Presentation to the: 2014 UCD EGA Autumn Panel Discussion
November 2014
Glanbia overview
Glanbia Ingredients
Ireland GII’s
operating environment
Dynamic at Farm Level GII’s
Investment Response
Policy Response
Presentation to UCD Autumn Panel – November 2014
Presentation to IFA Dairy Conference – October 2014
Presentation to UCD Autumn Panel Discussion– November 2014
Glanbia Group
29 COUNTRIESof operation
130+ EXPORT markets
Leading global performance nutrition and ingredients group
€3.3 BILLION 2013 revenue
€3.3 BILLION+ Market capitalisation
5,200 Employees
6 BILLION Litres of milk
Presentation to UCD Autumn Panel Discussion– November 2014
Which is of significant scale…
Glanbia Ingredients
Ireland
Presentation to UCD Autumn Panel – November 2014
Presentation to UCD Autumn Panel Discussion– November 2014
GII is a private company run on co-op principles
Presentation to UCD Autumn Panel Discussion– November 2014
GII’s vision and mission
To be the dairy based solutions partner-of-choice for leading organisations globally.
To process our suppliers’ growing milk volumes and maximise sustainable value in global markets for all our stakeholders.
Presentation to UCD Autumn Panel Discussion– November 2014
GII overview
An International Dairy Ingredient Solutions Company
€883 MILLION 2013 sales revenue
€33.3 MILLION 2013 profit after tax
€40 MILLION EBIT
• No.1 Irish dairy processor
• No.1 European producer of enriched milk powders
• No.3 Indigenous Irish exporter
• 23% Shareholder in Irish Dairy Board
c.€300m gross investment since 2007 In projects that target high value markets, increase capacity, enhance efficiency and diversify our product and geographic base
Farm Suppliers
4,550
Litres of milk
processed 1.6 bn
Tonnes of ingredients
245,000
Ireland’s milk pool
30%
Ireland’s whey pool
35% Employees
500+
Presentation to UCD Autumn Panel Discussion– November 2014
GII collects milk across 16 counties
• 4,550 farmer supplies across 16 counties.
Presentation to UCD Autumn Panel Discussion– November 2014
GII’s milk processing infrastructure
• Supplying 5 processing sites
Presentation to UCD Autumn Panel Discussion– November 2014
GII produces and sells 245,000 tonnes of dairy products
Presentation to UCD Autumn Panel Discussion– November 2014
GII – our global reach
Presentation to UCD Autumn Panel Discussion– November 2014
GII market focus
Sports Nutrition Clinical Nutrition Infant Nutrition
Affordable Nutrition Retail Ingredient Cheese
Presentation to UCD Autumn Panel Discussion– November 2014
GII – producing for some of the world’s favourite food brands
GII’s operating
environment
Presentation to UCD Autumn Panel – November 2014
Presentation to IFA Dairy Conference – October 2014
Dynamic within the marketplace for GII
Short term: Challenging
Medium/ long term:
Opportunities
Presentation to UCD Autumn Panel – November 2014
Presentation to IFA Dairy Conference – October 2014
Long-term growth in demand for dairy product continues
• Urbanisation • Growing population • Westernisation of diet • Growing middle class
Dairy consumption
growth 2.3% / year
Presentation to UCD Autumn Panel – November 2014
Presentation to UCD Autumn Panel Discussion– November 2014
Demand growth dominated by the emerging markets
Source (1) IMF World Economic Outlook Database, October 2013
Presentation to IFA Dairy Conference – October 2014
Emergence of new market trends, re-establishment of some old ones
Presentation to UCD Autumn Panel – November 2014
Presentation to UCD Autumn Panel Discussion– November 2014
Forensic attention to quality and supply chain integrity
Advancements in low-cost analytical technology… …& prevalence of social media
Presentation to UCD Autumn Panel Discussion– November 2014
Brand owners are focused on supply chain visibility
Presentation to UCD Autumn Panel Discussion– November 2014
But volatility remains a feature of the market
Presentation to IFA Dairy Conference – October 2014
Key dynamics driving the global dairy markets
Integration without
ownership
‘Emerged’ economies dominate
Volatility Global pricing
Partnerships ‘Hardcore’ sustainability
Regulation Supply security
Pursuit of efficiency
Presentation to UCD Autumn Panel – November 2014
Presentation to IFA Dairy Conference – October 2014
Key dynamics driving the global dairy markets
Integration without
ownership
‘Emerged’ economies dominate
Volatility Global pricing
Partnerships ‘Hardcore’ sustainability
Regulation Supply security
Pursuit of efficiency
Presentation to UCD Autumn Panel – November 2014
Dynamic at Farm Level
Presentation to UCD Autumn Panel – November 2014
4
Dairy Industry 2025 – A presentation to Dairy Ireland Conference
What is happening today at farm level?
Presentation to UCD Autumn Panel – November 2014
Presentation to IFA Dairy Conference – October 2014
Age 51
Successor identified 75%
No. of cows 71
Milk production (litres) 355,000
Land farmed 183 acres
Land owned 150 acres
Stocking rate low
Expansion plans +53% by 2020
Balance sheet strong
Farm Structure Family farm
The typical Glanbia farmer today…
Presentation to UCD Autumn Panel – November 2014
5 GII’s
Investment Response
Presentation to UCD Autumn Panel Discussion– November 2014
GII is focussed on tackling critical global issues for customers
Presentation to IFA Dairy Conference – October 2014
Major investment programme… World class facilities
Presentation to UCD Autumn Panel – November 2014
Presentation to UCD Autumn Panel Discussion– November 2014
Partnering with the best…
Presentation to IFA Dairy Conference – October 2014
Focus on innovation…
Presentation to UCD Autumn Panel – November 2014
Presentation to UCD Autumn Panel Discussion– November 2014
For GII, innovation runs from pre-cow to post-customer
Presentation to UCD Autumn Panel Discussion– November 2014
Focus on facilitating expansion… removing obstacles
• No capital contribution required
• No Share up required • Open to new entrants
Presentation to UCD Autumn Panel Discussion– November 2014
Internationally leading programmes…
GII Open Source Sustainability Programme GII Fixed Milk Price Scheme
Policy Response
Presentation to UCD Autumn Discussion Panel – November 2014
Presentation to UCD Autumn Panel Discussion– November 2014
What should be the focus of Policy Makers
?
Thank you
Presentation to UCD Autumn Panel Discussion – November 2014