Performance nutrition is an attractive category given its high growth rate. The sector is fragmented but this is an advantage for Glanbia PLC (LON:GL9) as it is the only global player and hence it can seize the opportunity to cement its leadership both organically and through acquisition, which should give the company a lasting competitive advantage.
Performance nutrition in focus
Glanbia hosted an investor day to shine a spotlight on its global performance nutrition (GPN) business, which in FY15 made up 25% of sales and 44% of EBITA. The business has successfully integrated a number of acquisitions over the past few years, increased constant currency EBITA by 28% in 2015, and there is still much excitement in terms of further opportunities for the acquired brands. Following a strong Q415, Q116 was somewhat weaker, but management expects FY16 sales growth in the mid-single digits and margin evolution to be positive.
Glanbia snapshot
Glanbia consists of two main businesses: performance nutrition and global ingredients. Over the past few years the management team has streamlined the business and moved up the value chain. The ingredients and dairy business is more susceptible to fluctuations in raw material costs, and recent volatility has affected the performance. The GPN business suffered from political tensions in Brazil and Russia during 2015. In addition, there is a legacy Dairy Ireland business and several JVs and associates. These all have much lower top line and margin growth prospects.
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