capital and

merger reserve

Currency reserve

Hedging reserve

Available for sale

financial asset

reserve Own

shares

Share based payment

reserve Total

Half year 2016 €'000 €'000 €'000 €'000 €'000 €'000 €'000

Balance at 02 January 2016 115,973 186,251 (660) 3,391 (13,238) 14,708 306,425

Currency translation differences - (33,036) - - - - (33,036)

Net investment hedge - 2,015 - - - - 2,015

Revaluation of interest rate swaps – gain in period - - 27 - - - 27

Foreign exchange contracts – loss in period - - (657) - - - (657)

Transfers to income statement:

Foreign exchange contracts – gain in period - - (307) - - - (307)

Forward commodity contracts – loss in period - - 360 - - - 360 Revaluation of forward commodity contracts - gain in period - - 71 - - - 71 Revaluation of available for sale financial assets - loss in period - - - (617) - - (617)

Deferred tax on fair value movements - - (141) 204 - - 63

Cost of share based payments - - - - - 5,693 5,693 Transfer on exercise, vesting or expiry of share based payments - - - - 8,166 (5,485) 2,681

Purchase of own shares - - - - (10,318) - (10,318)

Balance at 02 July 2016 115,973 155,230 (1,307) 2,978 (15,390) 14,916 272,400

Capital and

merger reserve

Currency reserve

Hedging reserve

Available for sale

financial asset

reserve Own

shares

Share based payment

reserve Total

Half year 2015 €'000 €'000 €'000 €'000 €'000 €'000 €'000


Currency translation differences - 75,654 - - - - 75,654 Recycle of currency reserve to the Group income statement on disposal of Investment in Joint Venture - 5,037 - - - - 5,037

Net investment hedge - (6,980) - - - - (6,980)


Foreign exchange contracts – gain in period - - 2,955 - - - 2,955



Forward commodity contracts – loss in period - - 700 - - - 700 Revaluation of forward commodity contracts - loss in period - - (443) - - - (443) Revaluation of available for sale financial assets - gain in period

- - - 1,052 - - 1,052

Deferred tax on fair value movements - - (97) (347) - - (444)

Cost of share based payments - - - - - 3,565 3,565 Transfer on exercise, vesting or expiry of share based payments - - - - 486 (694) (208)


Balance at 04 July 2015 115,973 172,507 1,634 3,243 (12,139) 12,855 294,073

Other reserves for the half year ended 02 July 2016


Capital and

merger reserve

Currency reserve

Hedging reserve

Available for sale

financial asset

reserve Own

shares

Share based payment

reserve Total

Year 2015 €'000 €'000 €'000 €'000 €'000 €'000 €'000


Currency translation differences - 91,102 - - - - 91,102 Recycle of currency reserve to the Group income statement on disposal of Investment in Joint Venture - 5,037 - - - - 5,037

Net investment hedge - (8,684) - - - - (8,684)


Foreign exchange contracts – loss in period - - (294) - - - (294)



Forward commodity contracts – loss in period - - 701 - - - 701 Revaluation of forward commodity contracts - loss in period - - (361) - - - (361) Revaluation of available for sale financial assets - gain in period

- - - 1,273 - - 1,273

Deferred tax on fair value movements - - (60) (420) - - (480)

Cost of share based payments - - - - - 8,724 8,724 Transfer on exercise, vesting or expiry of share based payments - - - - 8,078 (4,000) 4,078



Condensed statement of cash flows for the half year ended 02 July 2016


Half year Half year Year 2016 2015 2015 Notes €’000 €’000 €’000

Cash flows from operating activities

Cash generated from operating activities 20 53,616 25,463 307,865

Interest received 615 417 1,773

Interest paid (11,710) (13,164) (22,939)

Tax (paid)/refunded (11,762) 1,360 (9,987)

Net cash inflow from operating activities 30,759 14,076 276,712 Cash flows from investing activities

Acquisition of subsidiaries – purchase consideration 21 (8,724) (544) (195,579)

Net cash flow relating to previous acquisitions (6,942) - -

Acquisition of subsidiaries – liabilities settled at completion - (802) (1,296)

Acquisition of subsidiaries – cash and cash equivalents acquired - - 6,991

Disposal of Investment in Joint Venture - 28,511 28,516

Capital grants received - - 1,132

Purchase of property, plant and equipment 11 (34,471) (52,241) (103,792)

Purchase of intangible assets 11 (7,223) (6,523) (19,798)

Interest paid in relation to property, plant and equipment (500) (1,250) (2,403)

Dividends received from Joint Ventures & Associates 2,248 3,237 14,924

Loans advanced to Associate 18 (12,800) - -

Net redemption and additions in available for sale financial assets 32 1,151 1,140

Proceeds from property, plant and equipment 98 132 428

Net cash outflow from investing activities (68,282) (28,329) (269,737) Cash flows from financing activities

Proceeds from issue of ordinary shares 16 23 608 642

Net outflow from derivative financial instruments (1,815) - -

Purchase of own shares (10,318) (4,660) (13,351)

(Decrease)/increase in borrowings (67,197) (21,471) 91,577

Finance lease payments (169) (203) (468)

Dividends paid to Company shareholders 9 (21,374) (19,449) (33,895)

Dividends paid to non-controlling interests - - (427)

Net cash (outflow)/inflow from financing activities (100,850) (45,175) 44,078 Net (decrease)/increase in cash and cash equivalents (138,373) (59,428) 51,053 Cash and cash equivalents at the beginning of the period 169,125 110,370 110,370

Effects of exchange rate changes on cash and cash equivalents (2,333) 6,418 7,702 Cash and cash equivalents at the end of the period 13

28,419 57,360 169,125

Half year Half year Year

2016 2015 2015

Reconciliation of net cash flow to movement in net debt €’000 €’000 €’000

Net (decrease)/increase in cash and cash equivalents (138,373) (59,428) 51,053

Cash movements from debt financing 67,366 21,675 (91,109) (71,007) (37,753) (40,056)

Exchange translation adjustment 10,910 (28,947) (33,824) Movement in net debt in the period (60,097) (66,700) (73,880)

Net debt at the beginning of the period (584,243) (510,363) (510,363) Net debt at the end of the period (644,340) (577,063) (584,243) Net debt comprises:

Borrowings 13 (672,759) (634,423) (753,368)

Cash and cash equivalents 13 28,419 57,360 169,125

(644,340) (577,063) (584,243)

Notes to the condensed financial statements for the half year ended 02 July 2016


1. General information

Glanbia plc (the “Company”) and its subsidiaries (together the “Group”) is a leading global nutrition group with its main

operations in Europe, USA, Middle East, Asia Pacific and Latin America.

The Company is a public limited company incorporated and domiciled in Ireland. The address of its registered office is

Glanbia House, Kilkenny, Ireland. Glanbia Co-operative Society Limited (the “Society”), together with its subsidiaries, holds

36.5% of the issued share capital of the Company. The Board of Directors as at 02 July 2016 is comprised of 18 members, of

which up to 10 are nominated by the Society. In accordance with IFRS 10 ‘Consolidated Financial Statements’, the Society

controls the Group and is the ultimate parent of the Group.

The Company’s shares are quoted on the Irish and London Stock Exchanges.

These condensed interim financial statements were approved for issue by the Board of Directors on 16 August 2016.

2. Summary of significant accounting policies

a) Basis of preparation

The Group’s condensed interim financial statements for the six months ended 02 July 2016 have been prepared 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 condensed

interim financial statements should be read in conjunction with the financial statements for the year ended 02 January 2016,

which have been prepared in accordance with International Financial Reporting Standards (“IFRS”).

The condensed interim financial statements for the six months ended 02 July 2016 and for the six months ended 04 July 2015

have not been audited or reviewed by the Group’s auditors.

b) Statutory information

The condensed interim financial statements are considered non-statutory financial statements for the purposes of the

Companies Act 2014 and in compliance with section 340(4) of that Act we state that:

the condensed interim financial statements for the half year to 02 July 2016 have been prepared to meet our

obligation to do so under the Transparency (Directive 2004/109/EC) Regulations 2007 as amended (Statutory

Instrument No. 277);

the condensed interim financial statements for the half year to 02 July 2016 do not constitute the statutory

financial statements of the Group;

the statutory financial statements for the financial year ended 02 January 2016 have been annexed to the annual

return and filed with the Companies Registration Office;

the statutory auditors of the Group have made a report under section 391 in the form required by section 336

Companies Act 2014 in respect of the statutory financial statements of the Group; and

the matters referred to in the statutory auditors’ report were unqualified, and did not include a reference to any

matters to which the statutory auditors drew attention by way of emphasis without qualifying the report.

c) Going Concern

The Group meets its day-to-day working capital requirements through its bank facilities. The Group’s forecasts and

projections, taking account of changes in trading performance, show that the Group expects to be able to operate within the

level of its current facilities. After making enquiries, the Directors have a reasonable expectation that the Group has sufficient

resources to continue in operational existence for the foreseeable future. In forming this view, the Directors have reviewed

the Group’s budget for 2016 and the medium term plans as set out in the three year strategic plan, and have taken into

account the cash flow implications of the plans, including proposed capital expenditure, and compared these with the Group’s

committed borrowing facilities and Group financing key performance indicators (“KPIs”). The Group therefore continues to

adopt the going concern basis in preparing its condensed interim financial statements for the six months ended 02 July 2016.



d) Foreign currency translation

The Group’s condensed interim financial statements are presented in euro, which is the Group’s presentation currency.

The principal exchange rates used for the translation of results and balance sheets into euro are as follows:

Average Period end

Half year Half year Year Half year Half year Year 2016 2015 2015 2016 2015 2015

euro 1 =

US dollar 1.1161 1.1150 1.1092 1.1135 1.1096 1.0887

Pound Sterling 0.7795 0.7316 0.7259 0.8383 0.7102 0.7340

Danish Kroner 7.4497 7.4567 7.4589 7.4380 7.4607 7.4626

Following the result of the UK referendum on EU membership on 23 June 2016, the Group reviewed its methodology for

determining the average rates and concluded that due to the trading profile of the Group, it remained appropriate to use an

average rate as an approximation of the actual Pound Sterling exchange rate when translating income and expenses.

e) Changes in accounting policies

The methods of computation, presentation and accounting policies adopted in the preparation of the Group’s condensed

interim financial statements are consistent with those applied in the Annual Report for the year ended 02 January 2016

(“2015 Annual Report”). The Group’s accounting policies are set out in the financial statements in the 2015 Annual Report.

The following standards, issued by the International Accounting Standards Board (“IASB”) and the International Financial Reporting Interpretations Committee (“IFRIC”), are effective for the Group for the first time in the period ended 02 July 2016 and have been adopted by the Group.

Amendments to IFRS 11 ‘Joint Arrangements’ on acquisition of an interest in a joint operation (effective on or after 01 January 2016).

Amendments to IAS 16 ‘Property, Plant and Equipment’ and IAS 38, ‘Intangible Assets’, on depreciation and amortisation (effective on or after 01 January 2016).

Amendments to IAS 27 ‘Consolidated and Separate Financial Statements’ on the equity method (effective on or after 01 January 2016).

Amendments to IFRS 10 ‘Consolidated Financial Statements’ and IAS 28, ‘Investments in Associates and Joint Ventures’ (effective on or after 01 January 2016 - not yet endorsed).

Amendment to IAS 1 ‘Presentation of Financial Statements’ on the disclosure initiative (effective on or after 01 January 2016).

Annual Improvements 2012-2014 on IFRS 7 ‘Financial Instruments: Disclosures’, IAS 19 ‘Employee Benefits’ and IAS 34 ‘Interim Financial Reporting’ (effective on or after 01 January 2016).

The above standards did not have a significant impact on the results or the financial position of the Group during the six months ended 02 July 2016.

The following standards, amendments and interpretations have been published. The Group will apply the relevant standards from their effective dates and is currently assessing their impact on the Group’s financial statements. The standards are mandatory for future accounting periods but are not yet effective and have not been early adopted by the Group.

IFRS 15 ‘Revenue from Contracts with Customers’ (effective on or after 01 January 2018 - not yet endorsed).

IFRS 15 is a converged standard from the IASB and the Financial Accounting Standards Board (“FASB”) on revenue recognition. The standard will improve the financial reporting of revenue and improve comparability of the top line in financial statements globally.

IFRS 9 ‘Financial Instruments’ (effective on or after 01 January 2018 - not yet endorsed).

This standard replaces the guidance in IAS 39 ‘Financial Instruments: Recognition and Measurement’. It includes requirements on the classification and measurement of financial assets and liabilities; it also includes an expected credit losses model that replaces the current incurred loss impairment model.

Amendments to IAS 12 'Income Taxes' on the recognition of deferred tax assets for unrealised losses (effective on or after 01 January 2017 - not yet endorsed).

These amendments clarify the recognition of deferred tax assets for unrealised losses on debt instruments.



Amendments to IAS 7 'Statement of Cash Flows' under its disclosure initiative (effective on or after 01 January 2017 - not yet endorsed).

These amendments are intended to improve the information provided to users of financial statements about an entity's financing activities.

IFRS 16 'Leases' (effective on or after 01 January 2019 - not yet endorsed).

IFRS 16 supersedes IAS 17 'Leases'. The new standard provides a single lessee accounting model, requiring lessees to recognise assets and liabilities for all leases unless the lease term is 12 months or less or the underlying asset has a low value. Lessors continue to classify leases as operating or finance, with IFRS 16's approach to lessor accounting substantially unchanged from IAS 17.

3. Changes in critical accounting estimates and assumptions

Having considered the result of the UK referendum on EU membership, the Group concluded that no indicator of impairment

existed at the reporting date with respect to intangible assets and property, plant and equipment. In valuing the retirement

benefit obligation at the reporting date, the loss from changes in financial assumptions was €64.7 million offset by the return

on plan assets of €13.3 million. A significant driver of the movement in the discount rate (based on high quality corporate

bonds) was the result of the UK referendum on EU membership. See note 17 for further details on the retirement benefit

obligation at the reporting date.

With the exception of those outlined above, the significant judgements made by management in applying the Group’s

accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated

financial statements for the year ended 02 January 2016.

4. 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. A segment manager is responsible for each segment and is directly

accountable for the performance of that segment to the Glanbia Operating Executive which acts as the Chief Operating

Decision Maker for the Group. There has been no change in the basis of segmentation or in the basis of measurement of

segment profit or loss in the period.

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; 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 for Joint Ventures & Associates represents the Group’s share.



4.1 The segment results for the period ended 02 July 2016 are as follows:

Gross segment revenue

Inter-segment revenue

Total Group revenue EBITA

€'000 €'000 €'000 €'000

Glanbia Performance Nutrition 505,370 (115) 505,255 81,675

Glanbia Nutritionals 586,413 (13,856) 572,557 57,984

Dairy Ireland 357,383 (431) 356,952 17,730

Joint Ventures & Associates 402,257 - 402,257 19,135

Group including Joint Ventures & Associates 1,851,423 (14,402) 1,837,021 176,524

Joint Ventures & Associates (402,257) (19,135) Reported Group 1,434,764 157,389

Amortisation (19,424)

Operating profit 137,965

Exceptional items (8,885)

Share of results of Joint Ventures & Associates 12,328

Finance income 1,160

Finance costs (12,732)

Reported profit before taxation 129,836

Income taxes (20,035) Reported profit for the period 109,801

Included in external revenue are related party sales between Dairy Ireland and Joint Ventures & Associates of €4.5 million

and related party sales between Glanbia Nutritionals and Joint Ventures & Associates of €6.6 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.

Amortisation and exceptional items are not allocated to segments as they are not reported by segment to the Glanbia

Operating Executive. Finance income, finance costs and income taxes are not allocated to segments as this type of activity is

driven by central treasury and taxation functions which manage the cash and taxation position of the Group.

Segment assets and liabilities: Segment

assets Segment

liabilities €’000 €’000

Glanbia Performance Nutrition 1,128,231 247,784

Glanbia Nutritionals 803,838 198,333

Dairy Ireland 362,541 216,398

Joint Ventures & Associates 169,891 -

Group including Joint Ventures & Associates 2,464,501 662,515

Unallocated 134,095 875,436 Reported Group 2,598,596

1,537,951

Unallocated assets primarily include taxation, cash and cash equivalents, available for sale financial assets and derivatives.

Unallocated liabilities include taxation, borrowing and derivatives.



4.2 The segment results for the period ended 04 July 2015 are as follows:




€'000 €'000 €'000 €'000

Glanbia Performance Nutrition 453,818 (346) 453,472 60,686

Glanbia Nutritionals 626,732 (17,476) 609,256 60,342

Dairy Ireland 368,862 - 368,862 17,445








Finance income 885



Income taxes (18,542) Reported profit for the period 99,091


and related party sales between Glanbia Nutritionals and Joint Ventures & Associates of €7.6 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.



driven by central treasury and taxation functions which manage the cash and taxation position of the Group.

Segment assets and liabilities:

Segment

assets Segment

liabilities

€’000 €’000

Glanbia Performance Nutrition 867,221 153,560






1,328,414





4.3 The segment results for the year ended 02 January 2016 are as follows:




€'000 €'000 €'000 €'000

Glanbia Performance Nutrition 924,165 (1,050) 923,115 135,610

Glanbia Nutritionals 1,272,795 (54,814) 1,217,981 106,642

Dairy Ireland 633,787 (557) 633,230 28,751








Finance income 1,706



Income taxes (34,779) Reported profit for the year 183,917


and related party sales between Glanbia Nutritionals and Joint Ventures & Associates of €15.3 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.



driven by central treasury and taxation functions which manage the cash and taxation position of the Group. Segment assets and liabilities:

Segment

assets Segment

liabilities

€’000 €’000

Glanbia Performance Nutrition 1,150,637 257,148






1,587,880



5. Seasonality

Elements of the Dairy Ireland segment reflect the seasonal nature of the Irish agricultural industry.



6. Exceptional items


2016 2015 2015

Notes €'000 €'000 €'000

Organisation redesign costs (a) (6,207) (3,099) (6,945)

Acquisition integration costs (b) (1,850) - (2,919)

Rationalisation costs (c) (828) (1,162) (7,841)

Irish defined benefit pension schemes (d) - - (5,006)

Disposal of Joint Venture (e) - (3,577) (3,631)

Total exceptional charge before tax (8,885) (7,838) (26,342)

Exceptional tax credit 1,629 533 2,543 Total exceptional charge

(7,256) (7,305) (23,799)

The nature of the total exceptional charge before tax is as follows:


2016 2015 2015

€'000 €'000 €'000

Employee benefit expense (3,385) (1,162) (7,416)

Defined benefit pension scheme settlement loss - - (4,306)

Other operating costs (5,500) (6,676) (14,620) Total exceptional charge before tax

(8,885 ) (7,838) (26,342)

The total cash outflow during the period in respect of exceptional charges was €10.5 million (HY 2015: €3.0 million) of which €6.4 million (HY 2015: €0.6 million) was in respect of prior year exceptional charges.

a) 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. Costs of €6.2 million include consultancy of €2.3 million, employee benefit expense (directly attributable employee costs and redundancy) of €1.7 million and other costs of €2.2 million.

b) 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. Costs of €1.9 million include consultancy of €0.7 million, employee benefit expense (directly attributable payroll costs and redundancy) of €0.9 million and other costs of €0.3 million.

c) Rationalisation costs primarily relate to the current redundancy and rationalisation programme in the Dairy Ireland segment. Costs of €0.8 million include employee benefit expense (redundancy) of €0.8 million.

d) 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 gains and losses on settlement of €4.3 million, in accordance with IAS 19 ‘Employee Benefits’, and professional fees of €0.7 million in relation to the transaction. This settlement reduced the gross retirement benefit obligation by €60.2 million.

e) On 01 April 2015, the Group disposed of its 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, resulting in a non cash loss of €3.6 million.



7. Finance income and costs


2016 2015 2015

€'000 €'000 €'000

Finance income

Interest income 1,160 885 1,706 Total finance income 1,160 885 1,706

Finance costs

Bank borrowing costs (3,632) (2,233) (4,109)

Facility fees (1,325) (1,414) (2,761)

Unwinding of discounts (73) (74) (142)

Finance lease costs (38) (72) (127)

Finance cost of private debt placement (7,664) (7,795) (15,677)

Total finance costs (12,732) (11,588) (22,816)

Net finance costs (11,572) (10,703) (21,110)

Net finance costs do not include borrowing costs of €0.5 million (HY 2015: €1.25 million) attributable to the acquisition,

construction or production of a qualifying asset, which have been capitalised, as disclosed in note 11. Borrowing costs are

capitalised at the Group’s average interest rate for the period of 3.6% (HY 2015: 3.9%).

8. Income taxes

The Group’s income tax charge after exceptional items of €20.0 million (HY 2015: €18.5 million) has been prepared based on

the Group’s best estimate of the weighted average tax rate that is expected for the full financial year.

9. Dividends


2016 2015 2015

€'000 €'000 €'000

Dividends paid per ordinary share are as follows: Final dividend for the year ended 02 January 2016 of 7.22 cent per share paid on 29 April 2016

21,374 - -

Final dividend for the year ended 03 January 2015 of 6.57 cent per share paid on 15 May 2015

- 19,449 19,449

Interim dividend for the year ended 02 January 2016 of 4.88 cent per share paid on 16 October 2015

- - 14,446

21,374 19,449 33,895

The Directors have recommended the payment of an interim dividend of 5.37 cent per share on the ordinary shares which

amounts to €15.9 million. This dividend will be paid on 07 October 2016 to shareholders on the register of members at 26

August 2016, the record date. These condensed financial statements do not reflect this interim dividend. There are no income

tax consequences for the Company in respect of dividends proposed prior to issuance of the condensed interim financial

statements.



10. Earnings per share Basic

Basic earnings per share is calculated by dividing the net profit attributable to the equity holders of the Parent by the weighted average number of ordinary shares in issue during the period, excluding ordinary shares purchased by the Group and held as own shares.


2016 2015 2015

Profit attributable to equity holders of the Parent (€’000) 109,364 98,674 183,271

Weighted average number of ordinary shares in issue 295,127,674 295,124,380 295,196,003

Basic earnings per share (cent) 37.06 33.43 62.08

Diluted

Diluted earnings per ordinary share is calculated by adjusting the weighted average number of ordinary shares in issue to assume conversion of all potential dilutive ordinary shares. Share options and share awards are the Company’s only potential dilutive ordinary shares. Share awards, which are performance based, are treated as contingently issuable shares because their issue is contingent upon satisfaction of specified performance conditions in addition to the passage of time. These contingently issuable ordinary shares are excluded from the computation of diluted earnings per share where the exercise conditions have not been satisfied as at the end of the reporting period.


2016 2015 2015

Weighted average number of ordinary shares in issue 295,127,674 295,124,380 295,196,003

Adjustments for share awards 1,090,798 2,182,723 1,002,678

Adjustments for share options 34,191 42,162 42,617

Adjusted weighted average number of ordinary shares 296,252,663 297,349,265 296,241,298

Diluted earnings per share (cent) 36.92 33.18 61.87

Adjusted

Adjusted earnings per share is calculated on the net profit attributable to equity holders of the Parent, before net exceptional items and intangible asset amortisation (net of related tax). Adjusted earnings per share is considered to be more reflective of the Group’s overall underlying performance, and reflects the metrics used by the Group to measure profitability and financial performance.


2016 2015 2015

Profit attributable to equity holders of the Parent (€’000) 109,364 98,674 183,271

Amortisation of intangible assets (net of related tax) (€’000) 15,531 13,620 26,126

Amortisation of Joint Ventures & Associates intangible assets (net of related tax) (€’000) 270 208 417

Exceptional items (net of related tax) (€’000) 7,256 7,305 23,799 Adjusted net income (€’000) 132,421 119,807 233,613

Adjusted earnings per share (cent) 44.87 40.60 79.14

Diluted adjusted earnings per share (cent) 44.70 40.29 78.86



11. Property, plant and equipment, intangible assets and capital commitments

During the six month period to 02 July 2016 the Group spent €41.7 million (HY 2015: €58.8 million) on additions to property,

plant and equipment and intangible assets. There were no significant disposals during the period.

As part of the business combination during the period (note 21), the Group acquired intangible assets, comprising customer

relationships and goodwill, amounting to €2.5 million and property, plant and equipment amounting to €0.2 million.

At 02 July 2016 the Group had entered into contractual commitments for the acquisition of property, plant and equipment

amounting to €11.3 million (HY 2015: €24.6 million). During the six month period the Group capitalised borrowing costs

amounting to €0.5 million (HY 2015: €1.25 million) on qualifying assets (note 7).

12. Inventories The amount written off as an expense to the condensed income statement in respect of inventories carried at net realisable value was €2.5 million (HY 2015: €0.7 million).

13. Net debt


2016 2015 2015

€’000 €’000 €’000

Non-current

Bank borrowings 380,187 340,393 453,978

Private debt placement 291,872 292,898 298,521

Finance lease liabilities 349 724 464

672,408 634,015 752,963

Current

Bank overdraft and borrowings 66,490 37,040 41,764

Finance lease liabilities 351 408 405

66,841 37,448 42,169

Total borrowings 739,249 671,463 795,132

Less: cash and cash equivalents (94,909) (94,400) (210,889) Net debt 644,340 577,063 584,243

The maturity of non-current borrowings is €0.3 million (HY 2015: €0.4 million, 2015: €0.4 million) in 1 to 2 years, €672.1 million (HY 2015: €340.7 million, 2015: €454.1 million) in 2 to 5 years and €nil (HY 2015: €292.9 million, 2015: €298.5 million) in more than 5 years. Cash and cash equivalents include the following for the purposes of the condensed statement of cash flows at the reporting date:


2016 2015 2015

€’000 €’000 €’000

Cash and cash equivalents (94,909) (94,400) (210,889)

Bank overdraft 66,490 37,040 41,764

(28,419)

(57,360)

(169,125)



Borrowings include the following for the purposes of the condensed statement of cash flows at the reporting date:


2016 2015 2015

€’000 €’000 €’000

Borrowings 739,249 671,463 795,132

Bank overdraft included as part of cash and cash equivalents (66,490) (37,040) (41,764)

672,759 634,423 753,368 The Group has the following undrawn borrowing facilities at the reporting date:


2016 2015 2015

€’000 €’000 €’000

Expiring within 1 year 97,790 76,113 80,701

Expiring beyond 1 year 337,781 377,473 265,652

435,571 453,586 346,353

Movement in net borrowings in the period is analysed as follows:

Half year 2016

€’000

Half year 2015

€’000

Year 2015

€’000

At the beginning of the period 584,243 510,363 510,363

Net drawdown of borrowings 71,007 37,753 40,056

Exchange translation adjustment (10,910) 28,947 33,824

At the end of the period 644,340 577,063 584,243

14. Financial risk management

The Group’s activities expose it to a variety of financial risks as follows: currency risk, interest rate risk, price risk, liquidity

risk, cash flow risk and credit risk. The condensed interim financial statements do not include all financial risk management

information and disclosures required in the annual financial statements, and should be read in conjunction with the Group’s

2015 Annual Report.

There have been no changes to the risk management procedures or policies since 2015 year end.

Fair value estimation

The condensed interim financial statement fair value estimation disclosures below should be read in conjunction with the

Group’s 2015 Annual Report.

Fair value of financial assets and liabilities measured at fair value

The table below analyses the Group’s financial instruments measured at fair value by valuation method. The different levels

have been defined as follows:

quoted prices (unadjusted) in active markets for identical assets and liabilities (level 1);

inputs, other than quoted prices included in level 1, that are observable for the asset and liability, either directly

(that is, as prices) or indirectly (that is, derived from prices) (level 2); and,

inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level 3).



The following table presents the Group’s financial assets and liabilities that are measured at fair value at the reporting dates:

Fair Value Half year Half year Year

Hierarchy 2016 2015 2015

€’000 €’000 €’000

Assets

Non hedging derivatives Level 2 - 649 -

Derivatives used for hedging Level 2 1,012 1,037 414

Available for sale financial assets - equity securities Level 1 132 212 161

Available for sale financial assets - equity securities Level 2 6,111 5,360 5,666

Total assets 7,255 7,258 6,241

Liabilities

Non hedging derivatives Level 2 (3,299) - (666)

Derivatives used for hedging Level 2 (597) (408) (283)

Total liabilities (3,896) (408) (949)

There were no transfers between levels 1 and 2 during the period. There were no changes in valuation techniques during the

periods. The Group did not hold any level 3 financial assets or liabilities at the reporting dates.

Valuation techniques used to derive level 2 fair values

Level 2 equities are fair valued using the latest prices quoted in the grey market as at the reporting dates.

Level 2 derivatives comprise mainly of foreign exchange contracts and commodity futures. These foreign exchange contracts

and commodity futures have been fair valued using forward rates that are quoted in active markets. The effects of

discounting are generally insignificant for level 2 derivatives.

Group’s valuation process

The Group’s finance department includes a team that performs the valuations of financial assets and financial liabilities

required for financial reporting purposes, including level 3 fair values. The Group did not hold any level 3 financial assets or

liabilities at 02 July 2016, 04 July 2015 or 02 January 2016. The valuation team reports directly to the Group Finance Director

who in turn reports to the Audit Committee. Discussions of valuation processes and results are held between the Group

Finance Director and the Audit Committee.

Changes in level 2 and level 3 fair values are analysed at each reporting date. As part of this discussion, the valuation team

presents a report that explains the reasons for the fair value movements.

Fair value of financial assets and liabilities measured at amortised cost

The fair value of the Group’s trade and other receivables, cash and cash equivalents and trade and other payables

approximate their carrying value.

The following table presents the fair value of the Group’s financial assets and liabilities that are measured at amortised cost at

the reporting dates:


2016 2015 2015

€'000 €'000 €'000

Non-current borrowings

Carrying value 672,408 634,015 752,963

Fair value 705,814 658,058 776,931

The carrying value of current borrowings approximates to their fair value.



15. Provisions

Restructuring €'000

UK pension

€'000

Legal claims €'000

Lease commitments

€'000 Operational

€'000 Total

€'000

note (a) note (b) note (c) note (d) note (e)

At 02 January 2016 5,692 18,898 6,928 992 5,602 38,112

Provided for in the period

828 - - - - 828 Utilised in the period (1,747) (94) (199) (64) (3) (2,107)

Exchange differences - (2,348) (112) - (18) (2,478)

Unwinding of discounts - 70 - 3 - 73

At 02 July 2016 4,773 16,526 6,617 931 5,581 34,428

Non-current - 15,776 - 802 - 16,578

Current 4,773 750 6,617 129 5,581 17,850

4,773 16,526 6,617 931 5,581 34,428

a) The restructuring provision relates to rationalisation programmes in Dairy Ireland. The provision, which relates to redundancy payments, is expected to be utilised during the year. The amount provided in the period is recognised in the income statement as an exceptional item.

b) The UK pension provision relates to administration and certain costs associated with pension schemes attached to businesses disposed of in prior years. This provision is expected to be fully utilised over the next 27.5 years.

c) The legal claims provision represents legal claims brought against the Group. Due to the nature of these items, there is some uncertainty around the amount and timing of payments. In the opinion of the Directors, after taking appropriate legal advice, the outcome of these legal claims is not expected to give rise to any significant loss beyond the amounts provided for at 02 July 2016.

d) The lease commitments provision relates to onerous leases in respect of two properties where the Group has present and future obligations to make lease payments. It is expected that €0.1 million will be utilised during the year and the balance will be fully utilised in 2017.

e) The operational provision represents provisions relating to certain insurance claims, property remediation works and product returns. Due to the nature of these items, there is some uncertainty around the amount and timing of payments.

16. Share capital and share premium

Number of shares

(thousands) Ordinary shares

€'000 Share premium

€'000 Total

€'000

At 03 January 2015 295,876 17,752 86,976 104,728

Shares issued 155 9 633 642

At 04 July 2015 and 02 January 2016 296,031 17,761 87,609 105,370

Shares issued 10 1 22 23 At 02 July 2016 296,041 17,762 87,631 105,393

The total authorised number of ordinary shares is 350 million shares (HY 2015 and 2015: 350 million shares) with a par

value of €0.06 per share (HY 2015 and 2015: €0.06 per share). All issued shares are fully paid.

During the period ended 02 July 2016 10,000 (HY 2015 and 2015: 155,000) of the 2002 Long Term Incentive Plan shares

were exercised with exercise proceeds of €0.02 million (HY 2015 and 2015: €0.6 million). The exercise price was €2.29 (HY

2015 and 2015 average exercise price: €4.14) per share.



17. Retirement benefit obligations The movement in the liability recognised in the Group condensed balance sheet is as follows:


2016 2015 2015

€’000 €’000 €’000

At the beginning of the period (87,288) (114,808) (114,808)

Exchange differences 2,584 (2,362) (1,557)

Service cost and net interest cost (3,699) (4,299) (8,512)

Loss on settlement - - (4,306)

Remeasurements - defined benefit schemes (51,379) 18,178 20,856

Contributions paid/payable by employer 7,707 9,320 21,039 At the end of the period (132,075) (93,971) (87,288)

The amounts recognised in the Group condensed balance sheet are determined as follows:


2016 2015 2015

€’000 €’000 €’000

Fair value of plan assets 360,877 416,691 352,789

Present value of funded obligations (492,952) (510,662) (440,077)

Liability in the Group condensed balance sheet (132,075) (93,971) (87,288)

The following actuarial assumptions have been made in determining the Group's retirement benefit obligations for the half years ended 02 July 2016 and 04 July 2015 and full year ended 02 January 2016:

Half year 2016 Half year 2015 Year 2015

IRL UK IRL UK IRL UK

Discount rate 1.40% 2.60% 2.40% 3.65% 2.25% 3.70%

Inflation rate 1.10% - 1.20% 1.75% - 2.75% 1.50% - 1.60% 2.15% - 3.15% 1.30% - 1.40% 2.00% - 3.00%

Future salary increases 2.20% 3.50% 2.60% 3.90% 2.40% 3.75%

Future pension increases 0.00% 1.90% - 2.65% 0.00% 2.20% - 2.95% 0.00% 2.10% - 2.80%

The following table analyses for the Group’s pension schemes, the estimated impact in the plan liabilities resulting from a

0.25% change in the discount rate:


2016 2015 2015

€’000 €’000 €’000

Discount rate – increase/decrease 0.25% Decrease/increase by

€21.8 million Decrease/increase by

€23.6 million Decrease/increase by

€19.4 million

Mortality rates The mortality assumptions are consistent with those applied in the 2015 Annual Report.



18. Related party transactions

The Group is controlled by the Society, which holds 36.5% of the issued share capital of Glanbia plc and is the ultimate parent

of the Group. During the period, dividends of €7.8 million (HY 2015: €8.0 million) were paid to the Society and its wholly

owned subsidiaries based on their shareholding in Glanbia plc.

During the six months to 02 July 2016, sales to related parties amounted to €16.6 million (HY 2015: €18.1 million), purchases

from related parties amounted to €35.2 million (HY 2015: €39.5 million) and net balances owed to related parties were

€39.9 million (HY 2015: €54.3 million). During 2016 the Group advanced a loan of €12.8 million at arms length to Glanbia

Ingredients Ireland Limited (Associate), which is repayable on 03 July 2018. The related party transactions relate primarily to

trading between the Group, Southwest Cheese Company, LLC, Glanbia Ingredients Ireland Limited and the Society.

In the opinion of the Directors, there have been no related party transactions, or changes therein, since the year ended 02

January 2016, that have materially affected the Group’s financial position or performance during the six months ended 02

July 2016.

19. Contingent liabilities

Group bank guarantees amounting to €4.9 million (HY 2015: €3.6 million) are outstanding at 02 July 2016. The Group does

not expect any material loss to arise from these guarantees.

The Group has contingent liabilities in respect of legal claims arising in the ordinary course of business. It is not anticipated

that any material liability will arise from these contingent liabilities other than those provided for.

20. Cash generated from operations


2016 2015 2015

€’000 €’000 €’000

Profit before taxation 129,836 117,633 218,696

Non cash element of exceptional charge 4,785 5,386 18,299

Share of results of Joint Ventures & Associates (12,328) (13,267) (26,270)

Write off of property, plant and equipment 183 - -

Depreciation 24,588 21,209 43,137

Amortisation 19,424 15,566 31,125

Cost of share based payments 5,693 3,565 8,724

Difference between pension charge and cash contributions (4,008) (5,023) (6,027)

Loss on disposal of property, plant and equipment 87 96 209

Finance income (1,160) (885) (1,706)

Finance expense 12,732 11,588 22,816

Amortisation of government grants received (121) (103) (282)

Cash generated before changes in working capital 179,711 155,765 308,721

Changes in net working capital:

- Decrease in inventory 9,309 7,184 20,287

- (Increase) in short term receivables (100,690) (88,962) (12,187)

- (Decrease)/increase in short term liabilities (32,607) (38,114) 846

- (Decrease) in provisions (2,107) (10,410) (9,802)

Cash generated from operating activities 53,616 25,463 307,865



21. Business combinations

For the acquisitions completed in 2015 there have been no material revisions, as at the reporting date, of the provisional fair value adjustments since the initial values were established. On 29 February 2016, the Group acquired 100% of the business and operating assets of EMI Nutrition Distributors Pty Limited (“EMI”). EMI’s principal activity is the distribution and marketing of performance nutrition products. The acquisition will allow the Group to expand and further enhance Glanbia Performance Nutrition distribution channels. Goodwill is attributable to the profitability and development opportunities associated with complementing and enhancing existing distribution channels. Goodwill is not deductible for tax purposes. Acquisition related costs charged to the condensed income statement, included within other expenses, during the period ended 02 July 2016 amounted to €0.2 million (HY 2015: €nil). Details of the net assets acquired and goodwill arising from the acquisition are as follows:

Half year 2016

€’000

Purchase consideration 10,318

Less: Fair value of assets acquired (9,355) Goodwill 963

Prior to the acquisition, EMI was a distributor of the Group’s product in Australia. As at the acquisition date, EMI’s trade payable balance to the Group amounted to €1.6 million, being the contractual value. This balance was effectively settled on the acquisition date and is excluded from the liabilities acquired. The total purchase consideration is as follows:

Half year 2016

€’000

Purchase consideration – cash paid 8,724

Pre-existing relationship payable balance 1,594 Purchase consideration 10,318

The fair value of assets and liabilities arising from the acquisition are as follows:

Half year 2016

€’000

Property, plant and equipment 165

Intangible assets - customer relationships 1,508

Inventories 3,686

Trade and other receivables 4,225

Trade and other payables (41)

Deferred tax liability (188) Fair value of assets acquired 9,355

The fair value of EMI’s trade and other receivables at the acquisition date amounted to €4.2 million, which equates to the gross contractual amount. The revenue and profit (net of transaction costs) of the Group including the impact of the acquisition during the period ended 02 July 2016 were as follows:

2016 Group

excluding

Consolidated Group

including

Acquisition acquisition acquisition

€’000 €’000 €’000

Revenue 1,761 1,433,003 1,434,764

(Loss)/profit before taxation and exceptional items (1,228) 139,949 138,721



The revenue and profit (net of transaction costs) of the Group for the period ended 02 July 2016 determined in accordance with IFRS 3 as though the acquisition date for all business combinations effected during the period had been at the beginning of the period would be as follows:

2016 Group

excluding Pro Forma

Consolidated

Acquisition acquisition Group

€’000 €’000 €’000

Revenue 2,612 1,433,003 1,435,615

(Loss)/profit before taxation and exceptional items (798) 139,949 139,151

22. Events after the reporting period

There have been no material events subsequent to the end of the interim period 02 July 2016 which require disclosure in this

report.

23. Information

Copies of this half yearly financial report are available for download from the Group’s website at www.glanbia.com.

http://www.glanbia.com/

Glossary Key performance indicators and non-IFRS performance measures


Non-IFRS performance measures The Group reports certain performance measures that are not defined under IFRS but which represent additional measures

used by the Board of Directors and the Glanbia Operating Executive in assessing performance and for reporting both

internally and to shareholders and other external users. The Group believes that the presentation of these non-IFRS

performance measures provides useful supplemental information which, when viewed in conjunction with our IFRS financial

information, provides readers with a more meaningful understanding of the underlying financial and operating performance

of the Group.

None of these non-IFRS performance measures should be considered as an alternative to financial measures drawn up in

accordance with IFRS.

The principal non-IFRS performance measures used by the Group for the half year results are consistent with those

presented in the Group’s 2015 Annual Report and there have been no changes to the basis of calculation. The full list of key

performance indicators and non-IFRS performance measures used by the Group are set out in the 2015 Annual Report.

Constant currency While the Group reports its results in euro, it generates a significant proportion of its earnings in currencies other than euro,

in particular US dollar. Constant currency reporting is used by the Group to eliminate the translational effect of foreign

exchange on the Group's results. To arrive at the constant currency change, the results for the prior period are retranslated

using the average exchange rates for the current period and compared to the current period reported numbers.

The principal average exchange rates used to translate results as at the reporting dates were as follows:

Half year 2016

Half year 2015

Year 2015

euro 1 = US dollar 1.1161 1.1150 1.1092 Pound Sterling 0.7795 0.7316 0.7259 Danish Kroner 7.4497 7.4567 7.4589

Total Group The Group has a number of strategically important Joint Ventures & Associates which when combined with the Group’s wholly owned businesses give an important indication of the scale and reach of the Group’s operations. Total Group is used to describe certain financial metrics such as Revenue and EBITA when they include both the wholly owned businesses and the Group's share of Joint Ventures & Associates.

Revenue Revenue comprises sales of goods and services of the wholly owned businesses to external customers net of value-added tax, rebates and discounts. Revenue is one of the Group’s Key Performance Indicators.

Total Group Revenue Total Group Revenue comprises the revenue of the wholly owned businesses and the Group's share of the revenue of its Joint Ventures & Associates.

Notes

Half year 2016

€’000

Half year 2015

€’000

Year 2015 €’000

Revenue per the Group condensed income statement 1,434,764 1,431,590 2,774,326 Group’s share of revenue of Joint Ventures & Associates 4 402,257 445,327 893,089

Total Group Revenue 1,837,021 1,876,917 3,667,415

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

EBITA is one of the Group's Key Performance Indicators. Business Segment EBITA growth on a constant currency basis is one of the performance conditions in Glanbia's Annual Incentive Plan for Executive Directors with Business Unit responsibility.



Total Group EBITA Total Group EBITA comprises EBITA of the wholly owned businesses and the Group's share of its Joint Ventures & Associates EBITA.

Notes

Half year 2016

€’000

Half year 2015

€’000

Year 2015

€’000 EBITA per the Group condensed income statement 157,389 138,473 271,003 Group’s share of EBITA of Joint Ventures & Associates 4 19,135 20,204 39,690

Total Group EBITA 176,524 158,677 310,693

Reconciliation of the Group's share of Joint Ventures & Associates EBITA to the share of results of Joint Ventures & Associates per the Group condensed income statement is as follows:

Notes

Half year 2016

€’000

Half year 2015 €’000

Year 2015

€’000 EBITA of Joint Ventures & Associates 4 19,135 20,204 39,690 Amortisation (309) (238) (476) Finance costs (2,799) (2,574) (5,037) Income tax (3,699) (4,125) (7,907)

Share of results of Joint Ventures & Associates per the Group

condensed income statement

12,328 13,267 26,270

EBITA margin EBITA margin is defined as EBITA as a percentage of the revenue of the wholly owned businesses.

Half year 2016

€’000

Half year 2015

€’000

Year 2015

€’000 EBITA per the Group condensed income statement 157,389 138,473 271,003 Revenue per the Group condensed income statement 1,434,764 1,431,590 2,774,326

EBITA margin 11.0% 9.7% 9.8%

Total Group EBITA margin Total Group EBITA margin is defined as Total Group EBITA as a percentage of Total Group Revenue.

Notes

Half year 2016

€’000

Half year 2015

€’000

Year 2015

€’000 Total Group EBITA 4 176,524 158,677 310,693 Total Group Revenue 4 1,837,021 1,876,917 3,667,415

Total Group EBITA margin 9.6% 8.5% 8.5%



Adjusted Earnings per share (EPS) Adjusted EPS is defined as the net profit attributable to the equity holders of Glanbia plc, before exceptional items and intangible asset amortisation, net of related tax, divided by the weighted average number of ordinary shares in issue during the period. The Group believes that Adjusted EPS is a better measure of underlying performance than Basic EPS as it excludes exceptional items that are not related to on-going operational performance and intangible asset amortisation, which allows better comparability of segments and companies that grow by acquisition to those that grow organically.

Adjusted EPS is one of the Group's Key Performance Indicators. Adjusted EPS growth on a constant currency basis is one of the performance conditions in Glanbia's Annual Incentive Plan. Adjusted EPS growth on a reported basis is one of the performance conditions in Glanbia's Long-term Incentive Plan.

Notes

Half year 2016

€’000

Half year 2015

€’000

Year 2015

€’000 Profit attributable to equity holders of the Parent 109,364 98,674 183,271 Amortisation of intangible assets (net of related tax) 10 15,531 13,620 26,126 Amortisation of Joint Venture & Associates intangible assets (net of

related tax) 10 270 208 417 Exceptional items (net of related tax) 6 7,256 7,305 23,799

Adjusted net income 132,421 119,807 233,613

Weighted average number of ordinary shares in issue 10 295,127,674 295,124,380 295,196,003

Adjusted earnings per share (cent) 44.87 40.60 79.14

Financing Key Performance Indicators The following are the financing key performance indicators defined as per the Group’s financing agreements and are for a rolling 12 month period. Net debt : adjusted EBITDA is calculated as net debt at the end of the period divided by adjusted EBITDA. Net debt is calculated as total borrowings less cash and cash equivalents. Adjusted EBITDA is calculated as EBITDA for the wholly owned businesses (earnings before interest, taxation, depreciation and amortisation) plus dividends received from Joint Ventures & Associates, and in the event of an acquisition in the period, includes pro-forma EBITDA as though the acquisition date had been at the beginning of the period.

Notes

Half year 2016

€’000

Half year 2015

€’000

Year 2015

€’000 Rolling 12 month EBITDA 336,135 278,060 313,858 Rolling 12 month dividends received from Joint Ventures & Associates 13,935 12,714 14,924 Acquisition pro-forma EBITDA 2,088 2,180 5,188

Adjusted EBITDA 352,158 292,954 333,970 Net Debt 13 644,340 577,063 584,243

Net debt : adjusted EBITDA 1.83 1.97 1.75

Adjusted EBIT : net finance cost is calculated as earnings before interest and tax plus dividends received from Joint Ventures & Associates divided by net finance cost. Net finance cost comprises finance costs less finance income per the Group condensed income statement plus capitalised borrowing costs.

Half year 2016

€’000

Half year 2015

€’000

Year 2015

€’000 Rolling 12 month operating profit 254,936 212,280 239,878 Rolling 12 month dividends received from Joint Ventures & Associates 13,935 12,714 14,924

Adjusted EBIT 268,871 224,994 254,802

Rolling 12 month net finance cost

23,629 22,932 23,510 Adjusted EBIT : net finance cost 11.4 9.8 10.8



Operating cashflow Operating cashflow is defined as earnings before interest, taxation, depreciation and amortisation (EBITDA) of the wholly owned businesses net of business sustaining capital expenditure and working capital movements, excluding exceptional cash flows. EBITDA represents pre-exceptional EBITA of the wholly owned businesses plus depreciation, net of grant amortisation.

Operating cashflow is one of the Group's Key Performance Indicators. Operating cashflow on a constant currency basis is one of the performance conditions in Glanbia's Annual Incentive Plan. Reconciliation of Operating cashflow to the condensed statement of cash flows in the condensed interim financial statements:

Notes

Half year 2016

€’000

Half year 2015

€’000

Year 2015

€’000

Cash generated from operating activities 20 53,616 25,463 307,865

Add back exceptional costs paid in period - note 1 10,505 3,040 15,090

Add back non operating working capital movements in period 1,517 512 (1,295)

Less business sustaining capital expenditure - note 2 (13,926) (13,868) (37,391)

Non cash items not adjusted in computing Operating Cash Flow:

Cost of share options 20 (5,693) (3,565) (8,724)

Difference between pension charge and cash contributions 20 4,008 5,023 6,027

Loss on disposal of property, plant and equipment 20 (87) (96) (209)

Operating cashflow 49,940 16,509 281,363

Exceptional costs paid in the period Pre-tax exceptional charge for period 6 8,885 7,838 26,342 Non-cash element of exceptional charge 20 (4,785) (5,386) (18,299) Current period exceptional costs paid in the period 4,100 2,452 8,043 Prior period exceptional costs paid in the period 6,405 588 7,047 Total exceptional costs paid in the period

10,505 3,040 15,090

Capital expenditure analysis

Business sustaining capital expenditure 13,926 13,868 37,391 Strategic capital expenditure 27,768 44,896 86,199 Total capital expenditure

41,694 58,764 123,590

Capital expenditure reconciled to condensed statement of cash flows:

Purchase of property plant and equipment 34,471 52,241 103,792 Purchase of intangible assets 7,223 6,523 19,798 Total capital expenditure per the condensed statement of cash flows

41,694 58,764 123,590

Business sustaining capital expenditure The Group defines business sustaining capital expenditure as the expenditure required to maintain/replace existing assets with a high proportion of expired useful life. This expenditure does not attract new customers or create the capacity for a bigger business. It enables the company to keep running at current throughput rates but also keep pace with regulatory and environmental changes as well as complying with new requirements from existing customers.

Strategic capital expenditure The Group defines strategic capital expenditure as the expenditure required to facilitate growth and generate additional returns for the Group. This is generally expansionary expenditure beyond what is necessary to maintain the Group's current competitive position.

Documents

2016/media/Files/G/Glanbia-Plc/2016-half-year-results.pdf · Revenues increased 12.0% to €505.3 million. Drivers of revenue growth were an 8.0% improvement in volume and a 10.7%