The drivers of the revenue increase, on a constant currency basis was volume growth of 11.5% offset by a price decline of 1.8% and the Foodarom acquisition representing 0.8%. Volume growth was broad based and reflected strong demand across Glanbia’s end-markets, in particular in North America and Asia Pacific. Price decline related to lower year-on-year US cheese market prices, which offset price improvement in GPN and Nutritional Solutions in the period. The Foodarom acquisition completed by the GN segment in August 2020 is performing well, Glanbia said.
Glanbia said it has started 2021 well with strong revenue growth in the first quarter as trading conditions have improved in key regions in North America and Asia Pacific. This more than offset headwinds in European markets related to ongoing Covid related restrictions across the region.
Some revenues in the first quarter are attributable to the reopening of channels and markets, however the company said there is strong underlying demand for its health and wellness focused portfolio, which is continuing into the second quarter. Glanbia said it is confident of delivering good revenue growth in both GPN and Nutritional Solutions in FY 2021, assuming restrictions continue to ease in key markets.
The GPN Transformation Programme will support the delivery of double-digit margins in GPN in FY 2021 and will enable the business to invest in increased brand marketing as well as counteract some raw material inflation, which is expected in the second half of the year, the company said.
Following its first quarter performance, Glanbia expects FY 2021 adjusted EPS growth to be in the upper end of the previously guided range of 6% to 12% on a constant currency basis.
GPN delivered revenue growth of 14.1% in the first quarter of 2021 compared to the prior year. This was driven by volume growth of 9.5% and by a price increase of 4.6%. Excluding the impact of North American contract business, which is being exited, like-for-like branded revenues increased by 17.6% in Q1 2021.
Volume growth was driven by growth in the Americas and International portfolios. Price improvement was driven by the impact of price increases implemented in the second half of 2020.
The GPN Transformation Programme continued in Q1 2021 and is on track to deliver an overall GPN EBITA margin ambition by 2022 of between 12% and 13%.
Key efficiency work streams in 2021 include the exit of contract business in North America, which is expected to be completed in Q2, and a consolidation of supply chain activity which is expected to be largely completed by the end of 2021.
Key growth initiatives in 2021 include: an increase in marketing investment in the Optimum Nutrition (ON) and SlimFast brands primarily in digital channels to drive brand awareness and consumer engagement, as well as a reorganization to align resourcing to growth opportunities with the revised organizational structure to be fully in place for H2 2021.
GPN will now be managed as Americas and International. The Americas region includes all markets in North and Latin America with the International business including all other geographic markets.
GPN Americas delivered 69% of total GPN revenues in Q1 2021.
The ON brand had a strong performance in the first quarter of 2021 with positive consumption trends continuing into the second quarter, Glanbia said.
The SlimFast brand was impacted by headwinds in the diet category as Covid restricted consumer mobility in the first quarter of 2021 with consumption improving in the second quarter.
Increased brand investment, innovation and a further easing of Covid related restrictions in the Americas are expected to drive growth in the ON and SlimFast brands for the remainder of the year.
GPN International delivered 31% of total GPN revenues in Q1 2021 and had strong growth in the quarter versus the prior year. This was driven by strong volume growth in Asia Pacific markets as route-to-market transitions take effect. European volumes were modestly down year-on-year as a result of ongoing headwinds related to Covid restrictions across the region. Price improvement was broad based, reflecting increases implemented in the second half of 2020. The ecommerce channel was a key driver of growth across the International business and is a key component of market development in key regions across owned DTC websites as well as third party online retailers.
Increased brand investment and easing of Covid related restrictions are expected to drive growth in the international region for the remainder of the year.
GN delivered revenue growth in the first quarter of 2021 versus prior year. Revenue increased by 9.0% versus prior year. This was driven by a volume increase of 12.4% offset by a price decrease of 4.5%, and the Foodarom acquisition, completed in August 2020, delivering 1.1% revenue growth.
NS revenue increased by 14.9% in the period. Volume growth was 10.3%, pricing increased by 0.9% and the Foodarom acquisition delivered 3.7% revenue growth.
Volume growth in Q1 2021 was driven primarily by a strong performance in the vitamin and mineral premix business. Both dairy and non-dairy solutions drove a marginal improvement in price in the period.
Glanbia said throughout Q1 there has been global demand from customers oriented to health, wellbeing and immune enhancing trends as well as mainstream food and beverage in a range of product formats. NS expects these trends to continue in the second quarter. Demand for dairy solutions across various consumer formats remained solid during Q1 2021. The Foodarom acquisition continues to perform well.
US Cheese revenue increased by 6.5% in the period. This was driven by volume growth of 13.4% offset by a price decline of 6.9%. Volume growth was driven by US Cheese sales from the new large-scale joint venture plant in Michigan, which is expected to be fully commissioned, as planned, during the second quarter. Overall end-market demand has remained robust during the quarter. Price decline was related to lower year-on-year market pricing.
Glanbia said its joint ventures delivered good volume driven revenue growth in Q1 2021, which more than offset negative price.
Construction of the new Glanbia Cheese EU JV plant in Portlaoise, Ireland is on track. Commissioning for this plant is expected to be completed in the second quarter of 2021.
In April 2021, Glanbia completed its previously announced share buyback program. Between November 9, 2020 and April 9, 2021 Glanbia deployed €50m repurchasing 4,790,502 ordinary shares on Euronext Dublin at an average price of €10.4373. This represents a discount of 2% to the volume weighted average price over the same period. The total number of repurchased shares was equivalent to 1.6% of the company’s issued share capital prior to the buyback.
Glanbia's net debt at April 3, 2021 was €498.5m, a decrease of €191.6m versus the net debt position at the end of the first quarter of 2020. This decrease was driven by continuing strong operating cash flow across the business.
At the end of Q1 2021 the Group had €1.1bn in committed debt facilities with a weighted average maturity of 4.6 years, and an earliest maturity date of January 2024. Glanbia said it has access to resources from unutilized debt facilities for further investment in the business.