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Delivering
Better
Nutrition
Glanbia plc
Annual Report and
Financial Statements 2022
Contents
Strategic Report
Highlights
At a glance
Group Chairman’s statement
Group Managing Director’s review
Market trends and growth drivers
Our Business Model
Strategy
Key Performance Indicators
People
Diversity, Equity & Inclusion
Operations Review
Group Finance Director’s review
Sustainability
Showing respect for all our stakeholders
Climate and environment
Society
Task Force on Climate-Related
Financial Disclosures
Governance
Risk Management
Principal Risks and Uncertainties
Directors’ Report
Corporate Governance Report
02
04
06
08
10
12
14
18
20
22
24
44
50
52
56
60
62
66
67
72
80
Board of Directors and Senior Management 83
Audit Committee Report
Environmental, Social and Governance
Committee Report
Nomination and Governance
Committee Report
Remuneration Committee Report
Statutory information and
Forward-looking statement
Directors’ Responsibility Statement
Financial Statements
Independent Auditor’s Report
Group Financial Statements
Notes to the Financial Statements
Company Financial Statements
Notes to the Company
Financial Statements
Other information
Glossary of KPIs and
non-IFRS Performance Measures
Shareholder Information
Contacts
103
110
114
120
141
157
160
170
175
238
240
246
255
260
For definitions and more information on constant
currency and other performance measures see the
glossary on pages 246-254.
*ESEF: European Single Electronic Format.
We deliver
consumer brands
We deliver branded sports nutrition and
lifestyle products for consumers through our
Glanbia Performance Nutrition business.
Discover more about Glanbia at a glance on page 4
We deliver
nutritional ingredients
Glanbia Nutritionals is the ingredient
partner of choice to global customers in the
food, beverage and clinical nutrition industry.
Discover more about Glanbia at a glance on page 4
F I N D U S O N L I N E
Our online report
This copy of the statutory annual
report of Glanbia plc for the year
ended 31 December 2022 is not
presented in the ESEF*-format as
specified in the Regulatory Technical
Standards on ESEF (Delegated
Regulation (EU) 2019/815). The ESEF
annual report is available at:
glanbia.com/annualreport2022
Discover more about our 2025 ambition on page 14
@Glanbiaplc
@Glanbia
Glanbia has evolved
and grown.
People want to live full, healthy lives. To perform well,
recover quickly, and stay strong, at any age. Better living
requires better nutrition – and Glanbia delivers just that.
Glanbia has evolved and grown. Today, we are a better
nutrition company, the home of consumer brands and
ingredients that nourish millions around the world.
The choices we do – and don’t – make, are guided by
our purpose. Everything we do reflects our respect for
each other and the earth.
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
1
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Highlights
Financial Highlights (based on continuing operations)
Non-Financial Highlights
Profit after tax
€199.6m
2021: €141.0m
+€58.6m
Basic EPS
72.67c
2021: 48.47c
+49.9%1 / +23.5%2
Health and safety
Lost time case rate
35%
improvement versus 2021
Return on Capital Employed
Net debt
Scope 1 & 2 GHG emissions
11.1%
2021: 10.0%
+110bps
Revenue
€5.6bn
2021: €4.2bn
+€1.4bn
Adjusted EPS
104.02c
2021: 77.84c
+33.6%1 / +17.6%2
€459.4m
2021: €602.7m
reduction of €143.3m
8.6%
reduction versus 2021
EBITA (pre-exceptional)
Employee engagement score
€347.1m
2021: €270.6m
+28.3%1 / +13.5%2
OCF³ conversion
85.7%
2021: 100.2%
reduction of 1,450bps
71 points
increase of 1 point versus 2021
1. Reported currency
2. Constant currency
3. Operating cash flow
2018-2022 targets were achieved as set at our 2018 capital markets day
+€1.5bn
80%+
10%-13%
5%-10%
25%-35%
OCF
generation
Avg. OCF
Conversion %
Avg. ROCE
Avg. Adj EPS
Dividend
Payout
Resilient through volatility
For our 2023-2025 targets please see page 14.
For definitions and more information on constant currency and other performance measures see the glossary on pages 246-254.
2
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
“I am pleased to report that our
2022 results exceeded our expectations
demonstrating the impact of
a series of actions we implemented
since the latter part of 2021 in response
to unprecedented inflation.”
Siobhán Talbot
Group Managing Director
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
3
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION At a glance
O U R P U R P O S E
Delivering
Better
Nutrition
Glanbia is a better nutrition
company whose purpose is to
deliver better nutrition for every
step of life's journey. We employ
6,163 people including joint ventures
across 31 countries and our brands
and ingredients reach millions of
people every day.
O U R M A R K E T S
Serving growing
consumer trends
Focus on healthy living
As the foundation for healthy living has shifted to prevention,
consumers increasingly make food and beverage choices based
on health, nutritional benefit, functionality, energy and immunity.
Increased trust in established brands
Consumers are loyal to established and trusted brands in
performance and lifestyle nutrition.
Mass appeal of protein
The functional and nutritional benefits of protein are now
recognised by a wide consumer set.
The rise of plant-based diets
Plant-based protein appeals to three growing consumer
cohorts: flexitarian, vegetarian and vegan.
Provenance and sustainability focus
Consumers want to know much more about ingredient sourcing
and want to understand the food system better, rather than be
passive participants in it. Customers want sustainability
embedded in the supply chain.
Our portfolio
Our unique portfolio comprises world-leading
sports nutrition and lifestyle brands and large-
scale, expert capabilities in proprietary technologies
across a range of nutritional ingredients, all meeting
consumer demand for better nutrition.
Acceleration of ecommerce
ecommerce has emerged as the trend of the 2020s
with penetration and usage accelerating at pace.
Adding value
Over the past decade our portfolio has evolved from
base ingredients to higher-value ingredient
solutions and branded products.
Read more in ‘market trends and
growth drivers’ on pages: 10–11
4
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
R O U T E S T O M A R K E T
Nutrition focused
brands and ingredients
Consumer
branded
products
by Glanbia Performance Nutrition
#1 global sports nutrition brand1
A portfolio of leading brands
in performance and lifestyle nutrition.
2022 Revenue
2022 Revenue growth
€1,625.7m
13.9% cc²
Read more about our consumer brands
on pages: 24-33
Better Nutrition
Specialty
nutritional
ingredients
by Glanbia Nutritionals
#1 US producer of whey protein isolate
#2 global leader of premix solutions
# 1 producer of American-style cheddar
cheese
Glanbia Nutritionals’ (GN) Nutritional Solutions (NS)
is a leading provider of both bespoke customised
premix solutions and whey protein isolate.
GN’s US Cheese business is the number one
marketer of American-style cheddar cheese.
2022 Revenue
2022 Revenue growth
€4,016.7m
24.3% cc
Read more about our functional ingredients
and solutions on pages: 34–43
O U R C U L T U R E & V A L U E S
Our purpose, vision, and values
provide focus and direction for the
organisation, and guide us in our
business interactions.
Our diverse, engaged and energetic
workforce drive our strategy to
deliver better nutrition every day.
Customers' champion
We are the customers’ champion. Our customers
and consumers do not just choose us once but
rely on us delivering for them again and again.
Performance matters
We are committed to the highest standards of
performance, in quality, consistency and safety. We
are not just delivering better nutrition but delivering
it better every day.
Find a better way
The drive to constantly improve is in our DNA.
It leads us to innovate and collaborate. It has fueled
acquisitions, partnerships, new products,
and smarter ways of working.
Winning together
We expect a lot from our people and offer much
in return. We nurture individuals but encourage
everyone to work together. Winning is great,
but together we are more.
Showing respect
Respect underpins everything we do. Caring for
people and the planet is embedded in the fabric
of our business. Respect builds a better future
for everyone and is vital for our success.
1 Euromonitor
2 Constant currency
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
5
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Group Chairman’s statement
"Key to Glanbia's continuing success in
2022 is our unique culture and values,
and the importance we place on our
relationships with all our stakeholders.
We listen to our people, our investment
community, and our consumers and
customers to craft and deliver on our
strategy and this allows us to succeed
on the world stage."
A clear
strategy
driving
growth
6
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Our investment case
We have simplified
and continue to
evolve our strategy.
We have a highly focused,
attractive position in
growing nutrition categories.
We have invested in
key capabilities across
talent, innovation and
supply chain.
We have reshaped
our operating model
to drive customer and
consumer relevance.
We have delivered on our
2018-2022 strategic targets
and have set new ambitious
goals for 2023-2025.
Dear Shareholder,
2022 saw Glanbia deliver the highest
earnings it has ever delivered in terms
of adjusted earnings per share from
continuing operations of 104.02c, with
growth in adjusted EPS from continuing
operations of 17.6% constant currency
against the originally guided range of 2%
to 8%. This is attributable to the hard
work of our employees, the consistent
execution of our strategy, the resilience
and flexibility of the Group’s business
model and ongoing initiatives to enhance
business and operational performance.
We delivered a strong performance
across all our key metrics. Revenues,
profit, cash generation and return on
capital employed ("ROCE") all grew in
2022. Pre-exceptional Group EBITA
increased by 13.5%, constant currency, to
€347.1 million (+28.3% reported). ROCE, a
key metric for the Group, was 11.1% and
our strong Operating Cash Flow
conversion continued at 85.7%.
But the year wasn’t without its
challenges, and indeed these challenges
continue into 2023, with considerable
instability in the global environment, the
continued reverberations from Covid-19
and significant inflationary pressures
across many cost areas. North America, our largest market
remains very resilient as we continue to leverage our supply chain
capabilities and longstanding experience in managing the
complexities of running a global business.
Long term ambition and strategy
We continue to take a long-term view of our business. Having
proudly delivered across all the key metrics of our 2018–2022
strategy, at our Capital Markets Day in November 2022 we set out
our new 2023–2025 growth ambitions. We have clear revenue,
earnings and returns ambitions at business and Group level as
set out on page 14. These ambitions are grounded in attractive
fundamentals for our business which provide a strong platform
for growth. These include a growing global demand for better
nutrition as consumers seek healthier and more active lifestyles.
In April 2022, following a long and successful partnership, we
completed the sale of our 40% holding in Glanbia Ireland (Tirlán)
to Tirlán Co-operative Society Limited (formerly Glanbia
Co-operative Society Limited) (the "Society") for €307 million.
This disposal enables us to focus on our portfolio of key brands
and ingredients which have distinct competitive advantages and
hold leadership positions across their categories. In May we
announced the acquisition of Sterling Technology, LLC, a
US-based manufacturer of dairy bioactive solutions derived from
bovine colostrum. This acquisition represents an attractive
addition to the Glanbia Nutritionals (GN) portfolio strengthening
our offering in immunity solutions. Our strategy is clear. We will
continue to grow our core brands and ingredients, while
simultaneously optimising our business through innovation,
investment, creativity and precision in our marketing. And we will
achieve all this while maintaining consistent financial discipline.
Our long-term value creation model is based on the balanced
pursuit of top and bottom-line growth and improved capital
efficiency.
Our commitment to ESG
This year the Group made further significant and wide-ranging
progress in our environmental, social and governance
commitment. Over the course of 2022, we completed a process
to realign the Group’s Scope 1 and 2 decarbonisation agenda. We
have moved from a well below two degrees Celsius temperature
pathway ambition to 1.5 degrees Celsius pathway, in line with the
Paris Agreement. The revised ambition is for a 50% reduction
(previously a 31% reduction) in Scope 1 and 2 carbon emissions by
2030 from a 2018 base year. We also agreed that our ESG targets
will represent 20% of the total 2022 Long Term Incentive Plan
award for the senior executive team.
As the Group’s Engagement Director, I continued to engage with
employees and was very pleased with the results of the
Engagement Survey which showed a score of 71 points (up 1 point
since 2021) for employee engagement. Importantly representing
a more pronounced improvement in our employee inclusion
metrics. As set out later in the Governance section (page 66) of
this Report, the Board recognises that Glanbia’s culture is one of
it's principal competitive advantages and something to be
carefully nurtured and developed.
The Board’s engagement across all of Glanbia’s stakeholders is
deeper and more extensive than ever before, whether through
townhalls with employees, consultations with suppliers and
customers or meetings with shareholders.
Dividends
In testament to the strength of the business, the Board believes it
is appropriate for Glanbia to deliver a strong dividend for 2022.
The Board is recommending a final dividend of 19.28 cent per
share for the year ended 31 December 2022. This brings the total
dividend per share for the year ended 31 December 2022 to 32.21
cent per share, up 10% on the previous year. The Board will
continue to review the availability of surplus cash and capital in
accordance with the Group’s policies on financial leverage and
capital allocation. In 2022, we spent €173.5m on share buybacks
and will continue to assess this option as part of our capital
allocation tools.
Our Board
We have significantly refreshed the composition of the Board to
ensure we reflect an appropriate mix of skills, experience and
diversity to suit the evolving nature of the business and the
expectations of society. The reduction in the representation of
the Society, on the Board from six to five in 2022 with a further
agreed reduction to three in 2023, has also enabled us to achieve
greater board diversity. Patrick Coveney and Vincent Gorman
retired from the Board on 30 March 2022 and 5 May 2022
respectively. On behalf of the Board, I thank them for their
extensive contributions.
We welcomed Ilona Haaijer and Kimberly Underhill who were
appointed as Independent Non-Executive Directors effective
1 August 2022 increasing female Board membership to 36%.
Full biographical details for Ilona and Kimberly can be found on
page 85. Developing our diversity will remain a focus in the
selection of future Board members.
While Dan O'Connor continues in the role of Senior Independent
Director, Paul Duffy replaced Dan as chair of the Audit
Committee. During the year, Michael Horan stepped down as
Group Secretary with Liam Hennigan taking the role. I would like
to thank Michael for his work and commitment over the many
years.
Looking ahead
Every one of Glanbia’s employees deserve great credit for the
achievements of 2022. On behalf of the Board, I offer them my
sincere thanks for their unremitting efforts in helping drive our
business forward in accordance with our purpose and values. The
confidence I have in Glanbia’s people extends fully to its senior
leadership team, and I particularly thank Siobhán for her
commitment to Glanbia and for her continued leadership.
In this complex world, Glanbia’s guiding light remains its purpose:
delivering better nutrition for every step of life’s journey. The
Group also benefits from considerable financial strength
attributable to its strong cash generating capability and long
-term financing agreements. As set out in our Capital Markets
Day last November, we are confident for future and believe we
have two strong platforms to realise our ambitions for the future
growth. Your Board and executive leadership team will remain
focused on delivering long-term value creation for all our
stakeholders.
Donard Gaynor
Group Chairman
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
7
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Group Managing Director’s review
"In 2022, we delivered the highest earnings
that Glanbia has ever delivered in terms
of adjusted earnings per share. The fact
that the Group prospered in a highly
challenging global environment is a
testimony to the strength of our
consumer-focused better nutrition
portfolio."
Sustaining
growth
momentum
8
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Dear Shareholder,
I am delighted to report that Glanbia
enters 2023 with confidence.
Our performance in 2022 once again
clearly demonstrates the strength and
agility of the Group. There were of course,
challenges with accelerating inflationary
pressures, the lasting impacts of Covid-19
and the terrible conflict in Ukraine. The
fact that the Group prospered, despite
these challenges, is testimony to the
commitment of our people and to the
strength of our consumer-focused better
nutrition portfolio.
Delivering double digit growth
In 2022, we delivered the highest earnings
that Glanbia has ever delivered in terms
of adjusted earnings per share. Adjusted
EPS from continuing operations rose by
17.6% constant currency to 104.02c. Group
Revenue increased to €5.6bn, an increase
of 21.2% constant currency, (+34.4%
reported) over the previous year. And
pre-exceptional operating profit rose to
€272.1m an increase of 31.6% reported.
We significantly evolved our portfolio and
are very pleased that we delivered across
all our key financial metrics over the
period 2018–2022 as set out in 2018. In
November 2022 as part of our Capital
Markets Day, we set new guidance for
consistent and sustainable growth for
2023–2025. The core of our ambition is to
grow the consumer relevance of our
leading ingredients solutions and brands
through sustained investment in
innovation, technology and brand
marketing. This strategy will translate
into financial growth across revenue,
earnings and investment returns.
The bedrock of our portfolio is a deep
knowledge and expertise in the
application of protein technologies
across a range of consumer occasions.
We have reshaped and broadened this
portfolio to focus on that better nutrition
space. Ten years ago, that better
nutrition element of our portfolio was
about 50%. As we progressively moved
from largely commodity-based spaces
into higher value-added areas, better
nutrition is now 90% of what we do. We
achieved this by portfolio evolution;
redeploying the capital from areas we
divested; and driving organic and
acquired growth in performance nutrition
and nutritional solutions.
Two core growth platforms
Our journey of focus on better nutrition
has now consolidated into our two core
growth platforms, Glanbia Nutritionals
Nutritional Solutions ("GN NS") and Glanbia Performance
Nutrition ("GPN"). There is a strong complementary thread of
protein nutrition expertise across both businesses providing
functional and nutritional benefits through a range of protein
ingredient solutions and leading consumer brands. Informed by
increasing investment in consumer engagement, insights and
research and development, both platforms, have significantly
extended their nutrition propositions beyond protein, both
organically and by acquisition, to serve a variety of consumer
nutrition needs across multiple occasions, formats and indeed
geographies. On this strategic journey we have significantly
evolved our operating models to best serve our customers and
consumers. Aligned with centres of excellence in financial
operations, capital allocation and risk management, each
business unit team now has clarity of focus on driving ‘one face
to the customer’ supported by centres of excellence in key
functional areas. This evolution of our operating models has been
most evident recently in GPN through the successful execution of
the transformation programme which has driven both revenue
and margin growth.
Our portfolio changes and focused strategic approach has
served Glanbia well in navigating the volatile external
environment of recent years. This is ultimately reflected in a
strong 2022 financial performance building on the 2021
achievements. GPN continued to build on the 2021 momentum
with strong, pricing led, revenue growth of 13.9%, constant
currency and earnings growth of 10.5%, constant currency. In the
context of unprecedented inflation both businesses delivered a
strong margin performance sustaining margins at, or close to,
prior year levels. Nutritional Solutions ("NS") continues to
demonstrate great resilience growing revenue by 16.6% constant
currency, largely driven by pricing with strong earnings growth of
13%, constant currency.
Our focus on working capital in 2022 sustained our cash
conversion performance and strengthened our balance sheet,
positioning us well for future growth.
An evolved and simplified strategy
I want to pay tribute to my Glanbia colleagues not just for the
strong performance delivered in 2022, but also for the strong
progress we have already achieved across our refreshed
strategic pillars of lead and grow the core; optimising our
business; and disciplined financial management:
Lead and grow the core: We have leading positions in our North
American market and capabilities that we can extend to other
geographies. We remain a protein powerhouse within our
Nutritional Solutions business, and we are proud to be the #1
global supplier of whey protein isolate and #2 in global premix.
We are home to the #1 sports nutrition brand in the world –
Optimum Nutrition, a $1 billon brand, in a growing category
which is available in over 90 countries, and we have an on-trend
growing portfolio of lifestyle nutrition brands:
Optimising our business: In 2022, post completion of the disposal
of our 40% interest in Glanbia Ireland, we enhanced our strategic
planning processes to complete a thorough review of our Group
strategy and structure. This review reaffirmed the significant
strategic growth opportunity inherent in our current focus on
driving performance in our complementary nutrition platforms of
GPN and NS. As part of our ongoing focus on our core growth
platforms, we have announced our intention to sell our interest in
our UK and EU Glanbia cheese joint ventures. After a long and
successful partnership with Leprino Foods for over 20 years,
where we built a strong European market leading mozzarella
business, strategically now is the right time for the business to
transfer to full ownership of Leprino. The proceeds of the sale will
be used to drive further growth in our core business and to return
capital to shareholders. See page 43 for more details.
We will continue to refine our operating model, understanding
and responding to our customers and consumers through
innovation and active portfolio management. As mentioned
earlier, in 2022 GPN’s transformation programme was
completed, driving revenue and margin progression, and
embedding new capabilities to drive future growth momentum.
Disciplined financial management: Strong financial
management has been a key ethos of the Group for a long
number of years. We are disciplined in the deployment of our
shareholders' capital. We will always be cautious, but ambitious.
This has stood us in good stead through the recent volatile times.
With that said, given the inherent uncertainties of the current
external environment, our strategy is underpinned by both
responsiveness and resilience – a responsiveness to
opportunities and resilience to volatility. This gives us the
confidence that we are resilient to the heightened volatility in the
marketplace.
Sustainable operations
As you would expect in an organisation that has, through our
co-operative heritage, been involved in the nutrition business for
over 100 years, we understand that the environmental impact of
what we do is hugely important. We have signed up to SBTi
targets for carbon emission reduction. We are very clear on our
roadmap now across Scope 1 and 2 emissions.
We remain committed to our diversity, equity and inclusion
journey as detailed on page 22. We firmly believe that everybody
should be able to thrive in an environment that values their
contribution and celebrates what makes them unique. Across
Glanbia we champion inclusion and diversity, from how we
attract, recruit and develop our teams to the ways we portray the
diverse richness of society across our portfolio.
Ambition 2023–2025
Our strong 2022 results highlight the strength of our business, the
diversity of our products and markets, our geographic spread,
robust financing and an organisational design that permits fast
and agile decision-taking.
We have built capabilities and platforms to drive sustainable
growth. We have incredible teams of people, passionate about
the delivery of our better nutrition agenda.
In today’s environment there is no shortage of opportunities for a
global organisation focused on better nutrition. We shall
continue to invest and grow our Nutritional Solutions and Glanbia
Performance Nutrition portfolios to drive sustainable growth for
our shareholders.
Siobhán Talbot
Group Managing Director
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
9
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Market trends and growth drivers
Glanbia’s broad, global portfolio of
performance nutrition and ingredients
products is addressing the growth
opportunities arising from major
macrotrends: maximising athletic
performance, active lifestyles and
health and wellness.
Meeting
market
needs
10
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
C O N S U M E R N E E D # 1
Maximise athletic performance
Performance nutrition
From sports enthusiasts seeking to build muscle mass to lifestyle
consumers aiming to improve their overall health, there is a
growing awareness of the role of nutrition in maximising sports
performance and recovery. The US sports nutrition category
achieved double-digit growth in 2022.¹
1. Source Spins: multi-outlet + natural channel, 52 Weeks ending 01/01/2023,
Team analysis.
Total addressable markets⁴
$25bn
How we’re meeting this need
World-leading
brands and ingredients
Our portfolio of brands and ingredients hold significant
leadership positions in the performance nutrition category.
Most notably, Optimum Nutrition ("ON") is the world’s #1 Sports
Nutrition brand and has been a pioneer of performance nutrition
for over 35 years. Available in over 90 countries, Optimum
Nutrition holds leading positions in protein powder with its Gold
Standard Whey and Serious Mass products.
GPN’s portfolio also includes BSN, targeted at consumers
looking to build muscle mass with a range of protein and
energy-based products.
In our NS ingredients business we build our business around
healthy categories. We are the #1 global supplier of whey protein
isolate supplying key market segments including performance
nutrition. Our functional and nutritional ingredients appeal to the
heightened desire from our customers for tailor-made ingredient
solutions to enrich their food and beverage products.
For more information, see pages 24–43
4. Source: Euromonitor, team analysis.
C O N S U M E R N E E D # 2
C O N S U M E R N E E D # 3
Healthy, active lifestyles
Improve and maintain energy levels
Improve physical and cognitive health
More and more people are living healthy and active lifestyles,
a trend amplified by the Covid-19 pandemic. They are now more
focused on nutrition that supports their physical and mental
health. Post pandemic, 50% of US adults have increased their
prioritisation of wellness.2
Energy and supplements
Consumer interest in fortified products and foods with functional
claims continues to increase, as people seek to supplement their
diets with immune boosting nutrients to improve their energy
levels and health. The use of sports nutrition ("SN") supplements
grew +5% in 2022 with 39% of US adults using a SN supplement
over the last 12 months.3
2. McKinsey Future of Wellness Survey.
3. Council for Responsible Nutrition Annual Consumer Survey on Supplement usage.
Total addressable markets⁴
Total addressable markets⁴
$17bn
$54bn
How we’re meeting this need
How we’re meeting this need
Delivering trusted lifestyle brands
and ingredients
Energy boosting products and
beverages
GPN offers a range of lifestyle nutrition brands. SlimFast has
been helping consumers manage and lose weight for over 30
years with a range of delicious snacks and meal replacement
drinks and bars. Isopure provides low and zero carb protein
powders and drinks to premium consumers looking to support
their active lifestyles, while think! offers high- protein low sugar
bars for consumers looking for healthy on-the-go
snacking options.
NS produces a large portfolio of nutrition-enriched functional
and nutritional ingredients for use in the bakery, beverage, snack
bar, dairy and foodservice markets. Our capabilities range from
producing ‘straight’ ingredients to bespoke premix blends.
Historically anchored in dairy proteins, our capabilities now
extend from marketing ‘straight’ ingredients to developing
bespoke nutritional solutions using a wide range of ingredients,
providing greater market reach and broader customer relevance.
For most people, the true definition of health and
wellness is having the energy to live an active lifestyle.
In NS business, we offer tailor-made and sustainable nutritional
ingredients and supplements that provide energy without
compromising quality. In May 2022, we acquired Sterling
Technology, a US-based manufacturer of dairy bioactive
solutions. This acquisition represents an attractive addition to
the GN portfolio expanding our offering in immunity solutions.
ON's leading Amino Energy brand offers energy powders and
drinks that provide consumers with the extra energy they require
to achieve their healthy lifestyle goals.
Amazing Grass is a leader in the Greens segment with a range of
Greens Superfood powders for consumers looking to supplement
their intake of vegetables. This brand appeals to the growing
consumer groups of flexitarians, vegetarians and vegans.
For more information, see pages 24–43
For more information, see pages 24–43
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
11
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Our Business Model
Through disciplined capital management,
operational efficiency, and the delivery of
world-class brands and capabilities Glanbia
creates value for all its stakeholders.
e
rs
Value for stakehold
How we add valu
Our core a
e
D eliverin
c
tiv
i
t
i
e
s
g
B
e
t
t
e
r Nutrition
12
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
We focus on delivering
our purpose…
Our purpose to deliver better nutrition for every
step of life's journey connects us with the passion
our consumers and customers have for our sports
nutrition brands and nutritional ingredients.
…through our business
activities and skills…
Adding value through customer-focused
innovation and collaboration is central to our
philosophy. It ensures that we can influence and
drive market trends rather than simply respond
to them.
…and leverage our
unique capabilities…
The power of our brands and ingredients
coupled with our unrivalled expertise in protein
have made us the #1 sports nutrition company
in the world, #1 global supplier of whey protein
isolate and #2 global premix supplier.
…to create sustainable
value for all.
The impact of our purpose is evidenced through
the delivery of sustainable growth and value
creation for all of society.
Our portfolio of brands and
ingredients
GPN is the world's #1 sports nutrition
company with an unrivalled product
offering and key channel and category
leadership. As an ingredient supplier in the
B2B arena, GN stands for quality, integrity,
innovation and sustainability.
Our markets
Glanbia’s brands and ingredients are
positioned at the centre of large and
growing sports nutrition and ingredients
markets. Our portfolio of products meets
key consumer needs and enables people
to achieve their healthy lifestyles goals.
Our culture and talent
• Committed, adaptive and resilient
• Passion for delivering better nutrition
• Curious and innovative
• Respectful and inclusive
Sourcing
We work with our
suppliers to procure
high-quality raw
materials and
services, with social
impact and
environmental
sustainability in mind.
Manufacturing
Our operational
excellence enables us
to manufacture brands
and ingredients that
meet the highest
standards of food
safety and quality. All
our facilities operate
with full regulatory
compliance and good
environmental
stewardship.
Innovating
Using our deep
understanding of
nutritional trends and
behaviours we focus
on driving sustainable
innovation that
delivers innovative
branded products and
patented nutritional
ingredient solutions.
Marketing and
brand building
We continually evolve
our data analytical skills
to understand
consumers attitudes
and motivations. We
invest in world-class
marketing tools to build
GPN's brands and
sustain our leadership
positions in GN.
Our brands and
ingredients
We actively manage
our portfolio of brands
and nutritional
ingredients to ensure
we offer a broad range
of products across
regions, categories
and price points.
Protein expertise
and knowhow
We have a deep
understanding of
protein and its
applications across
nutritional sports
brands and ingredient
solutions.
Capital
Management
Glanbia has a strong
track record of
efficient capital
allocation and
reallocation to where
we see optimum
opportunity for
growth.
Global talent
management
As a global business,
excellence in human
resources and talent
management is key
to the Group’s future
success and this was
a particular area of
focus in 2022.
Selling
In GPN our global and
local sales teams use
data, digital tools and
insights to extend our
sales and channel
reach and improve our
execution. In GN we
work in collaboration
with our customers to
deliver bespoke
ingredient solutions
that enable them to
grow their business.
Delivery of our
Strategy
a
n
d fi
e
n
i
l
p
i
c
s
i
D
e m e n t
g
L
e
a
d
a
G r o w i n g End Markets
n
d
g
r
o
w
ncial m a n a
t
h
e
c
o
r
e
t
n
Tale
Better
Nutrition
S
u
s
t
a
i
n
a
b
le Operation s
Optimise our b u s i n e
s
s
Read more on pages:
Read more on pages:
Read more on pages:
Read more on pages:
Read more on pages:
24-43
24-43
44-49
20-23
14-17
Consumers
and customers
ON enjoys strong
brand loyalty as a
$1bn brand that
continues to grow.
$1bn
ON brand
Revenue
People
We invest in our
people and their
careers, providing
development
opportunities,
competitive
rewards and
benefits.
€481.3m
Employee benefits
for wholly owned
group
Suppliers
We partner with
suppliers to ensure
long-term, mutually
beneficial
relationships.
We have an active
programme in place
to risk assess
our suppliers.
Environment
We continue to
focus on climate
initiatives and have
committed to a
50% reduction in
Scope 1 & 2 carbon
emissions by 2030.
Communities
We contributed
and donated time
and money to
support causes
in our local
communities.
8.6%
Scope 1 & 2 carbon
emissions
reduction in 2022
€1.2m
Raised to support
charitable
donations in 2022
Investors
Our dividend policy
has a targeted
dividend payout
ratio of 25%-35%.
Shareholders were
returned €173.5m in
2022 under the
share buyback
programmes.
€84.4m
Dividends paid to
shareholders in FY
2022
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
13
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION
Strategy
Creating Value.
Delivering Growth.
Our ambition
To deliver better nutrition
for every step of life’s journey.
Glanbia has evolved and grown over the
past decade. Today, we are a better
nutrition company, the home of consumer
brands and ingredients that nourish
millions around the world. The choices we
do – and don’t – make, are guided by our
purpose. Everything we do reflects our
respect for each other and the earth.
Each day, we set our sights on better. With
ceaseless curiosity, our experts meet the
needs of our partners and consumers,
using insight and science-led innovation
to create high-quality nutrition and more
sustainable ways of doing business.
As a team, we stay ahead of the curve
by asking the right questions. What
we’re made of makes more possible.
Having achieved all our 2018-2022 financial
metric targets, we have defined a clear set
of strategic priorities to help us achieve our
2025 ambitions: lead and grow the core;
optimise the business; disciplined financial
management. To support these priorities
and harness Glanbia’s global growth
potential, we will continue to develop our
key enablers, our world-class strategic
capabilities and our strong assets.
Our strategy
a
n
d fi
e
n
i
l
p
i
c
s
i
D
e m e n t
g
L
e
a
d
a
G r o w i n g End Markets
n
d
g
r
o
w
ncial m a n a
t
h
e
c
o
r
e
t
n
Tale
Better
Nutrition
S
u
s
t
a
i
n
a
b
le Operation s
Optimise our b u s i n e
s
s
Key enablers
Growing end markets: Our markets have
evolved and as a Group we are evolving
with them, understanding and staying
close to our consumers and customers.
See pages 10-11
Culture and talent: Glanbia culture and
extraordinary talent are key sources of
competitive advantage for the Group. Our
heritage is rooted in the vision of extraordinary
people delivering better nutrition and better
livelihoods for the communities around them.
Sustainable operations: We seek to
maintain a strong position on key
sustainability issues in our sector
including food safety and quality,
diversity, equity and inclusion and in
particular our environmental
commitments. We have signed up to the
Science-Based Targets initiative ("SBTi")
and are very clear on our roadmap across
Scope 1 and 2 emissions.
See our Business Model on pages 12-13
See our Business Model on pages 12-13
See pages 21-23
Ambition 2023-2025
Business Unit Metrics*
Revenue
Revenue
5-7%
GPN avg. revenue growth
3-5%
NS avg. volume growth
EBITA Margin %
12%+
GPN avg. EBITA margin
12%+
NS avg. EBITA margin
*Organic growth
** Organic & M&A growth
14
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Delivering
sustainable
value
creation
Group Metrics**
Adj. EPS
OCF %
5-10%
Avg. Adj. EPS growth %
+80%
Avg. OCF conversion %
ROCE
10-13%
Avg. ROCE
Strategic priority #1
Lead and grow the core
Better
Better
Nutrition
Nutrition
Our core brands and nutritional ingredients hold market-leading positions in categories
that are driven by strong underlying health and wellness trends.
Our refreshed strategy
Capture Global potential of $1bn Optimum Nutrition ("ON") brand;
Build North America's branded lifestyle nutrition platform;
Build on core strength in GN NS custom premix solutions;
Scale NS extensive capability in protein; and
Focus on earnings and cash potential of US cheese/JV operations.
2022 Progress
Looking ahead to 2023
• Like-for-like ("LFL") GPN branded
growth of 14.6% constant currency
with strong growth in all regions;
• Solidified ON's position as the world's
#1 sports nutrition brand, ON delivered
US consumption growth* of 30.8%;
• LFL NS revenue growth of 12.6%;
• Ensured NS resiliently played into
market trending categories driven by
strong demand for functional and
nutritional ingredients; and
• Continued to build compelling
capabilities and innovative solutions
that are attractive to NS’ customers.
• Fully cement ON's #1 global position
across the sports nutrition industry;
• Capture further growth of GPN
lifestyle brands in key growing markets
and leverage refresh of SlimFast brand
in the US;
• Maintain NS’ momentum in healthy
snacking and ingredients solutions; and
• Continue to build out NS' business
through enhanced capabilities,
innovative technologies and bolt-on
acquisitions.
* US consumption growth is measured in North American channels and includes Online, FDMC (Food,
Drug, Mass, Club) and Specialty channels. Data compiled from published external sources and Glanbia
estimates for the 52-week period to 1 January 2023.
S T R A T E G Y I N A C T I O N
GPN Transformation programme
With strong delivery against both growth and
margin enhancement initiatives throughout 2020
and 2021, the GPN transformation programme
continued to deliver in 2022, further enhancing
margins and delivering increased growth rates for
our brands. The programme has now matured,
becoming embedded across the business as our
execution engine. The capabilities of our teams
have been enhanced with team members now
applying the core programme concept – ideate,
plan, execute – to all initiatives, whether focused
on driving demand or increasing efficiencies. The
benefits of the transformation programme are
expected to be felt across the business for many
years to come.
KPIs
Basic EPS –
continuing operations
72.67c
+23.5% constant currency
GPN Revenue
€1.6bn
+13.9% constant currency
GN Revenue
€4.0bn
+24.3% constant currency
Key 2023 Risks
• Macroeconomic headwinds impacting
demand;
• Competitor promotional activity or
unexpected product innovation; and
• A rapid change in consumer behaviour
or preferences.
For more information about risk, see
pages 67–77
Link to Remuneration
• Adjusted earnings per share is a
performance target in both annual
incentive and LTIP for Executive Directors;
• Business segment EBITA forms part of
the annual incentive and LTIP for the
CEOs of GPN and GN;
• GPN LFL branded revenue growth and
margin forms part of the annual
incentive of the CEO of GPN; and
• NS LFL revenue growth and margin
forms part of the annual incentive of
the CEO of GN.
For more information about
remuneration, see pages 120-140
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
15
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Strategy continued
Strategic priority #2
Optimise our business
Better
Better
Nutrition
Nutrition
Improving the operational, commercial, sustainability and financial performance
of our business to maximise long-term value and deliver superior returns.
Our refreshed strategy:
Science-led innovation
Refine business and operating model
Optimise opportunities for margin expansion
Digitise our ecosystem
2022 Progress
Looking ahead to 2023
• Completed GPN's transformation
programme driving top line and
margin momentum ahead of target;
• Launched new innovation in GPN for
•
ON energy and plant products;
Invested in new technologies and
capabilities in NS;
• Continue to refine Group and Business
Unit operating models and pursue
efficiencies;
• Focus on digitally enabled ongoing
talent development and engagement
strategies;
• Embed our ESG strategy across the
• Despite significant inflation delivered
business; and
• Optimise Group-wide support
functions to align with our growth
agenda.
2022 margins in both GPN and NS at or
close to prior year levels;
• Committed to our science-based
carbon emissions targets and
enhanced our global DE&I focus; and
• Developed our HR transformation
programme.
S T R A T E G Y I N A C T I O N
Establishing new R&D capabilities
In NS we have a strong culture of innovation.
Our 15 innovation and collaboration centres
match our customers’ brand ambitions,
providing the resources, knowledge, and
expertise to solve their product challenges
through co-innovation. Most recently, we
have built a new innovation centre in
Singapore. We are also establishing new
R&D capabilities in Japan. These new
innovation hubs further link us with
customers in the Asia Pacific region. In
Europe, we expanded our lab in Ireland to
support our growing business on the
Continent and in North America, we have
expanded our facilities in Twin Falls. We can
develop deeper extrusion, confectionary
and flavour applications. Whatever our
customers’ ambition, we are there to
partner with them on their journey and to
solve the challenges in bringing their
products to life.
16
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
KPIs
Basic EPS – continuing operations
72.67c
+23.5% constant currency
Employee Engagement Score
71 points
+1 point
Increase in point score for employees who
said they were happy working at Glanbia.
Carbon Emission reduction
8.6%
Scope 1 & 2 GHG emissions reduction
versus 2021.
ROCE – continuing operations
11.1%
+110bps
Key Risks
• A failure to attract, develop, engage
and retain key talent;
• Adverse cyber security events resulting
in significant operational impacts; and
• Climate or pandemic-related events
impacting supply chains.
For more information about risk, see
pages 67–77
Link to Remuneration
• Adjusted earnings per share is a
performance target in both annual
incentive and LTIP for Executive Directors;
• Margin progression is included in the
STIP for the Executive Team;
• Development of talent is a personal
objective of Executive Directors and
the Operating Executive; and
• STIP and LTIP incentives for the
Executive Team and Senior Leadership
Teams both include measurable metrics
aligned to our strategic road map to
deliver on our ESG targets.
For more information about
remuneration, see pages 120–140
Strategic priority #3
Disciplined financial management
Better
Better
Nutrition
Nutrition
Optimising our business for maximum long-term value through the disciplined and
focused allocation and reallocation of capital.
Our refreshed strategy:
Focus on cash generation
Disciplined cash management
Accretive M&A
KPIs
OCF conversion
85.7%
2021: 100.2%
Balance between investment and return of capital to shareholders
ROCE – continuing operations
11.1%
2021: 10.0%
Net Debt
€459.4m
2021: €602.7m
Key 2023 Risks
•
Ineffective due diligence, transaction
completion or business integration.
• Failing to obtain accurate and relevant
market intelligence.
For more information about risk, see
pages 67–77
Link to Remuneration
• OCF conversion is a performance
target in the annual incentive for
Executive Directors and Operating
Executive; and
• ROCE is a performance target in the
LTIP for Executive Directors and the
Operating Executive.
For more information about
remuneration, see pages 120–140
2022 Progress
Looking ahead to 2023
• Delivered strong cash generation with
85.7% operating cash conversion;
• Net debt: adjusted EBITDA 1.12 (2021:
1.71) and adjusted EBIT: adjusted net
finance cost 17.0 (2021: 15.1);
• Refinanced €0.9 billion of near term
debt, extending the duration of Group
financing facilities to 5.8 years;
• Completed detailed strategic review of
existing business and portfolio options;
• Completed divestment of Glanbia
Ireland and an acquisition in NS; and
• Continued growth in dividend (+10%)
and €173.5m returned via share
buyback programmes.
• Continue progressive capital
allocation strategy through
mechanisms such as dividends and
share buyback programmes;
• Transition to a US$ presentation
currency for reporting, better
representing core Group markets;
• Complete divestment of our Glanbia
Cheese EU and UK joint ventures
• Pursue other margin accretive
strategic M&A opportunities, to
complement the current portfolio; and
• Progress programme to optimise
Group-wide functions supporting our
growth agenda.
S T R A T E G Y I N A C T I O N
Strategic review of our portfolio
A disciplined approach to M&A is at the core of our
strategy as we pursue opportunities to strengthen
our growth platforms as a brand owner and
ingredient solutions provider. In May, 2022 we
announced the acquisition of Sterling Technology,
a US-based manufacturer of dairy bioactive
solutions derived from bovine colostrum, for
€54.5 million plus deferred consideration. This
acquisition represents an attractive addition to the
GN portfolio expanding our offering in immunity
solutions. We continuously review our existing
operations to ensure alignment with Glanbia’s long
term strategy and explore opportunities to release
capital. As part of our on going focus on optimising
our portfolio, we have decided to dispose of our
stake in our UK and EU cheese joint ventures to our
partner Leprino Foods Company. The proceeds of
the sale will be used to drive further growth in our
core business and return capital to shareholders.
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
17
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Key performance indicators
Revenue
€5.6bn (2021: €4.2bn)
+21.2% constant currency
+34.4% reported currency
Strategic relevance
Revenue growth is a key indicator of how the
Group is succeeding in developing through
investment in organic growth and the ongoing
acquisition programme.
In addition, there are a number of key
components of Group revenue (price, volume
and acquisition) which are actively monitored
to provide greater insight into performance.
Performance
In 2022, revenue was €5.6 billion (2021:
€4.2 billion), an increase of 34.4% on a
reported basis and up 21.2% constant
currency (cc) on 2021. Revenue growth
was driven by positive pricing of 19.7% in
response to inflationary pressures,
volume growth of 0.5% and a further
contribution from acquisitions of 1.0%.
Revenue volume growth1
+0.5% (2021: +16.1%)
GPN -2.1% (2021: +13.6%)
Like-for-like branded
revenue volume growth
NS -3.5% (2021: +13.6%)
Like-for-like revenue
volume growth
EBITA2
€347.1m (2021: €270.6m)
+13.5% constant currency
+28.3% reported currency
Profit after Tax
€256.8m (2021: €167.4m)
Continuing operations €199.6m
Discontinued operations €57.2m
Strategic relevance
Revenue volume growth is an important
metric for the Group as it represents the
underlying growth in sales to customers
excluding any impact of price. Volume is
further broken down by the Business Units to
understand the brand growth within GPN and
the components of volume growth in NS
within GN.
Strategic relevance
Earnings Before Interest, Tax and Amortisation
("EBITA"), pre-exceptional items, is the key
performance measure for the wholly-owned
segments of the Group. The exclusion of
amortisation aids comparability between
our segments.
EBITA margin is a key metric to ensure that
growth is being driven in a responsible manner
by maintaining margins within an acceptable
range. The strategy for the Group is to focus
on higher growth, higher margin products
within GPN and GN.
Strategic relevance
Profit after tax is the measure of the profit
generated by the Group for the year, post tax
and post exceptional items.
Basic Earnings Per Share
– continuing operations
72.67c (2021: 48.47c)
23.5% constant currency
49.9% reported currency
Strategic relevance
Basic Earnings Per Share ("EPS") is an
important IFRS reporting metric and relates to
EPS of the Group post tax and post
exceptional items.
Performance
Overall volumes increased by 0.5% in
the year. LFL branded volumes in GPN
declined by 2.1% and volume declined
by 3.5% in NS, offset by volume growth
of 4.3% in the US Cheese business
within the GN segment. Volume
declines in GPN and NS were in the
context of significant pricing
adjustments in mitigation of record
input cost inflation, with US Cheese
volumes benefiting from the full year
impact of the new Michigan cheese
facility, commissioned in 2021.
Performance
EBITA was €347.1 million in 2022, an
increase of 28.3% reported and up
13.5% cc. GPN’s EBITA increased by
10.5% cc versus 2021, while EBITA
margins were up 10bps to 11.2%. GN
achieved EBITA growth of 16.9% (cc)
with EBITA margins down 20bps versus
2021 to 4.1%, comprising EBITA margins
in Nutritional Solutions of 11.4% (2021:
11.5%) and US Cheese of 1.3% (2021: 1.2%).
Performance
Profit after tax for 2022 was €256.8
million (2021: €167.4 million), an increase
of €89.4 million on prior year. This
comprises the profit generated from
continuing operations of €199.6 million
and discontinued operations of €57.2
million, with discontinued operations
representing the exceptional gain on the
divestment of the Group’s interest in
Glanbia Ireland.
Performance
Basic EPS – continuing operations was
72.67 cent, an increase of 49.9% on a
reported basis and an increase of 23.5%
cc, driven by increased profitability
across the Group. Discontinued
operations, which includes the gain on
disposal of Glanbia Ireland, have been
excluded on the basis that they are now
less relevant as a benchmark for the
ongoing business of the Group.
1. Performance condition of Glanbia’s Annual Incentive Scheme.
2 Both EBITA and OCF are presented on a pre-exceptional basis.
18
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Adjusted Earnings Per Share –
continuing operations1,3
104.02c (2021: 77.84c)
+17.6% constant currency
+33.6% reported currency
Strategic relevance
Adjusted EPS is an important measure of the
profitability of the Group as it represents the
underlying profit per equity share in issue.
Return on Capital Employed –
continuing operations3
11.1% (2021: 10.0%)
Strategic relevance
Return on Capital Employed ("ROCE")
measures the efficiency of the Group’s organic
and acquisition investment programme as well
as the utilisation of its assets.
Performance
Adjusted EPS (continuing operations)
increased 33.6% to 104.02 cent, representing a
cc increase of 17.6%, due to continued growth
in profitability of the wholly owned business,
net of reduced profitability in joint ventures.
Positive pricing in response to inflationary
pressures and the ongoing benefit from
transformation initiatives contributed to this
record performance for the Group.
Performance
ROCE from continuing operations increased
by 110 basis points to 11.1% (2021: 10.0%). This
increase was primarily due to the continued
growth in profitability from the successful
execution of strategy with pricing and
efficiency improvements to mitigate against
input cost inflation.
OCF conversion1,2
85.7% (2021: 100.2%)
Strategic relevance
Operating Cash Flow ("OCF") measures the
cash generated from operations before
interest and tax payments and before strategic
capital expenditure. OCF conversion is OCF as
a percentage of earnings before interest, tax,
depreciation and amortisation ("EBITDA") and
is a measure of the ability of the Group to
convert trading profits to cash, which is then
available for strategic investments and
dividend payments.
Performance
OCF conversion was 85.7% in 2022 (2021:
100.2%) compared to a target of 80%. The
OCF conversion rate remains very strong and
ahead of target. OCF conversion has reduced
since prior year due to increased investment
in working capital as a result of higher pricing
in receivables and inventory, and restoration
of inventory buffer levels to ensure sufficient
supplies of key raw materials.
Carbon emissions4
-8.6%
Objective
Decarbonise our operations and
dairy supply in line with the SBTi
commitment and future-proof
our organisation and our
value chain.
Health and safety5
35%
Improved Lost Time Case Rate
("LTC")
Objective
Maintain the highest possible
global safety standards using
sites with no LTC as a key
benchmark.
Employee engagement
score
71
Objective
Measure and understand how
well our employees believe we
are doing in living our values.
NFM Strategic relevance
Climate change is impacting all of society.
At Glanbia we are committed to doing our part
by focusing on our most material areas. Our
Pure Food + Pure Planet strategy prioritises
energy efficiency and renewable electricity
procurement for our operations.
NFM Strategic relevance
The health and safety of our employees is
inherent in our Glanbia values and is reflected
in our organisational goal of ‘Zero Harm’.
Proportion of sites meeting at least industry
standard safety performance, based on NAIC
("North American Industry Codes") benchmark,
and reduced severity of injuries, by progression
of the Lost Time Incident Rate ("LTIR") are
established global measures of safety
performance. Glanbia aspires to zero LTC and
all sites maintaining a minimum of industry
benchmark performance for lost time injuries.
NFM Strategic relevance
Employee engagement is a key enabler of
performance. At Glanbia we acknowledge that
people who are positively engaged, motivated
and supported perform to the best of their
ability, find a greater sense of meaning in what
they do and contribute positively to
Glanbia’s success.
Performance
In 2022 we reduced Scope 1 and 2
greenhouse gas ("GHG") emissions in our
operations by 8.6% from the previous
reporting year (2021). Glanbia updated its
ambition to a SBTi validated target aligned
with 1.5 degrees Celsius climate scenario.
The Board approved the Group's new
decarbonisation plan for a 50% reduction
in operational GHG emissions by 2030
from a 2018 base.
Performance
Overall, 35% improvement in the LTC rate in
2022, led by a strong performance in GN
(50% improvement in overall injury rate).
Group LTIR was 0.45 / 200,000 hours, well
below our NAIC food industry benchmark of
1.20 (2021: 0.69). 44% of operational sites
were without an LTC case recorded for a
year or longer, 83% are better than the NAIC
industry LTC injury rate for their peers. Sites
below the NAIC performance standard
maintain robust improvement plans
supported and monitored by leadership.
Performance
In the 2022 'Your Voice' survey, overall
engagement was up 1 point with scores
increasing across all business units on our
key focus areas of wellbeing and
communication. While there is opportunity
to further improve our wellbeing
programmes, employees expressed
particular appreciation for the flexible,
hybrid working options available to them.
NFM Non-financial metric
3. Performance condition of Glanbia’s Long-Term Incentive Plan.
4. GHG emissions reduction in Scope 1 and 2 in comparison to prior year result (2021). Refer to page 57 for operational control GHG emissions breakdown by Scope
and performance since 2018 base year.
5. Results relate to sites under Glanbia's operational control. Includes Group’s wholly-owned operations and MWC-Southwest Holdings LLC joint venture operations.
19
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION People
A year of
growth and
success
“We are committed to creating
a strong and inclusive culture
where each individual feels
engaged and supported to do
their best work. We want our
people to feel that they belong
and to know that they can
thrive at Glanbia.”
A year of transformation for
our global HR organisation
2022 was a year of significant change
for our global HR function as the
phased implementation of Grow@
Glanbia, our multi-year
transformation programme
commenced. This programme enables
us to create a future-ready, people-
centred organisation with the HR
capabilities to support further
business growth. Our new HR
operating model was rolled out
establishing global centres of
excellence for a number of functions
including talent and engagement;
performance and reward; and talent
acquisition. Our new People Success
Organisation also went live with a
centralised team to provide support to
our employees and managers in our
major markets as well as enabling our
wider HR teams to focus more
strategically.
Creating a culture of continuous
learning
In a world of change, a culture of
continuous learning, developing new
skills and strong leadership
capabilities are key to enabling our
business and our people to grow and
flourish. This year, we launched our
new career growth tools 'MyLearning'
and 'MyCareer' to support our people
to gain the skills, leadership
Sue Sweem
Chief Human
Resources Officer
20
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
capabilities and career pathways to
be future-ready. MyLearning enables
inclusive access to leading-edge,
mobile-enabled learning content,
while MyCareer empowers employees
to take ownership of their career
aspirations and development plans.
Our learning platform was accessed
by more than 1,700 employees,
building education and awareness
through our general employee
population.
Our leadership development
programmes continue to evolve. Our
Advanced Leadership Programme
("ALP"), for our most senior leaders, is
currently being redesigned and will be
relaunched in 2023. Our Senior
Leadership Programme ("SLP") for
senior executives continued in 2022,
with a particular focus on accelerating
succession readiness. Our Leading the
Glanbia Way programme for people
managers has been refreshed with
new content including a focus on
inclusive leadership. Our Early Years
Careers programme continued to be
an important focus in 2022. In
recognition of the contribution made
by our Early Years Associates to our
organisation, we were proud to be
awarded the Gold Award for Graduate
Employer of the year by gradireland
for 2022.
Maintaining a strong culture
through progressive policies
We continued to embed our Smart
Working Model in 2022. Core principles
of the model include flexible hours;
blended working where employees
can work remotely on a hybrid basis;
and flex Fridays where eligible. Our
most recent employee engagement
survey shows that employees continue
to value our Smart Working model. We
believe that it helps enhance and
differentiate Glanbia from a talent
acquisition perspective.
Based on feedback from our
employee engagement survey, we are
taking steps to strengthen our Family
Leave support with the launch of a
new suite of policies this year to
include enhanced benefits for: birth
mothers; adoptive parents; employees
undertaking fertility treatments as
well as those who experience loss. As
we continue to focus on building a
strong and inclusive culture, we will
implement policies to support all our
employees across the business.
Culture and engagement
We continue to build our strong Group engagement metrics. Our
'Your Voice' employee pulse survey conducted in 2022 showed
employee engagement score levels increasing to 71 points,
against a backdrop of a challenging external environment.
Reflecting the Group's listening and action-oriented approach,
engagement scores increased across all areas of the business
with continued improvements noted in the areas of inclusion and
communication. Our Inclusion Index score improved for all parts
of the organisation (+2.5 points). The Inclusion Index is based on a
combination of the two scores:
• Belonging: I feel a sense of belonging at Glanbia
(+2 points since last year); and
• Equal opportunity: Regardless of background,
everyone at Glanbia has an equal opportunity to succeed
(+3 points since last year).
While we have more to do in this area, we believe that initiatives
including the establishment of our Employee Resource Groups
and Smart Working policies are having a positive impact in
relation to these scores. Key areas identified for improvement in
the survey include further action on employee wellbeing and
career progression with action plans developed to support these
areas. A key focus in 2023 will be the development of a Group
Wellbeing strategy. A wellbeing working group comprising HR
and business leaders has been established to progress this
initiative.
Global employee base
In 2022, total Group employees, including Joint Ventures &
Associates, came to 6,163 people based in 31 countries. Glanbia
Performance Nutrition ("GPN") had 1,996 employees while
Glanbia Nutritionals ("GN") employed 3,010 people during the
year. Our Joint Ventures had 1,157 employees in 2022.
Total Group employees in 2022
6,163
across 31 countries
GPN
GN
Joint Ventures
1,996
3,010
1,157
Gender split
Male 63%
Female 27%
Engagement score
Inclusion Index
71
(up 1 point since last year)
69.5
(up 2.5 points since last year)
C A S E S T U D Y
Creating an inclusive culture through our
Employee Resource Groups
In 2022, we established a number of employee resource groups,
including Glanbia NOW (Network of Women); our LGBTQIA+
network True Colours; and our multicultural network Mosaic.
These networks provide a safe space for our people to support
one another and to address workplace and career-related
strategies through education, conversation, networking,
mentorship and professional development. Our ERGs also help
our leaders to better understand the priorities and concerns of
our under represented communities. Highlights from our ERGs’
programme of activities this year include: a global mentorship
pilot programme and marking moments including International
Women’s Day; Pride Month; Black History Month; Hispanic
Heritage Month; World Mental Health Day, Diwali and Lunar
New Year.
Glanbia Network of Women (NOW) European Chapter celebrating the doubling in
membership numbers in 2022. Pictured: Harsha Sinha, Communications Lead and
Martha Kavanagh, Chair European Chapter.
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
21
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION People continued
Diversity, Equity & Inclusion
Building an inclusive
culture and society
We are committed to building an inclusive culture
that empowers our people to thrive and grow.
Our Inclusion Journey
At Glanbia, respect is a cornerstone of
our values, behaviours and culture. We
strive to develop a more diverse and
inclusive work environment and to build
an understanding of inclusive behaviour at
all levels of the organisation. To ensure we
are aligning our actions to our ambition,
we implemented diversity, equity and
inclusion (“DE&I”) targets for our senior
leaders as part of remuneration incentives.
In 2020, we engaged our organisation to
develop our vision for inclusion and
together we defined the statement that
at Glanbia ‘we celebrate individuality,
knowing that together we are more.’ In
2022, we continued to make progress on
the rollout of our diversity, equity and
inclusion programme. We are committed
to creating an inclusive and diverse
culture, as well as shaping progressive
policies and practices.
Education and training were an
important focus for our DE&I programme
in 2022. In 2022, our entire senior
leadership team completed our
immersive Inclusion development
programme, designed to build leadership
skills and impact in this area, while over
200 other managers completed our
Leading Inclusively online course. We
developed unconscious bias training for all
employees and more than 200 employees
completed inclusive recruitment training
to support eliminating bias in our
recruitment processes.
Over the course of the year, we also
focused on giving a voice to our under
represented employees through the
establishment of our Employee Resource
Groups (“ERGs’”). More than 700
employees across the organisation are
now involved in an ERG. We continued to
improve representation throughout the
organisation, with 36% female
participation at Board level and 38%
female participation in management in
2022. Our commitment and focus on
improving representation at all levels,
reflecting the communities in which we
operate, will continue in 2023.
Gender Pay Ratio
Our Global Reporting Initiative (“GRI”)
Gender Pay Ratio measures average
female to male pay for our employees in
the US and Ireland.
Our GRI gender pay ratio for 2022 is
99:100 which means that there is a 1%
difference in average pay between men
and women across this population.
We are committed to improving our
gender balance by working to increase
female representation particularly at
management level. Our long term
ambition is to achieve gender balance in
our management team.
Female management
participation in 2022
38%
Roadmap to Building an Inclusive Culture
Strong internal
culture &
engagement
Aim to increase gender,
racial and ethnic
representation
in leadership
Promoting true
inclusivity of all
diversity
Three Employee Resource
Groups – women,
multi-cultural
and LGBTQIA+
Unconscious bias/
inclusivity training for
all senior management
Tracking employee
inclusion
perceptions
Smart Working and
enhanced family
leave policies
Performance
linked to
remuneration
22
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
C A S E S T U D Y
Building a zero-incident
culture in Glanbia
Nutritionals
GN achieved its best ever performance in both rolling
incident rate and rolling lost time rate in 2022. A focused,
committed, and dedicated EHS team drove initiatives and
behaviour-based programmes aimed at reducing the
number of incidents. By leveraging and centralising data,
the team created a live dashboard to demonstrate daily
performance and to allow plants to analyse information
for their own site and compare it to other operational
plants in the network. This data was then used to roll out
targeted programmes to the common injury categories,
aimed at reducing the overall number of injuries in the
calendar year. In addition to internal programmes, the
team leveraged external programmes through SafeStart.
GN has built a zero-incident culture by living its daily
mission to safely deliver quality products in full and on
time as efficiently as possible. This achievement is
testament to the culture of safety developed by the
Company's supply chain leadership and plant personnel
across the entire global network.
Health & Safety
2022 was a year of continued progress in our mission towards ‘Zero
Harm’ with a significant reduction in the Group's total recordable
incident rate ("TRIR") from 2.30 to 1.22 and of lost time injuries from
0.69 to 0.45. In addition, zero critical injuries were reported for the full
year, as the organisation benefited from enhanced prevention
tools and metrics including Job Safety Analysis ("JSA") risk
assessments and ‘Near Miss’ data to drive sustainable
improvements. Our internal benchmarking has also indicated an
excellent performance in reference to the NAIC (North American
Industry Code) Occupational Health and Safety performance. In
2022, 97% of our locations are at or better than the NAIC average
performance in total recordable incidences.
Further, we have had zero lost time incidences in all laboratories
and administrative/corporate offices globally. In 2022, eight
operational locations had zero lost time cases recorded,
demonstrating the sustainability and resilience of our health and
safety approach over time.
GN has driven an (H&S) culture of excellence in 2022, driving its lost
time injury rate ("LTIR") down to 0.71 from 1.38 just a year ago. Across
the Group a number of projects have successfully been rolled out
and contributed to this progress. These include a chemical safety
programme aimed at improved labelling and handling practices,
focused efforts for reduction of sprain and strain injuries including
earlier identification and intervention, as well as an office induction
training have all been successfully rolled out in 2022 and are
reflected in the improved injury metrics.
Our focus in 2023 will continue on Environmental Health and Safety
("EHS") training for managers and supervisors, Hand Safety
Initiative, and expanding our plans for H&S compliance. This
includes best practice benchmarking and assuring compliance with
the GRI Occupational Health and Safety reporting standard.
Key Achievements in 2022*
• TRIR1 1.22 (2021: 2.30)
• LTIR2 0.45 (2021: 0.69)
• GN recorded lowest LTIR in the history of the business
• GN achieved a 50% reduction in TRIR, while GPN recorded a
38% reduction in TRIR, versus 2021.
* Results relate to sites under Glanbia's operational control. Includes Group’s
wholly-owned operations and MWC-Southwest Holdings LLC joint venture
operations.
Health and Safety Benchmarking – Food manufacturing
Total Recordable Incident Rate (TRIR)1
Lost Time Incident Rate (LTIR)2
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0
NAIC Average Food Manufacturing
2.0
1.8
1.6
1.4
1.2
1.0
0.8
0.6
0.4
0.2
0.0
NAIC Average Food Manufacturing
2020
2021
2022
2020
2021
2022
Glanbia’s 2022 TRIR score is 1.22, down from 2.30 in 2021 and
substantially lower than the NAIC Average of 4.0.
Glanbia’s 2022 LTIR was 0.45 down from 0.69 in 2021. Glanbia's score is
significantly lower than the NAIC Food Manufacturing Average of 1.2.
1. TRIR is the number of recordable, work-related incidences per 200,000 hours worked.
2. LTIR is the number of lost time work related incidences per 200,000 hours worked.
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
23
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Operations review
Glanbia Performance Nutrition
24
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Financial ambition
2023 to 2025
Average Revenue
Growth
5-7%
Average
EBITA margin
12%+
Transformative
Growth
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
25
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Operations review
Glanbia Performance Nutrition
Delivering a strong performance
led by the world’s #1 sports
nutrition brand
Revenue
€1,625.7m
2021: €1,303.1m
EBITA (pre-exceptional)
€182.1m
2021: €145.1m
EBITA Margin
11.2%
2021: 11.1%
Hugh McGuire
CEO Glanbia
Performance
Nutrition
Performance highlights:
Like-for-like (“LFL”) branded revenue growth of
+14.6% with volume -2.1% and pricing +16.7%
ON, the leading brand in the sports nutrition sector,
continues to sustain a strong consumer position in
key markets and delivered US consumption growth
of 30.8%,
EBITA margin increase of +10bps versus prior year
despite unprecedented inflation, with 12.0% EBITA
margin delivered for the second half of 2022.
GPN Performance Overview
€’m
Revenue
EBITA
EBITA margin
FY 2022
FY 2021
Change
Constant
Currency
Change
1,625.7
1,303.1
+24.8%
+13.9%
182.1
11.2%
145.1
11.1%
+25.5%
+10.5%
+10bps
Commentary on percentage movements is on a constant currency basis throughout.
Who we are
Glanbia Performance Nutrition
("GPN") is the number one global
sports nutrition portfolio with a
growing position in US Lifestyle
nutrition. Our mission is to inspire
people everywhere to achieve their
performance and healthy lifestyle
goals, and we achieve this through
education, advocacy, quality and
authenticity.
Our brands
Our portfolio comprises nine
brands – Optimum Nutrition ("ON"),
BSN, Isopure, Nutramino, SlimFast,
think! Amazing Grass, Body & Fit and
LevlUp. Each has its own brand
essence and consumer appeal.
Our brands participate across a range
of formats such as powders, capsules
and tablets, drinks, smoothies, bites
and bars and are sold in a variety of
channels such as online, specialty and
mass retail. Innovation sits at the
heart of our business and we
continuously develop new products.
26
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Financial performance 2022
Overall GPN revenue increased by 13.9%
in 2022 versus prior year. This was driven
by volume declines of 2.9%, price
increases of 16.4%, and the LevlUp
acquisition contributing 0.4%. Excluding
the impact of our contract business,
which we exited in North America,
like-for-like branded revenues increased
by 14.6% with 16.7% growth in pricing
offset by a volume decline of 2.1%. Pricing
was driven by the execution of strategic
price increases across all brands, in all
regions, in response to inflationary
trends. While volume performance in the
global ON brand was strong, the overall
decline was driven by the SlimFast brand,
where the brand refresh activity remains
on track.
GPN EBITA increased by 10.5% versus
prior year to €182.1 million. The GPN
transformation programme, widened in
scope to include mitigation of inflation,
is now complete and provides a
fundamental underpin to margins as
the business moves through the current
inflationary cycle. The benefits from this
programme, together with the pricing
action taken, enabled the business to
deliver a 12.0% EBITA margin for the
second half of the year.
significant pricing actions and revenue
growth management initiatives. The
ON brand continued to exhibit very
strong performance in the period and
was supported by continued brand
investment and innovation. ON delivered
US consumption¹ growth in 2022 of 30.8%.
Strong consumption trends in the healthy
lifestyle portfolio also continued through
the period across the think!, Isopure and
Amazing Grass brands, with US
consumption¹ in 2022 up 13.9%. The
SlimFast brand performance continues
to be impacted by headwinds in the
overall diet category with US
consumption¹ in 2022 down 17.9%.
The brand refresh is in market as planned,
supported by new branding and pack
design, creative content and innovation.
International
GPN International, which includes
direct-to-consumer ("DTC") brands,
grew like-for-like revenues by 16.3% in
2022 compared to the prior year. This
was driven by volume growth in key
regional markets, with consumption
trends in Europe, India and Oceania
particularly strong. Pricing was positive
across all regions due to the execution
of multiple price increases in response
to inflationary trends.
Glanbia
Performance
Nutrition brand
portfolio
GPN is the
number one
sports nutrition
company
in the world2
#1in the world
Americas
GPN Americas delivered 12.3% revenue
growth in 2022 compared to the prior
year, with like-for-like branded revenue
increasing by 13.2%. This was driven by
1 US consumption growth is measured in
North American channels and includes Online,
FDMC (Food, Drug, Mass, Club) and Specialty
channels. Data compiled from published
external sources and Glanbia estimates for
the 52-week period to 1 January 2023.
2 Euromonitor
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
27
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Operations review continued
Glanbia Performance Nutrition continued
Growing
the world’s
#1 Sports
Nutrition
business
Our strategy
Capturing the global potential of
Optimum Nutrition
Building a lifestyle nutrition platform
in North America
Accelerating growth in priority
international markets
Supported by digital commerce expertise
GPN’s consistent strategy
• Capturing the global potential of $1 billion Optimum Nutrition
brand;
• Building a lifestyle nutrition platform in North America; and
• Accelerating growth in priority international markets.
These pillars, which are individually supported by digital
commerce expertise, are outlined in more detail over the
following pages.
Our unique strategy is enabled by our recently completed
transformation programme, our people, our enhanced
capabilities in consumer insights and analytics and our
continued focus on innovation and M&A.
GPN growth transformation ongoing since 2019
We commenced GPN’s transformation programme in late 2019,
which we accelerated over the past number of years, and
widened in scope to address rising inflation. The programme has
been highly successful, delivering ahead of its business case and
driving focus and discipline across the business as we executed
hundreds of initiatives to drive demand and increase efficiencies.
Brand focus
GPN has driven strong demand through a deeper focus on its
brands and consumers. A strong insights and analytics function
has been built to enhance our understanding of consumer
motivations and needs, and we track our key brands regularly
with a range of brand equity and performance studies. Marketing
investment has increased significantly in the last five years
leading to greater visibility of our brands with our target
audiences.
For more information on our markets see pages 10-11
Route to markets
As part of our transformation programme, we focused on
international routes to market and became a truly omnichannel
business selling across all channels. We have also implemented
new operating models in both the Americas and International
regions while also enhancing the capabilities of our teams.
In terms of efficiency, we eliminated circa.50% of our stock
keeping units ("SKUs") since 2019, which has significantly
simplified our operations and enhanced margins.
28
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Optimum Nutrition is the world’s
#1 Sports Nutrition Brand, sold in
over 90 countries.
ON Gold Standard Whey is the world’s best-selling Protein Powder. Since its launch in 1986 ON
has built trust with consumers and established a leading position in many markets through its
uncompromising commitment to quality and continued innovation across a portfolio of products
and formats. ON consumers are typically highly engaged in the category and see sports nutrition
as an “essential” spend.
On track to deliver revenue in excess of
$1 billion in 2023, ON has driven growth by
protecting the brand’s reputation among
its core sports nutrition audience while at
the same time aggressively recruiting
consumers beyond that core audience. The
brands success has been achieved through
the execution of a simple brand growth
model.
Ongoing prioritisation of the brand’s
“hero” product groups of Protein,
Energy and Gainers
Expanding the distribution footprint
beyond the traditional specialty
sports nutrition channel
Development of a range of distinctive
brand assets, most notably the Gold
Standard Whey tub
Creation of inspiring brand content,
combining product and emotional
benefits and growing the reach of
that content through increased
investment in digital media channels
Continued product and format
innovation, most recently with
Amino Energy ready-to-drink and
Gold Standard Plant Protein
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
29
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Operations review continued
Glanbia Performance Nutrition continued
An attractive runway for further
growth: Optimum Nutrition
ON operates in a large and growing category. We are ambitious for growth
and have identified six reasons to believe that ON can accelerate beyond $1bn
in revenue.
#1 brand growing fast
globally
Growing category,
compelling to
consumers
# 1 brand growing
fast globally.
Growing category desired by
consumers: 75% of consumers
expect protein consumption to
go up or stay the same in next
12 months.¹
Commitment to
brand investment
Large consumer pool
in all markets
Continued brand
investment in all
priority markets:
marketing spend
increased by 20%
in 2022 vs 2020.
Strong and
established routes
to market and
distribution.
Strong routes-to-mar-
ket and distribution
capability
Proven brand growth
model
Large untapped
consumer pool in
all markets: 110
million potential
customers in
USA.²
Proven brand
growth playbook.
1. GPN internal estimates.
2. GPN research study.
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GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
A lifestyle nutrition
platform in North America
GPN has a range of leading consumer brands that appeal to consumers across a range of
lifestyle nutrition needs and motivations in the US. Our strategic focus in our lifestyle nutrition
portfolio centres on: recruiting new consumers; increasing brand awareness; and driving
physical distribution.
Firmly established as a
leading bar brand in the US
for over 20 years, think! has
been offering high protein, low
sugar, great tasting bars.
Isopure has been offering
premium low carb protein
ready-to-drink and powder
solutions for discerning sports
nutrition consumers for over
20 years through its Purity
platform.
Founded in 1999, Amazing
Grass has developed a strong
reputation among natural
nutrition enthusiasts for family
farm sourcing, whole food
nutrition and natural
ingredients and is the #1
Greens brand in the US.
Recognised by consumers looking to lose and manage
their weight, SlimFast is an iconic brand with a
reputation for offering an effective, nutritionally
balanced, great tasting range of products in convenient
ready-to-drink, ready-to-eat and powder formats. 2023
sees a new look for the brand, with an updated pack
design, product architecture and advertising campaign
as well as the launch of a range of products designed to
help consumers with their intermittent fasting plans.
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
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STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Operations review continued
Glanbia Performance Nutrition continued
Accelerate priority
international markets
Accelerating growth in priority international markets is critical for GPN. We have a scaled
presence in 10 markets with an in-market presence in a further 13 markets. Our brands are well
positioned across these markets with a large pool of consumers.
UK
Second largest GPN market outside of US
• Manufacturing hub in Middlesbrough, UK
• True omnichannel market with strong
• Strong and diverse roster of leading
sporting influencers
GPN retail penetration
• Extending our portfolio into plant-based
• #2 in sports nutrition category driven by
ON brand and #1 in weight management
driven by SlimFast brand
nutrition, energy and on-the-go
opportunities
• Top 3 Net Promotor Score in sports
• Consistent growth and market
nutrition category.
share gain
India
India is a competitive market with significant growth
potential for GPN
• One of GPN’s fastest growing markets
globally
• ON is #1 ranked brand in sports nutrition
(source: Euromonitor)
• Strong omnichannel presence across
150 key cities
• Strong awareness of ON brand (up over
• Significant investment in building out
the capabilities of the in-market team
• Deep roster of local sporting influencers
from personal trainers to individual
athletes and sports teams
Implemented local manufacturing of
key SKUs
•
40% in last 2 years)
• Top 3 Net Promotor Score in sports
nutrition category.
Australia
Australia is a scale international market for GPN delivering
stable growth
• ON continues to lead the specialty
channel – the largest sports nutrition
channel in the Australian market
• Strong growth in ecommerce
• Enhanced capabilities across the
business with emphasis on brand-
building talent
• GPN has invested significantly in local
consumer insight capabilities to inform
our innovation strategy
• ON is the official protein of the AFL
(Australian Football League) –
Australia’s most watched sport
• Voted brand of the year for 5
consecutive years by customers of
Nutrition Warehouse (Australia’s
largest sports supplement retailer)
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GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
A growing international
business
Percentage of GPN’s net
revenue in international
32%
Percentage of international
in ecommerce
38%
Scaled presence in 10 markets
and an in-market presence in
a further 13 markets
23
Total employees in our
international business
938
Optimum Nutrition
75%
of international sales
Product Supply
• UK manufacturing facility fulfils
Europe
• Local co-manufacturing
for India, China and Australia
• US manufacturing facilities
fulfils rest of world
• DTC fulfillment in the
Netherlands
GPN’s financial ambition
Financial ambition
2023 to 2025:
5% to 7% average
revenue growth.
12%+ average
EBITA margin.
GPN has a clear growth strategy and a
compelling growth opportunity. We have
a track record of organic and acquisition-
driven growth and are ambitious for the
future of the business.
ON is a $1 billion brand with significant
potential for growth, and we continue to
invest behind it. We have the ambition to
grow our unique portfolio of lifestyle
brands in North America. We have a
global, scalable, efficient operating and
business model enabling us to leverage
our portfolio of brands across multiple
channels and geographies, driving
sustained growth.
We are truly a global business, the only
global business in our category that has
the required level of infrastructure and
capability to play in the on-trend
categories with large consumer pools
represented by sports and healthy
lifestyle nutrition.
GPN has a strong values-led culture with
a great passion for our brands across the
team.
Our financial ambition is to build on our
growth momentum to deliver average
revenue growth of 5% to 7% over the next
three years, with average EBITA margin of
over 12%.
Delivering our 2023-2025 ambition through our strong platform for growth
ON – approaching $1bn revenue
with further potential for growth
Unique portfolio of lifestyle
brands
On-trend growing categories
with large consumer pools
Global business with established
infrastructure and capabilities
Track record of organic and
acquisition-driven growth
Values-led culture, passion
for our brands
True omnichannel business
Talented team of brand
& business builders
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
33
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Operations review
Glanbia Nutritionals
g
n
i
v
e
h
c
A
i
l
e
a
c
S
l
a
b
o
G
l
34
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Our growth ambition
Continue
to build
We will continue to build
our leadership positions
in protein and premix
solutions.
Accelerate
our growth
We will scale extensive
protein capability
& deep expertise.
Growth
enablers
Scaling complementary
technologies
and further M&A.
Nutritional
Solutions
Average Volume Growth
3%–5%
Average EBITA Margins
12%+
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
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STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Operations review continued
Glanbia Nutritionals continued
A good performance backed by
growing scale and capabilities
in Nutritional Solutions
Nutritional Solutions Revenue
€1,126.6m
2021: €877.4m
US Cheese Revenue
€2,890.1m
2021: €2,016.4m
Brian Phelan
CEO Glanbia Nutritionals
Performance highlights:
Glanbia Nutritionals Nutritional Solutions ("GN NS")
like-for-like ("LFL") revenue growth of +12.6% with
pricing +16.1% and volumes -3.5%;
EBITA margin of 11.4% was broadly in line
with prior year;
Recent acquisitions performed well in the year,
building further on innovation and operational
capabilities in NS; and
Glanbia Nutritionals' US Cheese business performed
well with revenue growth of 27.7% and EBITA growth
of 33.3%.
GN divisional performance
FY 2022
FY 2021
€’m
Revenue
EBITA Margin % Revenue
EBITA Margin %
Nutritional Solutions
US Cheese
Total GN
1,126.6
2,890.1
4,016.7
128.2
36.8
165.0
877.4
11.4%
1.3% 2,016.4
4.1% 2,893.8
101.1
24.4
125.5
11.5%
1.2%
4.3%
Commentary on percentage movements is on a constant currency basis throughout.
Nutritional Solutions (NS)
€’m
Revenue
EBITA
EBITA margin
FY 2022
FY 2021
Change
Constant
Currency
Change
1,126.6
128.2
11.4%
877.4
101.1
+28.4% +16.6%
+26.8% +13.0%
11.5% -10bps
Financial performance 2022
NS revenues increased by 16.6% in
2022 versus prior year. This was driven
by a 3.5% decrease in volume, 16.1%
increase in price and the net impact of
acquisitions and disposals delivering
4.0% revenue growth. While the
customised premix solutions portfolio
delivered volume growth this was
offset by a volume decline in the
protein solutions business, driven
largely by supply chain realignment
and inventory reduction by customers
in the second half of the year. Overall
pricing was strong in the year driven
by significantly heightened dairy
protein market prices. NS EBITA was
€128.2 million, 13.0% higher versus
prior year as margins were sustained
at broadly the same level as 2021.
36
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Who we are
Glanbia Nutritionals (GN) is a leading
innovation and solutions partner to the
global food and nutrition industry. GN
Nutritional Solutions is a global provider
of customised premix solutions, proteins
and complementary technologies. GN US
Cheese is the leading producer and
marketer of American-style cheddar
cheese in the US.
What we do
GN’s Nutritional Solutions (NS) is a global
business delivering a broad range of
innovative ingredient solutions that
improve product functionality and
nutritional profile. The business has a
deep protein expertise , a scaled position
in customised premix solutions and a
range of complemented technologies
that enhance global solutions
capabilities.
Through our innovative ingredient
solutions, we proudly solve our customers’
product challenges across the
mainstream food and beverage industry,
health and fitness industry and
specialised nutrition sector. Our
expertise, innovations and custom
formulations enable them to outperform
their competition.
GN’s US cheese business is a leading
producer and marketer of American-
style cheddar cheese, used by leading
retail brand owners and food
service organisations.
Our Business structure
Nutritional
Solutions
Cheese
2022 EBITA
€128.2m
2022 EBITA
€36.8m
2022 EBITA margin
2022 EBITA margin
11.4%
1.3%
• Growth categories
• Track record of organic
and acquisition growth/
strong return on capital
employed
• Strong market positions
across key platforms
• Global and Regional
customers
• Deep innovation
expertise
• Broad suite of
complementary
solutions
• Supply chain leverage
• Stable earnings and
cash flow/strong return
on capital employed
• #1 position in American-
style cheddar cheese
• Deep customer
relationships
• Operationally integrated
with NS dairy solutions
Innovative scale model
– investment through
JV model
•
• Commercial and
operational partner
for the MWC and SWC
joint ventures ( MWC-
Southwest Holdings LLC)
Focus for future
growth 2023–2025
Stable earnings
over 2023–2025
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
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STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Operations review continued
Glanbia Nutritionals continued
Culture of innovation
Nutritional Solutions
Our key
platforms
Our competitive edge
Custom premix
solutions
Unique access
to ingredients
Breadth of
customer offerings
Protein and
complementary
technologies
Customer at the
core of everything
Collaboration partnership
& accelerated development
Strength of
supply chain
Truly global
organisation & reach
Deep innovation
capability
15 global innovation
centres
The consumer
needs we serve
Performance
Nutrition
Boosting our capabilities
through acquisition
In excess of
€250m
Deployed on acquisitions
since 2019
Energy &
Supplements
Healthy
Lifestyle
Strengthens our dairy
bioactives portfolio
Specialised
Nutrition
Healthy snacking
technology
platform
Core
Capability
Premix scale and
technology
38
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Scale
flavours
A clear expertise in the
application of protein
technologies
Innovation is at the core of our business.
From bars to beverages to bakery and much
more, our 15 global innovation and collaboration
centres are designed for customers to work
side-by-side with our scientists, so ideas flow
faster and solutions get stronger.
Customer relationships
Whether our customers are looking for a cleaner label product,
a product with better texture, flavour and nutrition, or the
next category blockbuster, our innovation capabilities are
built from the ground up to help accelerate the process and
get their product to market faster than the competition.
We use our own production facilities as real-time testing grounds for
new ingredient ideas and improve ingredient production practices.
Supported by our innovation and collaboration centres in Europe,
the US and Asia, our technologies have enabled us to revolutionise
functional protein solutions in the nutritional bar category, develop
accelerated cheese aging techniques and invent an oat ingredient that
remains fluid and pourable through high pressure processing ("HPP")
and ultra-high temperature ("UHT") processing.
We offer a suite of technologies across custom premix solutions and
functional and nutritional solutions.
C A S E S T U D Y
Caffeine ingredient
Our NutraShield™ technology works well
in the energy sector as demonstrated
with our NutraShield™ Triple Layer
Caffeine ingredient. Caffeine has a very
undesirable taste, making it difficult to
include at large dose levels within
products. Encapsulating the nutrient
with NutraShield™ provides protection
during challenging processing conditions
(heat) and stops ingredient interactions
in the final product format. This also
allows for the insertion of higher caffeine
content while still tasting great.
C A S E S T U D Y
Pea protein
GN applies its insights capability and development expertise to inform and bring new product
concepts to its customers. This combination of market knowledge, consumer knowledge, and
application science stimulates new product ideation with customers that is focused on emerging
opportunities.
A good example of this is a Blueberry Pancake Pea Protein Cereal concept, developed across
several R&D internal teams and combining capabilities and technologies from across our product
portfolio encompassing plant-based ingredients, edible films, Foodarom flavors and PacMoore
extrusion technologies. Using a newly developed clean label pea protein ingredient called
BarHarvest™ 120 (with properties designed to work optimally in the extrusion process), the
ingredients R&D team leveraged our PacMoore extrusion capabilities to create a neutral flavoured,
loop shaped extruded piece (cereal). The applications R&D team then incorporated our edible film
and Foodarom flavour technologies to imagine a new children’s cereal idea that would deliver
higher protein cereal with a soft crunchy cereal piece, impart palette-enticing blueberry pancake
flavor, and offer fun visual appeal with the addition of EdiSparklz® edible glitter.
The resulting Blueberry Pancake Pea Protein Cereal demonstrates the synergy of complementary
capabilities and technologies that we can bring to our customers, while giving them a new product
idea to chew on.
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
39
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Operations review continued
Glanbia Nutritionals continued
Customised
premix solutions
#2Global
player
We are one of the world’s leading providers of customised premix solutions,
delivering critical micronutrients into everything from beverages and
supplements to infant and clinical nutrition.
Our customised premix solutions business has
strong capabilities across multiple geographies.
We leverage our technologies to bring value to our
customers and we play into large growing consumer
categories.
Growth ambition built around:
Categories in growth
Strong global & regional
customer relationships
Leverage global scale
Leverage technology and
innovation capability in NS
Further M&A to accelerate
growth (LATAM/SEA)
Ideation
Technologies
Application
expertise
Premix
Ingredients
Custom
formulations
C A S E S T U D Y
Delivering higher protein content
Standard extrusion is the technology used to make cold cereals,
hand-held snacks and puffs. Our unique technologies enable us to
deliver protein content of more than 70%, well above the industry
norm of 15% to 20% protein content. It can be a challenge to process
proteins as they tend to gel and clog up processing equipment. Using
unique processing technologies from our PacMoore acquisition our
protein chemists have developed this platform and system that
enables us to deliver a high-protein extrusion process that works
across snacks, chips, inclusions etc.
40
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Protein and
complementary
technologies
NS’ protein expertise has revolutionised the world of healthy snacking.
We are the #1 global supplier of whey protein isolate and we leverage
our technologies and ingredients to bring protein to the world in
a range of convenient formats.
#1Whey Protein
Isolate
We built our business around healthy
categories and deliver functional and
nutritional ingredients and applications
across mainstream food and beverages,
supplements, sports and lifestyle nutrition
and clinical and early-life nutrition.
Furthermore our Foodarom acquisition
has given us access to a 20,000-flavour
library and with it, the opportunity to
integrate flavours with protein.
We have long-standing relationships with
our customers and have been with many
of these customers since they started in
business, so we understand their brand
ambitions. Some of our customers want
to move into adjacent categories, launch
new formats, or enter new geographies.
Whatever their ambition, we help them
bring it to life. By doing so, we become the
innovation partner of choice for many of
the world’s leading brands and we have
helped to kickstart the journey for some of
the industry’s most successful start-ups.
Ideation
Technologies
Partnership
Protein and
complementary
technologies
Ingredients
Innovative
JV models
Growth ambition built
around:
Categories in growth
Strong customer
relationships –
innovation partner
to support customer
brand ambition
Leverage global scale,
reach and deep protein
expertise
Replicate success in
North America in EMEA
and ASPAC markets
Scale current
capabilities & footprint
in flavours
Further M&A to
accelerate growth
markets
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
41
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Operations review continued
Glanbia Nutritionals continued
Our ‘Go-to-Market’
strategy
An integrated vision
culture strategy
Our go-to-market strategy
brings our full breadth of
capabilities to our customers
thereby increasing our
relevance across all their
needs and ambitions.
One face to
the customer
Insights &
innovation led
Fuelled by
top talent
Scalable
Centres of
excellence
Efficient,
agile
Ambitious for Growth
Our
growth
ambition
2023-2025
Build on core
strength in
custom premix
solutions
Scale extensive
protein capability
& deep expertise
Scaling
complementary
technologies &
further M&A
Protein expertise
and
strong talent
Track record
of organic &
acquisition
driven growth
Nutritional
Solutions
42
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Nutritional
Solutions
Avg. volume Growth
3%–5%
Avg. EBITA Margins
12%+
Global scale and
reach across our
platforms
Deep innovation
capabilities
US Cheese
Our combined US Cheese business and US JV
cheese and dairy operations make us the #1
provider of American-style cheddar cheese.
US Cheese revenue increased by 27.7% in 2022 versus prior year.
This was driven by a 4.3% increase in volume and a 23.4%
increase in price. Volume growth was driven by end-use markets
and expanded production through the new joint venture plant in
Michigan which was commissioned during 2021. Price increases
were aligned to the higher year-on-year market pricing.
US Cheese EBITA increased by 33.3% to €36.8 million due to
incremental volumes. EBITA margin increased from 1.2% to 1.3%
as a result of operating leverage and efficiencies.
US Cheese
€’m
Revenue
EBITA
EBITA margin
2022
2021
2,890.1
36.8
1.3%
2,016.4
24.4
1.2%
Reported
change
43.3%
50.8%
+10bps
Constant
currency
change
27.7%
33.3%
C A S E S T U D Y
Probiotic cheddar
Our Health & Wellness cheese platform
provides cheeses that deliver increased
health benefits to an already healthy snack.
Varieties include higher-protein cheddar,
probiotic cheddar and Vitamin D
fortified cheeses.
Joint Ventures
Focused on MWC-Southwest Holdings
Looking forward, Glanbia’s joint venture activities are
focused at MWC-Southwest Holdings, a US business with
strong alignment to our Glanbia Nutritionals platform.
For 2022 Glanbia’s joint ventures (continuing operations)
included MWC-Southwest Holdings, Glanbia Cheese EU
and Glanbia Cheese UK. The Group’s share of joint ventures’
profit after tax pre-exceptionals for continuing operations
was €15.4 million.
Aligned with the evolution of our strategy, subsequent to the
year end, Glanbia has signed a non-binding memorandum
of understanding for the sale of the Company’s
shareholding in Glanbia Cheese and Glanbia Cheese EU
joint ventures (“Glanbia Cheese”) to Leprino Foods
Company. It is expected that Glanbia will receive initial cash
proceeds in excess of €160m (including the repayment of
shareholder loans), with further contingent consideration of
up to €25m dependant on the performance of Glanbia
Cheese over the next three years.
On 1 April 2022, Glanbia completed the disposal of its 40%
interest in the Glanbia Ireland joint venture to Glanbia
Co-operative Society Limited (the ‘Society’) for €307 million.
The transaction was approved by members of the Society
on 17 December 2021, following which this joint venture
investment was considered as an investment ‘held for sale’,
with equity accounting ceasing to apply from that date.
Joint Ventures (Glanbia share)
€’m – pre-exceptionals
2022
2021
Change
Share of joint ventures’
profit after tax –
continuing operations
Share of joint ventures’
profit after tax –
discontinued operations
Total
15.4
19.2
(3.8)
–
15.4
25.7
44.9
(25.7)
(29.5)
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
43
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION
Group Finance Director’s review
An evolved strategy driving a
strong sustainable performance
Adjusted EPS –
continuing operations
104.02 cent
(2021: 77.84 cent)
+33.6% reported currency
+17.6% constant currency
EBITA
(pre-exceptional)
€347.1m
(2021: €270.6m)
+28.3% reported currency
+13.5% constant currency
OCF
conversion
85.7%
(2021: 100.2%)
OCF as % of EBITDA
Mark Garvey
Group Finance
Director
ROCE –
continuing operations
11.1%
(2021: 10.0%)
+110bps
Dividend
payout ratio
31.0%
(2021: 33.6%)
Profit After Tax –
continuing operations
€199.6m
(2021: €141.0m)
+41.6% reported currency
+16.7% constant currency
Basic EPS –
continuing operations
72.67 cent
(2021: 48.47 cent)
Dividend per share as a % of adjusted
EPS (continuing and discontinued)
+ 49.9% reported currency
+23.5% constant currency
In what was a challenging year with
unprecedented global inflation and
volatile macro-economic conditions,
Glanbia continued delivering strong
growth, achieving above the upper end of
market guidance and representing the
strongest ever adjusted EPS result, while
continuing to evolve and progress the
strategic agenda. Revenues increased by
21.2% constant currency (reported: 34.4%)
to €5.6 billion with EBITA (before
exceptional gains) of €347.1 million
achieved, representing an increase of
13.5% constant currency (reported 28.3%)
since prior year. The Group reported
adjusted EPS of 104.02 cent (all continuing
operations), an increase of 17.6% constant
currency (+33.6% reported) on prior year.
Basic EPS from continuing operations of
72.67 cent was achieved (2021: 48.47 cent),
an increase of 23.5% constant currency
(+49.9% reported).
Effective execution of strategy combined
with the strength of platforms in better
nutrition enabled the Group to
successfully navigate the turbulent
economic conditions and deliver on the
growth agenda. Furthermore, the recent
and planned portfolio changes positions
the Group well as an ambitious
purpose-led global nutrition
company.
On 1 April 2022, the Group completed
the disposal of its 40% interest in
Glanbia Ireland. This represents the
completion of a long-term strategic
goal and enables more future focus
on the core business and growth
opportunities in the health, wellbeing
and nutrition space. The proceeds
received on completion of this
transaction were reinvested to drive
further growth across the Group and
return of capital to shareholders.
In addition to the Glanbia Ireland
disposition, as part of a broader
strategic review, all remaining
businesses were reviewed to consider
other non-core parts of the portfolio. A
decision was reached to dispose of a
small bottling facility in the US (Aseptic
Solutions). The impacted assets are
considered to be held-for-sale at year
end, resulting in a fair value adjustment
to reduce the carrying value of the
assets to recoverable value, with a
sales transaction expected to conclude
in H1, 2023. In addition, subsequent to
the year end the Group made a
decision to dispose of its interests in its
EU and UK cheese joint ventures
(Glanbia Cheese EU Limited and
44
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Glanbia Cheese Limited). In February 2023, a non-binding
memorandum of understanding to sell these businesses was
entered into with the joint venture partner, Leprino Foods Company.
It is anticipated that subject to the completion of limited
confirmatory diligence and final negotiations, a sales transaction
will conclude in H1, 2023.
Following the progression of these portfolio changes, the Group
launched a programme to realign Group-wide support functions
and optimise structures in support of the remaining Group
portfolio, to better enable the business and support further
growth. This programme will continue into 2023 with realisation
of benefits from 2024 onwards further enabling the Group’s
ambitious growth strategy.
Acquisition activity saw the addition of Sterling Technology, a US
based bioactive ingredient business, to the Nutritional Solutions’
portfolio in March 2022, further enhancing and complementing
the Group’s existing ingredient technology portfolio. Integration
of this business has gone well, and performance of the new
business has been impressive, surpassing original expectations.
Operating cash flow ("OCF") was strong at €355.3 million
converting 85.7% of EBITDA into OCF, against a target of 80%
conversion. Free cash flow ("FCF") for the year was €268.6 million.
In December 2022, the Group completed the re-financing of an
existing €0.9 billion of near-term bank facilities, extending the
duration of Group facilities to 5.8 years, with the earliest
maturing debt not due for repayment before December 2027.
When combined with the Group’s ability to generate cash, this
positions the Group well with the capacity to finance future
investments and progress the strategic growth agenda.
Return on Capital Employed ("ROCE") from continuing operations
increased by 110 basis points to 11.1% (2021: 10.0%), with the
consistent delivery of profits as the business recovered post-
pandemic, combined with the benefit of simplification and
optimisation of the business and operating model.
The Group engaged in share buyback activity during 2022,
returning €173.5 million to shareholders via these programmes.
With confidence in the strong cash generation abilities of the
organisation, further buyback programmes will be considered in
2023 as an effective mechanism to return value to shareholders,
with an additional €50 million buyback just recently announced.
In addition, the Board is recommending a final dividend of 19.28
cent per share representing a dividend payout of 31.0% of
adjusted Earnings Per Share in respect of 2022.
Looking ahead
The Group remains vigilant to the continued volatile and
disruptive potential of rising geopolitical tensions, the lingering
impact of Covid-19, and the indirect impact of inflation and
global supply chain disruption. The strong performance and
strategic actions progressed in 2022 position the Group well to
navigate this environment and further enable growth.
2023-2025 ambition
In November 2022, we held a Capital Markets Day ("CMD") which
gave us the opportunity to present our ambition for the Group
over the next 3 years and reflect on the performance since the
previous CMD in 2018. I am pleased that all Group Financial
Targets set in 2018 were successfully achieved and the Group is
now well positioned to achieve the revised targets set out at the
2022 event.
2018-2022
ambition
2018-2022
outcome
2023-2025
ambition
Adjusted EPS growth (cc)
Cash Conversion
ROCE
Dividend payout ratio
5-10%
80% +
10%-13%
25%-35%
√
√
√
√
5-10%
80% +
10%-13%
25%-35%
√ Outcome achieved
2022 Income Statement review
Revenue and EBITA
Revenue and EBITA are key performance indicators ("KPIs") for
the Group. In particular the Group focuses on revenue, volumes
and EBITA margins to assess underlying performance. Details of
these KPIs are set out below.
2022
2021
Change
€’m
Revenue
GPN
GN
1,625.7
4,016.7
1,303.1
2,893.8
Total Revenue
5,642.4
4,196.9
EBITA (pre-exceptional)
GPN
GN
182.1
165.0
Total EBITA
347.1
EBITA margin (pre-exceptional)
GPN
GN
Total EBITA margin
11.2%
4.1%
6.2%
145.1
125.5
270.6
11.1%
4.3%
6.4%
24.8%
38.8%
34.4%
25.5%
31.5%
28.3%
+10bps
-20bps
-20bps
Constant
currency
change
13.9%
24.3%
21.2%
10.5%
16.9%
13.5%
Revenue
Revenue increased in 2022 by 21.2% versus prior year on a
constant currency basis to €5.6 billion, an increase of 34.4% on a
reported basis. Like-for-like ("LFL") wholly owned revenue
increased by 20.2%, driven by positive pricing of 19.7% and
volume increases of 0.5%. The full year impact of the 2021 LevlUp
and PacMoore acquisitions, and the recent Sterling Technology
acquisition added a further 1.0% to revenue. Detailed analysis of
revenue is set out below.
Glanbia Performance Nutrition
€2,000m
€1,500m
€1,303m
€124m
€1,427m
(2.9%)
16.4% 0.4%
€1,626m
During 2023, the Group will transition from a euro presentation of
consolidated financial statements to a US$ presentation, better
reflecting the Group’s underlying core markets in light of recent
portfolio changes. International markets, however, remain a key
priority for the Group and part of the Group’s long-term growth
strategy, which continues to be a blend of organic, M&A and
portfolio activity. The Group's strong financial position will allow
us to capitalise on these opportunities as they arise.
€1,000m
€500m
€0m
FY21
FX
FY21 CC
Volume
Price
Acquisitions
FY22
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
45
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Group Finance Director’s review continued
Glanbia Performance Nutrition ("GPN") recorded a total revenue
increase of 13.9% constant currency (reported 24.8%) in 2022 versus
prior year. LFL branded revenue grew 14.6%, with strong
performance across US Sports Nutrition, Healthy Lifestyle and
International markets driven by solid underlying consumption
trends as well as the successful implementation of price increases
to mitigate cost inflation, offset by headwinds in the weight
management category. Overall price increases of 16.4% were
achieved, volume declined 2.9% and the 2021 LevlUp acquisition
contributed a further 0.4% revenue growth in the period.
Glanbia Nutritionals
Glanbia Nutritionals ("GN") delivered revenue growth of 24.3%
constant currency (reported 38.8%) in 2022, with volume growth
of 1.9%, price increases of 21.2% and contribution from
acquisitions of 1.2%. Nutritional Solutions ("NS") volumes
decreased by 3.5%, with premix volume growth more than offset
by dairy volume declines, particularly in bar solutions and whey
as customers reduced inventory levels. NS pricing contributed
16.1%, primarily driven by higher whey markets and the benefit of
price increases across the portfolio. US Cheese volumes were
4.3% higher than prior year, benefitting from the full year impact
of the new Michigan joint venture cheese plant following
successful commissioning in 2021. Cheese pricing also increased
by 23.4% in 2022 due to strong market conditions.
Nutritional Solutions
€1,250m
€1,000m
€877m
€89m
€966m
(3.5%)
16.1%
4.0%
€1,127m
€750m
€500m
€250m
€0m
FY21
FX
FY21 CC
Volume
Price
Acquisitions
FY22
US Cheese
€248m
€2,264m
4.3%
€2,016m
23.4%
€2,890m
€3,000m
€2,500m
€2,000m
€1,500m
€1,000m
€500m
€0m
FY21
FX
FY21 CC
Volume
Price
FY22
EBITA (pre-exceptional)
EBITA before exceptional items increased 13.5% constant currency
(+28.3% reported) to €347.1 million (2021: €270.6 million) with strong
EBITA delivery in both GPN and GN. EBITA margin in FY 2022 was
6.2%, compared to 6.4% in 2021 as a result of the unprecedented
inflationary trends across the business, net of mitigating actions.
GPN pre-exceptional EBITA increased by 10.5% constant currency
to €182.1 million (2021: €145.1 million), an increase of 25.5% on a
reported basis. GPN pre-exceptional EBITA margin at 11.2% for the
year was 10 basis points higher than prior year reported, with an
improving margin profile over the year and delivering 12% margin in
H2, 2022.
GN pre-exceptional EBITA grew 16.9% constant currency to €165.0
million (2021: €125.5 million), an increase of 31.5% on a reported
46
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
basis. GN pre-exceptional EBITA margin was 4.1%, down 20 basis
points from 2021, as the dilutive impact of higher dairy markets was
largely mitigated by improved business mix and operating
efficiencies.
Net finance costs (pre-exceptional)
€’m
Finance income
Finance costs
Net finance costs
2022
1.8
(22.5)
(20.7)
2021
Change
2.0
(19.5)
(17.5)
(0.2)
(3.0)
(3.2)
Net finance costs (pre-exceptional) increased by €3.2 million to
€20.7 million (2021: €17.5 million). The increase was primarily
driven by increased average debt levels and stronger average US
dollar exchange rates in 2022 compared to 2021. The Group’s
average interest rate was 2.3% (2021: 3.0%). Glanbia operates a
policy of fixing a significant amount of its interest exposure, with
90% of projected 2023 debt currently contracted at fixed rates.
Share of results of joint ventures
€’m – pre-exceptional
2022
2021
Change
Share of profits of joint ventures:
– continuing operations
– discontinued operations
Total
15.4
–
15.4
19.2
25.7
44.9
(3.8)
(25.7)
(29.5)
The Group’s share of results of joint ventures is stated after tax
and before exceptional items. The Group’s share of joint venture
profits from continuing operations decreased by €3.8 million to
€15.4 million (2021: €19.2 million) in the year.
Operationally, the joint ventures, particularly in the US, delivered
a strong performance with year-on-year volume growth,
benefiting from the full year impact of the new Michigan facility,
following successful commissioning in 2021.
The prior year share of joint venture profits from discontinued
operations relate to the Glanbia Ireland investment which was
classified as an asset held-for-sale in 2021. Following receipt of all
shareholder approvals and regulatory clearances, the disposal
was completed in April 2022, with the related once off gain on
disposal treated as an exceptional item in the period.
Income taxes
€’m
Income taxes
Exceptional tax credit
2022
25.7
5.7
2021
17.0
7.6
Change
8.7
(1.9)
Income taxes (pre-exceptional)
Effective tax rate
31.4
12.5%
24.6
13.0%
6.8
-50bps
The 2022 pre-exceptional tax charge increased by €6.8 million to
€31.4 million (2021: €24.6 million). This represents an effective tax
rate, excluding joint ventures, of 12.5% (2021: 13.0%). The tax credit
related to exceptional items is €5.7 million (2021: €7.6 million). The
Group currently expects that its effective tax rate for 2023 will be
in the range of 13.5% to 14.5%.
Exceptional items
€’m – continuing operations
Pension related costs (note 1)
Changes in fair value of contingent
consideration and call option (note 2)
Organisation redesign costs (note 3)
Portfolio related reorganisation costs
(note 4)
Non-core assets held for sale (note 5)
Total
Share of results of joint ventures (note 1)
Exceptional tax credit
Exceptional charge – continuing
operations
2022
(1.7)
6.7
–
(2.9)
(43.8)
(41.7)
0.2
5.7
2021
(30.3)
–
(18.1)
–
–
(48.4)
(2.0)
7.6
6. Exceptional gain from discontinued operations relates to the
gain arising on the divestment of the Group’s interest in
Glanbia Ireland, following its classification as a discontinued
operation in 2021. The 2021 gain includes one off gains on the
settlement of forward contracts, net of one off reorganisation
costs within this joint venture.
During 2022 there were cash outflows of €21.3 million in respect
of exceptional charges (2021: €55.9 million).
Profit after tax
€’m
Profit after tax –
2022
2021
Change
(35.8)
(42.8)
continuing operations
199.6
141.0
+58.6
Profit after tax –
€’m – discontinued operations
2022
2021
discontinued operations
Profit after tax for the year
57.2
256.8
26.4
167.4
+30.8
+89.4
Exceptional gain from discontinued
operations (note 6)
Total exceptional gain/(charge) in the year
57.2
21.4
0.7
(42.1)
Details of the exceptional items are as follows:
1. Pension related costs relate to the restructure of legacy
defined benefit pension schemes associated with the Group
and joint ventures, which included initiating a process for the
ultimate buyout and wind up of these schemes and a further
simplification of schemes that remain. Costs incurred relate to
the estimated cost of the settlement loss as a result of
acquiring bulk purchase annuity policies to mirror and offset
movements in known liabilities of the schemes (‘buy-in’
transaction), as well as related advisory and execution costs,
net of gains from risk reduction activities. The restructuring
effort has progressed well during 2022, effectively managing
the volatile financial market conditions in the UK during 2022,
with final wind up of schemes planned for completion in 2023.
Profit after tax for the year was €256.8 million compared to €167.4
million in 2021, comprising continuing operations of €199.6 million
(2021: €141.0 million) and discontinued operations of €57.2 million
(2021: €26.4 million). Profit after tax from continuing operations
comprises pre-exceptional profit of €235.4 million (2021: 183.8
million) and exceptional charges of €35.8 million (2021: €42.8 million).
The €51.6 million increase in pre-exceptional profit after tax from
continuing operations is driven by the continued growth in
profitability of wholly owned businesses net of reduced profitability
of Joint Ventures.
Profit after tax from discontinued operations in the current and prior
year relates to the Glanbia Ireland joint venture. As outlined above,
the Group’s share of Glanbia Ireland was disposed in April 2022, with
the resulting gain being recognised as an exceptional gain.
2. Changes in fair value of contingent consideration and call
Earnings Per Share
option relate to contingent payments and call option
associated with the 2021 LevlUp acquisition that have now
reduced following an assessment of conditions that give rise
to the additional payments.
3. Prior year organisation redesign costs related to a
fundamental reorganisation of the GPN segment to drive
greater efficiencies, improve margin and deliver top line
growth. The investment phase of this programme is now
complete, with no further costs incurred during the period.
4. Portfolio related reorganisation costs relate to indirect one
off costs as a result of recent and planned portfolio changes.
Following divestment decisions related to non-core
businesses, the Group launched a programme to realign
Group-wide support functions and optimise structures of the
remaining portfolio, to more efficiently support business
operations and growth. This programme will continue into
2023 with realisation of benefits from 2024 onwards. Costs
incurred to date relate to advisory fees and people-
related costs.
5. Non-core assets held-for-sale relate to fair value
adjustments to reduce the carrying value of certain assets to
recoverable value. The assets relate to a small US based
bottling facility (Aseptic Solutions) which, following
completion of a strategic portfolio review, were determined to
be non-core and a decision was made to divest the business,
resulting in the designation as held-for-sale at year end.
Discussions are ongoing and a sale is expected to conclude by
the end of H1, 2023.
2022
2021
Reported
Change
Constant
Currency
Change
Basic EPS
– continuing
– discontinued
93.42c
72.67c
20.75c
57.57c
48.47c
9.10c
+37.5%
+62.3%
+49.9%
+23.5%
+128.0% +128.0%
Adjusted EPS
– continuing
– discontinued
104.02c
104.02c
nil
87.15c
77.84c
9.31c
+6.4%
+19.4%
+17.6%
+33.6%
-100.0% -100.0%
Basic EPS increased by 62.3% reported versus prior year, driven
by a year-on-year increase in pre-exceptional profitability and
the exceptional one off gains arising on portfolio related
adjustments.
Adjusted EPS is a KPI of the Group, a key metric guided to the
market and a key element of Executive Director and senior
management remuneration. Adjusted EPS increased by 6.4%
constant currency (19.4% reported) in the year, driven primarily by
the increased profitability in both GPN and GN, offset by a
reduced share of profits of joint ventures. Adjusted EPS
comprises continuing operations of 104.02 cent (2021: 77.84 cent)
and discontinued operations representing the now disposed
Glanbia Ireland joint venture of nil (2021: 9.31 cent).
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
47
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Group Finance Director’s review continued
Cash flow
The principal cash flow KPIs of the Group and Business Units are
OCF and FCF. OCF represents EBITDA of the wholly owned
businesses net of business-sustaining capital expenditure and
working capital movements, excluding exceptional cash flows.
FCF is calculated as the cash flow in the year before the following
items: strategic capital expenditure, equity dividends paid,
expenditure on share buyback, acquisition spend, proceeds
received on disposal, exceptional costs paid, loans/equity
invested in joint ventures, and foreign exchange movements.
These metrics are used to monitor the cash conversion
performance of the Group and Business Units and identify
available cash for strategic investment. OCF conversion, which is
OCF as a percentage of EBITDA is a key element of Executive
Director and senior management remuneration.
€’m
EBITDA pre-exceptional
Movement in working capital
(pre-exceptional)
Business-sustaining capital expenditure
Operating cash flow
Net interest and tax paid
Dividends from joint ventures
Payment of lease liabilities
Other inflows/(outflows)
Free cash flow
Strategic capital expenditure
Dividends paid to Company shareholders
Share buyback (purchase of own shares)
Payment for acquisition of subsidiaries
Exceptional costs paid
Proceeds from sale of property, plant
and equipment
Loans/investment in joint ventures
Proceeds on disposal of interest in Glanbia
Ireland
Net cash flow
Exchange translation
Cash/(debt) acquired on acquisition
Net debt movement
Opening net debt
Closing net debt
2022
414.6
(39.9)
(19.4)
355.3
(81.4)
14.5
(16.5)
(3.3)
268.6
(49.5)
(84.4)
(173.5)
(54.9)
(21.3)
3.4
(18.2)
307.0
177.2
(34.8)
0.9
143.3
(602.7)
(459.4)
2021
333.6
16.5
(15.9)
334.2
(51.5)
33.9
(19.1)
6.4
303.9
(61.6)
(80.5)
(91.3)
(95.0)
(55.9)
1.5
(10.7)
–
(89.6)
(23.6)
4.4
(108.8)
(493.9)
(602.7)
For more information on operating cash flow and free cash flow
see glossary pages 246 to 254.
OCF was €355.3 million in the year (2021: €334.2 million) and
represents a strong cash conversion on EBITDA of 85.7% (2021:
100.2%). The OCF conversion target for the year was 80%. This
rate remains above target conversion levels, reducing since the
prior year as a result of an increased investment in working
capital due to higher pricing in receivables and inventory, and the
restoration of appropriate inventory buffer levels to ensure
appropriate supplies of key raw materials to mitigate further
inflationary exposures.
FCF was €268.6 million versus €303.9 million in 2021, with the
reduction primarily due to higher net tax payments in the year
combined with a reduction in dividend income from joint ventures
following the disposal of the Group’s interest in Glanbia Ireland.
Capital allocated for the benefit of shareholders includes regular
dividend payments of €84.4 million (2021: €80.5 million) and the
execution of share buyback programmes of €173.5 million (2021:
48
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
€91.3 million). The Board continues to review buyback programmes
as part of the Groups capital allocation strategy as they provide
an opportunity to allocate capital to the benefit of shareholders.
Acquisition spend relates primarily to the acquisition of Sterling
Technology, a US based bioactive ingredient company, for an
initial consideration of €54.5 million which concluded in March
2022 and divestment proceeds relate to the completion of the
disposal of the Group’s 40% holding in Glanbia Ireland for a
consideration of €307.0 million in April 2022.
Loans to/equity in joint ventures during 2022 includes the
continued investment in Glanbia Cheese EU, the mozzarella
cheese joint venture in Portlaoise, Ireland which was fully
commissioned during Q4, 2022. Negotiations are ongoing to sell
the Group’s interest in this joint venture, with full repayment of
outstanding loans on completion of the sales transaction.
Group financing
Financing Key Performance Indicators
2022
2021
Net debt (€’m)
Net debt: adjusted EBITDA
Adjusted EBIT: net finance cost
459.4
1.12 times
17.0 times
602.7
1.71 times
15.1 times
The Group’s financial position continues to be strong. At year-end
2022, net debt was €459.4 million (2021: €602.7 million), a
decrease of €143.3 million from prior year and the Group had
committed debt facilities of €1.215 billion (2021: €1.16 billion) with a
weighted average maturity of 5.8 years (2021: 3.9 years). Glanbia’s
ability to generate cash, as well as available debt facilities
ensures the Group has considerable capacity to finance future
investments. Net debt to adjusted EBITDA was 1.12 times (2021: 1.71
times) and interest cover was 17.0 times (2021: 15.1 times), both
metrics remaining well within financing covenants.
In December 2022, the Group completed the refinancing of
€0.9 billion of bank facilities, repayable in January 2024, with
replacement facilities repayable in December 2027. This
refinancing improved the weighted average maturity of committed
debt facilities, at 2022 year-end, to 5.8 years (2021: 3.9 years).
Use of capital
Capital expenditure
Cash outflow relating to capital expenditure in the year amounted
to €68.9 million (2021: €77.5 million), including €19.4 million of
business-sustaining capital expenditure and €49.5 million of
strategic capital expenditure. Key strategic projects completed in
2022 include ongoing capacity enhancement and business
integrations to drive further efficiencies in operations.
Investments in Joint Ventures
During 2022, the Group continued developing its joint venture
investment portfolio. Following the successful commissioning of the
US cheese and whey facility in Michigan in 2021, the Glanbia Cheese
EU mozzarella cheese plant in Ireland was fully commissioned
during Q4, 2022. A further €47.0 million was advanced to this venture
in the period, all of which will be fully repaid on completion of the
planned divestment of this business in 2023.
Return on Capital Employed
Return on Capital Employed:
– continuing operations
– discontinued operations
2022
11.1%
11.1%
–
2021
Change
10.1% +100bps
10.0% +110bps
12.0% -1,200bps
ROCE increased in 2022 by 100 basis points to 11.1%. This increase
was primarily due to the continued growth in profitability of the
wholly owned business, as well as the successful execution of
strategy through pricing and efficiency improvements to
mitigate the impact of unprecedented input cost inflation.
Acquisitions remain a key part of the growth strategy of the
Group with investments assessed against a target benchmark of
12% return after tax by the end of year three.
Annual impairment testing
The Group monitors the performance of acquisitions on an ongoing
basis and completes annual impairment reviews in respect of
goodwill and intangible assets. No impairments were identified from
the 2022 review, nor did sensitivity analysis identify any scenarios
where a reasonably possible change in assumptions would result in
an impairment charge. Full details of the annual impairment reviews
are set out in Note 16 of the financial statements.
For the purposes of impairment testing, assets are grouped at
the lowest level for which there are separately identifiable cash
inflows, in Cash Generating Units ("CGUs"), and these CGUs are
kept under review to ensure that they reflect any changes to the
interdependencies of cash flows within the Group.
Dividends
The Board is recommending a final dividend of 19.28 cent per
share which brings the total dividend for the year to 32.21 cent
per share, a 10% increase on the prior year. This total dividend
represents a return of €87.9 million to shareholders from 2022
earnings and a payout ratio of 31.0% of 2022 adjusted Earnings
Per Share which is in line with the Board’s target dividend payout
ratio of 25% to 35%. The final dividend will be paid on 5 May 2023
to shareholders on the share register on 24 March 2023.
Total Shareholder Returns
Total Shareholder Return ("TSR") for 2022 was -8.4%. The STOXX
Europe 600 Food & Beverage Index (F&B Index), a benchmark for
the Group, decreased by 14.25% in 2022. The three-year period
2020 to 2022 Glanbia TSR was +15.6% versus the F&B Index which
decreased by 3.62%. The five-year Glanbia TSR to 2022 was -19.2%
versus the F&B Index of +10.79%. Glanbia’s share price at the end of
the financial year was €11.92 compared to €12.30 at the 2021
year-end, representing a decrease of 3%.
Impact of new accounting standards
No new accounting standards were adopted in 2022. Amendments
to existing standards during the year did not have a material
impact on the Group.
Pension
The Group’s net pension liability under IAS 19 (revised) ‘Employee
Benefits’, before deferred tax, improved by €15.8 million since 2021,
resulting in a net pension asset of €1.6 million at 31 December 2022
(2021: liability of €14.2 million). The defined benefit pension position
is calculated by discounting the estimated future cash outflows
using appropriate corporate bond rates. During 2022, the company
progressed the restructuring of UK pension schemes, further
reducing the Group's exposure to liabilities on these legacy
schemes. It is anticipated that the UK schemes will ultimately be
wound up in 2023, removing any related scheme assets and
liabilities and associated volatility from the Group’s balance sheet.
Foreign exchange
Glanbia generates the majority of its earnings in US dollar currency
and has significant assets and liabilities denominated in US dollars.
As a result, and as Glanbia’s reporting currency is euro, there can
be a significant impact to reported numbers arising from currency
movements year-on-year and on translation of US dollar non-
monetary assets and liabilities in the preparation of the
consolidated financial statements. Commentary is provided on a
constant currency basis to provide a better reflection of the
underlying operating results in the year, removing the translational
currency impact. To arrive at the constant currency change, the
average foreign exchange rate for the current period is applied to
the relevant reported result from the same period in the prior year.
At the balance sheet date, due to the strengthening of the US dollar
in 2022, there was a gain arising primarily on the translation of US
assets and liabilities into euro which is presented within other
comprehensive income and amounted to €79.9 million in the year.
The amount included a gain of €0.2 million on the retranslation of
non-euro denominated cash and cash equivalents as presented in
the cash flow statement. Average and year-end euro to US dollar
rates were as follows:
Average
Year-end
2022
2021
2022
2021
1 euro converted to
US dollar
1.0534
1.1826
1.0666
1.1326
Investor relations
Glanbia has a proactive approach to shareholder engagement
with the Annual General Meeting ("AGM") being a key event
annually. In 2022, a hybrid AGM was held, with shareholders given
the opportunity to attend the event in person or participate
online. All details relating to the AGM were published on the
Company’s website: www.glanbia.com/agm.
The Group Chairman consulted directly with a number of
shareholders during the year. A shareholder perceptions survey
was also completed by an independent third party, where
shareholders and investors were given the opportunity to provide
confidential feedback to the company. Feedback was discussed
with the Board with actions taken on specific areas. The Group
Secretary and Head of Investor Relations also undertook a
shareholder consultation on the Group’s share buyback
resolution and support was noted.
In 2022, Glanbia attended 12 international equities investor
conferences (physically and virtually). In November 2022, the
Group held a Capital Markets Day at its GPN facilities in Illinois,
USA, bringing together our investor and shareholder
communities to learn more about our strategy, including details
of our medium term financial objectives, as set out on page 14.
In addition to full year and half year results, Glanbia publishes
interim management statements after the first and third
quarters to provide investors with a regular update on
performance and expectations throughout the year. All releases,
reports and presentations are made available immediately on
publication on the Group’s investor relations website.
Annual General Meeting (AGM)
Glanbia plc’s AGM will be held on Thursday, 4 May 2023, at 11.00
a.m. in the Lyrath Estate, Kilkenny, R95 F685, Ireland.
Mark Garvey
Group Finance Director
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
49
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Sustainability
Delivering better
nutrition responsibly
Glanbia’s purpose is delivering
better nutrition for every step of
life’s journey. Over the past
number of years, we have
evolved our business to become
more focused on better nutrition.
“We have a robust
and ambitious
approach to our
ESG strategy
focusing in
particular on our
environmental
impacts”
Michael Patten
Chief ESG & Corporate
Affairs Officer
Our purpose and products have real
meaning and impact in a world where
lifestyle diseases are the number-one
killer worldwide, and where better diets
and active lifestyles are the most
important preventative measures.
Better Nutrition is at the core of what
we do. In Glanbia Performance
Nutrition ("GPN") our products support
consumers directly, and in Glanbia
Nutritionals ("GN") our functional
ingredients and solutions support the
wider food industry and
customer base.
If delivering better nutrition is our
purpose, our Environmental, Social and
Governance ("ESG") focus is about how
we bring that to life. It is about
delivering better nutrition responsibly.
Driving action to achieve our
sustainability targets
Guided by our materiality assessments
on where to prioritise, we have
developed a robust and ambitious
approach to our ESG strategy. This
strategy sets out our targets and
actions focused on our Climate and
Environment, our People, Communities
and our Performance and
Value Creation.
We advance with intent and contribute
to the delivery of global goals, such as
the United Nations Sustainable
Development Goals ("SDGs") and the
Paris Agreement. Supported by expert
external advisors and aligned to the
SDGs, we have taken a rigorous
approach to measuring our impacts
through data, baselining, and risk
assessments, setting a clear strategy
and aligning to science-based targets
or other relevant external benchmarks.
Our focus now is on driving action. In
doing so we are committed to keeping
our stakeholders informed with Global
Reporting Initiative ("GRI") aligned
reporting, Carbon Disclosure Project
("CDP") disclosures, as well as our
annual Taskforce for Climate-related
Financial Disclosure ("TCFD") and
other Non-Financial Reporting.
We have made good progress against
our stated targets across our
environmental pillars, refer to pages
56-59 for details, with individual work
programmes and associated business
unit teams in place to support delivery
of these targets. In 2023 we will
continue to drive progress while
ensuring the appropriate feasibility
studies and assessments are finalised
and incorporated into our future plans.
Awareness and support for delivery of
our ESG agenda is driven by the Board
and cascades through the Group. We
have linked our ambition to
remuneration, which was formally
approved by shareholders at our 2021
AGM in our updated remuneration
policy. Senior management long term
incentives are directly linked to the
achievement of our environmental
sustainability goals (see page 133 for
more detail), while actions on our
social agenda are reflected in senior
management short term incentives.
We strive to ensure our overall ESG
ambition and commitments are
integrated into our strategic planning
and risk management oversight. As
part of the Group Risk Management
Framework, we ensure ESG risks are
identified, evaluated and assessed.
Where deemed material, such risks
are monitored and reported upon,
with the appropriate mitigating
actions feeding into our strategy and
operational response.
See pages for more detail 67-73.
We are proud of the advancements
made to support our people, see
pages 20-22 within the Our People
section of this report, for details on the
progress made against our stated
Diversity, Equity & Inclusion ("DE&I")
ambition and page 23 for a review of
the 2022 Group Health and Safety
programme and results.
50
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
For more information, see pages
55, 62-66.
Reinforcing our
commitments and actions
Our ESG strategy draws together our environmental, social and governance ambitions, guided
by our materiality assessments on where to prioritise.
We recognise the global impact our corporate actions have on the environment and society, and have mapped the SDGs that we are
addressing as part of our ESG framework.
Refer to page 52-53 for details on our stakeholder engagement process and outcomes, page 54 for further details on how Glanbia
considers SDGs in the way we operate and page 55 on the process undertaken to identify our most material ESG topics.
People & Society
Employee
engagement and
health and safety
Diversity, equity & inclusion
Economic contribution
& community
Climate change
Water
Waste
Biodiversity
Sustainable
products and
packaging
Better
Nutrition
Food safety & quality
Responsible nutrition
Trusted business
partner
Responsible sourcing
Business ethics
Risk management
Transparency and reporting
o v ern ance
G
t
n
e
m
n
o
r
i
v
n
E
&
e
t
a
m
i
l
C
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
51
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION
Sustainability continued
Showing respect for all our stakeholders
Stakeholder group – why we engage
Key topics
Outcomes
Key Stakeholder
engagement in 2022
One of Glanbia’s core values is
‘Showing Respect’. Valuing all our
people, our producers and our
communities is at our core and
builds a better business. To support
this core value Glanbia aims to
create trusted relationships through
effective engagement and to
understand the needs of all our
stakeholders. The Board is aware
that the Group’s actions and
decisions impact all our
stakeholders, and it ensures that
there is regular dialogue taking
place with stakeholders, which is
carried out by those most relevant
to the stakeholder group or issue,
and discussed appropriately in the
boardroom.
See more information
see pages 90-91
Employees
Regular and ongoing engagement with our employees is
leadership and
key to attracting, developing and retaining a talented,
education
dedicated and motivated workforce which ensures the
successful delivery of our strategy and achievement of
our purpose.
• Group strategic agenda/
priorities
• Safety and support at work
• Smart (flexible) working
• Diverse and inclusive
workplaces
• Career development
• Reward framework
Customers and consumers
Strong engagement with our customers and consumers
enables us to operate a customer-centric business
our consumers and
customers
model and act as our customers’ most valued partner,
creating a world of sustainable nutrition.
Local communities
By fostering strong relationships with the communities in
which we operate, we can help support livelihoods and
create a better society while protecting the environment.
Shareholders
Active engagement with our shareholders ensures they
are aware of the Group’s business environment, strategy,
performance and sustainability commitments. The views
of our shareholders help to inform the strategic decision
making of the Board.
Suppliers and business partners
By partnering and engaging with our suppliers, and
our value chain
establishing trusted business partnerships within our
partners
our value chain
value chain, we enable them to meet our high standards
partners
in food safety & quality, business ethics, labour, human
rights and the environment.
Government & non-governmental
organisations (NGOs)
Through active engagement with governments and
NGOs we can share valuable insights gained as a global
nutrition company on the strategic issues facing our
industry, while increasing our understanding of wider
issues, enabling us to add value to relevant policy and
regulatory debates and support industry initiatives.
Insights on consumer trends
•
• Stable supply of high-
quality products and
ingredients
• Food safety & quality
• Sustainable food with a
lower environmental
footprint, produced in a
responsible way
• Economic development of
the communities in which
we operate
• ESG impact on local
communities
• Strategic agenda/priorities
• Governance performance
• Portfolio evolution through
organic growth, acquisitions
and divestments
• ESG agenda and priorities
• Responsible sourcing and
use of raw materials
• Long-term, sustainable
partnerships
• Positive environmental and
social impact
• Ethical business conduct
• Regulation across all
business activities
• Reliable and complete
corporate reporting
• Contribution to local
economy and communities
• Climate change and
environmental preservation
• Responsible sourcing
• Human rights, diversity and
inclusion
52
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
How we engage
•
Implemented
multiyear ‘Grow@
Glanbia’ programme,
using technology to
enable personalised
employee
development and
engagement
• Connection to the
Board through a
dedicated Workforce
Engagement Director
(Group Chairman)
• Employee Resource
Groups
•
‘Speak Up’ and
• Ongoing engagement
Whistleblowing
through one-to-one
meetings, team
meetings and town
halls
procedures
• Monitoring of actions
to address topics
raised by employees
• Engagement and
• ESG Impact
regular pulse surveys
Materiality
Assessment
Read more
Pages
20-23
Employee attraction, retention and engagement
Our approach keeps us connected with our people. It helps attract,
develop, retain and motivate our workforce, sustaining our competitive
advantage and long-term success. It provides key insights into the
effectiveness of employee-related programmes and key focus areas. It
also helps us strengthen our approach to diversity, equity and inclusion
across our businesses.
•
Inclusion Index: 69.5 points (up 2.5 points since 2021).
• Employee engagement score of 71 points (up 1 point since 2021).
• Employee survey scores increased across all business units on our
key focus areas of wellbeing and communication.
• Gold Award for Graduate Employer of the Year by gradireland for 2022.
• Customer relationship
• Product information
Engaging with our consumers means we enable them to achieve their
development – key
account managers,
R&D insights and
brand teams
on packaging
• Customer surveys
• GPN sports nutrition
school
• Company websites &
• ESG Impact
lifestyle and nutrition goals. We bring strong market insights and
secure supply quality to our customers
• The ON brand is one of the world’s most awarded, most reviewed and
most nominated sport nutrition brands by consumers.
• ON is now a $1bn brand consistently recording strong Net Promotor
Pages
24-43
social media
• Formal market
research
• Exhibitions
materiality
assessment
Scores.
brands.
• Gold Standard whey tub certified "Widely Recycled" by How2Recycle
• GN – ingredients partner of choice to some of the world’s leading
• Supporting customer ESG ambition through the provision of
transparent, product specific data sharing.
• My Community
• Ongoing dialogue and
Strong and positive community relationships
Page 61
funding of community
Engaging with our local communities during 2022 ensured that we
increased our understanding of their needs and priorities, addressed
any concerns and identified areas for value creation.
• GPN sports nutrition
initiative
school
• Employee volunteering
• ESG Impact
programme
and charitable
organisations
materiality
assessment
• Capital Markets Day
• One-to-one meetings
Trust and engagement from the investor community
Page 90
•
Investor meetings and
and calls
conferences
• Regular externally
published
performance and
strategy updates
• Perception survey
• Annual general
meeting
• CDP climate change
and water reporting
• Key investor rating
assessments
• ESG Impact
materiality
assessment
Engagement with investors helps us to understand their expectations of
our strategic agenda, risk management and financial and ESG
performance. During 2022, investor focus continued around the Group’s
strategic direction, performance, emissions reduction and employee
engagement.
• Supplier surveys and
• Membership of
Partnering with our suppliers to make sustained positive impact in the
Page 60
audits
• Tenders
• Contractual meetings
• Membership in
industry expert panels
industry associations
value chain
•
Information requests
• ESG Impact
• E-tendering platforms
• Assessment and due
materiality
assessment
diligence
We engage with suppliers to develop a responsible and sustainable
supply chain needed to deliver innovative and sustainable products.
During 2022, we specifically engaged with our suppliers to drive
improvements across our sustainability priority areas.
•
Industry associations
• One-to-one meetings
Engagement with Government and NGOs
Page 91
• Briefings & direct
• Participation in events
Our engagement with local and national regulators, governments and
• ESG Impact
materiality
assessment
industry associations, ensures that we contribute to issues relevant to
our activities, improve our sustainability performance and compliance
and progress projects for the enhancement of society.
meetings
• Multistakeholder
forums
• Participating in
relevant calls for
information
Through our memberships and partnerships with NGOs we continue to
be involved in developing industry best practices across a range of
established sustainability topics and collaborating on integrated
solutions across the value chain.
Stakeholder group – why we engage
Key topics
Employees
Regular and ongoing engagement with our employees is
leadership and
education
key to attracting, developing and retaining a talented,
dedicated and motivated workforce which ensures the
successful delivery of our strategy and achievement of
our purpose.
• Group strategic agenda/
priorities
• Safety and support at work
• Smart (flexible) working
• Diverse and inclusive
workplaces
• Career development
• Reward framework
Customers and consumers
Strong engagement with our customers and consumers
our consumers and
enables us to operate a customer-centric business
customers
model and act as our customers’ most valued partner,
creating a world of sustainable nutrition.
Local communities
By fostering strong relationships with the communities in
which we operate, we can help support livelihoods and
create a better society while protecting the environment.
Shareholders
Active engagement with our shareholders ensures they
are aware of the Group’s business environment, strategy,
performance and sustainability commitments. The views
of our shareholders help to inform the strategic decision
making of the Board.
Suppliers and business partners
By partnering and engaging with our suppliers, and
our value chain
establishing trusted business partnerships within our
partners
our value chain
value chain, we enable them to meet our high standards
in food safety & quality, business ethics, labour, human
partners
rights and the environment.
Government & non-governmental
organisations (NGOs)
Through active engagement with governments and
NGOs we can share valuable insights gained as a global
nutrition company on the strategic issues facing our
industry, while increasing our understanding of wider
issues, enabling us to add value to relevant policy and
regulatory debates and support industry initiatives.
•
Insights on consumer trends
• Stable supply of high-
quality products and
ingredients
• Food safety & quality
• Sustainable food with a
lower environmental
footprint, produced in a
responsible way
• Economic development of
the communities in which
we operate
• ESG impact on local
communities
• Strategic agenda/priorities
• Governance performance
• Portfolio evolution through
organic growth, acquisitions
and divestments
• ESG agenda and priorities
• Responsible sourcing and
use of raw materials
• Long-term, sustainable
partnerships
• Positive environmental and
social impact
• Ethical business conduct
• Regulation across all
business activities
• Reliable and complete
corporate reporting
• Contribution to local
economy and communities
• Climate change and
environmental preservation
• Responsible sourcing
• Human rights, diversity and
inclusion
How we engage
•
Implemented
multiyear ‘Grow@
Glanbia’ programme,
using technology to
enable personalised
employee
development and
engagement
• Ongoing engagement
through one-to-one
meetings, team
meetings and town
halls
• Engagement and
regular pulse surveys
• Customer relationship
development – key
account managers,
R&D insights and
brand teams
• Company websites &
social media
• Formal market
research
• Exhibitions
• Connection to the
Board through a
dedicated Workforce
Engagement Director
(Group Chairman)
• Employee Resource
•
Groups
‘Speak Up’ and
Whistleblowing
procedures
• Monitoring of actions
to address topics
raised by employees
• ESG Impact
Materiality
Assessment
• Product information
on packaging
• Customer surveys
• GPN sports nutrition
school
• ESG Impact
materiality
assessment
• My Community
initiative
• GPN sports nutrition
school
• Employee volunteering
programme
• Ongoing dialogue and
funding of community
and charitable
organisations
• ESG Impact
materiality
assessment
• Capital Markets Day
•
Investor meetings and
conferences
• Regular externally
published
performance and
strategy updates
• Perception survey
• Annual general
meeting
• One-to-one meetings
and calls
• CDP climate change
and water reporting
• Key investor rating
assessments
• ESG Impact
materiality
assessment
• Supplier surveys and
• Membership of
audits
• Contractual meetings
• Tenders
•
Information requests
• E-tendering platforms
• Assessment and due
diligence
industry associations
• Membership in
industry expert panels
• ESG Impact
materiality
assessment
Read more
Pages
20-23
Outcomes
Employee attraction, retention and engagement
Our approach keeps us connected with our people. It helps attract,
develop, retain and motivate our workforce, sustaining our competitive
advantage and long-term success. It provides key insights into the
effectiveness of employee-related programmes and key focus areas. It
also helps us strengthen our approach to diversity, equity and inclusion
across our businesses.
•
• Employee engagement score of 71 points (up 1 point since 2021).
• Employee survey scores increased across all business units on our
Inclusion Index: 69.5 points (up 2.5 points since 2021).
key focus areas of wellbeing and communication.
• Gold Award for Graduate Employer of the Year by gradireland for 2022.
Engaging with our consumers means we enable them to achieve their
lifestyle and nutrition goals. We bring strong market insights and
secure supply quality to our customers
• The ON brand is one of the world’s most awarded, most reviewed and
Pages
24-43
most nominated sport nutrition brands by consumers.
• ON is now a $1bn brand consistently recording strong Net Promotor
Scores.
• Gold Standard whey tub certified "Widely Recycled" by How2Recycle
• GN – ingredients partner of choice to some of the world’s leading
brands.
• Supporting customer ESG ambition through the provision of
transparent, product specific data sharing.
Strong and positive community relationships
Engaging with our local communities during 2022 ensured that we
increased our understanding of their needs and priorities, addressed
any concerns and identified areas for value creation.
Page 61
Trust and engagement from the investor community
Engagement with investors helps us to understand their expectations of
our strategic agenda, risk management and financial and ESG
performance. During 2022, investor focus continued around the Group’s
strategic direction, performance, emissions reduction and employee
engagement.
Page 90
Partnering with our suppliers to make sustained positive impact in the
value chain
We engage with suppliers to develop a responsible and sustainable
supply chain needed to deliver innovative and sustainable products.
During 2022, we specifically engaged with our suppliers to drive
improvements across our sustainability priority areas.
Page 60
Industry associations
•
• Briefings & direct
meetings
• Multistakeholder
forums
• Participating in
relevant calls for
information
• One-to-one meetings
• Participation in events
• ESG Impact
materiality
assessment
Engagement with Government and NGOs
Our engagement with local and national regulators, governments and
industry associations, ensures that we contribute to issues relevant to
our activities, improve our sustainability performance and compliance
and progress projects for the enhancement of society.
Page 91
Through our memberships and partnerships with NGOs we continue to
be involved in developing industry best practices across a range of
established sustainability topics and collaborating on integrated
solutions across the value chain.
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
53
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Sustainability continued
Showing respect for all our stakeholders continued
Sustainable development goals
The United Nations (UN) 2030 Agenda is a global plan to promote sustainable peace and prosperity and to protect our planet. Since
2016, countries and organisations have been working to implement this agenda with its 17 Sustainable Development Goals (SDGs).
Our aim is for our business activities to create shared value that is both measurable and makes a recognisable contribution to society.
While all 17 SDGs are critical, as part of our sustainability strategy, we have identified six SDGs on which we have the strongest impact
through our business actions. These six SDGs and their impact are outlined below.
Climate action
We recognise how deeply
connected food systems
are to the planet’s resources.
We have upgraded Scope 1
and 2 emissions reduction
targets to meet a 1.5 degrees
Celsius temperature
pathway and mapped out
a decarbonisation plan to
meet this ambition by 2030.
Responsible consumption
and production
We use resources
efficiently and reduce
waste and emissions.
We incorporate this
approach in our product
development and in our
manufacturing activities.
We support our customers
ambitions to manufacture
their products sustainably
and efficiently.
17
Partnership
for the
goals
1
No
poverty
16
Peace &
justice
15
Life on
land
14
Life below
water
11
Sustainable
cities &
communities
10
Reduced
inequalities
9
Industry,
innovation &
infrastructure
4
Quality
education
6
Clean water
& sanitation
7
Affordable &
clean energy
Decent work and economic growth
We see it as our responsibility to respect human
rights both within our company and along our
supply chain. That is why we are dedicated to
upholding appropriate and fair labour and social
standards. We want to drive sustainable
economic growth through progressive
resource efficiency.
Zero hunger
We develop and deliver products
with nutritional attributes, in
sufficient quantities and at
affordable prices. We collaborate
with organisations to help better
meet society’s food challenges.
Good health
and wellbeing
We take a scientific
approach to nutrition,
meeting nutritional
needs across
all stages of life and
promoting active and
healthy lifestyles.
Through our brands and
products, we positively
impact the health and
wellbeing of millions of
people around the world.
Gender equality
We continue to advocate against
all discrimination including gender
inequality with a zero tolerance
towards child labour, modern
slavery and human trafficking. This
is achieved through our internal
DE&I programmes, ethical
business conduct practices,
procurement and related due
diligence procedures.
54
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Identifying our material impacts
Glanbia will publish its first Global Reporting Initiative (GRI) Sustainability Report in May 2023. In 2022, we updated our impact
materiality assessment in line with the GRI framework standards. To determine our material topics, we followed a process based on the
standard ‘GRI 3: Material Topics 2021’ which included:
• Understanding our ESG context;
•
Identifying actual and potential impacts;
• Assessing the significance of the impact; and
• Prioritising the most significant impacts.
Throughout each step of the process, we engaged our identified stakeholder groups as set out on page 52 through surveys, interviews,
workshops and research. The table below shows the material topics, the impacts, and their alignment with the United Nations
Sustainable Development Goals (SDGs). The list of material topics was reviewed and approved by Glanbia’s Board of Directors.
Topic
Summary impact
Value chain mapping SDG reference Read more
1. Food safety & quality
Impact of our food safety and quality systems, ensuring
quality nutritious product are produced
Operations and
Downstream
2
3
12
Page 60
2. Employee health,
safety & wellbeing
3. Climate change
Impact of our health, safety and wellbeing programmes
protecting our people in line with industry best practice.
Operations
3 8 12
Page 23
Impact of global warming as a result of carbon emissions, and
the corresponding emission reduction initiatives within
our operations and value chain.
Upstream and
Operations
3
12
13
Pages 56-57
4. Water
Impact of water use within our value chain and manufacturing
sites and related efficiency initiatives.
Upstream and
Operations
5. Responsible sourcing
Impact of Glanbia procurement controls and oversight
within our value chain.
Upstream
6. DE&I
7. Waste
Impact of DE&I initiatives for Glanbia’s employees.
Operations
Impact of waste generation within our manufacturing sites
and related resource efficiency initiatives.
Operations
8. Animal welfare
Impact of animal care and protection measures in
supporting animal welfare within our value chain.
Upstream
12
13
8 12
85
3 8
12 13
12
Page 58
Page 60
Page 22
Page 69
Page 66
9. Sustainable products
& packaging
Impact of innovative product and packaging design
on resource consumption and environmental impact.
Operations and
Downstream
8
12
13
Page 59
10. Biodiversity
Impact of direct manufacturing activities and indirect
impact through our supply chain on biodiversity
and ecosystems.
Upstream and
Operations
12
13
Page 113
11. Trusted business partner
Impact within the value chain as a trusted joint venture
partner, food company and seller of quality nutrition products.
Upstream and
Operations
8 12
Page 60
12. Economic contributions
Impact of Glanbia’s operations on the economy and
government through its economic activities and monetary
contribution.
Operations and
Downstream
13. Employee engagement
& development
Impact of employee programmes to support job satisfaction,
a healthy working culture and employee development.
Operations
14. Responsible nutrition
Impact of the development of nutritional products in a
responsible and ethical way.
Downstream
15. Business ethics
Impact of strong governance and oversight, fair competitive
practices, underpinned by our code of conduct.
Operations
8
8
3 12
8
Pages 10-11,61
Page 21
Page 60
Page 66
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
55
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Sustainability continued
Climate and environment
Delivering on our
sustainability strategy
Climate and environment
Climate – Scope 1 & 2 emissions
Target:
50% absolute reduction in operations’
emissions by 2030 vs 2018 baseline
Upgraded Scope 1 and 2 emissions
reduction targets to meet a 1.5 degrees
Celsius temperature pathway
In 2021 the Science Based Target initiative ("SBTi") validated our
emissions reduction strategy for a 31% reduction in Scope 1
(direct emissions from sources owned or controlled directly) and
Scope 2 (indirect, purchased energy) emissions by 2030. The
modelling to inform this ambition was in line with keeping global
temperature increases well below 2 degrees Celsius ("WB2DC").
Our transition plan
In 2022, we partnered with the Carbon Trust, Schneider Electric
and EM3 to model our transition (decarbonisation) plan to 2030
against our existing 31% reduction, and to factor in options to
accelerate our transition plan. The resultant roadmap, approved
by the Board in November 2022, outlines how we are accelerating
our ambition and updating our target to a 50% reduction in
Scope 1 and 2 emissions by 2030 from a 2018 base year. This plan
aligns with the Paris Agreement which calls for countries to take
concerted climate action to reduce greenhouse gas ("GHG")
emissions in order to limit global temperature increases to 1.5
degrees Celsius.
Our strategic plan targets reductions in Scope 1 and 2 emissions.
We aim to reduce Scope 1 emissions by 15,000 tonnes by 2025
through energy efficiency projects and a further minimum
reduction of 30,000 tonnes by 2028 by leveraging advances in
energy efficient process technologies.
We are also integrating energy management systems at our
largest manufacturing sites providing real time insights into
operational efficiency together with expert advice on energy
investments.
Our roadmap envisages the elimination of Scope 2 emissions,
initially through progressively matching electricity consumption
with a qualifying Renewable Energy Certification ("REC")
programme. From there we aim to progress to long term power
purchase agreements ("PPAs") as well as self-generation. In 2023
we will work with Schneider Electric to develop the options for
PPA execution.
Glanbia Decarbonisation Plan 2030 for Scope 1 and 2, aligned with 1.5 degrees Celsius SBTi target1
)
e
2
O
C
t
(
s
n
o
s
s
m
E
i
i
300,000
250,000
200,000
150,000
100,000
50,000
0
2018
2019
2020
2021²
2022
2023
2024
2025
2026
2027
2028
2029
2030
Scope 1
Scope 2
Total Emissions
Rebaseline 1.5 degrees Celsius
1 GHG emissions presented include the projected footprint of all Glanbia acquisitions contracted by the end of 2022 and organic growth. 12-month averages
were used to estimate the footprint of the acquired sites back to 2018. Scope 2 GHG emissions were calculated according to the market-based methodology
by GHG Protocol, using data on procured renewable electricity (including RECs), energy providers’ and eGRID data where appropriate.
In 2021, a new-to-world dairy processing facility was commissioned in Michigan, resulting in an absolute Scope 1 and 2 GHG emissions increase, which will be
eliminated by 2025 per the Board-approved decarbonisation plan.
2
56
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
2022 performance
Continuous decarbonisation stays the
most ambitious element of our strategy.
Glanbia is committed to growth while
reducing GHG emissions from our existing
production facilities and new acquisitions.
In 2022, our operational control Scope 1
and 2 emissions decreased by 8.6% over
the previous reporting year (2021).
The proportion of renewables in our
electricity supply reached 45% representing
an 8% increase from the preceding year.
We have a 50% renewable electricity target
for 2023, and we aim to progress to 100%
renewable electricity procurement for our
US, Canada, UK and EU operations by 2028.
Since the initial SBTi baselining, a new-to-
world MWC- Southwest Holdings LLC
production facility was commissioned, in
Michigan, which resulted in an absolute
GHG emissions increase in 2021-2022.
However, compared to the original
baseline scope that excluded the
Michigan plant, our footprint would be
21% lower today over the 2018 base year.
We will continue working on further
emissions reduction in Michigan and
other processing sites. Our New Mexico,
Michigan and Idaho dairy sites’
decarbonisation will be in focus in
2023-25, in line with the Board-approved
plan, supporting the Group’s upgraded
SBTi commitment.
GHG Emissions in Operational Control,
2018-20223
2018
115,191
131,973
10,174
2019
100,371
123,628
11,956
2020
108,441
118,830
15,659
2021
2022
141,066
148,848
12,847
139,753
125,227
13,045
Scope 1, MtCO2e
Scope 2, MtCO2e
Biogenic Emissions, MtCO2e
Climate – Scope 3 emissions
Target:
25% reduction in dairy emissions intensity by 2030
Our work on Scope 3 emissions is ongoing,
focusing in particular on the dairy supply
chain. In 2021 the SBTi validated our
target of a 25% intensity reduction in
Scope 3 dairy emissions by 2030.
Our actions and impact
In 2022 our work on Scope 3 evaluated
baselines for the three elements of dairy
supply: 1. Direct shipped milk in Idaho;
2. JV partner ambition in New Mexico and
Michigan; and 3. Dairy ingredient supplier
strategy for our GPN business.
Direct shipped milk
In our direct shipped milk in Idaho, we
have completed GHG footprints on all our
direct suppliers providing a complete
primary data set using the National Milk
Producers Federation Farmers Assuring
Responsible Management ("FARM")
Environmental Stewardship ("ES") tool. A
FARM ES footprint gives our suppliers an
understanding of the specific emission
sources associated with their farm,
recognising the significant regional
differences, and allows benchmarking
against regional and national averages.
In 2023, our focus will be on building a
comprehensive Scope 3 roadmap. We
have engaged Newtrient LLC, a US dairy
sustainability specialist group, to
complete comprehensive analysis across
the main sources of emissions of a
representative sample of Idaho suppliers.
The project will fill a significant gap for
Glanbia and our farm suppliers in
identifying the feasible abatement
technologies and their likely emissions
and economic impacts. In 2022 we
engaged the Carbon Trust to assess the
implications of the SBTi’s Forest, Land
and Agriculture Guidance ("FLAG"). In
2023, we will continue to work with the
Carbon Trust on this evolving guidance
with engagement with Newtrient
developing roadmaps to satisfy our
current commitments and potential
accelerated scenarios. In addition, we will
evaluate carbon trading implications and
opportunities particular to US dairy on
farm investments.
JV partner ambition in New Mexico and
Michigan
As Scope 3 emissions rest outside of our
operations, our approach continues to be
one of partnership with suppliers and the
wider dairy industry. We are a leader in the
development of the US Dairy Net Zero
Initiative ("NZI") as part of the ES
Committee of the Innovation Center for
US Dairy, which convenes the entire dairy
supply chain. NZI is building the proof
points with extensive US wide research.
This effort was significantly augmented
by US government supports for climate
action in 2022.
In 2022 we engaged our largest JV
partner, Dairy Farmers of America
("DFA"). DFA, on their Scope 3 ambition,
and who also have a SBTI for dairy supply.
We will continue our partnership in 2023
on a roadmap for JV milk pool
decarbonisation, shared learnings, and
potential projects.
Dairy ingredient supplier strategy for our
GPN business
In GPN we engaged with dairy ingredient
suppliers to review their ambition and
strategy. In line with many of our upstream
customers, we will be requiring annual
emissions factors from our suppliers to
support our strategy going forward.
Glanbia Scope 3: a partnership approach
Our approach is 4-pronged and iterative:
Economic
supports &
incentives
Farm
emission
mapping
Better
Dairy
Tailored
emissions
reduction
roadmap
Technology
abatement
potential
3 GHG emissions reported include the footprint of the acquired Watson sites, which resulted in previous years and base year Scope 1 & 2 recalculation per GHG
Protocol. Scope 2 GHG emissions were calculated according to the market-based methodology by GHG Protocol, using data on procured renewable electricity
(including RECs), energy providers’ and eGRID data where appropriate.
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
57
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Sustainability continued
Climate and environment continued
Water
Target:
New target to further reduce freshwater use
by 10% by 2025 vs 2021 baseline
Our actions and impact
Glanbia is committed to water
conservation at all our sites. Having
reduced freshwater consumption intensity
by 17% between 2015 and 2020, in 2022
the Board approved a new ambition for a
further absolute reduction in freshwater
use of 10% by 2025, a reduction of over
500 million litres annually.
The decision to accelerate was the output
of extensive strategic work in 2022
including leveraging the insights from
robust plant water use data sets, improved
plant real time data analysis and
prioritising sites previously identified as
high risk through the World Resources
Institute ("WRI") Aqueduct risk assessment.
Dairy processing plants have a unique
opportunity for water reuse, where water is
generated, referred to as polished water,
when milk constituents are separated and
concentrated or fractionated. Polished
water optimisation is the priority focus, by
both ensuring water use efficiency and
capitalising on the inherent efficiency of
dairy operations that return more water
than they take in.
The project shortlists to achieve our
ambition focus on clean-in-place ("CIP")
optimisation, more polished water reuse
opportunities, and reverse osmosis
systems.
Resource efficiency and circularity have
always been core values in our
operations. In Idaho, our dairy facilities
reuse polished water and recycle it in our
processes before cleaning it at our onsite
wastewater treatment plant and using it
to irrigate the crops we grow in adjacent
fields. The crops go to local milk suppliers
as feed, fuelling the regenerative process.
The current ratio of freshwater and
polished water used in our dairy
operations allowed us to save 5,313
million litres of freshwater from being
withdrawn for processing in 2022. We will
maximise polished water recovery and
recycling to bring freshwater withdrawals
further down in line with our new target.
We recognise water as a precious
resource and will continue to drive
efficiency beyond 2025.
C A S E S T U D Y
Freshwater consumption
reductions
In 2022, our Twin Falls, Idaho plant received a
pollution prevention award, from the Idaho
Department of Environment and Quality.
The award recognised the initiatives
implemented by a dedicated process
improvement team to reduce freshwater
consumption. Due to these initiatives, average
daily freshwater consumption is reduced by
nearly 10,000 litres, with improved water quality
readings also recorded.
58
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
2022 Freshwater use intensity
(L/Kg)
GPN
1.032
GN
Specialty
GN Dairy
Glanbia
Total
4.978
3.602
3.585
2022 Water use and discharge
(Million litres)
9,031
5,382
5,313
Freshwater use Polished water Water discharge
Reduction target
500 million
litres per annum by 2025
Glanbia returns
more treated
water to the
environment
than it draws
as freshwater
Waste
Targets:
Overall waste target
upgraded to achieving
TRUE zero waste
certification by 2025
Target 50% reduction in
food waste by 2030 vs
2021 baseline
Our actions and impact
To help lower our environmental impact,
we are focused on a more circular
approach that recovers resources for
re-use within our business, or as an input
to another system. Our initial waste
target was zero waste to landfill, but we
have upgraded this to achieve TRUE zero
waste certification Group-wide by 2025.
This international externally validated
certification focuses primarily on waste
prevention and reduction and ultimately
diverting the remainder away from
landfill. Our TRUE Zero Waste
commitment includes a goal to divert at
least 90% of each site’s non-preventable
waste from landfill and incineration.
We are also focused on a 50% reduction
in food waste by 2030. A significant
proportion of our food waste (70%) is
recovered for animal feed use, however,
our teams are focused on preventing
food waste in our operations including
ingredient and finished product inventory.
In 2022 we established a waste leadership
team to deliver TRUE certification,
manage data reporting needs, and
develop our food waste strategy.
70% of food waste
is now recycled to
animal feed
2022 Waste diverted from
landfill and incineration (%)
87
90
88
65
GPN
GN Dairy GN Specialty
Total
2022 Food waste recovery (%)
Consumer packaging
Target:
100% recyclable, reusable or compostable
consumer packaging by 2030
Animal feed 70%
Anaerobic digestion 22%
Recycling 7%
Other 1%
Our actions and impact
Our target for consumer packaging is to
ensure that 100% is designed to be fully
recyclable, reusable or compostable by
the end of 2030. This is an area of major
focus for GPN, which includes
collaborating with industry partners on
sustainable packaging options that align
to the recycling infrastructure capabilities
in the markets that we operate in.
As part of this collaboration, GPN has
committed to meeting How2Recycle and
On-Pack Recycling Label schemes in the
US and UK respectively that will result in
addition of on-pack recycling guidance
for our consumers to recycle packaging
correctly.
In addition to our work to redesign our
packaging for recyclability, we are
evaluating opportunities to reduce the
amount of virgin plastic we use along
with incorporating more recycled plastic
in our packaging.
With 2021 serving as baseline year for
global packaging procurement,
recyclability assessments were
completed in 2022 resulting in base
recyclability rate of 62% for all packaging.
From this, GPN leadership has committed
to a milestone target of 83% by end of
2025 with the 2030 target being 100%.
GPN packaging recyclability rates (% by weight)
Target recyclability rate:
2022
Actual:
62%
2025
Target:
83%
2030
Target:
100%
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
59
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Sustainability continued
Society
Society
Responsible sourcing
Food safety and quality
Our Global Procurement Policy was updated to include
responsible procurement requirements and ethical provisions
which are included in our standard terms and conditions. In
growing our procurement teams’ understanding, we partnered
with The Chartered Institute of Procurement and Supply ("CIPS")
to provide an ethical procurement and supply course across
ESG topics.
Glanbia’s procurement teams work closely with key stakeholders
to manage activities in the areas of supplier selection, contract
negotiation and supplier performance. Under the policy,
procurement teams are required to apply responsible sourcing
criteria to our selection decisions and requires all suppliers to be
compliant with laws, regulations and social customs for the
countries they operate in and to comply fully with all human
rights, labour, food safety, environment and health and safety
regulations. The policy governs Glanbia’s ‘Supplier Process’ which
suppliers must go through before they can become available to
purchase from, through Glanbia’s procurement systems.
Glanbia has partnered with EcoVadis since 2021, a global trusted
provider of business sustainability ratings. We have carried out a
risk assessment exercise on our supplier base using the EcoVadis
IQ module. This involved risk-profiling our suppliers across four
sustainability risk themes, including environmental, labour and
human rights, ethics and procurement, in the context of the
industry and country of the respective suppliers. This analysis
enables us to prioritise the suppliers that require a more in-depth
assessment using the EcoVadis Platform.
The Quality Leadership Team ("QLT") remains Glanbia’s centre of
excellence and food safety and quality expert network. All
manufacturing sites hold an externally recognised food safety
certification, such as those recognised by the Global Food Safety
Initiative ("GFSI").
The Glanbia Quality System ("GQS") – our internal code of
practice aims to provide in-depth technical criteria to augment
GFSI requirements, and rate capability using both internal and
verification auditing. To further leverage these tools, in 2022 we
rolled out an ‘internal benchmarking’ protocol that aligns each
site’s GQS results, along with third party auditing performance,
and incident management practices to prioritise and rank site
action planning.
The overall GQS programme (and Infant Nutrition Food Safety
standards) were thoroughly reviewed in 2022 by an external expert
and considered a ‘best practice approach’ to food safety systems.
Other focus areas, during 2022, included updating and
reassessing our Mergers and Acquisition and Contract
Manufacturing GQS standards, with action plans developed to
address any areas of opportunity identified in 2023.
In 2023, the QLT’s focus will remain on continuous improvement
of processes and procedures in line with industry best practice.
This includes an independent regulatory capability assessment
and benchmarking review to assure readiness for reporting
expectations, including under the Global Reporting Initiative.
C A S E S T U D Y
Laboratory excellence
Glanbia’s extensive expertise in
quality control laboratories (lab)
and testing capabilities is a
differentiator for our customers
and reflects our leadership in
quality and food safety.
After a successful lab expansion
project in 2021 at the Aurora 948
facility, Chicago, Illinois, the full
lab performance and expanded
capabilities were rolled out in
2022 under the Lab Excellence
programme.
The Aurora site conducts over
6,000 routine quality tests per
month to assure product label,
nutritional and food safety
standards are met. Further, the
lab conducts specialised testing
in contaminants, restricted
substances and advanced
sensory analytical methods.
As well as this, GN initiated a
central lab project in Idaho to
service our GN dairy facilities.
The GN central lab in Twin Falls,
Idaho will be up and running in
Q2 of 2023. The lab will have the
capacity to process over 30,000
tests per month across our dairy,
whey and specialty products and
is planning ISO certification for a
full microbiological suite of
testing.
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GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Community
Supporting our communities
around the world
We aim to strengthen the communities in
which we live and work by providing safe and
inclusive workplaces; by building sustainable
supply chains; and by delivering programmes
to support health, wellbeing and better
nutrition in our local communities.
Glanbia supported the humanitarian work of
the International Committee of the Red Cross
in Ukraine this year, contributing more than
€130,000 through a combination of company
and employee donations.
Combatting food insecurity
In North America, Glanbia supported relief
efforts in regions impacted by Hurricane Ian
through our Glanbia Performance Nutrition
("GPN") business by donating $50,000 to
Feeding Florida, which provides state-wide
hunger relief. GPN also supported the Northern
Illinois Food Bank across a range of initiatives
this year including volunteering and other
contributions.
Glanbia Nutritionals ("GN") in Twin Falls, Idaho
hosted its 29th Annual Charity Challenge golf
tournament, raising $200,000 for local
organisations, ranging from food banks to
community resource centres. In keeping with
our value of ‘Showing Respect’, Glanbia has
facilitated the donation of $2.9 million to
organisations in southern Idaho in recent
years. GN also partnered with non-profit
Bigger Table to help fight food insecurity in the
Chicago area by donating ingredients to
create nutrient-rich products to support local
food banks.
C A S E S T U D Y
Breast cancer research
Glanbia continued its partnership with Breast Cancer
Ireland ("BCI") in 2022, sponsoring the Great Pink Run
which raised over €575k for BCI’s pioneering research
into metastatic breast cancer and their educational
and awareness programmes. Over €6m has been
raised by the Great Pink Run over the last number of
years, which has helped support pioneering treatments
for breast cancer in Ireland and in North America via
the Ludwig Breast Cancer Research Centre at the
University of Chicago.
Glanbia employee Jacinta Power and family members Pippa Cass and Courtney Cass participated
in the Great Pink Run in Kilkenny.
Below: Glanbia Nutritionals team members at the annual Charity
Golf Challenge in Twin Falls, Idaho.
C A S E S T U D Y
GPN’s Sports Nutrition School
In 2011, GPN introduced Sports Nutrition School ("SNS"),
an industry-leading educational programme designed
to immerse participants in the world of performance
nutrition, lifestyle nutrition and weight management.
Today, SNS is a globally-recognised programme with
participation from Glanbia teams, customers, retailers,
and distributors. In 2022, SNS launched the first-ever
virtual regional SNS in India, returned to live SNS at GPN
Chicago and delivered the first-ever live SNS in
Santiago, Chile. GPN also offers SNS Advanced
Training, a continuing education platform supporting
nutritionists, athletes, personal trainers, as well as
influencers, agencies and more.
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
61
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Sustainability continued
Task Force on Climate-related Financial Disclosures Report
Task Force on Climate-Related
Financial Disclosures Report
Glanbia is committed to achieving our climate change ambition and playing our part in
sustaining our earth. As outlined on page 64 we have identified and assessed our climate-
related risks and opportunities ("CROs") and continue to monitor and embed the identified
impacts within our governance, operations and strategic model and risk management system.
This statement pertains to the parts of the business over which
Glanbia has operational control. This includes the Group’s
wholly-owned operations as well as the MWC-Southwest
Holdings LLC joint venture operations where Glanbia plc has
authority to introduce and implement operating policies in
accordance with our sustainability strategy, as well as those
operations related to our supply chain footprint.
Glanbia has complied with all of the requirements of LR 9.8.6R by
including climate-related financial disclosures in this section
(and in the information available at the locations referenced
therein) consistent with the Task Force on Climate-related
Financial Disclosures ("TCFD") recommendations. Refer to page
156 for the TCFD Disclosure Index table.
Governance
Please refer to the ESG Committee Report, page 113 for details of
how the Board, its respective committees and Group
management embed climate change and related topics into our
governance, risk management and strategic structures.
Chaired by the Group Chairman, the Board has appointed an
ESG Committee to oversee execution of our ESG strategy
agenda, refer to page 113 which outlines the key activities of the
Committee, including reviewing updates from management
responsible for aligning processes and disclosures with the TCFD
recommendations. All Board members undertook dedicated ESG
training during 2022, which focused on environmental impacts,
including climate change.
Board oversight of CROs
The Board is responsible for the oversight of all Group activities
that ensure the long term sustainability of our business, and
therefore considers all risks and opportunities including the
impact of climate change.
A number of key activities and significant decisions were made
by the Board during 2022, where climate change was taken into
account including the review and approval of:
• the Group strategic plan for the years 2023-2025, reflecting
assessment of opportunities against all external factors
including environmental considerations.
• the revision of our scope 1 and 2 emissions reduction target
•
upwards to 50% by 2030 from a 2018 base.
listing of potential capital projects to improve operational
efficiencies and reduce on-site carbon emissions (Scope 1).
• renewable electricity procurement plan (Scope 2).
• LTIP metrics which incorporate renewable energy targets.
• Glanbia’s 2022 ESG material impacts assessment which
reflects climate change as a priority for our key stakeholders.
• the Group Risk Register, where climate change is categorised
as a primary risk.
62
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Management’s role in assessing and managing CROs
The Group Managing Director and Executive team are
responsible, under Board direction, for the execution and delivery
of the Group’s strategic plans, overseeing the delivery of the
Group’s investment ambition and the realisation of commercial
opportunities. Management report monthly to the Board through
a monthly Board Report, supported by formal Board and
strategy meetings, on all matters relating to the performance of
the Group including climate change matters.
The Chief ESG and Corporate Affairs Officer, supported by a
dedicated leadership team and business unit resources, holds
responsibility for the delivery of the Group’s ESG strategy, key
policies and commitments. This is achieved by providing
oversight, coordination and management of ESG commitments
and activities, with regular progress updates provided to the
Group Operating Executive and ESG Committee. These include:
• updates on performance against stated targets.
• results of our 2022 TCFD financial quantification analysis.
• progress made on approved initiatives to support delivery of
our decarbonisation transition plan.
• presentation of the Sustainability Risk Register, incorporating
all CROs identified.
Strategy
In 2021, we engaged the Carbon Trust, a global climate consultancy,
to assist the Group in analysing the possible CROs which may be
faced by the business. The identified CROs were prioritised by their
likelihood, velocity, and estimated financial materiality (prior to the
consideration of any mitigation measures). This allowed us to better
understand the potential impacts from physical climate change risks
and possible risks and opportunities associated with the transition to
a decarbonised economy. In 2022, Glanbia again partnered with the
Carbon Trust, and drawing on climate science and scenario data, we
assessed in greater detail the potential impact that Glanbia’s top
CROs could have on our business, operations and strategy.
Two scenarios were considered for each CRO: current policies
and a stress scenario: current policies relate to the Network for
Greening the Financial System ("NGFS") scenario projections,
where the world does not take any further action than what has
been already stated and planned for implementation.
For transition risks, the stress scenario used in the analysis relate
to an ambitious low-carbon transition. Where available, the analysis
prioritised scenarios aligned with a Net Zero or 1.5°C target, while
well-below 2°C or 2°C aligned scenarios were used when scenario
data around more ambitious pathways were not available. For
physical risks, the stress scenario is based on high-emissions
scenarios associated with significant increases in temperatures,
aligned with the Shared Socio-economic Pathway SSP5-8.5.
A detailed modelling approach was used to quantify the financial
implications of the identified CROs on Glanbia’s operations and
wider value chain. Transition risks and opportunities were modelled
in line with a 2022-2030 timeframe, while physical risks were
modelled until 2050, due to the longer-term impact of these CROs.
The output of this analysis provides an assessment of the nature and
potential scale of Glanbia’s most relevant CROs. This assessment
outlines any potential risk hotspots; evaluates our business readiness
to respond to these risks; identifies how we can capitalise on potential
opportunities; and reviews current strategy and business continuity
plans against a set of defined scenarios. As the underlying
assumptions and methodology are further refined and matured, we
will consider if disclosing additional detail on the quantification work
undertaken would add value to our stakeholders.
Risks under a two-degree scenario
Under current policies and a transition scenario, Glanbia is largely
protected against climate-related risks that may impact the value
chain, due to its market position, business partnerships, contractual
relationships, as well as existing and planned mitigation actions.
Alignment with, and delivery of, science-based targets across
Scopes 1, 2, and 3 is considered a key mitigant against the impact
of the transition risks identified, including risks associated with
potential dairy market decline and changing consumer
preferences. The underlying assumption is that changes in
demand driven by sustainability concerns can be mitigated if
Glanbia (and its value chain) can successfully align with a
decarbonisation trajectory that is considered compatible with the
goals set out by the Paris Agreement.
While some transition opportunities are still likely to materialise
under a four degree scenario, the high likelihood of carbon credit
prices increasing would render propositions such as the creation
and sale of credits from the generation and use of biogas more
attractive by leveraging Glanbia’s supply chain.
Having assessed the identified CROs, including climate scenario
analysis to understand their potential future impacts, we do not
believe that there are any significant adjustments to this year’s
financial statements. We will continue to monitor the identified
CROs and we will adjust our financial position and performance
in line with accounting standards, should the need arise. We have
considered our commitments under SBTi, and the proposed
Scope 1 and 2 transition plan to achieve the required reductions
up to 2030 and concluded that these plans do not require
reflection in the financial statements at this time.
Risk management
The Audit Committee is responsible for providing structured and
systematic oversight of the Group’s risk management and
internal control systems. The Group operates a bottom up and
top-down assessment process which facilitates the identification
and evaluation of risks, as well as assessing how the risks are
monitored, managed and mitigated, referred to as our Group
Risk Management Framework. This process is coordinated by
Group Internal Audit, including the consolidation and
presentation of the material and trending risks to the Group
Operating Executive, Audit Committee and Board on a twice
yearly basis. This process is described in detail on pages 67-70.
The residual risks (i.e., after taking into account mitigation actions)
identified for this area mostly relate to:
1) the uncertainty around the level of ambition required for
decarbonisation targets to be effective at influencing consumers
perception of the overall sustainability of the dairy sector; and
2) the success of the on-farm decarbonisation plan which is
dependent on cooperation and engagement from our dairy
supply partners.
For the risks that have a direct operational cost impact such as
direct and indirect carbon taxes, increasing energy prices and
sustainable trends in packaging, after consideration of the output
from this quantitative analysis, the potential financial impact is
expected to be mitigated through improving resource efficiency
at the production and distribution level, cost pass through and
fulfilment of our stated packaging and carbon emission targets.
Process for identifying and assessing climate risk
Climate change is identified as a principal risk to Glanbia. This
risk includes output from the TCFD CRO identification and
prioritisation process (likelihood and velocity) and financial
quantification assessment (materiality). Key outputs of this
process are summarised within this report on page 64, and
assessed through the Group Risk Register process (pages 67-73).
The register includes the estimated likelihood, velocity and
financial materiality of each CRO assessed, and also documents
the identified Group-wide controls and actions to mitigate
against the respective risks to evaluate the potential residual
impact encompassing both transition and physical risks. These
risks are consolidated as one principal risk ’Climate Change’
within the Group Risk Register. Page 65 further outlines our
resilience and strategic response to the individual risks identified.
Risks under a greater than four-degree scenario
The impact of climate-related physical risks may also become
increasingly evident and more substantial in the longer-term,
especially if global actions fail to contain global temperature
increases to within 2°C. In these physical risk scenarios, long-term
shifts in climate patterns and increased occurrence of extreme
weather events may have a significant impact on the dairy supply
chain. As a Group, we recognise this requires close monitoring to
ensure existing mitigation factors remain viable, and that our
strategic and operational plans remain alert to the challenges
associated with such risks.
The table on the next page summarises the material climate risk
themes reviewed as part of financial quantification analysis, with
the expected time horizon and value chain impact outlined.
Opportunities under two and greater than four-degree scenarios
Potential opportunities were identified in both the two and
four-degree scenarios. Under a two-degree scenario opportunities
include; investment in operational and dairy decarbonisation,
access to low carbon markets and product diversification.
CRO risk measurement metrics and targets
To support Glanbia in measuring our exposure to the risks
identified and modelled, tailored risk measurement metrics were
developed as part of the project with the Carbon Trust. These
were developed with direct input from the relevant Glanbia
subject matter experts with a view to supporting central and
operational oversight and monitoring the CROs going forward.
Metrics and targets
In 2022, supported by a transition plan, we enhanced our Scope 1
and 2 emissions reduction ambition in line with calls to limit global
average temperature increase to 1.5 degrees Celsius, as set out by
the Paris Agreement. In support of our climate objectives, we also
have a number of associated targets which contribute to our
overall goals including meeting key elements of our transition
plan; to progressively shift towards 100% renewable energy
procurement (Scope 2) by 2030 and reduce on-site emissions
(Scope 1) through operational efficiencies and capital investment.
Refer to pages 56-59 for more information on the Group’s targets
and progress to date, and page 65 which outlines how these
metrics form part of our strategic response to the CROs identified.
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
63
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Sustainability continued
Task Force on Climate-related Financial Disclosures Report continued
Climate risk description
Glanbia assessment
Potential risk
impact to Glanbia
prior to mitigation
Mitigations considered as
part of strategic planning
and risk management
Business
readiness
assessment
Climate risk theme
Dairy market decline – impact of end
consumers/customers reducing dairy
consumption to:
Decrease their carbon footprint; and
Align with their own science based
targets
Time
horizon
Medium
Direct value
chain impact
Dairy value
chain – raw
materials
production
sales
Climate regulation on dairy – impact of
stricter regulation of on-farm methane
emissions.
Short,
Medium
Dairy value
chain – raw
materials
Short,
Medium
Short,
Medium
Medium
Raw materials
– distributions
Product
– distributions
Production
Production
Sales
Long
Dairy value
chain – raw
materials
s
k
s
i
R
n
o
i
t
i
s
n
a
r
T
k
s
i
R
l
a
c
i
s
y
h
P
Direct and indirect carbon taxes –
a direct increase in the cost of fuel due
to the implementation of a price on
carbon, or indirectly through phase out
of fossil fuel subsidies.
Increasing energy prices – (natural gas,
biogas, and electricity) due to
regulatory and market changes.
Sustainable trends in packaging
– increase in demand for sustainable
packaging alternatives (secondary
plastics) and the subsequent increase
in packaging procurement costs.
Effect of temperature increases
(both acute and chronic) on key aspects
of Glanbia’s supply chain including
negatively impacting dairy productivity,
milk yields and crop yields, potentially
impacting supplier margins and milk
price.
Water scarcity – increasing water
scarcity caused by droughts, increased
temperatures, heatwaves, and water
demand resulting in increasing water
prices.
Potential
changes in
consumer
preferences,
impacting
revenue
Increased
operating
costs due to
increasing raw
material costs
Increased
operating
costs
Increased
operating
costs
Increased
operating
costs
Increased
operating
costs due to
increasing raw
material costs
Short,
Medium
Production
Increased
operating
costs
Monitored
In plan
In plan
Monitored
In plan
In plan
Monitored
In plan
Time horizon
Period
Short
Up to 3 Years
Medium
From three to 10 years
Long
Beyond 10 years
Business readiness
Impact description
Aligned with our business strategy cycle where we develop detailed financial
projections and use them to manage performance.
Nearer term to primarily capture transition risks and opportunities, embedded
within our sustainability strategy.
Greatest level of uncertainty associated with these CROs, primarily linked
to the physical risks identified.
Related response to risk has been built into Glanbia’s strategic plan, with a view to operationalise based on output of
relevant scoping and feasibility assessments.
Recognition that associated risks may require action but currently based on level of uncertainty being monitored with
a view to incorporating into our strategic plan where appropriate.
In plan
Monitored
64
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Resilience and strategic response
Glanbia acknowledges that there are challenges associated with climate change but equally we see great opportunities to build efficiencies
and cost savings through our capital decarbonisation and process improvement plans. As a Group we have robust innovative business models
and expertise, we pride ourselves in our agility to meet the varied nutritional needs of our customers and consumers. Our market insight
teams anticipate and monitor ever changing market trends, through the development of new branded products and ingredients. For
example, in response to these trends we have developed a number of new products such as Gold Standard 100% plant protein powder.
We recognise potential investment opportunities which will support our climate change agenda and provide additional revenue streams. This
includes development of future consumer brands and ingredient solutions, investment in operational and supply chain decarbonisation and
access to low carbon markets. For example, the use of anaerobic digesters at Glanbia’s sites can generate biogas and reduce methane
emissions from Glanbia’s operations. In this transition phase, these potential strategic investments and opportunities analysed are dependent
on feasibility studies of technological, operational and commercial suitability for Glanbia and are under consideration as part of our medium to
longer term strategy, with a similar estimated time horizon impact. We continue to monitor the resilience of the organisation with due regard
for the CROs that the business faces. The table below outlines our strategic responses in dealing with these.
Resilience
and
strategic
response
Action
Brand portfolio/
loyal customer
Strong brand
portfolio with a
loyal customer
base, offering
a range of
ingredient
choices
Closely monitor
consumer
preferences and
consumption
trends
Dedicated
consumer
insights and
analytics team
Informs our
strategy and
innovation focus
Capital investment
opportunities
Dairy
partnership
Carbon
emissions
Innovation/ R&D
Proven R&D
and innovation
capabilities
Climate change
impact
incorporated
into investment
assessment criteria
16 dedicated
innovation/ R&D
facilities
Pipeline of
innovation
products and
packaging
solutions –
key input into
strategy process
Annual formal
review of results
and approval
by the Board of
both Business
Units innovation/
R&D strategy
and pipeline
Due diligence
assessment of
all potential
acquisitions and
capital expansions
– evaluating carbon
emission impact
Commitment
to reduce our
emissions through
low energy
technologies
Capital projects
identified to date to
reduce Scope 1 and
2 emissions deliver
on Group
investment hurdle
rates
Hold a strong and
valued partnership
with our dairy
suppliers
Joint venture
business model that
largely protects
business profitability
Active role in
supporting US
Dairy’s Net Zero
ambition and the
Global Dairy
Platform’s pathways
to Dairy Net Zero
Active members of
initiatives which aim
to support our supply
base including
preparedness for
regulation relating
to climate change
Dedicated farm
relationship team
to support our dairy
suppliers and ensure
supply security
SBTi validated
targets across
Scopes 1, 2 and 3
Operational plan
in place to ensure
support to on-site
decarbonisation
pathway plan
On site feasibility
studies underway
relating to on-site
generation,
primarily solar
Development of
renewable energy
procurement plan
Partnering with
dairy suppliers on
Scope 3 emissions
reductions
Environment
Stated targets
and externally
accredited
programmes in
place across core
environment pillars
of Water, Waste
and Packaging
Water risk
assessments and
freshwater
reductions
Polished water
optimisation
Adoption of
TRUE Zero Waste
Certification as the
standard for our
facilities
Packaging
recyclability
aligned to
externally
recognised criteria
– How2Recyle and
The on Pack
Recycling Label
Further
details
Pages 26-43
Pages 28-30,
38-42
Page 56
Page 57
Pages 56-57
Pages 58-89
Focus for 2023
We are committed to building on the progress made in 2022 on our climate impact. In 2022, to support our revised Scope 1 and 2 carbon
emissions reduction target, we mapped out a transition plan to meet this target, refer to page 56 for further details. A key focus for 2023
will be to complete the required scoping and feasibility assessment to fulfil this transition plan, in order to remain on track to comply
with our commitments. In 2023 we will accelerate the modelling work to develop a comprehensive roadmap to reduce Scope 3 emissions
to meet our stated target.
We recognise the deep and intricate connections between food systems and the planet’s health, as well as the impact of a changing
climate for our own future. Glanbia is committed to further embedding the appropriate mitigating actions within our strategy and risk
management process. We will continue to address the assessed material climate-related risks, ensuring we build out our existing metrics
further to monitor and assess those risks and focus on maximising the climate-related opportunities within our business model.
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
65
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Sustainability continued
Governance
Governance
To embed our approach, Glanbia’s ESG focus reaches from the Board through the Group Operating Executive and ESG Centre of Excellence
into all aspects of the business through specialists and cross functional teams and workstreams. This approach provides oversight, and
balances the focus on programme delivery, required due diligence procedures and increased reporting and disclosure obligations.
See more on pages 95 and 112.
At Glanbia, we are committed to conducting business in the right way, complying with the law and working responsibly. Glanbia
updated and recommunicated a number of our core governance policies during 2022. This included the Code of Conduct, Supplier Code
of Conduct and Anti-bribery and Corruption policy. The Group has a zero-tolerance approach to bribery or any form of corrupt practices
and actively encourages all workers and third parties to speak up through our dedicated whistleblowing line if they have any concerns.
See more on pages 103 and 107.
Glanbia complies with the European Union (Disclosure of Non-Financial and Diversity information by certain large undertakings and
groups) Regulations 2017. The table below is designed to help stakeholders navigate to the relevant sections in this Annual Report to
understand the Group’s approach to these non-financial risks. Many of our policies can be viewed on www.glanbia.com.
Reporting requirement
Policies and standards which govern our approach
Risk management and additional information
Environmental
matters
• Environmental policy
• Supply chain and responsible sourcing and
on-farm sustainability
• Animal welfare policy
• Environment section – pages 50-59
• Responsible sourcing – page 60
• ESG Committee report – pages 110-113
• Task Force on Climate-related Financial Disclosures (TCFD)
Report – pages 62-65
• Risk management – pages 67-73
Employee matters
• Culture and engagement
• Group code of conduct
• Whistleblowing policy
• Diversity, equity and inclusion policy
• Health & safety policy
• Employee engagement survey – pages 20-21 and 52-53
• Whistleblowing and fraud – page 107
• UK Corporate Governance Code – pages 82 and 102
• Diversity, equity and inclusion – page 22
• Health and safety – page 23
Social matters
• Education initiatives
• Community support
• Food safety & quality policy
• GPN sports nutrition school – page 61
• Community and charity support – page 61
• Food safety and quality – page 60
Human rights
• Anti-slavery and human trafficking statement
• Supplier code of conduct
• Human rights policy
• See page 60 and our policies can be viewed on
www.glanbia.com/about/corporate-governance/our-policies
Anti-bribery and
corruption
• Group code of conduct
• Anti-bribery and corruption policy
• See page 107 and our policies can be viewed on
www.glanbia.com/about/corporate-governance/our-policies
Description of principal risks and impact of business activity
• Principal risks and uncertainties – pages 72-77
Description of the business model
• Business model – pages 12-13
Non-financial key performance indicators (KPIs)
• Key performance indicators – page 19
Consolidated disclosures pursuant to Article 8 Taxonomy Regulation
Following consideration of the ‘EU Taxonomy Compass’, and detailed review of the economic activities’ descriptions and
NACE code definitions as referenced within the “EU Taxonomy Climate Delegated Act (Delegated Act)”, the Group concludes
that our core economic activities of food processing and manufacturing are not included within the Delegated Act and
consequently are Taxonomy non-eligible.
Refer to pages 146 to 155 for Glanbia’s consolidated disclosure in accordance with “Article 8 Taxonomy Regulation” and Art.
10 (2) of the Art. 8 Delegated Act (Disclosures Delegated Act).
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GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Risk management
Managing risk volatility and the
impacts to our strategic objectives
Managing our risks
Volatility continues to be a core theme with the global
macroeconomic environment, geopolitical tensions and ongoing
inflationary impacts affecting multiple geographic regions with
varying levels of severity. The ongoing war in Ukraine has driven
up energy prices and impacted supply, aggravating inflationary
pressures at a time when the cost of living was already rising
rapidly around the world due in part to the lingering impacts of
the Covid-19 pandemic. While consumption trends remain
resilient following the pricing actions taken in response to the
inflationary impacts, the Group remains vigilant to the volatile
external environment.
Covid-19 and general macroeconomic environment
The impacts of Covid-19, the ongoing war in Ukraine and the
general macroeconomic conditions on the business are explained
in various sections of the Strategic Report and consequently the
narrative included in the Group Managing Director’s Review, Group
Finance Director’s Review and Operations Review updates should
be read in conjunction with the below disclosures to provide an
overall understanding of the risks, economic uncertainties and
challenges which will continue in 2023.
The Covid-19 pandemic is not over yet but its economic impacts
have continued to lessen during the year as the public health
situation improves due to rising vaccination rates and improved
Covid-19 treatments. The Group will continue to focus on strict
compliance with safety policies for our frontline workers, the
effective execution of our smart working hybrid model for
office-based employees and the continued monitoring of our risk
environment for any significant changes that may impact the
delivery of the Group’s strategic objectives.
Our risk management framework
The Group encounters risk every day in the pursuit of its strategic
priorities. Our risk management framework is designed to ensure
that risk management is embedded into our culture, policies and
practices. There is input across all levels of the business to enable
the Group to remain responsive to the ever-changing operating
environment, including the consequences of the ongoing war in
Ukraine, geopolitical tension, climate change, the general
macroeconomic conditions, rising energy and interest costs,
inflationary pressures together with the residual impacts of
Covid-19, which are factors in almost all risks to some extent. An
overview of the Group’s risk management and internal control
framework is outlined in the diagram below.
Top
Down
Risk
Board underpinned by:
Our Purpose
Our Values
Our Code
Our Strategic Priorities
Lead and grow
the core
Optimise our
business
Disciplined
financial
management
Oversight
Identification
Assessment
Mitigation
Including the
identification
and mitigation
of emerging
risks
Governance supported through:
Audit
Committee
ESG
Committee
Group
Operating
Executive
Group Internal
Audit
Senior Leadership Team driven by:
Risk
awareness
Risk
ownership
Risk
monitoring
Risk
reporting
Oversight
Identification
Assessment
Mitigation
At Business
Unit and Group
functional level
Including the
identification
and mitigation
of emerging
risks
Bottom
Up
Risk
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
67
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Risk management continued
Risk oversight
Board of Directors
The Board has overall responsibility for determining the nature
and extent of the significant risks it is willing to take in achieving
the Group’s strategic objectives and for setting the Group’s risk
appetite. The Board has an overarching Group risk appetite
statement in place and has reviewed the individual risk appetite
statements related to the Group’s principal risks. These risk
appetite statements seek to implement a balanced approach to
risk, embracing risk in areas in which management has the
appropriate skills, knowledge and experience to take advantage
of the opportunities presented, whilst limiting risk in other areas.
As part of the annual Group strategy process, the Board
conducted a detailed assessment of the impact of the Group’s
principal risks, including emerging risks. This was designed to
ensure that the Board understands both the key risks existing
within the business and newly emerging risks, together with the
methods employed to manage these risks. The focus during such
reviews is to ensure that the Group’s residual risk position is
within the Group’s risk appetite. The Board and management use
the same process to assess and manage risks within our material
joint ventures as it does for the wholly-owned areas of the Group.
In 2022, we held board positions in all such entities.
The Board conducted a formal half-year and full-year review of
the risk register summary reports prepared by Group Internal
Audit to ensure that the Group’s principal risks and uncertainties,
as outlined on pages 72 to 77, effectively describe the nature and
extent of the Group’s principal risks. The Board is satisfied that its
risk management systems and internal control processes are
effective. However, as with all practices, a mindset of continuous
improvement is required. The Board also considered its
obligations in relation to the annual Going Concern and Long-
term Viability Statements. Its review and conclusions in this
regard are outlined on pages 70 and 71.
Audit Committee
The Audit Committee on behalf of the Board, has responsibility
for monitoring the Group’s systems of risk management and
internal control including the review of their effectiveness. In 2022
and early 2023, to ensure that appropriate measures are in place
to validate the strength of internal controls and risk mitigation
and to continue to develop a deeper awareness and insight into
the Group’s principal risks, the Audit Committee received
updates from senior executives and detailed presentations from
Group functional leads across Health and Safety, Food Safety
and Quality, Glanbia Business Services and IT, Legal, Financial
Reporting and Taxation. In addition to the detailed
considerations on climate related matters outlined in the
Environmental, Social and Governance (“ESG”) Committee
Report on pages 110 to 113, following the publication of the 2021
Annual Report, the Audit Committee also received three updates
in 2022 from the Group Financial Controller on current and
anticipated future ESG reporting obligations related to the Task
Force on Climate-related Financial Disclosures (“TCFD”), the EU
Taxonomy for sustainable activities, the EU Non-Financial
Reporting Directive (“NFRD”) Statement and the EU Climate
Sustainability Reporting Directive (“CSRD”). These presentations
typically provide the Committee with the opportunity to review
the Group’s risk appetite statements in relation to the principal
and emerging risks being examined. Proactive attention is also
given to key risks where the probability of occurrence and extent
of impact are elevated by the consequences of the ongoing war
in Ukraine and the deteriorating global economic outlook.
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GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Group Operating Executive
The Group Operating Executive forum as outlined in the
Corporate Governance Report on page 95 also acts as the Group
Risk Committee and supports the Audit Committee in the risk
management process through the ongoing monitoring of the risk
environment and the effectiveness of the controls in place. The
Group Operating Executive aims to ensure that the risk
management process supports the delivery of the Group’s
strategy by managing the risks impacting the Group’s ability to
achieve business objectives.
Environmental, Social and Governance (“ESG”) Committee
The ESG Committee supports the Group’s ongoing commitment
to environmental, corporate social responsibility and corporate
governance matters. The ESG Committee is responsible for
monitoring and reviewing current and emerging ESG trends,
relevant international standards and legislative requirements
and identifying how these are likely to impact the strategy,
operations, and reputation of the Group. The ESG Committee, in
conjunction with the Group Operating Executive, is also
responsible for assessing the effectiveness of the Group’s
policies, programmes, practices and systems for:
a) Identifying, managing and mitigating or eliminating ESG risks
and opportunities, as outlined on pages 72 and 73, in
connection with the Group’s operations and corporate
activity; and
b) Ensuring compliance with relevant legal and regulatory
requirements and industry standards and guidelines
applicable to ESG matters.
Risk reporting
Group Internal Audit (“GIA”)
GIA assists in the process by preparing regular Group summary
risk management reports based on information submitted by
management throughout the year. These reports include:
• An analysis of key Group risks in terms of impact (assessed
over the following 12 months within defined monetary terms),
likelihood of occurrence (using defined probabilities of
occurrence) and velocity (speed at which the impact of the risk
could materialise) with the climate related exceptions outlined
on pages 69 and 70;
• A summary of the key movements in the identified risks, with a
particular focus on highlighting new or emerging risks;
• A summary of management action plans (MAPs) to manage
potential significant risk exposures; and
• An overview of organisational, business and emerging risks.
The Audit Committee and Board perform bi-annual reviews of
these reports, with interim updates received from management
as required.
Group Senior Leadership Team (“SLT”)
The identification of risk is based on a Group-wide approach.
The management team of each business segment and the Group
functional leads are required to maintain and submit a risk
register. The register ensures consistency of approach in the
reporting of risks in accordance with Group defined guidelines.
By focusing our risk management system on the early
identification of new or emerging risks, it enables us to conduct
a detailed assessment of the existing level of mitigation and the
management actions required to either reduce or remove the
risk. Where the removal or reduction of the risk is not possible,
the Group formulates management action plans to respond to
the risk, should the risk materialise.
The quality and consistency of SLT risk reporting is supported by
a number of other monitoring and reporting processes including:
• Group strategy process and Board review of financial and
operational performance, including detailed finance, capex
planning and expenditure reviews;
• KPI tracking of health and safety and environmental reporting
within the Group’s environmental management system;
• Bi-annual control self-assessment and management
representation letter processes;
• Post-acquisition completion and Capex project reviews;
• Risk-focused GIA plan; and
• The externally assessed Glanbia Risk Management System
(“GRMS”) reviews which assess operational risks across the
Group and the internal Glanbia Quality System reviews.
Risk categories
Our approach recognises the external risks associated with our
operating environment, which are typically considered and
managed through our strategic processes, and the primarily
internal risks associated with our people, processes and systems
which are managed through our internal controls. Emerging risks
with the potential to impact our longer-term success are also
considered to ensure that we plan appropriately to respond to
them over time.
Identifying our principal risks and uncertainties
The Directors have carried out a robust assessment of the
Group’s principal risks, including those that may threaten our
business model, future performance, solvency or liquidity. Key
risks are identified based on the likelihood of occurrence,
potential impact and velocity on the Group using the process
outlined on pages 67 to 69.
Risks are reported on a residual risk basis and represent a
snapshot of the Group’s principal risk profile. This is not an
exhaustive list of all the risks faced by the Group, there may be
other risks and uncertainties that are not yet considered material
or not yet known to us. This list will change if these risks assume
greater importance in the future. Likewise, some of the current
risks will drop off the key risks schedule as management actions
are implemented or changes in the operating environment occur.
The Board also fully recognises that many risks do not exist in
isolation and that one or more risks may crystallise at the same
time which could increase the impact to the Group. The
interactions and relationship between such risks are discussed
and considered by the Board throughout the year. In 2022, these
discussions included an in-depth consideration of the
consequences of the ongoing war in Ukraine, the general
macroeconomic environment including rising energy costs and
availability concerns, cost of living impacts including the
inflationary and interest rate environment, and climate change
risks. The outlook for Covid-19 is more optimistic as the public
health situation continues to improve together with the strength
and operating effectiveness of our internal controls implemented
for managing its impacts.
Principal risks and uncertainties
Changes to risks during the year
The Directors have considered the Group’s principal risks and
uncertainties and have determined that the risks and
uncertainties reported in Glanbia plc’s 2021 Annual Report remain
relevant, with no new principal risks identified. In our previous
disclosures, we explained how Covid-19 had wide-ranging
consequences on our principal risks and uncertainties and was not
presented as a single principal risk. This has not changed, and the
same approach has been taken in relation to the impacts of the
Russian invasion of Ukraine and the general macroeconomic
environment, with the consequences being captured in the
relevant principal risks rather than shown as a stand-alone item.
The fluctuation in risk trends that arose in 2022 include:
• Economic, industry and political, and supply chain risks
continue to trend upwards as the geopolitical risks and global
macroeconomic environment continue to be challenging,
creating headwinds across the business into 2023.
• The risk trend for market disruption risk increased from stable
to increasing during the year, due to the potential impacts to
demand from the rising cost of living which has been
intensified by continued inflationary pressures and rising
energy costs hitting household incomes.
• Climate change risk continues to trend upwards due to the
evolving landscape and expected future developments in ESG
regulations including the stricter regulation of on-farm
methane emissions, and the increasing stakeholder corporate
reporting expectations and the other climate change risks
disclosed in the TCFD Metrics and Targets disclosures on
pages 62 to 65.
• Cyber security and data protection, and talent management
risks continued to trend upwards due to continued existence of
risks in these areas at a global level.
The Group actively manages these and all other risks, inclusive of
emerging risks, through its risk management and internal control
processes.
Climate-related risks and opportunities
In line with the recommendations of the TCFD reporting
requirements, the Group has considered climate-related impacts
within the organisation under the pillars of Governance, Strategy,
Risk Management and Metrics and Targets as outlined on pages
62 to 65.
As detailed in our 2021 Annual Report, the Group engaged the
Carbon Trust, an independent sustainability consultant, to
conduct a comprehensive climate change risk assessment of the
parts of the business over which Glanbia has operational control.
The identified climate-related risks and opportunities (CROs)
were prioritised by their likelihood, velocity and estimated
financial materiality (prior to the consideration of any mitigation
measures). This allowed us to better understand the potential
impacts from physical climate change risks and the possible risks
associated with the transition to a decarbonised economy.
This year, Glanbia has again partnered with the Carbon Trust to
carry out further analysis and to assess in greater detail the
potential impact that Glanbia’s top CROs could have on our
business, operations, and strategy, drawing on climate science
and scenario data. Two scenarios were considered for each CRO,
Current Policy and a Stress Scenario. The material CRO themes
that were reviewed as part of the risk identification, prioritisation
and quantification analysis, with the expected time horizon and
direct value chain impact are outlined on pages 62 to 65 of the
TCFD Report.
In line with the Group’s risk management framework, the CROs
were assessed for likelihood, velocity and materiality (impact)
with the following threshold deviations:
• Velocity: The time horizon applied to velocity was short term
up to 3 years, medium term from three to 10 years and long
term beyond 10 years as opposed to the Group approved
thresholds which assess velocity as very rapid if the impact of
the risk is felt within 1 month, rapid if within 1 quarter and slow
if it extends beyond 1 quarter.
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
69
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Risk management continued
Risk trend
Increasing
Stable
Decreasing
Strategic/External
Technological
Operational/Regulatory
Financial
Mainly external risks associated
with our operating environment
The systems we use to drive the
business and the data they hold
The people and processes we use
to power our business model
Our financial status
and internal controls
Economic, Industry
and Political
Market disruption
Customer concentration
Climate change
Digital transformation
Cyber security and data
protection
Talent management
Health and safety
Supply chain
Product safety
and compliance
Acquisition/Integration
Taxation
changes
• Likelihood: Under the CRO assessment, this is based upon the
certainty of outcome across the different climate scenarios
analysed. Where there is a highly consistent outcome under all
scenarios, the relevant CRO is categorised with a higher
likelihood and conversely, where the outcome is only expected
under stress scenarios the CRO is categorised with a lower
likelihood. The standard Group approach to likelihood is
measured as a percentage of possible occurrence over a
three-year period in line with the Group’s strategic plan.
The Directors consider these deviations from the standard risk
framework to be acceptable given the nature of the specific risk.
The controls for this principal risk are aligned with our strategy
and regulatory framework requirements. They include controls
relating to governance, leadership and climate adaptation.
Climate change risks are also considered when assessing other
relevant risks including: Economic, Industry and Political; Market
Disruption and Acquisition/Integration. For example, this includes
involving the relevant internal functional experts when making
acquisition or capital investment decisions or impairment review
decisions where required.
Climate considerations were enhanced during the year through
the scenario analysis performed, as outlined on pages 62 to 65.
The Group concluded that climate change is not expected to
have a material impact on the viability of the Group in the current
year and summarised the material climate risk themes which will
require close monitoring going forward as outlined on pages 62
to 65. Glanbia has also a continuing engagement with the
Carbon Trust who provide technical expertise on the Group’s
carbon footprint mapping, and identification of key carbon
reduction projects. The Group plans to continue this work and
has committed to building on the progress achieved in 2022 in
relation to our climate impact.
Going concern
Glanbia’s business activities, together with the main factors likely
to affect its future development and performance, are described
in the Strategic Report on pages 1 to 77. After due consideration
and review, the Directors have a reasonable expectation that the
Group has adequate resources to continue in operational
existence for a period of at least 12 months from the date of
approval of the Financial Statements.
The Group therefore continues to adopt the going concern basis
of accounting in preparing its Financial Statements. In reaching
this conclusion the Directors have given due regard to:
• Available cash resources, cash generation from operations,
liquidity, borrowing facilities and related covenant
requirements which taken together, provide confidence that
Glanbia will be able to meet its obligations as they fall due.
Further information on the Group’s bank facilities, which were
successfully re-financed in December 2022, is provided in Note
25 to the Financial Statements and outlined in the Group
Finance Director’s review on pages 44 to 49;
• Glanbia’s financial risk management policies as described in
Note 30 to the Financial Statements, the nature of its business
activities and the factors likely to impact our operating
performance and future growth; and
• The lingering impact of the Covid-19 pandemic, the general
macroeconomic environment including inflation, rising energy
costs, high interest rates and the cost-of-living crisis
exacerbated by the ongoing war in Ukraine, geopolitical
tensions, climate change, the recoverability of trade
receivables, inventory and other assets.
Long-term viability statement
Assessment of prospects
In accordance with the Code and Listing Rule 6.1.82 (3) of
Euronext Dublin Listing Rules, the Directors have assessed the
viability of the Group and its ability to meet its liabilities as they
fall due over a period extending to 2025. This period was chosen
as it is aligned to the Group’s budget and strategy plans as
approved at the Board’s strategy review session in December
2022. The Board considers this the most appropriate period to
assess the Group’s prospects taking into account its current
financial position, the Group’s strategy and business model and
the potential impact arising from the principal risks and
uncertainties. Factors considered in assessing long-term
prospects include:
(a) The Group’s current position
• A team of talented and committed people, focused on the
delivery of Group targets in line with our Group purpose, vision
and values.
• Strong market positions in the wholly-owned segments GPN
and GN and robust joint venture business models.
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GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
• Global market trends in human nutrition continue to
strengthen and will underpin the execution of the Group’s
strategic ambition.
• Key long-term customer relationships, brands with strong
equity and leadership positions in ingredients.
• Our recent acquisition, Sterling Technology, is performing well.
• Completion of share buyback programmes of €173.5 million in
2022. These programmes support the Board’s confidence in
the strength of the Group’s financial position.
• Net debt at year end decreased by €143.3 million versus the
prior year, primarily due to the net impact of the Group’s
divestment and acquisition activity and the execution of the
Group’s share buyback programmes. The net debt to adjusted
EBITDA ratio remained low at 1.12 times with continuing strong
cash generation.
See the Finance Director’s review on pages 44 to 49 for more
detail.
(b) The Group’s strategy and business model
• The strategic agenda progressed with the completion of the
sale of the Company’s minority interest in Glanbia Ireland and
other planned divestments recently announced. The Group
continues to evolve as a focused, purpose-led global nutrition
company via its two growth platforms, Glanbia Performance
Nutrition (“GPN”) and Glanbia Nutritionals (“GN”), and through
strategic joint ventures.
• Clearly articulated business model with well-defined Group
growth targets focused on building GPN top line growth and
driving earnings to 2025 from GPN and Nutritional Solutions
(“NS”).
• Clear focus on and prioritisation of the development of talent
which remains central to our strategy as outlined in the
‘People’ section on pages 20 to 23.
• The Group continues to invest for growth, with all key strategic
capital expenditure projects on track and the acquisition of
Sterling Technology completed in March 2022.
• Customer demand has sustained in GPN following a number
of price increases to mitigate the impact of input cost
inflation.
• The successful implementation of price increases in GPN is
expected to continue to mitigate the impact of inflation during
2023.
• Solid progress against the stated environmental, social and
governance objectives as outlined in the ESG Committee
report on pages 110 to 113.
• Ambition to grow through both organic investment and
acquisition activity within a framework of clear capital
allocation priorities.
See the Group’s business model on pages 12 and 13 and strategy
on pages 14 to 17 for more detail.
(c) Principal risks related to the Group’s business
See pages 72 to 77 for a detailed description of each of the
Group’s principal risks, including climate change risk, related
mitigation measures and 2023 focus areas.
Assessment of viability
The Directors’ assessment of the Group’s viability has been made
with reference to the 2022 performance, the principal risks and
uncertainties including emerging risks facing the Group and how
these are managed within the Board’s risk appetite as detailed
on pages 72 to 77. The Directors carried out a robust assessment
of the consolidated financial forecast for the current year and
financial projections for future years to 2025 during its strategy
and budget review session in December 2022 with due
consideration to the actual and potential consequences of the
ongoing war in Ukraine, climate change risks and the general
macroeconomic environment particularly with respect to the
significant judgements and estimates made in the application of
its accounting policies.
The Board reviewed the assessment of the Group’s prospects
made by management, including:
• The development of a rigorous planning process, the outputs
of which are comprised of a strategic plan, a consolidated
financial forecast for the current year and financial
projections for future years covering the period of the plan;
• A comprehensive review of the strategic plan as part of its
annual strategy review, with regular monitoring of the
achievement of strategic objectives taking place at each
Board meeting;
• Assumptions are developed at both Group and Business Unit
levels and are subject to detailed examination, challenge and
sensitivity analysis by management and the Directors;
• A consideration of how the impact of one or more of the
principal risks and uncertainties, outlined on pages 72 to 77,
could materially impact the Group’s performance, solvency or
liquidity; and
• The impact of climate change on the Financial Statements as
outlined in Note 2. The assessment concluded that climate
change is not expected to have a material impact on the
viability of the Group in the current year. The material climate
risk themes which will require close monitoring in the medium
and long term are summarised on pages 64 and 65.
These considerations include external factors such as the
impacts of the expected high levels of inflation, increasing
interest rates and energy costs; lower economic growth and
geopolitical tension, particularly in our key areas of operation;
the potential impacts of Covid-19 on the Group; currency
exchange rate movements, principally the USD/euro rate;
increased regulations; and internal factors such as the strategic
plan under-delivering; the loss of a key production site; or a major
food safety or health and safety related event. These
considerations also took into account additional mitigating
measures available to the Group, including the ability to reduce
capital expenditure and the potential availability of additional
debt facilities. The Board is satisfied that sufficient financial
headroom exists to address the potential negative impacts
arising from the events considered.
Conclusions
Having considered these elements, the challenging global
economic outlook and the lingering Covid-19 related challenges
and impacts experienced in 2022, the Board assessed the
prospects and viability of the Group in accordance with the UK
Corporate Governance Code requirements.
The Board has a reasonable expectation that the Group will be
able to continue in operation and meet its liabilities as they fall
due over the period of the assessment. The Board does not
expect any reasonably anticipated Covid-19 outcome, ongoing
war in Ukraine, geopolitical tensions, climate change impacts or
general macroeconomic condition to impact the Group’s
long-term viability or ability to continue as a going concern. The
Board, in considering its dividend policy for the years to 2025,
believes it will have sufficient distributable reserves to pay
dividends. The Board assesses the Group’s key financial metrics,
liquidity position and projected cash flows before declaring
interim and proposing final dividends.
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
71
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Principal risks and uncertainties
Link to strategic priorities (see pages 14 to 17)
Lead and grow the core
Optimise our business
Disciplined financial management
Risk
Potential impact
Mitigation
Developments in 2022
2023 focus areas
Strategic/External
Economic, industry
and political
Our performance is influenced by global
economic conditions, consumer confidence
and the stability of the markets in which
we operate.
Deterioration in economic
growth or consumer confidence,
significant currency movements,
political instability, or civil
disturbance may impact
performance and the achievement
of growth targets.
The Board regularly assesses key market trends, the current economic
environment and the implications for Group performance and strategic
objectives. Our strategy is aimed at the continued expansion of our
geographic reach, focusing on key customer relationships and
investment in new product development which helps to protect the Group
from economic fluctuations and rapid changes in the external
environment.
The ongoing war between Russia
and Ukraine and continuing
tensions between China and
Taiwan may also negatively
impact performance.
The inability to continue to contain
the spread of global pandemics
such as Covid-19 which may create
a risk of business interruption.
Continued inflationary pressures
above expectations may disrupt
demand due to consumer price
elasticity.
Consumer spending habits have
altered as a result of a changed
way of working/living through the
pandemic.
Failing to recognise or obtain
accurate and relevant competitive
and environmental intelligence
may result in the adoption of
incorrect business strategies.
The loss or material disruption
with one or more of these
customers, or a significant
deterioration in commercial terms,
could have a material impact on
Group profitability.
Pricing risks associated with the
growth of the online channel.
Market disruption
Inflationary pressures may create further
headwinds for the business.
Increasing competition across certain
channels through high promotional activity,
competitor product innovation and channel
shifts provide an ongoing challenge.
Further waves of Covid-19 may disrupt the
ability of markets to remain open and delay
growth plans.
Customer concentration
The Group benefits from close
commercial relationships with
a number of key customers and adverse
changes could materially impact the Group.
Climate change
Failing to have an appropriate business
model in place to react to the CROs and
to achieve the Group’s vision of protecting
the environment through responsible
stewardship.
The risk of non-compliance
with regulations.
Changes in policy, regulation,
technologies and weather
conditions, may impact the Group
or influence consumer preferences.
Failure to comply with
environmental incident reporting
regulations may cause
reputational damage.
Covid-19 actions taken by governments in the countries in which we
operate continue to address the spread of the virus. The public health
situation continues to improve based on rising vaccination rates and
improved Covid-19 treatments.
Significant actions to mitigate cost inflation were implemented across a
range of initiatives including pricing, revenue growth management and
efficiency programmes.
The GPN team has invested in developing in-house capabilities to assess
market trends and to improve the accuracy and relevance of data
available to the Board and management to support decision making.
We invest in research and development expenditure focused on
value-added and customer-specific solutions and invest in promotional
activities where required.
GN focuses on differentiating its capabilities from competitors through
innovation to enable it to be the partner of choice for nutritional and
functional solutions across both the dairy and non-dairy segments.
The Group has developed strong relationships with major customers by
focusing on superior customer service, quality assurance and cost
competitiveness. There is a continued focus on new customer and
channel development opportunities.
Continued strong execution of the GN commercial team’s ‘one face to the
customer’ approach.
The Board regularly reviews its exposure, including credit exposure,
to individual customers and considers the impact of acquisitions
where relevant.
An ESG Board subcommittee is in place and a member of the Group
Operating Executive has responsibility for overseeing the delivery of the
Group’s agenda on environmental, sustainability and governance topics.
The Board recognises the scientific consensus that action is required to
address the impact of greenhouse gases on rising global temperatures
and has ensured that:
• A Board approved strategy is in place to accelerate our climate
change commitments, targeting decarbonisation in our operations
and supply chain and addressing our most material sustainability
focus areas.
• The Group-wide sustainability programme focuses on building a
strong culture, systems and governance model to oversee progress
and to ensure compliance with environmental incident reporting
regulations.
• Clearly defined Board approved KPIs and targets in place as outlined
on pages 56 to 59.
• We have expanded our climate change reporting to include the use of
the TCFD framework as outlined on pages 62 to 65.
We reinforced our clear environment strategy which is aligned to
science-based targets and other relevant benchmarks and continued our
focus on driving actions to achieve targets.
72
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
The macroeconomic environment faced headwinds particularly in relation to
The macroeconomic environment is uncertain, and it is possible some of our
cost inflation, global trade uncertainty and currency fluctuations which the
end markets may be in recession in the near term. This will remain under
Group will continue to navigate and mitigate where possible.
The successful progression of the GPN transformation objectives and the careful
management of price increases were required to address inflationary
where appropriate.
continued review throughout 2023 to ensure mitigating actions to combat
cost inflation and rising cost of living impacts are assessed and implemented
challenges. The impact of price increases will continue to be monitored for
Aside from the impact of the pandemic and inflationary concerns affecting
elasticity effects.
The business continued to remain resilient in managing the Covid-19 pandemic.
The Group maintained its focus on protecting employees, continuing food
supply, and maintaining our strong financial position, throughout the year.
the global economy, the geopolitical climate has also deteriorated with
continued significant concern over the ongoing conflict between Russia and
the Ukraine in particular, and with regard to the tension between China and
Taiwan. The Group will continue to monitor this closely where any potential
conflict, economic sanctions or trade rulings may impact the growth
objectives of the Group.
A strategic portfolio review was performed in 2022 resulting in divestment
The Group will monitor any adverse changes in economic conditions, such as
decisions around non-core assets as outlined in the Group Finance Director’s
the rising cost of living which has been intensified by continued inflationary,
review on pages 44 to 49.
The impact of increasing inflationary pressures, supply chain volatility and
interest rate and energy cost/availability pressures that could result in
reduced consumer spending which may disrupt demand.
labour shortages have been mitigated by price increases and this balance will
We will continue to invest in developing in-house capabilities to assess trends
continue to be closely monitored in 2023.
The continued embedding of the GPN transformation programme together with
in key market areas ensuring accurate and relevant data is available to
management teams to support decision making.
the mitigating cost inflation and cost saving actions implemented have enabled
The Board will keep the frequency and impact of any future waves of
the business to underpin margins.
Covid-19 under review to assess the level of potential market disruption.
Marketing spend has continually focused on the areas/brands where recovery
momentum is strong.
Continued assessment of the impacts of channel shifts by consumers and the
The impact of pricing increases associated with the rising cost of inflation will
financial strength of our customer base, particularly our US customers which
be closely monitored.
represent approximately 82% of Group Revenue.
There is an ongoing monitoring and relationship investment with current
customers, and we continue to build out our direct-to-consumer (“DTC”)
capabilities to reach consumers directly.
The Group will continue to build key customer partnerships through strategic
capacity expansions and product supply opportunities, particularly with our
core GN customers.
We will continue to review new customer and channel development
Dedicated consumer insights and analytics teams are in place.
opportunities.
The Board carefully monitored credit exposures in 2022 as customers recovered
from the challenges imposed by Covid-19 restrictions on their operations.
The Group’s business model was reviewed and refreshed during the year
The Board will continue to receive regular updates from the ESG Committee
including an appropriate consideration of the impacts of the CROs and the
on environment related risks and opportunities and will work to enhance the
ability of the Group to react to environmental changes.
The Group has taken a rigorous approach to measuring climate risk impact
through data, baselining and risk assessment supported by the Carbon Trust
and aligned to the United Nation’s Sustainable Development Goals.
A number of key activities and significant decisions were made by the Board
during the year, where climate change was taken into account including the
integration of climate-related impacts into our governance, operational and
strategic model, particularly with regard to investment in energy efficiency
advancements, carbon reduction and emission management programmes.
In 2023, over 50% (2022: 45%) of our electricity usage will be by way of
renewable electricity, see pages 56 and 57 for more information on the
pathway to achieving this goal.
completion of the scenario analysis and financial impact assessment of material
The Group will continue to update the data systems and processes to meet
CROs as detailed in the TCFD Report on pages 62 to 65.
new disclosure requirements which are expected with the forthcoming EU
Updated our environment and sustainability targets as detailed in the ‘Climate &
Corporate Sustainability Reporting Directive.
Environment’ report on pages 56 to 59 including a 50% reduction in Scope 1 and 2
The ESG Committee will continue to focus on monitoring the effectiveness of
operations emissions by 2030 to meet a 1.5 degrees celsius temperature
the environment metrics and regulatory disclosure requirements to ensure
pathway.
progress is being maintained in line with expectations.
ESG training was provided to the Board designed to cover the evolving
regulatory landscape/climate change reporting requirements and to ensure
that a baseline understanding of the requirements is in place.
The Group’s Capital Investment Policy has been reviewed to incorporate
environmental considerations into the existing due diligence process.
Risk
Potential impact
Mitigation
Developments in 2022
2023 focus areas
Risk trend
Increasing
Stable
Decreasing
Strategic/External
Economic, industry
and political
Our performance is influenced by global
economic conditions, consumer confidence
and the stability of the markets in which
we operate.
Deterioration in economic
The Board regularly assesses key market trends, the current economic
growth or consumer confidence,
environment and the implications for Group performance and strategic
significant currency movements,
objectives. Our strategy is aimed at the continued expansion of our
political instability, or civil
disturbance may impact
geographic reach, focusing on key customer relationships and
investment in new product development which helps to protect the Group
performance and the achievement
from economic fluctuations and rapid changes in the external
of growth targets.
environment.
The ongoing war between Russia
Covid-19 actions taken by governments in the countries in which we
operate continue to address the spread of the virus. The public health
situation continues to improve based on rising vaccination rates and
improved Covid-19 treatments.
and Ukraine and continuing
tensions between China and
Taiwan may also negatively
impact performance.
The inability to continue to contain
the spread of global pandemics
such as Covid-19 which may create
a risk of business interruption.
Market disruption
Inflationary pressures may create further
headwinds for the business.
Increasing competition across certain
channels through high promotional activity,
competitor product innovation and channel
shifts provide an ongoing challenge.
Further waves of Covid-19 may disrupt the
ability of markets to remain open and delay
growth plans.
Continued inflationary pressures
Significant actions to mitigate cost inflation were implemented across a
above expectations may disrupt
range of initiatives including pricing, revenue growth management and
demand due to consumer price
efficiency programmes.
elasticity.
The GPN team has invested in developing in-house capabilities to assess
Consumer spending habits have
market trends and to improve the accuracy and relevance of data
altered as a result of a changed
available to the Board and management to support decision making.
way of working/living through the
pandemic.
We invest in research and development expenditure focused on
value-added and customer-specific solutions and invest in promotional
Failing to recognise or obtain
activities where required.
accurate and relevant competitive
and environmental intelligence
may result in the adoption of
incorrect business strategies.
GN focuses on differentiating its capabilities from competitors through
innovation to enable it to be the partner of choice for nutritional and
functional solutions across both the dairy and non-dairy segments.
Customer concentration
The Group benefits from close
commercial relationships with
a number of key customers and adverse
changes could materially impact the Group.
The loss or material disruption
The Group has developed strong relationships with major customers by
with one or more of these
customers, or a significant
focusing on superior customer service, quality assurance and cost
competitiveness. There is a continued focus on new customer and
deterioration in commercial terms,
channel development opportunities.
could have a material impact on
Group profitability.
Pricing risks associated with the
growth of the online channel.
Continued strong execution of the GN commercial team’s ‘one face to the
customer’ approach.
The Board regularly reviews its exposure, including credit exposure,
to individual customers and considers the impact of acquisitions
where relevant.
Changes in policy, regulation,
technologies and weather
An ESG Board subcommittee is in place and a member of the Group
Operating Executive has responsibility for overseeing the delivery of the
conditions, may impact the Group
Group’s agenda on environmental, sustainability and governance topics.
Climate change
Failing to have an appropriate business
model in place to react to the CROs and
to achieve the Group’s vision of protecting
the environment through responsible
stewardship.
The risk of non-compliance
with regulations.
or influence consumer preferences.
Failure to comply with
regulations may cause
reputational damage.
environmental incident reporting
and has ensured that:
The Board recognises the scientific consensus that action is required to
address the impact of greenhouse gases on rising global temperatures
• A Board approved strategy is in place to accelerate our climate
change commitments, targeting decarbonisation in our operations
and supply chain and addressing our most material sustainability
focus areas.
• The Group-wide sustainability programme focuses on building a
strong culture, systems and governance model to oversee progress
and to ensure compliance with environmental incident reporting
regulations.
on pages 56 to 59.
• Clearly defined Board approved KPIs and targets in place as outlined
• We have expanded our climate change reporting to include the use of
the TCFD framework as outlined on pages 62 to 65.
We reinforced our clear environment strategy which is aligned to
science-based targets and other relevant benchmarks and continued our
focus on driving actions to achieve targets.
The macroeconomic environment faced headwinds particularly in relation to
cost inflation, global trade uncertainty and currency fluctuations which the
Group will continue to navigate and mitigate where possible.
The successful progression of the GPN transformation objectives and the careful
management of price increases were required to address inflationary
challenges. The impact of price increases will continue to be monitored for
elasticity effects.
The business continued to remain resilient in managing the Covid-19 pandemic.
The Group maintained its focus on protecting employees, continuing food
supply, and maintaining our strong financial position, throughout the year.
The macroeconomic environment is uncertain, and it is possible some of our
end markets may be in recession in the near term. This will remain under
continued review throughout 2023 to ensure mitigating actions to combat
cost inflation and rising cost of living impacts are assessed and implemented
where appropriate.
Aside from the impact of the pandemic and inflationary concerns affecting
the global economy, the geopolitical climate has also deteriorated with
continued significant concern over the ongoing conflict between Russia and
the Ukraine in particular, and with regard to the tension between China and
Taiwan. The Group will continue to monitor this closely where any potential
conflict, economic sanctions or trade rulings may impact the growth
objectives of the Group.
A strategic portfolio review was performed in 2022 resulting in divestment
decisions around non-core assets as outlined in the Group Finance Director’s
review on pages 44 to 49.
The impact of increasing inflationary pressures, supply chain volatility and
labour shortages have been mitigated by price increases and this balance will
continue to be closely monitored in 2023.
The continued embedding of the GPN transformation programme together with
the mitigating cost inflation and cost saving actions implemented have enabled
the business to underpin margins.
Marketing spend has continually focused on the areas/brands where recovery
momentum is strong.
The Group will monitor any adverse changes in economic conditions, such as
the rising cost of living which has been intensified by continued inflationary,
interest rate and energy cost/availability pressures that could result in
reduced consumer spending which may disrupt demand.
We will continue to invest in developing in-house capabilities to assess trends
in key market areas ensuring accurate and relevant data is available to
management teams to support decision making.
The Board will keep the frequency and impact of any future waves of
Covid-19 under review to assess the level of potential market disruption.
Continued assessment of the impacts of channel shifts by consumers and the
financial strength of our customer base, particularly our US customers which
represent approximately 82% of Group Revenue.
There is an ongoing monitoring and relationship investment with current
customers, and we continue to build out our direct-to-consumer (“DTC”)
capabilities to reach consumers directly.
Dedicated consumer insights and analytics teams are in place.
The impact of pricing increases associated with the rising cost of inflation will
be closely monitored.
The Group will continue to build key customer partnerships through strategic
capacity expansions and product supply opportunities, particularly with our
core GN customers.
We will continue to review new customer and channel development
opportunities.
The Board carefully monitored credit exposures in 2022 as customers recovered
from the challenges imposed by Covid-19 restrictions on their operations.
The Group’s business model was reviewed and refreshed during the year
including an appropriate consideration of the impacts of the CROs and the
ability of the Group to react to environmental changes.
The Group has taken a rigorous approach to measuring climate risk impact
through data, baselining and risk assessment supported by the Carbon Trust
and aligned to the United Nation’s Sustainable Development Goals.
A number of key activities and significant decisions were made by the Board
during the year, where climate change was taken into account including the
completion of the scenario analysis and financial impact assessment of material
CROs as detailed in the TCFD Report on pages 62 to 65.
Updated our environment and sustainability targets as detailed in the ‘Climate &
Environment’ report on pages 56 to 59 including a 50% reduction in Scope 1 and 2
operations emissions by 2030 to meet a 1.5 degrees celsius temperature
pathway.
ESG training was provided to the Board designed to cover the evolving
regulatory landscape/climate change reporting requirements and to ensure
that a baseline understanding of the requirements is in place.
The Group’s Capital Investment Policy has been reviewed to incorporate
environmental considerations into the existing due diligence process.
The Board will continue to receive regular updates from the ESG Committee
on environment related risks and opportunities and will work to enhance the
integration of climate-related impacts into our governance, operational and
strategic model, particularly with regard to investment in energy efficiency
advancements, carbon reduction and emission management programmes.
In 2023, over 50% (2022: 45%) of our electricity usage will be by way of
renewable electricity, see pages 56 and 57 for more information on the
pathway to achieving this goal.
The Group will continue to update the data systems and processes to meet
new disclosure requirements which are expected with the forthcoming EU
Corporate Sustainability Reporting Directive.
The ESG Committee will continue to focus on monitoring the effectiveness of
the environment metrics and regulatory disclosure requirements to ensure
progress is being maintained in line with expectations.
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
73
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION
Principal risks and uncertainties continued
Link to strategic priorities (see pages 14 to 17)
Lead and grow the core
Optimise our business
Disciplined financial management
Risk
Technological
Digital transformation
The risk of the Group implementing
an ineffective digital strategy.
Cyber security and data
protection
The Group is dependent on robust IT systems
and infrastructure for most of our principal
business processes which may be impacted
by the significant growth of cyber threats.
Potential impact
Mitigation
Developments in 2022
2023 focus areas
A failure to adopt new technologies
may impact our targeted growth.
Each core business function has a three year digital roadmap that is
reviewed and updated annually.
Significant investment by the Group to ensure a leading eCommerce
platform and market-leading technologies have been deployed to drive
growth across the eCommerce landscape.
Executive commitment to ensure the full benefits of the Group’s digital
capabilities are maximised to increase our speed to market, reduce costs
and improve customer experience.
Completed a strategic review of the Group IT organisation and services.
The Group has deployed the leading technologies from SAP, which support the
automation of our key business processes. The Group is currently upgrading the
Continue to focus our digitisation programme on supply chain, customer
engagement, manufacturing, operations, finance, and HR systems and
progress on the planned SAP S/4HANA upgrade within the Group.
ERP system to SAP’s latest technology, S/4HANA, which will bring enhanced
Continue to evaluate additional opportunities to leverage the DTC platform
machine learning and artificial intelligence capabilities to the Group.
across GPN and execute where the opportunity matches the brand strategy.
Fraud and cyber security exercises completed with vulnerability scans
Continue to execute fraud and cyber security reviews and vulnerability scans
implemented across all eCommerce sites.
across all eCommerce sites.
An adverse event could result in
significant financial loss or
reputational damage due to the
potential loss of or unauthorised
access to sensitive financial,
personal and commercial
information. This includes the
Group’s intellectual property (IP) or
that of our customers.
An adverse event could also result
in significant negative impacts to
our operational capabilities
through ransomware or denial of
services attacks.
Financial and reputational loss
may also occur through targeted
attacks such as phishing or
impersonation frauds.
Dedicated Group IT Security team in place to manage IT risks.
Continue to evolve security and data privacy programmes to address new
Continue to raise awareness of potential cyber-attack risks such as phishing
Regular security scanning across all eCommerce sites with penetration
testing completed on all new sites.
Policies in place regarding the protection of both business and personal
information, as well as the use of IT systems and applications by our
employees with oversight by the Group Data Protection Committee.
Systems in place, including ongoing audit activities, to monitor
compliance with relevant privacy laws and regulations.
The Group maintains a cyber insurance policy and there were no material
information or cybersecurity breaches noted over the last three years
resulting in an insurance claim.
Continued investment in cyber-crime prevention and information security
programme.
threats, hybrid working models and increasing regulatory requirements.
and social engineering.
Cyber security and anti-fraud control reviews were conducted against the US
Continue to progress the Tirlán (formerly Glanbia Ireland) segregation and
Department of Commerce and National Institute of Standards and Technology
separation of IT infrastructure and applications from the Group in line with
Cybersecurity Framework to continue to gain comfort over the effectiveness of
the transition agreement.
the Group’s ransomware prevention, detection and response plans.
The cross-functional teams involved will continue to ensure our IP is protected
Enhanced existing incident response processes from the system recovery
through appropriate IT security measures, patent applications and related
simulation exercise learnings.
control procedures.
Significant development of control processes to limit the risk of system intrusion
Ongoing cybersecurity awareness will continue to be actively promoted
and/or data loss with a particular focus on regulatory compliance.
Continued progress on the effective integration of our IT systems and related
Group monitoring controls within our recent acquisitions.
Group IT updated the Board and Audit Committee on the refreshed Group IT
strategy and key IT risks.
through regular IT awareness communications, information security training
and other initiatives to keep employees updated on new and emerging IT
threats. This will continue in 2023 with follow up workshops and awareness
sessions with the leadership team and Board representatives.
Operational/Regulatory
Talent management
The ability to attract, develop, engage
and retain appropriately qualified talent
is critical if the Group is to continue to
compete effectively.
A failure to retain, attract and/or
develop key talent, particularly in
emerging areas of talent need, will
impact our ability to deliver
sustainable value for all our
stakeholders.
The Group’s purpose, vision and values are embedded across all levels of
the Group through defined training programmes.
A remuneration policy is in place with clear links to our strategic
objectives. This policy includes a balanced approach to short and
long-term incentives and is aimed at mitigating weak performance in any
one year and utilising appropriate retention tools for key individuals.
Strong recruitment processes, effective human resources (HR) policies
and procedures, robust succession management planning and talent
management initiatives are in place.
Remote working continued, and new smart working hybrid models were
implemented to make the workplace more accessible.
Health and safety
The risk of non-compliance with Health and
Safety and/or building regulations resulting
in injuries or a loss of capacity or closure at a
major site.
The risk of a global pandemic such as
Covid-19.
Health and safety risks to our
people and the wider public.
Reputational damage, regulatory
penalties and an inability to service
customer requirements due to
capacity restrictions or plant
closure.
ESG Board subcommittee in place and a member of the Group Operating
Executive responsible for overseeing Health and Safety related
performance.
We have created and continue to expand programmes, processes and
tools to ensure progress in Health and Safety for all our workforce.
The Group Operating Executive monitor progress against our key Health
and Safety, food safety and quality and environmental objectives. This
review is focused on ensuring an effective framework, Group policies and
clear objectives are in place and that corrective actions are implemented
in a timely manner.
The Group monitors overall safety and loss prevention performance
through the independently assessed GRMS.
Significant management focus directed at ensuring the impacts of a
competitive labour market were carefully navigated.
Continuing the successful execution of our people strategy which aims to
sustain a high-performing, values driven and respectful culture with a
Continued working on building an actively inclusive culture, growing gender and
diversity and inclusion focus.
racial representation in senior management in particular and creating more
DE&I targets are included in senior leader incentives. To assist target delivery,
equitable work practices and benefits.
The DE&I agenda has further progressed with the launch of an inclusive
leadership development programme for senior leaders as well as a continued
focus on employee resource groups including NOW (Network of Women) and the
the future.
addition of LGBTQIA+ and multicultural groups.
The senior management long-term incentives are now directly linked to the
achievement of the Group’s environmental sustainability strategy.
the pandemic.
Completed the HR transformation through the implementation of the Grow@
Glanbia programme as outlined on page 20.
Continued navigating the return to office in a flexible way as a key initiative to
supporting the retention of the salaried workforce while also protecting our
models.
employees from Covid-19.
the Group is formally measuring female management participation with
particular focus on hiring and retention. Through engagement surveys,
employee attitudes toward DE&I measures will continue to be monitored in
Monitoring the evolving talent retention risks driven by inflationary pressures
and remote working options which have become more widespread during
Continue to focus on the protection of our employees with a focus on
wellbeing and employee communications to support smart working hybrid
Continued progress in our mission towards ‘Zero Harm’ and other Health and
The Group HR and operational teams will continue to ensure ongoing
Safety initiatives during the year as outlined on page 23.
surveillance and support across the Group to maintain business continuity
Management controls in place to monitor the Group’s business continuity plans.
and employee welfare including:
These were reviewed and enhanced in response to the evolving organisational
• Maintaining effective employee engagement and welfare programmes.
needs arising from the pandemic.
Close monitoring of our accident rates continues with a clear focus on driving
effective root cause analysis across the Group. Risk assessment methods and
leading indicators (“near miss” reporting) in place to help drive sustainable
improvement at site level.
Standardised Group Health and Safety, and Quality, Food Safety KPIs in place
aligned to industry benchmarks.
• Sustaining operations in line with local geographical restrictions.
• Ensuring clearly communicated site health and safety policies and
procedures are in place.
• Monitoring evolving regulatory requirements and working to ensure
compliance to the Global Reporting Initiative (GRI) 403 Occupational
•
Implementing effective corrective actions to address any improvement
Health and Safety standard.
opportunities identified.
74
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Risk
Technological
Digital transformation
The risk of the Group implementing
an ineffective digital strategy.
may impact our targeted growth.
reviewed and updated annually.
Significant investment by the Group to ensure a leading eCommerce
platform and market-leading technologies have been deployed to drive
growth across the eCommerce landscape.
Executive commitment to ensure the full benefits of the Group’s digital
capabilities are maximised to increase our speed to market, reduce costs
and improve customer experience.
Cyber security and data
protection
The Group is dependent on robust IT systems
and infrastructure for most of our principal
business processes which may be impacted
by the significant growth of cyber threats.
An adverse event could result in
Dedicated Group IT Security team in place to manage IT risks.
significant financial loss or
reputational damage due to the
potential loss of or unauthorised
access to sensitive financial,
personal and commercial
information. This includes the
Regular security scanning across all eCommerce sites with penetration
testing completed on all new sites.
Policies in place regarding the protection of both business and personal
information, as well as the use of IT systems and applications by our
employees with oversight by the Group Data Protection Committee.
Group’s intellectual property (IP) or
Systems in place, including ongoing audit activities, to monitor
that of our customers.
compliance with relevant privacy laws and regulations.
The Group maintains a cyber insurance policy and there were no material
information or cybersecurity breaches noted over the last three years
resulting in an insurance claim.
Continued investment in cyber-crime prevention and information security
programme.
An adverse event could also result
in significant negative impacts to
our operational capabilities
through ransomware or denial of
services attacks.
Financial and reputational loss
may also occur through targeted
attacks such as phishing or
impersonation frauds.
emerging areas of talent need, will
impact our ability to deliver
sustainable value for all our
stakeholders.
Operational/Regulatory
Talent management
The ability to attract, develop, engage
and retain appropriately qualified talent
is critical if the Group is to continue to
compete effectively.
A remuneration policy is in place with clear links to our strategic
objectives. This policy includes a balanced approach to short and
long-term incentives and is aimed at mitigating weak performance in any
one year and utilising appropriate retention tools for key individuals.
Strong recruitment processes, effective human resources (HR) policies
and procedures, robust succession management planning and talent
management initiatives are in place.
Remote working continued, and new smart working hybrid models were
implemented to make the workplace more accessible.
Health and safety
The risk of non-compliance with Health and
Safety and/or building regulations resulting
in injuries or a loss of capacity or closure at a
major site.
Covid-19.
The risk of a global pandemic such as
customer requirements due to
capacity restrictions or plant
closure.
Health and safety risks to our
people and the wider public.
ESG Board subcommittee in place and a member of the Group Operating
Executive responsible for overseeing Health and Safety related
Reputational damage, regulatory
performance.
penalties and an inability to service
We have created and continue to expand programmes, processes and
tools to ensure progress in Health and Safety for all our workforce.
The Group Operating Executive monitor progress against our key Health
and Safety, food safety and quality and environmental objectives. This
review is focused on ensuring an effective framework, Group policies and
clear objectives are in place and that corrective actions are implemented
in a timely manner.
The Group monitors overall safety and loss prevention performance
through the independently assessed GRMS.
Potential impact
Mitigation
Developments in 2022
2023 focus areas
Risk trend
Increasing
Stable
Decreasing
A failure to adopt new technologies
Each core business function has a three year digital roadmap that is
Completed a strategic review of the Group IT organisation and services.
The Group has deployed the leading technologies from SAP, which support the
automation of our key business processes. The Group is currently upgrading the
ERP system to SAP’s latest technology, S/4HANA, which will bring enhanced
machine learning and artificial intelligence capabilities to the Group.
Continue to focus our digitisation programme on supply chain, customer
engagement, manufacturing, operations, finance, and HR systems and
progress on the planned SAP S/4HANA upgrade within the Group.
Continue to evaluate additional opportunities to leverage the DTC platform
across GPN and execute where the opportunity matches the brand strategy.
Fraud and cyber security exercises completed with vulnerability scans
implemented across all eCommerce sites.
Continue to execute fraud and cyber security reviews and vulnerability scans
across all eCommerce sites.
Continue to evolve security and data privacy programmes to address new
threats, hybrid working models and increasing regulatory requirements.
Continue to raise awareness of potential cyber-attack risks such as phishing
and social engineering.
Cyber security and anti-fraud control reviews were conducted against the US
Department of Commerce and National Institute of Standards and Technology
Cybersecurity Framework to continue to gain comfort over the effectiveness of
the Group’s ransomware prevention, detection and response plans.
Enhanced existing incident response processes from the system recovery
simulation exercise learnings.
Significant development of control processes to limit the risk of system intrusion
and/or data loss with a particular focus on regulatory compliance.
Continued progress on the effective integration of our IT systems and related
Group monitoring controls within our recent acquisitions.
Group IT updated the Board and Audit Committee on the refreshed Group IT
strategy and key IT risks.
Continue to progress the Tirlán (formerly Glanbia Ireland) segregation and
separation of IT infrastructure and applications from the Group in line with
the transition agreement.
The cross-functional teams involved will continue to ensure our IP is protected
through appropriate IT security measures, patent applications and related
control procedures.
Ongoing cybersecurity awareness will continue to be actively promoted
through regular IT awareness communications, information security training
and other initiatives to keep employees updated on new and emerging IT
threats. This will continue in 2023 with follow up workshops and awareness
sessions with the leadership team and Board representatives.
A failure to retain, attract and/or
The Group’s purpose, vision and values are embedded across all levels of
develop key talent, particularly in
the Group through defined training programmes.
Significant management focus directed at ensuring the impacts of a
competitive labour market were carefully navigated.
Continued working on building an actively inclusive culture, growing gender and
racial representation in senior management in particular and creating more
equitable work practices and benefits.
The DE&I agenda has further progressed with the launch of an inclusive
leadership development programme for senior leaders as well as a continued
focus on employee resource groups including NOW (Network of Women) and the
addition of LGBTQIA+ and multicultural groups.
The senior management long-term incentives are now directly linked to the
achievement of the Group’s environmental sustainability strategy.
Completed the HR transformation through the implementation of the Grow@
Glanbia programme as outlined on page 20.
Continued navigating the return to office in a flexible way as a key initiative to
supporting the retention of the salaried workforce while also protecting our
employees from Covid-19.
Continued progress in our mission towards ‘Zero Harm’ and other Health and
Safety initiatives during the year as outlined on page 23.
Management controls in place to monitor the Group’s business continuity plans.
These were reviewed and enhanced in response to the evolving organisational
needs arising from the pandemic.
Close monitoring of our accident rates continues with a clear focus on driving
effective root cause analysis across the Group. Risk assessment methods and
leading indicators (“near miss” reporting) in place to help drive sustainable
improvement at site level.
Standardised Group Health and Safety, and Quality, Food Safety KPIs in place
aligned to industry benchmarks.
Continuing the successful execution of our people strategy which aims to
sustain a high-performing, values driven and respectful culture with a
diversity and inclusion focus.
DE&I targets are included in senior leader incentives. To assist target delivery,
the Group is formally measuring female management participation with
particular focus on hiring and retention. Through engagement surveys,
employee attitudes toward DE&I measures will continue to be monitored in
the future.
Monitoring the evolving talent retention risks driven by inflationary pressures
and remote working options which have become more widespread during
the pandemic.
Continue to focus on the protection of our employees with a focus on
wellbeing and employee communications to support smart working hybrid
models.
The Group HR and operational teams will continue to ensure ongoing
surveillance and support across the Group to maintain business continuity
and employee welfare including:
• Maintaining effective employee engagement and welfare programmes.
• Sustaining operations in line with local geographical restrictions.
• Ensuring clearly communicated site health and safety policies and
procedures are in place.
• Monitoring evolving regulatory requirements and working to ensure
compliance to the Global Reporting Initiative (GRI) 403 Occupational
Health and Safety standard.
•
Implementing effective corrective actions to address any improvement
opportunities identified.
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
75
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION
Principal risks and uncertainties continued
Link to strategic priorities (see pages 14 to 17)
Lead and grow the core
Optimise our business
Disciplined financial management
Risk
Potential impact
Mitigation
Developments in 2022
2023 focus areas
Operational/Regulatory
Supply chain
The risk that unprecedented inflation creates
significant headwinds for the business and/
or an inability to contain the spread of a
global pandemic (such as Covid-19) resulting
in prolonged supply chain disruptions.
Milk availability and pricing can
vary from quarter-to-quarter
and year-to-year with resulting
impacts on production levels and
input costs. This can be
exacerbated by greater-than-
expected inflationary impact.
A global pandemic could result in
supply chain constraints,
inflationary impacts and/or
negative impacts on our
international sales channels.
Appropriate short-term safety stocks are in place for our core raw
materials and detailed monitoring of raw material delay risks is in place
with alternative sources of supply identified if required.
Broad geographic spread of our supplier base and other functional
ingredient options.
The majority of our dairy activities are in joint venture partnerships with
established, robust business models to manage this risk in our dairy
operations.
Our milk and procurement strategy teams work proactively with the US
patron supplier base to ensure the business remains competitive in its
supplier offerings to underpin long-term sustainable supply including the
provision of non-pricing value-added initiatives.
Product safety and compliance
A breakdown in control processes may result
in contamination of products leading to
a breach of existing food safety legislation
and potential consumer or employee illness.
Reputational damage, regulatory
penalties or restrictions, product
recall costs, compensation
payments, lost revenues and
reduced growth potential.
The sudden introduction of more
stringent regulations such as
additional labelling requirements
may also cause operational
difficulties.
The global reporting tool and core Glanbia Quality Standards (“GQS”)/
KPIs are embedded across the Group.
Considerable focus on ensuring suitably qualified and experienced staff
are employed within the Group.
Ensuring new regulatory requirements and emerging issues are captured
with appropriate team training.
Appropriate product liability insurance is maintained.
Acquisition/integration
The anticipated benefits of acquisitions
may not be achieved if the Group fails to
conduct effective due diligence, complete
the transaction or properly integrate the
acquired businesses.
Below expected performance of
the acquired business and the
diversion of management
attention to integration efforts
could result in significant value
destruction.
The Board approves the business case and funding requirements for all
significant investments and has acquisition integration processes in
place to monitor the performance of acquired businesses.
Chief Corporate Development Officer and a Corporate Development
Committee are in place to oversee acquisition and divestiture related
activity.
Acquired entity management teams are typically strengthened by the
transfer of experienced Glanbia managers, which assists in increasing
the efficiency of integration efforts.
Mandatory post-acquisition completion and significant capital
expenditure project reviews are conducted, with regular Audit Committee
updates.
Significant management effort deployed to prevent supply chain disruptions.
The impact of price increases across our brand portfolio, which may disrupt
Pricing action in both GPN and GN were implemented to offset some of the
increased inflationary related input costs.
Continuous review of future supply, demand and expected pricing of raw
materials through further strengthening relationships with suppliers were
performed to ensure resources were available at competitive prices.
Appropriate safety stocks for core raw materials are in place and continued
monitoring of raw materials delay risks are considered with alternative sources
of supply identified.
demand due to price elasticity, will continue to be monitored. Any further
price increases will be managed against the Group’s ambition to continue to
drive revenue growth.
Ongoing engagement with our supply base to ensure sustainability of supply
at a level of pricing that is both commercial and competitive.
Continuing to monitor the potential impacts of Covid-19 and geopolitical
tensions, particularly in relation to the import of key raw materials and/or
negative impacts on our international sales channels. Effective action will be
taken where required.
Robust quality and auditing standards continue to be maintained with routine
Maintaining standards as we integrate new acquisitions and optimise our
ESG and Audit Committee reporting.
supply chain globally by encompassing a mix of owned and contract
All sites achieved or maintained a globally recognised food safety certification
manufacturer facilities.
in 2022.
Critical incident trends continue to be closely monitored to ensure effective root
cause analysis and implementation of appropriate corrective and preventive
Working to continuously improve our operations, particularly in the servicing
actions from previous incidents.
New ‘internal benchmarking’ protocol for food safety risk has been implemented
of higher risk product sectors, while reducing our environmental impacts in a
cost effective and sustainable manner.
which defines the minimum acceptable programme elements that all sites are
Focusing on identifying, and as needed, narrowing the gap to meeting the
Ensuring effective oversight of third-party manufacturing qualifications and
compliance with Glanbia’s food safety performance standards.
GRI 416 Customer Health and Safety standard, with priority on an
independent regulatory capability assessment and benchmarking review.
expected to meet.
systems.
The Group’s overall GQS programme was reviewed by an external globally
recognised expert and considered a ‘best practice approach’ to food safety
Completed the disposal of the Group’s 40% interest in the Glanbia Ireland joint
The Board will continue to review the Group’s overall portfolio as part of its
venture to Tirlán Co-operative Society Limited (formerly Glanbia Co-operative
strategic review processes and will evaluate potential acquisition
Society Limited) for €307 million.
Completed the acquisition of Sterling Technology, a US bioactive ingredient
company focused on immunity solutions, in March 2022 for an initial
consideration of €54.5 million plus deferred consideration.
Implemented changes in the fair value of contingent consideration related to
opportunities to broaden the portfolio in this context that will drive growth
and assist the Group in achieving its ambition.
Completing the divestment of other non-core assets arising from the
strategic review performed, as outlined in the Group Finance Director’s
review on pages 44 to 49.
LevlUp as outlined in the Group Finance Director’s review on page 47.
Acquisition integration and post-acquisition review processes will continue to
The joint venture Glanbia Cheese EU, a mozzarella cheese plant in Ireland, was
be monitored through Board and/or Audit Committee reviews.
fully commissioned during Q4 2022. A further €47.0 million was advanced to this
The Audit Committee will continue to review the impairment testing
Irish venture in 2022, with full repayment of these loans on completion of the
methodology, inputs, assumptions, sensitivity analysis and results of any
planned divestment of this business in 2023.
material businesses performing below expectations.
The Audit Committee assessed the impairment review of goodwill and
intangibles, including an assessment of the current global economic
environment, as outlined on page 108 and reviewed a number of post-
completion reviews presented by the Group Finance Director.
Financial
Taxation changes
The Group’s tax strategy may be impacted
by legislative changes to local or
international tax rules.
The Group may be exposed to
additional tax liabilities.
The Group employs a team of tax professionals to support the Group in
ensuring compliance with legislative requirements globally.
The Audit Committee received a detailed management presentation on our tax
Management will continue to monitor developments in international tax
structures and controls, the status of tax audits, the ongoing management of our
legislation, with a focus on maintaining compliance with legislative
We constructively engage with tax authorities where appropriate and we
engage advisors to clarify tax legislation to ensure that we achieve
compliance with relevant tax law across the jurisdictions in which we
operate.
The Audit Committee is routinely updated on the outcome of tax authority
reviews. No material issues arose in any such reviews in recent years.
current operations and evolving tax legislation including the work of the
requirements.
Organisation for Economic Co-operation and Development (OECD).
We will continue to engage external tax advisors to clarify tax legislation to
ensure that we achieve compliance with relevant tax laws across the
jurisdictions in which we operate.
Pro-active engagement with tax authorities in all material jurisdictions will
also continue where required.
76
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Risk
Potential impact
Mitigation
Developments in 2022
2023 focus areas
Risk trend
Increasing
Stable
Decreasing
Operational/Regulatory
Supply chain
The risk that unprecedented inflation creates
significant headwinds for the business and/
or an inability to contain the spread of a
global pandemic (such as Covid-19) resulting
in prolonged supply chain disruptions.
Milk availability and pricing can
vary from quarter-to-quarter
and year-to-year with resulting
impacts on production levels and
input costs. This can be
exacerbated by greater-than-
expected inflationary impact.
A global pandemic could result in
supply chain constraints,
inflationary impacts and/or
negative impacts on our
international sales channels.
Appropriate short-term safety stocks are in place for our core raw
materials and detailed monitoring of raw material delay risks is in place
with alternative sources of supply identified if required.
Broad geographic spread of our supplier base and other functional
ingredient options.
operations.
The majority of our dairy activities are in joint venture partnerships with
established, robust business models to manage this risk in our dairy
Our milk and procurement strategy teams work proactively with the US
patron supplier base to ensure the business remains competitive in its
supplier offerings to underpin long-term sustainable supply including the
provision of non-pricing value-added initiatives.
Product safety and compliance
Reputational damage, regulatory
The global reporting tool and core Glanbia Quality Standards (“GQS”)/
penalties or restrictions, product
KPIs are embedded across the Group.
A breakdown in control processes may result
in contamination of products leading to
a breach of existing food safety legislation
and potential consumer or employee illness.
recall costs, compensation
payments, lost revenues and
reduced growth potential.
The sudden introduction of more
stringent regulations such as
additional labelling requirements
may also cause operational
difficulties.
Considerable focus on ensuring suitably qualified and experienced staff
are employed within the Group.
Ensuring new regulatory requirements and emerging issues are captured
with appropriate team training.
Appropriate product liability insurance is maintained.
Acquisition/integration
The anticipated benefits of acquisitions
may not be achieved if the Group fails to
conduct effective due diligence, complete
the transaction or properly integrate the
acquired businesses.
Below expected performance of
The Board approves the business case and funding requirements for all
the acquired business and the
significant investments and has acquisition integration processes in
diversion of management
attention to integration efforts
could result in significant value
destruction.
place to monitor the performance of acquired businesses.
Chief Corporate Development Officer and a Corporate Development
Committee are in place to oversee acquisition and divestiture related
activity.
updates.
Acquired entity management teams are typically strengthened by the
transfer of experienced Glanbia managers, which assists in increasing
the efficiency of integration efforts.
Mandatory post-acquisition completion and significant capital
expenditure project reviews are conducted, with regular Audit Committee
Financial
Taxation changes
The Group’s tax strategy may be impacted
by legislative changes to local or
international tax rules.
The Group may be exposed to
The Group employs a team of tax professionals to support the Group in
additional tax liabilities.
ensuring compliance with legislative requirements globally.
We constructively engage with tax authorities where appropriate and we
engage advisors to clarify tax legislation to ensure that we achieve
compliance with relevant tax law across the jurisdictions in which we
operate.
The Audit Committee is routinely updated on the outcome of tax authority
reviews. No material issues arose in any such reviews in recent years.
Significant management effort deployed to prevent supply chain disruptions.
Pricing action in both GPN and GN were implemented to offset some of the
increased inflationary related input costs.
Continuous review of future supply, demand and expected pricing of raw
materials through further strengthening relationships with suppliers were
performed to ensure resources were available at competitive prices.
Appropriate safety stocks for core raw materials are in place and continued
monitoring of raw materials delay risks are considered with alternative sources
of supply identified.
The impact of price increases across our brand portfolio, which may disrupt
demand due to price elasticity, will continue to be monitored. Any further
price increases will be managed against the Group’s ambition to continue to
drive revenue growth.
Ongoing engagement with our supply base to ensure sustainability of supply
at a level of pricing that is both commercial and competitive.
Continuing to monitor the potential impacts of Covid-19 and geopolitical
tensions, particularly in relation to the import of key raw materials and/or
negative impacts on our international sales channels. Effective action will be
taken where required.
Robust quality and auditing standards continue to be maintained with routine
ESG and Audit Committee reporting.
All sites achieved or maintained a globally recognised food safety certification
in 2022.
Critical incident trends continue to be closely monitored to ensure effective root
cause analysis and implementation of appropriate corrective and preventive
actions from previous incidents.
New ‘internal benchmarking’ protocol for food safety risk has been implemented
which defines the minimum acceptable programme elements that all sites are
expected to meet.
The Group’s overall GQS programme was reviewed by an external globally
recognised expert and considered a ‘best practice approach’ to food safety
systems.
Maintaining standards as we integrate new acquisitions and optimise our
supply chain globally by encompassing a mix of owned and contract
manufacturer facilities.
Ensuring effective oversight of third-party manufacturing qualifications and
compliance with Glanbia’s food safety performance standards.
Working to continuously improve our operations, particularly in the servicing
of higher risk product sectors, while reducing our environmental impacts in a
cost effective and sustainable manner.
Focusing on identifying, and as needed, narrowing the gap to meeting the
GRI 416 Customer Health and Safety standard, with priority on an
independent regulatory capability assessment and benchmarking review.
Completed the disposal of the Group’s 40% interest in the Glanbia Ireland joint
venture to Tirlán Co-operative Society Limited (formerly Glanbia Co-operative
Society Limited) for €307 million.
Completed the acquisition of Sterling Technology, a US bioactive ingredient
company focused on immunity solutions, in March 2022 for an initial
consideration of €54.5 million plus deferred consideration.
Implemented changes in the fair value of contingent consideration related to
LevlUp as outlined in the Group Finance Director’s review on page 47.
The joint venture Glanbia Cheese EU, a mozzarella cheese plant in Ireland, was
fully commissioned during Q4 2022. A further €47.0 million was advanced to this
Irish venture in 2022, with full repayment of these loans on completion of the
planned divestment of this business in 2023.
The Board will continue to review the Group’s overall portfolio as part of its
strategic review processes and will evaluate potential acquisition
opportunities to broaden the portfolio in this context that will drive growth
and assist the Group in achieving its ambition.
Completing the divestment of other non-core assets arising from the
strategic review performed, as outlined in the Group Finance Director’s
review on pages 44 to 49.
Acquisition integration and post-acquisition review processes will continue to
be monitored through Board and/or Audit Committee reviews.
The Audit Committee will continue to review the impairment testing
methodology, inputs, assumptions, sensitivity analysis and results of any
material businesses performing below expectations.
The Audit Committee assessed the impairment review of goodwill and
intangibles, including an assessment of the current global economic
environment, as outlined on page 108 and reviewed a number of post-
completion reviews presented by the Group Finance Director.
The Audit Committee received a detailed management presentation on our tax
structures and controls, the status of tax audits, the ongoing management of our
current operations and evolving tax legislation including the work of the
Organisation for Economic Co-operation and Development (OECD).
Management will continue to monitor developments in international tax
legislation, with a focus on maintaining compliance with legislative
requirements.
We will continue to engage external tax advisors to clarify tax legislation to
ensure that we achieve compliance with relevant tax laws across the
jurisdictions in which we operate.
Pro-active engagement with tax authorities in all material jurisdictions will
also continue where required.
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
77
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION
78
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Governance
Directors’ Report
Corporate Governance Report
Board of Directors and Senior Management
Audit Committee Report
Environmental, Social and
Governance Committee Report
Nomination and
Governance Committee Report
Remuneration Committee Report
Statutory information and
Forward-looking statement
Directors’ Responsibility Statement
80
83
103
110
114
120
141
157
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
79
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Corporate Governance Report
Introduction from the Group Chairman
Effective
governance
enabling
growth
“The Board is very conscious of the role
that it plays in ensuring that Glanbia
operates in a manner which is consistent
with the highest standards of corporate
governance. In 2022 we made good
progress on our key governance priorities
in the areas of Board renewal,
sustainability and stakeholder
engagement”
Donard Gaynor
Group Chairman
80
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Dear Shareholder,
On behalf of the Board, I am delighted to present the Corporate
Governance Report for the year ended 31 December 2022.
We have sustained the growth momentum seen in 2021 and
continued to focus on delivering on and exceeding our targets.
While we see further challenges ahead in the form of the volatile
political climate, ever pressing climate and environmental targets
and rising inflation, we are more determined than ever to deliver
excellence across the Group and remain a top choice for our
customers and end-point consumers.
A performance driven, purpose-led better nutrition
company
We are driven by healthier lifestyles and our purpose is to deliver
better nutrition for every step of life’s journey. We aim to do this
through focused, scalable growth and continue to make progress
on our strategic agenda. Reiterating the sentiment expressed by
our Group Managing Director, Siobhán Talbot, at the Capital
Markets Day held in Illinois on 9 November 2022, change is part of
our DNA, we have evolved enormously, our markets have evolved
and we have stayed close to our customers and consumers. We
don’t let structure get in the way of strategy.
With the completion of the sale of the Group’s minority interest in
Glanbia Ireland (Tirlán) on 1 April 2022, the Company continues to
evolve as a focused, purpose-led global better nutrition
company.
Further details on the disposal transaction are set out on
page 44.
Sustainability
Sustainability remains a large focus area for the Group. We are
committed to delivering our Environmental Social and Governance
(“ESG”) goals, reducing our carbon emissions in line with a 1.5
degrees Celsius pathway. The revised ambition is for a 50%
reduction in Scope 1 and 2 carbon emissions by 2030, from a 2018
base year.
Further details on our sustainability strategy can be found on
pages 50 to 67.
Stakeholder engagement
Stakeholder engagement, and understanding the views of our
stakeholders, is a core part of my role as Group Chairman.
Following the lifting of Covid-19 restrictions, I focused on
face-to-face engagements throughout the year.
A highlight of 2022 was the Capital Markets Day where we
provided robust detail on the Group’s strategic plans and three
year financial ambition, on operations for GN, GPN and joint
ventures, their performance and strategies, and on our
sustainability targets and commitments.
During 2022, representatives of the Group attended 12 investor
conferences. Meetings were held face-to-face where possible
and an analyst dinner was held in London in June.
A shareholder perceptions survey to understand shareholders’
priorities was carried out by an independent specialist firm on
behalf of the Board. Shareholders and investors were given an
opportunity to provide feedback to the Company on a confidential
basis. Interviews with shareholders and equity analysts, covering a
significant proportion of the Company’s equity ownership, were
carried out on an anonymous basis. Investors were interested in
understanding the evolution of the Group’s strategy following the
disposal of its stake in Glanbia Ireland (Tirlán). They were also keen
to further understand the key markets the Group is exposed to as
well as the drivers of growth following the pandemic. The findings
were presented to the Board for review and discussion.
Further details on how we engage with our stakeholders are set
out on pages 52 to 53.
Culture
As a purpose-led company, the culture of the Group is integral
and we live this through inclusive behaviours and promoting our
values, as set out on pages 20 and 21. We adopt this culture in
every aspect of how we do business, from the manner in which
we engage with our customers, consumers and the communities
in which we operate, to the ways in which we show our respect for
our people. We put a lot of emphasis on respect, on respecting
perspective, views and the environment. We are conscious that
the success of Glanbia is underpinned by the work and
dedication of its people and we are committed to fostering this
supportive, inclusive and diverse culture in Glanbia.
This year we established employee resource groups (“ERG”) for
female, multicultural and LGBTQIA+ employees, we built female
management representation targets into our annual incentives,
increased awareness and education programmes on diversity
and inclusion and we engaged with our employees by rolling out
a pulse survey during the year, with favourable results. We
endeavour to promote an open and inclusive environment for our
employees. We understand that our people have busy and
challenging lives and have chosen to continue to support working
from home where possible and permitted by work commitments,
allowing us access to a wide geography of talent.
Over the course of the year, I held a number of face-to-face
meetings with employees throughout the organisation across
both Ireland and the US. During these conversations, I heard
about what we are doing right as an organisation and indeed
how we can improve. I am always grateful for these meetings and
listened carefully to these suggestions, reporting them back to
the Board to be factored into decision making.
Our cultural climate is measured through a number of policy and
compliance processes, internal audit and both formal and
informal channels for employees to raise concerns (including our
employee engagement survey and our whistleblowing
programme, ‘Speak Up’, which is also available to the contractors
and suppliers working with us).
For more on our culture and values see pages 20-21 and 91, and
for DE&I policies see page 22.
Board composition, Board renewal and Committee
changes
There were a number of changes in the composition of the Board
and Committees during 2022, which are discussed in more detail
in the Nomination and Governance Committee Report on page
114. Patrick Coveney and Vincent Gorman retired from the Board
on 30 March 2022 and 5 May 2022 respectively. I thank both of
them sincerely for their service and commitment to the Board
during their tenure. Following an extensive search using a global
talent search firm, Ilona Haaijer and Kimberly Underhill were
appointed as Independent Non-Executive Directors effective
1 August 2022, increasing female Board membership to 36%.
This follows the reduction in the representation of Tirlán Co-
operative Society Limited (formerly Glanbia Co-operative
Society Limited) (the “Society”) on the Board from six to five in
2022 with a further agreed reduction to three in 2023.
The reduction of Society representation on the Board has
enabled us to increase the range of diversity and experience on
our Board. Full biographical details for Ilona and Kimberly can be
found on page 85.
Michael Horan stepped down from his role as Group Secretary and
as a member of the Group Operating Executive on 4 April 2022. As
a result, Liam Hennigan took on the role of Group Secretary and
Head of Investor Relations with effect from 4 April 2022. Liam
joined Glanbia in 2014 as Head of Investor Relations and later took
on added responsibility for Strategic Planning. Prior to Glanbia he
worked at PwC, focusing on restructuring, mergers and
acquisitions within the consumer sector.
A new Development Committee was established on 24 February
2022 to assist the Board in assessing new corporate development
opportunities. Paul Duffy replaced Dan O’Connor as Chair of the
Audit Committee on 7 March 2022.
Looking ahead
The governance priorities for the coming year include a continued
focus on delivering strong results, maximising our growth strategy,
supporting diversity, equity and inclusion, monitoring the progress
of our sustainability targets, mitigating inflation and the continued
evolution of the Board. Good governance and a strong corporate
culture are the foundations of Glanbia’s purpose, vision and
strategy. We have considered this report carefully so that our
stakeholders have an in-depth understanding of our priorities and
the arrangements and processes we have in place to comply with
the UK Corporate Governance Code 2018 (the “Code”) and the Irish
Corporate Governance Annex (the “Irish Annex”) (together the
“Codes”). The information contained in this report and the
Corporate Governance Statement has been set out in a way to
enable the reader to evaluate how the principles in the Codes have
been applied.
We are currently planning our 2023 Annual General Meeting
(“AGM”) which will be held on 4 May 2023 at 11.00 a.m. at the
Lyrath Estate, Kilkenny, R95 F685, Ireland. I encourage all
shareholders to either attend the AGM personally or use their
proxy vote in respect of the resolutions to be considered. This will
enable us to obtain a better understanding of your views. I also
welcome questions from shareholders either via our website
www.glanbia.com, by e-mail at groupsecretary@glanbia.ie or in
person at the AGM.
I would like to express my sincere thanks to the Board, and on
behalf of the Board to our employees, colleagues and partners
worldwide, whose dedication, as always, has been exemplary
and without whose talents we could not continue to deliver the
high standard of excellence for which Glanbia is known.
Donard Gaynor
Group Chairman
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
81
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Corporate Governance Report continued
Corporate Governance
Experience and skills of the Non-Executive Directors
Food and
beverage
industry
Leadership
and
management
Finance
Strategic
planning
Brand
experience
Change
management
Corporate
transactions
Corporate
governance
International
business
development
Donard Gaynor
Patsy Ahern
Róisín Brennan
Paul Duffy
Ilona Haaijer
Brendan Hayes
Jane Lodge
John G Murphy
John Murphy
Patrick Murphy
Dan O’Connor
Kimberly Underhill
x
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UK Corporate Governance and Irish Corporate
Governance Annex Statement of Compliance
In 2022 the Group was subject to the Codes. The Group applied
all the principles and complied with the detailed provisions of the
Codes with the exception of those set out below. The Codes
recognise that an alternative to following a provision may be
justified in particular circumstances where good governance is
still achieved. The rationale for these departures is explained
below.
Provision 11 (Composition of the Board of Directors)
Provision 11 provides that at least half the Board, excluding the
chair, should be non-executive directors whom the Board
considers to be independent. The current composition of the
Board is the Group Chairman, two Executive Directors, five
Directors nominated by the Society and six Independent
Non-Executive Directors, with the Independent Non-Executive
Directors making up 43% of the Board. The current Board
composition reflects the relationship of the Company with the
Society which is documented in the amended and restated
Relationship Agreement dated 5 May 2021. On 23 February 2021,
the Society and the Board agreed a number of changes which
will impact the composition and size of the Board over the period
between 2021 to 2023 and which will reduce the number of
Directors nominated by the Society on the Board from seven to
three (currently five) and the Board size from 15 to 13 (currently 14)
(details of which are set out in the Nomination and Governance
Committee Report). This would mean the composition of the
Board in 2023 will be the Group Chairman, two Executive
Directors, three Directors nominated by the Society and seven
Independent Non-Executive Directors, with the Independent
Non-Executive Directors making up 54% of the Board. The Board
is satisfied that the current composition of the Board is justified
in our particular circumstances where there is an identified plan
to increase the number of Independent Directors on the Board.
Provision 19 (Chairman tenure)
In accordance with the Relationship Agreement dated 2 July 2017,
Donard Gaynor, (at the time an Independent Non-Executive
Director), was appointed as the first Independent of the Society
Group Chairman of the Company on 8 October 2020, having
been appointed to the Board on 12 March 2013. In 2021, the Board
unanimously agreed that he will continue as Group Chairman
until his successor is appointed in 2025 to facilitate the
appointment of three new Independent Non-Executive Directors
together with ongoing effective Board renewal. The Board
believes that the extension of the Group Chairman’s tenure for a
limited period beyond nine years is warranted in this instance to
facilitate effective succession planning and the development of a
diverse board. The Group Chairman is evaluated yearly and the
Board is satisfied that he continues to demonstrate
independence of character and judgment and is free from any
business or other relationship that could affect his judgement.
Provision 38 (Pension Contributions)
We are reviewing our workforce pension arrangements so that
our Executive Directors will be aligned to the workforce rate in
Ireland following this review. Although the review has not yet
completed, from 1 January 2023 the pension contribution for the
Group Managing Director and Group Finance Director was
reduced from 26.5% and 25% of salary respectively to 12% for
both. Upon conclusion of the review in 2023, any further
necessary adjustments for the Group Managing Director and
Group Finance Director to align with the workforce rate in Ireland
will be made at that time. The pension contribution rates for
future Executive Directors will be aligned to the workforce in the
country of appointment. Further details can be found in the
Remuneration Committee Report.
A description of how we have applied the principles and detailed
provisions of the Codes is set out in the following pages.
82
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Board of Directors and Senior Management
Group Chairman and Executive Directors
Leading
by example
Name
Job title
Date of appointment
Board tenure
Skills and expertise
Experience
Donard Gaynor
Siobhán Talbot
Mark Garvey
Group Chairman and Non-
Executive Director
Group Managing Director and
Executive Director
Group Finance Director and
Executive Director
12 March 2013
Nine full years
1 July 2009
13 full years
12 November 2013
Nine full years
Extensive knowledge of the food
and beverage industry with
significant commercial acumen
and deep insight into international
business.
Strong leadership qualities, and
deep knowledge of management,
finance and strategic planning
acquired from a successful career
path within Glanbia.
Strong background in finance and
global executive management
and extensive experience in the
food and beverage industry.
Donard Gaynor was appointed
Group Chairman on 8 October
2020. Donard Gaynor retired
in December 2012 as Senior
Vice President of Strategy and
Corporate Development of Beam,
Inc., the premium spirits company
previously listed on the New
York Stock Exchange. A Fellow of
Chartered Accountants Ireland
and the American Institute of
Certified Public Accountants, he
joined Beam, Inc. in 2003 as Senior
Vice President and Managing
Director – International. Prior
to this, he served in a variety of
senior executive leadership roles
with The Seagram Spirits & Wine
Group in New York and was also
Audit Client Services Partner with
the New York office of PwC.
Siobhán Talbot was appointed
as Group Managing Director on
12 November 2013, having been
appointed Group Managing
Director Designate on 1 June
2013. She was previously Group
Finance Director and her role
encompassed responsibility
for Group strategic planning.
She has been a member of the
Group Operating Executive
since 2000 and the Board since
2009 and has held a number of
senior positions since she joined
the Group in 1992. She is also
a Director of the Irish Business
and Employers Confederation
(IBEC) and was appointed as a
Non-Executive Director of CRH plc
effective 1 December 2018. Prior
to joining Glanbia, she worked
with PwC in Dublin and Sydney. A
Fellow of Chartered Accountants
Ireland, Siobhán graduated from
University College Dublin with a
Bachelor of Commerce degree
and Diploma in Professional
Accounting.
Mark Garvey was appointed
as Group Finance Director on
12 November 2013. Prior to joining
Glanbia he held the position of
Executive Vice President and
Chief Financial Officer until 2012
with Sara Lee Corporation, a
leading global food and beverage
company. Mark also held a
number of senior finance roles in
the Sara Lee Corporation in the
US and Europe and prior to that
he worked with Arthur Andersen
in Ireland and the US. A Fellow of
Chartered Accountants Ireland
and the American Institute of
Certified Public Accountants,
Mark graduated from University
College Dublin with a Bachelor of
Commerce degree and Diploma
in Professional Accounting and
has an Executive MBA from
Northwestern University, Illinois.
Key external appointments
None.
Non-Executive Director of CRH plc
and Director of the Irish Business and
Employers Confederation (IBEC).
None.
Committee memberships
Key
Audit
Committee
Development
Committee
Nomination and
Governance
Committee
Environmental Social and
Governance Committee
Remuneration
Committee
Chair
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
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Board of Directors and Senior Management continued
Senior Independent Director, Non-Executive Directors
Name
Job title
Dan O’Connor
Róisín Brennan
Paul Duffy
Ilona Haaijer
Jane Lodge
Kimberly Underhill
Senior Independent Director and
Non-Executive Director
Non-Executive Director
Non-Executive Director
Job title
Non-Executive Director
Non-Executive Director
Non-Executive Director
Date of appointment
1 December 2014
Board tenure
Eight full years
1 January 2021
Two full years
1 March 2021
One full year
Date of appointment
1 August 2022
1 November 2020
1 August 2022
Board tenure
Less than one full year
Two full years
Less than one full year
Skills and expertise
Strong, strategic leadership
acquired from 30 years
international and financial
services sector experience.
Extensive strategic and financial
advisory experience across many
sectors including food and FMCG.
Experienced Chairman and Chief
Executive Officer with extensive
knowledge of the consumer and
beverage industry with significant
strategic and brand experience.
Experience
Dan O’Connor is currently
Chairman of Activate Capital
Limited and a Director of Oriel
Windfarm Limited. He is former
Chairman of International
Personal Finance plc and a former
Non-Executive Director of CRH
plc. Dan is a former President
and Chief Executive Officer of GE
Consumer Finance Europe and a
former Senior Vice-President of
GE. He was Executive Chairman
of Allied Irish Banks plc from
2009 until 2010. A Fellow of
Chartered Accountants Ireland.
Dan graduated from University
College Dublin with a Bachelor of
Commerce degree and Diploma in
Professional Accounting.
Róisín Brennan is a former Chief
Executive of IBI Corporate Finance
Ltd and has over 20 years of
investment banking experience,
particularly advising public
companies in Ireland. She brings
strong strategic and financial
advisory experience across many
sectors including food and FMCG
to the Board. Róisín is currently a
Non-Executive Director of Ryanair
Holdings plc, Musgrave Group
plc and Dell Bank International
DAC. Formerly, she was a Non-
Executive Director of DCC plc
from 2005 until 2016 and is also
a former Non-Executive Director
of Hibernia REIT plc, Wireless
Group plc, Coillte DAC and The
Irish Takeover Panel. A Fellow of
Chartered Accountants Ireland,
Róisín graduated from University
College Dublin with a Bachelor of
Civil Law degree.
Paul Duffy is a former Chairman
and CEO of Pernod Ricard North
America, a global leader in the
Wine and Spirits industry. During
his 25 year career with Pernod
Ricard, Paul held a number of
senior management positions
including Chairman and CEO roles
at Pernod Ricard UK, The Absolut
Company (Sweden) and Irish
Distillers. He served on the Pernod
Ricard worldwide management
executive committee. Paul is
currently a director of W.A. Baxter
& Sons, a United Kingdom Food
Group and is a former director of
Corby Spirit and Wine Limited,
a leading Canadian marketer
and distributor of spirits and
wines listed on the Toronto Stock
Exchange. Paul is a Fellow of
Chartered Accountants Ireland
and is a graduate of Trinity
College Dublin.
Skills and expertise
Experience
Extensive and significant
leadership experience of
strategic development, change
management, mergers and
In-depth knowledge of
international business,
management, corporate
transactions, corporate
acquisitions and leading complex,
governance and reporting gained
global businesses in the food
from a successful career with
ingredients and consumer sectors.
Deloitte.
Ilona Haaijer is a former President
and CEO of DSM Food Specialties,
President of DSM Personal Care
and also previously served as
CEO of Bugaboo International,
CEO of Philips AVENT, Vice
President Corporate Strategy
of Royal Philips Electronics,
and as a Consultant at The
Boston Consulting Group. Ilona
brings significant international
experience of food ingredient and
consumer oriented businesses
and is currently a Non-Executive
Director of Corbion N.V., an
Amsterdam based Euronext
listed food and bio-technology
company. Formerly, she was a
Non-Executive Director of RPC
Group plc and Royal Boskalis
Westminster N.V.. Ilona graduated
from the University of Groningen,
Netherlands with an MA in
Business Economics.
Jane Lodge is a former Senior
Audit Partner of Deloitte with
extensive knowledge and
experience of international
businesses in a wide range of
sectors. Jane served on the
Deloitte UK Board of Partners
and was the UK Manufacturing
Industry Lead Partner. She
is currently a Non-Executive
Director of TI Fluid Systems plc,
FirstGroup plc and Bakkavor
Group plc. She is a former Non-
Executive Director of Devro
plc, Sirius Minerals plc, Costain
Group plc and DCC plc. A Fellow
of the Institute of Chartered
Accountants in England and
Wales, Jane graduated from
University of Birmingham with a
BSc in Geology.
Extensive and significant
leadership experience in US and
international consumer products
businesses, with particular
strength in product development,
marketing, portfolio management,
brand-building, strategic planning
and international business
development.
Kimberly Underhill is a former
Group President, Consumer
Business North America of
Kimberly-Clark. During her 33
year career with Kimberly-Clark,
she held roles within research
and engineering, operations and
marketing. Kimberly served as
Global President, Kimberly-Clark
Professional and as President,
Consumer Europe. Kimberly
is currently a Non-Executive
Director of Foot Locker Inc., the
global sportswear and footwear
retailer listed on the New York
Stock Exchange. She also serves
on the Board of Trustees of Theda
Care Regional Medical Centre,
is a Director of The Menasha
Corporation (a privately held
company that is a packaging
manufacturer and provider of
supply chain solutions) and is
Co-Chair of Fox Cities United Way
Campaign. Formerly, Kimberly
chaired the Network of Executive
Women and was a Director of the
Food Marketing Institute. Kimberly
graduated from Milwaukee School
of Engineering, USA with a MSc
in Engineering Management, and
Purdue University, USA with a BSc
in Chemical Engineering.
Key external appointments
Chairman of Activate Capital
Limited and Director of Oriel
Windfarm Limited.
Non-Executive Director of Ryanair
Holdings plc, Musgrave Group plc
and Dell Bank International DAC.
Non-Executive Director of W.A.
Baxter & Sons.
Key external appointments
Non-Executive Director of
Corbion N.V.
Non-Executive Director of TI Fluid
Systems plc, FirstGroup plc and
Bakkavor Group plc.
Non-Executive Director of Foot
Locker Inc., and a director of The
Menasha Corporation.
Committee memberships
84
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
DCNGCESGDCNGCRCACDCRCACDCESGACDCRCACDCRC
Name
Job title
Non-Executive Director
Dan O’Connor
Róisín Brennan
Paul Duffy
Ilona Haaijer
Jane Lodge
Kimberly Underhill
Senior Independent Director and
Non-Executive Director
Non-Executive Director
Job title
Non-Executive Director
Non-Executive Director
Non-Executive Director
Date of appointment
1 December 2014
Board tenure
Eight full years
1 January 2021
Two full years
1 March 2021
One full year
Date of appointment
1 August 2022
1 November 2020
1 August 2022
Board tenure
Less than one full year
Two full years
Less than one full year
Skills and expertise
Skills and expertise
Strong, strategic leadership
acquired from 30 years
international and financial
services sector experience.
Extensive strategic and financial
advisory experience across many
sectors including food and FMCG.
Experienced Chairman and Chief
Executive Officer with extensive
knowledge of the consumer and
beverage industry with significant
strategic and brand experience.
Experience
Experience
Dan O’Connor is currently
Chairman of Activate Capital
Limited and a Director of Oriel
Windfarm Limited. He is former
Chairman of International
Personal Finance plc and a former
Non-Executive Director of CRH
plc. Dan is a former President
and Chief Executive Officer of GE
Consumer Finance Europe and a
former Senior Vice-President of
GE. He was Executive Chairman
of Allied Irish Banks plc from
2009 until 2010. A Fellow of
Chartered Accountants Ireland.
Dan graduated from University
College Dublin with a Bachelor of
Commerce degree and Diploma in
Professional Accounting.
Róisín Brennan is a former Chief
Executive of IBI Corporate Finance
Ltd and has over 20 years of
investment banking experience,
particularly advising public
companies in Ireland. She brings
strong strategic and financial
advisory experience across many
sectors including food and FMCG
to the Board. Róisín is currently a
Non-Executive Director of Ryanair
Holdings plc, Musgrave Group
plc and Dell Bank International
DAC. Formerly, she was a Non-
Executive Director of DCC plc
from 2005 until 2016 and is also
a former Non-Executive Director
of Hibernia REIT plc, Wireless
Group plc, Coillte DAC and The
Irish Takeover Panel. A Fellow of
Chartered Accountants Ireland,
Róisín graduated from University
College Dublin with a Bachelor of
Civil Law degree.
Paul Duffy is a former Chairman
and CEO of Pernod Ricard North
America, a global leader in the
Wine and Spirits industry. During
his 25 year career with Pernod
Ricard, Paul held a number of
senior management positions
including Chairman and CEO roles
at Pernod Ricard UK, The Absolut
Company (Sweden) and Irish
Distillers. He served on the Pernod
Ricard worldwide management
executive committee. Paul is
currently a director of W.A. Baxter
& Sons, a United Kingdom Food
Group and is a former director of
Corby Spirit and Wine Limited,
a leading Canadian marketer
and distributor of spirits and
wines listed on the Toronto Stock
Exchange. Paul is a Fellow of
Chartered Accountants Ireland
and is a graduate of Trinity
College Dublin.
Extensive and significant
leadership experience of
strategic development, change
management, mergers and
acquisitions and leading complex,
global businesses in the food
ingredients and consumer sectors.
In-depth knowledge of
international business,
management, corporate
transactions, corporate
governance and reporting gained
from a successful career with
Deloitte.
Ilona Haaijer is a former President
and CEO of DSM Food Specialties,
President of DSM Personal Care
and also previously served as
CEO of Bugaboo International,
CEO of Philips AVENT, Vice
President Corporate Strategy
of Royal Philips Electronics,
and as a Consultant at The
Boston Consulting Group. Ilona
brings significant international
experience of food ingredient and
consumer oriented businesses
and is currently a Non-Executive
Director of Corbion N.V., an
Amsterdam based Euronext
listed food and bio-technology
company. Formerly, she was a
Non-Executive Director of RPC
Group plc and Royal Boskalis
Westminster N.V.. Ilona graduated
from the University of Groningen,
Netherlands with an MA in
Business Economics.
Jane Lodge is a former Senior
Audit Partner of Deloitte with
extensive knowledge and
experience of international
businesses in a wide range of
sectors. Jane served on the
Deloitte UK Board of Partners
and was the UK Manufacturing
Industry Lead Partner. She
is currently a Non-Executive
Director of TI Fluid Systems plc,
FirstGroup plc and Bakkavor
Group plc. She is a former Non-
Executive Director of Devro
plc, Sirius Minerals plc, Costain
Group plc and DCC plc. A Fellow
of the Institute of Chartered
Accountants in England and
Wales, Jane graduated from
University of Birmingham with a
BSc in Geology.
Extensive and significant
leadership experience in US and
international consumer products
businesses, with particular
strength in product development,
marketing, portfolio management,
brand-building, strategic planning
and international business
development.
Kimberly Underhill is a former
Group President, Consumer
Business North America of
Kimberly-Clark. During her 33
year career with Kimberly-Clark,
she held roles within research
and engineering, operations and
marketing. Kimberly served as
Global President, Kimberly-Clark
Professional and as President,
Consumer Europe. Kimberly
is currently a Non-Executive
Director of Foot Locker Inc., the
global sportswear and footwear
retailer listed on the New York
Stock Exchange. She also serves
on the Board of Trustees of Theda
Care Regional Medical Centre,
is a Director of The Menasha
Corporation (a privately held
company that is a packaging
manufacturer and provider of
supply chain solutions) and is
Co-Chair of Fox Cities United Way
Campaign. Formerly, Kimberly
chaired the Network of Executive
Women and was a Director of the
Food Marketing Institute. Kimberly
graduated from Milwaukee School
of Engineering, USA with a MSc
in Engineering Management, and
Purdue University, USA with a BSc
in Chemical Engineering.
Key external appointments
Chairman of Activate Capital
Limited and Director of Oriel
Windfarm Limited.
Non-Executive Director of Ryanair
Holdings plc, Musgrave Group plc
and Dell Bank International DAC.
Non-Executive Director of W.A.
Baxter & Sons.
Key external appointments
Non-Executive Director of
Corbion N.V.
Non-Executive Director of TI Fluid
Systems plc, FirstGroup plc and
Bakkavor Group plc.
Non-Executive Director of Foot
Locker Inc., and a director of The
Menasha Corporation.
Committee memberships
Key
Audit
Committee
Development
Committee
Nomination and
Governance
Committee
Environmental Social and
Governance Committee
Remuneration
Committee
Chair
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
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Board of Directors and Senior Management continued
Non-Executive Directors nominated by the Society
Name
Job title
Patsy Ahern
Brendan Hayes
John G Murphy
John Murphy
Patrick Murphy
Non-Executive Director
nominated by the Society
Non-Executive Director
nominated by the Society
Non-Executive Director
nominated by the Society
Job title
Non-Executive Director
nominated by the Society
Non-Executive Director
nominated by the Society
Date of appointment
21 June 2018
2 June 2017
Seven full years
(over each of his terms)
10 full years
(over each of his terms)
29 June 2010
12 full years
Date of appointment
8 October 2020
Board tenure
Two full years
26 May 2011
11 full years
Board tenure
Skills and expertise
Experience
Extensive knowledge of the global
food and beverage industry
and significant experience in
the governance and strategic
management of a global business
gained from his tenure on the
boards of Tirlán Co-operative
Society Limited and Glanbia plc.
Extensive knowledge of the global
food and beverage industry
and significant experience in
the governance and strategic
management of a global business
gained from his tenure on the
boards of Tirlán Co-operative
Society Limited and Glanbia plc.
Extensive knowledge of the global
food and beverage industry
and significant experience in
the governance and strategic
management of a global business
gained from his tenure on the
boards of Tirlán Co-operative
Society Limited and Glanbia plc.
Skills and expertise
Extensive knowledge of the global
Extensive knowledge of the global
food and beverage industry
and significant experience in
the governance and strategic
food and beverage industry
and significant experience in
the governance and strategic
management of a global business
management of a global business
gained from his tenure on the
boards of Tirlán Co-operative
Society Limited and Glanbia plc.
gained from his tenure on the
boards of Tirlán Co-operative
Society Limited and Glanbia plc.
Patsy Ahern farms at Sheanmore,
Ballyduff Upper, Co. Waterford
and previously served two full
years on the Board. Patsy has
completed the University College
Cork Diploma in Corporate
Direction.
Brendan Hayes farms at
Ballyquinn, Carrick-on-Suir, Co.
Waterford and previously served
four full years on the Board. He
was appointed Vice-Chairman
of Tirlán Co-operative Society
Limited (formerly Glanbia Co-
operative Society Limited) on
8 October 2020. Brendan has
completed the University College
Cork Diploma in Corporate
Direction.
John G Murphy farms at
Ballinacoola, Craanford, Gorey,
Co. Wexford. John served as
Group Vice-Chairman between
2 June 2017 and 8 October 2020.
John was appointed Chairman
of Tirlán Co-operative Society
Limited (formerly Glanbia
Co-operative Society Limited)
on 8 October 2020. John has
completed the University College
Cork Diploma in Corporate
Direction.
Experience
John Murphy farms at High Down
Patrick Murphy farms at
Hill, Newcastle, Co Dublin.
Smithstown, Maddoxtown, Co.
Kilkenny. Patrick served as Group
Vice-Chairman until 8 October
2020 having served as Vice-
Chairman for over five years over
two separate terms. He is Vice-
Chairman of Tirlán Co-operative
Society Limited (formerly Glanbia
Co-operative Society Limited).
Patrick is a Director of Farmer
Business Developments plc.
Key external appointments
Director of Tirlán Co-operative
Society Limited and Irish Co-
operative Organisation Society
Limited.
Vice-Chairman of Tirlán Co-
operative Society Limited.
Chairman of Tirlán Co-operative
Society Limited.
Key external appointments
Director of Tirlán Co-operative
Society Limited.
Vice-Chairman of Tirlán Co-
operative Society Limited and
Director of Farmer Business
Developments plc.
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GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
ESG Name
Job title
Board tenure
Skills and expertise
Patsy Ahern
Brendan Hayes
John G Murphy
John Murphy
Patrick Murphy
Non-Executive Director
nominated by the Society
Non-Executive Director
nominated by the Society
Non-Executive Director
nominated by the Society
Job title
Non-Executive Director
nominated by the Society
Non-Executive Director
nominated by the Society
Date of appointment
21 June 2018
2 June 2017
Seven full years
(over each of his terms)
10 full years
(over each of his terms)
29 June 2010
12 full years
Date of appointment
8 October 2020
Board tenure
Two full years
26 May 2011
11 full years
Extensive knowledge of the global
Extensive knowledge of the global
Extensive knowledge of the global
food and beverage industry
and significant experience in
the governance and strategic
food and beverage industry
and significant experience in
the governance and strategic
food and beverage industry
and significant experience in
the governance and strategic
management of a global business
management of a global business
management of a global business
gained from his tenure on the
boards of Tirlán Co-operative
Society Limited and Glanbia plc.
gained from his tenure on the
boards of Tirlán Co-operative
Society Limited and Glanbia plc.
gained from his tenure on the
boards of Tirlán Co-operative
Society Limited and Glanbia plc.
Skills and expertise
Extensive knowledge of the global
food and beverage industry
and significant experience in
the governance and strategic
management of a global business
gained from his tenure on the
boards of Tirlán Co-operative
Society Limited and Glanbia plc.
Extensive knowledge of the global
food and beverage industry
and significant experience in
the governance and strategic
management of a global business
gained from his tenure on the
boards of Tirlán Co-operative
Society Limited and Glanbia plc.
Experience
Patsy Ahern farms at Sheanmore,
Brendan Hayes farms at
Experience
John Murphy farms at High Down
Hill, Newcastle, Co Dublin.
Ballyduff Upper, Co. Waterford
and previously served two full
years on the Board. Patsy has
completed the University College
Cork Diploma in Corporate
Direction.
Ballyquinn, Carrick-on-Suir, Co.
Waterford and previously served
four full years on the Board. He
was appointed Vice-Chairman
of Tirlán Co-operative Society
Limited (formerly Glanbia Co-
operative Society Limited) on
8 October 2020. Brendan has
completed the University College
Cork Diploma in Corporate
Direction.
John G Murphy farms at
Ballinacoola, Craanford, Gorey,
Co. Wexford. John served as
Group Vice-Chairman between
2 June 2017 and 8 October 2020.
John was appointed Chairman
of Tirlán Co-operative Society
Limited (formerly Glanbia
Co-operative Society Limited)
on 8 October 2020. John has
completed the University College
Cork Diploma in Corporate
Direction.
Patrick Murphy farms at
Smithstown, Maddoxtown, Co.
Kilkenny. Patrick served as Group
Vice-Chairman until 8 October
2020 having served as Vice-
Chairman for over five years over
two separate terms. He is Vice-
Chairman of Tirlán Co-operative
Society Limited (formerly Glanbia
Co-operative Society Limited).
Patrick is a Director of Farmer
Business Developments plc.
Key external appointments
Vice-Chairman of Tirlán Co-
operative Society Limited.
Chairman of Tirlán Co-operative
Society Limited.
Key external appointments
Director of Tirlán Co-operative
Society Limited.
Director of Tirlán Co-operative
Society Limited and Irish Co-
operative Organisation Society
Limited.
Vice-Chairman of Tirlán Co-
operative Society Limited and
Director of Farmer Business
Developments plc.
Key
Audit
Committee
Development
Committee
Nomination and
Governance
Committee
Environmental Social and
Governance Committee
Remuneration
Committee
Chair
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
87
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATIONESGACDCNGCESGRC
Board of Directors and Senior Management continued
Senior management, Group Operating Executive
Name
Job title
Ian Doyle
Hugh McGuire
Michael Patten
Brian Phelan
Sue Sweem
Liam Hennigan
Chief Corporate Development
Officer
CEO Glanbia Performance
Nutrition
Chief ESG & Corporate Affairs
Officer
CEO Glanbia Nutritionals
Chief Human Resources Officer
Group Secretary and
Head of Investor Relations
Date of appointment
4 January 2022
Tenure
One full year
1 June 2013
Nine full years
11 December 2014
Eight full years
Date of appointment
1 January 2004
1 December 2021
4 April 2022
19 full years
One full year
Less than one full year
Skills and expertise
Experience
A deep knowledge of international
corporate finance with extensive
experience negotiating and
structuring complex acquisitions,
divestitures, investments and
partnerships.
Experienced chief executive
officer who has extensive
strategic, corporate development
and acquisition experience. Strong
leadership qualities acquired
from a successful career within
Glanbia.
Internationally experienced senior
leader with a deep understanding
of leadership and culture, ESG,
reputation and policy agendas
in the global food and beverage
sector.
Ian Doyle is Chief Corporate
Development Officer and
responsible for identifying
partnership, acquisition and new
business opportunities globally.
Prior to joining Glanbia, he was
Managing Director in the North
American Consumer Retail
Group of Nomura Securities
with responsibility for food and
beverage companies. Previously
Ian was based in London and
was part of Lehman Brothers’
European investment banking
business. He holds a degree in
Business Studies and German
from Trinity College Dublin.
Hugh McGuire is CEO of Glanbia
Performance Nutrition. Hugh was
appointed to the Board on 1 June
2013 and served as a Director of
the Company between June 2013
and April 2019. Hugh joined the
Group in 2003 and has been CEO
of Glanbia Performance Nutrition
since 2008. Prior to that he held
a number of senior management
roles in the Group. He previously
worked for McKinsey & Company
as a consultant across a range of
industry sectors. Prior to this he
worked in the consumer products
industry with Nestle and Leaf.
Hugh graduated from University
College Dublin with an M.Sc. in
Food Science. He has a Diploma
in Finance from the Association of
Chartered Certified Accountants
Ireland.
Michael Patten is Chief
Environmental Social Governance
(“ESG”) & Corporate Affairs
Officer and has responsibility
for the development and
implementation of our ESG
strategy, strategic leadership of
the Group’s global reputation,
public affairs and sustainability
agenda. Previously Michael
was Glanbia’s Chief Human
Resource Officer. Prior to joining
the Group, Michael was Global
Public Affairs Director with
Diageo plc. He previously served
with the Group as Director of
Communications. Michael
is currently a Non-Executive
Director of the Irish Management
Institute (IMI). Michael holds a BA
in Communication Studies from
Dublin City University and is an
Honorary Life Fellow of the Public
Relations Institute of Ireland.
Michael is a Chartered Director
with the Institute of Directors.
Job title
Tenure
Skills and expertise
Experience
Experienced chief executive
officer who has extensive
strategic, commercial and
corporate development
experience. Strong leadership
qualities acquired from a
A deep knowledge of global
human resources management
with expertise in organisation
development shaping the culture
and capabilities of the business,
and supporting the integration of
successful career within Glanbia.
acquisitions.
In-depth knowledge of the
consumer goods sector, strategy,
finance, restructuring, mergers,
acquisitions, capital markets and
communications.
Brian Phelan was appointed
as CEO of Glanbia Nutritionals
on 1 June 2013 and served as a
Director of the Company between
January 2013 and April 2019.
Brian was previously Group
Human Resources & Operations
Development Director from 2004
to 2012. He is the Chairman of
Glanbia Cheese Limited. Since
joining the Group in 1993, he
has held a number of senior
management positions. Prior
to this, he worked with KPMG.
He graduated from University
College Cork with a Bachelor of
Commerce degree and is a Fellow
of Chartered Accountants Ireland.
Sue Sweem is Chief Human
Resources Officer and has
responsibility for the strategic
leadership of Group Human
Resources. Previously, she
was Chief People Officer for
Glanbia Performance Nutrition
(“GPN”) from 2015 to 2021 and
held other HR positions in GPN
since joining in 2012. Prior to
joining Glanbia, Sue was a HR
Director at Walgreens and gained
international experience while
serving as Head of HR in the US
for AkzoNobel, a global company
based in The Netherlands. Sue
holds a PhD in Organization
Development from Benedictine
University, a Master’s degree in HR
& Industrial Relations from Loyola
University and a BS in Sociology
from Iowa State University.
Liam Hennigan was appointed
Group Secretary and Head of
Investor Relations on 4 April 2022,
having previously held the position
of Group Director of Strategic
Planning and Investor Relations.
Liam joined the Group in 2014 as
Head of Investor Relations and
later took on added responsibility
for Strategic Planning. Liam
previously worked as a Corporate
Finance Director with PwC and
prior to that at Diageo plc where
he worked in brand innovation and
marketing procurement. Liam has
lived and worked extensively in
the UK, USA, Spain and Ireland. He
holds a degree in Food Technology
from University College Cork,
Ireland as well as an MBA from
IE Business School, Spain and a
diploma in Accounting from the
Association of Chartered Certified
Accountants.
Key external appointments
None.
Director of ClonBio Group Limited.
Non-Executive Director of the Irish
Management Institute (IMI)
Key external appointments
None.
None.
None.
88
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Ian Doyle
Officer
Name
Job title
Tenure
Skills and expertise
Chief Corporate Development
CEO Glanbia Performance
Chief ESG & Corporate Affairs
Job title
CEO Glanbia Nutritionals
Chief Human Resources Officer
Group Secretary and
Head of Investor Relations
Hugh McGuire
Michael Patten
Brian Phelan
Sue Sweem
Liam Hennigan
Date of appointment
4 January 2022
Date of appointment
1 January 2004
1 December 2021
4 April 2022
One full year
Nine full years
Eight full years
Tenure
19 full years
One full year
Less than one full year
Nutrition
1 June 2013
Officer
11 December 2014
A deep knowledge of international
corporate finance with extensive
experience negotiating and
structuring complex acquisitions,
divestitures, investments and
partnerships.
Experienced chief executive
officer who has extensive
strategic, corporate development
and acquisition experience. Strong
leadership qualities acquired
from a successful career within
Glanbia.
Internationally experienced senior
leader with a deep understanding
of leadership and culture, ESG,
reputation and policy agendas
in the global food and beverage
sector.
Skills and expertise
Experienced chief executive
officer who has extensive
strategic, commercial and
corporate development
experience. Strong leadership
qualities acquired from a
successful career within Glanbia.
A deep knowledge of global
human resources management
with expertise in organisation
development shaping the culture
and capabilities of the business,
and supporting the integration of
acquisitions.
In-depth knowledge of the
consumer goods sector, strategy,
finance, restructuring, mergers,
acquisitions, capital markets and
communications.
Experience
Experience
Ian Doyle is Chief Corporate
Development Officer and
responsible for identifying
partnership, acquisition and new
business opportunities globally.
Prior to joining Glanbia, he was
Managing Director in the North
American Consumer Retail
Group of Nomura Securities
with responsibility for food and
beverage companies. Previously
Ian was based in London and
was part of Lehman Brothers’
European investment banking
business. He holds a degree in
Business Studies and German
from Trinity College Dublin.
Hugh McGuire is CEO of Glanbia
Performance Nutrition. Hugh was
appointed to the Board on 1 June
2013 and served as a Director of
the Company between June 2013
and April 2019. Hugh joined the
Group in 2003 and has been CEO
of Glanbia Performance Nutrition
since 2008. Prior to that he held
a number of senior management
roles in the Group. He previously
worked for McKinsey & Company
as a consultant across a range of
industry sectors. Prior to this he
worked in the consumer products
industry with Nestle and Leaf.
Hugh graduated from University
College Dublin with an M.Sc. in
Food Science. He has a Diploma
in Finance from the Association of
Chartered Certified Accountants
Ireland.
Michael Patten is Chief
Environmental Social Governance
(“ESG”) & Corporate Affairs
Officer and has responsibility
for the development and
implementation of our ESG
strategy, strategic leadership of
the Group’s global reputation,
public affairs and sustainability
agenda. Previously Michael
was Glanbia’s Chief Human
Resource Officer. Prior to joining
the Group, Michael was Global
Public Affairs Director with
Diageo plc. He previously served
with the Group as Director of
Communications. Michael
is currently a Non-Executive
Director of the Irish Management
Institute (IMI). Michael holds a BA
in Communication Studies from
Dublin City University and is an
Honorary Life Fellow of the Public
Relations Institute of Ireland.
Michael is a Chartered Director
with the Institute of Directors.
Brian Phelan was appointed
as CEO of Glanbia Nutritionals
on 1 June 2013 and served as a
Director of the Company between
January 2013 and April 2019.
Brian was previously Group
Human Resources & Operations
Development Director from 2004
to 2012. He is the Chairman of
Glanbia Cheese Limited. Since
joining the Group in 1993, he
has held a number of senior
management positions. Prior
to this, he worked with KPMG.
He graduated from University
College Cork with a Bachelor of
Commerce degree and is a Fellow
of Chartered Accountants Ireland.
Sue Sweem is Chief Human
Resources Officer and has
responsibility for the strategic
leadership of Group Human
Resources. Previously, she
was Chief People Officer for
Glanbia Performance Nutrition
(“GPN”) from 2015 to 2021 and
held other HR positions in GPN
since joining in 2012. Prior to
joining Glanbia, Sue was a HR
Director at Walgreens and gained
international experience while
serving as Head of HR in the US
for AkzoNobel, a global company
based in The Netherlands. Sue
holds a PhD in Organization
Development from Benedictine
University, a Master’s degree in HR
& Industrial Relations from Loyola
University and a BS in Sociology
from Iowa State University.
Liam Hennigan was appointed
Group Secretary and Head of
Investor Relations on 4 April 2022,
having previously held the position
of Group Director of Strategic
Planning and Investor Relations.
Liam joined the Group in 2014 as
Head of Investor Relations and
later took on added responsibility
for Strategic Planning. Liam
previously worked as a Corporate
Finance Director with PwC and
prior to that at Diageo plc where
he worked in brand innovation and
marketing procurement. Liam has
lived and worked extensively in
the UK, USA, Spain and Ireland. He
holds a degree in Food Technology
from University College Cork,
Ireland as well as an MBA from
IE Business School, Spain and a
diploma in Accounting from the
Association of Chartered Certified
Accountants.
Key external appointments
None.
Director of ClonBio Group Limited.
Non-Executive Director of the Irish
Key external appointments
None.
None.
None.
Management Institute (IMI)
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89
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Corporate Governance Report continued
Board Leadership and Company Purpose
The Board recognises the different interests of our stakeholder groups and the impact the delivery of our strategic priorities will have
upon them. As outlined on pages 52 and 53, stakeholder engagement occurs at all levels of the organisation. The Board monitors and
contributes to regular dialogue taking place with stakeholders.
Shareholder engagement
Communications with shareholders are given high priority and
the Group devotes considerable time and resources each year to
shareholder engagement. Effective dialogue is an integral
element of good corporate governance. The Investor Relations
team, together with the Group Chairman, Group Managing
Director, Group Finance Director and other senior executives
regularly meet with shareholders. Details on the issues covered in
those meetings and the views of shareholders are circulated to
the Board regularly.
A brief outline of the nature of the activities undertaken by our
Investor Relations Team in 2022 which included 12 conferences
and over 200 investor meetings are set out below.
2022 Shareholder engagement
First Quarter 2022
• Released the Full Year Results, along with accompanying
•
presentation, webcast and conference call.
Investor Roadshows: held following the release of formal
announcements.
• Media Briefings: the Company provided media briefings and
•
interviews on various issues.
Industry Conferences: attended key sector and investor
conferences affording members of the senior management
team the opportunity to engage with key investors and
analysts.
Second Quarter 2022
• Released the Interim Management Statement, along with
accompanying presentation, webcast and conference call;
• 2022 Annual General meeting.
•
Investor presentation made available on the Group’s website
and an analyst event held in London, UK.
• Completed investor perceptions survey. The Group Chairman
completed a number of shareholder engagements.
Third Quarter 2022
• Released the Half Year Results, along with accompanying
•
presentation, webcast and conference call.
Investor Roadshows: held following the release of formal
announcements.
• Completed engagement with shareholders on Resolution 14
(the share buyback resolution) following the Company’s AGM
on 5 May 2022. Glanbia consulted with, and received support
from, a number of its independent shareholders on the use of
share buybacks as a capital allocation tool, where
appropriate. The feedback received was that in general
shareholders believed share buybacks are a helpful additional
capital allocation tool.
Fourth Quarter 2022
• Released the Interim Management Statement and published
ESG targets for the Group, along with accompanying
presentation, webcast and conference call.
90
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
• Held a Capital Markets Day in November. The event provided
an opportunity for the senior management team to update
the market on the Group’s strategy and 2022 – 2025 financial
ambition. The event included a presentation on various
aspects of Glanbia’s operations and strategy and an
opportunity for investors and analysts to meet with Glanbia’s
wider management team.
• Announced the appointment of Barclays Bank plc and Morgan
Stanley & Co International plc as its UK corporate brokers
alongside its existing Irish corporate broker J&E Davy.
• Attended a number of investor conferences following the
Capital Markets Day to engage with shareholders following
the event.
For more information see pages 52 and 53
Employee engagement
Regular and ongoing engagement with employees is key to
attracting, developing and retaining a talented, dedicated and
motivated workforce which ensures the successful delivery of our
strategy and achievement of our purpose. We aim to build a
trusting, respectful and inclusive culture where our people feel
valued, engaged and fulfilled. As Workforce Engagement
Director, Group Chairman Donard Gaynor provides regular
feedback to the Board on employee engagement activities
during the year. The global survey of employees known as ‘Your
Voice’ is carried out annually and its findings are reviewed by the
Board. The Board is also provided with feedback on the global
priorities and plans to address the matters raised by employees
in the survey and in ongoing dialogue and focus groups. These
employee surveys provide valuable insights into what is valued
and seen as corporate norms. As part of the feedback from the
2022 survey, the Board was pleased to note improvements in our
key focus areas of wellbeing, communication and acting on
employee feedback. In addition, the Board also received regular
updates on the health, safety and wellbeing of employees.
For more information see pages 20-23
Customers and consumers
Maintaining a broad portfolio of consumer brands and
nutritional ingredients is key for our customers and consumers.
The Board regularly reviews both innovation and inorganic
opportunities to enhance the Group’s portfolio and to ensure
that it has sufficient breadth and depth in its portfolio to meet
consumer demand. The Board is also constantly exploring new
ways to meet consumers’ and customers’ needs by listening to
consumers’ needs and collaborating with our customers.
Furthermore, we consider customer and consumer engagement
matters as part of the overall Group sustainability strategy. We
also assess recommendations in respect of our brands’
positioning and focuses on household penetration, net promoter
scores and consumption rates.
In terms of the Group’s investment in Research & Development
activities, the Board, together with management, ensures focus
is given to those projects that can best meet customers’ needs
and thereby enable the Group to achieve its purpose and
strategic objectives in relation to revenue growth, margin
expansion, return on investment and enabling the delivery of
Better Nutrition in a more environmentally sustainable manner.
For more information see pages 24-43
Local communities
Our vision is to have a positive social and economic impact on
our communities, by promoting health and wellbeing while
protecting the environment. The Board considers the
maintenance of close and supportive relationships with the
communities in which Glanbia operates to be of particular
importance to the Group. We aim to create long-term value for
the communities in which we live, work, source and sell. By
ensuring we empower people, increase their access to
opportunities and champion inclusion and diversity, we can help
build thriving communities and strengthen our business. The
Board considers local community engagements as part of the
overall Group sustainability strategy. We support and receive
updates on Glanbia’s involvement in local communities and
charitable partnerships.
For more information see page 61
Suppliers and business partners
As a Group, we are committed to excellence in food safety and
quality and adhere to international standards at our
manufacturing sites. We take environmental stewardship
seriously, supporting our suppliers and safeguarding animal
welfare and life on land. The Board, together with management,
ensure that the organisation works with suppliers who provide
raw materials to the required safety and quality standards,
produced on a sustainable basis and with the proper regard for
the fair treatment of workers across the supply chain. Our
suppliers must be compliant with the regulations and social
customs of the countries in which they operate. The Board
receives updates on the operation of the Group procurement
function and supply chain priorities and initiatives, and we
continuously engage with dairy producers as part of the review
of our joint venture operations.
For more information see page 60
Government and Non-Governmental
Organisations (NGOs)
As a Board we are cognisant of the regulatory environment in
which we operate. The Board engages indirectly with
government, regulators and policy makers through regular
reports from Senior Executive Team and management. In
particular, the Board has received regular briefings during the
year on the macro economic environment, world events and
emerging geopolitical trends. Management also provided the
Board with an analysis of potential developments in regulation
and tax policies.
For more information see pages 52 and 53
Purpose, values and culture
Purpose
We have a clear purpose to deliver better nutrition for every
step of life’s journey. Our purpose communicates the
Group’s strategic direction and intentions to our employees
and wider stakeholders. Due to its importance, it is regularly
reviewed by the Board.
In 2022 we refreshed our purpose and brand identity to
reflect how the organisation has grown and evolved over
the past number of years. During the year the Board
approved a new corporate brand identity which was rolled
out as part of the Group’s Capital Markets Day in
November 2022.
Our values
Glanbia has a very distinct set of values which articulate the
qualities we embody and our underlying approach to doing
business. Our values are embedded in our operational
practices through the policies approved by the Board and
the direct oversight and involvement of the Executive
Directors. Glanbia’s values of: Customers’ champion;
Performance matters; Find a better way; Winning together;
and Showing Respect are the code by which the Group
operates both internally and externally.
Our culture
Our business spans several continents, but our culture is
universal. Our culture has developed from our values and is
a key strength of our business. Fuelled by a positive growth
mindset, Glanbia leaders inspire and empower others to
maximise their potential. The Board reinforces our culture
and values through its decisions, strategy and conduct. The
Board monitors the Group’s culture through several cultural
indicators such as:
• management’s attitude to risk;
• health and safety data; and
• compliance with the Group’s policies and procedures:
- key performance indicators, including staff retention;
- messages received via the Group’s whistleblowing
‘Speak-Up’ system;
- promptness of payments to suppliers;
- independent assurance is sought via the internal audit
function and other outsourced advisers; and
- employee surveys.
A key consideration during our recruitment process is a
potential candidate’s ‘fit’ with our culture and values. We
reinforce our culture and values during our induction
programme, town halls, and monitor our employees’ ‘fit’
through performance appraisals. Our senior management
teams undertake training to ensure they are supporting
their teams and encouraging the behaviours which align
with our culture. During 2022, management training
covered recognising and supporting mental health
concerns, diversity and inclusion, and unconscious bias.
In addition, the Board received regular updates from the
Group Managing Director and Chief Human Resources
Officer on the health, safety and wellbeing of employees.
For more information see pages 20- 23.
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STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Corporate Governance Report continued
Board Leadership and Company Purpose
2022 Board highlights
The Board is responsible for promoting the long-term sustainable success of the Group to generate value for its stakeholders and
contribute to the wider society. The Board recognises that the alignment of the Group’s purpose, strategy and culture is a cornerstone of
its leadership role and critical to our success.
The following pages provide an overview of a range of matters that the Board considered at its meetings. These are non-exhaustive and
detail the breadth of oversight provided by the Board in order to discharge responsible leadership. The Board considerations in relation
to stakeholder engagement can be found on pages 52 and 53.
Key Board Considerations
Strategy and performance • The Board had a strong focus on shareholder value creation and returns.
• The Board continues to perform its duties and functions with the Group’s
purpose of delivering ‘Better Nutrition’ front and centre of its decision
making.
In August 2022, the Board approved the raising of full year guidance
from 9% to 13% adjusted EPS growth constant currency.
In November 2022, the Board approved the strategic growth ambitions
outlined at the Group’s Capital Markets Day on 9 November 2022 for the
three years to 2025.
•
•
Further details are available
on pages 14-19
• The Board focused on feedback from its shareholders on strategy and
performance throughout the year.
Sterling Technology,
LLC Acquisition
• The Board approved and completed the acquisition of Sterling
Technology, LLC, a bioactive ingredients business based in Brookings,
South Dakota.
Further details are available
on page 45
Disposal of Glanbia plc’s
40% interest in Glanbia
Ireland (Tirlán)
• On 1 April 2022, the Board oversaw the sale of the Company’s
minority interest in Glanbia Ireland (Tirlán) to the Society for €307 million.
• Following this disposal the Board commenced a review of the Group’s
Further details are available
on pages 44 and 48
structure and growth strategy.
Share buyback
programmes
• Share buybacks of €173.5 million were approved by the Board.
Further details are available
on pages 45 and 48
Group sustainability
strategy
• The Board appointed a New Senior Vice President for Sustainability
and Vice President of Diversity, Equity & Inclusion with strong
organisation development put in place.
• The Board approved an upgraded Scope 1 and 2 carbon emissions target
in line with the 1.5 degrees Celsius pathway.
• The Board oversaw the completion of energy audits across the
seven largest Group operational sites, with detailed energy efficiency
planning, and validation of emissions reduction assessments.
• A specialist sustainability firm delivered environmental sustainability
Board training in October 2022.
Further details are available
on pages 50-67
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GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Key Board Considerations
Diversity, equity and
inclusion (DE&I)
Diversity, equity and
inclusion (DE&I)
Further details are available
on page 22
• During the year, the Board launched ERGs for female, multicultural
and LGBTQIA+ employees.
• The Board is dedicated to meeting its diversity targets for Board
members and senior leadership roles. Female management
representation targets were built into annual incentives.
• The Board focused on equipping talent acquisition with the resources
to attract and source under represented talent and educate hiring
managers on inclusive hiring practices.
• The Board rolled out unconscious bias training for all employees and
Inclusive Leadership training for the Group Senior Leadership which was
conducted by Korn Ferry.
• The Board published its first gender pay gap report in December 2022.
• The Board placed an emphasis on employee engagement, awareness
and impact. The Board rolled out a pulse employee engagement survey
in June. The Group inclusion index score increased by 2.5 points.
Capital investment
Capital investment
• Glanbia’s total investment in capital expenditure (tangible and intangible
assets) was €68.9 million (2021: €77.5 million). Strategic investment
totalled €49.5 million which related mainly to ongoing capacity
enhancement and business integrations to drive further efficiencies in
operations.
• The Board is focused on cash generation, disciplined cash management,
Financing and
refinancing
accretive M&A and balancing investment and return
of capital to shareholders.
Further details are available
on page 48
Financing and refinancing
•
In December 2022, the Group successfully renewed its debt facilities, and
at the year end had committed debt facilities of €1.21 billion (FY 2021:
€1.16 billion) with a weighted average maturity of 5.8 years (FY 2021: 3.9
years). Glanbia’s ability to generate cash and its available debt facilities
ensure the Group has considerable capacity to finance future
investment.
Further details are available
on page 48
Development
Committee
Development Committee
• A new Development Committee was established on 24 February 2022
Cybercrime prevention
and security
programme
Cybercrime prevention
and security programme
to assist the Board in assessing new corporate development
opportunities.
• Following the disposal of the Group’s interest in Glanbia Ireland (Tirlán)
the Development Committee reviewed the Group’s portfolio with
support from its advisors. This re-emphasised a focus on the Group’s two
growth platforms of GPN and GN, strategic joint ventures and M&A
strategy to acquire targets across GPN and Nutritional Solutions (“NS”).
• The Board considered the strategic review of the Group’s IT organisation
and services, cyber security and anti-fraud controls.
• This included a review of the protocols the Group would follow in the
event of an attack, based on a protect, detect, respond and recover
model.
• A new Group Ransomware Response Policy was adopted.
• Management response simulation testing was performed to assess the
completeness of protocols and internal capabilities.
• Email phishing simulation exercises were conducted with the wider
workforce to raise awareness in this area.
Further details are available
on page 95 and members
are listed on pages 83-87
Further details are available
on pages 74 and 75
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STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Corporate Governance Report continued
Board Leadership and Company Purpose continued
2022 Board highlights continued
Mitigating Inflation
Key Board Considerations
Mitigating inflation
• The Group’s financial priority has been its financial strength and
mitigating inflation to keep its strong position.
• As we recover from the worst of the Covid-19 pandemic, supply chain
issues remain a concern. Along with the outbreak of war in Ukraine
and soaring energy prices, inflation has been identified as a major risk by
the Board.
• Supported by the Board, significant action is being taken across the
Group to mitigate inflation with the implementation of operational
efficiencies, and pricing increases.
• The Board is recommending a final dividend of 19.28 cent per share
(FY 2021: 17.53 cent per share) which brings the total dividend for the
year to 32.21 cent per share, representing an increase of 10% for
the prior year. The final dividend will be paid on 5 May 2023 to
shareholders on the register of members as at 24 March 2023.
Dividend payments
Dividend payments
Board composition
Board renewal
• Two new Independent Non-Executive Directors were appointed
on 1 August 2022, Kimberly Underhill and Ilona Haaijer.
• Patrick Coveney and Vincent Gorman retired from the Board
on 30 March 2022 and 5 May 2022 respectively.
• Liam Hennigan replaced Michael Horan and was appointed as Group
Secretary and Head of Investor Relations on 4 April 2022.
• During 2021 the Remuneration Committee completed a review of
the Directors’ Remuneration Policy to ensure that delivery of an
ambitious Group strategy is appropriately incentivised while
maintaining focus on strong financial discipline. The Directors’
Remuneration Policy for 2022–2024 received 87.91% approval of
shareholders at the 2022 AGM.
Further details are available
on page 76
Further details are available
on page 49
Board biographical details
are available on pages
83-87
Further details are available
on page 123
• The Board approved the appointment of Barclays Bank plc and
Morgan Stanley & Co International plc as UK corporate brokers
alongside its existing Irish corporate broker J&E Davy.
Further details are available
on page 90
• An external quality assessment of the Internal Audit function was
conducted in 2022 by PwC.
• The review noted that the Internal Audit function is providing effective
assurance to management and the Audit Committee and is operating in
general compliance with the Institute of Internal Auditors Standards with
no material issues arising.
Further details are available
on page 107
Research and
Development facility
in Kilkenny
Research & Development
facility in Kilkenny, Ireland
• The Board approved an upgrade of GN R&D facility in Kilkenny, Ireland.
The new enhanced R&D facility will allow GN teams to better deliver
innovative solutions to their EMEA-based food and beverage, lifestyle
and nutrition brand customers as a key part of their market strategy
in the EMEA region.
Further details on capital
expenditure on research and
development are available
in Note 5 to the Financial
Statements on page 190
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GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Directors’ Remunera-
tion Policy 2018-2020
Directors’ Remuneration
Policy 2022–2024
Corporate brokers
Corporate brokers
External Group audit
evaluation
External Group audit
evaluation
Division of Responsibilities
The Board is responsible for establishing the Group’s purpose, values and strategy, promoting its culture, overseeing its conduct
and affairs, and for promoting the success of the Group for the benefit of its members and stakeholders. It discharges some of its
responsibilities directly and others through its Committee framework, the Group Operating Executive and Group Senior Leadership
Team. A description of the Governance Framework as at 31 December 2022 is set out below.
Audit
Committee
Key activities: review of
Annual Report and
Financial Statements and
statutory Auditor’s
independence and fees,
internal controls, risk
management systems,
post-acquisition reviews
and the effectiveness of
the Group Internal Audit
and Group Finance
functions.
ESG
Committee
Key activities: oversight of
the ESG programme, the
Group sustainability
strategy, Pure Food + Pure
Planet and the Diversity,
Equity and Inclusion Policy,
monitoring progress
against key performance
indicators and external ESG
index results, overseeing
progress on ESG
commitments and targets
and monitoring and
reviewing the Group’s
quality, health and safety
(“QHS”) performance to
support continuous
improvement and
transparency regarding the
Group’s QHS performance.
Board
Board Committees
Nomination and
Governance Committee
Key activities: making
recommendations on
appointments to the Board
(including the Group
Chairman), senior
management succession
planning, review of the
independence and time
commitment of Non-
Executive Directors and
keeping under review
corporate governance
developments to ensure
Group governance
practices remain in line
with best practice.
Group Management
Development
Committee
Key activities: assist the
Board in assessing new
corporate development
opportunities.
Remuneration
Committee
Key activities: review of
Executive Directors’
salaries and benefits,
approval of annual
incentive targets,
long-term incentive share
awards, review of
Non-Executive Directors’
fees and compliance with
the relevant codes.
Managing
Director
Group Operating Executive
This group is comprised of the two Executive Directors, the CEO of
GPN, the CEO of GN, the Chief Human Resources Officer, the Chief
Corporate Development Officer and the Chief ESG & Corporate
Affairs Officer. Key activities: monitoring performance and making
strategic recommendations to the Board. This forum is also the
Group Risk Committee and the Group Investment Committee.
Group Senior Leadership Team
This team includes the Group Operating Executive and the Group’s
senior business and functional leaders. Key activities: to create
alignment and drive delivery of the Group’s business plans.
The Disclosure Committee is in place to oversee the timely and accurate disclosure of all information required to be so disclosed by the Company to meet
the legal and regulatory obligations required by its stock exchange listings. It also continues to assist in the design, implementation and periodic
evaluation of disclosure controls and procedures. The Disclosure Committee comprises of the Group Managing Director, the Group Finance Director, the
Group Secretary and Head of Investor Relations and the Group Financial Controller.
The following are the key matters
reserved for the Board:
• approval of the Group’s strategic plan,
oversight of the Group’s operations
and review of performance in light of
the Group’s strategy, objectives,
business plans and budgets, ensuring
that any necessary corrective/
transformative action is taken;
• ultimate oversight of risk, including
determining the Group’s risk profile
and risk appetite;
• approval of acquisitions, disposals,
share buybacks and other transactions
outside delegated limits;
• financial reporting and controls,
including approval of the Half Year
Results, Interim Management
Statements and Full Year Results,
approval of the Annual Report and
Financial Statements, approval of any
significant changes in accounting
policies or practices and ensuring
maintenance of appropriate internal
control and risk management systems;
• appointment and removal of Directors;
• ensuring the Annual Report and
Financial Statements present a fair,
balanced and understandable
assessment of the Group’s position and
prospects and provides the
information necessary for shareholders
to assess the Group’s position,
performance, business model and
strategy;
• assessment of the Group’s viability and
ability to continue as a going concern;
• capital expenditure, including annual
approval of capital expenditure
budgets and any material changes to
them in line with the Group-wide policy
on capital expenditure;
• dividend policy, including annual
review of the dividend policy and
declaration of the interim dividend and
recommendation of the final dividend;
• shareholder documentation, including
approval of resolutions and
corresponding documentation to be
put to the shareholders and approval
of all press releases concerning
matters decided by the Board; and
• key business policies.
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
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STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Corporate Governance Report continued
Division of Responsibilities
Board and Committee meeting attendance
Director
D Gaynor
S Talbot
P Ahern
R Brennan
P Coveney1
P Duffy
M Garvey
V Gorman2
I Haaijer3,5
B Hayes
J Lodge
JG Murphy5
J Murphy
P Murphy
D O’Connor
K Underhill4
Years on
the Board
9
13
7
2
8
2
9
8
less than 1
10
2
12
2
11
8
less than 1
Scheduled
Unscheduled
7/7
7/7
7/7
7/7
1/1
7/7
7/7
2/2
4/4
7/7
7/7
7/7
7/7
7/7
7/7
4/4
7/7
7/7
7/7
7/7
1/1
7/7
7/7
2/3
2/2
7/7
6/7
7/7
7/7
6/7
7/7
2/2
1 P Coveney retired from the Board on 30 March 2022
2 V Gorman retired from the Board on 5 May 2022
3
I Haaijer was appointed to the Board on 1 August 2022
4 K Underhill was appointed to the Board on 1 August 2022.
5
Ilona Haaijer was unable to attend one Audit Committee meeting and John
G Murphy was unable to attend one ESG Committee meeting due to
personal commitments made prior to their appointments to the respective
Committees.
Audit
Committee
Environmental
and Social
Governance
Committee
Nomination and
Governance
Committee
Remuneration
Committee
3/3
3/3
1/1
1/1
2/3
1/1
5/5
5/5
5/5
6/6
6/6
6/6
6/6
4/4
2/2
3/3
8/8
1/2
8/8
6/6
2/2
The Board held seven scheduled Board meetings and seven unscheduled Board
meetings in 2022. Unscheduled meetings were held as and when required
throughout the year.
Board responsibilities
To ensure that the Group operates efficiently and effectively, the Directors, the Group Secretary and Head of Investor Relations and the
Group Operating Executive have clearly defined responsibilities which are set out below. There is a clear division of responsibility
between the Group Chairman and the Group Managing Director.
Donard Gaynor, Group Chairman
• Leads the Board, sets the agenda and promotes a culture of
• Contribute to developing strategy.
• Scrutinise and constructively challenge the performance of
open debate between Executive and Non-Executive Directors
and sets the highest standards of corporate governance.
the business, management and individual Executive Directors.
• Monitor the integrity of financial information and ensures that
• Regularly meets with the Group Managing Director and other
senior management to stay informed.
there are robust financial controls and systems of risk
management.
• Ensures effective communication with our stakeholders.
• Determine and agree the framework and policy for executive
Siobhán Talbot, Group Managing Director
• Develops and implements strategy and chairs the Group
Operating Executive.
• Leads the Group through the Group Operating Executive.
• Promotes the purpose, vision and values of the organisation.
Dan O’Connor, Senior Independent Director
• Provides a sounding board to the Group Chairman and
appraises his performance.
• Acts as intermediary for other Directors, if needed.
•
Is available to respond to shareholder concerns when contact
through the normal channels is inappropriate.
Mark Garvey, Group Finance Director
• Manages the effectiveness and profitability of the Group
including financial and operational risk management.
• Develops appropriate capital and corporate structures to
ensure the Group’s strategy is met.
Non-Executive Directors
• Provide independent insight and support the Group Chairman
in instilling the appropriate culture, values and behaviours in
the Group.
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GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
remuneration.
• Oversee Director succession planning.
Liam Hennigan, Group Secretary and Head of Investor Relations
• Monitors the Group’s compliance with legal, regulatory,
governance, ethics, policy and procedural matters.
• Ensures the Group is appropriately and strategically
•
positioned with analysts, investors, and all stakeholders.
In conjunction with the Group Chairman, ensures that the Directors
receive timely and clear information so that the Directors are
equipped for robust debate and informed decision making.
• Supports the Group Chairman by organising induction and
training programmes for Directors.
• Provides support and guidance to the Board and the Group
Chairman, and acts as an intermediary for Non-Executive
Directors.
Group Operating Executive
• With the Group Managing Director, develops and executes the
Group’s strategy in line with the policies and objectives agreed
by the Board.
• Manages operational effectiveness and profitability of the
Group.
Is the Group Risk Committee and Group Investment Committee.
•
Composition, succession and evaluation
Composition, succession and evaluation
The Board has a clear governance framework with defined
responsibilities and accountabilities which ensures that policies
and procedures set at Board level are effectively communicated
across the whole Group. The Board has established certain
principal Committees to assist it in fulfilling its oversight
responsibilities, providing detailed focus on particular areas as
set out in the respective Committee Reports that follow. The
Committees focus on their areas of expertise enabling the Board
meetings to focus on strategy, performance, leadership and
people, governance and risk, and stakeholder engagement,
thereby making the best use of the Board’s time together as a
whole. The Committee Chairs report to the full Board at each
Board meeting following their sessions, ensuring a good
communication flow while retaining the ability to escalate items
to the full Board’s agenda if appropriate.
Information for the Board
The Group Chairman, with the assistance of the Group Managing
Director and the Group Secretary and Head of Investor Relations,
is responsible for ensuring that Directors are supplied with
information in a timely manner and of an appropriate quality
that enables them to discharge their duties. Board papers are
published typically seven days prior to each meeting to ensure the
Board has sufficient time to read the papers and presentations
and be prepared in advance of the meeting. In the normal course
of business, such information is provided by the Group Managing
Director in a regular report to the Board that includes
information on operational matters, strategic developments,
financial performance relative to the business plan, business
development, corporate responsibility and investor relations. The
Board meets sufficiently frequently to discharge its duties, and
holds additional unscheduled meetings when required, for
example to discuss a strategic growth opportunity if it arises.
Each scheduled Board meeting follows a carefully tailored
agenda agreed in advance by the Group Chairman, the Group
Managing Director and the Group Secretary and Head of
Investor Relations. At each scheduled Board meeting, the Group
Managing Director, the Group Finance Director and CEOs of the
Group’s two global growth platforms, GPN and GN, provide
detailed operational and financial updates. Depending on the
nature of the agenda item to be considered, other Senior
Executives are invited to make presentations or participate in
Board discussions to ensure that Board decisions are supported
by a full analysis.
Throughout the year the Chairs of the Audit, ESG, Nomination
and Governance, Remuneration and Development Committees
updated the Board on the proceedings of their meetings,
including the key discussion points and any particular areas of
concern. All Directors have access to the advice and services of
the Group Secretary and Head of Investor Relations, who is
responsible for advising the Board on all governance matters.
The Directors also have access to independent professional
advice, if required, provided by the Group. This is coordinated
through the Group Secretary and Head of Investor Relations.
Board and Committee meetings are held in person, usually in
Kilkenny or Dublin, with the availability for Directors to attend
remotely if needed.
Board structure
The Board, who come from diverse backgrounds, ranging from
corporate finance, accountancy and banking to industry (food
and beverage, fast moving consumer goods and production),
currently comprises 14 Directors: two Executive Directors, the
Group Chairman and 11 Non-Executive Directors of whom five are
currently nominated by the Society, there are currently six other
Independent Non-Executive Directors. On 23 February 2021, the
Society and the Board agreed a number of changes which will
impact the composition and size of the Board over the period
between 2021 to 2023 and which will reduce the number of
Directors nominated by the Society on the Board effective 2023
from five (2021: seven) to three and the Board size from 14 (2021:
15) to 13. Two Directors nominated by the Society will retire at the
2023 AGM and an additional Independent Non-Executive
Director is expected to be appointed in 2023, bringing the
number of Independent Non-Executive Directors on the Board,
excluding the Chairman, to seven of 13 (54% of the Board).
Appointments to the Board: policy, diversity and
succession planning
Having regard to the right of the Society to nominate Directors to
the Board, the Nomination and Governance Committee keeps
the Board’s balance of skills, knowledge, experience and the
tenure of Directors under constant review. During 2018, the Board
approved a Board Diversity Policy which recognises the benefits
of diversity. This was updated in early 2022 to reflect that the
Group has agreed that as new Director appointments are made,
the target is that a minimum of 50% of the Independent Non-
Executive Directors will be female. The Group progressed this in
2022 with both of its most recent appointments being female.
Females now represent 55.5% of the Independent Non-Executive
Directors.
In respect of succession planning and maintaining the skill-set of
the Board, there is an established procedure for the appointment
of new Directors and Senior Executives. The Nomination and
Governance Committee considers the set of skills and experience
required as well as the Company’s targets on Board diversity.
External search agencies are engaged to assist where appropriate
(see pages 117-118 for details of such engagements). The Company
also has a formal policy with respect to the appointment of new
Independent Non-Executive Directors (other than those
nominated by the Society). Further information on appointments
to the Board and succession planning can be found on pages 116.
Induction
A robust induction and site visits are an integral part of
performing one’s duties as a Director. They are invaluable in
enabling Board members to develop a greater understanding of
the opportunities and challenges affecting the business, leading
to more informed discussions around the Board table.
The Company puts full, formal and tailored induction programmes
in place for all of its new Directors. While Directors’ backgrounds
and experience are taken into account, the induction programme
is aimed to be a broad introduction to the Group’s businesses
and its areas of significant risk. Key elements include meeting the
Executive Directors and senior management as well as visiting
the Group’s main sites to be briefed on Group strategy and on
their individual businesses. Induction programmes are usually
completed within the first six months of a Director’s appointment
and the Group Secretary and Head of Investor Relations provides
assistance and support throughout the induction process.
The programmes are reviewed regularly to consider Directors’
feedback and are continually updated and improved.
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STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Corporate Governance Report continued
Composition, succession and evaluation continued
Ilona Haaijer and Kimberly Underhill joined the Board on 1 August
2022. Ilona and Kimberly received an extensive and thorough
induction involving one-to-one meetings with the Group
Chairman, Group Managing Director, the Group Finance Director
and other members of senior management from various Group
functions including Group Finance, Group Treasury, Group Tax
and Group HR.
In August 2022 Ilona and Kimberly met with each member of the
Group Operating Executive Team as part of their induction
process and in September 2022, they visited a number of the
Group’s manufacturing plants in the US and met with US based
senior leaders within the GPN and GN segments.
Board development
The Group Chairman regularly encourages the Non-Executive
Directors to update their skills, expertise and knowledge of the
Group in order to carry out their responsibilities competently. This
is achieved by regular presentations at Board meetings from
senior management on matters of significance. Examples during
the year included regular presentations from senior
management of our two wholly-owned business segments GPN
and GN and from our strategic joint ventures. During the year the
Board and Committees received presentations from the Group
Chairman, the Group Finance Director, the Chairs of each of the
Committees, the CEOs of each of GPN and GN, the heads of the
various business units, the Group Secretary and Head of Investor
Relations, the Chief ESG and Corporate Affairs Officer, the Chief
Corporate Development Officer, the Chief Human Resources
Officer, the General Manager of Group Business Services, the
Group Head of IT and the Group Head of Quality and Safety. The
Board also participated in ESG training, delivered by a specialist
sustainability firm, along with regular sustainability briefings.
In addition to the induction programme that all Directors
undertake on joining the Board, an ongoing programme of
Director development has been established. For example, it has
been the Board’s practice to hold a number of Board meetings at
subsidiary locations each year to provide Directors with the
opportunity to meet local teams, see operations on the ground
and have presentations on current operations, projects, future
plans and strategy. Opportunities to visit our operations globally
and learn more about the business continue to be very important
and valuable for the Board, and for new members in particular,
as they provide the opportunity for our Directors to understand
operations, performance and challenges in a regional context.
Board members also get a chance to engage with local
employees in different roles at different levels of seniority and
from varying backgrounds. This aspect of Board visits provides
real insight into the culture of the business. These visits also
afford Directors the opportunity to interact with employees and
develop deeper insights into the quality of our current senior
management and the potential for succession. It also helps the
Directors to actively embed the values of Glanbia across
key locations.
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GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
“My induction to the Glanbia Board
has been thorough and
informative. I was delighted to visit
Glanbia’s operations in Ireland
and the US as well as meet key
management across the Group
and I look forward to further
engagement during 2023.”
GOVERNANCE IN ACTION
New Director Induction
Kimberly Underhill was appointed to the Board on
1 August 2022. Following her appointment, Kimberly
underwent a formal induction programme which was
tailored to her individual requirements and included
the following induction activities.
Induction Activities
• Provision of a detailed information pack including
key corporate governance policies, Board papers,
financial and strategic documents and information
on Directors’ duties and responsibilities.
• Meetings with the Executive Directors.
• Meetings with the Group Chairman, the Senior
Independent Director and the Chairs of the
Remuneration Committee and the Audit
Committee.
• Meetings with functional leaders on matters such
as Board and corporate governance, corporate
development, internal audit, strategy, investor
relations, human resources and sustainability.
• Meetings with business leaders of the Glanbia
Performance Nutrition and Glanbia Nutritionals to
obtain an overview of each business.
• Meetings with external auditors and other advisors.
• Site visits to see first-hand the Group’s
operations while engaging with employees
and senior management.
The Group Secretary and Head of Investor Relations in conjunction
with Glanbia’s advisers, monitor legal and governance
developments and Directors are regularly provided with updates
on corporate governance, legislative and regulatory issues, and an
annual update is circulated and presented to the Nomination and
Governance Committee. Board updates in 2022 also included
investor relations update presentations from the Group Secretary
and Head of Investor Relations in conjunction with advice from
various specialist advisors on the governance framework, investor
perceptions, the Group’s portfolio and a presentation on the
Group’s cyber security and anti-fraud controls.
As part of their annual performance evaluation, Directors are given
the opportunity to discuss their own training and development
needs and our Directors can avail of external courses.
Independence
Avonmore Foods plc and Waterford Foods plc merged in 1997 to
form Glanbia plc, the Company. At the same time, their respective
major shareholders also merged to form the Society. The Society
held a substantial shareholding (over 30%) in the Company until
13 September 2022 when their holding was reduced to 27.6%. In
accordance with Listing Rule 6.1.7 of Euronext Dublin/Listing Rule
6.5.4R of the United Kingdom Financial Conduct Authority (FCA),
the Company and the Society entered into a relationship
agreement in 2014 clarifying the right of the Society to nominate
Directors to the Board of Company and the intention of the
Company and the Society to comply with the independence
provisions/undertakings set out in Listing Rule 2.2.15 of Euronext
Dublin and 6.5.4 R of the FCA (the “Independence Provisions”).
When the Society’s holding in the Company fell below 30% on
13 September 2022, the Relationship Agreement terminated in part,
the provision providing for the right of the Society to appoint
Non-Executive Directors remained. Notwithstanding the
termination of the Relationship Agreement, the Company can
confirm it complied with the Independence Provisions in the
Relationship Agreement for the entire of 2022 and, in so far as the
Company is aware, the Society has also complied with the same
Independence Provisions. Since the disposal of the Company’s
minority interest in Glanbia Ireland (Tirlán), separate executive
teams have been established. The Group continues on an interim
basis to provide certain corporate, shared services, IT and Group
purchasing services to Glanbia Ireland (Tirlán).
The Board and the Nomination and Governance Committee
believe that all Non-Executive Directors demonstrate the
essential characteristics of independence and bring independent
challenge and deliberations to the Board. Notwithstanding this,
the Non-Executive Directors nominated by the Society are not
counted by the Board as being independent solely for the
purposes of the Codes. An explanation of the basis for this belief
is set out in the Nomination and Governance Committee Report
on page 118.
The Group has robust procedures in relation to conflicts of
interest. Directors, upon their appointment are advised of their
duty to declare their conflicts and are invited to declare their
general interest in any entity in which they are to be regarded as
interested in any contract which may, after their appointment, be
made with that entity. The Directors nominated by the Society
did not take part in the Board’s consideration of the Glanbia
Ireland (Tirlán) transaction.
Board Evaluation
A key element of good governance is an annual evaluation to
ensure that the Board, its Committees and Board members are
continuing to operate and perform effectively. The Group has
established a formal process for the annual evaluation of the
performance of the Board and its principal Committees,
including a triennial external evaluation. The external evaluation
supplements our existing internal Board performance evaluation
processes. The last external evaluation was conducted in 2020
and the next external evaluation is scheduled to be conducted in
2023. For review of the findings of the external Board evaluations,
please see the Annual Report 2019 at page 71 and the Annual
Report 2020 at page 80.
2022 internal Board and Board Committee
evaluation process
This year, our Board evaluation was an internal one in line with
our agreed three-year cycle.
Process
Questionnaires focussing on best practice, relevant guidance
and recommendations of previous evaluations, were issued
electronically to all Board members following which each
Director was individually given the opportunity to have detailed
discussions with the Group Chairman to give feedback on
strategy, the operation of the Board and its Committees, talent
management, succession planning for the Board and senior
management and the transition of the chairmanship of the
Group.
The performance of the Group Chairman was separately
evaluated by the Board led by the Senior Independent Director.
As part of the Group Chairman’s evaluation, the Non-Executive
Directors met separately under the chairmanship of the Senior
Independent Director.
Outcome
The questionnaire responses and interview results were collated
and analysed and a report, summarising the findings and
including proposed recommendations for discussion, was
prepared by the Group Chairman. The report was presented to
the Board in December 2022 for consideration. Overall, it was the
collective view of the Directors that the Board is engaged,
committed and effective in discharging its responsibilities with
an open and transparent culture. Relations with senior
management allows constructive challenge on key issues. Key
highlights for the Board in 2022 which were recognised in the
evaluation was the work completed on Group strategy following
the disposal of the Company’s stake in the Glanbia Ireland
(Tirlán) joint venture, the approval of the Company’s
Remuneration Policy at the AGM in 2022, the Board renewal
(advancing diversity objective) and the further development of
the ESG agenda. The Board recognised that significant work had
been undertaken in these areas throughout the year.
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STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Corporate Governance Report continued
Composition, succession and evaluation continued
Areas of focus for 2023
The following areas of focus were agreed for 2023:
• continued focus on Diversity, Equity and Inclusion and
succession planning on the Board and across the Company;
• focus on risk management and cyber security preparedness;
and
• continued execution of the Group’s strategy and corporate
development agenda.
A review of the performance of each of the Board Committees
was also undertaken covering each of their terms of reference,
composition, procedures, contribution and effectiveness. As a
result of that assessment, the Board and each Committee is
satisfied that each Committee is functioning effectively and
continues to meet its terms of reference. In particular, all
Committees were considered to be well chaired, enjoy a broad
representation across the Board, deal with relevant topics and
substantially ease the burden of specific matters or areas on the
Board as a whole.
Individual Directors’ evaluation
Executive Directors’ variable pay is tied to their personal
contribution to organisational effectiveness and as such both the
Group Managing Director and the Group Finance Director are
subject to rigorous review each year. The Group Managing
Director sets the strategic performance objectives for the Group
Finance Director, and the Group Managing Director’s strategic
objectives are set by the Group Chairman in conjunction with the
Remuneration Committee. All strategic objectives are then
agreed with the Remuneration Committee who monitors the
Executive Directors’ progress throughout the year. More details
can be found on pages 130-136.
The performance of the Group Chairman is reviewed internally
each year by the Board (in the absence of the Group Chairman),
led by the Senior Independent Director. In 2022, the Board was
unanimous in its view that the Group Chairman has provided
strong and effective leadership to the Board since his
appointment on 8 October 2020 and that the Group Chairman
is very committed to his role and is always available to Directors
and stakeholders. The Board acknowledged the Group
Chairman’s understanding of the Group and his ambition to drive
the business forward.
Subject to the right of the Society to nominate Non-Executive
Directors, the Non-Executive Directors are appointed for an
initial three-year term unless otherwise terminated earlier by and
at the discretion of either party upon written notice. Continuation
of their appointment(s) is contingent on satisfactory
performance and re-election at each AGM. Additionally, all new
Independent Non-Executive Directors, and any re-appointments,
will be subject to a rigorous review by the Nomination and
Governance Committee after each three-year term and annually
after six years.
Election or Re-election of Directors
In accordance with the Code, all of the Directors are subject to
annual re-election by shareholders. Accordingly, each of the
Directors, with the exception of Patsy Ahern and John Murphy,
who will retire in line with the planned reduction of the Society’s
representation on the Board, will seek election or re-election at
the 2023 AGM.
The Group Chairman has confirmed that each of the Directors
who are seeking election or re-election continue to be effective
members of the Board and demonstrate their commitment to
their responsibilities. The Executive Directors and Independent
Non-Executive Directors bring extensive senior leadership
experience, strategic commercial business acumen, wide
ranging operational experience and strong understanding of
global capital markets and major transactions. The Directors
nominated by the Society are full time farmers who also have
significant experience of the global food and beverage industry.
The Board believes that the considerable and wide-ranging
experience and perspective of the Directors (the individual skills,
experience and competence of whom are set out on pages 82-87
of the Annual Report) will continue to be invaluable to the
Company and its long-term sustainable success and
recommends their election or re-election.
Board evaluation
The annual Board evaluation process is an important element in ensuring
and enhancing the effective and efficient operation of the Board.
2020
Year 1
External evaluation
In-depth external Board
evaluations by external
facilitator
2021
Year 2
Internal evaluation
Internal evaluation facilitated
by the Group Chairman focusing
on progress against the key
objectives highlighted by the
external evaluations
2022
Year 3
Internal evaluation
Internal evaluation facilitated
by the Group Chairman
100 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Audit, Risk and Internal Control and Remuneration
Audit, Risk and Internal Control
Risk management and internal control
Effective risk management underpins our operating, financial
and governance activities. The Board continues to place
particular emphasis on monitoring both principal and emerging
risks and regularly monitors the risk management framework to
ensure risks are being appropriately mitigated and new risks
identified.
Fair, balanced and understandable
The Directors have concluded that the Annual Report and
Financial Statements, taken as a whole is fair, balanced and
understandable and provides the information necessary for
shareholders to assess the Group and the Company position,
performance, business model and strategy. This evaluation was
supported by the Audit Committee as outlined in its Report on
page 106.
While the Board has ultimate responsibility for determining the
Group’s risk profile and risk appetite, the Board has delegated
responsibility for reviewing the design and implementation of the
Group’s risk management and internal control systems to the
Audit Committee.
These systems are designed to manage, rather than eliminate,
the risk of failure to achieve business objectives and provide
reasonable, but not absolute, assurance against material
misstatement or loss. During the year, the Board considered the
Group’s key risk reports and received updates from the Chair of
the Audit Committee on the programme of risk presentations
from key risk managers across the Group. This work provided a
comprehensive insight into how key risk exposures are managed
and better informs the Board in its evaluation of progress against
strategic objectives of the business.
The Board and management are satisfied that appropriate risk
management and internal control systems are in place
throughout the Group. The Risk Management Report is contained
on pages 67-77.
Going concern
Glanbia’s business activities, together with the main factors likely
to affect its future development and performance, are described
in the Strategic Report on pages 1 to 77.
After due consideration and review, the Directors have a
reasonable expectation that the Group has adequate resources
to continue in operational existence for a period of at least 12
months from the date of approval of the Financial Statements.
The Group therefore continues to adopt the going concern basis
in preparing its Financial Statements. The full Going Concern
Statement is contained on page 70.
Long-term viability statement
In accordance with the Code and Listing Rule 6.1.82(3) of Euronext
Dublin Listing Rules, the Directors have assessed the viability of
the Group and its ability to meet its liabilities as they fall due over
a period extending to 2025, taking into account the Group’s
current financial position, the Group’s strategy and business
model and the potential impact arising from the principal risks
and uncertainties. The factors considered in assessing the
long-term prospects are detailed on pages 70-71.
Having considered these factors, the challenging global
economic outlook such as the impacts of the expected high
levels of inflation, increasing interest rates and energy costs;
lower economic growth and geopolitical tension, particularly in
our key areas of operations, climate change and the lingering
Covid-19 related challenges and impacts experienced in 2022
and anticipated for the years ahead, the Board assessed the
prospects and viability of the Group in accordance with the Code
requirements. The Board has a reasonable expectation that the
Group will be able to continue in operation and meet its liabilities
as they fall due over the period of the assessment. The full
viability statement is contained on pages 70-71.
Adequate accounting records
The Directors are responsible for keeping adequate accounting
records that are sufficient to correctly record and explain the
transactions of the Company or enable, at any time, the assets,
liabilities, financial position and profit or loss of the Company to
be determined with reasonable accuracy, enable the Directors to
ensure that the Financial Statements comply with the
Companies Act 2014, and, as regards the Group Financial
Statements, Article 4 of the IAS Regulation, enable those
Financial Statements to be audited. The Directors, through the
use of appropriate procedures and systems, have also ensured
that measures are in place to secure compliance with the
Company’s and the Group’s obligation to keep adequate
accounting records. These accounting records are kept at
Glanbia House, Kilkenny, R95 E866, Ireland, the registered office
of the Company.
Accountability and audit
Directors’ responsibilities for preparing the Financial Statements
for the Company and the Group are detailed on page 157.
The Independent Auditor’s Report details the respective
responsibilities of Directors and the statutory auditor.
Statutory Auditor
The statutory auditor, Deloitte Ireland LLP, continues in office in
accordance with section 383(2) of the Companies Act 2014.
Deloitte (who was succeeded by Deloitte Ireland LLP) was
originally appointed on 27 April 2016.
Disclosure of information to statutory auditor
In accordance with the provisions of section 330 of the
Companies Act 2014, each of the persons who are Directors of
the Company at the date of approval of this Report confirms
that:
• so far as the Director is aware, there is no relevant audit
information (as defined in the Companies Act 2014) of which
the statutory auditor is unaware; and
• the Director has taken all the steps that he/she ought to have
taken as a Director to make himself/herself aware of any
relevant audit information (as defined) and to ensure that the
statutory auditor is aware of such information.
Remuneration
The Remuneration Committee’s agenda continued to apply
focus to the key matters of Group and individual Executive
Director performance and the consideration of appropriate
targets for 2023 and beyond. Our aim is to ensure that our
remuneration policies and practices remain competitive within
our industry to attract, retain and motivate high quality and
committed people who are critical to the future development
and growth of the Group.
Details of 2022–2024 Remuneration Policy and the work of
the Remuneration Committee can be obtained in the
Remuneration Report on page 120-140.
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
101
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Corporate Governance Report continued
Compliance Statements
UK Corporate Governance Code
Board Leadership and Company Purpose
Division of Responsibilities
Composition Succession and Evaluation
Audit Risk and Internal Controls
Remuneration
Pages
80-94
95-96
97-100
101, 103-109
101, 120-140
Irish Corporate Governance Annex
Pages
Board Composition
Board Appointments
Board Evaluation
Board Election or Re-election
Audit Committee
Remuneration
Section 1373 Companies Act 2014
Applicable Codes
Departures from the Codes
Risk Management and Internal Control
Takeover Regulations
Shareholder Information
Board and Committees
83-87
81, 94, 96-98
and 116-117
99-100
100
103-109
120-140
Pages
82, 102
82
67-77
141-146
255
80-140
Compliance Statements
Directors’ Compliance Statement
It is the policy of the Company to comply with its relevant
obligations (as defined in the Companies Act 2014). The Directors
have drawn up a compliance policy statement as defined in
section 225(3)(a) of the Companies Act 2014. Arrangements and
structures have been put in place that are, in the Directors’
opinion, designed to secure a material compliance with the
Company’s relevant obligations. These arrangements and
structures were reviewed by the Company during the financial
year. As required by section 225(2) of the Companies Act 2014, the
Directors acknowledge that they are responsible for the
Company’s compliance with the relevant obligations. In
discharging their responsibilities under section 225, the Directors
relied on the advice of third parties whom the Directors believe
have the requisite knowledge and experience to advise the
Company on compliance with its relevant obligations.
Corporate governance statement
During 2022 the Group was subject to the Codes. Our Corporate
Governance Statement can be found on page 82.
The Irish Annex published in December 2010 by Euronext Dublin,
previously named the Irish Stock Exchange, is publicly available
on the website: https://www.euronext.com/sites/default/
files/2019-06/Irish-Corporate-Governance-Annex.pdf. The Code
is publicly available on the Financial Reporting Council website:
www.frc.org.uk/getattachment/88bd8c45-50ea-4841-95b0-
d2f4f48069a2/2018-UK-Corporate-Governance-Code-FINAL.PDF.
Our approach to corporate governance and how we apply the
principles of the Codes is set out in this Corporate Governance
Report, the Board and senior management section, the non-
Financial Reporting Statement, Task Force on Climate-Related
Financial Disclosures Report and the Risk Management Report
(all of which are deemed to be incorporated in this Corporate
Governance Report). The Reports from the Chairs of the Audit,
ESG, Nomination and Governance and Remuneration
Committees highlight the key areas of focus for, and the
background to, the principal decisions taken by those
Committees, which form an integral part of our governance
structure. A fair, balanced and understandable assessment of
the Group’s position and prospects is set out in the Strategic
Report on pages 1-77. The Strategic Report also includes other
important information relating to Governance including our
approach to People, Sustainability and Stakeholders. Other
Statutory Information contains certain other information
required to be incorporated into this Corporate Governance
Statement. All of these statements are deemed to be
incorporated in the Corporate Governance Statement.
102 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Audit Committee Report
Delivering
on our
purpose
Paul Duffy
Audit Committee Chair
Committee members and Committee tenure
P Duffy (Chair)
J Lodge
I Haaijer
K Underhill
D O’Connor¹
P Coveney²
Appointed to
the Committee
Number of full
years on the
Committee
17 Jun 21
20 Jan 21
17 Aug 22
17 Aug 22
1 Dec 14
30 Sep 14
1
2
<1
<1
7
7
1. D O’Connor stepped down as an Audit Committee member on
17 August 2022.
2. P Coveney retired as an Independent Non-Executive Director and
stepped down as an Audit Committee member on 30 March 2022.
See pages 84 and 85 for more information on the current
Audit Committee members.
Terms of reference
The full terms of reference of the Audit Committee can be found
on the Group’s website: www.glanbia.com or can be obtained
from the Group Secretary.
Key responsibilities
Protecting the interest of shareholders by monitoring the
integrity of all aspects of corporate and financial reporting
(both in the annual report and on the company website),
internal control, risk management and audit quality.
Reviewing and reporting to the Board the significant financial
reporting issues and judgments made in preparing the Group’s
Financial Statements, interim reports, and related formal statements.
Reviewing and challenging where necessary the appropriateness
and consistency of the accounting policies applied in preparing the
Group’s Financial Statements.
Providing advice to the Board on whether the Annual Report and
Financial Statements, taken as a whole, is fair, balanced and
understandable and provides the necessary information for
shareholders to assess the Group’s position and performance,
business model and strategy.
Assisting the Board in its responsibilities in monitoring and
reviewing the effectiveness of the Group’s systems of risk
management and internal control and assessing the emerging
and principal risks facing the Group.
Reviewing reports from specialist functions such as Health &
Safety, Quality and Food Safety, Group Treasury, and Group Tax
to identify issues that may have a material impact to the Group.
Considering and inputting into the work undertaken to improve
the Group IT and cyber security capabilities, and the Group’s ESG
disclosure requirements.
Advising the Board of any material uncertainties that may
impact the Group’s ability to continue as a going concern and the
appropriateness of the Group’s long-term viability statement.
Overseeing the relationship with the statutory auditor, including
reviewing and monitoring the independence, objectivity and
effectiveness of the external audit and the appropriateness of
the provision of non-audit services to the Group in line with the
Group Auditor Relationship and Independence Policy.
Approving the statutory Auditor’s terms of engagement and
remuneration.
Making recommendations to the Board in relation to the
appointment, re-appointment and removal of the Group’s
statutory auditor and ensuring that an audit tender is conducted
at least every 10 years.
Monitoring the operation and reviewing the effectiveness of the
Internal Audit Function.
Assessing the Group’s procedures for fraud prevention and
detection and supporting the Board in assessing the Group’s
whistleblowing arrangements.
Allocation of time
Financial and corporate governance activities
Statutory Auditor
Risk management and internal controls
Internal Audit
Other
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
103
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION
Audit Committee Report continued
Dear shareholder,
As Chair of the Audit Committee, I am pleased to present the
Committee’s report for the year ended 31 December 2022. This
report provides an overview of the Committee’s principal
activities during the year, its role in ensuring the integrity of the
Group’s published financial information and an outline of the
Committee’s priorities for the year ahead.
Committee structure changes
As announced on 24 February 2022, I have succeeded Dan
O’Connor as Chair of the Audit Committee effective 7 March
2022. Patrick Coveney retired as an Independent Non-Executive
Director effective 30 March 2022. Ilona Haaijer and Kimberly
Underhill were appointed as members of the Audit Committee
effective 17 August 2022 and Dan O’Connor stepped down as an
Audit Committee member on the same date.
Responsibilities
The Audit Committee is responsible for monitoring the integrity
of the Group’s Financial Statements and for assisting the Board
in determining that the Annual Report and Financial Statements,
taken as a whole, is fair, balanced and understandable and
provides the information necessary for shareholders to assess
the Group’s position and performance, business model and
strategy. The work performed in this regard and our engagement
with the statutory auditor is detailed on pages 105 to 109.
The Audit Committee also supports the Board in monitoring and
reviewing the effectiveness of the Group’s risk management and
internal control systems and for ensuring a robust assessment of
the emerging and principal risks facing the Company is
performed. The Audit Committee, together with the Board, are
closely monitoring the key risks that could materially and
adversely affect the Group’s ability to achieve its strategic
objectives, particularly those whose probability of occurrence
and extent of impact are elevated by the consequences of the
ongoing war in Ukraine, geopolitical tension, the general
macroeconomic environment and the lingering impacts of
Covid-19.
During the year, the Group has continued to make progress on
climate change initiatives and has made important strides in
embedding climate change impacts within our strategy,
operations and risk management processes. The approach taken
to measure climate risk impact through the scenario analysis
and financial impact assessment are discussed in detail in the
TCFD Report on pages 62 to 65. The Audit Committee has also
assessed with management the impact of climate-related
matters on the Group’s Financial Statements (see Note 2). The
Audit Committee continues to monitor the regulatory
environment to ensure the Group provides stakeholders with
consistent, comparable and reliable information on ESG matters.
Group Internal Audit (“GIA”) presented the results of a Group-
wide combined assurance exercise, completed across the
Group’s core activities. While this exercise did not identify any
significant improvement opportunities, it provided greater detail
for the Audit Committee to assess the Group’s principal risks and
to further progress our overall assurance model. The work
performed in this regard is detailed on page 107.
104 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Engagement
In fulfilling its key oversight responsibilities, the Audit Committee
engaged regularly with management, GIA and the statutory
auditor to ensure timely and accurate information was
consistently provided to the Audit Committee. Our engagement
with the GIA function and the statutory auditor is detailed on
pages 107 and 109 together with an explanation of how the Audit
Committee has assessed the independence and effectiveness of
the external audit process.
The Audit Committee is satisfied, based on the evidence
obtained throughout the external audit process, including its
review of the key audit risk areas, and the work undertaken by the
statutory auditor to address those risks, that a robust, effective
and efficient process is evident across the Group.
Priorities for 2023
The Audit Committee’s key priorities for 2023 include:
• ensuring the Group’s Financial Statements are accurate and
reflect the balanced and consistent application of financial
and non-financial reporting requirements;
• providing independent challenge and oversight of areas of key
judgement or estimation;
• maintaining focus on impairment testing methodology, inputs,
assumptions, sensitivity analysis and results;
• continuing to assess the processes in place to ensure effective
oversight of ESG activities and other non-financial disclosures;
• monitoring the Group’s principal risks and uncertainties
including potential negative impacts arising from geopolitical
risks affecting the Group, the ongoing war in Ukraine, the
global economic outlook, and inflation, energy cost and
interest rate increases;
• receiving direct presentations from management to ensure
that effective risk management processes are implemented to
address key risk areas in a manner consistent with the Group’s
risk appetite;
• maintaining oversight on the remaining challenges posed by
Covid-19 on the business, principal risks, cash flow, accounting
disclosures and financial controls; and
• ensuring that robust due diligence is performed, acquisition
integration is closely monitored and post completion reviews
are conducted for all material investments.
Review of Audit Committee performance
The Audit Committee assessed its performance covering its
terms of reference, composition, procedures, contribution, and
effectiveness. As a result of that assessment, the Board and
Audit Committee are satisfied that the Audit Committee is
functioning effectively and continues to meet the requirements
of its terms of reference. A detailed Audit Committee
effectiveness review, conducted by GIA, validated the Audit
Committee’s conclusion.
On behalf of the Audit Committee
Paul Duffy
Audit Committee Chair
Governance
Committee membership
The Audit Committee was in place throughout 2022. At present,
the Audit Committee is comprised of four Independent Non-
Executive Directors, Paul Duffy (Chair of the Audit Committee),
Jane Lodge, Ilona Haaijer and Kimberly Underhill. Two members
constitute a quorum. The Group Secretary acts as secretary to
the Audit Committee.
• significant areas in which estimation or judgement had been
applied in the preparation of the Financial Statements.
The GIA team contribute to the assurance process by reviewing
compliance with internal control processes including the review
of the Group’s internal financial controls. The statutory auditor
presents its findings to the shareholders as the owners of the
business, and its report can be found on pages 160 to 169.
Membership is reviewed annually by the Chair of the Audit
Committee and the Group Chairman who recommend new
appointments to the Nomination and Governance Committee for
consideration and onward recommendation to the Board.
The Board is satisfied that the Audit Committee, as a whole,
meets the requirements for recent and relevant financial
experience, as set out in the UK Corporate Governance Code
2018. The Board is also satisfied that the Audit Committee, as a
whole, has competence relevant to the sector in which the Group
operates including a wide range of skills, expertise and
experience in financial and commercial matters arising from the
senior positions they hold or held in other organisations as set out
in their biographical details on pages 84 and 85.
Given the evolving Audit Committee membership a training
session was delivered to the members of the Audit Committee
focused on ensuring the effective operation of the Audit
Committee in line with its duties from a statutory basis, as well as
the Irish and UK Listing requirements.
Meetings
The Audit Committee met eight times during the year ended
31 December 2022. The Group Managing Director, Group Finance
Director, Group Secretary, Group Head of Internal Audit, Group
Financial Controller and representatives of the statutory auditor
are invited to attend all meetings of the Audit Committee. Where
required other key executives or members of the senior
management team are invited to attend meetings and when
specialist technical knowledge is required to provide a deeper
insight on agenda items related to the Group’s principal risks.
The Audit Committee meet with the statutory auditor, without
other executive management being present, on an annual basis
to discuss any issues which may have arisen in the year under
review. This meeting was held in February 2023 to review the
findings from the audit of the Financial Statements. The Group
Head of Internal Audit also has direct access to the Chair of the
Audit Committee. After each Audit Committee meeting, the
Chair of the Audit Committee reports to the Board on the key
issues which have been discussed. The allocation of time across
each of the key Audit Committee activities is set out on page 103.
Audit Committee key activities
Financial reporting and significant financial judgements
As part of the Audit Committee’s role, the Audit Committee
reviewed the Interim Management Statements, the Interim and
Annual Consolidated Financial Statements and all formal
announcements relating to these statements before submitting
them to the Board with a recommendation to approve. These
reviews were focused on but not limited to:
• the appropriateness and consistency of application of
accounting policies, practices and proposed disclosures;
• compliance with financial reporting standards and corporate
governance requirements including compliance with climate-
related disclosures; and
As outlined in our accounting policies on page 177, the Group has
adopted an income statement format that seeks to highlight
significant items within the Group results for the year
(‘exceptional items’). Judgement is applied by the Directors in
assessing the particular items which by virtue of their scale and
nature should be disclosed in the Income Statement and
Financial Statement notes as exceptional items. Several
significant items have been highlighted as exceptional items in
both 2021 and 2022 and the Audit Committee is satisfied that this
is appropriate and consistent with the Group’s policy in this area.
The table on page 108 sets out the 2022 significant Financial
Statements reporting judgements and disclosures and how the
Audit Committee addressed these matters.
The Audit Committee considered the Directors’ Responsibility
Statement and the Group’s principal risks and uncertainties
within the 2022 Annual Report and Financial Statements and the
half-year results and were satisfied with the adequacy of the
disclosures.
Geopolitical risk
The Audit Committee has supported the Board in closely
monitoring the risks associated with the ongoing war in Ukraine
and other geopolitical tensions that could potentially impact the
growth objectives of the Group. While the Group does not have
operations in either Russia or Ukraine, a review was undertaken
to assess any impacts for the Group’s Financial Statements
arising from the conflict or sanctions imposed on Russia. The
Audit Committee together with the Board are also monitoring
the escalating tensions in other key trading regions, particularly
between China and Taiwan, where any potential conflict,
economic sanctions or trade rulings would impact the growth
objectives of the Group. The impact on the Group’s principal risks
is discussed in the Risk Management Report and Principal Risks
and Uncertainties on pages 67 to 77.
Covid-19
The Audit Committee continues to be conscious of the potential
impact of Covid-19 on the Group’s employees and operations.
Employee performance has remained strong, and the controls
implemented to support remote working continue to be
operationally effective. Our offices remained open during the
year as restrictions on movement and travel were eased as the
general public health situation continued to improve. The Audit
Committee will continue to engage with the Board to ensure that
effective internal control and risk management systems are
maintained.
The Audit Committee discussed with Group management the
work performed in respect of the Going Concern and Viability
Statements, the goodwill and intangible asset impairment
reviews and the evaluation of exceptional items. Impacts to the
internal and external audit processes, which are being conducted
in a hybrid manner (both in-person and remotely), have also been
considered. The Audit Committee is satisfied that both the
internal and external audit teams were able to work safely and in
compliance with the relevant laws and guidance.
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
105
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Audit Committee Report continued
Fair, balanced and understandable
At the request of the Board, the Audit Committee reviewed the
contents of the Annual Report and Financial Statements to
ensure that when taken as a whole, it is fair, balanced and
understandable, and provides the information necessary for
shareholders to assess the company’s position, performance,
business model and strategy. In satisfying this responsibility the
Audit Committee considered the following:
• the documented process and timelines for the co-ordination,
preparation and review of the Annual Report and Financial
Statements;
• a dedicated project manager was in place to drive adherence
to deadlines, reporting standards and consistency and this is
aligned with the external audit process undertaken by Deloitte
Ireland LLP;
• the senior finance management and executive team review
and approval procedures;
• the key process milestones, to ensure the draft Annual Report
and Financial Statements were available to the Audit
Committee in sufficient time to facilitate adequate review and
effective challenge at the meeting;
• a detailed report was presented to the Audit Committee
outlining the process by which they assessed the narrative,
financial sections and disclosures of the 2022 Annual Report to
ensure that the criteria of fair, balanced and understandable
has been achieved;
• together with the ESG Committee, disclosures on ESG related
matters including the TCFD report and other climate
disclosures were discussed in detail; and
• the effectiveness of the key features of internal control.
Having considered the above, in conjunction with the regular
updates the Audit Committee receives from management and
the reports received from the statutory auditor, Deloitte Ireland
LLP, the Committee confirmed to the Board that the Annual
Report and Financial Statements, taken as a whole, is fair,
balanced and understandable and provides the information
necessary for shareholders to assess the Group and the
Company position, performance, business model and strategy.
Regulators and our financial reporting
During the year, the Group received correspondence from the
Irish Auditing and Accounting Supervisory Authority (IAASA) in
respect of the Group’s Annual Report and Financial Statements
for the year ended 1 January 2022 outlining a number of areas on
which they required further information. The Company provided
the necessary information requested and IAASA acknowledged
the cooperation received from the Directors and management in
responding to the queries raised. The Audit Committee was
satisfied that no material findings arose from the review.
Going Concern and Viability Statements
The Audit Committee reviewed the draft Going Concern and
Viability Statements prior to recommending them for approval
by the Board. These statements are included in the Risk
Management report on pages 70 and 71. This review included
assessing the effectiveness of the process undertaken by the
Directors to evaluate going concern, including the lingering
impacts of the Covid-19 pandemic, the general macroeconomic
environment, inflationary pressures, rising energy costs, interest
rates and cost of living which have been exacerbated by the
ongoing war in Ukraine, and the analysis supporting the Going
Concern Statement and disclosures in the Financial Statements.
The Audit Committee and the Board consider it appropriate to
adopt the going concern basis of accounting with no material
uncertainties as to the Group’s ability to continue to do so.
106 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
The Audit Committee also reviewed the Long-term Viability
Statement which is supported by the work conducted in the
strategy and budget review in December 2022 and the Board’s
ongoing review of monthly and year-to-date business
performance versus budget and forecast. Further detail is
provided within the Viability Statement on pages 70 and 71.
Directors’ Compliance Statement
The Audit Committee considered the requirements of the Irish
Companies Act 2014 in relation to the Directors’ Compliance
Statement and received a report from senior management on
the review undertaken during the financial year of the compliance
structures and arrangements in place to ensure the Company’s
material compliance with its relevant obligations. On the basis of
this review, the Audit Committee confirmed to the Board that it is
satisfied that appropriate steps have been undertaken to ensure
that the Company is in material compliance with its relevant
obligations.
Risk management and internal control systems
The Audit Committee receives regular Group key risk summary
reports, prepared by the Internal Audit team, tracking residual
key risk exposures which allows the Audit Committee to assess
the appropriateness of management’s action plans to ensure the
Board’s risk appetite is not exceeded and to remain alert to
emerging risks as they are identified through the review process.
The Risk Management Report on pages 67 to 77 sets out the
detailed steps in the process and the Group’s principal risks. The
Audit Committee’s risk management focus during 2022 included:
• reviewing and approving the assessment of the principal risks
and uncertainties that could impact the achievement of the
Group’s strategic objectives as outlined on pages 72 to 77;
• continued increasing focus on developing a detailed
understanding of the risks within each of the core functions,
our improvement opportunities and areas of emerging risk
exacerbated by the ongoing war in Russia and Ukraine;
• receiving risk presentations from a number of Group
functional leads in particular receiving detailed presentations
from Group IT on the progress of the Group’s IT strategy and
its response to cyber security risks. Cyber security remains a
major focus for the Audit Committee given the ever-increasing
risks in this area at a global level. The Audit Committee
received updates on information security matters from Group
IT three times during the year. The Chair of the Audit
Committee updated the Board on the IT discussions on each
occasion;
• evaluating the continued impacts of Covid-19 on the business
and the health and safety of its employees;
• reviewing the disclosures in relation to material CROs as
outlined in the TCFD and the results of the reassessment and
the completion of scenario and quantification analysis of the
potential impact of CROs under a number of temperature
scenarios on pages 62 and 63;
• reviewing Group Finance papers which considered the impact
of climate change on the Group Financial Statements which
includes details on the TCFD requirements, as outlined on
pages 62 to 65 and accounting policy Note 2 to the Financial
Statements. During the year, Group Finance and the statutory
Auditors provided the Audit Committee with regular updates
on the evolving legislative and external reporting requirements
including climate-related risk disclosures;
• reviewing and assessing management’s recommendation to
change the presentation currency of the Group’s Financial
Statements from euro to US dollar reporting in 2023 as
outlined in the Group Finance Director’s review on page 45 and
Note 36 to the Financial Statements;
• a consideration of the detailed business unit performance
updates on Group investments and the impairment review
methodology and outcomes outlined in Note 16;
• receiving updates from the Group Head of Internal Audit
outlining areas of non-compliance with Group policies and
control deficiencies identified during the year, fraud
investigation reports and management actions to address the
weaknesses noted;
• assessing the Group’s risk management and internal control
systems in line with the Financial Reporting Council (FRC)
guidance on risk management and internal control; and
• reviewing reports from the statutory auditor in respect of
significant financial accounting and reporting issues, key
matters arising from the statutory audit together with
management’s plans in place to address any internal control
weaknesses noted.
The Audit Committee, having assessed the above information, is
satisfied that the Group’s systems of internal control and risk
management are operating effectively and has reported that
opinion to the Board who has conducted its own review and is
also satisfied that these systems are operating effectively.
Internal audit
To fulfil its responsibilities for monitoring and reviewing the
operation and effectiveness of the GIA function, the Audit
Committee:
• approved the GIA Charter and annual risk-based work plan
including any amendments to ensure the plan remains
dynamic to address business challenges, changes to current
and emerging areas of key Group risks and the changing
business environment during the year. Audits were conducted
in a hybrid manner (both in-person and remotely) as travel
restrictions were lifted in key locations during the year;
• ensured that it is adequately resourced with a strong mix of
skills and expertise capable of conducting effective internal
audits, IT audits and special investigations;
• satisfied itself that the internal audit team is appropriately
resourced, where additional skills or expertise are required, the
Head of Internal Audit makes the necessary arrangements to
complement the in-house team;
• reviewed the team’s use of technology including the audit
management system and data analytics tools, processes,
techniques and plans to ensure the effectiveness of Internal
Audit processes and oversight of risks;
• approved the GIA Strategic Plan for 2022 to 2024;
• received regular reports from the Head of Internal Audit
covering team development, progress against the audit plan,
amendments required and best practice risk management
procedures. This included receiving updates on the activities
performed in line with the quality assurance and improvement
programme policy (QAIP) that is designed to ensure that
Internal Audit performs its work in accordance with its Charter,
which is consistent with the Institute of Internal Auditors (IIA)
International Standards for the Professional Practice of
Internal Auditing, Definition of Internal Auditing and Code of
Ethics; and
• as part of the QAIP, an external quality assessment of the
Internal Audit function was conducted in 2022 by PwC. The
external review noted that the Internal Audit function is
providing effective assurance to management and the Audit
Committee and is in general compliance with the IIA
Standards with no material issues identified.
GIA performed a combined assurance mapping exercise to
identify potential assurance gaps and avoid duplication of
assurance effort. The output of the exercise was presented to the
Audit Committee and while it did not identify any significant
improvement opportunities, it provided greater detail to allow
the Audit Committee to further progress the Group’s overall
assurance model. GIA also continued its focus on principal risks,
which included cyber threat and information security, legal and
regulatory compliance and technology failure. Audit results are
reported to the Audit Committee to allow the Audit Committee to
have an integrated view on the way risks are managed.
Management is responsible for ensuring issues raised by Internal
Audit are addressed within the agreed timeframe, and the Audit
Committee reviews the status of actions periodically throughout
the year to ensure they are completed on a timely basis.
The Group Head of Internal Audit routinely meets with the Chair
of the Audit Committee, to review the meeting agendas, and
draft papers and to ensure that the overall Audit Committee
work plan remains aligned to the current and emerging areas of
key Group risk. Where required, the relevant Board or Audit
Committee agendas are amended to include items that require
more detailed consideration, typically by a direct presentation to
the Audit Committee or Board by the relevant business unit or
functional lead.
On the basis of the above, the Audit Committee concluded that
the Internal Audit function was performing well and is satisfied
that the quality, experience and expertise of the function is
appropriate for the Group. The Audit Committee continues to
encourage effective coordination among the internal assurance
providers, external and internal audit teams to maximise the
benefits from coordinated activities and ensures that this is
in place.
Whistleblowing and fraud
The Board has delegated responsibility to the Audit Committee
for ensuring that the Group maintains suitable arrangements for
its employees to raise concerns, in confidence, about possible
wrongdoing in financial reporting and other matters. These
arrangements are outlined in our updated Code of Conduct
which is available on the Company’s website www.glanbia.com
and on our Group intranet. The Audit Committee received a
presentation from the Group Secretary providing an overview of
how concerns raised are categorised, investigated, monitored
and reported, together with a review of the main themes, issues
and resolution actions arising. The Group’s Speak Up Policy was
updated during the year to reflect evolving regulatory and best
practice requirements.
The Group’s Anti-Bribery and Corruption Policy, Group Code of
Conduct and Supplier Code of Conduct were refreshed during
the year to further strengthen the Group’s fraud prevention
procedures. A training module to support the Supplier Code of
Conduct was developed during 2022 and will be launched in
2023. Management with the support of Internal Audit have
formalised and enhanced the existing fraud risk management
policies and processes, to help ensure a robust fraud prevention
programme is implemented across the Group. A fraud risk
assessment has been completed and approved by the Audit
Committee and Board.
The Audit Committee concluded, and confirmed to the Board,
that it was satisfied that the Group’s whistleblowing and other
fraud prevention and detection procedures, including the
Internal Audit team’s activities, are adequate and allow for the
proportionate and independent investigation of such matters
and appropriate follow up action.
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
107
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Audit Committee Report continued
2022 significant financial reporting judgements and disclosures
The areas considered and the actions taken by the Audit Committee in relation to the 2022 Annual Report are outlined in the table
below. For each area, following its enquiries, the Audit Committee was satisfied with the key assumptions made, the accounting
treatment applied and the disclosures in the Financial Statements.
Key financial judgement and disclosures
How the Audit Committee addressed these matters
Impairment review of goodwill and
intangibles
Judgement decisions largely relate to the
assumptions used to assess the value-in-use
of the assets being tested. These
assumptions typically include short and
long-term business and macroeconomic
projections, cash flow forecasts and
associated discount rates.
Exceptional items
Judgement decisions relate to the
assessment of the items identified as being
exceptional in nature and the
appropriateness of the presentation in the
Financial Statements.
• Management provided the Audit Committee with detailed reports to support the
recoverable value of the balances included in Note 16 to the Financial Statements
including an analysis of the level of headroom between the carrying value of the asset
and the value-in-use;
• The Audit Committee considered the reorganisation of the Group’s cash generating
units (CGUs) following the fundamental reorganisation of the GPN segment which
commenced in 2019 and is now complete. The Audit Committee is satisfied that the
revised CGUs reflect the interdependencies of cash inflows within the Group and how
management monitors operations.
• The Audit Committee reviewed and discussed the reports with management and
challenged the application of management’s methodology, the appropriateness of
the assumptions made for future cash flows, discount rates, terminal values and
growth rates, and the achievability of the business plans with consideration of
different scenarios;
• The Audit Committee considered the updates made to assumptions and Financial
Statement disclosures as a result of management’s assessment of the impact of
Covid-19 on forecasted business performance and cash flows, impact of climate
related matters as disclosed in Note 16 to the Financial Statements, and the extent of
sensitivity disclosures provided;
• The Audit Committee considered the potential impacts of the ongoing war in Russia
and Ukraine; rising energy costs, inflation, and interest rates; and climate change on
the Group’s businesses and valuation assumptions; and
• The Audit Committee considered the output from the sensitivity analysis performed at
2022 year-end, and in particular, noted that based on the conclusions of the
impairment process completed, no impairment was identified.
• The Audit Committee reviewed the nature of the exceptional items identified and the
effectiveness of the process that requires all exceptional items to be pre-approved.
After a detailed review and consideration of the disclosures, the Audit Committee is
satisfied that the treatment is in line with the Group policy, consistently applied across
years and appropriately presented in the Financial Statements with sufficient detail to
allow users of the Financial Statements to understand the nature and extent of the
exceptional items and how they arose. Further details on the exceptional items
identified in 2022 are included in Note 6 to the Financial Statements.
Revenue recognition
Revenue is a risk given the inherent
complexity of IFRS 15 accounting
requirements, the nature of some customer
relationships and the adjustments recorded
to ensure the basis of year-end rebate
provisions are appropriate.
• Within the GPN segment, revenue is recognised net of rebate, discount, deduction and
allowance claims where the amounts payable can vary depending on the
arrangements made with individual customers and the volume of trade entered into;
and
• Key areas of focus and challenge from the Audit Committee were in relation to the
period-end close process and the basis of any significant year-end rebate provisions
to ensure they were adequate and appropriate.
Uncertain tax provisions
Significant judgement is applied in assessing
current and deferred tax exposures in
relation to the interpretation of local and
international tax laws, rates and treaties
relating to the worldwide uncertain tax
provisions.
• The Audit Committee received a presentation from the Group Finance Director and
the Group Head of Tax on various tax matters including tax structures and controls,
the ongoing management of the Group’s system of operation, evolving tax legislation
and the status or outcome of any tax authority reviews conducted during the financial
period;
• The Audit Committee considered the impact of the Group financing arrangements
and the Group’s compliance with the legislative requirements in this area;
• The Audit Committee received an analysis of movements in the year-end uncertain tax
provisions, reviewed the key judgements in relation to the calculation of the uncertain
tax provisions, the external professional advice obtained to support the provisions and
the Financial Statements disclosure requirements; and
• The Audit Committee challenged management on the key judgements and estimates
underpinning both the provisions and disclosures adopted for the most significant
components of the taxation liabilities and the underlying assumptions for the
recognition of deferred tax assets, principally the availability of future taxable profits
and the utilisation period.
108 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Non-audit services
The Glanbia Auditor Relationship and Independence Policy
includes a clearly defined pre-approval process, subject to
defined monetary thresholds, for audit and other services,
including a requirement for the business to submit a formal
template setting out the details of the services requested, the
likely fee level, the rationale for requiring the work to be carried
out by Deloitte Ireland LLP rather than another service provider
and confirmation that the service requested is not a prohibited
service. The provision of all non-audit services which are not
prohibited and approved in line with our policy must be ratified
by the Audit Committee at the following meeting of the Audit
Committee, who also ensures that the total fees for non-audit
services will not exceed the defined thresholds and that the
defined authorisation process is followed.
Fees paid to Deloitte Ireland LLP for audit-related and non-audit
related services are analysed in Note 5 to the Financial
Statements. The Audit Committee is pleased that this policy
continues to be effectively implemented.
Effectiveness
The Group Finance Director confirmed that the feedback from
the Group and subsidiary finance executives, who had the most
interaction with Deloitte Ireland LLP in 2022, remained
consistently positive.
Overall, the Audit Committee remains satisfied with the
effectiveness of the statutory auditor based on:
•
its own interactions with Deloitte Ireland LLP during Audit
Committee meetings;
• the quality of planning, delivery and execution of the audit;
• effectiveness of communications between management and
the audit team;
• the quality of the reports and presentations received;
• the robustness of the challenge provided, particularly in
relation to judgmental and complex areas as well as
demonstrating professional scepticism and independence;
• their technical insight; and
• their demonstration of a clear understanding of the Group’s
business and its key risks.
The Audit Committee’s conclusion that the external audit
process was effective was conveyed to the Board.
Review of statutory auditor
The Audit Committee oversees the relationship with the statutory
auditor, including ensuring that the statutory audit contract is put
out to tender at least every 10 years. Deloitte (who were succeeded
by Deloitte Ireland LLP) were appointed as the Group’s statutory
auditor on 27 April 2016 following a formal tender process.
The Audit Committee reviewed the approach and scope of the
annual audit work to be undertaken by the statutory auditor,
which included planned levels of materiality, significant risks and
key audit matters, the audit of the Group’s core financial IT
systems, fraud responsibilities and representations, the proposed
audit fee and the approval of the terms of engagement for the
audit. Particular consideration was given to the planning
considerations associated with developing a hybrid audit plan to
ensure the delivery of a robust audit within the required timelines
through a combination of remote and in-person meetings,
subject to any changes in Covid-19 restrictions. The Audit
Committee is satisfied, based on discussions with the Group lead
audit engagement partner, that the effectiveness of the audit
procedures performed were not unduly impacted as a result of
the hybrid audit approach adopted.
The Audit Committee received a number of updates from
Deloitte with regard to the evolving regulatory requirements for
ESG reporting and the recent corporate governance updates
including:
• ESG’s current landscape and future developments and the
importance of achieving an appropriate balance between the
climate-related disclosures in the management commentary
and the disclosures in the financial statements;
IAASA, FRC and IFRS technical updates and commentary
including the investor and regulator expectations of corporate
reporting; and
•
• UK Corporate Governance Code requirements.
Independence and objectivity of the statutory Auditor
To ensure the independence and objectivity of the statutory
auditor, the Audit Committee:
• maintains and regularly reviews the Group’s Auditor
Relationship and Independence Policy;
• considers the performance of the statutory auditor each year;
• monitors the nature and extent of services provided by the
statutory auditor through an annual review of fees paid for
audit and non-audit work;
• reviews audit partner rotation requirements and assesses
their independence on an ongoing basis. In line with regulatory
requirements for listed companies, the statutory auditor is
required to rotate the audit partner responsible for the Group
audit every five years. The current audit engagement partner,
Emer O’Shaughnessy was appointed as lead engagement
partner for the Group in 2021; and
• requests the statutory auditor to formally confirm in writing
that they are in compliance with relevant ethical and
professional guidance and that, in their professional
judgment, they are independent from the Group. This
confirmation process also provides examples of safeguards
that may, either individually or in combination, reduce any
independence threat to an acceptable level.
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
109
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Environmental, Social and
Governance Committee Report
Delivering
better nutrition
responsibly
Donard Gaynor
Environmental, Social and
Governance Committee Chair
Committee members and Committee tenure
D Gaynor (Chair)
P Coveney1
I Haaijer
J Murphy
D O’Connor
S Talbot
Appointed to
the Committee
17 Jun 21
Number of full
years on the
Committee
1
17 Jun 21
< 1 full year
1 Sep 22
<1 full year
17 Jun 21
1
1 Sep 22
<1 full year
17 Jun 21
1
1 P Coveney retired as an independent director and stepped down as
an ESG Committee member on the 30 March 2022.
See pages 83-86 for more information on current
Environment, Social and Governance Committee members.
Terms of reference
The full terms of reference of the Environmental, Social and
Governance (“ESG”) Committee can be found on the Group’s
website: www.glanbia.com or can be obtained from the Group
Secretary and Head of Investor Relations.
Key responsibilities
Assisting the Board in defining and regularly reviewing the
strategy of the Group relating to ESG matters and in setting
relevant key performance indicators.
Developing and reviewing regularly the policies, programmes,
codes of practices, targets and initiatives of the Group relating to
ESG matters, ensuring they remain effective and up to date and
consistent with good industry practice.
Providing oversight of the Group’s management of ESG matters
and compliance with relevant legal and regulatory requirements,
including applicable rules and principles of corporate governance,
and recognised international standards.
Reviewing and supporting progress made against the Group’s
core ESG strategies including: Environmental Sustainability;
Health and Safety; Food Safety and Quality; and Diversity, Equity
and Inclusion (“DE&I”).
Reviewing the quality and integrity of internal and external
reporting of ESG matters and performance to ensure that the
Group provides appropriate information, complies with reporting
obligations and meets international reporting standards and is
transparent regarding its ESG related policies with the
investment community.
Reporting on these matters to the Board and, where appropriate,
making recommendations to the Board.
Reporting as required to the shareholders of the Company on the
activities and remit of the ESG Committee.
110 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Dear Shareholder,
In 2021, we established our Environmental, Social & Governance
(ESG) Committee to provide the Group with rigour, support and
challenge on ESG matters. This report outlines our activities in
support of this aim, and how we have discharged the
responsibilities delegated to the ESG Committee by the Board.
This report should be read in conjunction with Our Sustainability
section on pages 50-66 and Our People section on pages 20-23
which provides further information on our ESG activities.
At Glanbia we are focused on delivering better nutrition in a
responsible way and achieving incremental improvements in
impact for all stakeholders. Our Group sustainability strategy
(as outlined on page 51) sets out our clear priorities based on the
most material ESG topics to our business and stakeholders.
Page 113 highlights the key activities of the ESG Committee
during 2022 and outlines the main focus areas for the
year ahead.
Regulatory environment
In the context of an evolving ESG reporting landscape with
recently added requirements such as reporting under the Task
Force on Climate-related Financial Disclosures (TCFD)
framework and upcoming legislative requirements, including the
EU Corporate Sustainability Reporting Directive (CSRD), which
enacts mandatory sustainability reporting standards, the ESG
Committee recognises the challenge that an evolving ESG
reporting landscape presents. This includes navigating ESG
reporting obligations, while ensuring our ESG ambition is
appropriately integrated into our strategic and operational plans
and risk management framework.
To support preparedness for existing and future requirements we
have taken a number of actions in 2022. These included aligning
to the Global Reporting Initiative (GRI) reporting standards, with
a separate GRI report relating to full year 2022 planned for
release in May of 2023, updating our ESG material topics impact
assessment, and carrying out a review of our IT system
capabilities to support disclosure requirements.
Climate change
The ESG Committee formally met three times this year. At each
meeting, the ESG Committee received an update on the
performance of our environmental pillars and the actions taken
to support the Group’s climate action agenda.
In the context of reviewing the Group’s transition plan outlining
the proposed Scope 1 and 2 carbon emissions reduction pathway
to 2030, the decision to increase the Group’s associated
emissions reduction target from 31% to 50% (2018 baseline year),
in line with the Paris Agreement, was endorsed by the
ESG Committee.
Results of the climate-related impact assessment as disclosed
within the TCFD report 62-65 was presented to the ESG
Committee. This analysis has allowed the Group to evaluate the
potential impacts of climate-related risks and opportunities that
face the business and the wider value chain, and assess our
current strategy and review our resilience against a number of
different climate scenarios.
In relation to Scope 3 emissions, as these relate to emissions
generated in our value chain, our approach is one of partnership
with suppliers and the wider dairy industry with a focus on data
quality and collaboration.
Focus areas in 2023 include building a comprehensive Scope 3
roadmap to achieve reductions in our Scope 3 emissions, with
on-farm footprinting a key input to this work, and to build on
existing initiatives such as the US Dairy Net Zero Initiative (NZI)
as part of the Environmental Stewardship Committee of the
Innovation Center for US Dairy.
Diversity, equity and inclusion (DE&I)
This year we focused on cultivating a culture of belonging for all of
our people at Glanbia, and ensuring our hiring practices align with
our DE&I Policy. We did this by continuing to educate and build
awareness around DE&I across the organisation through webinars,
social media and other forms of training for all employees,
especially leadership and talent acquisition cohorts. We also
established targets for leadership for female representation and
for measuring employee inclusion to ensure these goals are
being achieved in a quantifiable way.
Health and safety
2022 was a year of continued progress in our mission to ‘Zero
Harm’, with significant reductions in injury rates and zero critical
injuries reported, demonstrating the effectiveness of our health
and safety approach and culture of excellence across our sites.
Food safety and quality
The Group’s quality and food safety standards continue to meet
industry best practice, and all manufacturing sites hold an
externally recognised food safety certification. In 2022, we also
reviewed our internal programme, The ‘Glanbia Quality System’
(GQS), to ensure alignment with best practice standards through
a third party review.
Membership
The ESG Committee comprises of myself as Chair, the Group
Managing Director, and three Non-Executive Directors. Two
members constitute a quorum. The Deputy Group Secretary acts
as secretary to the ESG Committee. In addition, the Chief ESG
and Corporate Affairs Officer holds a standing invitation to
attend ESG Committee meetings. At the request of the ESG
Committee, members of the Executive Committee, senior
management team and external advisers may be invited to
attend all or part of any meeting, as and when appropriate. As
Chair, I report to the Board after each meeting on the nature and
content of our discussion, recommendations and any actions to
be taken.
I would also refer you to page 113 which provides an overview of
the ESG governance structure and related roles and
responsibilities, including those of the ESG Committee.
Review of Committee performance
The ESG Committee assessed its performance covering its terms
of reference, composition, procedures, contribution and
effectiveness. As a result of that assessment, the Board and
Committees are satisfied that the ESG Committee is functioning
effectively and is meeting its terms of reference.
Donard Gaynor
Environmental, Social and Governance Committee Chair
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
111
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Environmental, Social and
Governance Committee Report continued
ESG Governance structure
Glanbia plc Board
• Oversees all aspects
of ESG, including climate
change, responsible sourcing,
health and safety, food safety
and quality, DE&I and
community related topics.
Refer to the materiality
assessment page 55 for full
listing of material ESG topics.
• Provides rigorous challenge to
management on progress
against goals and targets.
• Ensures the Group maintains
an effective risk management
framework, including over
climate-related risks and
opportunities.
Group Operating
Executive (GOE)
The Board delegates specific ESG, including climate change,
oversight matters to its committees:
Remuneration
Committee
• Supports the ESG
strategy through
alignment of the
Groups incentive
plan to external ESG
targets, including
environment and
social metrics
ESG
Committee
• Oversees the
embedding of the
Group’s ESG
Strategy, on behalf
of the Board
• Reviews information
presented within the
ESG report
• Oversees the
Group’s ongoing
commitment relating
to TCFD
• Approves
recommendations
from the GOE in
respect of key ESG
issues and related
objectives
Nomination &
Governance
Committee
• Oversees
appropriate
personnel are
appointed to the
Group’s respective
Committees and
Board, and are
provided with
adequate training
and support to meet
ESG requirements
and Group strategy
Audit
Committee
• Oversees the Group
Financial Statements
and regulatory
non-financial
disclosures, including
climate-related
disclosures
• Oversees the
whistleblowing
programme
• Oversees the Group
risk register process
– including climate
change, talent
management, health
and safety and
product safety and
compliance
• Comprises of the Group Managing Director,
Group Finance Director, GPN and GN Chief
Executive Officers, Chief ESG and Corporate
Affairs Officer, Chief Human Resource Officer
and Corporate Development Director
• The Chief ESG and Corporate Affairs Officer is
responsible for implementation of the Group’s
ESG strategy including ensuring integration and
achievement of our climate related targets, with
support from the GOE
• Approves recommendations from the ESG Centre
of Excellence
• Makes recommendations to the ESG Committee
in terms of ESG initiatives, operational and
strategic approach to meet the overall Group
ESG agenda
• Members of the Capital Investment Committee
– responsible for oversight of responsible
investment activity
ESG Centre
of Excellence
• Chaired by the Chief ESG and Corporate Affairs Officer, comprises of the VP DE&I, SVP of QHS and SVP of
Sustainability, Head of ESG Governance and Reporting, and Head of ESG and Leadership
Communications
Input from wider group functions including Group Finance, Corporate Affairs, Investor Relations, IT and
Procurement
•
• Provides expert advice and direction in respect of ESG strategy, supporting the Business Units in
achieving ESG targets and commitments
• Monitors performance and keeps the GOE informed on areas of required focus and progress made
ESG Leadership Team (LT)
Sustainability LT
DE&I Committee
QHS LT
ESG Reporting LT
Comprises of Group and Business Unit representatives – responsible for advancing the relevant
strategic pillars and delivering the Group-wide strategy and Business Unit specific activities
Local
Business Units
The local Business Units are responsible for implementation of the Group’s ESG strategy, and ensuring
workstream delivery.
The following workstreams are in place to support the respective pillars and ensure delivery of respective
Business Unit work programmes:
DE&I
Culture & Leadership,
Talent Acquisition,
Commercial & Reputation,
Employee Resource Groups,
Training & Education
QHS
Food Quality & Safety,
Employee Health & Safety
Responsible Nutrition
Sustainability
Carbon Emissions, Water,
Waste, Packaging,
Responsible Sourcing,
Reporting,
Reports to
Informs
Board level
Operational level
112 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Key activities of the ESG Committee during 2022
Through the Chair of the ESG Committee, the Board has been formally updated of all the activities and related actions to meet the Board approved
ESG strategy:
Environment
Overseeing ESG ambition and performance against stated targets:
• Updated Scope 1 & 2 reduction commitment – aligned to 1.5 degrees Celsius pathway.
• Approval of supporting decarbonisation plan comprised of operational improvements and renewable electricity
procurement.
• Continued partnership with suppliers and wider dairy industry initiatives.
• Upgrading of our waste targets to externally accredited TRUE zero waste certification.
• Continued focus on consumer packaging innovation and recyclability.
• Enhanced analysis including financial quantification assessment on the identified climate-related risks and opportunities.
Social
Overseeing actions taken to support our stated DE&I strategy, employee engagement and our people’s health, safety and
wellbeing:
• Three Employee Resource Groups – Glanbia NOW (Network of Women), Mosaic (multi-cultural) and True Colours
(LGBTQIA+) were set up.
• Suite of global training modules deployed, including ‘fostering inclusion’ learning and development programme and
‘unconscious bias’ leadership training.
Initiatives from our employee engagement survey, including improved flexible working and parental leave.
•
• Continued improved health and safety metrics, with zero critical injuries reported during 2022.
• All manufacturing sites continue to maintain an externally recognised certification in quality food safety, such as those
recognised by the Global Food Safety Initiative (“GFSI”).
• Embedding of EcoVadis risk assessment as part of our supplier due diligence process.
Governance
Ensuring appropriate governance structures are in place to support the Group’s ESG strategy, including:
• Attending externally facilitated Board training sessions supporting our ESG strategy.
• Reviewing and approving Glanbia’s externally published ESG policies, including the updated Code of Conduct, Supplier
Code of Conduct and Anti-bribery and Corruption policy.
• Approval of ESG targets within STIP and LTIP remuneration targets.
• Enhanced and more transparent ESG reporting through use of the GRI reporting framework.
• External review of the Group’s ESG data systems and related processes.
Further
information
refer to:
Page(s)
56
57
57
59
59
62-65
Page(s)
21
22
20-21
23
60
60
Page(s)
92
66
133
55
50
Focus areas for 2023
In 2023 we will continue to build upon the momentum gained in
2022, and support the actions required to meet our stated
commitments and ambition. The key priorities for the ESG
Committee include:
• Further implementation of our on-site decarbonisation plan,
with a dedicated on-site team charged with delivering this
plan through a combination of production efficiencies (as
identified through our audit and metering processes) and
purposeful capital expenditure projects.
• Continued focus on our renewable energy procurement
strategy.
• Accelerate modelling work to develop a comprehensive
roadmap to reduce Scope 3 emissions to meet our targets.
• Further embed the results of climate change risk and
opportunity assessments within our strategy and risk
management process, with active challenge and support from
the ESG Committee.
• Progress our plans to incorporate an internal carbon price
mechanism within our capital investment assessments.
• Build on the initiatives and delivery of commitments set during
2022 within our other key environmental pillars, including
waste (building alignment with the TRUE zero waste
certification requirements), water and consumer packaging.
• Formalise our biodiversity, forestry and circular economy work
programmes.
• Continue to support improved health and safety performance
with a focus on root cause and near miss analysis reporting.
• Complete an independent regulatory capability assessment
and benchmarking review relating to food safety and quality.
• Further engrain our DE&I strategy across all aspects of our
organisation, including increase gender, racial and ethnic
representation in leadership.
• Ensure responsible procurement remains a key focus,
strengthen our due diligence processes further, through the
use of the EcoVadis risk assessment tool and Group
procurement protocols – with the protection of human rights
at the core.
• Continue focus on stakeholder engagement, and
understanding how Glanbia impacts our stakeholders.
• Monitor the Group’s ESG reporting, data systems and related
policies and processes delivering more transparent and
comparable reporting, and ensuring readiness for future
mandatory assurance, under CSRD.
• Ensure ESG performance continues to be a key indicator and
strategy driver, linked to remuneration performance.
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
113
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Nomination and Governance Committee Report
Fostering a
culture of
diverse and
inclusive
leadership
Donard Gaynor
Nomination and Governance Committee Chair
Committee members and Committee tenure
D Gaynor (Chair)
R Brennan
D O’Connor
Appointed to
the Committee
Number of full
years on the
Committee
12 Dec 14
20 Jan 21
12 Dec 14
8
2
8
See pages 83-87 for more information on current
Nomination and Governance Committee members.
Terms of reference
The full terms of reference of the Nomination and Governance
Committee can be found on the Group’s website: www.glanbia.
com or can be obtained from the Group Secretary and Head of
Investor Relations.
Key responsibilities
Assessing the composition, structure and size (including skills,
knowledge, experience and diversity) of the Board and its
Committees and making recommendations on appointments
and reappointments to the Board.
Planning for the orderly succession of new Directors to the Board
and of senior management.
Keeping up to date and fully informed about strategic issues and
commercial changes affecting the Company and the market in
which it operates.
Keeping under review the leadership needs of the Group, both
executive and non-executive, with a view to ensuring the
continued ability of the Group to compete effectively in the
market place.
Reviewing the talent capability across the Group.
Keeping the extent of Directors’ other interests under review to
ensure that the effectiveness of the Board is not compromised.
Overseeing the performance evaluation of the Board, its
Committees and individual Directors.
Keeping under review corporate governance developments with
the aim of ensuring that the Group’s governance policies and
practices continue to be in line with best practice.
Ensuring that the principles and provisions set out in the Irish
Corporate Governance Annex (the “Irish Annex”) and the UK
Corporate Governance Code 2018 (the “Code”) (together the
“Codes”) (and any other governance code that applies to the
Company) are observed.
Reviewing the disclosures and statements made in the Directors’
Report to the shareholders.
114 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Dear Shareholder,
On behalf of the Board and the Nomination and Governance
Committee it is my pleasure to present the Nomination and
Governance Committee Report for the year ended
31 December 2022.
Glanbia’s values are at the heart of our business and culture, and
for this to be the case, it is essential that the Board and each
individual Director, our senior leadership team and our wider
workforce share these values. We believe in leading by example,
and it is a paramount responsibility of the Nomination and
Governance Committee to oversee evaluation of the Board to
ensure these values are being maintained and encouraged in
every facet of our business. In this regard, the Nomination and
Governance Committee keeps Board composition under
constant review, continuously evaluating the composition,
balance and performance of the Board and of its Committees,
identifying and recommending to the Board the appointment of
new Directors and Committee members to ensure that the Board
and its Committees are comprised of an appropriate balance of
independence, skills, knowledge, experience and diversity so that
they are effective in discharging their responsibilities and in
having holistic oversight. The Nomination and Governance
Committee also identifies the leadership needs of the Group,
overseeing talent and succession plans for senior roles and
monitors the Group’s compliance with, and approach to, all
applicable legal, regulatory and guidance related to corporate
governance matters.
Focus for the year
The Nomination and Governance Committee’s areas of focus in
2022 were the appointment of two new Independent Non-
Executive Directors, Ilona Haaijer and Kimberly Underhill
(following the retirement of Patrick Coveney on 30 March 2022
and the retirement of Vincent Gorman on 5 May 2022) oversight of
the internal Board evaluation, ongoing succession planning and
oversight of the Board’s Diversity, Equity and Inclusion (“DE&I”)
ambitions, each of which are dealt in more detail in the following
pages. We also refreshed our Nomination and Governance
Committee composition following the appointment of Kimberly
and Ilona. Full biographical details for Kimberly and Ilona are set
out on page 85. Information on the process followed in respect of
their recruitment is contained on pages 97, 98 and 117.
Gender
Independence
Our search for new Independent Non-Executive Directors
continues in accordance with the planned reduction of the
Society’s representation on the Board and the Group’s well-
established succession plans. We remain cognisant of our
ambitions and will look to strengthen our diversity of skills,
knowledge and personal experiences. Gender diversity remains a
priority to ensure the Company maintains its target that 50% of our
Independent Non-Executive Director appointments are female.
Board evaluation
During 2022 in line with our agreed triennial evaluation cycle, the
Nomination and Governance Committee oversaw an internal
evaluation of the effectiveness of the Board and its Committees.
The results of this process were positive and provided the Board
with the assurance that it was operating effectively. An external
evaluation will be conducted in 2023. Information on the
evaluation process and a summary of the outcomes of the Board
evaluation and the areas of focus for 2023 arising therefrom are
set out in more detail on pages 99 and 100 of this report.
Committee aims for 2023
In 2023, Board composition, balance and diversity (both gender
and ethnicity), senior management succession planning and
governance oversight will continue to be priorities for the
Nomination and Governance Committee.
We will continue to support the Board’s broader oversight of
talent and succession, ensuring that the frameworks through
which the Board analyses and evaluates these matters are
thorough and robust. Additionally, the Nomination and
Governance Committee will oversee the Board’s external
evaluation process and monitor progress against the findings
from the most recent internal evaluation and will continue to lead
Non-Executive Director search activity and Board renewal with
an emphasis on diversity.
The following pages provide further details on the roles and
responsibilities of the Nomination and Governance Committee
and its governance duties.
I am available at any time to discuss any matters that any
shareholder may wish to raise.
On behalf of the Nomination and Governance Committee
Donard Gaynor
Nomination and Governance Committee Chair
Male – 64%
Female – 36%
Independent – 43%
Non-independent – 57%
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
115
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION
Nomination and Governance Committee Report continued
Diversity, Equity and Inclusion
Critical to our success is ensuring a culture that complements the
delivery of our strategy. The Board continues to focus on
engendering a corporate culture that is more diverse, equitable
and inclusive and on ensuring that this aligns with the Company’s
purpose, values and strategy.
We are committed to fostering a truly inclusive culture that
rejects any forms of racism and other discrimination, where talent
and individuality is nurtured, where everyone feels that they
belong, are valued, respected and appreciated for who they are
as individuals and the diverse perspectives they bring to Glanbia
and that they have equal opportunities to thrive regardless of
ethnicity, religion, colour, gender, sexual orientation, nationality
or any other personal characteristics.
This year, the Group was very active in promoting DE&I. Employee
Resource Groups (“ERGs”) were established for female (Glanbia
Network of Women (“Glanbia NOW”)), multicultural (Mosaic) and
LGBTQIA+ employees (True Colours) further details of which are
set out on page 22.
Female management representation targets were built into
annual incentives for Executive Directors. The Board also focused
on equipping talent acquisition with the resources to attract and
source diverse talent and educate hiring managers on inclusive
hiring practices along with an increased focus on ensuring
diverse candidate slates for open roles to improve diverse hiring.
Details of our diversity objectives, policy on equity and inclusion
and how this is linked to Company strategy can be found on
pages 20-22.
Board diversity
The commercial benefits of having a diverse Board are well
established. Our Board diversity policy is contained on page 97.
We strongly believe that diversity throughout the Group and at
Board level is a driver of business success. We respect, value and
welcome all forms of diversity. We recruit talented Board members
who have the appropriate mix of skills, capabilities and market
knowledge to ensure the Board is effective. When recruiting, we
look across all sectors and non-traditional talent pools, and we
require diversity on our candidate shortlists. We believe that
diversity, equity and inclusion are essential to our purpose of
delivering better nutrition for every step of life’s journey.
In 2020, the Group agreed that as new appointments are made,
the target is that a minimum of 50% of the Independent Non-
Executive Directors will be female. The Group continued to
progress this in 2022 with two of its most recent appointments
being female, increasing total female Board membership to 36%,
55.5% of Independent Non-Executive Directors, Group Chairman
and Executive Directors.
Tirlán Co-operative Society Limited (formerly Glanbia
Co-operative Society Limited) –
Right to nominate Non-Executive Directors
On 5 May 2021, the Company and the Society entered into an
amended and restated relationship agreement, as required for
compliance with the Listing Rules (the “Relationship Agreement”).
Under the Relationship Agreement, the number of Non-Executive
Directors nominated by the Society reduced to five in 2022 in a
Board comprising of 14 members, with seven Independent
Non-Executive Directors and two Executive Directors.
116 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
In 2023 the number of Directors nominated by the Society will
decrease to three and the overall Board size will be reduced by
one to 13. Patsy Ahern and John Murphy will retire immediately
following the 2023 AGM and it is expected a new Independent
Non-Executive Director will be appointed during the year.
Governance
The Nomination and Governance Committee comprises of the
Group Chairman as Chair and two Independent Non-Executive
Directors, of whom two members constitute a quorum. The
Group Secretary and Head of Investor Relations acts as
secretary to the Nomination and Governance Committee. The
Group Managing Director attends by invitation only.
The Nomination and Governance Committee advises the Board
on significant developments in the law and practice of corporate
governance and monitors the Company’s compliance with
corporate governance best practice (making recommendations
to the Board in relation to changes and enhancements to current
procedures), with particular reference to the Codes.
There was extensive engagement with shareholders during 2022
on governance matters which are detailed throughout the
Stakeholder Engagement on page 90 and Board Highlights on
pages 92-94.
Board size, composition and renewal
The Nomination and Governance Committee reviews Board
composition and structure and the leadership and succession
needs of the Group to ensure we have the right balance of skills,
knowledge and experience on the Board, taking account of our
business model and the specific sectors in which the Group
operates and developments in terms of scale, geographic
expansion and external factors.
Succession planning
Oversight of succession planning is one of the Board’s prime
responsibilities, assisted by the Nomination and Governance
Committee. The Nomination and Governance Committee leads
the process for Board appointments and is responsible for
ensuring that plans are in place for orderly Board and senior
management succession. In addition, the Nomination and
Governance Committee ensures that the Group’s governance
framework facilitates the appointment and development of
effective Directors and management that can deliver
shareholder value over the longer term.
The Nomination and Governance Committee regularly reviews
the structure, size and composition of the Board and its
Committees, to ensure critical skills and experience are
appropriately refreshed, that continuity is maintained, and that
Directors with the appropriate skills and experience and from a
diverse range of backgrounds join the Board to bring fresh
perspective. The Committee ensures that appropriate
procedures are in place for nominating (pages 116-118), inducting
(pages 97-98) and evaluating (pages 99-100) Directors.
The Nomination and Governance Committee gives full
consideration to succession planning for Directors, in particular
the Group Chairman, the Group Managing Director and Group
Finance Director taking into account both Group strategy and
the Group’s DE&I strategy (which is now at the core of the Group’s
succession planning). The Nomination and Governance
Committee is heavily focused on the leadership needs of the
Group at senior management level and regularly receives
updates from the Chief Human Resources Officer.
Governance in action
Non-Executive Director appointment
Ilona Haaijer and Kimberly Underhill were appointed to the Board with effect from 1 August 2022. The key stages of the
nomination process are outlined below.
1.
Assessment
2.
Requirement
3.
Search
4.
Screening
5.
Interview
6.
Approval
The Nomination and Governance Committee assessed the skill set, experience and diversity
on the Board, the requirements to meet the Group’s future growth plans, together with the
planned retirements from the Board over the coming years.
The Nomination and Governance Committee agreed to prioritise gender diversity to enable
the Company progress its objective to achieve its target that 50% of the Independent
Non-Executive Directors be female. Such candidate would bring the following mix of skills and
experience: marketing background with CEO, President, General Manager, or other
commercial leader experience; US market experience; food ingredients industry experience;
food or wider consumer products experience; and previous board experience.
A sub-Committee comprised of the members of the Nomination and Governance Committee
and the Chairman and Vice-Chairmen of the Society was established to progress the
Independent Non-Executive Director selection process with a global talent search firm.
The sub-Committee assessed a long list of candidates identified by the search firm as having
met the criteria.
A shortlist of potential candidates went through a two stage interview process meeting with
the Group Chairman and the Group Secretary and Head of Investor Relations, initially. Second
round interviews involving a number of Non-Executive Directors of the Company as well as the
members of the Nomination and Governance Committee and the Executive Directors were
undertaken.
Following a successful interview round, and a check for any disclosures required under Listing
Rule 6.1.66 of the Euronext Dublin Listing Rules and 9.6.13 of the FCA Listing Rules, the Group
Chairman took independent references on the candidates and then discussed their suitability
with the Nomination and Governance Committee. The Nomination and Governance
Committee then recommended the appointments to the Board for final approval.
During 2022, the Nomination and Governance Committee
focused on the succession pipeline in the context of the Group’s
longer term talent strategy to ensure the development of a
skilled workforce and nurture and encourage that workforce’s
own goals for management and senior leadership. Internal talent
development and the attraction and retention of skilled
individuals is facilitated through engagement with Human
Resources so that the people strategy is aligned with the
development of the internal talent pipeline. We look to identify
and accelerate the development of talent at all levels, based on
an assessment of successor readiness in respect of senior
positions, and our talent acquisition and development process
strives for transparent, equitable and accessible processes. NOW
provides a space for education, conversation, networking,
mentorship and professional development, with a view to
enabling our female workforce to access the support they need
to progress professionally within the Group, to facilitate more
women in senior leadership positions.
Crucial to the successful delivery of our strategy is attracting and
retaining strong, diverse talent who have an affinity to our
culture. Our culture is a major contributing factor to the delivery
of long-term success for our stakeholders and this makes the
effective internal management of that talent absolutely critical
to ensuring that Glanbia’s unique culture is preserved as far as
possible.
The Nomination and Governance Committee plays a key role in
embedding a positive culture by ensuring that our succession
planning and appointment process identifies candidates who are
exemplars of our values. Our induction and training programmes
and the annual performance evaluation process promotes these
values in all of our Directors and employees.
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
117
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Nomination and Governance Committee Report continued
The Nomination and Governance Committee is satisfied that
effective succession plans for Directors and senior management
are in place to ensure the continued ability of the Group to
implement strategy and compete effectively in the markets in
which it operates in a manner that fosters the Company’s culture
and values.
Independent Non-Executive Director recruitment and
selection process
In 2022, in accordance with the planned reduction of the
Society’s representation on the Board, an Independent Non-
Executive Director recruitment and selection process was
undertaken to identify two new diverse Independent Non-
Executive Directors.
Egon Zehnder, global talent search firm (who does not have any
other connection with the Company or the Directors) was
engaged to assist in the identification of suitable candidates for
appointment as Non-Executive Directors to the Board. A
Non-Executive Director role specification was drawn up to
determine the key skills, experience, characteristics and
requirements for the roles having regard to the challenges and
demands of the future operating environment, growth
opportunities for the Group and Board diversity. Please refer to
‘Governance in Action’ on page 117 for a detailed description of
the process.
Committee changes
There were a number of changes to the membership of the Board
Committees in 2022:
• a new Development Committee was established on
24 February 2022. The Group Chairman, the Group Managing
Director, the Group Finance Director, Dan O’Connor, Paul
Duffy and Róisín Brennan were appointed to the Development
Committee on that date. The Group Chairman was appointed
as Chair of the Development Committee;
• Paul Duffy replaced Dan O’Connor as Chair of the Audit
Committee on 7 March 2022;
• Patrick Coveney resigned from the Audit Committee on
30 March 2022 and the ESG Committee on 30 March 2022,
coincident with his resignation from the Board;
• Dan O’Connor retired from the Remuneration Committee on
1 August 2022 and the Audit Committee on 17 August 2022;
Ilona Haajer and Kimberly Underhill were appointed to the
Audit Committee on 17 August 2022;
•
• Kimberly Underhill was appointed to the Remuneration
•
Committee on 1 August 2022;
Ilona Haaijer and Dan O’Connor were appointed to the ESG
Committee on 1 September 2022; and
• Jane Lodge was appointed to the Development Committee on
29 July 2022 and Ilona Haajer and Kimberly Underhill were
appointed to the Development Committee on 1 August 2022.
The membership of the Nomination and Governance,
Development and Remuneration Committees continues to
comprise only the Group Chairman and Independent Non-
Executive Directors. The Audit Committee continues to comprise
only Independent Non-Executive Directors.
Workforce engagement Director
During 2019, the role of Donard Gaynor, an Independent Non-
Executive Director (at that time, and now Group Chairman), was
expanded to include oversight of workforce engagement to
further improve Board involvement in this area and to gather
employees views and communicate them to the Board so that
employees’ views can be considered in Board discussions and
118 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
decision-making. Details of Donard’s engagements with
employees during 2022 are set out in Stakeholder Engagement
on page 128.
Regular matters
A number of regular matters were considered by the Nomination
and Governance Committee in accordance with its terms of
reference, such as:
Review of Non-Executive Directors’ independence in
accordance with the guidance in the Codes
The Board evaluation and review process considered the
independence of each of the Non-Executive Directors, taking into
account their integrity, objectivity and contribution to the Board
and its Committees. A rigorous internal review was carried out in
respect of those Non-Executive Directors who served longer than
six years.
The Board is of the view that the following behaviours are
essential for a Non-Executive Director to be considered
independent:
• provides an objective, robust and consistent challenge to the
assumptions, beliefs and views of senior management and the
other Directors;
• questions intelligently, debates constructively and challenges
rigorously and dispassionately;
• acts at all times in the best interests of the Company and its
shareholders; and
• has a detailed and extensive knowledge of the Company and
the Group’s business and of the market as a whole which
provides a solid background with which they can consider the
strategy of the Company and the Group objectively and help
the Executive Directors develop proposals on strategy.
The Board also gives due regard to applicable legislation. The
Board and Nomination and Governance Committee believe that
all Non-Executive Directors demonstrated the essential
characteristics of independence and brought independent
challenge and deliberations to the Board.
The reviews took into consideration the fact that Donard Gaynor,
Brendan Hayes, John G Murphy and Patrick Murphy have each
served on the Board for more than nine years (John G Murphy
serving 12 years conterminously with the Group Managing
Director, the longest conterminous period with a current
Executive Director) a factor the Codes state could be relevant to
the determination of a Non-Executive Director’s independence.
The Codes also make it clear, however, that a director may be
considered independent notwithstanding these facts. This
reflects the Board’s view that independence is determined by the
Director’s character as set out above. Nevertheless, the Non-
Executive Directors nominated by the Society are not considered
by the Board to be independent for the purposes of the Codes.
Group Chairman tenure
On 11 August 2021, the Board extended the tenure of Donard
Gaynor as Group Chairman until 2025. The Board remain
unanimous in its view that the Group Chairman continues to
provide strong, objective and effective leadership to the Board
notwithstanding that he has served on the Board for more than
nine years. The Board believes that the extension of the Group
Chairman’s tenure for a limited period beyond nine years is
warranted in this particular instance to facilitate effective
succession planning and the development of a diverse board.
Election or Re-election of Directors
The Nomination and Governance Committee continues to be of
the view that all Directors should be re-elected to the Board at
the Company’s AGM and this was the case in 2022. All Directors
with the exception of Patsy Ahern and John Murphy, who will
retire following the 2023 AGM, in accordance with the planned
reduction of the Society’s representation on the Board, are
seeking election or re-election at the 2023 AGM. The Group
Chairman has confirmed that each of the Directors, who are
seeking election or re-election, continue to be effective members
of the Board and demonstrate their commitment to their
responsibilities, further detail in respect of which is contained on
page 100. The Nomination and Governance Committee assessed
the Non-Executive Directors’ time commitment considering both
the time required for Glanbia Board and Committee
appointments and the number and nature of the Directors’
external commitments. All Non-Executive Directors continue to
demonstrate that they have sufficient time to devote to their
present role on the Board. This has also been a consideration of
the Board in assessing potential candidates for the role of
Independent Non-Executive Director in 2022.
Committee performance
The Nomination and Governance Committee assessed its
performance covering its terms of reference, composition,
procedures, contribution and effectiveness. As a result of that
assessment, the Board and Committee are satisfied that the
Nomination and Governance Committee is functioning
effectively and continues to meet its terms of reference.
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
119
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Remuneration Committee Report
Focusing on
our strategic
objectives
and sustaining
performance
Jane Lodge
Remuneration Committee Chair
Committee members and Committee tenure
R Brennan
P Duffy
D Gaynor
J Lodge (Chair)
K Underhill
D O’Connor1
Appointed to
the Committee
Number of full
years on the
Committee
20 Jan 21
17 Jun 21
13 May 14
14 Dec 20
1 Aug 22
1 Dec 14
2
1
8
2
<1
7
1. D O’Connor stepped down as a Committee member on 1 August 2022.
See pages 83-87 for more information on the current
Remuneration Committee members.
120 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Terms of reference
The Remuneration Committee Terms of Reference were reviewed
and approved by the Committee during 2022, they can be found
on the Group’s website: www.glanbia.com or obtained from the
Group Secretary and Head of Investor Relations.
Key responsibilities
Determine and agree with the Board the framework and policy
for remuneration of the Executive Directors and other Senior
Executives as required.
Oversee remuneration design and target setting of annual and
long-term incentive arrangements to ensure comprehensive
linkages between performance and reward and to incentivise
delivery of Group strategy.
Determine, within the agreed policy, individual total
compensation packages for the Executive Directors and other
Senior Executives as required.
Determine any employee share-based incentive award and any
performance conditions to be used for such awards.
Consider and approve Executive Directors’ and other Senior
Executives’ total compensation arrangements annually.
Determine the achievement of performance conditions for
vesting of Annual and Long-Term Incentive Plans.
Review and understand reward policies and practices
throughout the Glanbia Group.
Dear Shareholder,
On behalf of the Board and the Remuneration Committee, I am
pleased to present the Directors’ Remuneration Committee
Report for the year end 31 December 2022.
2022 AGM and engagement with shareholders
I would like to thank those shareholders who engaged with me on
our proposals for a new Directors’ Remuneration Policy (the
“Policy”) ahead of the 2022 AGM. The feedback we received was
welcomed, and following the engagement, the Remuneration
Committee was very pleased with the level of support for the new
Policy with 87.9% of votes cast being in favour.
Our new Policy rebalances our incentives to the shorter term to
drive strong year-on-year growth over the next policy period, as
well as embed and sustain new ways of working after significant
organisational changes in recent years, leading to longer term
sustainable performance. Our new Policy also enables the
Remuneration Committee to be more agile in calibrating
performance targets for the majority of the variable
remuneration, resulting in the Remuneration Committee being
able to refocus objectives over shorter time frames as well as
resulting in a stronger link between management performance
and reward. Significant focus is maintained on longer term
sustainable performance and the wider shareholder experience
through bonus deferral, equity awards and shareholding
requirements.
Business performance 2022
As noted in the Group Chairman’s statement, the Group
performed strongly in 2022, delivering growth through an
attractive portfolio of growing nutrition categories. We have
simplified and evolved our strategy, reshaping our operating
model to drive customer and consumer relevance, delivering on
our 2018-2022 strategic targets and setting new and ambitious
goals for 2023-2025.
2022 saw Glanbia deliver its highest earnings ever in terms of
adjusted Earnings Per Share (“EPS”) , with growth in adjusted EPS
from continuing operations of 17.6% constant currency against
the originally guided range of 2% to 8%. We delivered across all
of our key metrics, with revenues, profit, margins, cash
generation and return on capital employed (“ROCE”) all growing
in 2022.
In May we acquired Sterling Technology LLC, strengthening our
offering in immunity solutions and in April we completed the sale
of our 40% holding in Glanbia Ireland to Tirlán Co-Operative
Society Limited (formerly Glanbia Co-operative Society Limited)
(the “Society”) for €307 million.
Our strategy is clear, and we are well positioned to deliver our
growth commitments over the 2023–2025 period and beyond. It
is within this business context that the Remuneration Committee
reviewed remuneration outcomes for 2022.
Remuneration in respect of 2022
Executive Director base salary, benefits and pension
Base salaries for the Executive Directors were increased by 2.8%
aligned to the increases to our wider employee population in
Ireland. The resulting base salary for the Group Managing
Director (“GMD”) from 1 January 2022 was €1,106,385 and for the
Group Finance Director (“GFD”) was €612,200.
There were no changes to pension contributions and benefits
from 2021.
2022 Annual Incentive
The 2022 annual incentive is the first award to be made under the
new Policy, with the maximum opportunity for the Group
Managing Director and Group Finance Director being 250% and
200% of salary respectively. Annual incentive measures and
weightings for 2022 were unchanged from 2021 and comprised a
combination of financial targets (adjusted EPS and Cash
Conversion, with a 50% and 20% weighting respectively),
strategic (20% weighting) and ESG (10% weighting) objectives.
The Group achieved all of its key financial targets for 2022,
progressively upgrading earnings guidance during the year as
the Group mitigated significant inflationary pressures. Reflecting
strong performance during the year, the Group exceeded its
maximum growth target for adjusted EPS (17.6% growth vs
annual incentive maximum of 8%, constant currency). The Group
also exceeded target for cash conversion (85.7% vs annual
incentive target 80%). In respect of the ESG measures, the
maximum inclusion index target was exceeded (69.5 vs 69),
however, the threshold female representation target was not
achieved (34% vs 35%). The Executive Directors performed
strongly against the operating and strategic objectives set by the
Remuneration Committee.
The formulaic outcome of the annual incentive is the
achievement of 88.2% of maximum for the Group Managing
Director and 89.1% of maximum for the Group Finance Director
reflecting the Group’s strong performance in 2022. Full details on
the targets and related performance can be found on page 130.
Under our new Policy, 50% of the annual incentive earned is
deferred into shares with 30% released after two years and the
remaining 20% after three years.
2020 Share Awards Vesting
The vesting of the 2020 share awards is determined by
performance over the three-year performance period to
31 December 2022, measuring Group EPS (40% weighting), Group
ROCE (40% weighting) and relative Total Shareholder Return
(“TSR”) against the STOXX Europe 600 Food and Beverage Index
(20% weighting).
At the date of grant, the 2020 share awards were scaled back by
20% to 200% of salary (from 250%) for the Group Managing
Director, and 160% (from 200%) for the Group Finance Director to
reflect challenging market conditions at that time and share
price performance during 2019.
The formulaic vesting outcome for both the Group Managing
Director and Group Finance Director for the 2020 share awards is
65.9% of maximum. The performance outcome inherent in this
vesting level is exceptional given that the targets set became
significantly more challenging due to the disruptive impact of the
Covid-19 pandemic over the period. The targets set at time of
grant were not adjusted for this factor for the Executive
Directors.
As I explained in last year’s Remuneration Report, I engaged with
shareholders during 2021 to understand their views on amending
targets, applying new targets or the exercise of discretion to
increase the vesting level of those inflight share awards affected
by the Covid-19 pandemic and factors outside of management’s
control. The Remuneration Committee listened carefully to
feedback at that time, determined that no action should be
taken in respect of the 2019 award and has this year considered
at length whether the application of discretion for the 2020
award would be appropriate. While the Remuneration
Committee noted that many shareholders understood the
context and were sympathetic to the rationale for applying
discretion, it determined not to apply discretion to increase the
formulaic outturn of the 2020 share awards for the Executive
Directors.
The 2020 share awards will not vest before 23 March 2023, the
third anniversary of grant. Full details of the targets and related
performance can be found on page 132.
2022 Share Awards
2022 share awards were made under the Policy with grants of
150% of salary to both Executive Directors. The metrics and
weightings were adjusted EPS (40%), ROCE (40%) and ESG
measures (20%).
Review of formulaic incentive outcome, consideration
of windfall gains and total single figure
The Remuneration Committee has reviewed both the 2022
annual incentive and 2020 share awards formulaic outcome and
considered whether they are appropriate in the context of
underlying business performance and wider stakeholder
experience. As part of its review the Remuneration Committee
has also considered matters such as culture, conduct, health and
safety, systems and controls, reputation and risk and noted the
positive delivery across these areas in the period.
As noted, the payment under the annual incentive reflects the
Group’s strong performance in 2022.
The vesting level of the 2020 share awards reflects both a scaled
back level of grant and exceptional performance delivery against
targets which were set prior to, and not adjusted for, the
unforeseen impact of the Covid-19 pandemic on the business in
the three-year period to December 2022. No positive discretion
has been applied to the formulaic outcomes achieved.
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The increase in the single total figure from 2021 results from the
application of the new incentive Policy, the strong performance
of the business and personal contribution of the Executive
Directors in 2022 and the vesting of the 2020 share awards
granted under the old Policy (the commensurate reduction in
2022 share award levels will vest in 2025). Considering all factors,
the Remuneration Committee is comfortable with the level of
remuneration payable to the Group Managing Director and
Group Finance Director for 2022.
The Remuneration Committee also considered investor concerns
regarding ‘windfall gains’. Acknowledging the scaling back of the
2020 awards at date of grant by 20%, the vesting level of 65.9%
and the strong business performance and outperformance of
Glanbia relative to the FTSE 100 and the STOXX Europe 600 Food
and Beverage index over the performance period, the Committee
considers that the increase in the share price from date of grant
(€8.79) is due to the underlying performance of the business and
the vesting of the 2020 awards does not result in a ‘windfall gain’.
No scale back was considered appropriate for the 2022 share
awards taking into account the share price at which the award
was made of €11.87 and the share price at which previous awards
have been made. Given the current share price relative to
previous share award share prices, it is not anticipated that a
scale back will be appropriate for the 2023 award.
2023 operation of Policy
Executive Director Base Salary
The base salary of the Group Managing Director and Group
Finance Director will increase by 3.4% to €1,144,002 and €633,015
respectively, effective 1 January 2023. The Remuneration
Committee considers that this increase for the Executive
Directors is appropriate in the context of the average increases in
the wider workforce with a higher rate of increase planned in
both the US of 4.1% (which is approximately 70% of the workforce)
and the UK of 4.3%. The salary increases for our different
locations vary dependent on local conditions, levels of inflation
and market positioning of overall remuneration.
Both the Remuneration Committee and management are
conscious that many of our employees, in Europe and North
America, have through 2022 and into 2023, experienced ongoing
cost-of-living pressures as a result of the current economic
environment. With approximately 70% of our talent population in
the US, in 2022 we made some mid-year adjustments to the
hourly paid employees which resulted in average hourly increases
higher than the standard increase.
Glanbia is committed to supporting its employees through
employee assistance programmes, a variety of wellbeing
initiatives and where appropriate, off-cycle adjustments.
We are delighted to develop new and more inclusive global
Family Leave policies, which will be implemented in 2023. A
Wellbeing working committee was also established, which has
led to the development of a new framework that will be rolled out
in early 2023. Smart Working was another area of focus as offices
began to open once again. Our employees continue to enjoy the
benefits of our hybrid working model and flexible hours policy.
We also enhanced our US benefit programme, providing lower
cost options to meet the needs of our employees.
Executive Director Pension
Last year I explained that we were reviewing our workforce
pension arrangement and that our Executive Directors would be
aligned to the workforce rate in Ireland following this review.
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Although the review has not yet completed, from 1 January 2023
the pension contribution for the Group Managing Director and
Group Finance Director has been reduced from 26.5% of salary
and 25% of salary respectively to 12% for both Directors. Upon
conclusion of our workforce pension review in 2023, any further
necessary adjustments for the Group Managing Director and
Group Finance Director to align with the workforce rate in Ireland
will be made at that time.
Executive Director Benefits
There were no changes to benefits from 2022.
2023 Annual Incentive
The maximum annual incentive opportunity for 2023 remains at
250% and 200% of salary for the Group Managing Director and
Group Finance Director. The performance metrics and weightings
remain the same as for 2022, being 50% adjusted EPS, 20% Cash
Conversion, 20% strategic objectives and 10% ESG measures. The
targets for the annual incentive are commercially sensitive and
will be disclosed retrospectively in next year’s Remuneration
Report. However, the Remuneration Committee is comfortable
that the targets set for 2023 reflect our business planning and
are appropriately stretching taking into account both the
increased annual incentive opportunity under our new
Remuneration Policy as well as the current economic and
business environment.
2023 Share Awards
2023 share awards will be granted at 150% of salary. Performance
and vesting will be determined by the same key Group
performance metrics that applied to the 2022 award of adjusted
EPS (40%), ROCE (40%) and ESG measures (20%). Full details on
measures, weightings and targets are set out on page 135.
Non-Executive Director Remuneration
Our Chair and Non-Executive Director fees for 2023 will be
increased in line with the increase for our Executive Directors at 3.4%.
Conclusion
2022 was a year of strong operational and strategic performance
delivery for Glanbia against a challenging economic backdrop.
Having performed robustly during the pandemic, we entered 2022
with an unprecedented level of inflation, executed significant pricing
action, delivered other inflation mitigations while continuing our
investment in our business and sustaining customer and consumer
relevance. We delivered our highest reported adjusted EPS from
continuing operations, positioned the Group for future growth and
made considerable progress on non-financial priorities including
our talent and ESG agendas. The Remuneration Committee,
reflecting on performance during the year, is completely satisfied
that the remuneration outcomes for 2022 demonstrate a strong
link between pay and performance, and that the Directors
Remuneration Policy approved at the 2022 AGM has worked
effectively during its first full year of operation.
I am available through our Group Secretary and Head of Investor
Relations if you wish to engage with me prior to our 2023 AGM. I look
forward to receiving your support at the AGM for the advisory
shareholder resolution to approve this Annual Statement and our
Annual Report on Remuneration.
Jane Lodge
Remuneration Committee Chair
At a glance: Individual Executive Remuneration for the year ended 31 December 2022 (Audited)
Base salary
Benefits
GMD (S Talbot)
€1,106,385 (2.8%) increase
GFD (M Garvey)
€612,200 (2.8%) increase
Company car or equivalent, medical/life assurance
and accommodation allowance
Company car or equivalent, medical/life assurance
and tax equalisation
Pension
26.5% of salary (cash in lieu of pension)
25% of salary
Short-Term Incentive Plan (“STIP”)
Measures
Adj. EPS (50%), Group Operating Cash Flow (20%), strategic objectives (20%), and ESG measures (10%)
Maximum opportunity
250% of salary
200% of salary
Achievement
Structure
€2,439,579 (88.2% of max)
€1,090,940 (89.1% of max)
50% of bonuses earned deferred into shares – 30% released after year 2, 20% released after year 3
Long-Term Incentive Plan (“LTIP”)
Measures 2022 award
Adj. EPS (40%), Group ROCE (40%) and ESG measures (20%)
Award level 2022 award
150% of salary
Achievement 2020 award
€1,877,223 (65.9% of max)
150% of salary
€830,987 (65.9% of max)
Structure
Paid in shares, subject to two-year post vesting holding period
Other Policy elements
Shareholding requirements 250% of salary
50% of shares vesting under the annual bonus and
LTIP must be retained until achieved
200% of salary
50% of shares vesting under the annual bonus and
LTIP must be retained until achieved
Post-employment
shareholding requirements
The lower of shares actually held and 100% of salary for the first year following cessation of employment
and 50% of salary for the second year
Section A: Directors Remuneration Policy 2022–2024
The Policy was approved by shareholders at the 2022 AGM and applies for a three-year period. However as permitted under Irish
regulation this may be extended for a fourth year if deemed appropriate by the Remuneration Committee. The Policy has been developed
with regard to regulatory requirements of both Euronext and FTSE listed companies, best practice and the views of our stakeholders. The
views of our shareholders were considered through extensive shareholder consultation as part of the Policy review process.
Remuneration strategy, policy, and purpose
The Policy has been developed to attract, retain and motivate executives to ensure that they perform in the best interests of the Group
and its shareholders by growing and developing the business over the long term. Performance-related elements of remuneration are
designed to form an appropriate portion of the overall remuneration package of Executive Directors and link remuneration to business
performance and individual performance, while aligning their interests with those of shareholders.
The Policy focuses on incentivising the successful implementation of our corporate strategy, consistent with our risk management
framework. This strategy aims to deliver sustainable, superior earnings growth, solid financial stewardship and total shareholder return
for our shareholders over the long-term through the strong performance of high-quality and committed leadership, critical to the future
development of the Group. The Group Key Performance Indicators (“KPI”s), which are detailed on pages 18 and 19, underpin the selection
of performance criteria used within the incentive arrangements.
Factors considered when developing the Remuneration Policy
The Remuneration Committee considered the following factors when developing the 2022 – 2024 Directors’ Remuneration Policy:
• Clarity – All elements of the Policy and its implementation is set out clearly in the Directors’ Remuneration Report.
• Simplicity – The Policy is simple and straightforward with the structures used being common across listed companies.
• Risk – The Policy has been developed so that incentive structures discourage inappropriate risk taking through use of
long-term incentives, the balance of measures used to determine variable remuneration outcomes and through features
such as shareholding requirements and malus and clawback.
• Predictability – The Policy has been constructed to have clear limits on the variable remuneration payable, with
the scenario chart later in this report providing illustrative examples of how the Policy may operate in practice.
• Proportionality – There is a sensible balance between fixed and variable pay, and variable remuneration is appropriately
structured to sustainable long-term performance.
• Alignment to culture – Through the assessment of financial and non-financial performance, executives are incentivised
to achieve performance in a way that aligns to Glanbia’s values and culture.
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Executive Directors’ Remuneration Policy Table
The following table sets out the different elements of remuneration for the Executive Directors.
Element
Objective
Description, Performance Measures and Maximum Value
Base salary (fixed)
Annual fixed pay
Provide competitive base
pay which reflects market
value of role, job size,
responsibility and individual
skills and experience.
Pension (fixed)
Retirement benefit
Provide market aligned,
affordable and sustainable
retirement benefits.
Other Benefits (fixed)
Short-Term Performance
Related Incentive (variable)
Provide competitive
benefits which recognise
market value of role, job size
and responsibility.
Incentivise Executive
Directors to achieve specific
performance goals and
personal performance
objectives which are linked to
the Group’s business plans
during a one-year period.
Set by reference to the relevant market median of Europe and US based on
an external independent evaluation of the role against appropriate peer
companies.
Reviewed annually by the Remuneration Committee. Any reviews, unless
reflecting a change in role or increased complexity, usually take effect from
the commencement of the relevant financial year.
There is no maximum increase or maximum salary amount, however,
increases as a percentage of salary will normally be aligned to those of the
wider workforce although the Remuneration Committee may determine it
is appropriate to make higher increases than this, for example, but not
limited to, where there is an increase in role including responsibilities and
complexities.
Determined as a percentage of base salary.
Until 31 December 2022, the Group Managing Director received cash in lieu
of pension of 26.5% of salary and the Group Finance Director participates
in the Glanbia defined contribution plan with contributions of 25% of salary.
Incumbent Executive Directors from 1 January 2023 and new appointments
with immediate effect, will receive a pension contribution aligned to the
workforce in the country of appointment.
Determined in consideration of the level of responsibilities and local market
practice.
Benefits to include but not be limited to company car or equivalent,
medical/life assurance, tax equalisation payments and accommodation/
relocation or other business-related allowances where appropriate.
The annual incentive scheme rewards achievement of specific short-term
annual performance metrics.
The Group Managing Director and the Executive Directors can earn 125%
and 100% of base salary at target performance respectively and up to
250% and 200% of base salary respectively for maximum performance.
Annual bonus starts to accrue at 0% for threshold performance.
Ensure greater linkage
of remuneration to
performance.
In relation to strategic targets the structure of the target will vary based on
the nature of the target set and it will not always be practicable to set
targets using a graduated scale. Vesting may therefore take place in full if
specific criteria are met in full.
Ensure greater linkage to
long-term sustainability and
alignment to Group Risk
Management Policy.
Alignment with shareholders
and/or share value growth.
The majority of the STIP will be based on financial metrics. The
Remuneration Committee reviews and determines the metrics, weightings
and calibration of targets annually taking into account the business
planning process and the strategic priorities of the business. The
Remuneration Committee has the discretion to adjust the formulaic vesting
outcome if it deems it appropriate.
50% of any annual incentive earned is deferred into shares and once the
appropriate taxation and social security deductions have been made,
invested in shares in the Company. The shares are subject to a holding
period, 30% is released after 2 years, and 20% after 3 years.
Deferred incentives are subject to malus and clawback (for a period of two
years following this investment) to the extent determined by the
Remuneration Committee as outlined in Note 1 on page 125.
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Element
Objective
Description, Performance Measures and Maximum Value
Long-Term Performance
Related Incentive (variable)
LTIP under which shares are
granted in the form of a
provisional allocation of
shares for which no
exercise price is payable
To align the interests of
Executive Directors and
shareholders through a
long-term share-based
incentive linked to share
ownership and holding
requirements.
Long-term incentive individual annual share award level cannot exceed
150% of base salary.
The majority of the LTIP will be based on financial metrics. The
Remuneration Committee reviews and determines the performance
metrics and weightings annually ensuring that they support the strategic
priorities of the business.
To focus on greater
alignment with
shareholders, long-term
retention and reward for
sustainable performance.
For all performance metrics, 25% vests at threshold performance and 100%
vests at maximum with straight line vesting in between these points.
In relation to strategic targets the structure of the target will vary based on
the nature of the target set, and it will not always be practicable to set
targets using a graduated scale. Vesting may therefore take place in full if
specific criteria are met in full.
The extent of vesting shall be dependent on the level of achievement,
measured over a three-year period, of the relevant performance conditions.
The Remuneration Committee has the discretion to select different
performance criteria (including the measures, their weighting and
calibration) where deemed appropriate for new Long-term incentive
awards to ensure they continue to reflect the strategic priorities of the
business. The performance conditions for each award will be disclosed in
the Directors’ Remuneration Report which will be subject to a general
shareholder non-binding advisory vote.
The Remuneration Committee has the discretion to adjust the formulaic
vesting outcome if it deems it appropriate and a share award shall not vest
unless the Remuneration Committee is satisfied that the Group’s
underlying financial performance has shown a sustained improvement in
the period since the date of grant.
Executive Directors will be required to hold shares received pursuant to the
vesting of share awards for a minimum period of two years post vesting
subject to sales to meet taxes. Share awards are subject to malus and
clawback (during the two-year holding period following vesting), to the
extent determined by the Remuneration Committee as outlined in Note 1
below.
Executive Directors are required to build a shareholding through retaining
50% of shares vesting under the annual bonus and LTIP (subject to sales to
meet taxes) until shareholding requirement is achieved.
The Group Managing Director is required to build and maintain a
shareholding of 250% of base salary and other Executive Directors are
required to build up and maintain a shareholding of 200% of base salary.
The lower of shares actually held and 100% of salary for the first year
following cessation of employment and 50% of salary for the second year
with Remuneration Committee discretion to amend the requirement in
exceptional circumstances.
Applies to incentive awards granted from 2022, and not to shares
purchased from the executive’s own funds.
Requirement is to retain 50% of vested LTIPs and bonus shares (after sales
to meet taxes) until sufficient shares held to meet post-employment
requirement.
Shareholding Requirement
Ensure a greater alignment
with shareholders’ interests.
Minimum share ownership
requirements to be built
up over time through the
retention of vested incentive
awards
Post-Employment
Shareholding Requirement
Ensure a greater alignment
with shareholders’ interests
Minimum share ownership
requirements to be built
up over time through the
retention of vested incentive
awards
Note 1: Malus and clawback – the Remuneration Committee may, at any time within two years of a share award or annual deferred incentive vesting, determine that
malus and clawback shall apply if the Remuneration Committee determines that there was a material misstatement of the financial statements of the
Company upon which the performance targets were assessed or an erroneous calculation was made in assessing the extent to which performance targets
were met. Additionally, the Remuneration Committee can determine at any time within two years of a share award or annual deferred incentive vesting that
malus and clawback will apply if an award holder is found guilty, or pleads guilty, to a crime which causes reputational damage; or an award holder is guilty of
serious misconduct or gross negligence which causes loss or reputational damage, or where corporate failure or failure in risk management has occurred.
Note 2: The policy table in the 2021 Remuneration Report contained a typographical error and showed deferral under the short term performance related incentive of
20% for 2 years and 30% for 3 years. The correct deferral is 30% for 2 years and 20% for 3 years as set out in table showing the policy changes and is the basis
on which investors were consulted.
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Executive Director employment conditions
The Remuneration Committee adopts a transparent framework when making Board appointments of either external or internal
candidates.
Recruitment policy
When recruiting new Executive Directors, the Group’s policy is to provide an appropriate remuneration package to attract the right
calibre of individuals taking into account the skills and experience appropriate to the role being filled, and taking into account cost and
remuneration across the Group, including other senior executives, and that offered by other international food and nutritional
companies and other companies of similar size and complexity. New Executive Directors will generally be appointed on remuneration
packages with the same structure and pay elements as described in the table below. Each element of remuneration to be included in
the package offered to a new Executive Director would be considered.
Element
Description
Base salary (fixed)
Pension (fixed)
Base salary levels will be set in consideration of the skills, experience and expected contribution to the
new role, the current salaries of other Executive Directors in the Group and current market levels for the
role.
Pension contribution will be aligned to the workforce in the country of appointment unless there is specific
market practice in the country of appointment and where for the recruitment of the right candidate it is
considered necessary by the Remuneration Committee for the executive to participate in retirement
benefits applicable to their local market and in line with relevant scheme rules and Company practice.
Other benefits (fixed)
Will be considered in light of relevant market practice for the role, the benefit received by the candidate in
current role and the provisions in place for other Executive Directors.
Short-Term Performance
Related Incentive (variable)
The maximum level of short-term variable remuneration which may be granted to a new recruit is 250%
(total maximum variable remuneration is 400%, annual and long-term variable). This excludes any buyout
share awards that might arise.
The Remuneration Committee will consider whether it is appropriate for the new recruit to participate in
the same annual incentive plan applicable to the current Executive Directors. If this is considered
appropriate, the same financial measures, weighting, payout scale and target and maximum incentive
opportunity (as a percentage of base salary) which apply to the existing Executive Directors will generally
apply to the new recruit.
Long-Term Performance
Related Incentive (variable)
The maximum level of long-term variable remuneration which may be granted to a new recruit is 150%
(total maximum variable remuneration is 400%, annual and long-term variable). This excludes any buyout
share awards that might arise.
The award of long-term incentives will depend on the timing of the appointment and where this fits into
the typical annual grant cycles.
In addition to the above, when appointing an Executive Director, all other aspects of the Remuneration Policy such as malus and
clawback and shareholding requirements will apply.
In exceptional circumstances or where the Remuneration Committee determines that it is necessary for the recruitment of key
executives, the Remuneration Committee reserves the right to offer additional cash and/or share-based payments to take into account
remuneration relinquished including incentive awards forfeited when leaving the former employer which would reflect as far as possible
the nature (delivery vehicle), time horizons and performance requirements attached to that remuneration.
The Remuneration Committee’s approach to this matter is to carry out a detailed review of the awards or other remuneration element
which the individual will lose and calculate the estimated value of them. In doing so, the Remuneration Committee will consider the
vesting period; the award exercise period if applicable; whether the awards are cash or share-based; performance-related or not; the
former employer’s recent performance and payout levels and any other factors the Remuneration Committee considers appropriate. If
a buyout share award is to be made, the structure and level will be carefully designed and will generally reflect and replicate the
previous awards as accurately as possible. The award will be made subject to appropriate clawback provisions in the event that the
individual resigns, or their employment is terminated within a certain time frame.
For an internal appointment, any variable pay element awarded in respect of the prior role may be allowed to payout according to its
terms, adjusted as relevant to take into account the appointment. In addition, any ongoing remuneration obligations existing prior to
appointment (which are inconsistent with the policy as disclosed herein) may continue, provided they are disclosed to the Remuneration
Committee and in the Annual Report on Remuneration. The Remuneration Committee may also if it considers it appropriate and in the
best interests of the Group and its shareholders realign existing incentive awards to the Director’s Remuneration Policy applicable at
the time of appointment.
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Executive Director Service Agreements
The Group’s policy is to provide rolling service contracts with a 12 month notice period. The Group Managing Director, Siobhán Talbot,
and the Group Finance Director, Mark Garvey’s service agreements have been renewed with a rolling 12 month notice period. The Group
retains the sole right to terminate with payment in lieu of 12 months’ notice, or part thereof, at any time.
Employment contracts for Executive Directors do not provide for any compensation for loss of office beyond payments in lieu of notice
and therefore, except as may otherwise be required by Irish law, the amount payable under the contract upon termination is limited to a
maximum of 12 months’ remuneration. If so required, the Group reserves the right to make necessary payments in settlement of a
Director’s statutory employment rights.
Both the Group Managing Director and Group Finance Director have additional 12 month restrictive covenant agreements which were
introduced in 2019 and are in addition to the contract of service and notice period. These restrictive covenant agreements were put in
place under the 2018-2021 Remuneration Policy and are grandfathered into the 2022-2024 policy. These agreements are necessary as a
matter of law and aligned to market practice in Ireland to ensure enforceability of non-compete obligations. The Remuneration
Committee will ensure that careful consideration is given to the remuneration payable on any termination of employment including
whether an Executive Director is required to work his or her notice period to minimise the total cost of severance.
All new appointments will have restrictive covenant agreements incorporated into their service contracts with no additional payment in
respect of these.
Exit pay policy
The Group’s exit pay policy for the variable pay of Executive Directors is as follows;
• STIP awards – STIP awards will vest pro rata to reflect the performance period, which was worked and the performance outcomes
achieved, in accordance with plan rules with the Remuneration Committee applying its discretion to allow all or part of STIP award to
vest. STIP payments will normally be made at the usual time;
• LTIP awards – In the event an Executive Director leaves before an award vests for reasons of death, redundancy, injury, ill health or
disability, retirement with the agreement of the Remuneration Committee or any other reason approved by the Remuneration
Committee LTIP awards lapse unless the Remuneration Committee exercises its discretion to allow all or some of the Executive
Director’s awards to vest taking into account pro-rating for service and the extent to which the performance conditions of the award
are met (save in the case of death or if the circumstances are sufficiently exceptional as determined by the Remuneration Committee
where the Remuneration Committee may reduce the pro-rating and vest awards earlier than the normal time). The Remuneration
Committee may at any time prior to vesting, in its absolute discretion, revoke any determination to permit awards to vest where an
Executive Director breaches a protective covenant. For all other leavers awards will lapse;
in the event of a takeover, merger, scheme of arrangement or other similar event involving a change of control of the Company or a
demerger of a substantial part of the Group, or a special dividend, or which has the effect of materially changing the Group’s
business, or an Executive Director’s employment with the Group terminates by reason of a transfer of his/her employment to an entity
outside the Group or other similar event that affects the Group’s shares to a material extent, share awards under the 2018 LTIP will
vest early, subject to normal restrictions on sale and the pro-rating of the share awards to reflect the reduced period of time between
the commencement of the performance period and the early vesting. The Remuneration Committee can decide not to apply
restrictions on sale or pro-rate a share award if it regards it as inappropriate to do so in the particular circumstances; and
•
• other payments, such as legal or other professional fees, relocation or outplacement costs, payments to settle legal claims may be
paid if it is considered appropriate and is at the absolute discretion of the Remuneration Committee.
Policy on external Board appointments
The long-standing policy of allowing Executive Directors to hold external Non-Executive Directorships with the prior approval of the
Remuneration Committee will continue. The Remuneration Committee considers that external directorships provide the Group’s
Executive Directors with valuable experience that is of benefit to Glanbia. The Remuneration Committee believes that it is reasonable
for the individual Executive Director to retain any fees received from such appointments given the additional personal responsibility that
this entails. Siobhán Talbot is a Non-Executive Director of CRH plc effective from 1 December 2018, for which Siobhán received an annual
fee in 2022 of €141,177. Siobhán Talbot also holds a position on the IBEC board, for which she does not receive any fee. The Group Finance
Director has no external directorships and no other fees earned.
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Remuneration below Executive Directors
The Group’s remuneration principles and the Policy underpin remuneration practice across the Group. Below the level of the Executive
Directors, similar principles and policy framework, as outlined in the preceding pages, cascade as far as possible, taking account of
seniority and relevant local market practice.
The table below outlines the reward elements which apply to employees across the Group depending on their level of seniority and
market location.
Element
Description
Base salary (fixed)
Pension (fixed)
Other benefits (fixed)
Short-Term Performance
Related Incentive (variable)
Long-Term Performance
Related Incentive (variable)
Set by reference to role responsibilities relative to the relevant local market based on external
independent market data against appropriate peer companies. Reviewed annually in consideration of
personal performance with any change of pay approved by a member of the Group Operating Executive
(and by the Remuneration Committee for senior executives falling under its remit).
Employees participate in retirement benefits applicable to their local market and in line with relevant
scheme rules and Company practice.
Employees participate in other benefits applicable to their local market and in line with relevant rules and
Company practice. Other benefits may include car benefit, illness benefit, medical insurance, relocation
expenses/payments.
The annual incentive potential is based on appropriate and specific Group or Business Unit measures, as
determined by the Remuneration Committee. For designated senior executives, deferral of the proportion
of the annual incentive earned once the appropriate taxation and social security deductions have been
made, will be invested in shares in the Company and delivered over three years following investment.
The LTIP is focused on key Group financial metrics aligned to the awards made to the Executive Directors.
The Remuneration Committee may also assign a portion of the share award as restricted stock over the
performance period with annual vesting of restricted stock awards to ensure incentive awards are
aligned to market practice and remain competitive in the markets in which Glanbia operates, which is
predominantly North America.
Consideration of employment conditions elsewhere in the Group
The Remuneration Committee considers all employees across the Group when establishing and implementing policy for Executive
Directors. Senior and high-performing individuals within the organisation are invited to participate in both annual and long-term
incentive arrangements. Similar to the Executive Directors, incentives are calibrated to provide appropriate rewards only on the
achievement of superior performance. In addition, senior executives below Board level may be eligible to participate in restricted stock
awards as part of the annual LTIP grant.
The Remuneration Committee has not previously consulted directly with employees when formulating Executive Director pay policy.
However, it does solicit and take into account information provided by the Group Human Resources function and the independent
external advice from its Remuneration Advisers. During 2022 there has been engagement with employees to explain how executive
remuneration aligns with the wider company policy.
The Group Chairman is the designated Non-Executive Director for engagement.
The Workforce Engagement Director held numerous engagement sessions with employees at all levels and at various global sites during
2022 in the US and Ireland as well as at business unit leadership conferences. The employee engagement sessions provided two-way
direct dialogue on the topics of total reward/inflation, benefits, wellbeing, belonging, and diversity, equity & inclusion. The sessions also
provided the opportunity for the Workforce Engagement Director to provide insights into the Board responsibilities and how the Board
committees cover remuneration, audit, and ESG oversight. Emphasis was placed on the Board’s keen desire to hear the voice of the
employee and to take that into account when decisions were being made.
128 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Elements of remuneration for Non-Executive Directors
The Remuneration Policy for the Group Chairman and Non-Executive Directors is set out below:
Element
Annual Fees
Objective
Description
Recognise market value of
role, job size, responsibility
and reflects individual skills
and experience.
Travel allowance
To recognise the additional
time commitment
associated with travel on
Company business.
Set by reference to market rates based on an external independent
evaluation of comparator companies of a similar scale and complexity.
Includes a base fee for the role of Non-Executive Director and additional
fees reflecting responsibilities for chairmanship of a committee of the
Board and Senior Independent Director, additional fees as appropriate for
other roles and increased time commitments. The Group Chairman fee is
reviewed from time to time by the Remuneration Committee and other
Non-Executive Director fees reviewed by the Board. Any reviews usually
take effect from 1 January in the relevant year.
The Group Chairman receives a single all-encompassing fee.
Set by reference to market rates where comparable allowances are paid
and taking into account the associated time commitment.
A travel allowance may be structured as appropriate from time to time,
taking into account the location of the Non-Executive Director and travel
commitments, including but not limited to an annual allowance, an
allowance per meeting and different allowances payable for Non-
Executives based in different continents.
Benefits and expenses
Reimburse role-based
expenses incurred during
performance of the duties
of the role.
No additional benefits are provided other than direct expenses relating to
the role. Such expenses may include travel in the course of the role for the
Group and any tax payable in respect of the reimbursement grossed up if
appropriate.
The Non-Executive Directors do not have service contracts but have letters of appointment detailing the basis of their appointment. The
terms and conditions of appointment of Non-Executive Directors are available for inspection at the Company’s registered office and at
the AGM of the Company.
The Non-Executive Directors do not have periods of notice and the Group has no obligation to pay compensation when their
appointment terminates in accordance with their letters of appointment. They are subject to annual re-election at the AGM of the
Company.
Section B: Annual Report on Remuneration
Remuneration Committee Governance
The Remuneration Committee comprises of the Group Chairman who was independent on appointment and four Independent Non-
Executive Directors, of whom two members constitute a quorum.
The Group Managing Director, Group Finance Director, Chief Human Resources Officer and VP HR, Performance & Reward attend
Remuneration Committee meetings by invitation only and as necessary. No Director or member of the Group Operating Executive is
involved in considering their own remuneration, they absent themselves when their remuneration is discussed. The Group Secretary and
Head of Investor Relations acts as secretary to the Remuneration Committee.
Remuneration best practices
The Remuneration Committee complies with all relevant reporting and legislative requirements applicable to an Irish incorporated
company with a primary listing on Euronext Dublin. With a secondary Premium listing on the London Stock Exchange, the Remuneration
Committee has also resolved on a voluntary basis to align, to the extent it considers possible and appropriate having had regard to Irish
law, the Directors’ Remuneration Policy and Remuneration Reporting with UK remuneration best practices including the regulations
applicable to UK incorporated and listed companies.
The Remuneration Committee receives independent external advice on executive remuneration from Korn Ferry, a member of the
Remuneration Consultants Group and signatory to its Code of Conduct, who were appointed as Remuneration Advisers in 2019 following
a competitive selection process in the same year. Korn Ferry, who do not have any connection with any Directors of the Company,
provide advice to the Remuneration Committee which supports robust and sound decision making. The Remuneration Committee is
satisfied that its remuneration advisers act independently. Korn Ferry fees for advising the Remuneration Committee during 2022 were
€90,000.
The Remuneration Committee is committed to strong and effective engagement with its stakeholders and to provide remuneration
reporting disclosures that effectively explain our remuneration decisions. The Remuneration Committee continues to actively listen and
incorporate, as far as possible, the views of the stakeholders.
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
129
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Remuneration Committee Report continued
Executive Directors’ Remuneration 2022
Executive Director Remuneration Payments 2022
Executive Directors
Full Year
Fixed Pay
Annual Incentives
Base
salary
€’000
Pension
contribution
€’000
Other
benefits1
€’000
Annual
incentive
(payable in
cash)2
€’000
Annual
incentive
(deferred
shares)3
€’000
S Talbot
M Garvey
2022
2021
2022
2021
1,106
1,076
612
596
-
–
153
149
567
457
93
33
1,220
807
545
447
1,220
770
545
426
Long-term
Incentives
Long-term
incentive4
€’000
1,877
349
831
155
Total
Fixed
Pay
€’000
1,673
1,533
858
778
Total
Variable
Pay
€’000
4,317
1,926
1,921
1,028
Total
€’000
5,990
3,459
2,779
1,806
1. Other benefits include company car or equivalent, medical/life assurance, tax equalisation payment to M Garvey in respect of DC pension contribution in Ireland,
taxable cash in lieu of pension payments of 26.5% of salary to S Talbot and an accommodation allowance of €100,000 for S Talbot. Having elected to forego
annual revaluation of her accrued pension (which applies to active members of the pension scheme), S Talbot received a cash pension amount of €97,805 in 2022.
2. This reflects the proportion of the annual incentive payable in cash to Executive Directors in respect of performance for full year 2021 and 2022 performance.
3. For 2021, this reflects the proportion of the gross annual incentive (over 75% of base salary) which is invested in shares and retained for two years, following appropriate
taxation and social security deductions. For 2022, 50% of the annual incentive will be deferred, with 30% being released after 2 years and 20% after 3 years.
4. For 2021, this reflects the value of the 2019 share award which vested on 25 May 2022. The vesting value has been updated from the 2021 Remuneration Report with
the actual share price on vesting. For 2022, this reflects the value of the 2020 share award which will not vest before 23 March 2023, where the performance period
ended on 31 December 2022. The gross value of the 2022 award is calculated using the official closing share price on 30 December 2022 (last day of trading for the
2022 financial year) of €11.92. Vested awards are held for a 2-year period from the date of vest.
Fixed Remuneration 2022
Base salary 2022
Base salary of the Group Managing Director and the Group Finance Director increased by 2.8% to €1,106,385 and €612,200, respectively,
effective 1 January 2022, in line with the increase for the broader employee population in Ireland.
Pension 2022
Mark Garvey participates in a defined contribution retirement plan, to which contributions were made at an agreed rate of 25% in 2022.
Other benefits 2022
Other benefits include the use of a company car or equivalent, for the Group Managing Director a payment in lieu of pension of 26.5% of salary,
medical/life assurance and an annual accommodation allowance and for the Group Finance Director, who is a US citizen, a tax equalisation in
respect of defined contribution (“DC”) pension contributions in Ireland. All benefits are subject to normal deductions per the relevant regulations.
Annual Incentive 2022
The table below summarises the 2022 annual incentive targets, weightings and outcomes.
Measure
Weighting
Threshold
50%
20%
5%
5%
20%
90.2
75%
67
35%
34%
0
0
Adjusted EPS (€ cent)
Group OCF
ESG – Inclusion Index
ESG – Female Representation
Strategic
GMD Outcome
GFD Outcome
Overall outcome (% of salary)
Annual incentive award
Target
92.0
80%
21
42
63
85.7%²
84
68
36%
Maximum
95.5
104.01
90%
105
69
37%
69.5%
Achievement as a
% of maximum
Achievement
outcome
100%
50.0%
78.0%
15.6%
100%
5.0%
0%
0.0%
21
42
63
84
105
GMD – 88.0%
GFD – 92.5%
88.0%
92.5%
GMD
220.50%
17.6%
18.5%
88.2%
89.1%
GFD
178.20%
€2,439,579
€1,090,940
The 2022 adjusted EPS outcome was 104.0 cent adjusted to 101.8 cent when the impact of the acquisition during the year is excluded.
1
2 The 2022 OCF outcome was 85.7% adjusted to 85.6% when the impact of the acquisition during the year is excluded.
Key Strategic Objectives 2022
Strategic objectives are aligned with the Group strategy reflecting the Executive Director’s personal contribution to organisational
effectiveness, the execution of the strategic growth plan and driving innovation capability. The Group Managing Director proposed the
strategic performance objectives for the Group Finance Director, with the Group Managing Director’s strategic objectives proposed by
the Group Chairman and all objectives approved, monitored during the year and scored by the Remuneration Committee.
130 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Group Managing Director,
Siobhán Talbot
Measure/Objective
Weighting % Performance Assessment
Achievement %
Objective 1 – Team development
Progression of career development and
succession plans for Group senior leaders.
Objective 2 – Deliver key GPN business
initiatives for 2022 including brand revenue
and consumption growth and margin
progression.
Objective 3 – Deliver key GN business
initiatives for 2022 including volume growth
in NS and progressing global premix and
healthy snacking solutions.
Objective 4 – Ensure achievement of
targeted M&A for 2022.
Objective 5 – Strategic portfolio
assessment.
Total achievement
Group Finance Director,
Mark Garvey
Clear career development plans in place and actioned for senior
leaders. Robust group wide senior leader succession planning
process completed in 2022.
Strong talent agenda including HR transformation and
execution of Group DE&I strategy actioned through the year.
2022 planned GPN financial metrics exceeded with good margin
progression through the year. Significant inflation mitigating
actions taken during the year while minimising volume impact.
Transformation programme completed, overachieving against
the business case.
Strong consumer activation / investment completed in 2022
delivering strong consumption in ON brand globally, growth of
US lifestyle portfolio and progression of the refresh of SlimFast
brand.
2022 planned GN financial metrics achieved. Significant pricing
actions taken and dilutive impact on margins largely mitigated.
Volume growth in premix offset by dairy solutions decline due to
significantly increased pricing.
Strong progress on progression of premix business with
continued evolution of global healthy snacking solutions.
Strong pipeline of potential acquisitions evaluated through 2022.
Acquisition of Sterling Technology completed.
With the successful sale of the Group interest in Glanbia Ireland,
robust strategic assessment of the Group strategic opportunity
and structure completed in 2022.
Clear targets for 2023-2025 communicated to the capital
markets in November 2022 across both financial and non-
financial (ESG) metrics.
10%
12%
5%
7%
10%
44%
10%
15%
8%
7%
10%
50%
Measure/Objective
Weighting % Performance Assessment
Achievement %
Objective 1 – Group IT. Finalise and align
actions on the execution of the Group IT
strategy.
Objective 2 – In collaboration with business
unit teams, drive Group-wide key margin
improvement initiatives.
Objective 3 – Investor Relations – develop
and execute plans.
Objective 4 – Finance team development.
Objective 5 – Deliver accretive M&A for
2022.
Objective 6 – Strategic portfolio
assessment.
Total achievement
Strong progress on strategy execution; deep engagement and
alignment with business unit strategies including investment in
digitalising key aspects of Group support functions.
GPN Transformation programme completed, overachieving
against the business case.
2022 Group and business unit margin exceeding plans despite
navigating unprecedented inflation headwinds.
Strong programme of stakeholder engagement in 2022.
Successful Capital Markets Day held in November outlining 2023
-2025 strategic financial ambitions.
Clear career development and succession plans in place and
actioned for global Group finance leaders.
Strong support of talent agenda including IT enabled HR
transformation programme and execution of Group DEI
strategy.
Strong pipeline of potential acquisitions evaluated through 2022.
Acquisition of Sterling Technology completed.
With the successful sale of the Group interest in Glanbia Ireland,
robust strategic assessment of the Group strategic opportunity
and structure completed in 2022.
Clear targets for 2023-2025 communicated to the capital
markets in November 2022 across both financial and non
financial (ESG) metrics.
6%
8%
5%
3%
5%
10%
37%
9%
8%
5%
3%
5%
10%
40%
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
131
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Remuneration Committee Report continued
Vesting of 2020 Long-Term Incentive Share Awards
The 2020 share awards granted on 23 March 2020 had a three-year performance period (2020 to 2022) which ended on 31 December 2022.
Performance against the targets set has been measured and independently verified by external advisers on behalf of the Remuneration
Committee with vesting as follows:
Measure
Weighting
Group Adjusted EPS
Group ROCE
Group TSR
Outcome
40%
40%
20%
Threshold
4% CAGR
9.12%*
Median
6.9 out of 9
Maximum
9% CAGR
12.12%*
10.07%
Top Quartile
Between median and top quartile
Outcome as a
% of maximum
Weighted
outcome
69.9%
48.6%
92.6%
27.9%
19.5%
18.5%
65.9%
* Group ROCE adjusted from 9.00 to 9.12% and 12.00 to 12.12% for the impact of the Glanbia Ireland disposal.
•
Targets are set in consideration of acquisitions and disposals over the three-year performance period and therefore no adjustment is normally made for acquisitions
and disposals to determine vesting. However as noted in the 2021 Remuneration Report, the disposal of the Company’s interest in Glanbia Ireland was not
contemplated at the time the targets for the 2020 (and 2021) LTIP awards were set. Following completion, the Remuneration Committee considered the implications of
the disposal on inflight incentives and given the exceptional nature of the disposal, determined to adjust the inflight LTIP awards made in 2020 and 2021 such that the
performance conditions measure continuing businesses only and take no account of either the gain or subsequent earnings impact of the disposal event.
FY2019 Group adjusted EPS of 88.10 cents, as set out in the 2019 Annual Report was used as a base year and has been adjusted on a continuing basis. Adjusted
EPS is calculated as the profit attributable to the equity holders of the Company before exceptional items and intangible asset amortisation and impairment
(excluding software amortisation) net of related tax, divided by the weighted average number of ordinary shares in issue during the year excluding ordinary shares
purchased by the Group and held as own shares. FY2022 Group adjusted EPS is 104.02 cents. The EPS performance condition is measured using constant currency
to reflect more accurately underlying earnings performance and remove any distortionary effect of currency volatility.
•
• Group ROCE is defined as the Group’s earnings before interest, and amortisation (net of related tax) plus the Group’s share of the results of joint ventures after
interest and tax divided by capital employed. Capital employed comprises the sum of the Group’s total assets plus cumulative intangible asset amortisation and
impairment less current liabilities and deferred tax liabilities excluding all borrowings and lease liabilities, retirement benefit assets, cash and acquisition related
contingent consideration and contract options. It is calculated by taking the average of the relevant opening and closing balance sheet amounts. In years where
the Group makes significant acquisitions or disposals, the ROCE calculation is adjusted appropriately, to ensure the acquisition or disposal are equally time
apportioned in the numerator and the denominator.
The vesting of the share awards granted to Executive Directors in 2020 which will not vest before 23 March 2023 is as follows:
Executive Directors
S Talbot
M Garvey
Total number
of shares
awarded
238,976
105,787
Number of
shares to
vest in 2023
157,486
69,714
Percentage
outcome %
Value at grant
of the shares
vesting (A)
Change in value
over vesting period
of share vesting (B)
65.9%
65.9%
€1,384,293
€612,786
€492,930
€218,200
Total vesting
value (A+B)1
€1,877,233
€830,991
1
This reflects the value of share awards expected to vest in 2023 with a three-year performance period ended in 3 1 December 2022. The total vesting values have
been estimated using the official closing share price on 30 December 2022 (last day of trading for FY 2022) of €11.92. The value at grant of the shares vesting was
€8.79 being the mean between the high and low of a Glanbia plc share on 20 March 2020 (being the last day of trading on the Euronext Dublin before the grant of
the award on 23 March 2020), which was the value used to determine the number of shares of the 2020 award.
Long-Term Incentive Share Awards 2021 and 2022
Details of the 2022 LTIP awards made to the Group Managing Director and Group Finance Director on 11 May 2022 are as follows:
Executive Director
Type of award
Basis of award
Face value of award
Number of shares
under award
End of
performance period
S Talbot
M Garvey
Conditional award
Conditional award
150% of salary
€1,653,988
€915,204
139,813
77,363
4 January 2025
Face value calculated using a share price of €11.83 being the mean between the highest and lowest share price on the date of grant.
The performance conditions and weightings for all outstanding share awards are set out in the following table.
Performance Condition
Group EPS
Three-year adjusted EPS
2021 Performance Measures Financial Period 2021 – 2023
2022 Performance Measures Financial Period 2022 – 2024
Weighting
% of max
Vesting
0%
Vesting 25%
(Threshold)1
Vesting 100%
(Maximum)¹
Weighting
% of max
Vesting
0%
Vesting 25%
(Threshold)¹
Vesting 100%
(Maximum)¹
50% < 6% CAGR = 6% CAGR ≥ 11% CAGR
40% < 4% CAGR = 4% CAGR ≥ 9% CAGR
Group ROCE
30%
< 8%
= 8%
≥ 11%
40%
< 8%
= 8%
≥ 11%
Group TSR
Ranking in STOXX Europe
600 Food and Beverage
Index
10% Below the
median
At median
In the top
quartile
ESG measures
10%
See table overleaf
20%
See table overleaf
1
Straight line vesting between threshold performance and maximum performance for Group EPS, ROCE and TSR.
132 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Achievement against financial performance conditions is determined on a constant currency basis to reflect more accurately
underlying earnings performance and remove any distortionary effect of currency volatility. LTIP performance targets are set with
future acquisitions in mind and are therefore reflective of the expected impact acquisitions may have on key performance conditions.
This approach acknowledges the strategic importance of acquisitions to the Group’s long-term performance and strategy.
ESG measures
2021 – 2023 LTIP
(10% weighting)
Renewable energy – 5%
Energy efficiency – 2.5%
Threshold
Maximum
Equal to a 30% conversion of existing non-
renewable energy utilisation by December 2023
Audits completed at all key sites, and energy
efficiency plans approved within the
performance period
Equal to or greater than 40% conversion of
existing non-renewable energy utilisation by
December 2023
Completion of planned actions within the
performance period
Waste and water utilisation – 2.5% Base lining completed and plans approved
within the performance period
Completion of planned actions within the
performance period
2022 – 2024 LTIP
(20% weighting)
Scope 1 & 2 emissions reduction
20% reduction by the end of the performance
period compared to 2021 emissions
29% reduction by the end of the performance
period compared to 2021 emissions
TSR Performance
The graph illustrates the TSR performance of the Group over the past seven years showing the change in value of €100 invested in
Group’s shares from 3 January 2016 to 31 December 2022 (dates aligning with opening and closing financial periods) compared with the
STOXX Europe 600 Food & Beverage Index of which the Group is a constituent. This chart was first incorporated into our reporting for
2020 covering five years and will build to 2025 to provide a full 10-year overview.
The STOXX Europe 600 Food and Beverage Index has been selected as an appropriate index as it comprises other companies within the
same broad sector to Glanbia and of which Glanbia is a constituent.
€180
€160
€140
€120
€100
€80
€60
€40
€20
€0
Jan 2016
Jan 2017
Jan 2018
Jan 2019
Jan 2020
Jan 2021
Jan 2022
Jan 2023
Glanbia
STOXX Europe 600 Food and Beverage Index
Group Managing Director Total Remuneration
The table below sets out the remuneration received by the Group Managing Director. This table will be extended each year to 2025 to
cover a 10-year period.
Total Remuneration €’000
Annual Incentive
achieved as a % of maximum
Long-term Incentives
achieved as a % of maximum
2015
2,631
2016
3,133
2017
3,229
2018
3,466
2019
1,5771
2020
2,310
2021
3,459
2022
5,990
81.2%
90.5%
71.6%
92.8%
0.0%1
36.3%
97.7%
88.2%
74.98%
81.07%
76.79%
58.13%
17.64%
21.0%
21.6%
65.9%
1. S Talbot voluntarily waived the entire 2019 annual incentive which would have otherwise resulted in a Total Remuneration earned in 2019 of €2.104 million. Annual
Incentive earned in 2019 was 33.4% of maximum.
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
133
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Remuneration Committee Report continued
Directors shareholdings
As at 31 December 2022 the Executive Directors share ownership against the guidelines was as follows:
Executive Directors
S Talbot
M Garvey
Shares held as at
31 December 2022
398,889
148,423
% of base salary
based on market
value as at
31 December 2022
430%
289%
Shareholding
guideline
250%
200%
•
The market values have been estimated using the official closing price of a Glanbia plc share on 30 December 2022 (being the last day of trading on the Euronext
Dublin before year end 31 December 2022) of €11.92.
Other disclosures
Dilution
Share awards granted under the 2008 LTIP, 2018 LTIP and the Annual Deferred Incentive are satisfied through the funding of employee
benefit trusts which acquire shares in the market. The Company’s employee benefit trusts held 1,711,322 shares at 31 December 2022.
Payments to past Directors and payments for loss of office
There were no payments to past directors and no payment for loss of office.
Change in remuneration of Directors compared to employees
The table below shows the percentage change in total remuneration using the single figure methodology for the years ended 4 January
2020, 2 January 2021, 1 January 2022 and 31 December 2022 for the Directors of the Company and the average of all permanent
employees of the Group on a full-time equivalent basis. For the purpose of this disclosure the Group is defined as all employees of
wholly-owned entities in US and Ireland who are deemed to be most representative of the global workforce.
Total
remuneration
2022,
€’000
Total
remuneration
2021,
€’000
Total
remuneration
2020,
€’000
Total
remuneration
2019,
€’000
Change in
total
remuneration
%
2021 to 2022
Change
in total
remuneration
%
2020 to 2021
Change
in total
remuneration
%
2019 to 2020
2019-20221
Executive Directors
S Talbot
M Garvey
Non-Executive Directors
D Gaynor
P Ahern
R Brennan
P Coveney3
P Duffy
V Gorman4
B Hayes
I Haaijer2
J Lodge
JG Murphy
J Murphy
P Murphy
D O’Connor
K Underhill2
Average remuneration on
full-time equivalent basis
Employees of the Group5
Earned
Paid
Earned
Paid
5,990
5,990
2,779
2,779
335
43
90
23
100
15
43
38
103
43
43
43
103
50
3,497
3,497
1,822
1,822
325
43
85
85
71
43
43
–
93
43
43
43
95
–
2,310
2,310
1,238
1,238
150
43
–
85
–
43
43
–
14
56
10
45
95
–
91
84
81
2,104
1,577
1,165
1,103
95
43
–
85
–
43
43
–
–
60
–
60
95
–
75
71.3%
71.3%
52.5%
52.5%
3.1%
0%
5.9%
-72.9%
40.8%
0%
0%
–
10.8%
0%
0%
0%
8.4%
–
51.4%
51.4%
47.2%
47.2%
116.7%
0%
–
0%
–
0%
0%
–
564.3%
-23.2%
330.0%
-23.2%
0%
–
9.8%1
46.5%1
6.3%2
12.2%2
57.9%
0%
–
0%
–
0%
0%
–
0%
-6.7%
–
-6.7%
0%
–
8%
4%
8%
Ilona Haaijer and Kim Underhill were appointed as Independent Non-Executive Directors effective 1 August 2022.
1. For supporting notes regarding 2020 and 2021 remuneration reference should be made to the 2020 and 2021 Remuneration Reports.
2.
3. Patrick Coveney retired from the Board 30 March 2022.
4. Vincent Gorman retired from the Board 5 May 2022.
5. Average remuneration has been determined based on the workforce of wholly-owned entities in Ireland and the US which is most representative of the global
workforce
Group Managing Director to all-employee pay ratio
Whilst not a reporting requirement, a voluntary disclosure on Group Managing Director pay ratio is set out below. The disclosure is
based on the workforce of wholly-owned entities in Ireland and the US which is most representative of the global workforce. Total
remuneration has been determined using the ‘single total figure’ methodology as it provides a like-for-like comparison between the
Group Managing Director and other employees. All elements of remuneration were calculated on a full-time and full-year equivalent
basis and no adjustments or assumptions were made by the Committee.
134 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
The Remuneration Committee notes that the median pay ratio has increased since last year, which is largely driven by the nature of the
Group Managing Director’s remuneration structure as a result of the new Policy as explained in the Annual Statement of the
Remuneration Committee Chair rather than changes in the wider workforce. As expected by shareholders a greater proportion of the
remuneration awarded to the Group Managing Director is performance based and therefore at risk. As a result, where performance is
strong the total remuneration of the Group Managing Director increases at a proportionately greater rate compared to the wider
workforce, with the reverse being true when performance is not as strong.
The Remuneration Committee is satisfied that the pay ratio is appropriate relative to the performance achieved and is consistent with
Glanbia’s reward and progression policies. The Remuneration Committee is committed to ensuring that remuneration structures below
Board level are appropriate and enable the business to attract, retain, incentivise and reward our people – see page 128 for further
details on our below Board level remuneration arrangements.
Financial Year
2019
2020
2021
2022
Total Remuneration Ratio
Total Remuneration Ratio
Total Remuneration Ratio
Total Remuneration (€’000)
Total Remuneration Ratio
Base Salary (€’000)
P25 (Lower
Quartile)
P50
(Median)
P75 (Upper
Quartile)
41
57
86
50
119
40
28
41
62
66
91
50
18
26
39
93
64
70
Chief
Executive
1,577 1
2,310
3,497
5,990
-
1,106
1.
In 2019 S Talbot was paid Total Remuneration of €1.577 million but earned €2.104 million. S Talbot voluntarily waived the entire 2019 annual incentive, 33.4% of maximum.
Implementation of policy in 2023
Salary, pension and benefits
The base salaries of the Group Managing Director and Group Finance Director are increased by 3.4% to €1,144,002 and €633,015
respectively, effective 1 January 2023. These increases are below the average increase for our overall workforce.
There is no change to benefits from 2022 except for pension. As of 1 January 2023 the Group Managing Director receives a cash payment
in lieu of pension of 12% of salary and the Group Finance Director receives a defined pension contribution of 12% of salary.
2023 Annual Incentive
The Annual Incentive opportunity for the Group Managing Director and Group Finance Director in 2023 is 250% and 200% of salary respectively.
The Annual Incentive is based on the following measures:
Measure
Adjusted EPS
Group Operating Cash flow
Strategic objectives
ESG
Weighting
50%
20%
20%
10%
The ESG measures in the 2023 annual incentive will focus on increasing female representation which aligns with our DE&I strategy. For
2023, the key DE&I measures will impact the behaviours which contribute to the ultimate outcome: 1) measuring the female hiring rates
for management roles; and 2) measuring the retention/voluntary turnover of females in management positions. These measures are
being measured on a Group-wide basis and also by business unit as the measures apply to the Executive Directors, Group Operating
Executive and the business unit leadership teams.
The Remuneration Committee believes that the targets set for 2023 reflect the internal planning and are appropriately stretching
relative to prior years given the current commercial circumstances and ensuring there continues to be a strong link between pay and
performance at all times and incentivise exceptional performance from management. Targets and performance against them will be
disclosed in our 2023 Remuneration Report.
2023 LTIP share awards
The 2023 share awards will be made under our new Policy at 150% of salary for both the Group Managing Director and Group Finance
Director.
Executive Directors
Group adjusted EPS
Three-year adjusted EPS CAGR
Group ROCE
ESG – Scope 1 & 2 (Reduction vs 2022 base year)
ESG – Water (Reduction vs 2021 base year)
ESG – Packaging (% of packaging that is recyclable)
Weighting
Vesting
0%
Vesting 25%
(Threshold)
Vesting 100%
(Maximum)
40%
40%
10%
5%
5%
<5%
<10%
<26%
<8%
<75%
5%
10%
26%
8%
75%
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
10%
13%
31%
11%
87%
135
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Remuneration Committee Report continued
Application of Remuneration Policy for 2023
The chart below shows how the composition of each of the Executive Directors packages varies at different levels of performance
under the operation of the Remuneration Policy for 2023. The assumptions noted for “target” performance are provided for illustration
purposes only.
8,000
7,000
6,000
5,000
0
0
0
€
’
4,000
3,000
2,000
€1,493
€6,927
28%
47%
€6,069
€3,352
13%
43%
1,000
100%
45%
25%
0
Below
target
Target
Maximum
€820
100%
Below
target
€3,510
31%
42%
27%
€3,035
€1,690
14%
37%
48%
Target
Maximum
Fixed Pay
Annual Bonus
LTIP
LTIP with 50% Share Price Growth
GMD
GFD
Threshold
Target
Maximum
1. Assuming constant share price; and
2. Assuming 50% increase in share price
Fixed pay
Annual
Incentives
Long-term
incentives
Fixed pay, being base salary, pension allowances for the 2023 financial year and other benefits taken from the single
total figure for the prior year
Nil
Nil
125% of salary for the Group Managing Director
100% of salary for the Group Finance Director
250% of salary for the Group Managing Director
200% of salary for the Group Finance Director
25% vesting of share awards
37.5% of salary for Group Managing Director
and Group Finance Director
100% vesting of share awards
150% of salary for Group Managing Director and
Group Finance Director
Non-Executive Director fees
Non-Executive Director fees are increased for FY 2023 by 3.4% being the same percentage increase applied to the Executive Directors.
A summary of the fee levels is provided below:
Role
Group Chairman
Non-Executive Director Base Fee
Senior Independent Director/Committee Chairs
Non-Executive Directors nominated by the Society
Intercontinental travel allowance for US-based Non-Executive Directors
2023 €
346,390
93,060
12,925
43,945
30,000
2022 €
335,000
90,000
12,500
42,500
30,000
Directors’ Remuneration Report results at 2022 AGM
Resolution to receive and consider the Directors’ Remuneration Report for the year ended 1 January 2022
For
%
Against
%
Total excluding
withheld
%
Withheld
%
Total including
withheld
%
170,387,084
90.05%
18,830,248
9.95%
189,217,332
100.00%
88,460
0.00%
189,305,792
100.00%
Directors’ Remuneration Policy results at 2022 AGM
Resolution to receive and consider the Directors’ Remuneration Policy 2022-2024
For
%
Against
%
Total excluding
withheld
%
Withheld
%
Total including
withheld
%
166,421,089
87.91%
22,883,020
12.09%
189,304,109
100.00%
2,438
0.00%
189,306,547
100.00%
Directors’ remuneration and interests in shares in Glanbia plc
Tables A to G on the following pages give details of the Directors’ remuneration and interests in shares in Glanbia plc held by Directors
and the Group Secretary and Head of Investor Relations, and their connected persons as at 31 December 2022. There have been no
changes in the interests listed in Tables B to G between 31 December 2022 and 23 February 2023 (being the latest practicable date prior
to the signing of the Financial Statements). The official closing share price on 30 December 2022 (last day of trading for the 2022
financial year) was €11.92 and the range during the year was €9.98 to €13.00. The average price for the year was €11.53.
136 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Table A: 2022 Directors remuneration
The salary, fees and other benefits pursuant to the remuneration package of each Director during the year were:
Date of Directorship
appointment/retirement
Salary
€’000
Fees
€’000
Pension
contribution1
€’000
Other
benefits2
€’000
Executive Directors
S Talbot
M Garvey
2022
2021
Former Executive Directors
H McGuire7
B Phelan7
Stepped down 24 April 2019
Stepped down 24 April 2019
2022
2021
2022
2021
App 1 January 2021
Ret 30 March 2022
App 1 March 2021
App 1 August 2022
Ret 6 May 2021
Non-Executive Directors
D Gaynor
P Ahern
R Brennan
P Coveney
P Duffy
V Gorman
I Haaijer
B Hayes
Mn Keane
J Lodge
JG Murphy
J Murphy
P Murphy
D O’Connor
K Underhill
App 1 August 2022
2022
2021
Total 2022
Total 2021
1,106
612
1,718
1,672
–
–
–
–
1,718
1,672
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1,718
1,672
–
–
–
–
–
–
–
–
–
–
335
43
90
23
100
15
38
43
–
103
43
43
43
103
50
1,072
1,027
1,072
1,027
Annual
Incentive
paid in
cash3
€’000
Annual
Incentive
deferred
into
shares4
€’000
1,220
545
1,765
1,254
1,220
545
1,765
1,196
–
–
–
–
–
–
–
–
567
93
660
490
–
–
–
–
660
490
1,765
1,254
1,765
1,196
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Long-Term
Incentive5
€’000
2022
Total
€’000
2021
Total6
€’000
1,877
831
2,708
504
–
–
–
571
2,708
1,075
5,990
2,779
8,769
–
–
–
–
–
8,769
3,459
1,806
-
5,265
232
339
–
571
–
–
5,836
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
335
43
90
23
100
15
38
43
–
103
43
43
43
103
50
1,072
325
43
85
85
71
43
–
43
15
93
43
43
43
95
–
–
–
1,027
–
153
153
149
–
–
–
–
153
149
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
153
149
660
490
1,765
1,254
1,765
1,196
2,708
1,075
9,841
–
–
6,863
1. M Garvey participates in the Glanbia defined contribution plan with a contribution of 25% to 2022.
2. Other benefits include company car or equivalent, medical/life assurance, tax equalisation payment to M Garvey in respect of DC pension contribution in Ireland,
taxable cash in lieu of pension payments of 26.5% of salary to S Talbot and an accommodation allowance of €100,000 for S Talbot. Having elected to forego
annual revaluation of her accrued pension (which applies to active members of the pension scheme), S Talbot received a cash pension amount of €97,805 in 2022.
3. This reflects the proportion of the gross Annual Incentive (50% of total Annual Incentive) payable in cash to Executive Directors in respect of performance for full
year 2022.
4. This reflects the proportion of the gross Annual Incentive (50% of total Annual Incentive) which will be invested in shares. Following the deduction of appropriate
taxation and social security 30% will be retained for two years and 20% will be retained for three years.
5. This reflects the value of the 2020 share awards which will vest on 23 March 2023, earliest, the performance period for which ended on 31 December 2022. The
gross value is calculated using the official closing price of a Glanbia plc share on 30 December 2022 (being the last day of trading on the Euronext Dublin for the
2022 financial year) of €11.92. 2020 vested share awards will be held for a 2 year period from the date of vest.
6. 2021 Total Remuneration has been restated to update the value of the 2019 share awards to the value on the date of vest, 25 May 2022. The restated gross value is
calculated using the official opening share price on the date of vest of €11.10. 2019 vested share awards will be held for a 2 year period to May 2024.
7. H McGuire and B Phelan stepped down as Executive Directors on 24 April 2019. The vest value of share awards granted while Executive Directors in 2019, in respect
of performance periods ending in 2021 respectively, are included in the table above. These have been restated to update the value of the 2019 share awards to the
value on the date of vest, 25 May 2022. The restated gross value is calculated using the official opening share price on the date of vest of €11.10. 2019 vested share
awards will be held for a 2 year period to May 2024.
Details of Directors’ long-term awards expected to vest in respect of performance to 31 December 2022 are set out on page 132.
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
137
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Remuneration Committee Report continued
The defined pension benefit of the Executive Directors during the year was as follows:
S Talbot
2022
2021
Table B: Directors and Secretary’s interests in ordinary shares in Glanbia plc
Directors
D Gaynor
S Talbot
P Ahern
R Brennan
P Duffy
M Garvey
I Haaijer
B Hayes
J Lodge
JG Murphy
J Murphy
P Murphy
D O’Connor
K Underhill
Notes
1
1
2
2
Group Secretary and Head of Investor Relations
L Hennigan
3
* or at date of original appointment to the Board if appointed during financial year.
1. Executive Director.
2. Appointed 1 August 2022.
3. Appointed 4 April 2022
Transfer value
of increase in
accrued
pension
€’ 000
Annual pension
accrued in 2022
in excess of
inflation
€’ 000
–
–
–
–
–
–
Total annual
accrued
pension at
31 December
2022
€’ 000
159
159
159
As at
31 December 2022
Ordinary Shares
As at
2 January 2022
Ordinary Shares*
10,000
398,889
18,832
4,000
6,930
148,423
–
43,696
5,000
11,849
1,870
15,687
7,680
–
10,000
335,235
14,091
–
6,930
119,490
–
39,151
5,000
7,283
1,292
11,506
7,680
–
672,856
557,658
9,421
7,128
Note: The ordinary shares held in trust for the Directors and Secretary disclosed in Table C below are included in the total number of
ordinary shares held by the Directors and Secretary above.
The Directors and Secretary did not use their shares as security during 2022 or up to 23 February 2023, being the latest practicable date
prior to the signing of the Financial Statements.
Table C: Director and Secretary interests in ordinary shares in Glanbia plc subject to restriction
Executive Directors
S Talbot
M Garvey
2018 LTIP2
2018 LTIP3
2018 LTIP4
2021 Annual
Deferred
Incentive5
17,437
8,205
–
–
16,832
7,451
38,822
21,482
Total1
73,091
37,138
Group Secretary and Head of Investor Relations
L Hennigan
–
2,255
–
–
2,255
1. The above ordinary shares are held on trust for the Directors and Group Secretary and Head of Investor Relations by the Glanbia plc Section 128D Employee
Benefit Trust and are included in the total number of ordinary shares held in trust by the Directors and Secretary disclosed in Table B.
2. Subject to restriction on sale until 18 May 2023.
3. Subject to restriction on sale until 25 May 2023.
4. Subject to restriction on sale until 25 May 2024.
5. Subject to restriction on sale until 28 March 2024.
138 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Table D: Summary of Directors interests in Glanbia plc 2018 LTIP
Executive Directors
S Talbot
M Garvey
Table E: Directors’ interests in 2018 LTIP
As at
31 December
2022
As at
2 January 2022
2018 LTIP
Share awards
2018 LTIP
Share awards
612,553
286,630
618,492
273,787
Executive Directors
S Talbot
Total:
M Garvey
Date of Grant
As at
2 January
2022
Granted
during the
year
Vested
during the
year
Lapsed
during the
year
As at
31 December
2022
Market
price at
date of
award €
Earliest date
for vesting
Expiry date Notes
21-Mar-19
23-Mar-20
16-Mar-21
11-May-22
145,752
238,976
233,764
–
–
–
–
139,813
31,482
–
–
–
114,270
–
–
–
–
238,976
233,764
139,813
17.73 21-Mar-22 21-Mar-23
8.24 23-Mar-23 23-Mar-24
11.57 16-Mar-24 16-Mar-25
11.82 11-May-25 11-May-26
618,492
139,813
31,482
114,270
612,553
21-Mar-19
23-Mar-20
16-Mar-21
11-May-22
64,520
105,787
103,480
–
–
–
–
77,363
13,936
–
–
–
50,584
–
–
–
–
105,787
103,480
77,363
17.73 21-Mar-22 21-Mar-23
8.24 23-Mar-23 23-Mar-24
11.57 16-Mar-24 16-Mar-25
11.82 11-May-25 11-May-26
1
2
3
4
1
2
3
4
Total:
273,787
77,363
13,936
50,584
286,630
1. Share awards granted on 21 March 2019 were subject to performance conditions measured over the three financial years ended 1 January 2022. The awards
vested on 25 May 2022 and the percentage of the awards vested are shown on page 140.
Directors were permitted to sell sufficient shares to satisfy any tax or social security deductions arising on the acquisition of the shares. The balance of the shares
are restricted from sale for two years and are held on trust for the Directors by the trustee of the Glanbia plc Section 128D Employment Benefit Trust.
The total number of shares subject to restriction are included in the total number of ordinary shares disclosed in Table B on page 138.
2. Share awards granted on 23 March 2020 were subject to performance conditions measured over the three financial years ended 31 December 2022.
The outcome of these performance conditions and the number of share awards expected to vest to Executive Directors during 2023 are set out on pages 132 and
140. The vested share award, net of relevant taxation and social security deductions, will be restricted from sale for two years and held on trust for them by the
trustee of the Glanbia plc section 128D Employee Benefit Trust.
3. The performance period in respect of the 2018 LTIP awards made in 2021 is the three financial years ending 2023.
4. The performance period in respect of the 2018 LTIP awards made in 2022 is the three financial years ending 2024.
The performance conditions attached to the awards granted in 2021 and 2022 are detailed in the section entitled ‘Long-Term Incentive
Share Awards 2021 and 2022’ on page 132.
Table F: Executive Directors’ annual deferred incentive paid
Executive Directors
S Talbot
2021 Annual Deferred Incentive
M Garvey
2021 Annual Deferred Incentive
Value of Annual
Incentive
converted into
shares €1
Date of
conversion/
acquisition of
shares
Acquisition
price per share
at date of
conversion
Number of
shares acquired
€770,000
28-Mar-22
€10.61872
72,469
€426,000
28-Mar-22
€10.61872
40,100
1. Numbers are rounded to the nearest thousand.
2. Directors were permitted to sell sufficient shares to satisfy any tax or social security deductions arising on the acquisition of the shares. The balance of the shares
are restricted from sale for two years and are held in trust for the Directors by the trustee of the Glanbia plc Section 128D Employee Benefit Trust.
3. The total number of shares subject to restriction are included in the total number of ordinary shares disclosed in Table B on page 138.
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
139
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION
Remuneration Committee Report continued
Table G: Value of awards expected to vest in 2023 and awards vested in 2022
Executive Directors
S Talbot
M Garvey
Number of
shares awarded
expected to vest
in 2023
Percentage
Outcome %
Estimated
Market Value €1
Number of
shares vested in
2022
Percentage
Outcomes %
Market Value on
Date of Vest2
157,486
69,714
65.9%
65.9%
1,877,233
830,991
31,482
13,936
21.6%
21.6%
349,450
154,690
1. This reflects the value of long term incentive share awards expected to vest in 2023 with a three year performance period ended in 2022.
The market values have been estimated using the official closing price of a Glanbia plc share on 30 December 2022 (being the last day of trading on the Euronext
Dublin before year end 31 December 2022) of €11.92.
2. This reflects the value of long term incentive share awards vested in 2022 with a three year performance period ended in 2021.
These have been valued at the market value of the shares on the date of vesting €11.10 per share (official opening price).
140 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Statutory information and Forward-looking statement
Principal activities, strategy and business model
Glanbia plc is a global nutrition group, headquartered in Ireland, with a direct presence in 33 countries worldwide.
The Group’s business model and strategy are summarised in the Strategic Report on pages 1 to 77.
The Group Chairman’s statement on page 6, the Group Managing Director’s review on page 8, the Operations review on pages 26 to 43
and the Group Finance Director’s review on pages 44 to 49 contain a review of the development and performance of the Group’s
business during the year, of the state of affairs of the business at 31 December 2022, of recent events and of likely future developments.
Information in respect of events since the year end is included in these sections and in Note 36 to the Financial Statements.
As set out on page 47, the Group reported a profit for the period of €256.8 million after exceptionals. Comprehensive reviews of the
financial and operating performance of the Group during 2022 are set out in the Group Finance Director’s review on pages 44 to 49 and
in the Operations review on pages 26 to 43. Key Performance Indicators are set out on pages 18 and 19. The treasury policy and the
financial risk management objectives of the Group are set out in detail in Note 30 to the Financial Statements. Our approach to our
people, diversity equity and inclusion, and our stakeholders are discussed on pages 20 to 22 and sustainability is discussed on pages 50
to 66 and 110 to 113.
Non-Financial Reporting Statement
The Group complies with the European Union (Disclosure of Non-Financial and Diversity Information by certain large undertakings and
groups) Regulations 2017, S.I. No. 360 of 2017 (as amended). The table on page 66 is designed to help stakeholders navigate to the
relevant sections in this Annual Report to understand the Group’s approach to these non-financial risks. Many of our policies can be
viewed on www.glanbia.com.
Process for appointment/retirement of Directors
In addition to the Companies Act 2014, the constitution of the Company contains provisions regarding the appointment and retirement
of Directors. At each Annual General Meeting (AGM) the constitution of the Company provides that each Director who has been in office
at the conclusion of each of the three preceding AGMs, and who has not been appointed or reappointed at either of the two most
recently held of those three meetings, shall retire from office; however in accordance with the UK Corporate Governance Code 2018 (the
“Code”), all of the Directors are subject to annual re-election. Each of the Directors will retire at the 2023 AGM and, being eligible, with
the exception of Patsy Ahern and John Murphy, who will retire following the 2023 AGM, offer themselves for election or re-election. The
constitution of the Company also allows the election and re-election of Independent Directors, where applicable, to be conducted in
accordance with the election provisions for Independent Non-Executive Directors in the Euronext Dublin Listing Rules and the United
Kingdom Financial Conduct Authority (“FCA”) Listing Rules.
No person, other than a Director retiring by rotation, shall be appointed a Director at any general meeting unless they are recommended
by the Directors or, not less than seven nor more than 42 days before the date appointed for the meeting notice, executed by a member
qualified to vote at the meeting has been given to the Company of the intention to propose that person for appointment. If a Director is
also a director of Tirlán Co-operative Society Limited (formerly Glanbia Co-operative Society Limited) (the “Society”), the constitution of
the Company provides that their appointment as a Director shall terminate automatically in the event of them ceasing to be a director
of the Society. The constitution of the Company also contains provisions regarding the automatic retirement of a Director in certain
other limited circumstances.
Annual General Meeting
The Company’s 2023 AGM will be held on 4 May 2023 at 11.00 a.m. at Lyrath Estate, Kilkenny, R95 F685, Ireland. Full details of the 2023
AGM, together with explanations of the resolutions to be proposed, will be contained in the Notice of the 2023 AGM. The record date for
the 2023 AGM will be determined in accordance with section 1087G and 1105 of the Companies Act 2014.
Powers of the Directors
The Directors are responsible for the management of the business of the Company and the Group and may exercise all powers of the
Company subject to applicable legislation and regulation and the constitution of the Company. At the 2022 AGM, the Directors were
given the power to issue new shares up to a nominal amount of €4,173,258.54. This power will expire on the earlier of the close of business
on the date of the 2023 AGM or 4 August 2023. Accordingly, a resolution will be proposed at the 2023 AGM to renew the Company’s
authority to issue new shares.
At the 2022 AGM, the Directors were also given the power to:
i. dis-apply the strict statutory pre-emption provisions in the event of a rights issue or other pre-emptive issue or in any other issue up
to an aggregate amount equal to 5% of the nominal value of the Company’s issued share capital. This 5% limit includes any treasury
shares re-issued by the Company while this authority remains operable; and
ii. dis-apply the strict statutory pre-emption provisions for an additional 5% for specific transactions. The resolution gave the Directors
an additional power to allot shares on a non-pre-emptive basis and for cash up to a further 5% of the issued share capital in
connection with an acquisition or a specified capital investment which is announced contemporaneously with the issue, or which has
taken place in the preceding six month period and is disclosed in the announcement of the issue. The 5% limit includes any treasury
shares reissued by the Company while this authority remains operable.
These powers will expire on the date of the 2023 AGM or 4 August 2023, whichever is earlier. Accordingly, resolutions will be proposed at
the 2023 AGM to renew these authorities.
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
141
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Statutory information and Forward-looking statement continued
At the 2022 AGM, the Directors were also given the power to buy back a maximum number of 28,044,569 ordinary shares at a minimum
price of €0.06 each. The maximum price was an amount equal to 105% of the average of the middle market quotations of the
Company’s ordinary shares as derived from the Euronext Dublin Daily Official List for the five business days immediately preceding the
day on which such ordinary shares are contracted to be purchased. This power will expire at the earlier of the conclusion of the 2023
AGM or 4 August 2023 and a resolution will be proposed at the 2023 AGM to renew this power. A special resolution will be proposed at
the 2023 AGM to renew the Company’s authority to acquire its own shares. At the 2022 AGM, shareholders also authorised the maximum
and minimum prices at which the Company may reissue off-market such shares as it may purchase. This authority will expire at the
earlier of the conclusion of the 2023 AGM or 4 August 2023 (whichever is earlier) and a resolution will be proposed at the 2023 AGM to
renew this authority.
Research and development
The Group is fully committed to ongoing technological innovation in all sectors of its business, providing integrated customer-focused
product development by leveraging our global technology capabilities and expertise. Expenditure on research and development
amounted to €20.4 million in 2022 (2021: €18.5 million) as disclosed in Note 5 to the Financial Statements.
Dividends
An interim dividend of 12.93 cent per share was paid on 7 October 2022 (an aggregate of €35.4 million) to shareholders on the share
register at the close of business on 26 August 2022. The Directors propose a final dividend of 19.28 cent per share which based on the
issued share capital at 23 February 2023 (being the latest practicable date prior to the signing of the Financial Statements) would
equate to (an aggregate of €52.5 million) bringing the total dividend in respect of 2022 to 32.21 cent per share (an aggregate of €87.9
million). Subject to shareholder approval, the final dividend will be paid on 5 May 2023 to shareholders on the share register on 24 March
2023. The foregoing amounts paid are net of dividends waived by the Group’s Employee Trusts.
Total dividends paid during 2022 amounted to an aggregate of €84.4 million (being a final dividend of 17.53 cent per share paid on
6 May 2022 (an aggregate of €49.0 million) and an interim dividend of 12.93 cent per share paid on 7 October 2022 (an aggregate of
€35.4 million). The foregoing amounts paid are net of dividends waived by the Group’s Employee Trusts.
All dividend payments will be made by direct credit transfer into a nominated bank or financial institution. If a shareholder has not
provided their account details prior to the payment of the dividend, a shareholder will be sent the normal tax voucher advising a
shareholder of the amount of their dividend and that the amount is being held because their direct credit transfer instructions had not
been received in time. A shareholder’s dividends will not accrue interest while they are held. Payment will be transferred to a
shareholder’s account as soon as possible on receipt of their direct credit transfer instructions.
For the past number of years, dividends have been paid in sterling to shareholders whose address, according to the Company’s share
register, is in the UK (unless they have elected otherwise). On 15 March 2021 this structure changed and a default currency of euro is
applied to all new shareholders who come on to the Company’s share register, regardless of their registered address. Where an existing
shareholder holds shares in certificated (i.e. paper) form and has previously received sterling because their registered address is in the
UK or because they have previously elected to receive sterling, they will continue to receive sterling unless they elect otherwise. All other
shareholders will from 15 March 2021 automatically be paid in euro unless a sterling currency election is made (including those
shareholders who hold their shares in uncertificated (i.e. dematerialised) form).
Shareholders holding their shares via the central securities depository operated by Euroclear Bank or CREST will receive dividends
electronically via such systems. To avail of these facilities, shareholders should follow the applicable rules and guidelines issued by the
operators of those systems from time to time.
Irish Dividend Withholding Tax (DWT) must be deducted from dividends paid by an Irish resident company, unless a shareholder is entitled
to an exemption and has submitted a properly completed exemption form to the Company’s Registrar. DWT is deducted at the standard
rate of Income Tax (25%). Non-resident shareholders located in countries with a double tax treaty with Ireland and certain Irish
companies, trusts, pension schemes, investment undertakings and charities may be entitled to claim exemption from DWT. Copies of the
exemption form may be obtained from the Company’s Registrar. Shareholders should note that DWT will be deducted from dividends in
cases where a properly completed form has not been received by the market deadline for the dividend. Individuals who are resident in
Ireland for tax purposes are not entitled to an exemption. If shares are held via Euroclear Bank or CREST, the owners of the shares will
need to contact the intermediary through whom the shares are held to ascertain arrangements for tax relief to be applied at source.
Political donations
The Electoral Act, 1997 (as amended) requires companies to disclose all political donations over €200 in aggregate made during the
financial year. The Directors, on enquiry, have satisfied themselves that no payment or other donations in excess of this amount have
been made by the Group.
Issued share capital
At 31 December 2022 the authorised share capital of the Company was 350,000,000 ordinary shares of €0.06 each and the issued share
capital was 272,287,360 (2021: 287,169,345) ordinary shares of €0.06 each, of which 27.74% was held by the Society. All the Company’s
shares are fully paid up and quoted on Euronext Dublin and the London Stock Exchange. The Company purchased 14,881,985 shares
during the year as part of the share buyback programme.
142 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Details of the Company’s share capital and shares under share award at 31 December 2022 are given in Notes 22 and 9, respectively, to
the Financial Statements.
Share buyback
During 2022, the Company repurchased a total of 14,881,985 ordinary shares, returning a total of circa €173.5 million in cash to
shareholders, which includes the placement as outlined below.
Month
January
February
March
April
June
July
August
September
Total 2022
Total number of
share buyback
purchases
Average price
paid per share
4,038,664
1,821,876
1,931,209
2,789,121
339,874
1,344,039
1,127,997
1,489,205
12.31
12.46
10.92
10.73
10.43
10.90
12.11
12.19
14,881,985
11.65
On 20 January 2022, the Society completed the sale of approximately 5.75 million ordinary shares in the Company (the “Shares”),
representing around 2 percent of the Company’s issued share capital, for a total consideration of approximately €70 million (the “Equity
Placement”). Concurrently with the Equity Placement, the Society placed €250 million senior secured bonds and certain subscribers to
these bonds placed existing shares (the “Delta Shares”) together with the Equity Placement (the “Placement”). The price per Share in the
Placement was €12.25. Pursuant to the Company’s existing authority to purchase its own shares, the Company participated in the
Placement via the Group’s broker J&E Davy and purchased 2,527,152 shares (representing around 0.9 percent of the Company’s existing
issued share capital), at a price of €12.25 per Share (the “Buyback”) (an aggregate of circa €31 million). The Shares purchased in the
buyback were cancelled. The purchase of shares from the Society as part of the buyback constituted a related party transaction for the
Company under the Euronext Listing Rules (“Euronext LR”) and the FCA Listing Rules (“FCA LR”). Pursuant to paragraph 11.1.15 (2)(a) of the
Euronext LR and paragraph 11.1.10 (2)(b) of the FCA LR, Davy Corporate Finance confirmed that the terms of the buyback with the related
party, were fair and reasonable as far as the shareholders of the Company were concerned. The Company’s participation in the
Placement was incremental to €50 million 2021 Buyback Programme announced on 8 December 2021. The figures in the Table above for
January include this purchase.
Rights and obligations of ordinary shares
On a show of hands at a general meeting, every holder of ordinary shares present in person or by proxy and entitled to vote shall have
one vote. On a poll, every shareholder present in person or by proxy, shall have one vote for every ordinary share held. In accordance with
the provisions of the constitution of the Company, holders of ordinary shares are entitled to a dividend where declared or paid out of
profits available for such purposes. On a return of capital on a winding up, holders of ordinary shares are entitled to participate.
Restrictions on transfer of shares/votes
With the exception of restrictions on transfer of shares under the Group’s share schemes, (while the shares are subject to such schemes),
there are no restrictions on the voting rights attaching to the Company’s ordinary shares (except as outlined below) or the transfer of
securities in the Company.
Certain restrictions on transfers of shares may from time to time be imposed by the Group’s share dealing rules and/or the Market
Abuse Regulation (EU) No 596/2014. Directors and certain employees are required to seek the Company’s approval to deal in its shares.
Additionally, members of the Group Operating Executive are required to hold a proportion of the value of their base salary in shares.
These shares may not normally be transferred during the individuals’ period in office. Where participants in a Group share scheme
operated by the Group are the beneficial owners of shares but not the registered owner, the voting rights are normally exercised by the
registered owner at the direction of the participants.
Article 2 of the constitution of the Company provides that any ordinary shares acquired by any person who is/was an employee of the
Group or any associate or joint venture (provided such person is neither a Director of the Company nor a director of the Society) shall be
non-voting shares if such acquisition would, if not for this restriction on voting rights, cause such person to be deemed to have acquired
indirect control of the Company or to have to make an offer under Rule 9 of the Irish Takeover Panel Act 1997, Takeover Rules 2022.
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
143
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Statutory information and Forward-looking statement continued
Under the constitution of the Company, the Directors have the power to impose restrictions on the exercise of rights attaching to
share(s) where the holder of the share(s) fails to disclose the identity of any person who may have an interest in those shares. No person
holds securities in the Company carrying special rights with regard to control of the Company. The Company is not aware of any
agreements between holders of securities that may result in restrictions in the transfer of securities or voting rights.
Exercise of rights of shares in employee share schemes
As detailed in Note 23(e) to the Financial Statements at 31 December 2022, 1,711,322 ordinary shares were held in employee benefit trusts
for the purpose of the Company’s employee share schemes.
The Group’s employee benefit trusts have waived dividends due to them in respect of unallocated shares save a nominal amount.
The Trustees of the Group’s employee trusts do not seek to exercise voting rights on shares held in the employee trusts other than on the
direction of the underlying beneficiaries. No voting rights are exercised in relation to shares unallocated to individual beneficiaries.
Rights under the Shareholders’ Rights (Directive 2007/36/EC) Regulations 2009
Shareholder(s) have the right to ask questions related to items on the agenda of a general meeting and to receive answers, subject to
certain qualifications. Shareholder(s) holding 3% of the issued share capital of the Company, representing at least 3% of its total voting
rights, have the right to put items on the agenda and to table draft resolutions at AGMs. The request must be received by the Company
at least 42 days before the relevant meeting. Further details of shareholders’ rights under the Shareholders’ Rights (Directive 2007/36/
EC) Regulations 2009 will be contained in the Notice of the 2023 AGM.
Restrictions on voting deadlines
The notice of any general meeting shall specify the deadline for exercising voting rights and appointing a proxy or proxies to vote in
relation to resolutions to be proposed at the general meeting. The number of proxy votes for, against or withheld in respect of each
resolution is published on the Group’s website after the meeting.
Constitution of the Company
The Company’s constitution details the rights attaching to the shares; the method by which the Company may purchase or reissue its
shares, the provisions which apply to the holding of shares and voting at general meetings and the rules relating to the Directors,
including their appointment, retirement, election, re-election, duties and powers. A copy of the Company’s constitution can be obtained
from the Group’s website: www.glanbia.com.
Unless expressly specified to the contrary in the constitution of the Company, the Company’s constitution may be amended by special
resolution of the Company’s shareholders.
Change of control provisions
The Group has certain debt facilities which may require repayment in the event that a change in control occurs with respect to the
Group.
There are also a number of agreements that take effect, alter or terminate upon a change of control of the Group, which include the
Group’s Glanbia Cheese joint ventures with Leprino Foods Company. If a third party were to acquire control of the Group, Leprino Foods
Company could elect to terminate its joint ventures with the Group and, if this were to occur, the Group could then be required to sell its
shareholding in the joint ventures to Leprino Foods Company at a price equal to its fair value.
In addition, the Company’s employee share plans contain change of control provisions which can allow for the acceleration of the
exercisability of share options and the vesting of share awards in the event of a change of control.
The Board is satisfied that no change of control has occurred in respect of these agreements.
Substantial interests
The Company has been advised of the following notifiable interests in its ordinary share capital as at 31 December 2022 and 23 February
2023 (being the latest practicable date prior to the signing of the Financial Statements):
Shareholder
Tirlán Co-operative Society Limited
Black Creek Investment Management Inc.1
Franklin Mutual Advisors, LLC
No. of ordinary
shares as at
31 December 2022
% of issued share
capital as at
31 December 2022
No. of ordinary
shares as at
23 Feb 2023
% of issued share
capital as at
23 Feb 2023
75,537,305
10,721,341
11,130,742
27.74%
3.94%
4.09%
75,537,305
8,054,877
11,130,742
27.74%
2.96%
4.09%
1 Black Creek Investment Management Inc. (“Black Creek”) is an investment management company. The shares are beneficially owned by 16 separate funds and
clients which Black Creek advises regarding their investment portfolios. Shares held directly are by funds for which Black Creek also acts as investment fund
manager. None of the funds or clients by itself reaches or exceeds the 3% threshold. The funds and clients give a proxy to Black Creek who can exercise the voting
rights for the shares in its own discretion.
144 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Contracts of significance
On 5 May 2021, the Company and the Society entered into an amended and restated relationship agreement, which was originally
entered into in accordance with Euronext LR 6.1.7/FCA LR 9.2.2AD, effective as of 23 February 2021 (the “Relationship Agreement”). Under
the Relationship Agreement, in 2022, the number of Directors nominated by the Society reduced from six to five in a board comprising of
14 members, with seven Independent Non-Executive Directors and two Executive Directors. In 2023, the number of Directors nominated
by the Society will further reduce to three, the size of the Board will reduce to 13 and the number of Independent Non-Executive Directors
will increase from seven to eight. Two Directors nominated by the Society will retire immediately following the 2023 AGM. When the
Society’s holding in the Company fell below 30% on 13 September 2022, the provisions of the Relationship Agreement terminated with
the exception of the above provisions providing for the right of the Society to appoint Non-Executive Directors.
In connection with disposal by the Company of its interest in Glanbia Ireland DAC (“Tirlán”), certain agreements were entered into by the
Company and the Society, the principal terms and conditions of which were included in the circular sent to shareholders on 1 February
2022 in respect of the Extraordinary General Meeting held on 25 February 2022 and is available to view on www.glanbia.com/egm.
These agreements include:
• Share Subscription and Redemption Agreement between the Company, the Society, Tirlán and Glanbia Financial Services Unlimited
Company dated 7 December 2021;
• the Services Amendment Agreement between the Company, Tirlán and Glanbia Management Services Limited dated 7 December
2021; and
• Pensions Agreement between Glanbia, the Society, Glanbia Foods Ireland Limited and Tirlán dated 7 December 2021 in respect of
pension matters arising in the context of the Proposed Transaction.
On 2 July 2017, the Company entered into a shareholders agreement with the Society in respect of Tirlán. This agreement terminated on
completion of the disposal of the Company’s interest in Tirlán to the Society.
Information required to be disclosed by LR 6.1.77, Euronext Dublin Listing Rules/FCA LR 9.8.4 R
For the purposes of Euronext LR 6.1.77/LR 9.8.4 R, the information required to be disclosed by Euronext LR 6.1.77/FCA LR 9.8.4 R can be
found in the following locations:
Section
Topic
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
(11)
(12)
(13)
(14)
Interest capitalised and related tax relief
Publication of unaudited financial information
Small related party transactions
Details of long-term incentive schemes
Waiver of emoluments by a director
Waiver of future emoluments by a director
Non pre-emptive issues of equity for cash
Item (7) in relation to major subsidiary undertakings
Parent participation in a placing by a listed subsidiary
Contracts of significance
Provision of services by a controlling shareholder
Shareholder waivers of dividends
Shareholder waivers of future dividends
Agreement with controlling shareholders and independence provisions/undertakings
Location
Financial Statements, Note 10
Not applicable
Page 143
Remuneration Committee Report
Not applicable
Not applicable
Not applicable
Not applicable
Not applicable
Page 145
Not applicable
Page 144
Page 144
Not applicable
All the information cross-referenced above is hereby incorporated by reference into this Directors’ Report.
Forward-looking statements
The Group has made forward-looking statements in this Annual Report that are based on management’s beliefs and assumptions and
on information currently available to management. Forward-looking statements include, but are not limited to, information concerning
the Group’s possible or assumed future results of operations, business strategies, financing plans, competitive position, potential
growth opportunities, potential operating performance improvements, the effects of competition and the effects of future legislation or
regulations. Forward-looking statements include all statements that are not historical facts and can be identified by the use of
forward-looking terminology such as the words ‘believe,’ ‘develop,’ ‘ensure’, ‘expect’, ‘arrive,’ ‘achieve,’ ‘anticipate,’ ‘maintain,’ ‘grow,’
‘aim,’ ‘deliver,’ ‘sustain,’ ‘should’, ‘should be’, ‘will be’ or the negative of these terms or similar expressions. Forward-looking statements
involve risks, uncertainties and assumptions. Actual results may differ materially from those expressed in these forward-looking
statements. You should not place undue reliance on any forward-looking statements. The risk factors included at pages 72-77 of this
Annual Report could cause the Group’s results to differ materially from those expressed in forward-looking statements. There may be
other risks and uncertainties that the Group is unable to predict at this time or that the Group currently does not expect to have a
material adverse effect on its business. These forward-looking statements are made as of the date of this Annual Report. The Group
expressly disclaims any obligation to update these forward-looking statements other than as required by law. The forward-looking
statements in this Annual Report do not constitute reports or statements published in compliance with any of Regulations 4 to 9 and 26
of the Transparency (Directive 2004/109/EC) Regulations 2007 or any equivalent provisions of the Disclosure and Transparency Rules of
the FCA. As an Irish-incorporated company, the Strategic Report does not constitute a strategic report for the purposes of the UK
Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013 and the Large and Medium-sized Companies and
Groups (Accounts and Reports) (Amendment) Regulations 2013, and the Remuneration Committee report does not constitute a
remuneration report for the purposes of the UK Large and Medium-sized Companies and Groups (Accounts and Reports) (Amendment)
Regulations.
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
145
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Statutory information and Forward-looking statement continued
Subsidiary and associated undertakings/branches outside the State
A list of the principal subsidiary and associated undertakings and their activities including details of any branches of the Group outside
the State is included in Note 37 to the Financial Statements.
Consolidated disclosures pursuant to Article 8 Taxonomy Regulation
The below disclosure required by Article 8 of the EU Taxonomy Regulation forms part of the Group’s Non-Financial Reporting Directive
Statement.
Article 8 Taxonomy Regulation
The Taxonomy Regulation is a key component of the European Commission’s action plan to redirect capital flows towards a more
sustainable economy. It represents an important step towards achieving climate neutrality by 2050 in line with EU goals as the
Taxonomy is a classification system for environmentally sustainable economic activities.
In the following section, in line with regulatory guidance, only the wholly owned business is considered. This therefore excludes joint
venture and associates activities from our evaluation of turnover, capital expenditure (“Capex”) and operating expenditure (“Opex”) for
the reporting period 2022, which are associated with economic activities that qualify as environmentally sustainable (Taxonomy-
aligned economic activities). This assessment is related to the first two environmental objectives (climate change mitigation and climate
change adaptation) in accordance with Article 8 of the Taxonomy Regulation and Art. 2 of the Art. 8 Delegated Act, (Disclosures
Delegated Act).
Glanbia activities
Following consideration of the EU Taxonomy Compass, and after a thorough review involving all relevant divisions and functions,
including carrying out detailed workshops with the business unit (BU) operational and finance senior leadership teams, reviewing the
economic activities description and NACE code definitions as referenced within the EU Taxonomy Climate Delegated Act, the Group
classified each business activity as either:
• Taxonomy non-eligible: An economic activity that is not described in the Climate Delegated Act;
• Taxonomy-eligible but not environmentally sustainable: An economic activity which is described in Annex I or Annex II of the Climate
Delegated Act and does not meet the requirements associated with a Taxonomy-aligned economic activity; or
• Taxonomy-aligned: Taxonomy-eligible and meets the defined Technical Screening Criteria consisting of substantially contributing to
at least one environmental objective and Doing no significant harm to any of the other environmental objectives; and is carried out in
compliance with ‘Minimum Safeguards’.
The assessment was completed by reviewing the Climate Delegated Act Annex I as our business practices are currently focused toward
pursuing the environmental objective of climate change mitigation and to contribute substantially to the stabilisation of greenhouse
gas emissions by avoiding or reducing them or by enhancing greenhouse gas removals. As we allocated our business activities only to
one environmental objective, we avoided double counting between different environmental objectives.
Outlook on our potential for Taxonomy-eligibility and alignment
In August 2021 the Platform on Sustainable Finance released a report containing draft criteria for activities that are considered for the
upcoming delegated act on the other four environmental objectives (sustainable use and protection of water and marine resource;
transition to a circular economy; pollution prevention and control; protection and restoration of biodiversity and ecosystem). In March
2022, the Platform on Sustainable Finances’ Technical working Group released their recommendations to the Commission after
feedback was received on their draft report where the manufacturer of food products and beverage was mentioned as an indicator to
establish priority activities regarding the objective of protection and restoration of biodiversity and ecosystems and the transition to a
circular economy.
Therefore, we expect to be able to report at least some of our core business activities as Taxonomy-eligible and aligned in the future. We
disclose this additional detail voluntarily as we believe that this information is helpful for users of our consolidated non-financial
statement to gain a better understanding of our business activities.
Key Performance Indicators (KPIs)
The KPIs include turnover, Capex and Opex calculations. For the reporting period 2022, the KPIs have been disclosed in relation to
Taxonomy-eligible but not environmentally sustainable and Taxonomy-aligned economic activities.
Please refer to the disclosure tables included below setting out our KPIs. We also assessed activities against the Complementary
Climate Delegated Act and have not completed templates 1 to 5 as none of the activities listed in this Act are applicable to Glanbia.
Turnover KPI
Glanbia has not identified Taxonomy-eligible economic activities in relation to turnover generated during 2022, reflecting the fact that
Glanbia’s core activities of food manufacturing and processing are not listed activities within the Climate Delegated Act. We also
undertook a deeper review of turnover with cross functional support from our finance and operational senior leadership team to
evaluate if there was any revenue generated outside of our core economic activities that would meet the activity description. No eligible
turnover was identified during this review.
In line with last year, with no eligible turnover (numerator) and using a base of our total turnover (denominator) as reported in our
Consolidated Income Statement, we established the proportion of eligible turnover to be zero and consequently alignment is also
deemed to be zero.
146 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Capex and Opex KPI
Explanation on the numerator of the Capex KPI and the Opex KPI
As Glanbia has not identified Taxonomy-eligible economic activities in relation to turnover, we do not record Capex/Opex related to
assets or processes that are associated with Taxonomy-eligible economic activities in the numerator of the Capex KPI and the Opex KPI.
Furthermore, there are no Capex plans to upgrade a Taxonomy-eligible economic activity to become Taxonomy-aligned or to expand a
Taxonomy-aligned economic activity.
Only “category c” Capex and Opex as defined within the Disclosures Delegated Act can therefore qualify as Taxonomy-eligible, i.e.
Capex/Opex related to the purchase of output from Taxonomy-eligible economic activities and individual measures enabling certain
target activities (our non-eligible activities) to become low-carbon or to lead to greenhouse gas reductions (Sect. 1.1.2.2. (c) of Annex I to
the Disclosures Delegated Act).
Capex
Overall based on the review exercise carried out, 6.8% of the Group’s capital expenditure during the year met the eligibility criteria as
defined within the Climate Delegated Act.
• 6.5 Transport by motorbikes, passenger cars and light commercial vehicles and 6.6 freight transport services by road – refer to motor
vehicle additions within Note 15 of the Accounts, Leasing (€1.9m), which accounts for 21% of the eligible Capex spend.
• 7.2 Renovation of existing buildings which accounts for 50% of the eligible capital expenditure identified, amounting to €4.4m, relates
to the business sustaining expenditure on sites and building costs associated with laboratory upgrades, related costs included within
the additions line in Note 14 of the Accounts.
• 7.7 Acquisition and ownership of buildings, which accounts for 29% of the eligible capital expenditure identified, amounting to €2.5m,
relates to the buildings acquired as part of the Sterling Technology acquisition, included within the acquisition line in Note 14 of the
accounts.
In conjunction with our engineering senior leadership team the capital expenditure which was deemed eligible was then assessed
against the technical screening criteria of substantial contribution and do no significant harm. Following this assessment it was
concluded that none of this eligible Capex met the alignment criteria.
Double counting in the allocation in the numerator was avoided across economic activities by only allocating amounts to one activity.
For Glanbia the material capital additions this year relate to a number of key projects to support delivery of our strategy. Within the
‘Property, plant and equipment’, Note 14 of the Accounts, total additions amounted to €33.5m. Outside of the costs noted above, a
number of key capital projects were completed to support production efficiency and related strategy commitments. The significant
additions relate to plant upgrades within the GN facilities, including upgrading elements of sites waste and water processing systems,
and equipment costs associated with expanding our laboratory and operational capabilities. Within the ‘Intangible asset’ in Note 16 of
the Accounts, total additions amounted to €37.0m. This includes costs associated with the development of GPN’s direct-to-consumer
platform, improving reporting capabilities, which included SAP integration projects and capitalised research and development costs
associated with Glanbia’s product development.
While these capital expenditure projects are integral to Glanbia’s commercial strategy and operations as a food manufacturing and
processing business, following evaluation against the Taxonomy criteria this capital expenditure did not meet the activity description as
outlined within the Climate Delegated Act and was therefore deemed non-eligible.
Opex
The analysis of Opex led to the amount analysed being considered insignificant. The ratio of total Opex (as defined by the Taxonomy
(“Taxonomy Opex”)) over ‘total operating costs’ (as noted in Note 5 of the Accounts) is circa. 1%, predominantly consisting of costs
related to the manufacture and sale of nutritional food and ingredient products. Therefore Taxonomy Opex is not a significant expense
in our business model. As a result, the low representativeness of Taxonomy Opex, combined with the fact that the Group’s activities are
not eligible to date, leads the Group to be exempted from the detailed calculation of the Taxonomy Opex KPI. The Taxonomy Opex
denominator is disclosed in the Opex table on page 154 and the calculation of the denominator is set out in the Accounting policy below.
Accounting policy
The specification of the KPIs is determined in accordance with Annex I of the Disclosures Delegated Act. We determine the Taxonomy-
eligible but not environmentally sustainable and the Taxonomy-aligned KPIs in accordance with the legal requirements and describe
our accounting policy in this regard as follows:
Turnover
The denominator used for the turnover KPI is based on the total revenue recognised pursuant to International Accounting Standard (IAS)
1, paragraph 82 (a) as reported in the Consolidated Income Statement on page 162. In determining the KPI for turnover, the proportion
that is Taxonomy-aligned (numerator) and Taxonomy-eligible but not environmentally sustainable (numerator) is each divided by the
denominator.
With regard to the numerator, we have not identified any Taxonomy-eligible activities as already outlined and as a result the numerator
value equals zero for both KPIs (Taxonomy-aligned turnover, Taxonomy-eligible but not environmentally sustainable).
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
147
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Statutory information and Forward-looking statement continued
Refer to Note 2 of the Accounts ‘Summary of significant accounting policies’ on page 169 which outlines the Group’s revenue recognition
policy. Refer to Note 5 of the Accounts ‘Operating profit’ and the ‘Revenue’ line for the denominator value, the denominator includes
total revenue recognised pursuant to International Accounting Standard (IAS) 1, paragraph 82(a).
Capital expenditure
Total Capex consists of additions to tangible and intangible fixed assets during the financial year, before depreciation, amortisation and
any re-measurements, including those resulting from revaluations and impairments, as well as excluding changes in fair value. It
includes additions to fixed assets (IAS 16), intangible assets (IAS 38) and right-of-use assets (IFRS 16). Additions resulting from business
combinations are also included. Goodwill is not included in Total Capex as it is not defined in Annex I of the Disclosures Delegated Act.
In determining the KPI for capex, the proportion that is Taxonomy-aligned (numerator) and Taxonomy-eligible but not environmentally
sustainable (numerator) is each divided by the denominator.
With regard to the numerator, as outlined within the Glanbia activities section, we identified €8.8m of eligible activities relating to
leased motor vehicles, building and renovation costs associated with maintaining plant facilities and investment in laboratory building
facilities, and buildings associated with the Sterling Technology acquisition, none of this capex meet the alignment criteria.
Consequently in relation to Taxonomy-aligned capex KPI, the numerator value is zero. Whereas the Taxonomy-eligible but not
environmentally sustainable capex KPI, numerator value is €8.8m.
Refer to Note 2 of the Accounts ‘Summary of significant accounting policies on pages 172-174, which outlines our property plant and
equipment, leasing and intangible assets accounting policies. Refer to Note 14 ‘Property, plant and equipment’, Note 15 ‘Leasing’ and
Note 16 ‘Intangible assets’ of the Accounts (acquisitions and additions line within the respective notes) for the denominator value. The
Capex denominator consists of all IAS 16, IFRS 16 and IAS 38 additions and acquisitions as described above.
Operating expenditure
Total Opex (denominator) consists of direct non-capitalised costs that relate to research and development, building renovation
measures, short-term lease, maintenance and repair, and any other direct expenditures relating to the day-to-day servicing of assets of
property, plant and equipment. This includes:
• Research and development expenditure recognised as an expense during the reporting period in our income statement. Refer to note
5 of the Accounts ‘Operating profit’, ‘Research and development costs’ amount. In line with our consolidated financial statements
(IAS 38.126), this includes all non-capitalised expenditure that is directly attributable to research or development activities.
• The volume of non-capitalised leases was determined in accordance with IFRS 16 and includes expenses for short-term leases and
low-value leases. Refer to 15 of the Accounts ‘Leasing’. Even though low-value leases are not explicitly mentioned in the Disclosures
Delegated Act, we have interpreted the legislation as to include these leases.
• Maintenance and repair and other direct expenditures relating to the day-to-day servicing of assets of property, plant and
equipment were determined based on the income statement general ledger accounts categorised as repairs and maintenance.
The denominator does not include expenditures relating to the day-to-day operation of property, plant and equipment such as raw
materials, cost of employees operating the machine, electricity or fluids that are necessary to operate the property, plant and
equipment.
Direct costs for training and other human resources adaptation needs are excluded from the denominator and the numerator. This is
because Annex I to the Disclosures Delegated Act lists these costs only for the numerator. In determining the KPI for opex, the proportion
that is Taxonomy-aligned (numerator) and Taxonomy-eligible but not environmentally sustainable (numerator) is each divided by the
denominator.
148 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
149
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Statutory information and Forward-looking statement continued
Proportion of turnover from products or services associated with Taxonomy-aligned economic activities – disclosure covering year
2022.
Absolute
turnover(3)
Proportion
of turnover (4)
Climate
change
mitigation (5)
Climate
change
adaptation (6)
Water and
marine
resources(7)
Circular
economy(8)
Pollution(9)
Biodiversity
and
ecosystems(10)
Climate
change
Climate
change
Water and
marine
Circular
Biodiversity
and
Minimum
mitigation(11)
adaptation(12)
resources(13)
economy(14)
Pollution(15)
ecosystems(16)
safeguards(17)
year N(18)
Category
(enabling
activity)(20)
Category
(transitional
activity)(21)
Taxonomy-
Taxonomy-
aligned
proportion
of turnover,
aligned
proportion
of turnover,
year N-1(19)
Substantial contribution criteria
DNSH criteria (‘Does Not Significantly Harm’)
Economic activities(1)
Code(s)(2)
€’m
%
%
%
%
%
%
%
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Percent
Percent
E
T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. Environmentally
sustainable activities
(Taxonomy-aligned)
Activity 1
Turnover of environmentally
sustainable activities
(Taxonomy-aligned) (A.1)
A.2 Taxonomy-Eligible but not
environmentally sustainable
activities (not Taxonomy-aligned
activities)
Activity 1
Turnover of Taxonomy-eligible but
not environmentally sustainable
activities (not Taxonomy-aligned
activities) (A.2)
Total (A.1 + A.2)
-
-
-
-
-
0%
0%
0%
0%
0%
0%
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
0%
0%
0%
-
-
-
-
n/a
n/a
n/a
n/a
n/a
n/a
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
Turnover of Taxonomy-non-eligible
activities (B)
5,642.4
100%
Total (A + B)
5,642.4
100%
150 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Proportion of turnover from products or services associated with Taxonomy-aligned economic activities – disclosure covering year
2022.
Absolute
turnover(3)
Proportion
Climate
change
Climate
change
Water and
marine
Circular
Biodiversity
and
of turnover (4)
mitigation (5)
adaptation (6)
resources(7)
economy(8)
Pollution(9)
ecosystems(10)
Climate
change
mitigation(11)
Climate
change
adaptation(12)
Water and
marine
resources(13)
Circular
economy(14)
Pollution(15)
Biodiversity
and
ecosystems(16)
Minimum
safeguards(17)
Taxonomy-
aligned
proportion
of turnover,
year N(18)
Taxonomy-
aligned
proportion
of turnover,
year N-1(19)
Category
(enabling
activity)(20)
Category
(transitional
activity)(21)
Substantial contribution criteria
DNSH criteria (‘Does Not Significantly Harm’)
Economic activities(1)
Code(s)(2)
€’m
%
%
%
%
%
%
%
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Percent
Percent
E
T
0%
0%
0%
0%
0%
0%
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. Environmentally
sustainable activities
(Taxonomy-aligned)
Activity 1
Turnover of environmentally
sustainable activities
(Taxonomy-aligned) (A.1)
A.2 Taxonomy-Eligible but not
environmentally sustainable
activities (not Taxonomy-aligned
activities)
Activity 1
Turnover of Taxonomy-eligible but
not environmentally sustainable
activities (not Taxonomy-aligned
activities) (A.2)
Total (A.1 + A.2)
-
-
-
-
-
0%
0%
0%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
Turnover of Taxonomy-non-eligible
5,642.4
100%
activities (B)
Total (A + B)
5,642.4
100%
-
-
-
-
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
151
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Statutory information and Forward-looking statement continued
Proportion of Capex from products or services associated with Taxonomy-aligned economic activities – disclosure covering year 2022.
Absolute
CapEx (3)
Proportion
of CapEx (4)
Climate
change
mitigation (5)
Climate
change
adaptation (6)
Water and
marine
resources(7)
Circular
economy(8)
Pollution(9)
Biodiversity
and
ecosystems(10)
Climate
change
Climate
change
Water and
marine
Circular
Biodiversity
and
Minimum
mitigation(11)
adaptation(12)
resources(13)
economy(14)
Pollution(15)
ecosystems(16)
safeguards(17)
year N(18)
Category
(enabling
activity)(20)
Category
(transitional
activity)(21)
Taxonomy-
Taxonomy-
aligned
proportion
of CapEx,
aligned
proportion
of CapEx,
year N-1(19)
Substantial contribution criteria
DNSH criteria (‘Does Not Significantly Harm’)
Economic activities(1)
Code(s)(2)
€’m
%
%
%
%
%
%
%
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Percent
Percent
E
T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. Environmentally
sustainable activities
(Taxonomy-aligned)
Activity 1
Capex of environmentally
sustainable activities
(Taxonomy-aligned) (A.1)
A.2 Taxonomy-Eligible but not
environmentally sustainable
activities (not Taxonomy-aligned
activities)
-
-
0%
0%
0%
0%
0%
0%
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
Transport by motorbikes, passenger
cars and light commercial vehicles
6.5
0.5
0.4%
Freight transport services by road 6.6
1.4
1.1%
Renovation of existing buildings
7.2
Acquisition and ownership of
buildings
7.7
Capex of Taxonomy-eligible but
not environmentally sustainable
activities (not Taxonomy-aligned
activities) (A.2)
Total (A.1 + A.2)
4.4
2.5
3.4%
1.9%
8.8
6.8%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
Capex of Taxonomy-non-eligible
activities (B)
120.6
93.2%
Total (A + B)
129.4
100%
152 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
-
-
-
-
n/a
n/a
n/a
n/a
n/a
n/a
Proportion of Capex from products or services associated with Taxonomy-aligned economic activities – disclosure covering year 2022.
Absolute
CapEx (3)
Proportion
of CapEx (4)
Climate
change
Climate
change
Water and
marine
Circular
Biodiversity
and
mitigation (5)
adaptation (6)
resources(7)
economy(8)
Pollution(9)
ecosystems(10)
Climate
change
mitigation(11)
Climate
change
adaptation(12)
Water and
marine
resources(13)
Circular
economy(14)
Pollution(15)
Biodiversity
and
ecosystems(16)
Minimum
safeguards(17)
Taxonomy-
aligned
proportion
of CapEx,
year N(18)
Taxonomy-
aligned
proportion
of CapEx,
year N-1(19)
Category
(enabling
activity)(20)
Category
(transitional
activity)(21)
Substantial contribution criteria
DNSH criteria (‘Does Not Significantly Harm’)
Economic activities(1)
Code(s)(2)
€’m
%
%
%
%
%
%
%
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Percent
Percent
E
T
-
-
0%
0%
0%
0%
0%
0%
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. Environmentally
sustainable activities
(Taxonomy-aligned)
Activity 1
Capex of environmentally
sustainable activities
(Taxonomy-aligned) (A.1)
A.2 Taxonomy-Eligible but not
environmentally sustainable
activities (not Taxonomy-aligned
activities)
Transport by motorbikes, passenger
6.5
0.5
0.4%
cars and light commercial vehicles
Freight transport services by road 6.6
1.4
1.1%
Renovation of existing buildings
7.2
Acquisition and ownership of
7.7
buildings
Capex of Taxonomy-eligible but
not environmentally sustainable
activities (not Taxonomy-aligned
activities) (A.2)
Total (A.1 + A.2)
4.4
2.5
3.4%
1.9%
8.8
6.8%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
Capex of Taxonomy-non-eligible
120.6
93.2%
activities (B)
Total (A + B)
129.4
100%
-
-
-
-
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
153
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Statutory information and Forward-looking statement continued
Proportion of Opex from products or services associated with Taxonomy-aligned economic activities – disclosure covering year 2022
Absolute
Opex (3)
Proportion
of Opex (4)
Climate
change
mitigation (5)
Climate
change
adaptation (6)
Water and
marine
resources(7)
Circular
economy(8)
Pollution(9)
Biodiversity
and
ecosystems(10)
Climate
change
Climate
change
Water and
marine
Circular
Biodiversity
and
Minimum
mitigation(11)
adaptation(12)
resources(13)
economy(14)
Pollution(15)
ecosystems(16)
safeguards(17)
year N(18)
Category
(enabling
activity)(20)
Category
(transitional
activity)(21)
Taxonomy–
Taxonomy-
aligned
proportion
of Opex,
aligned
proportion
of Opex,
year N-1(19)
Substantial contribution criteria
DNSH criteria (‘Does Not Significantly Harm’)
Economic activities(1)
Code(s)(2)
€’m
%
%
%
%
%
%
%
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Percent
Percent
E
T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. Environmentally
sustainable activities
(Taxonomy-aligned)
Activity 1
Opex of environmentally
sustainable activities
(Taxonomy-aligned) (A.1)
A.2 Taxonomy-Eligible but not
environmentally sustainable
activities (not Taxonomy-aligned
activities)
Activity 1
Opex of Taxonomy-eligible but not
environmentally sustainable
activities (not Taxonomy-aligned
activities) (A.2)
Total (A.1 + A.2)
-
-
-
-
-
0%
0%
0%
0%
0%
0%
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
0%
0%
0%
-
-
-
-
n/a
n/a
n/a
n/a
n/a
n/a
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
Opex of Taxonomy-non-eligible
activities (B)
53.8
100%
Total (A + B)
53.8
100%
154 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Proportion of Opex from products or services associated with Taxonomy-aligned economic activities – disclosure covering year 2022
Absolute
Opex (3)
Proportion
of Opex (4)
Climate
change
Climate
change
Water and
marine
Circular
Biodiversity
and
mitigation (5)
adaptation (6)
resources(7)
economy(8)
Pollution(9)
ecosystems(10)
Climate
change
mitigation(11)
Climate
change
adaptation(12)
Water and
marine
resources(13)
Circular
economy(14)
Pollution(15)
Biodiversity
and
ecosystems(16)
Minimum
safeguards(17)
Taxonomy–
aligned
proportion
of Opex,
year N(18)
Taxonomy-
aligned
proportion
of Opex,
year N-1(19)
Category
(enabling
activity)(20)
Category
(transitional
activity)(21)
Substantial contribution criteria
DNSH criteria (‘Does Not Significantly Harm’)
Economic activities(1)
Code(s)(2)
€’m
%
%
%
%
%
%
%
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Y/N
Percent
Percent
E
T
0%
0%
0%
0%
0%
0%
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. Environmentally
sustainable activities
(Taxonomy-aligned)
Activity 1
Opex of environmentally
sustainable activities
(Taxonomy-aligned) (A.1)
A.2 Taxonomy-Eligible but not
environmentally sustainable
activities (not Taxonomy-aligned
activities)
Activity 1
Opex of Taxonomy-eligible but not
environmentally sustainable
activities (not Taxonomy-aligned
activities) (A.2)
Total (A.1 + A.2)
-
-
-
-
-
0%
0%
0%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
Opex of Taxonomy-non-eligible
53.8
100%
activities (B)
Total (A + B)
53.8
100%
-
-
-
-
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
155
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Statutory information and Forward-looking statement continued
Location of Taskforce for Climate-related Financial Disclosures (TCFD) aligned disclosures within the
Annual Report
Governance: Disclose the Company’s governance around climate-related risks and opportunities
a) Describe the Board’s oversight of climate-related risks and opportunities
b) Describe management’s role in identifying, assessing and managing
climate-related risks and opportunities
ESG Committee Report
Audit Committee Report
Corporate Governance Report
Group Chairman’s Statement
Within TCFD report
Group Managing
Director’s Review
Risk management
Within TCFD report
See page(s)
110-113
103-109
80-81, 101-102
7
62
9
67-70
62
Strategy: Disclose the actual and potential impacts of climate-related risks and opportunities on
the Company’s business, strategy and financial planning where material
See page(s)
a) Describe the climate-related risks and opportunities that the organisation
has identified over the short, medium and long term
Identifying our material impacts 55
Principal risks and uncertainties 72-73
Within TCFD report
64
b) Describe the impact of climate-related risk and opportunities on the
Company’s business, strategy and financial planning
Within TCFD report
62-65
c) Describe the resilience of the organisation’s strategy considering different
climate-related scenarios, including a two-degree or lower scenario
Within TCFD report
63, 65
Risk management: Disclose how the Company identifies, assesses and manages climate-related risks
and opportunities
See page(s)
a) Describe the Company’s process for identifying and assessing climate-related
risks and opportunities
Risk management
Within TCFD report
67-70
63
b) Describe the Company’s process for managing climate-related risks
and opportunities
c) Describe how these processes are integrated into the overall
risk management programme
67-70
Risk management
Principal risks and uncertainties 72-73
Within TCFD report
63
Risk management
69-70
Principal risks and uncertainties 72-73
Within TCFD report
63
Metrics and targets: Disclose the metrics and targets used to assess and manage climate-related risks
and opportunities
See page(s)
a) Disclose the metrics used by the organisation to assess climate-related risks
and opportunities in line with its strategy and risk management process
Environment section
Within TCFD report
b) Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 greenhouse gas (GHG)
emissions, and the related risks
Environment section
c) Describe the targets used by the organisation to manage climate-related risks
and opportunities and performance against targets
Environment section
Within TCFD Report
56-59
65
56-57
56-59
65
156 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Directors’ Responsibility Statement
The Directors are responsible for preparing the Annual Report and the Group and Company Financial Statements in accordance with
applicable law and regulations. Irish company law requires the Directors to prepare Financial Statements for each financial year. Under
that law the Directors are required to prepare the Group Financial Statements in accordance with International Financial Reporting
Standards (IFRS) as adopted by the European Union and Article 4 of the IAS Regulation and elected to prepare the Company Financial
Statements in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework (FRS 101) as applied in accordance
with the provisions of the Companies Act 2014. Under Irish law the Directors shall not approve the Group and Company Financial
Statements unless they are satisfied that they give a true and fair view of the assets, liabilities and financial position, of the Group and
Company respectively, as at the end of the financial year and of the profit or loss of the Group for the financial year and otherwise
comply with the Companies Act 2014.
In preparing these Group and Company Financial Statements the Directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable and prudent;
• state that the Financial Statements comply with IFRS as adopted by the European Union and ensure the Financial Statements
contain the information required by the Companies Act 2014 and as regards the Company Financial Statements in accordance with
Financial Reporting Standard 101 Reduced Disclosure Framework (FRS 101) as applied in accordance with the provisions of the
Companies Act 2014; and
• prepare the Financial Statements on a going concern basis, unless it is inappropriate to presume that the Group and the Company
will continue in business.
The Directors are also required by the Transparency Directive (Directive 2004/109/EC) Regulations 2007, the Central Bank (Investment
Market Conduct) Rules 2019, the Companies Act 2014, the Listing Rules issued by Euronext Dublin and the Disclosure and Transparency
Rules of the UK Financial Conduct Authority to prepare a Directors’ Report and reports relating to Directors’ remuneration and
corporate governance and the Directors are required to include a management report containing, amongst other things, a fair review of
the development and performance of the Group’s business and of its position and a description of the principal risks and uncertainties
facing the Group.
The Directors are responsible for keeping adequate accounting records that are sufficient to:
• correctly record and explain the transactions of the Company;
• enable, at any time, the assets, liabilities, financial position and profit or loss of the Company to be determined with reasonable
accuracy;
• enable the Directors to ensure that the Group and Company Financial Statements and the Directors’ Report comply with the
Companies Act 2014, and as regards the Group Financial Statements Article 4 of the IAS Regulation; and
• enable the Group and Company Financial Statements to be audited.
The Directors are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for
the prevention and detection of fraud and other irregularities. The Directors are responsible for the maintenance and integrity of certain
corporate and financial information included on the Group’s website (www.glanbia.com). Legislation in Ireland concerning the
preparation and dissemination of Financial Statements may differ from legislation in other jurisdictions.
Each of the Directors, whose names and functions are listed on pages 83-87 (current Directors) confirms that he/she considers that the
Annual Report and Financial Statements, taken as a whole, is fair, balanced and understandable and provides the information
necessary for shareholders to assess the position, performance, business model and strategy of the Company and the undertakings
included in the consolidation taken as whole. Each of the Current Directors also confirms that to the best of each person’s knowledge
and belief:
• the Group Financial Statements prepared in accordance with IFRS as adopted by the European Union and the Company Financial
Statements prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework (FRS 101) and as applied in
accordance with the provision of the Companies Act 2014 give a true and fair view of the assets, liabilities and financial position and
profit or loss of the Company and the undertakings included in the consolidation taken as a whole; and
• the Directors’ Report contained in the Annual Report includes a fair review of the development and performance of the business and
the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the
principal risks and uncertainties that they face.
Directors’ Report
The Directors’ Report for the purpose of the Transparency Directive (Directive 2004/109/EC) Regulations 2007, the Central Bank
(Investment Market Conduct) Rules 2019, the Companies Act 2014, the Listing Rules issued by Euronext Dublin and the Disclosure and
Transparency Rules of the UK Financial Conduct Authority consists of pages 1-157.
On behalf of the Board
Donard Gaynor
Directors
28 February, 2023
Siobhán Talbot
Mark Garvey
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
157
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION 158 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Financial
Statements
Independent auditor’s report
Group income statement
Group statement of comprehensive income
Group balance sheet
Group statement of changes in equity
Group statement of cash flows
Notes to the financial statements
Company Balance Sheet
Company Statement of Changes in Equity
Notes to the Company Financial Statements
160
170
171
172
173
174
175
238
239
240
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
159
GOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATIONSTRATEGIC REPORT Independent auditor’s report to the members of Glanbia plc
Report on the audit of the European Single Electronic Format financial statements
Opinion on the financial statements of Glanbia plc (the ‘Company’)
In our opinion the Group and Company financial statements:
• give a true and fair view of the assets, liabilities and financial position of the Group and Company as at 31 December 2022 and of the
profit of the Group for the financial period then ended; and
• have been properly prepared in accordance with the relevant financial reporting framework and, in particular, with the requirements
of the Companies Act 2014 and, as regards the Group financial statements, Article 4 of the IAS Regulation.
The financial statements we have audited comprise:
The Group financial statements:
• the Group income statement;
• the Group statement of comprehensive income;
• the Group balance sheet;
• the Group statement of changes in equity;
• the Group statement of cash flows; and
• the related notes 1 to 37, including a summary of significant accounting policies as set out in note 2.
The Company financial statements:
• the Company balance sheet;
• the Company statement of changes in equity;
• the related notes 1 to 11, including a summary of significant accounting policies as set out in note 1.
The relevant financial reporting framework that has been applied in the preparation of the Group financial statements is the Companies
Act 2014 and International Financial Reporting Standards (IFRS) as adopted by the European Union (“the relevant financial reporting
framework”).
The relevant financial reporting framework that has been applied in the preparation of the Company financial statements is the
Companies Act 2014 and FRS 101 “Reduced Disclosure Framework” issued by the Financial Reporting Council (“the relevant financial
reporting framework”).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (Ireland) (ISAs (Ireland)) and applicable law. Our
responsibilities under those standards are described below in the “Auditor’s responsibilities for the audit of the financial statements”
section of our report.
We are independent of the Group and Company in accordance with the ethical requirements that are relevant to our audit of the
financial statements in Ireland, including the Ethical Standard issued by the Irish Auditing and Accounting Supervisory Authority
(IAASA), as applied to public interest entities, and we have fulfilled our other ethical responsibilities in accordance with these
requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Summary of our audit approach
Key audit matters
Impairment of goodwill and other intangible assets;
The key audit matters that we identified in the current period were:
•
• Provisions for uncertain tax positions;
• Revenue recognition; and
• Exceptional items.
Materiality
The Group’s materiality in the current period was €12.5m which was determined on the basis of profit before tax
excluding exceptional items.
Scoping
The materiality that we used for the Company was €6.9m which was determined based on net assets.
We focused our Group audit scope primarily on the audit work in 51 components. 6 of these were subject to a full
audit, whilst the remaining 45 were subject to audits of specified balances where the extent of our testing was
based on our assessment of the associated risks of material misstatement, and the materiality of the
component’s operations to the Group.
Significant changes
in our approach
Analytical review procedures were performed by the Group audit team on all other components within the Group.
There have been no significant changes in our audit approach in the current financial period.
160 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate.
Our evaluation of the directors’ assessment of the Group and Company’s ability to continue to adopt the going concern basis of
accounting included:
• We evaluated the design and determined the implementation of the relevant controls in place for the directors’ review of the budgets
and forecasts for at least a period of 12 months from the date of signing of the Annual Report and Financial Statements, including
reviewing their challenge of these;
• We evaluated the Group and Company’s financing arrangements, including the agreements in respect of the undrawn committed
bank facilities in place within the Group;
• We challenged the directors’ assumptions and the basis for their evaluation and the inclusion of sensitivities incorporated in the
budgets and forecasts related to macro-economic factors such as international conflicts, any potential supply-chain disruption,
labour challenges and inflationary pressures on future trading;
• We performed a look back analysis of the historical accuracy of forecasts prepared by management;
• We considered throughout the audit any contradictory information to the directors’ confirmation that the Group and Company is a
going concern, including evaluating whether the assumptions are realistic, achievable and consistent with the external and internal
environment; and
• We evaluated the completeness and accuracy of the disclosures made on pages 70 and 240 by reference to the understanding we
have obtained of the Group’s and Company’s financial performance during 2022, our assessment of the directors’ projections and our
reading of the Group’s and Company’s financing agreements.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the Group and Company’s ability to continue as a going concern for a period of
at least twelve months from when the financial statements are authorised for issue.
In relation to the reporting on how the Group has applied the UK Corporate Governance Code and the Irish Corporate Governance
Annex, we have nothing material to add or draw attention to in relation to the directors’ statement in the financial statements about
whether the directors considered it appropriate to adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
statements of the current financial period and include the most significant assessed risks of material misstatement (whether or not due
to fraud) we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the
audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
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STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Independent auditor’s report to the members of Glanbia plc continued
Impairment of goodwill and other intangible assets
Key audit matter
description
The Group’s goodwill and other intangible assets of €1,452m, which are held across 8 (2021: 10) individual Cash
Generating Units (CGUs), represent approximately 38% of the Group’s total assets at period end.
As a result of the finalisation of the Group’s re-organisation of the Performance Nutrition (“GPN”) business, the
Group has determined, based on the interdependency of cash inflows, that there are 4 (2021: 7) distinct CGUs in
GPN, namely Americas, International, DTC (Body & Fit) and DTC (LevlUp). There has been one acquisition in 2022
within Glanbia Nutritionals (“GN”) which has increased its CGUs from 3 to 4. As a result of these changes the
number of significant CGUs in the Group has decreased from 10 to 8.
In carrying out their impairment review, significant judgement is required by the directors in identifying
indicators of impairment, and estimation is required in determining the recoverable amount of the Group’s
CGUs.
There is a significant fraud risk, pinpointed to 5 CGUs, that the net present value of future cashflows within the
CGUs will not be sufficient to recover the Group’s carrying value of each CGU including goodwill and other
intangible assets including those with indefinite lives, leading to an impairment charge that has not been
recognised in the financial statements.
The recoverable amount used in the impairment assessment is determined based on value in use calculations
which rely on directors’ assumptions and estimates of future trading performance. These assumptions and
estimates may be impacted by new risks and uncertainties arising from international conflicts, and other
macro-economic factors such as supply chain disruption, labour challenges, inflationary and recessionary
pressures, resulting in reduced headroom and potentially impairment in the carrying value of goodwill and other
intangible assets.
Due to the high degree of auditor judgement and increased audit effort, including the need to involve our fair
value specialists, we have identified this as a key audit matter.
The key assumptions utilised by the directors in the impairment reviews are discount rates, cash flow projections
and long-term growth rates. Refer also to page 108 (Audit Committee Report), page 181 (Intangible assets
accounting policy), note 3 (Critical accounting estimates and judgements) and note 16 to the financial
statements.
We evaluated the design and determined the implementation of relevant controls in respect of the impairment
review process and the budgeting process upon which the Group’s discounted cash flow model is based.
In conjunction with our valuation specialists, we evaluated the Group’s impairment review methodology applied
by the directors in preparing the value in use calculations.
How the scope of
our audit responded
to the key audit
matter
We evaluated and challenged the judgements applied in determining the CGUs, particularly in relation to the
transformation project across the GPN segment that resulted in a change to the composition of the CGUs within
GPN.
We performed a retrospective review of assumptions used in prior period value in use calculations and
compared these to actual outturn.
We understood and challenged the underlying key assumptions within the Group’s impairment model, including
assessing for any indicators of management bias, by developing an independent view of the discount rates and
long-term growth rates where, in conjunction with our valuation specialists, we benchmarked the rates used by
the directors against market data and comparable organisations.
We obtained and challenged cash flow projections by comparing them to historic growth rates and the Group’s
strategic plans. We challenged and assessed for any indicators of management bias in the Group’s forecasts
with reference to recent performance and macro-economic factors such as international conflicts, supply chain
disruption, labour challenges, inflationary and recessionary pressures and trend analysis including comparing
recent historic CGU performance to budgets. We evaluated the directors’ sensitivity analysis and performed our
own sensitivity analysis on the key assumptions used.
Where we noted any significant reduction in headroom for a CGU since the prior period, we gained an
understanding of the reasons giving rise to the reduction and performed additional procedures to substantiate
these reasons. We held discussions with the business unit controllers to understand the changes being
implemented at the site level to achieve the targets set in the strategic plans.
We evaluated the completeness and accuracy of the disclosures in relation to goodwill and other intangible
assets for compliance with the relevant financial reporting framework.
162 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Key observations
While we note that specific actions are required by the Group to achieve the forecasts outlined in the Group’s
strategic plans, particularly in light of increasing inflationary pressures, over the short and medium term, we
concurred with management’s conclusions from their annual impairment review, that there was no impairment
of goodwill or indefinite life intangible assets.
Provisions for uncertain tax positions
Key audit matter
description
The Group operates across numerous multinational jurisdictions, the most significant of which are Ireland and
the US, and are subject to periodic challenge by local tax authorities on a range of tax matters during the normal
course of business including transfer pricing, Group financing arrangements and transaction-related tax
matters.
How the scope of
our audit responded
to the key audit
matter
The directors apply significant judgement in assessing current and deferred tax risks and exposures in relation to
the interpretation of local and international tax laws, rates and treaties relating to worldwide provisions for
uncertain tax positions.
As a result, there is a significant risk that tax authorities could have different interpretations to those of the
directors, and that the directors’ judgements are reflective of management bias, resulting in potential
misstatement of tax provisions.
Due to the high degree of auditor judgement and increased audit effort, including the need to involve our tax
specialists, we have identified this as a key audit matter.
Refer also to page 108 (Audit Committee Report), Page 179 (Income taxes accounting policy), note 3 (Critical
accounting estimates and judgements) and notes 11 and 26 to the financial statements.
To obtain evidence over the appropriateness of the directors’ assumptions in determining provisions for
uncertain tax positions, we obtained an understanding of the Group’s tax strategy, tax operating models and
correspondence with various tax authorities during the financial period.
We evaluated the design and determined the implementation of the relevant controls in respect of the tax
computation process and tax risk management process.
We also reviewed the directors’ assessment of related tax risks and exposures across the Group for the
identification of uncertain tax positions.
We engaged our Irish and International tax specialists as part of our audit team, including US tax specialists, to
analyse and challenge the appropriateness of the assumptions made by the directors in determining the current
and deferred tax provisions and any movements in those provisions on an annual basis.
We challenged and evaluated directors’ assumptions and estimates, including any indicators of management
bias within these, including external advice obtained, in respect of tax risks and related provisions. We focused
particularly on the directors’ judgements made in relation to transfer pricing models, interpretations of relevant
tax laws, new and amended Group financing arrangements and the directors’ assessment of likely outcomes for
uncertain tax positions in key jurisdictions where the Group has significant trading operations.
We inspected relevant correspondence between the Group and various tax authorities.
We evaluated the completeness and accuracy of current and deferred tax disclosures for compliance with the
relevant financial reporting framework.
Key observations
We note that there is inherent uncertainty and unpredictability in relation to the above tax matters, however,
based on the audit work performed as outlined above, we have concluded the Directors’ judgement and
measurement of uncertain tax positions to be within an acceptable range of estimates.
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STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Independent auditor’s report to the members of Glanbia plc continued
Revenue recognition
Key audit matter
description
The Group sells products to customers under a variety of contractual terms. The Group’s revenue arrangements
are predominantly straightforward and require little judgement to be exercised. However, in the Performance
Nutrition (GPN) segment, discounts, rebates and other promotional arrangements are a feature and revenue
must be recognised net of these selling arrangements.
At the period end, management estimates the level of discounts, rebates and other promotional arrangements
to be applied to its sales contracts. Judgement is required to determine the level of accruals required to settle
these arrangements with customers post period-end, which impacts the amount of revenue recognised in the
period. We have therefore pinpointed the significant presumed risk of fraud, including management bias, in
revenue recognition to period-end accrued rebates relating to selling arrangements, and the corresponding
debit adjustment to revenue as a risk exists that revenue could be misstated either intentionally to achieve
performance targets, or as a result of error.
Due to the judgements made by management in respect of discounts, rebates and other promotional
arrangements, this required extensive audit effort, therefore we have considered this as a key audit matter.
How the scope
of our audit
responded to the
key audit matter
Refer also to page 108 (Audit Committee Report), and page 177 (Revenue recognition accounting policy).
We obtained an understanding of the various revenue contracts and selling arrangements in place with customers
across all segments of the Group, and of the relevant internal controls and IT systems in place over the revenue
processes to determine if revenue was appropriately recognised to reflect the terms of contracts with customers.
We focused specifically on the GPN segment as these selling arrangements are a significant feature of the GPN
business. We evaluated the design and determined the implementation of relevant controls in respect of
discounts, rebates and promotional arrangements applied to revenue contracts. Operating effectiveness testing
was performed, and controls were relied upon.
We discussed key contractual arrangements with management and obtained relevant documentation,
including documentation in respect of discounts, rebates and other promotional arrangements.
On a sample basis, we recalculated period-end accruals based on underlying contracts with customers and
assessed whether there was any evidence of management bias in key judgements made by management.
We also performed retrospective look-back analysis over changes to prior period estimates to challenge the
assumptions made, including assessing the amounts recorded for evidence of management bias.
Key observations
We have no observations that impact on our audit in respect of the amounts and disclosures related to revenue
recognition.
Exceptional items
Key audit matter
description
As described in note 2 (summary of significant accounting polices) and note 6 (Exceptional items) the Group, in
accordance with its stated accounting policy, classified a number of significant items of income and expense
totalling a gain of €21.4m as exceptional items. These exceptional items primarily relate to impairment of
non-core assets held for sale, portfolio related re-organisation costs, pension related costs, remeasurements of
contingent consideration and call option, exceptional gain from disposal of Glanbia Ireland and the related tax
impact of these exceptional items.
Earnings before interest, tax and amortisation (EBITA) is disclosed throughout the Annual Report and Financial
Statements on a pre-exceptional basis and is one of the Group’s key performance indicators. The classification
of items as exceptional affects adjusted earnings per share and is inherently judgemental. As a result, there is a
risk that items are not consistently classified as exceptional items in line with the Group’s accounting policy, or
are not adequately disclosed.
Because of the significant audit effort and judgement made by the directors in respect of the classification of
exceptional items, we have identified this as a key audit matter.
Refer also to page 108 (Audit Committee Report), and page 177 (Exceptional Items accounting policy).
164 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
How the scope of
our audit responded
to the key audit
matter
We obtained an understanding of the process the directors undertook to identify and present exceptional items
within the Annual Report and Financial Statements. For each of these exceptional items, we audited the
underlying transactions giving rise to the charge or credit recognised.
We challenged the nature and classification of transactions as exceptional items in accordance with the Group’s
accounting policy, whilst also challenging whether the accounting policy for exceptional items is appropriate
and has been applied consistently with previous periods.
We evaluated the completeness and accuracy of the presentation and disclosures of exceptional items in the
Group’s financial statements against requirements under the relevant financial reporting framework.
Key observations
We have no observations that impact on our audit in respect of the amounts and disclosures related to
exceptional items.
Our audit procedures relating to these matters were designed in the context of our audit of the financial statements as a whole, and not
to express an opinion on individual accounts or disclosures. Our opinion on the financial statements is not modified with respect to any
of the risks described above, and we do not express an opinion on these individual matters.
Our application of materiality
We define materiality as the magnitude of misstatement in the financial statements that makes it probable that the economic
decisions of a reasonably knowledgeable person would be changed or influenced. We use materiality both in planning the scope of our
audit work and in evaluating the results of our work.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Group financial statements
Company financial statements
Materiality
€12.5m (2021: €11.5m)
Basis for determining materiality
Rationale for the benchmark applied
5% of profit before tax (“PBT”)
excluding exceptional items
We have considered PBT excluding
exceptional items to be the critical
component for determining materiality
because it is the most important measure
for the users of the Group’s financial
statements and the impact of exceptionals
is excluded to avoid distortion of the critical
component on an annual basis.
€6.9m (2021: €4.6m)
1% of net assets
As a non-trading company, the Company
does not generate significant revenues but
instead incurs costs, thus net assets are of
most relevance to the users of the Company
financial statements.
PBT excluding exceptional items
Group materiality
PBT excluding
exceptional items
€266.8m
Group
Component performance materiality range
€2.5m to €8.0m
Audit Committee reporting threshold
€0.63m
We set performance materiality at a level lower than materiality to reduce the probability that, in aggregate, uncorrected and
undetected misstatements exceed the materiality for the financial statements as a whole.
Performance materiality
€10.0m – 80% of Group materiality
€5.5m – 80% of Company materiality.
Group financial statements
Company financial statements
Basis and rationale for determining
performance materiality
In determining performance materiality, we considered the following factors:
a. Our cumulative knowledge of the Group and Company’s control environment and the
quality of the control environment and our ability to rely on controls; and
b. the nature, volume and size of misstatements (corrected and/or uncorrected) in the
previous audit.
We agreed with the Audit Committee that we would report to the Committee all audit differences in excess of €0.63m (2021: €0.575m),
as well as differences below that threshold that, in our view, warranted reporting on qualitative grounds. We also report to the Audit
Committee on disclosure matters that we identified when assessing the overall presentation of the financial statements.
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STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION
Independent auditor’s report to the members of Glanbia plc continued
An overview of the scope of our audit
We determined the scope of our Group audit by obtaining an understanding of the Group and its environment, including disposals and
acquisitions that occurred during the financial period, Group-wide internal financial controls, and assessing the risks of material
misstatement at the Group level. Based on that assessment, we focused our Group audit scope primarily on the audit work in 51
components. 6 of these were subject to a full audit, whilst the remaining 45 were subject to specified audit procedures where the extent
of our testing was based on our assessment of the associated risks of material misstatement and of the materiality of the component’s
operations to the Group. Analytical review procedures were performed by the Group audit team on all other components within the
Group.
The above components were selected based on the level of coverage achieved on revenue and net assets, the qualitative and risk
considerations of these components and to provide an appropriate basis for undertaking audit work to address the risks of material
misstatement identified. Our audit work for all components was executed at levels of materiality applicable to each individual
component which were lower than Group materiality and ranged from €2.5m to €8.0m.
At the Group level, we also tested the consolidation process and carried out analytical procedures to confirm our conclusion that there
were no significant risks of material misstatement of the aggregated financial information of the remaining components not subject to
a full audit or specified audit procedures.
Revenue % tested
Net Assets % tested
Full audit 18%
Specified audit balances 73%
Analytic procedures 9%
Full audit 43%
Specified audit balances 47%
Analytic procedures 10%
The Group audit team, adopting a hybrid approach, held planning discussions in person and/or virtually with all significant components
during the period and visited a number of locations in the US and Ireland as part of our audit planning.
In addition to our planning meetings, we sent detailed instructions to our component audit teams, included them in our team briefings,
discussed their risk assessment, attended client planning and closing meetings, and, for significant risks and judgemental areas,
reviewed their audit working papers.
The impact of climate change on our audit
In planning our audit, we considered the potential impacts of climate change on the Group and Company’s business and its financial
statements.
The Group has set out in the Strategic Report on pages 56 to 59 its commitment to achieving reductions in Scope 1 and Scope 2
greenhouse gas emissions (GHGs) and also reductions in Scope 3 GHGs by 2030 as well as its commitment to a number of other
shorter-term targets.
As a part of our audit, we have incorporated climate change into our risk assessment, including enquiries of management, to
understand how the impact of these commitments made by the Group in respect of climate change may impact the financial
statements and our audit. There was no impact of this work on our key audit matters.
We have read the disclosures of climate related information in the Annual Report and Financial Statements and considered whether it is
materially consistent with the financial statements and our audit knowledge.
Other information
The other information comprises the information included in the Annual Report and Financial Statements, other than the financial
statements and our auditor’s report thereon. The directors are responsible for the other information contained within the Annual Report
and Financial Statements.
166 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our
report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with
the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such
material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in
the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of directors
As explained more fully in the Directors’ Responsibilities Statement, the directors are responsible for the preparation of the financial
statements and for being satisfied that they give a true and fair view and otherwise comply with the Companies Act 2014, and for such
internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the Group and Company’s ability to continue as a
going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the
directors either intend to liquidate the Group and Company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high
level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (Ireland) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on IAASA’s website at: https://iaasa.ie/
publications/description-of-the-auditors-responsibilities-for-the-audit-of-the-financial-statements/. This description forms part of our
auditor’s report.
Extent to which the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our
procedures are capable of detecting irregularities, including fraud is detailed below.
Identifying and assessing potential risks related to irregularities
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws
and regulations, we considered the following:
• the nature of the industry and sector, control environment and business performance including the design of the Group’s
remuneration policies, key drivers for directors’ remuneration, bonus levels and performance targets;
• results of our enquiries of management, internal audit, legal counsel, Company Secretary and the Audit Committee about their own
identification and assessment of the risks of irregularities;
• any matters we identified having obtained and reviewed the Group’s documentation of their policies and procedures relating to:
– identifying, evaluating and complying with laws and regulations and whether they were aware of any instances of non-
compliance;
– detecting and responding to the risks of fraud and whether they have knowledge of any actual, suspected or alleged fraud;
– the internal controls established to mitigate risks of fraud or non-compliance with laws and regulations;
• the matters discussed among the audit engagement team including significant component audit teams and relevant internal
specialists, including tax, valuations, pensions and IT, regarding how and where fraud might occur in the financial statements and
any potential indicators of fraud.
As a result of these procedures, we considered the opportunities and incentives that may exist within the organisation for fraud and
identified the greatest potential for fraud in the areas of ‘Impairment of goodwill and other intangible assets’, ‘Provisions for uncertain
tax positions’ and ‘Revenue recognition’. In common with all audits under ISAs (Ireland), we are also required to perform specific
procedures to respond to the risk of management override.
We also obtained an understanding of the legal and regulatory frameworks that the Group and Company operates in, focusing on
provisions of those laws and regulations that had a direct effect on the determination of material amounts and disclosures in the financial
statements. The key laws and regulations we considered in this context included the Irish Companies Act, UK Corporate Governance Code,
Irish Corporate Governance Annex, Irish and UK Listing Rules, pensions legislation, and tax legislation in Ireland and the United States.
In addition, we considered provisions of other laws and regulations that do not have a direct effect on the financial statements but
compliance with which may be fundamental to the Group and Company’s ability to operate or to avoid a material penalty. These
included food safety and environmental regulations that the Group operates under.
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Audit response to risks identified
As a result of performing the above, we identified ‘Impairment of goodwill and other intangible assets’, ‘Provisions for uncertain tax
positions’ and ‘Revenue recognition’ as key audit matters related to the potential risk of fraud. The key audit matters section of our
report explains these matters in more detail and also describes the specific procedures we performed in response to those key audit
matters.
In addition to the above, our procedures to respond to risks identified included the following:
• reviewing the financial statement disclosures and testing to supporting documentation to assess compliance with provisions of
relevant laws and regulations described as having a direct effect on the financial statements;
• enquiring of management, the audit committee and in-house and external legal counsel concerning actual and potential litigation
and claims;
• performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material
misstatement due to fraud;
• reading minutes of meetings of those charged with governance, reviewing internal audit reports and reviewing correspondence with
•
relevant tax authorities; and
in addressing the risk of fraud through management override of controls, testing the appropriateness of journal entries and other
adjustments; assessing whether the judgements made in making accounting estimates are indicative of a potential bias; and
evaluating the business rationale of any significant transactions that are unusual or outside the normal course of business.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members including
internal specialists and significant component audit teams, and remained alert to any indications of fraud or non-compliance with laws
and regulations throughout the audit.
Report on other legal and regulatory requirements
Opinion on other matters prescribed by the Companies Act 2014
Based solely on the work undertaken in the course of the audit, we report that:
• We have obtained all the information and explanations which we consider necessary for the purposes of our audit.
•
In our opinion the accounting records of the Company were sufficient to permit the financial statements to be readily and properly
audited.
• The Company balance sheet is in agreement with the accounting records.
•
In our opinion the information given in those parts of the directors’ report as specified for our review is consistent with the financial
statements and the directors’ report has been prepared in accordance with the Companies Act 2014.
Corporate Governance Statement required by the Companies Act 2014
We report, in relation to information given in the Corporate Governance Statement on pages 80 to 102 that:
•
In our opinion, based on the work undertaken during the course of the audit, the information given in the Corporate Governance
Statement pursuant to subsections 2(c) and (d) of section 1373 of the Companies Act 2014 is consistent with the Company’s statutory
financial statements in respect of the financial period concerned and such information has been prepared in accordance with the
Companies Act 2014. Based on our knowledge and understanding of the Company and its environment obtained in the course of the
audit, we have not identified any material misstatements in this information.
In our opinion, based on the work undertaken during the course of the audit, the Corporate Governance Statement contains the
information required by Regulation 6(2) of the European Union (Disclosure of Non-Financial and Diversity Information by certain large
undertakings and Groups) Regulations 2017 (as amended); and
In our opinion, based on the work undertaken during the course of the audit, the information required pursuant to section 1373(2)
(a),(b),(e) and (f) of the Companies Act 2014 is contained in the Corporate Governance Statement.
•
•
Corporate Governance Statement
The Listing Rules and ISAs (Ireland) require us to review the directors’ statement in relation to going concern, longer-term viability and
the part of the Corporate Governance Statement relating to the Group’s compliance with the provisions of the UK Corporate
Governance Code and Irish Corporate Governance Annex specified for our review.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate
Governance Statement is materially consistent with the financial statements and our knowledge obtained during the audit:
• the directors’ statement with regards to the appropriateness of adopting the going concern basis of accounting and any material
uncertainties identified set out on page 70 and page 240;
• the directors’ explanation as to its assessment of the Group’s prospects, the period this assessment covers and why the period is
appropriate set out on pages 70 to 71;
• the directors’ statement on fair, balanced and understandable set out on page 101;
• the board’s confirmation that it has carried out a robust assessment of the emerging and principal risks and the disclosures in the
annual report that describe the principal risks and the procedures in place to identify emerging risks and an explanation of how they
are being managed or mitigated set out on pages 72 to 77;
• the section of the annual report that describes the review of effectiveness of risk management and internal control systems set out
on pages 68 to 71; and
• the section describing the work of the audit committee set out on pages 103 to 109.
168 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Matters on which we are required to report by exception
Based on the knowledge and understanding of the Group and Company and its environment obtained in the course of the audit, we
have not identified material misstatements in those parts of the directors’ report as specified for our review.
The Companies Act 2014 requires us to report to you if, in our opinion, the company has not provided the information required by
Regulation 5(2) to 5(7) of the European Union (Disclosure of Non-Financial and Diversity Information by certain large undertakings and
Groups) Regulations 2017 (as amended) for the financial period ended 31 December 2022. We have nothing to report in this regard.
The Companies Act 2014 also requires us to report to you if, in our opinion, the company has not provided the information required by
Section 1110N in relation to its remuneration report. We have nothing to report in this regard.
We have nothing to report in respect of the provisions in the Companies Act 2014 which require us to report to you if, in our opinion, the
disclosures of directors’ remuneration and transactions specified by law are not made.
The Listing Rules of the Euronext Dublin require us to review six specified elements of disclosures in the report to shareholders by the
Board of Directors’ remuneration committee. We have nothing to report in this regard.
Other matters which we are required to address
We were appointed by Glanbia plc on 27 April 2016 to audit the financial statements for the financial period ended 31 December 2016
and subsequent financial periods. The period of total uninterrupted engagement including previous renewals and reappointments of
the firm is seven years, covering the financial periods from 31 December 2016 to 31 December 2022.
The non-audit services prohibited by IAASA’s Ethical Standard were not provided and we remained independent of the Company in
conducting the audit.
Our audit opinion is consistent with the additional report to the audit committee we are required to provide in accordance with ISA
(Ireland) 260.
Use of our report
This report is made solely to the Company’s members, as a body, in accordance with Section 391 of the Companies Act 2014. Our audit
work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an
auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone
other than the Company and the Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Emer O’Shaughnessy
For and on behalf of Deloitte Ireland LLP
Chartered Accountants and Statutory Audit Firm
Deloitte & Touche House, Earlsfort Terrace, Dublin 2
28 February 2023
Notes: An audit does not provide assurance on the maintenance and integrity of the website, including controls used to achieve this, and in particular on whether any
changes may have occurred to the financial statements since first published. These matters are the responsibility of the directors but no control procedures can
provide absolute assurance in this area. Legislation in Ireland governing the preparation and dissemination of financial statements differs from legislation in other
jurisdictions.
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
169
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Group income statement
for the financial year ended 31 December 2022
Continuing operations
Revenue
Operating profit before intangible asset amortisation
and impairment (earnings before interest, tax and
amortisation (EBITA))
Intangible asset amortisation and impairment
Operating profit
Finance income
Finance costs
Share of results of joint ventures accounted for using the
equity method
Profit before taxation
Income taxes
Profit from continuing operations
Discontinued operations
Profit after tax from discontinued operations
Profit for the year
Attributable to:
Equity holders of the Company
Non-controlling interests
2022
2021
Pre-
exceptional
€’m
Exceptional
€’m
(note 6)
Notes
Pre-
exceptional
€’m
Exceptional
€’m
(note 6)
Total
€’m
Total
€’m
4/5
5,642.4
–
5,642.4
4,196.9
–
4,196.9
5
5
5
10
10
17
11
33
24
347.1
(75.0)
272.1
1.8
(22.5)
15.4
266.8
(31.4)
235.4
–
235.4
(21.9)
(26.5)
(48.4)
7.3
(0.6)
0.2
(41.5)
5.7
(35.8)
325.2
(101.5)
223.7
9.1
(23.1)
15.6
225.3
(25.7)
199.6
270.6
(63.9)
206.7
2.0
(19.5)
19.2
208.4
(24.6)
183.8
57.2
21.4
57.2
256.8
25.7
209.5
(48.4)
–
(48.4)
–
–
(2.0)
(50.4)
7.6
(42.8)
0.7
(42.1)
257.6
(0.8)
256.8
222.2
(63.9)
158.3
2.0
(19.5)
17.2
158.0
(17.0)
141.0
26.4
167.4
167.0
0.4
167.4
48.47
48.30
57.57
57.37
Earnings Per Share from continuing operations attributable to the equity holders of the Company
Basic Earnings Per Share (cent)
72.67
Diluted Earnings Per Share (cent)
71.76
12
12
Earnings Per Share attributable to the equity holders of the Company
Basic Earnings Per Share (cent)
Diluted Earnings Per Share (cent)
12
12
93.42
92.24
170 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Group statement of comprehensive income
for the financial year ended 31 December 2022
Profit for the year
Other comprehensive income
Items that will not be reclassified subsequently to the Group income statement:
Remeasurements on defined benefit plans, net of deferred tax
Revaluation of equity investments at FVOCI, net of deferred tax
Share of other comprehensive income of joint ventures accounted for using the equity
method, net of deferred tax
Share of other comprehensive income of discontinued operations, net of deferred tax
Items that may be reclassified subsequently to the Group income statement:
Currency translation differences
Currency translation difference arising on net investment hedge
Gain on cash flow hedges, net of deferred tax
Share of other comprehensive income of joint ventures accounted for using the equity
method, net of deferred tax
Share of other comprehensive income of discontinued operations, net of deferred tax
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Attributable to:
Equity holders of the Company
Non-controlling interests
Total comprehensive income for the year
Notes
23
17
17
23
23
23(c)
17
17
2022
€’m
256.8
12.1
0.4
0.5
–
79.9
(5.4)
2.6
15.6
–
105.7
362.5
363.3
(0.8)
362.5
2021
€’m
167.4
(0.5)
(0.2)
1.7
4.3
126.7
(6.7)
2.7
6.2
1.1
135.3
302.7
302.3
0.4
302.7
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
171
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Group balance sheet
as at 31 December 2022
ASSETS
Non-current assets
Property, plant and equipment
Right-of-use assets
Intangible assets
Interests in joint ventures
Other financial assets
Loans to joint ventures
Deferred tax assets
Other receivables
Derivative financial instruments
Retirement benefit assets
Current assets
Inventories
Trade and other receivables
Current tax receivable
Derivative financial instruments
Cash and cash equivalents (excluding bank overdrafts)
Assets held for sale
Total assets
EQUITY
Issued capital and reserves attributable to equity holders of the Company
Share capital and share premium
Other reserves
Retained earnings
Non-controlling interests
Total equity
LIABILITIES
Non-current liabilities
Borrowings
Lease liabilities
Other payables
Retirement benefit obligations
Deferred tax liabilities
Provisions
Current liabilities
Trade and other payables
Borrowings
Lease liabilities
Current tax liabilities
Derivative financial instruments
Provisions
Liabilities held for sale
Total liabilities
Total equity and liabilities
On behalf of the Board
Donard Gaynor
Directors
28 February 2023
Siobhán Talbot
Mark Garvey
172 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
31 December
2022
€’m
1 January
2022
€’m
Notes
14
15
16
17
18
35
26
29(a)
8
20
19
29(a)
21
33
22
23
24
25
15
28
8
26
27
28
25
15
29(a)
27
33
478.9
94.4
1,452.1
211.2
2.1
61.5
4.7
0.3
–
3.0
2,308.2
703.7
379.5
12.9
2.9
438.6
1,537.6
14.3
1,551.9
3,860.1
104.1
359.3
1,397.7
1,861.1
7.3
1,868.4
639.8
97.0
–
1.4
129.7
3.8
871.7
774.8
258.2
17.8
50.7
1.0
11.2
1,113.7
6.3
1,120.0
1,991.7
3,860.1
485.2
99.9
1,375.4
184.8
1.9
42.5
4.7
0.8
0.5
2.9
2,198.6
593.6
359.4
8.8
2.2
231.0
1,195.0
234.0
1,429.0
3,627.6
105.0
245.5
1,381.7
1,732.2
8.1
1,740.3
697.2
105.0
32.6
17.1
144.4
3.6
999.9
669.3
136.5
14.5
53.0
1.2
12.9
887.4
–
887.4
1,887.3
3,627.6
Group statement of changes in equity
for the financial year ended 31 December 2022
Balance at 2 January 2022
Profit for the year
Other comprehensive income
Total comprehensive income for the year
Dividends
Purchase of own shares
Cancellation of own shares
Cost of share-based payments
Transfer on exercise, vesting or expiry of share-based
payments
Deferred tax on share-based payments
Sale of shares held by a subsidiary
Remeasurement of put option liability (note 29(b))
Transfer to Group income statement
Attributable to equity holders of the Company
Share capital
and share
premium
€’m
(note 22)
105.0
–
–
–
–
–
(0.9)
–
–
–
–
–
–
Other
reserves
€’m
(note 23)
245.5
–
93.1
93.1
–
(196.9)
174.4
18.8
(1.9)
–
–
24.8
1.5
Retained
earnings
€’m
(note 24)
1,381.7
257.6
12.6
270.2
(84.4)
–
(173.5)
–
1.9
0.5
1.3
–
–
Non-
controlling
interests
€’m
Total
€’m
8.1
1,740.3
(0.8)
–
(0.8)
–
–
–
–
–
–
–
–
–
256.8
105.7
362.5
(84.4)
(196.9)
–
18.8
–
0.5
1.3
24.8
1.5
Total
€’m
1,732.2
257.6
105.7
363.3
(84.4)
(196.9)
–
18.8
–
0.5
1.3
24.8
1.5
Balance at 31 December 2022
104.1
359.3
1,397.7
1,861.1
7.3
1,868.4
Balance at 3 January 2021
105.3
126.0
1,380.5
1,611.8
Profit for the year
Other comprehensive income
Total comprehensive income for the year
Dividends
Purchase of own shares
Issuance of shares
Cancellation of own shares
Cost of share-based payments
Transfer on exercise, vesting or expiry of share-based
payments
Deferred tax on share-based payments
Non-controlling interests on acquisition of subsidiary
Recognition and remeasurement of put option liability
Balance at 1 January 2022
–
–
–
–
–
0.2
(0.5)
–
–
–
–
–
105.0
–
129.8
129.8
–
(94.0)
–
91.8
15.9
0.8
–
–
(24.8)
245.5
167.0
5.5
172.5
(80.5)
–
–
(91.3)
–
(0.8)
1.3
–
–
167.0
135.3
302.3
(80.5)
(94.0)
0.2
–
15.9
–
1.3
–
(24.8)
1,381.7
1,732.2
–
0.4
–
0.4
–
–
–
–
–
–
–
7.7
–
8.1
1,611.8
167.4
135.3
302.7
(80.5)
(94.0)
0.2
–
15.9
–
1.3
7.7
(24.8)
1,740.3
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
173
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Group statement of cash flows
for the financial year ended 31 December 2022
Cash flows from operating activities
Cash generated from operating activities before exceptional items
Cash outflow related to exceptional items
Interest received
Interest paid (including interest expense on lease liabilities)
Tax paid
Net cash inflow from operating activities
Cash flows from investing activities
Payment for acquisition of subsidiaries
Purchase of property, plant and equipment
Purchase of intangible assets
Interest paid in relation to property, plant and equipment
Proceeds from sale of property, plant and equipment
Dividends received from related parties*
Loans advanced to joint ventures
Proceeds on repayment of loans advanced to Glanbia Ireland DAC
Proceeds from disposal/redemption of FVOCI financial assets
Proceeds on sale of shares held by subsidiary
Payments for FVOCI financial assets
Proceeds from disposal of Glanbia Ireland DAC (exceptional)
Cash outflow related to exceptional items
Net cash inflow/(outflow) from investing activities
Cash flows from financing activities
Purchase of own shares
Drawdown of borrowings
Repayment of borrowings
Payment of lease liabilities
Dividends paid to Company shareholders
Proceeds from issue of shares
Net cash outflow from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents acquired on acquisition
Effects of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at the end of the year
Notes
32(a)
16
10
35
35
18
33
33
23
25/32(c)
25/32(c)
32(c)
13/24
22
25/34
21
2022
€’m
393.0
(13.3)
1.5
(23.2)
(59.7)
298.3
(54.9)
(31.9)
(37.0)
–
3.4
14.5
(47.0)
28.8
0.4
1.4
–
307.0
(8.0)
176.7
(196.9)
688.4
(780.8)
(16.5)
(84.4)
–
(390.2)
84.8
94.5
0.9
0.2
180.4
2021
€’m
358.0
(55.9)
2.1
(18.8)
(34.3)
251.1
(95.0)
(49.0)
(28.5)
(0.5)
1.5
33.9
(10.7)
–
1.1
–
(0.1)
–
–
(147.3)
(94.0)
458.5
(383.4)
(19.1)
(80.5)
0.2
(118.3)
(14.5)
91.6
4.4
13.0
94.5
* €12.2 million in 2021 related to discontinued operations and represented the net cash inflow from investing activities from discontinued operations.
174 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Notes to the financial statements
for the financial year ended 31 December 2022
1. General information
Glanbia plc (the “Company”) and its subsidiaries (together the “Group”) is a leading global nutrition group with geographical presence in
regions that include Americas, Europe and Asia Pacific. The Company is a public limited company incorporated and domiciled in Ireland,
the number under which it is registered is 129933. The address of its registered office is Glanbia House, Kilkenny, Ireland, R95 E866.
The Company is the ultimate parent of the Group and its shares are quoted on the Euronext Dublin and London Stock Exchange.
The consolidated financial statements were approved and authorised for issue by the Board of Directors on 28 February 2023.
2. Summary of significant accounting policies
The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies have been
consistently applied to all years presented by the Group and joint ventures unless otherwise stated.
Basis of preparation
The consolidated financial statements have been prepared in accordance with EU adopted International Financial Reporting Standards
(“IFRS”), IFRIC interpretations and those parts of the Companies Act 2014, applicable to companies reporting under IFRS. IFRS as adopted
by the European Union (“EU”) comprise standards and interpretations approved by the International Accounting Standards Board
(“IASB”). The consolidated financial statements comply with Article 4 of the EU IAS Regulation. IFRS adopted by the EU differs in certain
respects from IFRS issued by the IASB. References to IFRS hereafter refer to IFRS adopted by the EU.
The consolidated financial statements have been prepared under the historical cost convention as modified by use of fair values for
certain other financial assets, contingent consideration, put option liability, and derivative financial instruments.
The preparation of the consolidated financial statements in conformity with IFRS requires the use of estimates, judgements and
assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the
reported amounts of revenues and expenses during the reporting period. Although these estimates are based on management’s best
knowledge of the amount, event or actions, actual results ultimately may differ from these estimates. See note 3.
Amounts are stated in euro millions (€’m) unless otherwise stated. These financial statements are prepared for the 52-week period ended
31 December 2022. Comparatives are for the 52-week period ended 1 January 2022. The balance sheets for 2022 and 2021 have been
drawn up as at 31 December 2022 and 1 January 2022 respectively.
The Going Concern Statement on page 70 forms part of the Group financial statements.
Impact of climate related matters
The Group has considered the impact of climate change on the financial statements including the impairment of financial and non-
financial assets, the useful lives of those assets, and provisions, particularly in the context of the potential transition and physical risks
identified and assessed within Taskforce for Climate-related Financial Disclosure (TCFD) report and the associated mitigation plans in
place, refer to pages 62 to 65. The assessment concludes that climate change is not expected to have a significant impact on the
viability of the Group in the current year, and includes the following specific considerations:
• The Group has carried out a climate-related risk and opportunity (CRO) assessment during 2022 to assess the potential impact of
these risks and opportunities for the Group. This assessment did not indicate obsolete production methods, site locations or products,
hence management do not determine any significant impact on the business, including operating or capital expenditure
requirements, at this point in time.
• The impact of transition and physical risks identified and the potential impact on the carrying value of fixed assets and intangible
assets were specifically considered in the context of the estimated time horizon impact and output from the financial quantification
exercise carried out on each of the climate-related risks assessed. The conclusion was that there was no significant impact to the
carrying value of these assets as recorded in the group balance sheet at 31 December 2022.
• The Group considered our environmental commitments, including our carbon emission reduction targets, and the proposed scope 1
and 2 transition plan to 2030 (refer to page 56 for details) and concluded that there was no significant provision requirements related
to these commitments or plans required at 31 December 2022.
Basis of consolidation
Subsidiaries
The consolidated financial statements incorporate the financial statements of the Company and its subsidiaries. Subsidiaries are
entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns
from its involvement with the entity and has the ability to affect those returns through its power over the entity.
Subsidiaries are consolidated from the date on which control is transferred to the Group and are no longer consolidated from the date
that control ceases. Profit or loss and each component of other comprehensive income (“OCI”) are attributed to the equity holders of the
Company and to the non-controlling interests (“NCI”). Inter-company assets and liabilities, equity, income, expenses and cash flows
relating to transactions between members of the Group are eliminated on consolidation.
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
175
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION 2. Summary of significant accounting policies continued
Interests in joint ventures
Interests in joint arrangements are classified as either joint operations or joint ventures depending on the contractual rights and
obligations of each investor. The Group has assessed the nature of its joint arrangements and determined them to be joint ventures.
Interests in joint ventures are accounted for using the equity method of accounting. Under the equity method of accounting, interests in
joint ventures are initially recognised at cost. The Group’s share of joint ventures post acquisition profits or losses after tax are
recognised in the ‘Share of results of joint ventures accounted for using the equity method’ in the Group income statement. The Group’s
share of joint ventures post acquisition movement in reserves is recognised in the Group statement of comprehensive income.
The cumulative post acquisition movements are adjusted against the carrying amount of the investment less any impairment in value. Where
indicators of impairment arise, the carrying amount of the joint venture is tested for impairment by comparing its recoverable amount against
its carrying value.
Unrealised gains arising from transactions with joint ventures are eliminated to the extent of the Group’s interest in the entity. Unrealised
losses are similarly eliminated to the extent that they do not provide evidence of impairment of a transferred asset.
When the Group’s share of losses in a joint venture equals or exceeds its interest in the joint venture, the Group does not recognise
further losses unless the Group has incurred obligations or made payments on behalf of the joint venture.
When the Group ceases to have joint control, any retained interest in the entity is re-measured to its fair value at the date when joint
control is lost with the change in carrying amount recognised in the income statement. This may mean that amounts previously
recognised in other comprehensive income are classified to the Group income statement.
Foreign currency translation
Functional and presentation currency
Items included in the financial statements of each of the Group’s subsidiaries and joint ventures are measured using the currency of the
primary economic environment in which the entity operates (the functional currency). The consolidated financial statements are
presented in euro.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the date of the
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions are recognised in the income
statement, except when deferred in equity as qualifying cash flow hedges or net investment hedges.
Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at the reporting date.
Currency translation differences on monetary assets and liabilities are taken to the income statement, except when deferred in equity in
the currency translation reserve as (i) qualifying cash flow hedges or (ii) exchange gains or losses on long-term intra-group loans and on
net investment hedges.
Subsidiaries and joint ventures
The income statement and balance sheet of subsidiaries and joint ventures that have a functional currency different from the
presentation currency are translated into the presentation currency as follows:
• assets and liabilities at each reporting date are translated at the closing rate at the reporting date of the balance sheet;
•
income and expenses in the income statement and statement of comprehensive income are translated at average exchange rates
for the year when they are a reasonable approximation of the cumulative effect of the rates on transaction dates; and
• all resulting exchange differences are recognised in other comprehensive income.
Resulting exchange differences are taken to a separate currency reserve within equity. When a foreign entity is disposed of outside the
Group, such exchange differences are recognised in the income statement as part of the gain or loss on disposal.
The principal exchange rates used for the translation of results and balance sheets into euro are as follows:
1 euro =
US dollar
Pound sterling
2022
2021
Average
1.0534
0.8527
Year end
1.0666
0.8869
Average
1.1826
0.8596
Year end
1.1326
0.8403
Business combinations
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are denominated in the functional currency of the
foreign entity, recorded at the exchange rate at the date of the transaction and subsequently retranslated at the applicable closing rates.
176 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Notes to the financial statements continued Revenue recognition
The Group manufactures and sells performance nutrition and lifestyle nutrition products, cheese and dairy, and non-dairy nutritional and
functional ingredients. In general, there is one performance obligation relating to the sale of products in a contract with a customer.
Performance obligations are met at the point in time when control of the products has transferred to the customer, which is dependent
on the contractual terms with each customer. In most cases, control transfers to the customer when the products are dispatched or
delivered to the customer. Delivery occurs when the products have been delivered to the specific location. The Group is deemed to be a
principal in an arrangement when it controls the promised goods before transferring them to a customer, and accordingly recognises
revenue on a gross basis.
Rebates and discounts are provided for based on agreements or contracts with customers, agreed promotional arrangements and
accumulated experience using the most likely method. Judgement is exercised by management in the determination of quantum and
likelihood of rebates and discounts based on experience and historical trading patterns. Rebates and discounts are recorded in the
same period as the original revenue.
Generally, payment of the transaction price is due within credit terms that are consistent with industry practices, with no element of
financing. Thus, the Group does not adjust any of the transaction prices for the time value of money as a practical expedient as the
Group does not expect to have any contracts where the period between the transfer of the promised products to the customer and
payment by the customer exceeds one year.
Income statement format
Exceptional items
The Group has adopted an income statement format that seeks to highlight significant items within the Group results for the year. Such
items may include impairment of assets, including significant adjustments arising from the re-assessment of asset lives, adjustments to
contingent consideration, significant acquisition integration costs, restructuring costs including termination benefits, profit or loss on
disposal or termination of operations, significant reorganisation programmes that may span over a reporting period(s), significant
acquisition costs, litigation settlements, legislative changes, gains or losses on defined benefit pension plan restructuring, external
events including disasters relating to weather, pandemics, wars and other acts of God and natural disasters, and profit or loss on
disposal of investments. Judgement is used by the Group in assessing the particular items which by virtue of their scale and/or nature
should be disclosed in the income statement and notes as exceptional items.
Earnings before interest, tax and amortisation
The Group believes that Earnings before interest, tax and amortisation (“EBITA”) is a relevant performance measure and has therefore
disclosed this amount in the Group income statement. EBITA is stated before considering the share of results of joint ventures accounted for
using the equity method.
Segment reporting
The segments reported in note 4 reflect the Group’s organisation structure and the nature of the information reported to the Chief
Operating Decision Maker (“CODM”) who is identified as the Group Operating Executive.
In identifying the Group’s operating segments, management considered the following principal factors:
• the Group’s organisational structure, namely Glanbia Performance Nutrition, Glanbia Nutritionals and joint ventures
• how financial information is reported to the CODM
• existence of managers responsible for the components
• the nature of the component business activities; refer to note 4 for details
• the degree of similarity of products and services, and production processes
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 tax position of the Group. Unallocated assets and liabilities primarily include tax, cash
and cash equivalents, other financial assets, financial liabilities and derivatives. Inter-segment revenue is determined on an arm’s-length
basis. Where a material dependency or concentration on an individual customer would warrant disclosure, this is disclosed in note 4.
Finance income
Finance income is recognised in the income statement as it accrues using the effective interest rate method and includes net gains on
hedging instruments that are recognised in the income statement, and changes in fair value of call options and contingent
consideration.
Finance costs
Finance costs comprise interest payable on borrowings calculated using the effective interest rate method, net losses on hedging
instruments that are recognised in the income statement, facility fees, the unwinding of discounts on provisions, the interest expense
component of lease liabilities, and changes in fair value of call options and contingent consideration.
General and specific finance costs that are directly attributable to the acquisition, construction or production of a qualifying asset are
capitalised during the period of time that is required to complete and prepare the asset for its intended use or sale. Qualifying assets
are assets that necessarily take a substantial period of time to get ready for their intended use or sale. Other finance costs are expensed
in the income statement in the period in which they are incurred.
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Pension obligations
The Group operates various pension plans. The plans are funded through payments to trustee-administered funds. The Group has both
defined contribution and defined benefit plans.
Defined contribution pension
A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. The Group has no
legal or constructive obligation to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits
relating to employee service in the current and prior periods. The contributions are recognised as an employee benefit expense in the
income statement when they are due.
Defined benefit pension obligation
Defined benefit plans define an amount of pension benefit that an employee will receive on retirement, usually dependent on one or
more factors such as age, years of service and compensation.
The liability recognised in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit
obligation at the reporting date less the fair value of the plan assets. The defined benefit obligation is calculated annually by
independent actuaries using the projected unit credit method. The present value of the defined benefit obligation is determined by
discounting the estimated future cash outflows using interest rates of high-quality corporate bonds that are denominated in the
currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension
obligation. The fair value of plan assets is based on market price information and in the case of quoted securities in active markets it is
the published bid price.
Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in the
period in which they occur, directly in other comprehensive income. They are included in retained earnings in the statement of changes
in equity and in the balance sheet. Remeasurements are not reclassified to the income statement in subsequent periods.
A curtailment arises when the Group significantly reduces the number of employees or employee entitlements covered by a plan. A past
service cost may be either a loss (when benefits are introduced or changed so that the present value of the defined benefit obligation
increases) or a gain (when benefits are withdrawn or changed so that the present value of the defined benefit obligation decreases).
A settlement occurs when an entity enters into a transaction that eliminates all further legal or constructive obligation for part or all of
the benefits provided under a defined benefit plan (other than a payment of benefits to, or on behalf of, employees in accordance with
the terms of the plan and included in the actuarial assumptions). The gain or loss on a settlement is the difference between:
(a) the present value of the defined benefit obligation being settled, as determined on the date of settlement; and
(b) the settlement price, including any plan assets transferred and any payments made directly by the entity in connection with the
settlement.
The deferred tax impact of pension plan obligations is disclosed separately within deferred tax assets.
Share-based payments
The Group operates a number of equity settled share-based compensation plans which include share option and share award schemes
which are open to Executive Directors and certain senior managers.
The charge to the income statement in respect of share-based payments is based on the fair value of the equity instruments granted
and is spread over the performance period.
Awards under the 2018 Long-term incentive plan (2018 LTIP)
The fair value of the awards is calculated using discounted cash flows or the Monte Carlo simulation technique where the awards
contain both market and non-market vesting conditions. Where applicable, the market vesting condition is total shareholder return
(“TSR”) and, accordingly, the fair value assigned to the related equity instruments is adjusted so as to reflect the anticipated likelihood
at the grant date of achieving the market-based vesting condition. There are no revisions to the fair value at subsequent reporting dates
for changes in TSR estimates.
Awards under the 2019 Restricted share plan (2019 RSP)
The fair value of the awards is calculated using the discounted cash flow method. The awards typically contain only non-market vesting
and service conditions.
Awards under the Annual incentive deferred into shares scheme (AIDIS)
The fair value of shares awarded is determined in line with the Group’s Annual Incentive Scheme rules and equates with the cash value
of the portion of the annual incentive that will be settled by way of shares. The expense is recognised immediately in the income
statement with a corresponding entry to equity.
178 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Notes to the financial statements continued In respect of 2018 LTIP and 2019 RSP, non-market vesting and service conditions are included in assumptions about the number of
awards that are expected to vest. At each reporting date, the Group revises its estimates of the number of awards that are expected to
vest based on the non-market vesting and service conditions. It recognises the impact of the revision to original estimates, if any, in the
income statement with a corresponding adjustment to equity. The non-market based charge to the income statement is reversed where
awards do not vest because non-market performance conditions have not been met or where, subject to the rules of the scheme, an
employee in receipt of share awards leaves service before the end of the vesting period.
When the awards are exercised, the Company reissues shares from own shares and the fair value of the awards exercised is reclassified
from the share-based payment reserve to retained earnings.
Termination benefits
Termination benefits are payable when employment is terminated by the Group before the normal retirement date or whenever an
employee accepts voluntary redundancy in exchange for these benefits. The Group recognises termination benefits at the earlier of the
following dates: (i) when the Group can no longer withdraw the offer of those benefits; and (ii) when the entity recognises costs for a
restructuring that is within the scope of IAS 37 ‘Provisions, Contingent Liabilities and Contingent Assets’ and involves the payment of
termination benefits.
Income taxes
The tax expense for the period comprises current and deferred tax. Tax is recognised in the income statement except to the extent that
it relates to items recognised in other comprehensive income or directly in equity, in which case the tax is also recognised in other
comprehensive income or directly in equity, respectively.
A provision is recognised for those matters for which the tax determination is uncertain but it is considered probable that there will be a
future outflow of funds to a tax authority. The provisions are measured at the best estimate of the amount expected to become payable.
The assessment is based on the judgement of in-house tax experts, professional firms and previous experience of the Group. Further
detail on estimates and judgements are set out in note 3.
Current tax
Current tax is calculated on the basis of tax laws enacted or substantively enacted at the Group balance sheet date in countries where
the Group operates and generates taxable income, taking into account adjustments relating to prior years.
Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a
net basis, or to realise the asset and settle the liability simultaneously.
Deferred tax
Deferred tax is determined using tax rates and laws enacted or substantively enacted by the reporting date. Deferred tax is provided on a
non-discounted basis, using the balance sheet liability method, providing for temporary differences on the reporting date between the tax
bases of assets and liabilities and their carrying amounts in the financial statements. However, deferred tax is not accounted for if it
arises from initial recognition of an asset or liability in a transaction, other than a business combination, that at the time of the
transaction affects neither accounting nor taxable profit or loss. Deferred tax liabilities are not recognised to the extent they arise from
the initial recognition of goodwill not having full tax basis.
The carrying amount of a deferred tax asset or liability may change for reasons other than a change in the temporary difference itself.
Such changes might arise as a result of a change in tax rates or laws, a reassessment of the recoverability of a deferred tax asset or a
change in the expected manner of recovery of an asset or the expected manner of a settlement of a liability. The impact of these
changes is recognised in the income statement or in other comprehensive income depending on where the original deferred tax balance
was recognised.
Deferred tax is provided on temporary differences arising on investments in subsidiaries and joint ventures except where the timing of the
reversal of the temporary difference can be controlled by the Group and it is probable that the temporary difference will not reverse in
the foreseeable future. Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available
against which the temporary differences can be utilised.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax
liabilities and when they relate to income taxes levied by the same tax authority and the Group intends to settle its current tax assets and
liabilities on a net basis.
Earnings Per Share
Earnings Per Share (“EPS”) represents the profit attributable to owners of the Company divided by the weighted average number of
ordinary shares in issue during the period excluding own shares.
Adjusted EPS is calculated on the net profit attributable to the owners of the Company before exceptional items and intangible asset
amortisation and impairment (excluding software amortisation), net of related tax, divided by the weighted average number of ordinary
shares in issue during the period excluding own shares. Full details on the calculation and reconciliation to IFRS reported numbers are
included in the Glossary section.
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Diluted EPS is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive
potential ordinary shares.
Property, plant and equipment
Cost
Property, plant and equipment (“PP&E”) is stated at cost less accumulated depreciation and impairment losses. Cost includes
expenditure that is directly attributable to the acquisition of the assets. Subsequent costs, for example the costs of major renovation,
are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future
economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably.
The carrying amount of any component accounted for as a separate asset is de-recognised when replaced. All other repairs and
maintenance are charged to the income statement during the reporting period in which they are incurred.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount and are included in the income
statement. Borrowing costs directly attributable to the construction of property, plant and equipment which take a substantial period
of time to get ready for its intended use are capitalised as part of the cost of the assets.
Depreciation
Depreciation is calculated on the straight-line method to write off the cost less residual value of each asset over its estimated useful life
at the following rates:
Land
Buildings
Plant and equipment
Motor vehicles
%
Nil
2.5–5
4–33
20–25
Land and assets under construction are not depreciated. Residual values and useful lives are reviewed and adjusted if appropriate at each
reporting date.
Impairment
Carrying amounts of items of property, plant and equipment are reviewed at each balance sheet date to determine whether there is any
indication of impairment. An impairment loss is recognised whenever the carrying amount of an asset exceeds its recoverable amount.
Impairment losses are recognised in the income statement. Following the recognition of an impairment loss, the depreciation charge
applicable to the asset is adjusted prospectively in order to systematically allocate the revised carrying amount, net of any residual
value over the remaining useful life.
Leases
Right-of-use assets
The Group recognises right-of-use assets (“ROU assets”) at the commencement date of the lease (i.e. the date the underlying asset is
available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted
for any remeasurement of lease liabilities. The cost of right-of-use assets includes the initial amount of lease liabilities recognised, initial
direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. The recognised
right-of-use assets are generally depreciated on a straight-line basis over the shorter of its estimated useful life and the lease term. If the
Group is reasonably certain to exercise a purchase option, the right-of-use asset is depreciated over the underlying asset’s useful life.
Lease liabilities
At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments to be
made over the lease term. The lease payments include fixed payments (including in-substance fixed payments) less any lease incentives
receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value
guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Group
and payments of penalties for terminating a lease, if the lease term reflects the Group exercising the option to terminate. The variable
lease payments that do not depend on an index or a rate are recognised as an expense in the period on which the event or condition
that triggers the payment occurs.
In calculating the present value of lease payments, the Group uses the incremental borrowing rate (“IBR”) at the lease commencement
date if the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is
increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease
liabilities is remeasured if there is a modification, a change in the lease term, a change in the in-substance fixed lease payments or a
change in the assessment to purchase the underlying asset.
For leases of plant and equipment, and motor vehicles for which the Group is a lessee, it has elected not to separate lease and non-lease
components, and instead account for these as a single lease component.
180 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Notes to the financial statements continued Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to its short-term leases i.e. those leases that have a lease term of
12 months or less from the commencement date and do not contain a purchase option. It also applies the lease of low-value assets
recognition exemption to leases of assets that are considered of low value. Lease payments on short-term leases and leases of low-
value assets are recognised as an expense on a straight-line basis over the lease term.
Impairment
Carrying amounts of items of right-of-use assets reviewed at each balance sheet date to determine whether there is any indication of
impairment. An impairment loss is recognised whenever the carrying amount of an asset exceeds its recoverable amount. Impairment
losses are recognised in the income statement.
Intangible assets
Goodwill
Goodwill is initially recognised at cost being the excess of the aggregate of the consideration transferred and the amount of any
non-controlling interest in the acquired entity over the net identifiable assets of the acquired subsidiary or joint venture at the date of
acquisition. Goodwill on acquisition of subsidiaries is included within intangible assets. Goodwill associated with the acquisition of joint
ventures is not recognised separately and included within the interest in joint ventures under the equity method of accounting.
Following initial recognition goodwill is carried at cost less accumulated impairment losses, if applicable. Goodwill impairments are not
reversed. Goodwill is not amortised but is subject to impairment testing on an annual basis and at any time during the year if an indicator
of impairment is considered to exist. The annual goodwill impairment tests are undertaken at a consistent time in each annual period.
Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.
Research and development costs
Research expenditure is recognised as an expense in the income statement as incurred.
Costs incurred on development projects (relating to the design and testing of new or improved products) are recognised as intangible
assets when it is probable that the project will be a success, considering its commercial and technological feasibility and costs can be
measured reliably. Development costs are amortised using the straight-line method over their estimated useful lives. The useful life is
typically three years.
Brands, customer relationships, recipes, know-how and other intangibles
Brands, customer relationships, recipes, know-how and other intangibles acquired as part of a business combination are stated at their
fair value at the date control is achieved.
Indefinite life brands are carried at cost less accumulated impairment losses, if applicable. Indefinite life brands are not amortised on an
annual basis but are tested annually for impairment. Indefinite life intangible assets are those for which there is no foreseeable limit to
their expected useful life. The classification of intangible assets as indefinite is assessed annually.
Definite life brands, customer relationships, recipes, know-how and other intangibles are amortised using the straight-line method over
their useful life as follows:
Brands
Customer relationships
Recipes, know-how and other intangibles
Years
3–40
5–15
2–15
The useful life used to amortise definite life brands, customer relationships, recipes, know-how and other intangibles relates to the
future performance of the assets acquired and management’s judgement of the period over which the economic benefit will be derived
from the assets.
The carrying values of definite life brands, customer relationships, recipes, know-how and other intangibles are reviewed for indicators
of impairment at each reporting date and are subject to impairment testing when events or circumstances indicate that the carrying
values may not be recoverable.
Computer software
Computer software is stated at cost less accumulated amortisation and impairment losses. Costs incurred on the acquisition of
computer software are capitalised, as are costs directly associated with developing computer software programmes for internal use, if
they meet the recognition criteria of IAS 38 ‘Intangible Assets’. Computer software costs recognised as assets are amortised using the
straight-line method over their estimated useful lives, which is normally between five and 10 years.
Impairment of intangible assets
Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment,
or more frequently if events or changes in circumstances indicate that they might be impaired. Other assets are tested for impairment
whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
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For the purposes of impairment testing, assets are grouped at the lowest level for which there are separately identifiable cash inflows
(cash generating units (“CGUs”)). An impairment is recognised in the income statement for the amount by which the carrying value of
the CGU exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and its value in
use. Value in use is determined as the discounted future cash flows of the CGU.
Inventories
Inventories are stated at the lower of cost and net realisable value.
Cost includes all expenditure incurred in the normal course of business in bringing the products to their present location and condition.
Cost is determined by the first-in, first-out (FIFO) method or by weighted average cost. The cost of finished goods and work in progress
comprises raw materials, direct labour, other direct costs and related production overheads (based on normal capacity). Costs of
inventories include the transfer from equity of any gains/losses on qualifying cash flow hedges which relate to purchases of raw
materials.
Net realisable value is the estimated selling price in the ordinary course of business, less all estimated costs of completion and selling
expenses. Allowance is made, where necessary, for aged, slow moving, obsolete and defective inventories.
Trade and other receivables, loans to joint ventures and financial assets at amortised cost
Trade and other receivables, loans to joint ventures and financial assets at amortised cost are classified and measured at amortised cost
as they are held to collect contractual cash flows which comprise solely payments of principal and interest, where applicable. They are
recognised initially at fair value plus transaction costs, except trade receivables that do not contain significant financing components
which are recognised at transaction price. They are subsequently measured at amortised cost using the effective interest method less
expected credit loss allowance.
The Group recognises an allowance for expected credit losses (“ECL”) for financial assets not held at fair value through profit or loss. For
credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECL are provided for credit
losses that result from default events that are possible within the next 12 months. For those credit exposures for which there has been a
significant increase in credit risk since initial recognition or where there has been a credit impaired event, a lifetime expected loss
allowance is recognised, irrespective of the timing of the default.
The Group applies the IFRS 9 simplified approach to measure ECL which uses a lifetime expected loss allowance for all trade receivables.
A loss allowance for the amount of receivables that is subject to credit risk is estimated based on expected credit losses. To measure ECL,
historical loss rates are calculated based on historical credit loss experience. The loss allowance based on historical loss rates is adjusted
where appropriate to reflect current information and forward-looking information on macroeconomic factors, including the trading
environment of countries in which the Group sells its goods, which affect the ability of the debtors to settle the receivables.
The above financial assets are written off when there is no reasonable expectation of recovery such as a debtor failing to engage in a
repayment plan with the Group.
Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and on hand, and deposits held on call with banks. For the purposes of the Group
statement of cash flows, cash and cash equivalents consists of cash and cash equivalents net of bank overdrafts as bank overdrafts are
repayable on demand and they form an integral part of cash management.
Investments in equity instruments
The Group classifies and measures its investments in equity instruments at fair value. Changes in their fair value are recognised in the
income statement unless management has elected to present fair value gains and losses in OCI on an investment by investment basis.
When an election is made for an investment, there is no subsequent reclassification of fair value gains and losses related to the
investment to profit or loss following the derecognition of the investment. Dividends from such investments are recognised in profit or
loss when the Group’s right to receive payments is established.
Derecognition of financial assets
Financial assets are derecognised when the rights to receive cash flows from financial assets have expired or have been transferred and
the Group has transferred substantially all the risks and rewards of ownership. If the Group neither transfers nor retains substantially all
the risks and rewards of ownership and continues to control the transferred asset, the Group recognises its retained interest in the asset
and an associated liability for amounts it may have to pay.
On derecognition of a financial asset measured at amortised cost, the difference between the asset’s carrying amount and the sum of the
consideration received and receivable is recognised in profit or loss.
Borrowings
Borrowings are recognised initially at fair value and subsequently stated at amortised cost.
182 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Notes to the financial statements continued Trade and other payables
Trade and other payables, other than put options over non-controlling interests, are recognised initially at their fair value and
subsequently measured at amortised cost which approximates to fair value given the short-term nature of these liabilities. These
amounts represent liabilities for goods and services provided to the Group prior to, or at the end of the financial year which are unpaid.
The amounts are unsecured and are usually paid within 30–90 days of recognition depending on the terms negotiated with suppliers.
Put option liability over non-controlling interests
A put option that is held by non-controlling interests in a subsidiary is one where the holder of the put option can require the Group to
acquire the non-controlling interests’ shareholding in the subsidiary at a future date. The Group assesses whether the non-controlling
interests continue to have a present ownership interest in the shares subject to the put option. Present ownership interest can be
evidenced by non-controlling interests continuing to have a right to the receipt of dividends, or benefiting from increases in net assets
while holding a voting entitlement to the shares subject to the put option.
If it is considered that the put option holders continue to have a present ownership interest, the Group recognises non-controlling
interests in the subsidiary, including subsequent updates to reflect its share of profit and losses, dividends and other changes. A put option
liability is initially recognised based on an estimate of the fair value of the consideration to acquire the non-controlling interests shares
that are subject to the put option with a corresponding debit to equity. Changes in the estimated fair value of the liability, which is re-
evaluated at each year end, are recognised within equity.
If the non-controlling interests do not have present ownership rights from the put option, the transaction is accounted for as if the Group
had acquired the non-controlling interests at the date of entering into the put option.
Derecognition of financial liabilities
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial
liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially
modified, such an exchange or modification is treated as derecognition of the original liability and recognition of a new liability.
On derecognition of a financial liability, the difference between the carrying amount extinguished and the consideration paid (including
any non-cash assets transferred or liabilities assumed) is recognised in the income statement.
Offsetting
Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to
offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously.
The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in
the event of default, insolvency or bankruptcy of the Group or the counterparty.
Provisions, contingent liabilities and contingent assets
Provisions are recognised on the balance sheet when the Group has a constructive or legal obligation as a result of past events, it is
probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. Provisions are
not recognised for future operating losses. Provisions are measured using management’s best estimate of the present value of the
expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present
value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The
increase in provision due to passage of time is recognised as an interest expense.
Provisions arising on business combinations are only recognised to the extent that they have qualified for recognition in the financial
statements of the acquiree prior to acquisition.
A contingent liability is not recognised but is disclosed where the existence of the obligation will only be confirmed by future events or
where it is not probable that an outflow of resources will be required to settle the obligation or where the amount of the obligation
cannot be measured with reasonable reliability. Contingent assets are not recognised but are disclosed where an inflow of economic
benefits is probable.
Call options over non-controlling interests
If the Group has a call option over the shares held by non-controlling interests in a subsidiary where the Group can require the non-
controlling interests to sell its shareholding in the subsidiary at a future date, the call option is recognised as a derivative asset on its
inception. Changes in the fair value of the derivative asset are recognised in the income statement.
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Derivative financial instruments
Derivatives are initially recorded at fair value and subsequently remeasured at their fair value at the reporting date. Derivative contracts
are recognised on the trade date, other than ‘regular way’ contracts for which settlement date accounting is applied.
The fair value of any foreign currency contracts or any commodities contract is estimated by discounting the difference between the
contractual forward price and the current forward price, using the market interest rate at the measurement date, for a time period
equal to the residual maturity of the contract. The fair value of any interest rate swap is estimated by discounting future cash flows
under the swap, using the market interest rates, at the measurement date, for time periods equal to the residual maturity of the
contracted cash flows.
The method of recognising the resulting gain or loss depends on whether the derivative is designated as a hedging instrument and, if so,
the nature of the item being hedged. Changes in the fair value of any derivative instruments that do not qualify for hedge accounting
are recognised in the income statement. The Group adopts the hedge accounting model in IFRS 9.
The Group designates certain derivatives as either: (i) hedges of the fair value of recognised assets or liabilities or an unrecognised firm
commitment (fair value hedge); or (ii) hedges of a cash flow risk associated with the cash flows of recognised asset or liability or a highly
probable forecast transaction (cash flow hedge).
The Group documents at the inception of the transaction, the relationship between hedging instruments and hedged items, as well as its risk
management objective and strategy for undertaking various hedging transactions. The Group also documents its assessment, both at hedge
inception and half yearly, of whether the derivatives that are used in hedging transactions are effective in offsetting changes in fair values
or cash flows of hedged items.
The fair values of various derivative instruments used for hedging purposes are disclosed in note 29. The full fair value of a hedging
derivative is classified as a non-current asset or liability if the remaining maturity of the hedged item is more than 12 months, and as a
current asset or liability if the remaining maturity of the hedged item is less than 12 months.
Fair value hedge
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recorded in the income statement,
together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.
Cash flow hedge
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in OCI.
The gain or loss relating to the ineffective portion is recognised immediately in the income statement. Where option contracts are used to
hedge forecast transactions, the Group designates only the intrinsic value of the options as the hedging instrument. Gains or losses relating
to the effective portion of the change in intrinsic value of the options are recognised in the hedging reserve within equity. The changes in
the time value of the options that relate to the hedged item are recognised within OCI in the cost of hedging reserve within equity.
Amounts accumulated in equity are recycled in the income statement in the periods when the hedged item affects profit or loss (for
instance when the forecast sale that is hedged takes place). Where the hedged item subsequently results in the recognition of a
non-financial asset (such as inventory), the amounts accumulated in equity are included within the initial cost of the asset. The recycled
gain or loss relating to the effective portion of interest rate swaps hedging variable interest rates on borrowings is recognised in the
income statement within ‘finance costs’. The recycled gain or loss relating to the effective portion of foreign exchange contracts is
recognised in the income statement. The recycled gain or loss relating to the time value and the effective portion of the intrinsic value of
commodity option contracts are included within the initial cost of an asset.
The Group discontinues hedge accounting only when the hedging relationship (or a part thereof) ceases to meet the qualifying criteria
(after rebalancing, if applicable). This includes instances when the hedging instrument expires or is sold, terminated or exercised. The
discontinuation is accounted for prospectively. Any gain or loss recognised in OCI and accumulated in cash flow hedge reserve at that time
remains in equity and is reclassified to the income statement when the forecast transaction occurs. When a forecast transaction is no
longer expected to occur, the gain or loss accumulated in the cash flow hedge reserve is reclassified immediately to the income statement.
Net investment hedge
Net investment hedges, including a hedge of a monetary item that is accounted for as part of the net investment, are accounted for in a
way similar to cash flow hedges. Gains or losses on the hedging instrument (for instance foreign currency borrowings) relating to the
effective portion of the hedge are recognised as OCI while any gains or losses relating to the ineffective portion are recognised in the
income statement. On disposal of the foreign operation, the cumulative value of any such gains or losses recorded in equity is
transferred to the income statement.
184 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Notes to the financial statements continued Financial guarantee contracts
Financial guarantee contracts are recognised as a financial liability at the time the guarantee is issued. The liability is initially measured
at fair value and subsequently at the higher of: the amount determined in accordance with the expected credit loss model under IFRS 9
Financial Instruments; and the amount initially recognised less, where appropriate, the cumulative amount of income recognised in
accordance with the principles of IFRS 15 ‘Revenue from Contracts with Customers’.
The fair value of financial guarantees is determined based on the present value of the difference in cash flows between the contractual
payments required under the debt instrument and the payments that would be required without the guarantee, or the estimated
amount that would be payable to a third party for assuming the obligations.
Share capital
Equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity
as a deduction from the proceeds. Repurchase of the Company’s own equity instruments is recognised and deducted from equity with a
transfer between the own shares reserve and retained earnings when they are cancelled. No gain or loss is recognised in profit or loss on
the purchase, sale, issue or cancellation of the Company’s own equity instruments.
Own shares
Where the Employee Share Trust and/or the Employee Share Scheme Trust (on behalf of the Company) purchases the Company’s equity
share capital, under the 2008 and 2018 Long-term incentive plan, the 2019 Restricted share plan and the Annual incentive deferred into
shares scheme, the consideration paid is deducted from distributable reserves and classified as own shares until they are re-issued.
Where such shares are re-issued, they are re-issued on a first-in, first-out basis and the proceeds on re-issue of own shares are
transferred from own shares to retained earnings.
Dividends
Dividends on ordinary shares to the Company’s shareholders are recognised as a liability of the Company when approved by the
Company’s shareholders. Interim dividends are recognised when paid.
Proposed dividends that are approved after the balance sheet date are not recognised as a liability but are disclosed in the dividends note.
Business combinations
The Group uses the acquisition method of accounting to account for business combinations. The acquisition date is defined as the date the
Group gained control of the entity. The cost of the acquisition is measured at the aggregate of the fair value of the consideration given.
Upon acquisition, the Group assesses the assets acquired and liabilities assumed for appropriate classification and designation in
accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. Identifiable assets
acquired, liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the
acquisition date except for deferred tax assets or liabilities and assets or liabilities related to employee benefit arrangements which are
recognised and measured in accordance with IAS 12 ‘Income Taxes’ and IAS 19 ‘Employee Benefits’ respectively. The fair value of the
assets and liabilities are based on valuations using assumptions deemed by management to be appropriate. Professional valuers are
engaged when it is deemed appropriate to do so.
Goodwill represents the excess of the aggregate of the consideration transferred and the amount of any non-controlling interest in the
acquired entity over the net identifiable assets acquired. If this is less than the fair value of the net assets of the subsidiary acquired, in
the case of a bargain purchase, the difference is recognised directly in the income statement.
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the
Group reports provisional amounts for the items for which the valuation of the fair value of assets acquired and liabilities assumed is still
in progress. Those provisional amounts are adjusted during the measurement period of one year from the date control is achieved when
additional information is obtained about facts and circumstances which would have affected the amounts recognised as of that date.
Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date. Contingent
consideration is classified either as equity or a financial liability. Amounts classified as a financial liability are subsequently remeasured
to fair value, with changes in fair value recognised in the income statement.
Acquisition related costs are expensed as incurred in the income statement.
On an acquisition-by-acquisition basis, the Group recognises any non-controlling interest in the acquiree either at fair value or at the
non-controlling interest’s proportionate share of the acquiree’s net assets.
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
185
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION 2. Summary of significant accounting policies continued
Non-current assets held for sale and discontinued operations
Non-current assets and disposal groups classified as held for sale are measured at the lower of the carrying value and the fair value less
costs to sell.
Non-current assets and disposal groups are classified as held for sale if their carrying amounts will be recovered through a sale
transaction rather than continued use. This condition is regarded as satisfied only when the sale is highly probable and the asset or
disposal group is available for immediate sale in its present condition. Management must be committed to the sale, which should be
expected to qualify for recognition as a completed sale within one year of the date of classification.
When the Group is committed to a sale plan involving disposal of a joint venture, the interest in the joint venture that will be disposed of is
classified as held for sale when the criteria described above are met. The Group then ceases to apply the equity method of accounting in
relation to the portion that is classified as held for sale.
A discontinued operation is a component of the entity that has been disposed of or is classified as held for sale and that represents a
separate major line of business or geographical area of operation, is part of a single coordinated plan to dispose of a separate major
line of business or geographical area of operation, or is a subsidiary acquired exclusively with a view to resale. The results of discontinued
operations are presented separately in the Group income statement. In addition, the comparative Group income statement and Group
statement of comprehensive income are re-presented as if the operation had been discontinued from the start of the comparative year.
Additional disclosures are provided in Note 33. All other notes to the financial statements include amounts for continuing operations,
unless indicated otherwise.
Adoption of amended standards
The following changes to IFRS became effective for the Group during the financial year but did not result in material changes to the
Group’s financial statements:
• Property, Plant and Equipment: Proceeds before Intended Use – Amendments to IAS 16
• Onerous Contracts – Cost of Fulfilling a Contract – Amendments to IAS 37
• Annual Improvements to IFRS Standards 2018–2020
• Reference to the Conceptual Framework – Amendments to IFRS 3
New and amended standards that are not yet effective
The Group has not applied new standards and amendments to existing standards that have been issued but are not yet effective. The
most significant of which are as follows:
Disclosure of Accounting Policies – Amendments to IAS 1 (EU effective date: on or after 1 January 2023)
The IASB amended IAS 1 to require entities to disclose their material rather than their significant accounting policies. The amendments
define what is ‘material accounting policy information’ and explain how to identify when accounting policy information is material. They
further clarify that immaterial accounting policy information does not need to be disclosed. If it is disclosed, it should not obscure
material accounting information. The Group does not expect the adoption of the amendments to have a material impact on the
financial statements.
Classification of Liabilities as Current or Non-current – Amendments to IAS 1 (IASB effective date: on or after 1 January 2024)
The amendments clarify that liabilities are classified as either current or non-current, depending on the rights that exist at the end of
the reporting period. Classification is unaffected by the expectations of the entity or events after the reporting date (e.g. the receipt of a
waiver or a breach of covenant). The amendments also clarify what IAS 1 means when it refers to the ‘settlement’ of a liability. The Group
is currently evaluating the impact of the amendments on future periods.
Other changes to IFRS have been issued but are not yet effective for the Group. However, they are either not expected to have a material
impact on the Group or they are not currently relevant for the Group.
3. Critical accounting judgements and estimates
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of
future events that are believed to be reasonable under the circumstances. The Group makes estimates and assumptions concerning the
future. The resulting accounting estimates may not equal the related actual results. Revisions to estimates are recognised prospectively.
The most significant judgements and key sources of estimation uncertainty identified in the preparation of these financial statements
are set out in this note. With the exception of retirement benefit obligations which are subject to market conditions, it is not expected
that there will be a material adjustment to the carrying value of assets and liabilities of the other outlined areas.
186 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Notes to the financial statements continued Judgements
Exceptional items
The Group considers that items of income or expense which are significant by virtue of their scale and/or nature should be disclosed
separately if the Group financial statements are to fairly present the financial performance and financial position of the Group. Determining
which transactions are to be considered exceptional in nature is often a subjective matter. However, circumstances that the Group believes
would give rise to exceptional items for separate disclosure are outlined in the accounting policy on exceptional items in note 2. Exceptional
items are included on the income statement line item to which they relate. In addition, for clarity, separate disclosure is made of all items in
one column on the face of the Group income statement.
Interests in joint ventures
The Group holds 51% of the share capital of Glanbia Cheese Limited but this entity is considered to be a joint venture as the Group does not have
control of the company as along with its joint venture partner Leprino Foods Company, it has equal representation on the Board of Directors
who directs the relevant activities of the business. Decisions about the relevant activities require unanimous consent of the Group and the joint
venture partner. The Group controls 50% of the voting rights and is entitled to appoint 50% of the total number of Directors to the Board.
Estimates
Retirement benefit obligations
The Group operates a number of defined benefit pension plans both in Ireland and the UK. The rates of contributions payable, the
pension cost and the Group’s total obligation in respect of defined benefit plans is calculated and determined by independent qualified
actuaries and updated at least annually. Refer to note 8 for the amounts associated with the Irish and UK plans.
The size of the obligation and cost of the benefits are sensitive to actuarial assumptions. These include demographic assumptions
covering mortality and longevity, and economic assumptions including price inflation, benefit and salary increases together with the
discount rate used. The Group disclose the UK defined benefit pension plan details separately from the Irish plans to identify the impact
of a change in UK assumptions on the Group’s defined benefit pension plans.
The discount rate is a highly sensitive input to the calculation of scheme liabilities. Sensitivity analysis has been completed to assess the
impact of a change in the discount rate used and other principal actuarial assumptions. Refer to note 8 for the sensitivity analysis.
Impairment reviews of goodwill and indefinite life intangibles
The Group tests annually whether goodwill and indefinite life intangibles have suffered any impairment, in accordance with the
accounting policy stated in note 2. The recoverable amounts of CGUs have been determined based on value in use calculations. These
calculations require the use of estimates.
Goodwill and intangible assets in respect of CGUs within the Glanbia Performance Nutrition and Glanbia Nutritionals operating segments are
tested for impairment using projected cash flows over a three year period. In cases where management have strategic plans beyond three
years these numbers are also used in the projections. Discount rates are based on the Group weighted average cost of capital adjusted for
company risk factors and specific country risk. A terminal value assuming 2% growth into perpetuity is also applied. Refer to note 16 for the
sensitivity analysis on the key assumptions used for calculating value in use of the CGUs.
Additional information in relation to impairment reviews is disclosed in note 16.
Income taxes
The Group is subject to income tax in numerous jurisdictions. Significant estimation is required in determining the worldwide provision
for income taxes. There are many transactions during the ordinary course of business for which the ultimate tax determination is
uncertain and the applicable tax legislation is open to differing interpretations. The Group takes external professional advice to help
minimise this risk. It recognises liabilities for anticipated tax authority reviews based on estimates of whether additional taxes will be
due, having regard to all information available on the tax matter. The Group engages with local tax experts to support the judgements
made where there is significant uncertainty about the position taken.
In determining any liability for amounts expected to be paid to tax authorities, the Group has regard to the tax status of the entities
involved, the external professional advice received, the status of negotiations and correspondence with the relevant tax authorities, the
best estimate of the amount expected to become payable, past practices of the tax authorities and any precedents in the relevant
jurisdiction. Where the final outcome of these tax matters is different from the amounts that were initially recorded, such differences will
impact the income tax and deferred tax provisions in the period in which such determination is made.
Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the unused
tax losses and unused tax credits may be utilised. The Group estimates the most probable amount of future taxable profits using
assumptions consistent with those employed in impairment calculations and taking into consideration applicable tax legislation in the
relevant jurisdiction.
Income taxes and deferred taxes are disclosed in notes 11 and 26 respectively.
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
187
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION 4. Segment information
In accordance with IFRS 8 ‘Operating Segments’, the Group has identified Glanbia Performance Nutrition and Glanbia Nutritionals as
reportable segments as at 31 December 2022. Glanbia Performance Nutrition manufactures and sells sports nutrition and lifestyle
nutrition products through a variety of channels including specialty retail, online, Food, Drug, Mass, Club (FDMC), and gyms in a variety
of formats, including powders, Ready-to-Eat (bars and snacking foods) and Ready-to-Drink beverages. Glanbia Nutritionals
manufactures and sells cheese, dairy and non-dairy nutritional and functional ingredients, and vitamin and mineral premixes targeting
the increased market focus on health and nutrition.
Glanbia Ireland is no longer reported as a segment following its disposal on 1 April 2022 (note 33). In accordance with IFRS 8 Operating
Segments, the prior period pre-exceptional segment results were restated to exclude Glanbia Ireland and the segment assets
associated with Glanbia Ireland are included within “All other segments and unallocated” for the comparative period.
All other segments and unallocated include both the results of joint ventures who manufacture and sell cheese and dairy ingredients and
unallocated corporate costs. These investees did not meet the quantitative thresholds for reportable segments in 2022 or 2021. Amounts
stated for joint ventures represents the Group’s share.
These segments align with the Group’s internal financial reporting system and the way in which the CODM assesses performance and
allocates the Group’s resources. Each segment is reviewed in its totality by the CODM. The CODM assesses the trading performance of
operating segments based on a measure of earnings before interest, tax, amortisation and exceptional items. Given that net finance
costs and income tax are managed on a centralised basis, these items are not allocated between operating segments for the purposes
of the information presented to the CODM and are accordingly omitted from the detailed segmental analysis below.
2022
2021
Glanbia
Performance
Nutrition
€’m
Glanbia
Nutritionals
€’m
All other
segments
and
unallocated
€’m
Glanbia
Performance
Nutrition
€’m
Total
€’m
Glanbia
Nutritionals
€’m
All other
segments
and
unallocated
€’m
1,625.8
(0.1)
4,123.1
(106.4)
1,625.7
4,016.7
182.1
165.0
–
–
–
–
5,748.9
(106.5)
1,303.3
(0.2)
2,955.5
(61.7)
5,642.4
1,303.1
2,893.8
347.1
145.1
125.5
–
–
–
–
Total
€’m
4,258.8
(61.9)
4,196.9
270.6
–
–
–
–
15.4
15.4
–
–
–
–
–
–
19.2
19.2
25.7
25.7
1,818.2
433.1
1,264.3
471.9
777.6
1,086.7
3,860.1
1,991.7
1,741.3
441.4
1,138.9
446.7
747.4
999.2
3,627.6
1,887.3
Segment results (pre-exceptional)
Total gross segment revenue
Inter-segment revenue
Revenue
Operating profit before intangible
asset amortisation and impairment
(EBITA)
Share of results of joint ventures
accounted for using the equity
method
Profit after tax from discontinued
operations
Segment assets and liabilities
Segment assets
Segment liabilities
Other segment information (pre-exceptional)
Depreciation of PP&E and ROU assets
Amortisation of intangible assets
Capital expenditure – additions
Capital expenditure – business
combinations
22.9
53.0
20.3
–
44.6
22.0
44.5
71.1
–
–
16.0
–
67.5
75.0
80.8
71.1
23.4
45.7
54.9
49.7
39.6
18.2
36.5
44.3
(1.4)
–
9.4
61.6
63.9
100.8
–
94.0
Inter-segment transfers or transactions are entered into under the normal commercial terms and conditions that would also be
available to unrelated third parties. Revenue of approximately €1,076.3 million (2021: €736.3 million) and €829.4 million (2021: €543.3
million) is derived from two external customers respectively within the Glanbia Nutritionals segment.
Pre-exceptional segment operating profit before intangible asset amortisation and impairment (EBITA) is reconciled to reported profit
before tax and profit after tax in the Group income statement.
Geographical information
Revenue from external customers, and non-current assets, other than financial instruments, deferred tax assets, and retirement benefit
assets attributable to the country of domicile and all foreign countries of operation for which revenue/non-current assets exceed 10% of
total Group revenue/non-current assets are set out on the following page.
188 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Notes to the financial statements continued Revenue from external customers in the table below and in the disaggregation of revenue by primary geographical markets table below
is allocated to geographical areas based on the place of delivery or collection of the products sold as agreed with customers as
opposed to the end use market where the product may be consumed.
Ireland (country of domicile)
US
Other
– North America (excluding US)
– Europe (excluding Ireland)
– Asia Pacific
– LATAM
– Rest of World
2022
2021
Revenue
€’m
11.0
4,613.4
96.4
432.6
374.5
69.2
45.3
Non-current
assets
€’m
767.3
1,234.3
6.0
218.1
11.2
–
–
Revenue
€’m
7.7
3,390.2
79.9
372.6
265.6
43.9
37.0
Non-current
assets
€’m
713.1
1,201.9
5.2
214.7
11.2
–
–
5,642.4
2,236.9
4,196.9
2,146.1
Disaggregation of revenue
Revenue is disaggregated based on the Group’s internal reporting structures, the primary geographical markets in which the Group
operates, the timing of revenue recognition, and channel mix as set out in the following tables.
Internal reporting structures
Nutritional Solutions
US Cheese
GPN Americas
GPN International (including Direct-to-Consumer)
Primary geographical markets
North America
Europe
Asia Pacific
LATAM
Rest of World
Timing of revenue recognition
Products transferred at point in time
Products transferred over time
Channel mix for Glanbia Performance Nutrition
Distributor
Food, Drug, Mass, Club (FDMC)
Online
Specialty
Glanbia
Performance
Nutrition
€’m
2022
Glanbia
Nutritionals
€’m
Glanbia
Performance
Nutrition
€’m
Total
€’m
2021
Glanbia
Nutritionals
€’m
–
–
1,098.0
527.7
1,625.7
1,100.8
317.8
161.7
13.8
31.6
1,625.7
1,625.7
–
1,625.7
1,126.6
2,890.1
–
–
4,016.7
3,609.0
125.8
212.8
55.4
13.7
4,016.7
1,126.6
2,890.1
1,098.0
527.7
5,642.4
4,709.8
443.6
374.5
69.2
45.3
5,642.4
4,016.7
–
4,016.7
5,642.4
–
5,642.4
–
–
872.3
430.8
877.4
2,016.4
–
–
1,303.1
2,893.8
881.7
265.4
119.5
9.7
26.8
1,303.1
1,303.1
–
1,303.1
2,588.4
114.9
146.1
34.2
10.2
2,893.8
2,893.8
–
2,893.8
2022
€’m
367.0
575.6
482.3
200.8
1,625.7
Total
€’m
877.4
2,016.4
872.3
430.8
4,196.9
3,470.1
380.3
265.6
43.9
37.0
4,196.9
4,196.9
–
4,196.9
2021
€’m
287.7
440.0
398.6
176.8
1,303.1
The disaggregation of revenue by channel mix is most relevant for Glanbia Performance Nutrition.
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
189
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION 5. Operating profit
Revenue
Cost of goods sold
Gross profit
Selling and distribution expenses
Administration expenses
Net impairment losses on financial assets
Operating profit before intangible asset
amortisation and impairment (EBITA)
Intangible asset amortisation and
impairment
Operating profit
Pre-
exceptional
€’m
Notes
2022
Exceptional
€’m
5,642.4
(4,671.3)
971.1
(415.4)
(208.2)
(0.4)
–
(16.6)
(16.6)
(0.1)
(4.7)
(0.5)
Total
€’m
Pre-
exceptional
€’m
5,642.4
(4,687.9)
4,196.9
(3,359.9)
954.5
(415.5)
(212.9)
(0.9)
837.0
(379.7)
(185.9)
(0.8)
2021
Exceptional
€’m
–
(6.4)
(6.4)
(0.3)
(41.7)
–
Total
€’m
4,196.9
(3,366.3)
830.6
(380.0)
(227.6)
(0.8)
347.1
(21.9)
325.2
270.6
(48.4)
222.2
16
(75.0)
272.1
(26.5)
(48.4)
(101.5)
223.7
(63.9)
206.7
–
(48.4)
(63.9)
158.3
Operating profit is stated after (charging)/crediting:
Pre-
exceptional
€’m
Notes
2022
Exceptional
€’m
2021
Total
€’m
Pre-
exceptional
€’m
Exceptional
€’m
Total
€’m
Cost of inventories recognised as an expense
in cost of goods sold
Employee benefit expense
Depreciation of property, plant and
equipment
(Impairment)/reversal of impairment of
property, plant and equipment
(Loss)/profit on disposal of property, plant
and equipment
Depreciation of right-of-use assets
Impairment of right-of-use assets
Amortisation of intangible assets
Impairment of intangible assets
Research and development costs
Lease rentals
Net impairment losses on financial assets
Auditor’s remuneration
Net foreign exchange gain/(loss)
20
7
14
14
32(a)
15
15
16
16
(4,227.2)
(464.5)
(4.2)
(0.4)
(4,231.4)
(464.9)
(2,979.3)
(405.7)
–
(31.5)
(2,979.3)
(437.2)
(48.7)
–
(48.7)
(44.9)
–
(9.5)
(9.5)
(0.4)
(18.8)
–
(75.0)
–
(20.4)
(4.1)
(0.4)
(1.9)
0.2
–
–
(2.6)
–
(26.5)
–
–
(0.5)
–
–
(0.4)
(18.8)
(2.6)
(75.0)
(26.5)
(20.4)
(4.1)
(0.9)
(1.9)
0.2
1.4
0.1
(18.1)
–
(63.9)
–
(18.5)
(2.3)
(0.8)
(1.6)
(1.5)
–
(4.9)
–
–
(0.7)
–
–
–
–
–
–
–
(44.9)
(3.5)
0.1
(18.1)
(0.7)
(63.9)
–
(18.5)
(2.3)
(0.8)
(1.6)
(1.5)
The following table discloses the fees paid or payable to Deloitte Ireland LLP, the Group auditor, and to other statutory audit firms in the
Deloitte network:
Statutory auditor
Other statutory auditor
network firms
The audit of the Group financial statements
Other assurance services
Tax advisory services
Other non-audit services
2022
€’m
1.1
–
–
–
1.1
2021
€’m
0.8
–
–
–
0.8
2022
€’m
0.8
–
–
–
0.8
2021
€’m
0.8
–
–
–
0.8
In addition to the above, Deloitte Ireland LLP and Deloitte network member firms received fees of €0.2 million (2021: €0.3 million) in
respect of the audit of the Group’s joint ventures.
190 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Notes to the financial statements continued 6. Exceptional items
The nature of the total exceptional items is as follows:
Pension related costs
Organisation redesign costs
Portfolio related re-organisation costs
Non-core assets held for sale
Total
Remeasurements of contingent consideration and call option
Share of results of joint ventures accounted for using the equity method
Exceptional tax credit
Total exceptional charge from continuing operations
Exceptional gain after tax from discontinued operations
Total exceptional (gain)/charge after tax for the year
Details of the exceptional items are as follows:
Notes
(a)
(b)
(c)
(d)
(e)
(a)
11
(f)
32(a)
2022
€’m
1.7
–
2.9
43.8
48.4
(6.7)
(0.2)
(5.7)
35.8
(57.2)
(21.4)
2021
€’m
30.3
18.1
–
–
48.4
–
2.0
(7.6)
42.8
(0.7)
42.1
(a) Pension related costs relate to the restructure of legacy defined benefit pension schemes associated with the Group and joint
ventures, which included initiating a process for the ultimate buyout and wind up of these schemes and a further simplification of
schemes that remain. Costs incurred relate to the estimated cost of the settlement loss as a result of acquiring bulk purchase annuity
policies to mirror and offset movements in known liabilities of the schemes (‘buy-in’ transaction), as well as related advisory and
execution costs, net of gains from risk reduction activities. The restructuring effort has progressed well during 2022, effectively
managing the volatile financial market conditions in the UK during 2022, with final wind up of schemes planned for completion
in 2023.
(b) Prior year organisation redesign costs related to a fundamental reorganisation of the GPN segment to drive greater efficiencies,
improve margin and deliver top line growth. The investment phase of this programme is now complete, with no further costs incurred
during the period.
(c) Portfolio related re-organisation costs relate to indirect one off costs as a result of recent and planned portfolio changes. Following
divestment decisions related to non-core businesses, the Group launched a programme to realign Group-wide support functions
and optimise structures of the remaining portfolio, to more efficiently support business operations and growth. This programme will
continue into 2023 with realisation of benefits from 2024 onwards. Costs incurred to date relate to advisory fees and people
related costs.
(d) Non-core assets held for sale relate to fair value adjustments to reduce the carrying value of certain assets to recoverable value. The
assets relate to a small US based bottling facility (Aseptic Solutions) which, following the completion of a strategic portfolio review,
were determined to be non-core and a decision was made to divest the business, resulting in the designation as held-for-sale at year
end. Discussions are ongoing and a sale is expected to conclude by the end of H1, 2023.
(e) Remeasurements of contingent consideration and call option relate to contingent payments and call option associated with the
2021 LevlUp acquisition that have now reduced following an assessment of conditions that give rise to the additional payments.
(f) Exceptional gain after tax from discontinued operations relates to the gain arising on the divestment of the Group’s interest in
Glanbia Ireland, following its classification as a discontinued operation in 2021. The 2021 gain includes one off gains on the settlement
of forward contracts, net of one off reorganisation costs within this joint venture.
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
191
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION 7. Employment
The aggregate payroll costs of employees (including Executive Directors) in the Group were:
Wages and salaries
Social security costs
Pension costs – defined contribution plans
Pension costs – defined benefit plans
Other compensation costs
– Private health insurance
– Cost of share-based payments
– Company car allowance
Notes
8
8
9
2022
€’m
384.1
33.5
13.0
2.2
27.5
18.8
2.2
481.3
2021
€’m
341.1
28.6
11.6
30.8
21.8
15.9
2.1
451.9
Included within the aggregate payroll costs are exceptional items of €0.4 million (2021: €31.5 million) which include redundancy costs of
nil (2021: €1.9 million). Capitalised labour costs of €16.4 million (2021: €14.7 million) are included within the aggregate payroll costs while
the remaining post-exceptional cost of €464.9 million (2021: €437.2 million) are recognised as an expense (note 5).
The Directors’ remuneration information is shown on tables A to G on pages 137 to 140 in the Remuneration Committee Report.
The average number of employees, excluding the Group’s joint ventures, is analysed into the following reportable segments:
Glanbia Performance Nutrition
Glanbia Nutritionals
2022
1,996
3,010
5,006
2021
2,032
2,685
4,717
192 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Notes to the financial statements continued 8. Retirement benefit obligations
Defined contribution pension plans
The Group has a number of defined contribution pension plans in operation. €13.0 million (2021: €11.6 million) was recognised in the Group
income statement during the year (note 7).
Defined benefit pension plans
Recognition in the Group balance sheet:
Non-current assets – Surplus on defined benefit pension plan
Non-current liabilities – Deficit on defined benefit pension plan
Net defined benefit pension plans asset/(liability)
2022
€’m
3.0
(1.4)
1.6
2021
€’m
2.9
(17.1)
(14.2)
The Group operates two defined benefit pension plans in the Republic of Ireland (“Ireland”) and two defined benefit pension plans in the
United Kingdom (“UK”). The defined benefit pension plans in Ireland and the UK are administered by independent Boards of Trustees through
separate trustee controlled funds. These Boards are responsible for the management and governance of the pension plans including
compliance with all relevant laws and regulations. Each of the Group’s defined benefit pension plans operate under their respective
regulatory frameworks and minimum funding requirements in Ireland and the statutory funding objective in the UK. The UK pension plans
comprise solely of pensioners and deferred pensioners.
The defined benefit pension plans provide retirement and death benefits for the Group’s employees. The majority of the defined benefit
pension plans are career average pension plans, which provide benefits to members in the form of a guaranteed level of pension payable
for life. The level of benefits provided depends on members’ length of service and their average salary over their period of employment.
The contributions paid to the defined benefit pension plans are in accordance with the schedule of contributions agreed between the
Group and the Trustees of the relevant plans as recommended in the actuarial valuation reports or in subsequent actuarial advice. The
contributions are partly funded by the employees, where they are required to contribute a fixed percentage of pensionable salary, and
partly by the Group. The latest actuarial valuation reports for these plans, which are not available for public inspection, are dated
between 30 June 2018 and 1 January 2022.
In the prior year, the Trustee Boards of the UK pension plans completed a buy-in transaction whereby the assets of the plans were
invested in a bulk purchase annuity policy with a UK pension insurance specialist.
It is the intention of the Trustee Boards that the plans will move to a full buy-out as soon as practical, following which the insurance
company will become responsible for the UK pension plan obligations. On completion of the buy-out, the defined benefit assets
(comprising the annuity policy) and matching defined benefit obligations will be derecognised from the Group balance sheet.
The majority of the net UK pension liabilities at the end of the reporting period relates primarily to Guaranteed Minimum Pension
equalisation (“GMPe”) of the other UK pension plan. These GMPe liabilities will require an additional contribution from the Group prior to
the completion of the buy-out as described above and will result in the recognition of a charge/gain in the income statement. During 2022
there was an additional contribution from the Group of €1.8 million in respect of these GMPe liabilities for one of the UK pension plans
which resulted in a charge to the income statement of €0.2 million.
Additionally in the prior year, the Trustee Boards of the Irish pension plans undertook and concluded an enhanced transfer value exercise
with an associated €10.7 million of scheme payment and €1.5 million of contribution to fund the enhanced transfer values.
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
193
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION 8. Retirement benefit obligations continued
The amounts recognised in the Group balance sheet and the movements in the net defined benefit obligations over the year are as
follows:
2022
At the beginning of the year
Current service cost
Interest (expense)/income
Settlement loss*
Recognised in profit or loss
Remeasurements
– Return of plan assets in excess of interest income
– Loss from experience adjustments
– Gain from changes in financial assumptions
Effect of irrecoverable plan surplus
Recognised in OCI
Exchange differences
Contributions paid by the employer
Contributions paid by the employee
Benefits paid
Present value of obligation
Fair value of plan assets
ROI
€’m
UK
€’m
Total
€’m
(128.2)
(133.3)
(261.5)
(1.8)
(1.4)
–
(3.2)
–
(0.1)
39.2
–
39.1
–
–
(0.3)
4.1
–
(2.4)
–
(2.4)
–
(4.5)
45.5
–
41.0
6.9
–
–
7.3
(1.8)
(3.8)
–
(5.6)
–
(4.6)
84.7
–
80.1
6.9
–
(0.3)
11.4
ROI
€’m
118.7
–
1.3
–
1.3
(25.2)
–
–
(1.7)
(26.9)
–
2.1
0.3
(4.1)
UK
€’m
128.6
–
2.3
(0.2)
2.1
(39.7)
–
–
–
(39.7)
(6.7)
2.2
–
(7.3)
Total
€’m
247.3
–
3.6
(0.2)
3.4
(64.9)
–
–
(1.7)
(66.6)
(6.7)
4.3
0.3
(11.4)
At the end of the year
(88.5)
(80.5)
(169.0)
91.4
79.2
170.6
Net
(liability)/
asset
€’m
(14.2)
(1.8)
(0.2)
(0.2)
(2.2)
(64.9)
(4.6)
84.7
(1.7)
13.5
0.2
4.3
–
–
1.6
2021
At the beginning of the year
(146.3)
(112.4)
(258.7)
125.1
104.3
229.4
(29.3)
Current service cost
Interest (expense)/income
Settlement gain/(loss)*
Recognised in profit or loss
Remeasurements
– Return of plan assets in excess of interest income
– Loss from experience adjustments
– Loss from changes in demographic assumptions
– Gain/(loss) from changes in financial assumptions
Recognised in OCI
Exchange differences
Contributions paid by the employer
Contributions paid by the employee
Benefits paid
Net assets attributed to the Group**
(1.9)
(1.0)
2.9
–
–
(1.5)
(0.7)
3.7
1.5
–
–
(0.3)
16.9
–
–
(2.1)
–
(2.1)
–
(0.2)
–
(3.2)
(3.4)
(8.4)
–
–
5.1
(12.1)
(1.9)
(3.1)
2.9
(2.1)
–
(1.7)
(0.7)
0.5
(1.9)
(8.4)
–
(0.3)
22.0
(12.1)
At the end of the year
(128.2)
(133.3)
(261.5)
–
0.9
–
0.9
2.9
–
–
–
2.9
–
6.4
0.3
(16.9)
–
118.7
–
2.1
(31.7)
(29.6)
(1.0)
–
–
–
(1.0)
8.0
39.8
–
(5.1)
12.2
128.6
–
3.0
(31.7)
(28.7)
1.9
–
–
–
1.9
8.0
46.2
0.3
(22.0)
12.2
247.3
(1.9)
(0.1)
(28.8)
(30.8)
1.9
(1.7)
(0.7)
0.5
–
(0.4)
46.2
–
–
0.1
(14.2)
Included in pension related costs (note 6).
*
** Prior to the buy-in transaction, Glanbia Cheese Limited, a joint venture of the Group, and the Group were employers of the UK pension plans. As part of the buy-in
transaction, liabilities and assets of Glanbia Cheese Limited related to the pension plans were attributed to the Group.
The net (liability)/asset disclosed above relates to funded plans.
194 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Notes to the financial statements continued During the current financial year the Group recognised an amount of the total surplus on one of the plans based on the economic
benefits that the Group could gain from a reduction in future contributions.
The fair value of plan assets at the end of the reporting period are as follows:
2022
Quoted
€’m
Unquoted
€’m
Total
€’m
Equities
– Consumer
– Financials
– Information technology
– Other
Corporate bonds
– Investment grade
Government bonds and gilts
Property
Cash
Investment funds
Insured assets
Other
2.9
2.4
1.9
7.5
7.3
45.3
−
1.4
7.9
−
2.5
79.1
−
−
−
−
−
−
2.3
0.5
−
78.7
10.0
91.5
2.9
2.4
1.9
7.5
7.3
45.3
2.3
1.9
7.9
78.7
12.5
%
2
1
1
4
4
27
1
1
5
46
8
2021
Quoted
€’m
Unquoted
€’m
Total
€’m
6.0
5.1
5.0
13.5
9.4
44.5
−
3.2
14.4
−
2.5
−
−
−
−
−
−
2.2
1.0
−
127.3
13.2
143.7
6.0
5.1
5.0
13.5
9.4
44.5
2.2
4.2
14.4
127.3
15.7
247.3
%
3
2
2
5
4
18
1
2
6
51
6
100
170.6
100
103.6
The plan assets at the end of the reporting period do not include any equities held in the Group, nor does the Group use or occupy any of
the plan assets.
Principal risks in the defined benefit pension plans
The principal risks associated with the bulk of the UK pension plans are mitigated by the bulk annuity policy. Accordingly the Group is
exposed to a number of risks on the Irish pension plans and the residual GMPe component of the UK pension plan(s). The most
significant of those risks are detailed below:
Investment risk
The pension liabilities are discounted using market yields on high-quality corporate bonds. If the return on plan assets is below this rate,
it will create a plan deficit. Currently, the pension plans hold investments in primarily insured assets and government bonds and gilts.
The Trustees conduct investment reviews to take advice on asset allocation, taking into account asset valuations, liability durations,
funding measurements and an achievement of an appropriate return on assets.
Interest rate risk
A decrease in corporate bond yields will increase plan liabilities, although this will be partially offset by an increase in the value of the
plans’ bond holdings. A change in the net defined benefit obligation as a result of changes in the discount rate leads to volatility in the
Group balance sheet, Group income statement and Group statement of comprehensive income. It also impacts the funding
requirements for the plans.
Inflation risk
A significant proportion of the benefits under the plans are linked to inflation, be it consumer price inflation or retail price inflation, which
in most cases are subject to a cap on annual increases. Although there are caps in force on inflation increases and the plans’ assets are
expected to provide a good hedge against inflation over the long term, higher inflation will lead to higher liabilities.
Longevity risk
The present value of the defined benefit obligation is calculated by reference to the best estimate of the life expectancy of plan
participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the defined
benefit obligation.
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
195
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION 8. Retirement benefit obligations continued
Principal assumptions used in the defined benefit pension plans
The principal assumptions used for the purposes of the actuarial valuations were as follows:
Discount rate
Inflation rate
Future salary increases*
Future pension increases
Mortality rates (years)
– Male – reaching 65 years of age in 20 years’ time
– Female – reaching 65 years of age in 20 years’ time
– Male – currently aged 65 years old
– Female – currently aged 65 years old
2022
ROI
UK
5.00%
3.70%
2.50% 2.65%–3.30%
0.00%
3.50%
0.00% 2.65%–3.15%
24.2
26.3
21.9
24.3
22.2
24.5
21.2
23.3
2021
ROI
UK
1.90%
1.10%
2.10% 2.80%–3.40%
3.10%
0.00%
0.00% 2.75%–3.25%
24.1
26.2
21.8
24.2
22.1
24.5
21.1
23.2
* The ROI defined benefit pension plans are on a career average structure therefore this assumption does not have a material impact. The UK defined benefit
pension plans comprise solely pensioners and deferred pensioners.
Assumptions regarding future mortality experience are set based on actuarial advice in accordance with published statistics and
experience in each territory.
Sensitivity analysis for principal assumptions used to measure plan liabilities
There are inherent uncertainties surrounding the financial assumptions adopted in calculating the actuarial valuation of the Group’s
defined benefit pension plans. The following table analyses, for the Group’s pension plans, the estimated impact on the plan liabilities
resulting from changes to key actuarial assumptions, with all other assumptions remaining constant.
The sensitivity analysis may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change
in the assumptions would occur in isolation of one another as some of the assumptions may be correlated. The impact on the plan
liabilities has been calculated using the projected unit credit method, which is the same as that applied in calculating the defined
benefit obligation recognised in the Group balance sheet.
There have been no changes from the previous year in the methods used in preparing the sensitivity analysis. A 0.50% movement in the
discount and inflation rate has been assumed for the current year to reflect the increased volatility in the markets at the end of 2022.
Assumption
Change in assumption
ROI
UK
Increase
€’m
Decrease
€’m
Increase
€’m
Decrease
€’m
2022
Discount rate
Inflation rate
Mortality rate
Future salary increases*
Future pension increases**
2021
Discount rate
Inflation rate
Mortality rate
Future salary increases*
Future pension increases**
0.50% movement
0.50% movement
1 year movement
0.25% movement
0.25% movement
1 year movement
Expected contributions to the defined benefit plans for the coming year (€’m)
Weighted average duration of the defined benefit plans (years)***
(5.3)
1.3
2.3
(5.3)
1.5
4.2
5.8
(1.2)
(2.3)
5.5
(1.5)
(4.2)
(1.7)
1.2
1.2
(4.8)
3.8
6.3
2022
ROI
3.2
14
UK
−
12
2021
ROI
2.1
17
1.8
(1.3)
(1.3)
5.1
(3.7)
(6.4)
UK
–
15
* The majority of the defined benefit plans are career average plans. As a result, future salary increases will not have a material impact on the plan liabilities.
** There are no future pension increases agreed in the material defined benefit pension plans.
*** The reduction in the weighted average duration is primarily due to an increase in the discount rates used for the purposes of the actuarial valuations.
196 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Notes to the financial statements continued 9. Share-based payment expense
The Group operates various equity settled share-based payment arrangements which are described in this note. Further details of the
plans are available in the Remuneration Committee Report on pages 120 to 140.
The total cost recognised in the Group income statement is analysed as follows:
The 2018 Long-term incentive plan (2018 LTIP)
The 2019 Restricted Share Plan (2019 RSP)
The annual incentive deferred into shares scheme (AIDIS)
Notes
7/32(a)
2022
€’m
13.7
1.5
3.6
18.8
2021
€’m
10.5
2.8
2.6
15.9
2018 LTIP
For awards granted from 2022 to participants other than the Executive Directors and members of the Group Operating Executive
(“GOE”), 50% of the awards vest over a three year period based on the vesting conditions as described below. The remaining 50% vest
annually and evenly over three consecutive years following the grant based on service condition and personal objectives. For awards
granted to Executive Directors and members of the GOE, and previously granted awards, the awards vest over a three-year period
based on vesting conditions as detailed below.
The extent of vesting for awards granted from 2022 is determined based on a combination of performance metrices that comprised of
Group adjusted Earnings Per Share (“EPS”), Group Return on Capital Employed (“ROCE”), Environmental, Social and Governance (“ESG”),
and a service condition. For previously granted awards, the extent of vesting for awards is determined based on Group adjusted EPS,
Group ROCE, relative Total Shareholder Return (“TSR”) performance against the STOXX Europe 600 Food & Beverage index, business
segment EBITA and ROCE where applicable, a service condition, personal objectives, and ESG for the 2021 share awards where
applicable.
Vesting is determined on a straight line basis between threshold and maximum. There is a requirement to hold shares received pursuant
to the vesting of LTIP awards for a minimum period of two years post-vesting for members of the GOE (and one year otherwise for
awards granted before 2022).
The maximum annual award level is 150% (2021: 250%) of base salary. Awards lapse/expire by the fourth anniversary of the date of
a grant.
2019 RSP
This scheme was introduced in 2019 to provide share awards to certain employees. The maximum award level is 150% (2021: 250%) of
base salary. The extent of vesting for awards outstanding is generally determined based on a service condition and personal objectives.
AIDIS
This scheme is an annual performance related incentive scheme for Executive Directors and members of the GOE. The fair value of AIDIS
was calculated as €3.6 million in 2022 (2021: €2.6 million) and equates to the cash value of the portion of the annual incentive that will be
settled by way of shares. The number of shares received is determined by the share price on the date of vest.
Effective 2022, the Executive Directors and members of the GOE are required to hold 60% of the shares received (net of any applicable
taxes and social security) for a period of two years and three years for the balance post vesting (2021: two years for 100% of the shares
received).
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
197
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION 9. Share-based payment expense continued
Details of awards granted under 2018 LTIP and 2019 RSP are as follows:
At the beginning of the year
Granted
Vested
Lapsed
At the end of the year
Weighted average fair value of awards granted
2022
2021
2018 LTIP
4,033,767
1,703,218
(315,578)
(825,748)
4,595,659
€11.12
2019 RSP
371,834
179,868
(195,122)
(76,590)
279,990
€11.36
2018 LTIP
3,522,382
1,649,825
(296,153)
(842,287)
4,033,767
€10.94
2019 RSP
503,072
104,818
(187,025)
(49,031)
371,834
€13.29
The assumptions used in the valuation of the awards granted under 2018 LTIP and 2019 RSP included:
Year of earliest vesting date
Share price at date of award
Risk-free interest rate
Expected volatility*
Expected dividend yield
Fair value – TSR component
Fair value – non-market performance component
2022 awards
2021 awards
2018 LTIP
2019 RSP
2018 LTIP
2019 RSP
2023
€11.82
–
–
2.25%
–
€11.12
2023–2024
€10.45-€12.52
–
–
2.62%–2.63%
–
–
2024
€11.57
(0.73%)
37.5%
1.1%
€7.68
€11.19
2022–2023
€11.57–€14.90
–
–
2.12%–2.30%
–
–
* Expected volatility was determined by calculating the historical volatility of the Company’s share price over a period equivalent to the expected life of the award.
10. Finance income and costs
Finance income
Interest income on loans to joint ventures
Interest income on deposits
Interest income on swaps
Remeasurements of call option
Remeasurements of contingent consideration
Total finance income
Finance costs
Bank borrowing costs
Facility fees
Finance cost of private placement debt
Interest expense on swaps
Interest expense on lease liabilities
Remeasurements of call option
Remeasurements of contingent consideration
Total finance costs
Net finance costs
Notes
6
15
6
2022
€’m
1.1
0.4
0.2
0.1
7.3
9.1
(7.0)
(1.7)
(9.7)
–
(2.6)
(0.6)
(1.5)
(23.1)
(14.0)
2021
€’m
1.4
0.1
–
0.5
–
2.0
(3.8)
(2.0)
(10.8)
(0.2)
(2.5)
–
(0.2)
(19.5)
(17.5)
Capitalised borrowing costs of nil (2021: €0.5 million) on qualifying assets are not included in net finance costs (note 14). Interest is
capitalised at the Group’s average interest rate for the period of 2.3% (2021: 3.0%). Where relevant, tax deduction for capitalised interest
was taken in accordance with Sec 81(3), TCA 1997. Tax relief in relation to capitalised interest is nil (2021: €0.1 million).
198 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Notes to the financial statements continued 11. Income taxes
Current tax
Irish current tax charge
Adjustments in respect of prior years
Irish current tax for the year
Foreign current tax charge
Adjustments in respect of prior years
Foreign current tax for the year
Total current tax
Deferred tax
Deferred tax – current year
Adjustments in respect of prior years
Total deferred tax
Tax charge
The tax credit on exceptional items included in the above amounts is as follows:
Current tax credit on exceptional items
Deferred tax credit on exceptional items
Total tax credit on exceptional items for the year
Notes
26
Notes
6
2022
€’m
19.8
(1.2)
18.6
28.4
2.0
30.4
49.0
(23.8)
0.5
(23.3)
2021
€’m
9.4
–
9.4
28.4
(0.4)
28.0
37.4
(20.2)
(0.2)
(20.4)
25.7
17.0
2022
€’m
(0.6)
(5.1)
(5.7)
2021
€’m
(3.1)
(4.5)
(7.6)
The tax credit on exceptional items has been disclosed separately above as it relates to costs and income which have been presented as
exceptional.
The tax on the Group’s profit before tax differs from the theoretical amount that would arise applying the corporation tax rate in Ireland,
as follows:
Profit before tax
Income tax calculated at Irish rate of 12.5% (2021: 12.5%)
Earnings at non-standard Irish tax rate
Difference due to overseas tax rates (capital and trading)
Adjustment to tax charge in respect of previous periods
Tax on share of results of joint ventures accounted for using the equity method included in profit before tax
Other reconciling items
Total tax charge
2022
€’m
225.3
28.2
1.3
0.2
1.3
(2.0)
(3.3)
25.7
2021
€’m
158.0
19.8
0.2
2.2
(0.6)
(2.1)
(2.5)
17.0
Details of deferred tax charged or credited directly to other comprehensive income during the year are outlined in note 26.
Factors that may affect future tax charges and other disclosure requirements
The total tax charge in future periods will be affected by any changes to the applicable tax rates in force in jurisdictions in which the
Group operates and other relevant changes in tax legislation. The total tax charge of the Group may also be influenced by the effects of
corporate development activity and the resolution of uncertain tax positions where the final outcome of those matters is different than
the amounts recorded (note 3).
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
199
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION 12. Earnings Per Share
Basic
Basic Earnings Per Share is calculated by dividing profit after tax attributable to the equity holders of the Company by the weighted
average number of ordinary shares in issue during the year, excluding ordinary shares purchased by the Group and held as own shares
(note 23). The weighted average number of ordinary shares in issue used in the calculation of Basic Earnings Per Share is 275,760,676
(2021: 290,059,376).
Diluted
Diluted Earnings Per Share is calculated by adjusting the weighted average number of ordinary shares in issue to assume conversion of all
potential dilutive ordinary shares. Share awards are the Company’s only potential dilutive ordinary shares. The share awards, which are
performance based, are treated as contingently issuable shares, because their issue is contingent upon satisfaction of specified
performance conditions, as well as the passage of time. Contingently issuable shares are included in the calculation of Diluted Earnings
Per Share to the extent that conditions governing exercisability have been satisfied, as if the end of the reporting period were the end of
the vesting period.
Profit after tax attributable to equity holders
of the Company (€’m)
Basic Earnings Per Share (cent)
Diluted Earnings Per Share (cent)
2022
Continuing
operations
Discontinued
operations
200.4
72.67
71.76
57.2
20.75
20.48
2021
Continuing
operations
Discontinued
operations
140.6
48.47
48.30
26.4
9.10
9.07
Total
257.6
93.42
92.24
Total
167.0
57.57
57.37
Weighted average number of ordinary shares in issue
Shares deemed to be issued for no consideration in respect of share awards
2022
2021
275,760,676
3,505,766
290,059,376
1,048,035
Weighted average number of shares used in the calculation of Diluted Earnings Per Share
279,266,442
291,107,411
13. Dividends
The dividends paid and recommended on ordinary share capital are as follows:
Equity dividends to shareholders
Final – paid 17.53c per ordinary share (2021: 15.94c)
Interim – paid 12.93c per ordinary share (2021: 11.75c)
Total
Reconciliation to Group statement of cash flows and Group statement of changes in equity
Dividends to shareholders
Waived dividends in relation to own shares
Total dividends paid to equity holders of the Company
Equity dividends recommended
Final 2022 – proposed 19.28c per ordinary share (2021: 17.53c)
Notes
24
36
2022
€’m
49.1
35.4
84.5
84.5
(0.1)
84.4
2021
€’m
46.5
34.2
80.7
80.7
(0.2)
80.5
52.5
50.3
The amount of dividends recommended is based on the number of issued shares at year end (note 22). The actual amount will be based
on the number of issued shares on the record date (note 36).
200 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Notes to the financial statements continued 14. Property, plant and equipment
Year ended 31 December 2022
Opening carrying amount
Exchange differences
Acquisitions
Additions
Depreciation charge
Impairment
Assets classified as held for sale
Disposal of assets
Closing carrying amount
At 31 December 2022
Cost
Accumulated depreciation and impairment
Carrying amount
Year ended 1 January 2022
Opening carrying amount
Exchange differences
Acquisitions
Additions
Depreciation charge
Impairment
Disposal of assets
Closing carrying amount
At 1 January 2022
Cost
Accumulated depreciation and impairment
Carrying amount
Notes
34
5/32(a)
5
33
5/32(a)
5
Land and
buildings
€’m
Plant and
equipment
€’m
Motor
Vehicles
€’m
221.9
10.8
2.6
3.0
(10.7)
(0.1)
(0.1)
(3.1)
224.3
347.4
(123.1)
224.3
188.5
14.0
13.5
17.7
(10.6)
(1.1)
(0.1)
221.9
329.1
(107.2)
221.9
263.1
14.9
3.3
30.5
(37.8)
(9.4)
(9.4)
(0.7)
254.5
646.6
(392.1)
254.5
244.5
19.4
5.6
31.5
(34.1)
(2.4)
(1.4)
263.1
634.3
(371.2)
263.1
0.2
0.1
–
–
(0.2)
–
–
–
0.1
2.8
(2.7)
0.1
0.3
–
–
0.1
(0.2)
–
–
0.2
2.9
(2.7)
0.2
Total
€’m
485.2
25.8
5.9
33.5
(48.7)
(9.5)
(9.5)
(3.8)
478.9
996.8
(517.9)
478.9
433.3
33.4
19.1
49.3
(44.9)
(3.5)
(1.5)
485.2
966.3
(481.1)
485.2
Included in the closing cost at 31 December 2022 is an amount of €43.3 million (2021: €60.8 million) incurred in respect of assets under
construction. Included in the cost of additions for 2022 is €0.6 million (2021: €1.0 million) incurred in respect of staff costs capitalised into
assets. Included in the cost of additions for 2022 is nil (2021: €0.5 million) incurred in respect of borrowing cost capitalised into assets.
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
201
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION 15. Leasing
The movement in right-of-use assets during the year is as follows:
Year ended 31 December 2022
Opening carrying amount
Exchange differences
Acquisitions
Additions
Disposals
Impairment
Remeasurements
Assets classified as held for sale
Depreciation charge
Closing carrying amount
At 31 December 2022
Cost
Accumulated depreciation and impairment
Carrying amount
Year ended 1 January 2022
Opening carrying amount
Exchange differences
Acquisitions
Additions
Disposals
Impairment
Depreciation charge
Closing carrying amount
At 1 January 2022
Cost
Accumulated depreciation and impairment
Carrying amount
Notes
34
5
33
5/32(a)
5
5/32(a)
Amounts recognised in the Group income statement included the following:
Depreciation charge of right-of-use assets
Impairment of right-of-use assets
Interest expense on lease liabilities
Expense relating to short-term leases
Expense relating to variable lease payments not included in lease liabilities
Land and
buildings
€’m
Plant and
equipment
€’m
Motor
vehicles
€’m
93.8
5.1
0.2
2.8
(0.7)
(2.4)
4.4
(2.4)
(14.7)
86.1
118.4
(32.3)
86.1
84.0
6.2
0.7
19.7
(2.5)
(0.7)
(13.6)
93.8
119.2
(25.4)
93.8
2.5
–
0.4
5.6
(1.3)
(0.2)
–
(0.2)
(1.9)
4.9
8.2
(3.3)
4.9
3.4
0.2
0.4
1.2
–
–
(2.7)
2.5
5.4
(2.9)
2.5
Notes
5
5
10
3.6
0.2
–
1.9
(0.1)
–
–
–
(2.2)
3.4
8.2
(4.8)
3.4
3.1
0.2
–
2.1
–
–
(1.8)
3.6
6.4
(2.8)
3.6
2022
€’m
18.8
2.6
2.6
3.6
0.5
Total
€’m
99.9
5.3
0.6
10.3
(2.1)
(2.6)
4.4
(2.6)
(18.8)
94.4
134.8
(40.4)
94.4
90.5
6.6
1.1
23.0
(2.5)
(0.7)
(18.1)
99.9
131.0
(31.1)
99.9
2021
€’m
18.1
0.7
2.5
1.9
0.4
There was no income from subleasing and gains/losses on sale and leaseback transactions. The total cash outflow for lease payments
during the year was €22.2 million (2021: €22.9 million). At 31 December 2022, the Group was committed to €0.6 million (2021: €0.9 million)
for short-term leases.
Certain building leases contain extension options exercisable by the Group. As at 31 December 2022, undiscounted potential future lease
payments of €75.9 million (2021: €70.8 million) have not been included in lease liabilities because it is not reasonably certain that the
extension options, €67.3 million (2021: €66.2 million) of which relate to periods more than five years from the reporting date, will be availed
of. The undiscounted future lease payments relating to leases that have not yet commenced which the Group is committed as at
31 December 2022 and 1 January 2022 were not material. The effect of excluding future cash outflows arising from variable lease
payments, termination options, and residual value guarantees from lease liabilities is not material for the Group.
202 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Notes to the financial statements continued Lease liabilities shown in the Group balance sheet are as follows:
Current
Non-current
Total
Notes
30(c)/32(c)
2022
€’m
17.8
97.0
114.8
2021
€’m
14.5
105.0
119.5
Refer to note 30(b) for a maturity analysis of the lease liabilities arising from the Group’s leasing activities.
16. Intangible assets
Year ended 31 December 2022
Opening carrying amount
Exchange differences
Acquisitions
Additions
Impairment
Disposals
Amortisation
Closing carrying amount
At 31 December 2022
Cost
Accumulated amortisation and impairment
Carrying amount
Year ended 1 January 2022
Opening carrying amount
Exchange differences
Acquisitions
Additions
Amortisation
Closing carrying amount
At 1 January 2022
Cost
Accumulated amortisation and impairment
Carrying amount
Notes
Goodwill
€’m
Brands and
other
intangibles
€’m
Software
costs
€’m
Development
costs
€’m
5
4/5/32(a)
4/5/32(a)
629.1
34.6
22.5
–
(17.9)
–
–
668.3
686.0
(17.7)
668.3
548.4
42.6
38.1
–
–
629.1
629.1
–
629.1
654.0
39.8
42.1
–
(8.3)
–
(46.2)
681.4
1,053.3
(371.9)
681.4
609.7
47.8
35.7
–
(39.2)
654.0
954.1
(300.1)
654.0
70.1
1.2
–
25.4
(0.3)
–
(16.4)
80.0
166.7
(86.7)
80.0
64.6
1.6
–
18.4
(14.5)
70.1
139.1
(69.0)
70.1
22.2
1.3
–
11.6
–
(0.3)
(12.4)
22.4
59.4
(37.0)
22.4
20.6
1.7
–
10.1
(10.2)
22.2
45.6
(23.4)
22.2
Total
€’m
1,375.4
76.9
64.6
37.0
(26.5)
(0.3)
(75.0)
1,452.1
1,965.4
(513.3)
1,452.1
1,243.3
93.7
73.8
28.5
(63.9)
1,375.4
1,767.9
(392.5)
1,375.4
The average remaining amortisation period for software costs is 5.5 years (2021: 4.8 years) and development costs is 1.9 years (2021: 2.1
years).
Approximately €10.6 million (2021: €11.2 million) of software additions during the year were internally generated which included €9.5
million (2021: €7.3 million) of staff costs capitalised. €11.6 million of development cost additions during the year (2021: €10.1 million) were
internally generated which included €6.3 million (2021: €6.4 million) of staff costs capitalised.
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
203
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION 16. Intangible assets continued
Brands and other intangibles
Year ended 31 December 2022
Opening carrying amount
Exchange differences
Acquisitions
Reclassification
Impairment
Amortisation
Closing carrying amount
At 31 December 2022
Cost
Accumulated amortisation and impairment
Carrying amount
Year ended 1 January 2022
Opening carrying amount
Exchange differences
Acquisitions
Amortisation
Closing carrying amount
At 1 January 2022
Cost
Accumulated amortisation and impairment
Carrying amount
Individually material intangible assets with definite useful lives
Brands
Glanbia Performance Nutrition – BSN
Glanbia Performance Nutrition – Isopure
Glanbia Performance Nutrition – think!
Glanbia Performance Nutrition – Amazing Grass
Glanbia Performance Nutrition – Body & Fit
Glanbia Performance Nutrition – SlimFast North America
Glanbia Performance Nutrition – SlimFast International
Glanbia Performance Nutrition – LevlUp
Customer relationships
Glanbia Performance Nutrition – Optimum Nutrition
Glanbia Performance Nutrition – BSN
Glanbia Performance Nutrition – Isopure
Glanbia Performance Nutrition – think!
Glanbia Performance Nutrition – Amazing Grass
Glanbia Performance Nutrition – SlimFast North America
Glanbia Performance Nutrition – SlimFast International
Glanbia Nutritionals – Sterling Technology
Notes
34
Customer
relationships
€’m
Recipes,
Know-how
and other
€’m
170.5
11.3
30.5
–
–
(29.9)
182.4
443.2
(260.8)
182.4
170.8
13.1
11.5
(24.9)
170.5
388.4
(217.9)
170.5
31.2
2.2
10.0
6.7
(8.3)
(3.2)
38.6
62.2
(23.6)
38.6
21.3
2.0
10.2
(2.3)
31.2
36.0
(4.8)
31.2
Brands
€’m
452.3
26.3
1.6
(6.7)
–
(13.1)
460.4
547.9
(87.5)
460.4
417.6
32.7
14.0
(12.0)
452.3
529.7
(77.4)
452.3
Total
€’m
654.0
39.8
42.1
–
(8.3)
(46.2)
681.4
1,053.3
(371.9)
681.4
609.7
47.8
35.7
(39.2)
654.0
954.1
(300.1)
654.0
2022
2021
Average
remaining
amortisation
period
Years
Carrying
amount
€’m
Average
remaining
amortisation
period
Years
Carrying
amount
€’m
41.9
53.9
66.4
32.7
10.4
95.2
19.7
12.9
3.7
8.2
11.5
32.3
23.1
35.4
13.8
29.7
28
32
33
34
34
36
36
19
–
3
5
6
9
11
11
14
40.9
52.3
64.4
31.7
10.7
92.5
19.0
13.6
8.6
10.3
13.1
35.9
24.2
36.8
14.2
–
29
33
34
35
35
37
37
20
1
4
6
7
10
12
12
–
Management reviewed the amortisation period and amortisation method for the intangible assets with definite useful lives at the
reporting date. Management noted no difference in the expected useful life of the brands and customer relationship assets from the
original estimates and noted no change in the expected pattern of consumption of the future economic benefits of the assets.
204 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Notes to the financial statements continued Individually material indefinite life intangible assets
Carrying amount
Brands
Glanbia Performance Nutrition – Optimum Nutrition
2022
€’m
2021
€’m
115.0
108.3
The movement in the carrying amount of the asset is in relation to exchange differences arising on translation at year end.
As at the reporting date management reviewed the events and circumstances supporting the indefinite useful life assessment. The
brand is long established, continues to have a strong market presence with high customer recognition and there are no material legal,
contractual or other factors that limit its useful life. In addition, the likelihood that market based factors could truncate the brand’s life is
relatively remote because of the size, diversification and market share of the brand. It was determined that this asset will continue to
contribute indefinitely to the cash flows of the Group.
Impairment tests for goodwill and indefinite life intangibles
Goodwill and indefinite life intangibles acquired in business combinations are allocated to the Group’s cash generating units (“CGUs”)
that are expected to benefit from the business acquisition, rather than where the assets are owned. The CGUs represent the lowest level
within the Group at which the associated goodwill and indefinite life intangibles are monitored for internal management purposes and
are not larger than the operating segments determined in accordance with IFRS 8 ‘Operating Segments’. CGUs are kept under review to
ensure that they reflect changing interdependencies of cash inflows within the Group and how management monitors operations.
Cash generating units
The fundamental reorganisation of the GPN segment which commenced in 2019 is now complete. This global transformation project
aimed to realign operating and supply chain structures in support of individual businesses, sharpen focus on brands and optimise
routes-to-market across non-US markets to drive greater efficiencies, improve margin and deliver top line growth. The project led to the
formation of distinct lines of business within the GPN segment and the CGUs as disclosed in the prior year comparative information
section below. The completion of the reorganisation in the GPN segment led to the establishment of an Americas division which
consisted of previous lines of business: North America Performance Nutrition, and North America Lifestyle. As cash inflows within the
Americas division are largely interdependent and mirrors how management monitor operations following the reorganisation, Americas
represent a single CGU within the GPN business unit.
For the purposes of impairment testing as at 31 December 2022, the CGUs to which significant amounts of goodwill and indefinite life
intangibles have been allocated and the associated discount rates are set out below:
Americas
International
Direct-to-Consumer (Body & Fit)
Direct-to-Consumer (LevlUp)
Nutritional Solutions
Other CGUs without individually significant goodwill
Carrying amount
2022
Indefinite life
intangibles
€’m
106.0
9.0
–
–
–
–
115.0
Goodwill
€’m
386.6
60.8
28.5
27.4
130.2
34.8
668.3
Discount
rate
7.93%
9.73%
8.40%
7.76%
8.20%
7.93%–8.68%
The new Americas CGU comprises the former CGUs indicated with an asterisk in the table on the following page. Accordingly the
goodwill and indefinite life intangibles of the latter are allocated to the former.
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
205
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION 16. Intangible assets continued
Prior year comparative information
The CGUs to which significant amounts of goodwill and indefinite life intangibles have been allocated and the associated discount rates
used for impairment testing as at 1 January 2022 are set out below:
North America Performance Nutrition*
North America Lifestyle
– SlimFast North America*
– think!*
– Amazing Grass*
International
Direct-to-Consumer (Body & Fit)
Direct-to-Consumer (LevlUp)
Nutritional Solutions
Other CGUs without individually significant goodwill
Carrying amount
2021
Indefinite life
intangibles
€’m
99.8
Goodwill
€’m
136.0
108.7
82.2
37.5
53.1
28.5
27.4
139.6
16.1
629.1
–
–
–
8.5
–
–
–
–
108.3
Discount
rate
8.61%
8.61%
8.61%
8.61%
12.54%
10.12%
9.11%
9.06%
8.61%–12.77%
Key assumptions
The recoverable amount of goodwill and indefinite life intangibles allocated to a CGU is determined based on a value in use computation.
The key assumptions for calculating value in use of the CGUs are discount rates, growth rates and cash flows as described below.
As disclosed in note 2, specific consideration was given to the potential impact of the transition and physical risks associated with
climate change identified in our goodwill impairment assessment, including the estimated time horizon impact and output from the
financial quantification exercise carried out on each of the climate-related risks assessed, concluding that there was no significant
impact on the goodwill impairment assessment in the current year.
Discount rates
Refer to the table within this section for the pre-tax discount rates that are applied to the cash flow projections in the value in use
computations. The pre-tax discount rates are based on the Group’s weighted average cost of capital, calculated using the Capital Asset
Pricing Model adjusted for the Group’s specific beta coefficient together with a country risk premium to take account of the countries
from where the CGU derives its cash flows.
Growth rates
A terminal value of 2% growth into perpetuity was used to extrapolate cash flows beyond the budget and strategic plan period. This
growth rate does not exceed the long-term average growth rate for the industries in which each CGU operates. The application of the
terminal value has taken account of the Group’s position, playing in large and growing markets which centre around nutrition and
healthy lifestyles.
Cash flows
The cash flow projections are based on three years of cash flows being, the 2023 budget formally approved by, and the strategic plan for
2024 and 2025 as presented to, the Board of Directors. In cases where management have strategic plans beyond 2025 these numbers
are also used in the projections. Due to management’s plan as part of the Direct-to-Consumer business model to reinvest the profits of
the business for a number of years to drive revenue growth and build the brand for potential expansion into other markets, the cash
flows of the CGU relating to Direct-to-Consumer are over a five year period from 2023 to 2027. These cash flows have been used in the
impairment calculations.
In preparing the 2023 budget and strategic plan, management considered the Group’s history of earnings, past experience, and cash flow
generation. Management also considered external sources of information pertaining to estimated growth of the relevant market,
customer and consumer behaviours, competitor activity and developing trends in the industry in which the CGU operates in. Business
sustaining capital expenditure and working capital requirements are estimated by assigning values to the investment required to support
the estimated future profitability taking into account historic investment patterns and past experience. The cash flow projections exclude
the impact of future development and acquisition activity.
During 2022, fair value adjustments of €26.5 million reduced the carrying value of certain assets of a small US based bottling facility to
their recoverable value. The amounts were included as an exceptional item (note 6). There were no impairments relating to intangible
assets in 2021.
Sensitivity analysis
The key assumptions underlying the impairment reviews are set out above. Sensitivity analysis has been conducted in respect of each of
the CGUs using the following sensitivity assumptions: 1% increase in the discount rate; 10% decrease in EBITDA growth; and nil terminal
value growth. There were no CGU impairments as a result of the applied sensitivity analysis in 2022.
206 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Notes to the financial statements continued 17. Interests in joint ventures
The Group’s interests in joint ventures at the end of the reporting period is as follows:
MWC-Southwest Holdings LLC
Glanbia Cheese Limited
Glanbia Cheese EU Limited
Interests in joint ventures
Notes
(a)
(b)
(c)
2022
€’m
158.4
46.9
5.9
211.2
2021
€’m
134.6
36.2
14.0
184.8
The joint ventures have share capital, consisting solely of ordinary shares, membership interests or membership units and preference
shares. Decisions about the relevant activities of the joint ventures require unanimous consent of the Group and the respective joint
venture partners.
(a) MWC-Southwest Holdings LLC was established in 2018 to hold 100% of the ownership interest in Southwest Cheese Company, LLC
(“Southwest Cheese”) and MWC (Michigan) LLC (“MWC”). Consequently, the Group owns 50% of MWC-Southwest Holdings LLC and
its two subsidiaries. The Group controls 50% of the voting rights and is entitled to appoint 50% of the total number of Directors to the
Board. Southwest Cheese and MWC are large scale manufacturers of premium quality block cheese and whey protein ingredients for
consumer foods markets internationally.
(b) Glanbia Cheese Limited is a leading European mozzarella producer. Its customers include most of the leading pizza and pasta
chains, food service operators, industrial food manufacturers, wholesalers and retailers across Europe and internationally. The two
plants (Magheralin and Llangefni) are strategically located in productive agricultural heartland which helps to ensure a secure and
consistent supply of high-quality milk. The Group holds 51% of the share capital of Glanbia Cheese Limited but this entity is
considered to be a joint venture as the Group does not have control of the company as along with its joint partner Leprino Foods
Company it has equal representation on the Board of Directors, who direct the relevant activities of the business. The Group controls
50% of the voting rights and is entitled to appoint 50% of the total number of Directors to the Board.
(c) Glanbia Cheese EU Limited is a mozzarella cheese producer which was established in 2018 and is a joint venture with Leprino Foods
Company with each party owning 50% of the share capital of the company. The Group controls 50% of the voting rights and is
entitled to appoint 50% of the total number of Directors to the Board. The operations of the joint venture were fully commissioned in
Q4, 2022.
Refer to note 37 for further details of the joint ventures.
The movement in the interests in joint ventures recognised in the Group balance sheet is as follows:
At the beginning of the year
Share of profit after tax (post-exceptional)
– continuing operations
– discontinued operations
Share of OCI – remeasurements on defined benefit plan, net of deferred tax
– continuing operations
– discontinued operations
Share of OCI – fair value movement on cash flow hedges, net of deferred tax
– continuing operations
– discontinued operations
Dividends received
Income tax movement
Transferred to assets held for sale
Exchange differences
At the end of the year
Notes
24
24
35
33
2022
€’m
184.8
15.6
–
0.5
–
15.6
–
(14.4)
2.8
–
6.3
211.2
2021
€’m
395.9
17.2
26.4
1.7
4.3
6.2
1.1
(33.9)
(13.8)
(234.0)
13.7
184.8
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
207
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION 17. Interests in joint ventures continued
Summarised financial information for joint ventures accounted for using the equity method
Set out below is the summarised financial information for the Group’s joint ventures which are accounted for using the equity method.
The information below reflects the amounts presented in the financial statements of the joint ventures reconciled to the carrying value
of the Group’s investments in joint ventures.
Glanbia
Cheese
Limited
€’m
Glanbia
Cheese EU
Limited
€’m
MWC-
Southwest
Holdings
LLC
€’m
Notes
Total
41.3
154.4
737.8
933.5
49.9
78.9
128.8
4.7
33.9
38.6
14.2
281.6
295.8
68.8
394.4
463.2
–
(4.2)
(4.2)
–
(79.1)
(79.1)
86.8
86.8
43.4
3.5
46.9
498.6
(5.2)
(0.1)
0.4
(8.0)
0.3
24.3
0.1
24.4
24.3
24.4
12.2
–
3.5
15.7
2.6
–
(165.6)
(476.3)
(7.9)
(476.3)
(177.7)
(165.6)
(484.2)
(654.0)
–
(15.6)
(15.6)
11.8
11.8
(9.4)
(223.3)
(9.4)
(318.0)
(232.7)
(327.4)
316.7
316.7
415.3
415.3
5.9
–
5.9
158.4
–
158.4
207.7
3.5
211.2
42.3
(1.2)
–
(4.0)
5.3
–
(16.2)
–
(16.2)
(16.2)
(16.2)
(8.1)
–
–
(8.1)
–
2,112.1
(39.9)
(2.3)
(22.2)
(6.0)
–
15.7
33.4
49.1
15.7
49.1
24.6
0.2
–
24.8
11.8
2,653.0
(46.3)
(2.4)
(25.8)
(8.7)
0.3
23.8
33.5
57.3
23.8
57.3
28.7
0.2
3.5
32.4
14.4
2022
Summarised balance sheet (100%):
Non-current assets
Current assets
Cash and cash equivalents
Other current assets
Non-current liabilities
Borrowings
Other non-current liabilities
Current liabilities
Bank overdrafts and loans
Other current liabilities
Net assets (100%)
Net assets attributable to equity holders of the Company
Reconciliation to carrying amount:
Group’s share of net assets
Dividend income receivable
Carrying amount
Summarised income statement (100%):
Revenue
Depreciation
Amortisation
Interest income/(expense)
Tax
Exceptional items net of tax
Profit/(loss) after tax
Other comprehensive income
Total comprehensive income
Profit/(loss) after tax attributable to equity holders of the Company
Total comprehensive income attributable to equity holders of the Company
Reconciliation to the Group’s share of total comprehensive income:
Group’s share of total comprehensive income
Adjustment in respect of unrealised profit on sales to the Group
Dividends receivable by the Group
Group’s share of total comprehensive income
Dividends received by Group
35
208 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Notes to the financial statements continued 2021
Summarised balance sheet (100%):
Non-current assets
Current assets
Cash and cash equivalents
Other current assets
Non-current liabilities
Borrowings
Other non-current liabilities
Current liabilities
Bank overdrafts and loans
Other current liabilities
Net assets (100%)
Net assets attributable to equity holders of the Company
Reconciliation to carrying amount:
Group’s share of net assets
Adjustment in respect of unrealised profit on sales to the Group
Dividend income receivable
Carrying amount
Summarised income statement (100%):
Revenue
Depreciation
Amortisation
Interest expense
Tax
Exceptional items net of tax
Profit/(loss) after tax
Other comprehensive income
Total comprehensive income
Profit/(loss) after tax attributable to equity holders of the Company
Total comprehensive income attributable to equity holders of the Company
Reconciliation to the Group’s share of total comprehensive income:
Group’s share of total comprehensive income
Adjustment in respect of unrealised profit on sales to the Group
Dividends receivable by the Group
Group’s share of total comprehensive income
Dividends received by Group
Glanbia
Cheese
Limited
€’m
Glanbia
Cheese EU
Limited
€’m
MWC-
Southwest
Holdings
LLC
€’m
Notes
Total
42.9
150.5
705.6
899.0
31.2
55.2
86.4
–
(3.6)
(3.6)
–
(58.4)
(58.4)
67.3
67.3
33.6
–
2.6
36.2
369.7
(5.2)
(0.2)
–
(5.3)
(3.9)
8.4
3.5
11.9
8.4
11.9
6.0
–
2.6
8.6
11.1
10.0
17.5
27.5
–
(69.1)
(69.1)
(62.1)
(18.8)
(80.9)
28.0
28.0
14.0
–
–
14.0
27.4
–
–
(1.3)
(0.7)
–
(16.9)
–
(16.9)
(16.9)
(16.9)
(8.5)
–
–
(8.5)
–
52.5
243.7
296.2
(492.6)
(22.3)
(514.9)
–
(217.2)
(217.2)
269.7
269.7
134.9
(0.3)
–
134.6
1,421.6
(28.1)
(1.2)
(10.4)
(14.4)
–
38.3
14.1
52.4
38.3
52.4
26.2
(0.3)
–
25.9
10.6
93.7
316.4
410.1
(492.6)
(95.0)
(587.6)
(62.1)
(294.4)
(356.5)
365.0
365.0
182.5
(0.3)
2.6
184.8
1,818.7
(33.3)
(1.4)
(11.7)
(20.4)
(3.9)
29.8
17.6
47.4
29.8
47.4
23.7
(0.3)
2.6
26.0
21.7
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
209
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION 18. Other financial assets
Other financial assets comprise the following:
Financial assets at amortised cost
Ornua Co-operative Limited*
Equity instruments designated at FVOCI
The BDO Development Capital Fund
Others
Other financial assets
* This is a loan note receivable from Ornua Co-operative Limited.
Notes
29(b)/30(c)
2022
€’m
–
1.3
0.8
2.1
2021
€’m
0.2
1.1
0.6
1.9
Other financial assets are classified as non-current assets, unless they are expected to be realised within 12 months of the reporting
date or unless they will need to be sold to raise operating capital.
The movement in other financial assets is as follows:
At the beginning of the year
Disposals/redemption
Fair value adjustment
Additions
At the end of the year
19. Trade and other receivables
Current
Trade receivables
Less: loss allowance
Trade receivables – net
Receivables from joint ventures
Receivables from other related parties
Interest receivable on loans to joint ventures
Value added tax
Prepayments
Other receivables
23
30(b)
2022
€’m
1.9
(0.4)
0.6
–
2.1
2022
€’m
344.3
(13.0)
331.3
0.8
5.0
–
1.8
19.5
21.1
379.5
2021
€’m
3.2
(1.1)
(0.3)
0.1
1.9
2021
€’m
327.2
(12.0)
315.2
5.4
0.4
0.1
4.4
15.8
18.1
359.4
See note 32(b) for analysis of the movement in trade and other receivables. Information in relation to the fair value estimation process
and the Group’s credit risk is included in notes 29(b) and 30(b) respectively.
The currency profile of trade and other receivables is as follows:
At 31 December 2022
At 1 January 2022
euro
€’m
36.4
34.4
US dollar
€’m
297.0
288.9
Pound
sterling
€’m
24.9
20.4
Australian
dollar
€’m
3.9
2.5
Other
€’m
17.3
13.2
Total
€’m
379.5
359.4
Principal currencies in “other” include Canadian dollar, Indian Rupee and Chinese renminbi (2021: Indian Rupee and Chinese renminbi).
210 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Notes to the financial statements continued 20. Inventories
Raw materials
Work in progress
Finished goods
Consumables
Recognition in the Group income statement:
Cost of inventories recognised as an expense in Cost of Goods Sold
Write down of inventory to net realisable value during the year
Previous write downs of inventories reversed during the year*
* Previous write downs have been reversed as a result of increased sales prices in certain markets.
21. Cash and cash equivalents
2022
€’m
258.5
14.4
396.2
34.6
703.7
2021
€’m
200.3
15.4
338.2
39.7
593.6
Notes
5
2022
€’m
2021
€’m
4,231.4
2,979.3
27.8
(10.0)
17.8
12.2
(6.1)
6.1
Cash at bank and in hand
Short term bank deposits
Cash and cash equivalents in the Group balance sheet
Bank overdrafts used for cash management purposes
Cash and cash equivalents in the Group statement of cash flows
22. Share capital and share premium
At 2 January 2022
Cancellation of own shares
At 31 December 2022
At 3 January 2021
Issuance of shares
Cancellation of own shares
At 1 January 2022
Notes
25
25
2022
€’m
432.4
6.2
438.6
(258.2)
180.4
Number of
shares
(thousands)
287,169
(14,882)
272,287
294,402
40
(7,273)
287,169
Ordinary
shares
€’m
Share
premium
€’m
17.2
(0.9)
16.3
17.7
–
(0.5)
17.2
87.8
–
87.8
87.6
0.2
–
87.8
2021
€’m
224.2
6.8
231.0
(136.5)
94.5
Total
€’m
105.0
(0.9)
104.1
105.3
0.2
(0.5)
105.0
The total authorised number of ordinary shares is 350 million shares (2021: 350 million shares) with a par value of €0.06 per share (2021:
€0.06 per share). All issued shares are fully paid, carry one vote per share and a right to dividends. The rights and obligations of the
ordinary shares and the restrictions on the transfer of shares and voting rights are provided in Other Statutory Information.
During 2022, 14.9 million (2021: 7.3 million) ordinary shares were cancelled on the share buyback programme (note 23(e)). The amount paid
to repurchase these shares was initially recognised in the own shares reserve and was transferred to retained earnings on cancellation.
During the prior year 40,000 share options under the legacy 2002 LTIP plan were exercised. Consequently, the number of share options
outstanding and exercisable under the 2002 LTIP plan was nil at the end of the reporting period.
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
211
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Share-
based
payment
reserve
€’m
note (f)
Other
€’m
note (g)
Total
€’m
19.3
(0.4)
245.5
23. Other reserves
Capital and
merger
reserve
€’m
note (a)
Currency
reserve
€’m
note (b)
Hedging
reserve
€’m
note (c)
Put option
liability
reserve
€’m
note (d)
Balance at 2 January 2022
116.5
151.9
(10.6)
(24.8)
Currency translation differences
Net investment hedge
Revaluation – gross
Reclassification to profit or loss – gross
Deferred tax
Net change in OCI
Purchase of own shares
Cancellation of own shares
Cost of share-based payments
Transfer on exercise, vesting or expiry
of share-based payments
Remeasurement of put option liability
Transfer to Group income statement*
–
–
–
–
–
–
–
0.9
–
–
–
–
79.9
(5.4)
–
–
–
74.5
–
–
–
–
–
–
Balance at 31 December 2022
117.4
226.4
–
–
27.3
(3.2)
(5.9)
18.2
–
–
–
–
–
1.5
9.1
Balance at 3 January 2021
116.0
31.9
(20.6)
Currency translation differences
Net investment hedge
Revaluation – gross
Reclassification to profit or loss – gross
Deferred tax
Net change in OCI
Purchase of own shares
Cancellation of own shares
Cost of share-based payments
Transfer on exercise, vesting or expiry
of share-based payments
Recognition of put option liability
Remeasurement of put option liability
–
–
–
–
–
–
–
0.5
–
–
–
–
126.7
(6.7)
–
–
–
120.0
–
–
–
–
–
–
–
–
11.1
1.6
(2.7)
10.0
–
–
–
–
–
–
Balance at 1 January 2022
116.5
151.9
(10.6)
* On disposal of discontinued operation.
–
–
–
–
–
–
–
–
–
–
24.8
–
–
–
–
–
–
–
–
–
–
–
–
–
(23.2)
(1.6)
(24.8)
Own
shares
€’m
note (e)
(6.4)
–
–
–
–
–
–
(196.9)
173.5
–
9.1
–
–
(20.7)
–
–
–
–
–
–
–
–
18.8
(11.0)
–
–
27.1
(11.4)
10.3
–
–
–
–
–
–
(94.0)
91.3
–
7.7
–
–
(6.4)
–
–
–
–
–
–
–
–
15.9
(6.9)
–
–
19.3
–
–
0.6
–
(0.2)
0.4
–
–
–
–
–
–
–
(0.2)
–
–
(0.3)
–
0.1
(0.2)
–
–
–
–
–
–
79.9
(5.4)
27.9
(3.2)
(6.1)
93.1
(196.9)
174.4
18.8
(1.9)
24.8
1.5
359.3
126.0
126.7
(6.7)
10.8
1.6
(2.6)
129.8
(94.0)
91.8
15.9
0.8
(23.2)
(1.6)
(0.4)
245.5
(a) Capital and merger reserve
The reserve includes capital reserve of €4.3 million (2021: €3.4 million) and merger reserve of €113.1 million (2021: €113.1 million) at the
reporting date.
The capital reserve comprises of a capital redemption reserve and a capital reserve which arose on the re-nominalisation of the
Company’s share capital on conversion to the euro. The reserve also includes €0.9 million (2021: €0.5 million) undenominated share
capital that arose on the cancellation of own shares during the year.
The merger reserve arose on the merger of Waterford Foods plc now named Waterford Foods DAC and Avonmore Foods plc now named
Glanbia plc in 1997. The merger reserve adjustment represents the difference between the nominal value of the issued share capital of
Waterford Foods DAC and the fair value of the shares issued by Glanbia plc.
Share premium representing excess of fair value over nominal value of ordinary shares issued in connection with the
merger of Avonmore Foods plc and Waterford Foods plc
Merger reserve adjustment
Share premium and other reserves relating to nominal value of shares in Waterford Foods plc
At the beginning and end of the current and prior year
€’m
355.3
(327.2)
85.0
113.1
212 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Notes to the financial statements continued (b) Currency reserve
The currency reserve reflects the foreign exchange gains and losses arising from the translation of the net investment in foreign operations
and on borrowings designated as hedges of the net investment which are taken to equity. The movement in US dollar foreign exchange
rates from 1.1326 as at 1 January 2022 to 1.0666 as at 31 December 2022 is the primary driver of the movement in the currency reserve in
the year. When an entity is disposed of the accumulated foreign currency gains and losses are recycled to the income statement.
(c) Hedging reserve
The hedging reserve reflects the effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow
hedges. Amounts accumulated in the hedging reserve are recycled to the income statement in the periods when the hedged item
affects income or expense, or are included in the initial cost of a hedged non-financial item, depending on the hedged item. The hedging
reserve also reflects the Group’s share of the effective portion of changes in the fair value of derivatives that are entered into by the
Group’s joint ventures (note 29(a)).
The movements on the hedging reserve for the years ended 31 December 2022 and 1 January 2022 are as follows:
Balance at 2 January 2022
Revaluation – gross
– Foreign exchange contracts – (loss)/gain in year (currency risk)
– Commodity contracts – gain in year (commodity price risk)
– Interest rate swaps – gain in year (interest rate risk)
Recognised in OCI
Reclassification to profit or loss – gross
– Foreign exchange contracts – loss/(gain) in year (currency risk)
– Commodity contracts – gain in year (commodity price risk)
Reclassified from OCI to profit or loss
Deferred tax
Net change in OCI
Transfer to Group Income Statement
Balance at 31 December 2022
Balance at 3 January 2021
Revaluation – gross
– Foreign exchange contracts – (loss)/gain in year (currency risk)
– Commodity contracts – gain in year (commodity price risk)
– Interest rate swaps – gain in year (interest rate risk)
Recognised in OCI
Reclassification to profit or loss – gross
– Foreign exchange contracts – loss in year (currency risk)
– Commodity contracts – loss in year (commodity price risk)
Reclassified from OCI to profit or loss
Deferred tax
Net change in OCI
Balance at 1 January 2022
Joint ventures
€’m
(10.3)
(0.6)
1.3
21.7
22.4
0.1
(1.4)
(1.3)
(5.5)
15.6
1.5
6.8
(17.6)
(1.1)
0.1
9.6
8.6
0.7
0.3
1.0
(2.3)
7.3
(10.3)
Group
€’m
(0.3)
0.9
–
4.0
4.9
(1.9)
–
(1.9)
(0.4)
2.6
–
2.3
Total
€’m
(10.6)
0.3
1.3
25.7
27.3
(1.8)
(1.4)
(3.2)
(5.9)
18.2
1.5
9.1
(3.0)
(20.6)
1.2
–
1.3
2.5
0.6
–
0.6
(0.4)
2.7
(0.3)
0.1
0.1
10.9
11.1
1.3
0.3
1.6
(2.7)
10.0
(10.6)
(d) Put option liability reserve
This reserve records the initial estimate of the fair value of the consideration to acquire the NCI shares that are subject to the put option
and subsequent remeasurements of the estimated liability (note 29(b)).
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
213
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION 23. Other reserves continued
(e) Own shares reserve
The own shares reserve reflects the ordinary shares of Glanbia plc which are held in trust.
An Employee Share Trust was established in May 2002 to operate initially in connection with the Company’s Saving Related Share Option
Scheme and subsequently for the vesting of shares under the 2018 LTIP and 2019 RSP (note 9). The Trustee of the Employee Share Trust is
Computershare Trustees (Jersey) Limited, a Jersey based trustee services company. The dividend rights in respect of these shares have
been waived, save 0.001 cent per share. An Employee Share Scheme Trust was established in April 2013 to operate in connection with the
Company’s AIDIS. The Trustee of the Employee Share Scheme Trust is Glanbia Management Services Limited. The dividend rights in
respect of shares which have not vested have been waived.
From 2020 to 2022, the Group launched and completed several share buyback programmes. During 2022, the Group repurchased 14.9
million (2021: 7.3 million) ordinary shares under the programmes which were subsequently cancelled (note 22).
The movement in own shares reserve is as follows:
2022
2021
Value
€’m
Nominal value
€’m
Number of
Shares
Value
€’m
Nominal value
€’m
At the beginning of the year
Purchased by Employee Share (Scheme) Trust
Purchased under share buyback
Allocated under Employee Share (Scheme) Trust
Cancelled under share buyback
At the end of the year
6.4
23.4
173.5
(9.1)
(173.5)
20.7
0.1
0.1
0.9
(0.1)
(0.9)
0.1
412,493
2,049,210
14,881,985
(750,381)
(14,881,985)
1,711,322
11.4
2.7
91.3
(7.7)
(91.3)
6.4
0.1
–
0.5
–
(0.5)
0.1
Number of
Shares
692,698
207,886
7,272,432
(488,091)
(7,272,432)
412,493
The shares purchased during the year and those held in trust are allocated to employees under the various share-based schemes. Shares
purchased under the share buyback programmes were cancelled. The shares acquired during the year represented an insignificant amount
of the total share capital at the beginning and end of the year. Shares purchased are deemed to be own shares in accordance with IAS 32
‘Financial Instruments’. The own shares at 31 December 2022 restrict distributable profits by €20.7 million (2021: €6.4 million) and had a
market value of €20.3 million (2021: €5.1 million).
(f) Share-based payment reserve
The share-based payment reserve reflects the equity settled share-based payment plans in operation by the Group (note 9).
(g) Other
The reserve includes FVOCI reserve of nil (2021: €(0.4) million) at the reporting date. Unrealised gains and losses arising from changes in
the fair value of equity instruments measured at FVOCI are recognised in the FVOCI reserve. On derecognition of such an equity
instrument, the accumulated balances associated with the instrument is reclassified to retained earnings.
24. Retained earnings
At the beginning of the year
Profit for the year attributable to equity holders of the Company
Other comprehensive income
– Remeasurements on defined benefit plans
– Deferred tax on remeasurements on defined benefit plans
– Share of remeasurements on defined benefit plans from joint ventures, net of deferred tax
– Share of remeasurements on defined benefit plans from discontinued operations, net of deferred tax
Dividends
Cancellation of own shares
Transfer on exercise, vesting or expiry of share-based payments
Deferred tax on share-based payments
Sale of shares held by a subsidiary
At the end of the year
Notes
8
26
17
17
13
23(e)
23
26
2022
€’m
1,381.7
257.6
13.5
(1.4)
0.5
–
12.6
(84.4)
(173.5)
1.9
0.5
1.3
2021
€’m
1,380.5
167.0
–
(0.5)
1.7
4.3
5.5
(80.5)
(91.3)
(0.8)
1.3
–
1,397.7
1,381.7
214 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Notes to the financial statements continued 25. Borrowings
Non-current
Bank borrowings
Private placement debt
Current
Bank overdrafts
Total borrowings
Notes
29(b)
2022
€’m
288.2
351.6
639.8
21
258.2
2021
€’m
366.1
331.1
697.2
136.5
30(c)
898.0
833.7
At the year-end, the Group had multi-currency committed term facilities of €1,215.3 million (2021: €1,160.4 million) of which €575.5 million
(2021: €463.2 million) were undrawn.
The maturity profile of borrowings, and undrawn committed and uncommitted facilities is as follows:
Less than 1 year
Between 1 and 2 years
Between 2 and 5 years
More than 5 years
2022
Undrawn
committed
facilities
€’m
Undrawn
uncommitted
facilities
€’m
–
–
575.5
–
575.5
15.4
–
–
–
15.4
Borrowings
€’m
136.5
–
366.1
331.1
833.7
2021
Undrawn
committed
facilities
€’m
Undrawn
uncommitted
facilities
€’m
–
–
463.2
–
463.2
15.9
–
–
–
15.9
Borrowings
€’m
258.2
–
288.2
351.6
898.0
The weighted average maturity of committed facilities is 5.8 years (2021: 3.9 years).
Bank borrowings
The Group has committed unsecured bank facilities maturing in 2027. They are borrowed at fixed and floating interest rates. At
31 December 2022, €158.4 million of bank borrowings denominated in USD are at fixed nominal interest rate of 1.24% (2021: €149.2 million
at 1.24%). The remaining bank borrowings are subject to interest rate changes, taking account of contractual repricing dates. Nominal
interest rates of these borrowings range primarily from 3.24%–4.73% (2021: 0.25% – 1.91%). The floating interest rates are set at
commercial rates based on a margin over EURIBOR and Canadian dollar interest rates for periods of up to six months.
Private placement debt
At 31 December 2022, €164.0 million of private placement debt matures in December 2031, bears interest at a fixed 2.75% nominal interest
rate and is denominated in USD. €93.8 million of private placement debt facility matures in March 2028, bears interest at a fixed 2.49%
nominal interest rate and is denominated in USD and a further €93.8 million matures in March 2031, bears interest at a fixed 2.82%
nominal interest rate and is denominated in USD.
Bank overdrafts
Bank overdraft interest rates are variable and range from 2.13%–5.20% (2021: 0.23% – 1.25%). At 31 December 2022, the Group had
undrawn uncommitted bank overdraft facilities of €10.6 million (2021: €11.0 million).
Guarantees
Financial liabilities are guaranteed by Glanbia plc. The Group has complied with the financial covenants of its borrowing facilities during
2022 and 2021 (note 30(a)).
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
215
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION 25. Borrowings continued
Net debt is a non-IFRS measure which we provide to investors as we believe they find it useful. It is also used to calculate leverage under
the Group’s financing arrangements, as defined within covenants. Refer to the Financing Key Performance Indicators section in the
Glossary for more details. Net debt comprises the following:
Private placement debt
Bank borrowings
Not subject to interest rate changes*
Bank borrowings
Cash and cash equivalents net of bank overdrafts
Subject to interest rate changes*
Notes
21
2022
€’m
351.6
158.4
510.0
129.8
(180.4)
(50.6)
2021
€’m
331.1
149.2
480.3
216.9
(94.5)
122.4
Net debt
30(a)
459.4
602.7
* Taking into account contractual repricing dates at the reporting date.
The movement in net debt is as follows:
At 2 January 2022
Drawdown of borrowings
Repayment of borrowings
Net change in cash and cash equivalents
Acquisitions
Exchange differences
At 31 December 2022
At 3 January 2021
Drawdown of borrowings
Repayment of borrowings
Net change in cash and cash equivalents
Acquisitions
Exchange differences
At 1 January 2022
The currency profile of net debt is as follows:
At 31 December 2022
Borrowings
Cash and cash equivalents (note 21)
At 1 January 2022
Borrowings
Cash and cash equivalents (note 21)
Cash and
short-term
bank deposits
€’m
(note 21)
Overdrafts
€’m
(note 21)
Borrowings
€’m
Private
placement
debt
€’m
(231.0)
–
–
(203.7)
(0.9)
(3.0)
(438.6)
(164.3)
–
–
(46.6)
(4.4)
(15.7)
(231.0)
US
dollar
€’m
(687.3)
289.2
(398.1)
(566.0)
119.4
(446.6)
136.5
–
–
118.9
–
2.8
258.2
72.7
–
–
61.1
–
2.7
136.5
366.1
688.4
(780.8)
–
–
14.5
288.2
315.8
290.9
(252.7)
–
–
12.1
366.1
Pound
sterling
€’m
Canadian
dollar
€’m
(22.3)
22.2
(0.1)
(9.2)
18.7
9.5
(5.2)
4.0
(1.2)
(6.9)
5.4
(1.5)
331.1
–
–
–
–
20.5
351.6
269.7
167.6
(130.7)
–
–
24.5
331.1
Other
€’m
(5.9)
44.1
38.2
(0.3)
31.9
31.6
Notes
32(c)
32(c)
34
32(c)
32(c)
euro
€’m
(177.3)
79.1
(98.2)
(251.3)
55.6
(195.7)
Total
€’m
602.7
688.4
(780.8)
(84.8)
(0.9)
34.8
459.4
493.9
458.5
(383.4)
14.5
(4.4)
23.6
602.7
Total
€’m
(898.0)
438.6
(459.4)
(833.7)
231.0
(602.7)
Principal currencies in “other” include Australian Dollar and New Zealand Dollar (2021: Danish Krone and Swedish Krona).
216 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Notes to the financial statements continued Deferred tax
assets
€’m
38.2
(33.5)
4.7
Notes
11
24
23
23(c)
24
26. Deferred taxes
Recognition in the Group balance sheet:
Deferred tax assets/(liabilities) before set off
Set off of deferred tax
Deferred tax assets/(liabilities) after set off
Deferred tax
assets
€’m
44.6
(39.9)
4.7
2022
Deferred tax
liabilities
€’m
(169.6)
39.9
(129.7)
Net
€’m
(125.0)
–
(125.0)
The movement in the net deferred tax liability recognised in the Group balance sheet is as follows:
At the beginning of the year
Income statement credit
Deferred tax credit to other comprehensive income
– on remeasurement of defined benefit plans
– on disposal/redemption of FVOCI financial assets
– on fair value movements
Deferred tax credit/(charge) to equity
– on share-based payments
– on acquisition of subsidiaries
Exchange differences
At the end of the year
The movement in deferred tax assets during the year is as follows:
At 2 January 2022
(Charge)/credit to income statement
Charge to other comprehensive income
Credit to equity
Exchange differences
At 31 December 2022
At 3 January 2021
(Charge)/credit to income statement
Charge to other comprehensive income
Credit to equity
Exchange differences
At 1 January 2022
Retirement
benefit
obligations
€’m
Other
employee
obligations
€’m
Tax losses
€’m
4.8
(0.5)
(1.4)
–
0.3
3.2
5.5
(0.7)
(0.5)
–
0.5
4.8
16.1
(0.5)
–
0.5
1.2
17.3
8.8
5.1
–
1.3
0.9
16.1
4.5
(0.2)
–
–
(0.2)
4.1
3.0
1.4
–
–
0.1
4.5
2021
Deferred tax
liabilities
€’m
(177.9)
33.5
(144.4)
2022
€’m
(139.7)
23.3
(1.4)
(0.2)
(0.4)
0.5
–
(7.1)
Net
€’m
(139.7)
–
(139.7)
2021
€’m
(144.1)
20.4
(0.5)
(0.1)
(0.4)
1.3
(6.9)
(9.4)
(125.0)
(139.7)
Other
€’m
12.8
6.8
(0.2)
–
0.6
20.0
12.4
(0.4)
(0.1)
–
0.9
12.8
Total
€’m
38.2
5.6
(1.6)
0.5
1.9
44.6
29.7
5.4
(0.6)
1.3
2.4
38.2
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
217
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION 26. Deferred taxes continued
The movement in deferred tax liabilities during the year is as follows:
At 2 January 2022
Credit/(charge) to income statement
Charge to other comprehensive income
Exchange differences
At 31 December 2022
At 3 January 2021
Credit/(charge) to income statement
Charge to other comprehensive income
Acquisition of subsidiaries and intellectual properties
Exchange differences
At 1 January 2022
Accelerated tax
depreciation
€’m
Fair value gain
€’m
Development
costs and other
intangibles
€’m
(62.8)
1.1
–
(3.8)
(65.5)
(60.7)
2.8
–
–
(4.9)
(62.8)
–
(0.6)
(0.4)
–
(1.0)
0.4
–
(0.4)
–
–
–
(79.0)
9.1
–
(4.4)
(74.3)
(79.8)
13.8
–
(6.9)
(6.1)
(79.0)
Other
€’m
(36.1)
8.1
–
(0.8)
(28.8)
(33.7)
(1.6)
–
–
(0.8)
(36.1)
Total
€’m
(177.9)
17.7
(0.4)
(9.0)
(169.6)
(173.8)
15.0
(0.4)
(6.9)
(11.8)
(177.9)
A deferred tax asset has been recognised on the basis that the realisation of the related tax benefit through future taxable profits is
probable. This includes deferred tax assets which are recognised for tax losses carried forward to the extent that realisation of the
related tax benefit through future taxable profits is probable.
At the balance sheet date, the Group has unused tax losses of €127.0 million (2021: €129.3 million) available for offset against future profits.
A deferred tax asset has been recognised in respect of €4.1 million (2021: €4.5 million) of such losses. No deferred tax asset has been
recognised in respect of the remaining €122.9 million (2021: €124.8 million) as it is not considered probable that there will be future
taxable profits available. Unrecognised tax losses include €46.3 million (2021: €48.9 million) of capital losses. All tax losses may be
carried forward indefinitely.
No deferred tax liability has been recognised on temporary differences of €41.1 million (2021: €47.5 million) relating to the unremitted
earnings of overseas subsidiaries as the Group is able to control the timing of the reversal of these temporary differences and it is
probable that they will not reverse in the foreseeable future. Temporary differences arising in connection with interests in joint ventures
are insignificant.
27. Provisions
Balance at 2 January 2022 – non-current
Balance at 2 January 2022 – current
Amount provided for in the year
Utilised in the year
Unused amounts reversed in the year
Exchange differences
Balance at 31 December 2022
Non-current
Current
Restructuring
€’m
note (a)
Property
and lease
commitments
€’m
note (b)
Legal and
operational
€’m
note (c)
–
2.3
0.1
(2.3)
(0.2)
0.1
–
–
–
–
3.6
2.5
0.7
(0.5)
(0.2)
0.2
6.3
3.8
2.5
6.3
–
8.1
0.9
(0.1)
(0.3)
0.1
8.7
–
8.7
8.7
Total
€’m
3.6
12.9
1.7
(2.9)
(0.7)
0.4
15.0
3.8
11.2
15.0
(a) The restructuring provision related mainly to a redundancy provision arising from the completed strategic review within the Glanbia
Performance Nutrition segment. This was settled in full during 2022.
(b) The property and lease commitments provision relates to property remediation works and is based on the estimated cost of
reinstating a property to its original condition. Due to the nature of the remediation works there is some uncertainty around the
amount and timing of payments.
(c) The legal and operational provision relates to certain legal claims, insurance claims and other items. Due to the nature of these items,
there is some uncertainty around the amount and timing of payments.
See note 32(b) for analysis of the movement in provisions.
218 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Notes to the financial statements continued 28. Trade and other payables
Current
Trade payables
Amounts due to joint ventures
Amounts due to other related parties
Social security costs
Accrued expenses
Contingent consideration
Non-current
Put option liability
Contingent consideration
Other payables
Notes
29(b)/30(c)/34
29(b)/30(c)
29(b)/30(c)
2022
€’m
360.9
144.6
9.4
7.1
227.5
25.3
774.8
–
–
–
–
2021
€’m
309.0
133.5
–
6.9
219.9
–
669.3
24.8
7.3
0.5
32.6
Total
774.8
701.9
See note 32(b) for analysis of the movement in current trade and other payables. See note 29(b) for information on the Group’s fair value
estimation process.
29. Derivatives and fair value of financial instruments
(a) Derivatives
Cross currency swaps – fair value through income statement
Foreign exchange contracts – cash flow hedges (currency risk)
Interest rate swaps – cash flow hedges (interest rate risk)
Call option over non-controlling interests
Non-current
Current
Notes
2022
Assets
€’m
2022
Liabilities
€’m
2021
Assets
€’m
2021
Liabilities
€’m
–
0.1
2.8
–
2.9
–
2.9
2.9
(0.7)
(0.3)
–
–
(1.0)
–
(1.0)
(1.0)
1.4
0.8
–
0.5
2.7
0.5
2.2
2.7
–
–
(1.2)
–
(1.2)
(1.2)
–
(1.2)
30(d)
Derivatives recognised at fair value through income statement
Included in cross currency swaps is a pound sterling euro cross currency swap with a notional amount of £28.0 million and €32.0 million and
a US dollar euro cross currency swap with notional amounts of US$79.7 million and €75.0 million accounted for at fair value. The
translation loss included in the income statement in respect of these swaps is €0.7 million.
At 1 January 2022, there was a pound sterling euro cross currency swap with a notional amount of £60.0 and €70.2 million and a US
dollar euro cross currency swap with notional amounts of US$20.0 million and €17.7 million. The translation gain included in the 2021
income statement in respect of these swaps was €1.4 million.
Hedge accounting
The Group enters into hedge relationships when there is an economic relationship between the hedged item and the hedging
instrument. When the critical terms of the hedged item and hedging instrument are closely aligned for the prospective assessment of
effectiveness, a qualitative assessment is performed. In instances where changes occur to the hedged item which result in the critical
terms being no longer closely aligned, the Group uses the hypothetical derivative method to assess the ineffectiveness. A hedge ratio of
one to one is established as the quantities of the hedged item and the hedging instrument used to hedge that hedged item are the
same. Potential sources of ineffectiveness may include the timing and amounts of cash flows, and changes in credit risk of the hedging
instruments or hedged items.
Derivative assets and liabilities designated as cash flow hedges
Foreign exchange contracts
The Group may use foreign exchange contracts to hedge its future cash flow risk from movements in foreign exchange rates on foreign
denominated sales or purchases. Such contracts are generally designated as cash flow hedges. Weighted average hedged rate of
foreign exchange contracts (including forward points) as at 31 December 2022 is 1 euro = 1.0479 US dollar (2021: 1 euro = 1.1900 US dollar).
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
219
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION 29. Derivatives and fair value of financial instruments continued
The notional principal amounts of the outstanding foreign exchange contracts as at 31 December 2022 were €13.0 million (2021:
€14.9 million). All outstanding foreign exchange contracts will mature and be released to the income statement within 12 months of the
reporting date (2021: within 12 months of the reporting date).
Interest rate swaps
The Group may use floating to fixed interest rate swaps to hedge against its future cash flow risk from its exposure to variable rates
on its long-term borrowings with floating rates. The notional principal amounts of the outstanding EURIBOR linked interest rate swaps
designated as cash flow hedges as at 31 December 2022 were €120.0 million (2021: €120.0 million). Weighted average hedged rate of
interest rate swaps as at 31 December 2022 is 0.20% (2021: 0.20%). All outstanding interest rate swaps mature in 2023.
Commodity contracts
The Group may use commodity contracts to hedge its future cash flow risk from movement in milk prices. There were no outstanding
commodity contracts as at 31 December 2022 (2021: nil). All commodity contracts that were entered into during the period, if any, had expired as
at the end of the reporting period.
Gain recognised in other comprehensive income
Foreign exchange contracts
Interest rate swaps
Notes
23(c)
23(c)
2022
€’m
0.9
4.0
4.9
2021
€’m
1.2
1.3
2.5
(Gain)/loss transferred from cash flow hedge reserve to the Group income statement
Foreign exchange contracts
23(c)
(1.9)
0.6
The transferred amounts relating to foreign exchange contracts are recorded in the line item “Administration expenses” in the income
statement.
No material ineffectiveness were recognised in respect of the cash flow hedges in 2022 (2021: nil). If ineffectiveness had been recognised,
it would have been recorded in “Administration expenses” in the income statement.
Refer to note 23(c) for the balances in the cash flow hedge reserve. The maturity profile of the cash flows of the derivative financial
instruments is included in note 30(b).
Derivatives entered into by joint ventures
The Group’s joint ventures enter into interest rate swaps, commodity contracts (gas, butter, whey and skim milk powder) and foreign
exchange contracts. The Group’s share of the movement in the derivative financial instruments designated as cash flow hedges is
recognised in other comprehensive income and against the carrying value of the interest in joint ventures.
The movement recognised in other comprehensive income on interest rate swaps (note 23(c)) represents the Group’s share of the
movement in the interest rate swaps entered into by joint ventures. All movements are recognised against the carrying value of the
interest in joint ventures until repayment of the related bank borrowings.
Net investment hedge
A portion of the Group’s US dollar denominated borrowings (refer to note 25) with a nominal amount of US$98.5 million (2021: US$98.5
million) is designated as a hedge of a portion of the net investment in the Group’s US dollar net assets amounting to US$98.5 million (2021:
US$98.5 million). Therefore, hedge ratio is 1:1.
Carrying value of net investment hedge
Loss recognised in other comprehensive income
Notes
23
2022
€’m
92.4
(5.4)
2021
€’m
87.0
(6.7)
The borrowings of US$98.5 million is translated at year end exchange rate of 1 euro = 1.0666 US dollar (2021: 1 euro = 1.1326 US dollar) to
arrive at carrying amount of €92.4 million (2021: €87.0 million). €16.0 million (2021: €10.6 million) of the currency reserve (refer to note 23)
relates to the net investment hedge. There was no ineffectiveness recognised in the income statement during the year (2021: nil). If
ineffectiveness had been recognised, it would have been recorded in “Administration expenses” in the income statement.
220 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Notes to the financial statements continued (b) Fair value of financial instruments
Fair value of financial instruments measured at amortised cost
Except as detailed in the following table the Group deemed that the carrying amounts of financial instruments measured at amortised
cost approximate their fair value due to their short term nature:
Financial assets
– Non-current financial asset at amortised cost – Ornua Co-Operative Limited
– Non-current loans to joint ventures
Financial liabilities
– Non-current borrowings
Carrying
amount
2022
€’m
Fair value
2022
€’m
Carrying
amount
2021
€’m
Fair value
2021
€’m
–
61.5
–
61.5
0.2
42.5
0.2
42.6
639.8
567.2
697.2
673.2
Notes
18
35
25
Fair value is estimated by discounting future contractual cash flows using current market interest rates from observable interest rates
at the end of the reporting period that are available to the Group for similar financial instruments (classified as level 2 in the fair value
hierarchy).
Group’s fair valuation process
The Group’s finance department includes a team that performs the valuations of financial assets and liabilities required for financial
reporting purposes, including Level 3 fair values. 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 fair value movements.
In accordance with IFRS 13 ‘Fair Value Measurements’, the Group has disclosed the fair value of instruments by the following fair value
measurement hierarchy:
• quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1);
•
inputs, other than quoted prices included in Level 1, that are observable for the asset or 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).
•
Fair value of financial instruments carried at fair value
The following table shows the fair values of financial instruments measured at fair value:
Assets
Equity instrument designated at FVOCI – BDO Development Capital Fund
Foreign exchange contracts – cash flow hedges
Interest rate swaps – cash flow hedges
Cross currency swaps – fair value through income statement
Call option over non-controlling interests
Liabilities
Foreign exchange contracts – cash flow hedges
Cross currency swaps – fair value through income statement
Contingent consideration
Interest rate swaps – cash flow hedges
Put option liability
Notes
Fair value
hierarchy
(a)
(b)
(c)
(d)
(f)
(b)
(d)
(c)
(f)
Level 2
Level 2
Level 2
Level 2
Level 3
Level 2
Level 2
Level 3
Level 2
Level 3
2022
€’m
1.3
0.1
2.8
–
–
(0.3)
(0.7)
(25.3)(e)
–
–
2021
€’m
1.1
0.8
–
1.4
0.5
–
–
(7.3)(f)
(1.2)
(24.8)
(a) The investment in BDO Development Capital Fund (note 18) is fair valued by reference to the latest quarterly report available to the limited partners.
(b) Fair value is estimated by discounting the difference between the contractual forward exchange rates and the current forward exchange rates (from observable
forward exchange rates at the end of the reporting period). The effect of discounting was insignificant in 2022 and 2021.
(c) Fair value is estimated by discounting the difference between the contractual interest rate swap rates and the current interest rate swap rates (from observable
interest rate swap rates at the end of the reporting period). The effect of discounting was insignificant in 2022 and 2021.
(d) Fair value is determined by reference to the current foreign exchange rates at the end of the reporting period.
(e) Refer to note 34 for a description of how the fair value of the contingent consideration relating to the Sterling acquisition is estimated.
(f) The call option over non-controlling interests, contingent consideration and put option liability relate to the LevlUp acquisition in 2021. The fair value of the call
option is determined by discounting the excess of the estimated market value of the shareholding which is subject to call option over the actual call option
exercise price. The fair values of the contingent consideration and put option liability are estimated by calculating the present value of the future expected
payments discounted using a risk-adjusted discount rate.
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
221
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION 29. Derivatives and fair value of financial instruments continued
There were no transfers in either direction between Level 1 and Level 2 in 2022 and 2021. The movement in carrying amounts associated
with Level 3 financial instruments are as follows:
At 2 January 2022
Additions through business combination (note 34)
Remeasurements
Exchange translation adjustments
At 31 December 2022
At 3 January 2021
Additions through business combination
Remeasurements
Settlements
Additions through business combination
At 1 January 2022
Call option
over NCI
€’m
(note 29)
Put option
liability
€’m
(note 28)
Contingent
consideration
€’m
(note 28)
0.5
–
(0.5)
–
–
–
0.4
0.1
–
–
0.5
(24.8)
–
24.8
–
–
–
(23.2)
(1.6)
–
–
(24.8)
(7.3)
(23.1)
5.8
(0.7)
(25.3)
(17.4)
(7.1)
(0.6)
19.3
(1.5)
(7.3)
30. Capital and financial risk management
(a) Capital risk management
The Group’s objective when managing capital is to safeguard the Group’s ability to continue as a going concern while maximising the
returns to shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the overall cost of
capital. Total capital is calculated based on equity as shown in the balance sheet and net debt as follows:
Equity
Net debt
Total capital
Notes
25
2022
€’m
1,868.4
459.4
2,327.8
2021
€’m
1,740.3
602.7
2,343.0
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to
shareholders, issue new shares, sell assets to increase or reduce debt or buy back shares. Any material adjustments to the capital structure
are approved by the Board of Directors. From time to time, the Group purchases its own shares on the market. These shares are primarily
intended to be used for issuing shares under the Group’s long-term and short-term incentive plans. Buy decisions are made on a specific
transaction basis by the Employee Benefit Trusts. From 2020 to 2022, the Group also launched and completed several share buyback
programmes. Any shares repurchased in the buyback programmes were cancelled.
The Group’s key financing arrangements are: net debt: adjusted EBITDA and adjusted EBIT: adjusted net finance cost ratios, as defined
within covenants.
At 31 December 2022, the Group’s net debt: adjusted EBITDA ratio was 1.12 times (2021: 1.71 times), which is deemed by management to be
prudent and within the Group’s financing covenants. Net debt: adjusted EBITDA is calculated as net debt at the end of the period
divided by adjusted EBITDA. Net debt is calculated as current and non-current borrowings less cash and cash equivalents. Adjusted
EBITDA is calculated in accordance with lenders’ facility agreements definitions which adjust pre-exceptional EBITDA for items such as
dividends received from joint ventures, acquisitions or disposals and to reverse the net impact on EBITDA as a result of adopting IFRS 16
‘Leases’.
At 31 December 2022 the Group’s adjusted EBIT: adjusted net finance cost was 17.0 times (2021: 15.1 times) which is within the Group’s
financing covenants. Adjusted EBIT: adjusted net finance cost is calculated as earnings before interest and tax adjusted for the IFRS 16
‘Leases’ impact on operating profit plus dividends received from joint ventures divided by adjusted net finance cost. Adjusted net
finance cost comprises finance costs less finance income per the Group income statement plus borrowing costs capitalised into assets
and excludes finance income/costs on remeasurements of call options and contingent consideration and interest expense on lease
liabilities.
The Group’s capital position and information on the capital monitoring ratios are included in the monthly report issued to the Board of
Directors. The Group has no externally imposed capital requirements. No changes were made in the objectives, policies or processes for
capital management during 2022 and 2021.
222 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Notes to the financial statements continued (b) Financial risk management
The conduct of its ordinary business operations necessitates the Group holding financial instruments. The Group has exposure to the following
risks arising from financial instruments: market risk comprising of currency risk, interest rate risk, price risk, liquidity risk and cash flow risk, and
credit risk.
The Group does not enter into any financial instruments that give rise to a speculative position. The Group finances its operations by a
mixture of retained profits, medium-term committed borrowings and undrawn uncommitted borrowings. The Group borrows in the
major global debt markets in a range of currencies at both fixed and floating rates of interest, using derivatives where appropriate to
generate the desired effective currency profile and interest rate basis. Risk management, other than credit risk management, is carried
out by a central treasury department (“Group Treasury”) under policies approved by the Board of Directors. Group Treasury identifies,
evaluates and hedges financial risks in close co-operation with the Group’s business units. The Board of Directors provides written
principles for overall risk management, as well as, written policies covering specific areas such as foreign exchange risk, interest rate
risk, price risk, liquidity and cash flow risk, and credit risk, use of derivative and non-derivative financial instruments, and investment of
excess liquidity.
There has been no significant change during the financial year or since the end of the year to the types of financial risks faced by the
Group or the Group’s approach to the management of those risks.
Currency risk
Although the Group is based in Ireland with the euro as the functional currency of Glanbia plc, it has significant geographic investment
and operating exposures outside the eurozone, primarily in the US. As a result, currency movements, particularly movements in the
euro/US dollar exchange rate, can significantly affect the Group’s euro balance sheet and income statement. Group Treasury monitors
and manages these currency exposures on a continuous basis, using approved hedging strategies and appropriate currency derivative
instruments.
Sensitivity analysis
The following table demonstrates the sensitivity of profit before tax and total equity to movements in the euro/US dollar exchange rate
with all other variables held constant.
+/-5% change in euro/US dollar exchange rate
Impact on profit before tax*
Impact on total equity**
2022
€’m
-/+12.0
-/+70.2
2021
€’m
-/+10.5
-/+60.9
* The impact on profit before tax is based on changing the euro/US dollar exchange rate used in calculating profit before tax for the period.
** The impact on total equity is calculated by changing the euro/US dollar exchange rate used in measuring the closing balance sheet.
The Group is exposed to transactional foreign currency risk that arises from sales or purchases by an operating unit in currencies other
than the operating unit’s functional currency. Group companies are required to manage their foreign exchange risk against their
functional currency and spot and forward exchange contracts are primarily used to hedge foreign exchange risk exposure on foreign
currency denominated sales and purchases.
The notional principal amounts of the outstanding foreign exchange contracts as at 31 December 2022 were €13.0 million (2021: €14.9
million), which substantially covers the operating units currency exposure. Refer to note 29(a) for further details of the foreign exchange
contracts.
Interest rate risk
The Group’s objective is to minimise the impact of interest rate volatility on interest costs. This is achieved by determining a long-term
strategy against a number of policy guidelines, which focus on (i) the amount of floating rate indebtedness anticipated over such a
period and (ii) the consequent sensitivity of interest costs to interest rate movements on this indebtedness and the resultant impact on
reported profitability. The Group borrows at both fixed and floating rates of interest and can use interest rate swaps to manage the
Group’s resulting exposure to interest rate fluctuations.
The Group’s main interest rate risk arises from long-term borrowings with floating rates, due to the borrowings being periodically
contractually repriced within 12 months from the reporting date. These borrowings expose the Group to cash flow interest rate risk.
The Group policy is to maintain no more than one third of its projected debt exposure on a floating rate basis over any succeeding 12
month period with further minimum guidelines over the succeeding 24 and 36 month periods. The Group, on a continuous basis,
monitors the level of fixed rate cover dependent on prevailing fixed market rates, projected debt and market informed interest rate
outlook. Occasionally, the Group manages its cash flow interest rate risk by using floating to fixed interest rate swaps. Such interest rate
swaps have the effect of converting borrowings from floating rates to fixed rates. Under these interest rate swaps, the Group agrees
with other parties to exchange at specified intervals, the difference between fixed interest rate amounts and floating interest rate
amounts calculated by reference to the agreed notional amounts.
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
223
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION 30. Capital and financial risk management continued
The exposure of the Group’s borrowings subject to interest rate changes taking into account contractual repricing dates at the end of
the reporting period is €129.8 million (2021: €216.9 million) (note 25). The Group does not hedge 100% of its floating rate loans, therefore
the amount hedged is a proportion of the outstanding loans up to the notional amount of the swaps. See note 29(a) for the floating to
fixed interest rate swaps entered into by the Group to hedge against this exposure.
The Group enters into interest rate swaps that have similar critical terms as the hedged item. As all critical terms matched during the
year, there is an economic relationship between the interest rate swaps (hedging instruments) and floating rate borrowings (hedged
items).
Sensitivity analysis
The Group does not account for any fixed rate financial liabilities at fair value through profit or loss. Therefore a change in interest rates
at the reporting date would not affect profit or loss.
The table below demonstrates the sensitivity of profit before tax and total equity if market interest rates had been 1% higher or lower
with all other variables held constant:
+/-1% change in market interest rates*
Impact on profit before tax
Impact on total equity
2022
€’m
-/+0.1
-/+0.1
2021
€’m
-/+0.2
-/+0.2
*Each incremental +/-1% change in market interest rates at 2022 year end would impact profit before tax and total equity by -/+€0.1m.
Price risk
Equity price risk
The Group’s objective is to minimise the price risk the Group is exposed to because of equity instruments held by the Group (note 18).
These equity instruments are classified in the Group balance sheet as FVOCI. To manage its price risk arising from these equity
securities, the Group does not maintain a significant balance with any one equity. Diversification of the equity instruments held by the
Group must be done in accordance with the limits set by the Group. The impact of a 5% increase or decrease in equity indices across the
eurozone countries would not have any material impact on Group profit before tax or total equity.
Commodity price risk
Commodity price risk in the Group arises primarily from price fluctuations of commodities. The Group’s objective is to minimise
commodity price risk through entering into commodity options and future contracts for instance and the use of appropriate hedging
strategies. The Group enters into forward purchase and forward sale agreements in the normal course of business. Certain of these
contracts are deemed to be ‘own use’ as they were entered into in accordance with the Group’s expected purchase, sale or usage
requirements. The impact of a 5% increase or decrease in commodity prices (milk, cheese and gas) would not have any material impact
on Group profit before tax or total equity.
Liquidity and cash flow risk
The Group’s objective is to ensure that the Group does not encounter difficulties in meeting obligations associated with financial
liabilities that are settled by delivering cash or another financial asset.
In order to preserve the continuity of funding, the Group’s policy is that, at a minimum, committed facilities should be available at all
times to meet the full extent of its anticipated finance requirements, arising in the ordinary course of business, during the succeeding
12 month period. Refer to note 25 for details of the Group’s committed facilities.
When appropriate, surplus funds in the Group are transferred to Group Treasury through different methods including the repayment of
borrowings, deposits and dividends. These are then lent to Group companies, contributed as equity to fund Group operations, used to
repay external debt or invested externally. The Group does not use off-balance sheet special purpose entities as a source of liquidity or
for other financing purposes.
The Group uses cash flow forecasts to constantly monitor the funding requirements of the Group. Compliance with the Group’s financial
covenants is monitored continually based on statutory and management accounts and financial projections. All covenants have been
complied with in 2022 and 2021.
There is no significant concentration of liquidity risk.
Further analysis of the Group’s debt covenants is included in the Group Finance Director’s Review. For further details regarding the
Group’s borrowing facilities see note 25.
The table on the following page analyses the Group’s non-derivative and derivative financial liabilities, for which the contractual
maturities are essential for an understanding of the timing of the cash flows, into relevant maturity groupings based on the remaining
period from the reporting date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted
cash flows.
224 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Notes to the financial statements continued Less than
1 year
€’m
Between
1 and 2 years
€’m
Between
2 and 5 years
€’m
More than
5 years
€’m
At 31 December 2022
Non-derivative financial liabilities
Trade payables
Amounts due to joint ventures
Amounts due to other related parties
Contingent consideration
Lease liabilities
Interest-bearing borrowings
Projected interest payments on interest-bearing borrowings
Derivative financial liabilities
At 1 January 2022
Non-derivative financial liabilities
Trade payables
Amounts due to joint ventures
Put option liability
Contingent consideration
Lease liabilities
Interest-bearing borrowings
Projected interest payments on interest-bearing borrowings
Derivative financial liabilities
360.9
144.6
9.4
25.8
19.8
258.2
15.5
834.2
1.0
309.0
133.5
–
–
16.8
136.5
15.4
611.2
–
–
–
–
–
18.7
–
21.5
40.2
–
–
–
–
8.3
17.6
–
15.4
41.3
1.2
Total
€’m
360.9
144.6
9.4
25.8
126.6
898.0
129.3
–
–
–
–
39.4
288.2
63.8
391.4
–
–
–
–
48.7
351.6
28.5
428.8
1,694.6
–
–
1.0
–
–
36.3
–
41.8
366.1
26.8
471.0
–
–
–
–
–
57.2
331.1
34.2
309.0
133.5
36.3
8.3
133.4
833.7
91.8
422.5
1,546.0
–
1.2
Credit risk
The Group’s objective is to minimise credit risk which is managed on a Group basis. Credit risk is the risk of financial loss to the Group if a
customer or counterparty to a financial transaction fails to meet its contractual obligations. Credit risk arises from cash and cash
equivalents, credit exposures to customers, including outstanding receivables and committed transactions, and loans to joint ventures.
Other financial assets (note 18) are not material and accordingly, loss allowance of ECL is not material.
Financial assets subject to credit risk are written off when there is no reasonable expectation of recovery such as debtor failing to engage in a
repayment plan with a company. Subsequent recoveries of amounts written off are recognised in the Group income statement. The Group does
not expect any significant counterparty to fail to meet its obligations. The maximum exposure to credit risk is represented by the carrying
amount of each asset.
Cash and cash equivalents
In the international movement and placement of funds and execution of financial transactions, the risk of counterparty default is
managed by the Group’s policies requiring exposure to independently rated parties with long-term credit ratings of at least A3
(Moody’s) or A– (Standard & Poor’s). In the movement and placement of funds and execution of financial transactions in Ireland, the
Group’s policies accept exposure to independently rated parties with long-term credit ratings of at least Baa3 (Moody’s) or BBB–
(Standard & Poor’s). The Group’s cash and cash equivalents (note 21) at 31 December 2022 and 1 January 2022 were held within financial
institutions which complied with Group policy. Accordingly, the Group considers its cash and cash equivalents to be of low credit risk and
does not expect any expected credit loss in relation to them.
Trade receivables
The Group’s credit risk management policy requires that, where possible, all debt is insured with an external credit insurance underwriter.
The Group’s authorisation review includes external credit agency reports, the trading and financial history and position of the customer,
the business case, the country in which the customer operates and any other available information. The utilisation of credit limits is
actively managed and reviewed formally on an annual basis. Where the extension of credit is not appropriate, payment in advance is
required. No goods are dispatched on credit until the credit controller has authorised the application confirming all necessary procedures
have been complied with. Outstanding customer balances are regularly monitored and a review for indicators of impairment (evidence
of financial difficulty of the customer, payment default, breach of contract etc.) is carried out at each reporting date.
Goods are sold primarily subject to retention of title clauses, so that in the event of non-payment the Group may have a secured claim.
Where required, the Group holds appropriate security or liens in respect of trade and other receivables. The Group does not hold any
significant security or liens at the end of the year.
See note 19 for the carrying amount of the Group’s trade and other receivables.
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
225
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION 30. Capital and financial risk management continued
At the end of the reporting period, the Group derecognised €37.5 million of certain trade receivables related to one customer through
the use of a limited receivables sale programme (2021: €31.3 million). This programme was entered into to partially mitigate but not fully
offset an increase in credit terms relating to these trade receivables. Under this programme, the Group has the option to sell certain
trade receivable invoices to a third party financial institution. This third party may accept this offer for sale by way of a non-recourse
payment to the Group (for face value of the receivables net of transaction fees), upon which the Group no longer retains any risks and
rewards in the receivables sold, resulting in the derecognition of these receivables from the Group balance sheet. The proceeds from
these sales of receivables are included in cash from operating activities in the Group statement of cash flows. The fair value of the
receivables equals to its amortised cost as they are transferred at the face value of the trade receivable invoices.
The Group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for
all trade receivables. To measure the expected credit losses, historical loss rates of operating units are calculated based on their recent
historical credit loss experience and applied to the operating units trade receivables at the reporting date. The loss allowance is
estimated based on historical loss rates and adjusted where appropriate to reflect current information and forward-looking information
on macroeconomic factors which affect the ability of the debtors to settle the receivables. The loss allowance recognised during the
year reflects current and forward-looking information including the trading environment in which the Group sells its goods.
The movement in the expected credit loss allowance for trade receivables is as follows:
At the beginning of the year
Exchange differences
Increase in loss allowance recognised during the year
Receivables written off during the year as uncollectible
Unused amounts reversed
At the end of the year
Notes
19
2022
€’m
12.0
0.6
2.8
(0.5)
(1.9)
13.0
2021
€’m
11.2
0.8
2.6
(1.7)
(0.9)
12.0
The net increase in loss allowance has been included within the income statement.
Trade receivables amounted to €344.3 million at 31 December 2022 (2021: €327.2 million) (note 19). Receivable balances that are neither
past due nor impaired amounted to €318.0 million (2021: €299.7 million). Past due information is reported to key management personnel
for credit risk management purposes. At 31 December 2022, trade receivables of €26.3 million (2021: €27.5 million) were past due and
analysed as follows:
Past due
Less than 30 days
1 to 3 months
4 to 6 months
Over 6 months
Less: expected credit loss allowance
Total
2022
€’m
13.9
6.5
3.3
2.6
26.3
(13.0)
13.3
2021
€’m
19.6
4.5
1.3
2.1
27.5
(12.0)
15.5
226 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Notes to the financial statements continued Loans to joint ventures
The Group advanced interest bearing loans to its joint ventures for the purposes of funding capital expenditure. See note 35 for details of
the loans. The loans receivable are considered to have low credit risk as there is a low risk of default and the joint ventures are expected
to meet their contractual cash flow obligations in the near term. The Group considers information such as cash flow forecasts of the
joint ventures to determine whether they have the ability to repay the intercompany loans. Management does not expect significant
adverse changes in economic and business conditions which would reduce the ability of the joint ventures to repay the loans.
Consequently, the Group has determined that the loans are of low credit risk.
Where a loan is considered not to have low credit risk at the reporting date and to assess whether there is a significant increase in credit
risk of the loan since initial recognition, the Group considers information such as actual or expected significant adverse changes in
economic or business conditions that are expected to cause a significant change in a joint venture’s ability to meet its obligations, and
significant increases in credit risk on other financial instruments of the joint venture. A loan would be considered to be in default if a joint
venture did not make contractual repayments within 90 days after they fell due unless evidenced otherwise. Evidence that a loan is
credit-impaired would include information such as significant financial difficulty of the joint venture, or the probability that the joint
venture will enter bankruptcy.
In calculating the expected credit loss rates, the Group considers historical loss rate on its loans advanced to the joint ventures, internal
credit rating of the joint ventures based on the experience of Group Treasury and recent pricing provided by external credit providers
and adjusts for forward-looking macroeconomic data. There were no historical losses for loans advanced to the joint ventures and
internal credit rating of the joint ventures is considered to be about investment grade. Expected credit loss allowance is accordingly not
material.
(c) Carrying amounts of financial instruments
Financial assets measured at amortised cost
Trade receivables and receivables from related parties
Loans to joint ventures
Ornua Co-operative Limited
Financial liabilities measured at amortised cost
Borrowings
Trade payables and amounts due to related parties
Lease liabilities
Financial liabilities measured at FVTPL – contingent consideration
Investments in equity instruments designated at FVOCI
Put option liability measured at FV through equity
Net derivative asset
Notes
35
18
25
15
28
28
2022
€’m
337.1
61.5
–
398.6
(898.0)
(514.9)
(114.8)
2021
€’m
321.1
42.5
0.2
363.8
(833.7)
(442.5)
(119.5)
(1,527.7)
(1,395.7)
(25.3)
2.1
–
1.9
(7.3)
1.7
(24.8)
1.5
(d) Offsetting financial assets and financial liabilities
Financial assets and liabilities are offset and the net amount is reported in the Group balance sheet where the Group has a legally
enforceable right to offset recognised amounts which is not conditional on the occurrence of a future event, and there is an intention to
settle on a net basis or realise the asset and settle the liability simultaneously.
The Group enters into derivative transactions under International Swaps and Derivatives Association (ISDA) master netting arrangements.
The following table sets out the carrying amounts of recognised financial instruments that are subject to these agreements:
At 31 December 2022
Derivative financial assets
Derivative financial liabilities
At 1 January 2022
Derivative financial assets
Derivative financial liabilities
Notes
Gross amounts
€’m
Gross amounts
set off in the
balance sheet
€’m
Net amounts
presented in the
balance sheet
€’m
29(a)
29(a)
29(a)
29(a)
2.9
(1.0)
2.7
(1.2)
–
–
–
–
2.9
(1.0)
2.7
(1.2)
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
227
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION 31. Contingent liabilities and commitments
Contingent liabilities
Guarantees provided by financial institutions amounting to €7.8 million (2021: €6.9 million) are outstanding at 31 December 2022. 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.
Any Irish registered wholly-owned subsidiary of the Company may avail of the exemption from filing its statutory financial statements
for the year ended 31 December 2022 as permitted by section 357 of the Companies Act 2014 and if an Irish registered wholly-owned
subsidiary of the Company elects to avail of this exemption, there will be in force an irrevocable guarantee from the Company in respect
of all commitments entered into by such wholly-owned subsidiary, including amounts shown as liabilities (within the meaning of section
357 (1) (b) of the Companies Act 2014) in such wholly-owned subsidiary’s statutory financial statements for the year ended 31 December
2022.
Within the scope of benefitting from the exemption related to the filing of the statutory financial statements for the financial year
ended 31 December 2022 of Glanbia Foods B.V., the Company has guaranteed the liabilities ensuing from legal acts performed by this
subsidiary from 1 January 2022 in accordance with and to the extent as set out in section 2:403.1(b and f) of the Dutch Civil Code.
Therefore Glanbia Foods B.V. is exempt from the obligation to publish its statutory financial statements and its obligations to file
statutory financial statements has been fulfilled by means of the publication of the declaration of consent and the declaration of liability.
Within the scope of benefitting from the exemption related to the filing of the statutory financial statements for the financial year
ended 31 December 2022 of the Luxembourg subsidiary, Glanbia Luxembourg SA, the Company has guaranteed the liabilities of this
subsidiary in respect of any losses or liabilities (as provided by Article 70 (c) of the Luxembourg Law of 19 December 2002 on the register
of commerce and companies and the accounting and annual accounts of undertakings) for the financial year ended 31 December 2022.
This subsidiary avails of the exemption from filing of their statutory financial statements, as permitted by Article 70 of the Luxembourg
Law of 19 December 2002 on the register of commerce and companies and the accounting and annual accounts of undertakings. It is
noted that the two other Luxembourg subsidiaries, Glanbia Luxfin SA and Glanbia Luxinvest SA were liquidated in December 2022.
Commitments
Capital expenditure contracted for at the reporting date but not recognised in the Group financial statements is as follows:
Property, plant and equipment
Intangible assets
2022
€’m
8.4
0.7
2021
€’m
8.3
1.5
As at 31 December 2022, the Group has committed to invest €10.0 million cash contributions in Glanbia Cheese EU Limited (2021: €10.0
million). Additionally, there was an undrawn loan facility of €9.5 million as at 31 December 2022 (2021: €1.3 million) which was provided by
the Group to the joint venture.
228 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Notes to the financial statements continued 32. Cash flow information
(a) Cash generated from operating activities
Profit for the year
Exceptional items
Profit after tax from discontinued operations
Income taxes
Profit before taxation
Share of results of joint ventures accounted for using the equity method
Finance costs
Finance income
Amortisation of intangible assets
Depreciation of property, plant and equipment
Depreciation of right-of-use assets
Cost of share-based payments
Difference between pension charge and cash contributions
Net write down of inventories
Non-cash movement in/on:
– provisions
– allowance for impairment of receivables
– cross currency swaps
– disposal of leases
Reversal of impairment of property, plant and equipment
Loss/(profit) on disposal of property, plant and equipment
Operating cash flows before movement in working capital
Increase in inventories
Decrease/(increase) in short-term receivables
Increase in short-term liabilities
Decrease in provisions
Cash generated from operating activities before exceptional items
(b) The movement in working capital is as follows:
Notes
6
16
14
15
9/23
5
5
32(b)
32(b)
32(b)
32(b)
2022
€’m
256.8
(21.4)
–
31.4
266.8
(15.4)
22.5
(1.8)
75.0
48.7
18.8
18.8
(0.5)
13.6
1.0
0.4
2.6
(0.4)
–
0.4
450.5
(101.1)
5.6
40.9
(2.9)
393.0
2022
At 2 January 2022
Exchange differences
Arising on acquisition (note 34)
Loans/amounts payable to joint ventures, interest accruals,
capital creditors and other non-operating items
Increase/(decrease) in working capital
At 31 December 2022
2021
At 3 January 2021
Exchange differences
Arising on acquisition
Loans/amounts payable to joint ventures, interest accruals,
capital creditors and other non-operating items
Increase/(decrease) in working capital
At 1 January 2022
Inventories
€’m
(note 20)
Trade and other
receivables
€’m
(note 19)
Trade and other
payables
€’m
(note 28)
Provisions
€’m
(note 27)
593.6
25.8
3.3
(20.1)
101.1
703.7
377.6
33.1
2.9
(6.1)
186.1
593.6
359.4
24.0
5.5
(3.8)
(5.6)
379.5
319.2
23.5
3.4
(0.1)
13.4
359.4
(669.3)
(43.3)
(2.6)
(18.7)
(40.9)
(774.8)
(441.6)
(38.4)
(4.4)
22.2
(207.1)
(669.3)
(16.5)
(0.4)
–
(1.0)
2.9
(15.0)
(11.2)
(0.7)
–
(9.7)
5.1
(16.5)
2021
€’m
167.4
42.1
(25.7)
24.6
208.4
(19.2)
19.5
(2.0)
63.9
44.9
18.1
15.9
(6.4)
6.1
8.7
–
(0.8)
(0.1)
(1.4)
(0.1)
355.5
(186.1)
(13.4)
207.1
(5.1)
358.0
Total
€’m
267.2
6.1
6.2
(43.6)
57.5
293.4
244.0
17.5
1.9
6.3
(2.5)
267.2
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
229
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION 32. Cash flow information continued
(c) Changes in liabilities arising from financing activities
At 2 January 2022
Drawdown of borrowings
Repayment of borrowings
Leases
Payment of lease liabilities
Acquisitions
Exchange differences
At 31 December 2022
At 3 January 2021
Drawdown of borrowings
Repayment of borrowings
Leases
Payment of lease liabilities
Acquisitions
Exchange differences
1 January 2022
Borrowings
€’m
Private
Placement Debt
€’m
Lease
liabilities
€’m
Notes
25
25
34
25
25
366.1
688.4
(780.8)
–
–
–
14.5
288.2
315.8
290.9
(252.7)
–
–
–
12.1
366.1
331.1
–
–
–
–
–
20.5
351.6
269.7
167.6
(130.7)
–
–
–
24.5
331.1
119.5
–
–
11.2
(16.5)
0.6
–
114.8
110.2
–
–
27.3
(19.1)
1.1
–
119.5
Total
€’m
816.7
688.4
(780.8)
11.2
(16.5)
0.6
35.0
754.6
695.7
458.5
(383.4)
27.3
(19.1)
1.1
36.6
816.7
230 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Notes to the financial statements continued 33. Assets and liabilities held for sale, and discontinued operations
Property, plant and equipment
Right-of-use assets
Inventories
Interest in joint venture – Glanbia Ireland
Assets held for sale
Lease liabilities
Liabilities held for sale
Notes
14
15
17
2022
€’m
9.5
2.6
2.2
–
14.3
(6.3)
(6.3)
2021
€’m
–
–
–
234.0
234.0
–
–
The assets held for sale at 31 December 2022 relate to the non-core assets of a small US based bottling facility (Aseptic Solutions USA Ventures,
LLC). Following the completion of a strategic portfolio review, these assets (and related liabilities) which are part of the Glanbia Nutritional
segment were determined to be non-core and a decision was made to divest of them, resulting in the designation as held for sale at year end.
Discussions are ongoing with a number of interested parties, and a sale is expected to conclude by the end of H1, 2023. The lease liabilities at
31 December 2022 are directly associated with the right-of-use assets classified as held for sale.
An impairment of €14.5 million was recognised as an exceptional charge in the income statement immediately prior to the classification of the
assets and liabilities as held for sale. There was no further gain or loss recognised subsequently. Associated cumulative amounts recognised in
other comprehensive income associated with the assets and liabilities held for sale as at 31 December 2022 were currency translation gains of
€3.9 million.
We do not regard the divestment of the non-core assets and the associated liabilities as discontinued operations as they are not considered to
be either a separate major line of business or geographical area of operations.
The assets held for sale at 1 January 2022 related to the interest in Glanbia Ireland. The Company announced its intention to sell its 40% holding
in Glanbia Ireland to Tirlán Co-operative Society Limited (formerly Glanbia Co-operative Society Limited) (the “Society”) for €307.0 million in
November 2021 (the “Transaction”). Members of the Society approved the Transaction on 17 December 2021. Accordingly, in the prior year, the
Group has treated the joint venture investment in Glanbia Ireland as an asset held for sale on the Group balance sheet and ceased to apply the
equity method of accounting to its interest in Glanbia Ireland from 17 December 2021.
The Transaction was completed on 1 April 2022 for €307.0 million cash following the approval of the independent shareholders of the Company
and receipt of regulatory approvals. As part of the terms of the Transaction, the Company paid Glanbia Ireland a contribution of €8.0
million related to pension obligations, separation and rebranding costs and has committed to a maximum additional €1.5 million
re-imbursement of rebranding costs in connection with the Transaction. The gain of €57.2 million on disposal of Glanbia Ireland (note 6) is
based on the €307.0 million received, less the carrying amount of the asset held for sale of €234.0 million and costs associated with the
transaction of €15.8 million.
The profit after tax from discontinued operations included in the Group income statement in the prior year related to the Group’s share
of profit after tax of Glanbia Ireland and are analysed as follows:
Notes
Glanbia Ireland’s results (100%)
Revenue
Expenses
Profit before tax
Tax
Profit after tax
Profit after tax attributable to equity holders of Glanbia Ireland
Reconciliation to the Group’s share of Glanbia Ireland’s profit after tax
Group’s 40% share of profit after tax
Adjustments*
Group’s share of Glanbia Ireland’s profit after tax presented as discontinued operations
17
* Relates to adjustment in respect of unrealised profit on sales to the Group and amortisation of intangible assets recognised on fair value adjustments.
2021
€’m
2,169.9
(2,088.3)
81.6
(10.3)
71.3
69.5
27.8
(1.4)
26.4
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
231
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION 34. Business combinations
On 11 March 2022 Glanbia acquired 100% of the voting shares of Sterling Technology, LLC (“Sterling”), a bioactive ingredient company
based in South Dakota, USA. Sterling will complement the existing ingredient technology portfolio of Nutritional Solutions providing
bioactive ingredients which are mainly used in the growing immunity and gut-health segments as well as in pet nutrition. The goodwill
relates to the acquired workforce, the expectation that the business will give rise to synergies across the Glanbia Nutritionals segment,
will generate future sales beyond the existing customer base, as well as the opportunity to expand the business into new markets, where
there are no existing customers, and further builds on our offering in immunity solutions in Nutritional Solutions. Goodwill of €22.5 million
is expected to be deductible for tax purposes.
Details of the net assets acquired and goodwill arising from the acquisition are as follows:
Cash paid
Contingent consideration
Total consideration
Less: fair value of net assets acquired
Goodwill
The fair value of assets and liabilities arising from the acquisition are as follows:
Property, plant and equipment
Right-of-use assets
Intangible assets – customer relationships
Intangible assets – recipes and know-how
Intangible assets – trade names
Inventories
Trade and other receivables
Cash and cash equivalents
Trade and other payables
Lease liabilities
Fair value of net assets acquired
Notes
16
14
15
16
16
16
32(b)
32(b)
25
32(b)
32(c)
Total
€’m
54.5
23.1
77.6
(55.1)
22.5
5.9
0.6
30.5
10.0
1.6
3.3
5.5
0.9
(2.6)
(0.6)
55.1
The contingent consideration arrangement requires the Group to pay the former owners of Sterling an earnout in 2023 if a pre-defined
earnings threshold is exceeded within a defined period post acquisition. Under the acquisition agreement, the undiscounted amount of
future payments for which the Group may be liable ranges from nil to US$27.5 million (€25.8 million translated at period end exchange
rate).
The fair value of the contingent consideration of €25.3 million at period end (note 28) was estimated by calculating the present value of
the future expected payments. The main significant unobservable input in the calculation is the forecast EBITDA of Sterling over the
relevant period. As it is deemed highly probable that the higher end of the EBITDA range will be met, the Group have assumed that the
upper limit of the earnout will be payable. A 10% increase in the forecast EBITDA would not change the fair value of the contingent
consideration. A 10% decrease in forecast EBITDA would result in a decrease in fair value of the contingent consideration by €8.4 million.
The fair value of Sterling’s trade and other receivables at the acquisition date amounted to €5.5 million. The gross contractual amount
for receivables due is €5.8 million, of which €0.3 million is expected to be uncollectible. Acquisition-related costs of €0.2 million incurred
primarily on professional fees are included in administrative expenses.
Combined impact of acquisitions
The revenue and profit before taxation and exceptional items of the Group, including the post acquisition impact of the acquisition
completed during the year ended 31 December 2022, were as follows:
Revenue
Profit before taxation and exceptional items
2022
Acquisition
€’m
22.0
5.0
Group
excluding
acquisition
€’m
5,620.4
261.8
Group including
acquisition
€’m
5,642.4
266.8
232 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Notes to the financial statements continued The revenue and profit before taxation and exceptional items of the Group for the year ended 31 December 2022 determined in
accordance with IFRS 3 as though the acquisition date for all business combinations effected during the year had been at the beginning
of the year would be as follows:
Revenue
Profit before taxation and exceptional items
Pro-forma
2022
acquisition
€’m
Group
excluding
acquisition
€’m
Pro-forma
group including
acquisition
€’m
27.0
5.5
5,620.4
261.8
5,647.4
267.3
The Group acquired PacMoore Process Technologies, LLC in 2021 for which the fair value of assets and liabilities were determined
provisionally. There was no change to goodwill following the finalisation of the fair value of assets and liabilities during the measurement
period.
35. Related party transactions
Related parties of the Group include subsidiary undertakings, joint ventures, Tirlán Co-operative Society Limited (formerly Glanbia
Co-operative Society Limited) (the “Society”)and its subsidiaries (“Tirlán Co-operative Group”) and key management personnel. A listing of
the principal subsidiaries and joint ventures is provided in note 37.
Tirlán Co-operative Group holds 27.7% (2021: 32.5%) of the issued share capital of the Company. Refer to note 33 for the disposal of
Glanbia Ireland, which was a joint venture of the Group up to 1 April 2022, to the Society. From 2 April 2022, Glanbia Ireland became a
wholly owned subsidiary of the Society and also an other related party to the Group. Accordingly transactions with Glanbia Ireland before
2 April 2022 (including the prior year) and from 2 April 2022 were included within “Transactions with joint ventures” and “Transactions with
Tirlán Co-operative Group” respectively.
Details of related party transactions are as follows:
Transactions with joint ventures 1
Dividends received
Sales of goods
Sales of services
Purchase of goods
Loans advanced during the year 2
Repayment of loans advanced to Glanbia Ireland
Transactions with Tirlán Co-operative Group 3
Dividends received
Dividends paid
Sales of goods
Sales of services
Purchase of services
Purchase of goods
2022
€’m
2021
€’m
14.4
0.2
21.2
2,033.0
47.0
28.8
0.1
26.7
0.5
28.5
0.3
78.7
33.9
0.7
49.2
1,430.0
10.7
–
0.1
25.8
–
2.4
0.3
–
1. The Group trades in the normal course of business with its joint ventures and provides management and administrative services to them.
2. €0.8 million of interest was capitalised during the year (2021: nil).
3. The Group provides management and administrative services to the Society and is headquartered in a premises owned by the Society.
Receivable from and payables to joint ventures and Tirlán Co-operative Group as at the balance sheet date are included as separate line
items in notes 19 and 28. The outstanding balances included in receivables and payables at the balance sheet date in respect of
transactions with related parties are unsecured, interest free and settlement arises in cash. No guarantees have been given or received in
relation to related party receivables and payables. €61.5 million of loans to joint ventures as at 31 December 2022 (2021: €42.5 million)
(note 30 (c)) were advanced at arm’s length with interest accruing and, in general, paid to the Group at predetermined intervals.
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
233
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION 35. Related party transactions continued
Key management personnel
The Board of Directors and Glanbia Operating Executive are deemed to be key management personnel for the purposes of IAS 24 as they
are responsible for planning, directing and controlling the activities of the Group. Key management personnel remuneration amounted to:
Salaries and other short-term employee benefits
Post-employment benefits
Share-based payment expense
Non-Executive Directors fees
2022
€’m
9.0
1.1
8.6
1.1
19.8
2021
€’m
8.1
0.9
7.3
1.0
17.3
Dividends totalling €0.3 million (2021: €0.3 million) were received by key management personnel during the year, based on their personal
shareholdings in Glanbia plc. The Group through Employee Benefit Trusts reacquired Company shares from key management
personnel; the total number reacquired was 59,484 ordinary shares at an average price of €11.04 per share (2021: 52,506 ordinary shares
at an average price of €14.09 per share).
Retirement benefits of €0.3 million (2021: €0.4 million) were accrued in the year to two members of key management (2021: three) under
a post retirement defined benefit plan. Total retirement benefits accrued to key management under the post retirement defined benefit
plan are €5.1 million (2021: €7.8 million).
36. Events after the reporting period
See note 13 for the final dividend, recommended by the Directors. Subject to shareholder approval, this dividend will be paid on 5 May
2023 to shareholders on the register of members on 24 March 2023, the record date.
Subsequent to the year end, Glanbia has signed a non-binding memorandum of understanding for the sale of the Company’s
shareholding in Glanbia Cheese and Glanbia Cheese EU joint ventures (“Glanbia Cheese”) to Leprino Foods Company. It is expected that
Glanbia will receive initial cash proceeds in excess of €160m (including the repayment of shareholder loans), with further contingent
consideration of up to €25m dependant on the performance of Glanbia Cheese over the next three years.
Glanbia generates the majority of its earnings and has significant assets and liabilities denominated in US dollar. To reduce the
potential for foreign exchange volatility in future reported earnings, the Group has decided to change its presentation currency from
Euro to US dollar with effect from 1 January 2023. The impact of change in presentation currency will be provided in advance of the Q1,
2023 trading update.
234 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Notes to the financial statements continued 37. Principal subsidiaries and joint ventures
The information outlined in section (a) below relates only to the principal undertakings in the Group at the reporting date. The Group has
availed of the exemption under section 316 of the Companies Act 2014. The information required under section 314 of the Companies Act
2014 (including a full listing of subsidiaries and joint venture undertakings) will be annexed to the Company’s Annual Return to be filed in
the Companies Registration Office in Ireland. All beneficial interests are in ordinary shares, membership interests or membership units.
All Group entities are wholly owned subsidiaries, unless otherwise stated.
(a) Subsidiaries
Incorporated and operating in
Ireland
Alanfield Society Limited
Principal activity
Holding society
Avonmore Proteins Designated Activity Company 3
Financing
Avonmore Skim Milk Products Limited 3
Holding company
Glanbia Cheesip Limited 1,4
Glanbia Estates Limited
Research and development
Property and land dealing
Glanbia Finance International Designated Activity
Company
Financing
Glanbia Financial Services Unlimited Company
Financing
Glanbia GNPN Holding Limited
Glanbia Holdfin Limited
Glanbia Investchip Limited
Holding company
Holding company
Holding and managing receivables
Glanbia Investment Holding Limited
Holding company
Glanbia Management Services Limited
Management and general business services
Glanbia Nutritionals Limited
Glanbia Performance Nutrition Limited
Nutritional ingredients
Performance nutrition
Glanbia Property Holding Designated Activity Company Holding company
Glanbia Property Rentals Designated Activity Company 3 Property lessor
Glanbia Support Services Limited
Glassonby Unlimited Company
Holding company
Financing
Waterford Foods Designated Activity Company
Holding company
Aseptic Solutions USA Ventures, LLC
Nutritional ingredients
Foodarom USA, Inc.
Glanbia Business Services, Inc.
Glanbia (Delaware), Inc.
Glanbia Foods, Inc.
Glanbia, Inc.
Glanbia Nutritionals (NA), Inc.
Glanbia Nutritionals, Inc.
Flavours solutions
Business services
Holding company
Cheese and nutritional ingredients
Holding company
Nutritional ingredients
Nutritional ingredients
Glanbia Nutritionals Services, LLC
Management services (nutritional ingredients)
Glanbia Performance Nutrition (Manufacturing), Inc.
Performance nutrition
Glanbia Performance Nutrition (NA), Inc.
GPN Commercial, LLC
Performance nutrition
Performance nutrition
GPN Slimfast Commercial, LLC
Weight management solutions
Grass Advantage, LLC
KSF Acquisition Corporation
Performance nutrition
Weight management solutions
Lifeagen Biosciences of Florida, Inc.
Mineral and vitamin supplements
PacMoore Process Technologies, LLC
Nutritional ingredients
Sterling Technology, LLC 6
Bioactive solutions
United States
of America
Registered
office
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
2
3
2
2
4
2
2
2
2
2
5
2
2
2
2
5
2
2
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
235
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Incorporated and operating in
Britain and
Northern Ireland
Glanbia Holdings Limited
Glanbia Investments (UK) Limited
Glanbia Milk Limited
Principal activity
Financing
Holding company
Management services
Glanbia Performance Nutrition (UK) Limited
Performance nutrition
Glanbia Performance Nutrition (UK Sales Division)
Limited
Performance nutrition
Australia
Brazil
Glanbia (UK) Limited
Waterford Foods International Limited
Glanbia Performance Nutrition Pty Ltd
Glanbia Marketing de Produtos de Nutriçâo e
Performance do Brasil Ltda 1
Canada
Foodarom Group Inc. 1
Glanbia Nutritionals (Canada) Inc. 1
Holding company
Holding company
Performance nutrition
Performance nutrition
Flavours solutions
Nutritional ingredients
Glanbia Performance Nutrition Canada Inc. 1
Performance nutrition
China
Glanbia Nutritionals (Suzhou) Co., Ltd. 1
Glanbia Performance Nutrition Trading (Shanghai) Co.,
Ltd. 1
Nutritional ingredients
Performance nutrition
Denmark
Nutramino Int. ApS (formerly known as Nutramino
Performance nutrition
Glanbia (Shanghai) International Trading Co., Ltd. 1
Nutritional ingredients
Holding ApS) 1, 8
France
Germany
India
Italy
Japan
Glanbia Performance Nutrition France SAS 1
Performance nutrition
Body & Fit Nutrition GmbH 1
Foodarom Germany GmbH 1,5
Performance nutrition
Flavours solutions
Glanbia Nutritionals Deutschland GmbH 1
Nutritional ingredients
Glanbia Performance Nutrition GmbH 1
LevlUp GmbH 1, 7
Glanbia India Private Limited 2
Performance nutrition
Performance nutrition
Nutritional ingredients
Glanbia Performance Nutrition (India) Private Limited 2
Performance nutrition
Glanbia Nutritionals Italia Srl
Glanbia Japan K.K. 1
Performance nutrition
Nutritional ingredients
Korea (Republic of)
Glanbia Performance Nutrition Korea, LLC 1
Performance nutrition
Malta
Glanbia Maltfin Limited 1
Glanbia Maltinvest Limited 1
Mexico
Glanbia, S.A. de C.V. 1
Netherlands
Body & Fit Sportsnutrition B.V. 1
Glanbia Foods B.V. 1
Financing
Financing
Nutritional ingredients
Performance nutrition
Holding company
New Zealand
Glanbia Performance Nutrition (New Zealand) Limited 1 Performance nutrition
Norway
Philippines
Portugal
Nutramino NO AS 1
Performance nutrition
Glanbia Performance Nutrition Philippines, Inc. 1
Performance nutrition
Glanbia Nutritionals (Portugal), Sociedade Unipessoal
Lda. 1
Performance nutrition
Russian Federation
LLC Glanbia 1
Nutritional ingredients
Singapore
Glanbia Nutritionals Singapore Pte Limited
Nutritional ingredients
Glanbia Performance Nutrition Singapore Pte. Ltd
Performance nutrition
South Africa
Glanbia (Pty) Limited
Sweden
Nutramino AB 1
United Arab Emirates Glanbia Performance Nutrition DMCC 1
Uruguay
Glanbia (Uruguay Exports) SA 1
Nutritional ingredients
Performance nutrition
Performance nutrition
Nutritional ingredients
236 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Registered
office
6
6
6
6
6
6
6
7
8
9
9
9
10
11
12
13
14
15
16
16
17
18
19
20
21
22
23
24
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
Notes to the financial statements continued 1. The statutory year end of these subsidiaries is fixed at 31 December each year to comply with statutory requirements.
2. The statutory year end of these subsidiaries is 31 March, which coincides with the tax year in India.
3. The statutory year end of these subsidiaries is 23 December.
4. Glanbia Cheesip Limited had a branch at 1 rue Hildegard von Bingen L–1282 Luxembourg which was closed during 2022.
5. Foodarom Germany GmbH has a branch (now inactive) at Via Santa Valeria 52, Seregno (MB) 20831 Italy.
6. Acquired in 2022.
7. Acquired beneficial 60% interest in 2021.
8. During 2022 Nutramino Int. ApS merged into Nutramino Holding ApS and subsequently Nutramino Holding ApS changed its name to Nutramino Int. ApS.
The Group has no significant restrictions in relation to its ability to access or use the assets and settle the liabilities of its subsidiaries.
(b) Joint ventures
Incorporated and operating in
Ireland
Glanbia Cheese EU Limited
MWC-Southwest Holdings LLC
United States
of America
Britain and
Northern Ireland
Glanbia Cheese Limited
Cheese products
Principal activity1
Cheese products
Holding company of two cheese and
nutritional ingredients companies
Registered
office
1
2
39
1. Refer to note 17 for further details.
The Group has 50% beneficial interest Glanbia Cheese EU Limited and MWC-Southwest Holdings LLC, and 51% beneficial interest in
Glanbia Cheese Limited. The Group’s interest in Glanbia Ireland DAC was classified as held for sale as at 1 January 2022 and disposed
off during 2022 (note 33). The Group’s interests in joint ventures are subject to certain restrictions, however these are not material.
1700-242 Hargrave Street, Winnipeg MB, R3C 0V1, Canada
3411 Silverside Road Tatnall Building 104, Wilmington, New Castle County, DE 19810, United States
1925 Lovering Ave, Wilmington, DE 19806, United States
950 W Bannock Street 1100, Boise, ID83702, Ada County, United States
11380 Prosperity Farms Rd 221E, Palm Beach Gardens FL 33410, United States
The Colmore Building, 20 Colmore Circus, Queensway, Birmingham, England and Wales, B4 6AT, United Kingdom
Level 10, 68 Pitt Street, Sydney NSW 2000, Australia
Registered office
1 Glanbia House, Kilkenny, Ireland, R95 E866
2
3
4
5
6
7
8 Rua Funchal, no, 411, 4th floor, suite 43, room 36, Villa Olimpia, São Paula, SP 04551-060, Brazil
9
10 No. 128 Fangzong Street SIP, Suzhou, Jiangsu Province, PRC 215025, China
11 Unit 01, 03-D, Nominal Floor 6 (Actual Floor 6), Office Building C, No. 610, Xujiahui Road, Huangpu District, Shanghai, China
12 Room 228, 2/F, Building 1, No. 239, Gang’ao Road, Shanghai New Free Trade Zone, China
13 Holbergsgade 14, 2. tv., 1057, København K, Denmark
14 8, Avenue Hoche, 75008, Paris, France
15 Hohenstaufenring 62, 50674, Köln, Germany
16 Gewerbestrasse 3, 78359 Orsingen – Nenzingen, Germany
17 Mainzer Landstraße 41, 60329, Frankfurt am Main, Germany
18 Zeppelinstr. 15, 37983, Gottingen, Germany
19 Ground Floor, No. 12/47, 7th Cross, Swimming Pool Extension, Malleshwaram, Bangalore KA, 560003, India
20 Allied House, Nelson Mandela Marg Pocket 10, Sector B, Vasant Kunj, New Delhi, DL110070, India
21 Via Santa Valeria 52, Seregno (MB), 20831, Italy
22 Level 18 Yebisu Garden Place, Tower 4–20–3, Ebisu Shibuya-ku, Tokyo, Japan
23 #412 Fastfive, VPLEX, 501, Teheran-ro, Gangnam-gu, Seoul, 06168, Republic of Korea
24 Vision Exchange Building, Level 2, Triq it-Territorjals, Zone 1, Central Business District, Birkirkara, CBD 1070, Malta
25 Av. Prolongación Paseo de la Reforma No. 115–1006, Col. Paseo de las Lomas, C.P. 01330, Mexico
26 Mars 10, 8448CP, Heerenveen, Netherlands
27 Herikerbergweg 88, 1101 CM Amsterdam, Netherlands
28 C/–Martelli Mckegg, Level 20, HSBC Tower, 188 Quay Street, Auckland, 1010, New Zealand
29 Fjordalléen 16, Oslo, 0250, Norway
30 146 Yakal Street, San Antonio Village, Makati City 1203, Philippines
31 Miraflores, Torre de Monsanto, Rua Afonso Praça, 30–7o e 8o piso, 1495–061 Miraflores, Portugal
32 6 Vernadskogo prospect, Office 614, 119311, Moscow, Russian Federation
33 Helios, #03-03/04, 11 Biopolis Way, Singapore, 138667, Singapore
34 300 Beach Road, #35-06/07 , The Concourse, 199555, Singapore
35 Stand 893, 7 Forbes Street, Midstream Estate – Windsor Gate, Brakfontein Road, Guateng, South Africa, 2192, South Africa
36 Ostermalinstorg 1, 4 tr, 114 42, Stockholm, Sweden
37 Unit No: 1JLT-Nook-098, One JLT, Plot No: DMCC-EZ1-1AB, Jumeirah Lakes Towers, Dubai, United Arab Emirates
38 Copacabana Street, Block 26 – S 12, Médanos de Solymar City, Canelones, Uruguay
39 4 Royal Mews, Gadbrook Park, Rudheath, Northwich, Cheshire, CW9 7UD, United Kingdom
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
237
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Company Balance Sheet
as at 31 December 2022
ASSETS
Non-current assets
Investment in subsidiaries
Other financial assets
Deferred tax assets
Current assets
Trade and other receivables
Cash at bank and in hand
Joint venture held for sale
Total assets
EQUITY
Issued capital and reserves attributable to equity holders of the Company
Share capital and share premium
Other reserves
Retained earnings
Total equity
LIABILITIES
Non-current liabilities
Bank borrowings
Current liabilities
Bank overdraft
Provisions
Trade and other payables
Total liabilities
Total equity and liabilities
31 December
2022
€’m
1 January
2022
€’m
Notes
2
3
4
7
5
6
581.6
1.6
0.2
583.4
10.8
10.9
21.7
–
21.7
605.1
459.4
12.1
74.8
546.3
–
2.6
0.6
55.6
58.8
58.8
605.1
581.9
1.3
0.6
583.8
13.9
10.2
24.1
95.4
119.5
703.3
460.3
17.3
94.8
572.4
53.0
7.5
0.6
69.8
77.9
130.9
703.3
As permitted by section 304 of the Companies Act 2014, the Company is availing of the exemption from presenting its separate profit
and loss account in these financial statements and from filing it with the Registrar of Companies. The profit for the year dealt with in the
financial statements of the Company amounts to €236.0 million (2021: €145.9 million).
On behalf of the Board
Donard Gaynor
Directors
28 February 2023
Siobhán Talbot
Mark Garvey
238 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Company Statement of Changes in Equity
for the financial year ended 31 December 2022
Share
capital and
share
premium
€’m
(note 5)
Other reserves
Capital
reserve
€’m
Own
shares
€’m
Share-
based
payment
reserve
€’m
FVOCI
reserve
€’m
Retained
earnings
€’m
Total
Equity
€’m
Balance at 2 January 2022
460.3
4.8
(6.4)
19.3
(0.4)
94.8
572.4
Profit for the year
Other comprehensive income
– Revaluation – gross
– Deferred tax
Total comprehensive income for the year
Dividends
Purchase of own shares
Cancellation of own shares
Cost of share-based payments
Transfer on exercise, vesting or expiry of share-based
payments
Total contributions by and distributions to owners
Balance at 31 December 2022
At 3 January 2021
Profit for the year
Other comprehensive income
– Revaluation – gross
– Deferred tax
Total comprehensive income for the year
Dividends
Cost of share-based payments
Transfer on exercise, vesting or expiry of share-based
payments
Purchase of own shares
Cancellation of own shares
Issue of shares
Total contributions by and distributions to owners
At 1 January 2022
–
–
–
–
–
–
(0.9)
–
–
(0.9)
459.4
460.6
–
–
–
–
–
–
–
–
(0.5)
0.2
(0.3)
460.3
–
–
–
–
–
–
0.9
–
–
0.9
5.7
4.3
–
–
–
–
–
–
–
–
0.5
–
0.5
4.8
–
–
–
–
–
(196.9)
173.5
–
–
–
–
–
–
–
–
18.8
9.1
(11.0)
(14.3)
(20.7)
7.8
27.1
–
236.0
236.0
0.6
(0.2)
0.4
–
–
0.6
(0.2)
236.0
236.4
–
–
–
–
–
–
–
(84.4)
–
(173.5)
–
(84.4)
(196.9)
–
18.8
1.9
–
(256.0)
(262.5)
74.8
546.3
(11.4)
10.3
(0.2)
121.5
585.1
–
–
–
–
–
–
7.7
(94.0)
91.3
–
5.0
(6.4)
–
–
–
–
–
15.9
(6.9)
–
–
–
9.0
19.3
–
145.9
145.9
(0.3)
0.1
(0.2)
–
–
–
–
–
–
–
–
–
145.9
(80.5)
–
(0.8)
–
(91.3)
–
(0.3)
0.1
145.7
(80.5)
15.9
–
(94.0)
–
0.2
(172.6)
(158.4)
(0.4)
94.8
572.4
Refer to note 23 of the Group financial statements for a description of the individual components in other reserves.
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
239
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Notes to the Company Financial Statements
for the financial year ended 31 December 2022
1. Accounting policies
Basis of preparation
Glanbia plc (the “Company”) is a public limited company incorporated and domiciled in Ireland, the number under which it is registered
is 129933. The address of its registered office is Glanbia House, Kilkenny, Ireland, R95 E866.
These financial statements are prepared for the 52-week period ended 31 December 2022. Comparatives are for the 52-week period
ended 1 January 2022. The balance sheets for 2022 and 2021 have been drawn up as at 31 December 2022 and 1 January 2022
respectively. The financial statements were approved and authorised for issue by the Board of Directors on 28 February 2023.
The financial statements have been prepared under the historical cost convention, as modified by use of fair values for certain other
financial assets, and comply with the Companies Act 2014 and Financial Reporting Standard 101 Reduced Disclosure Framework (“FRS
101”). The Company has taken advantage of the following disclosure exemptions under FRS 101:
• a Cash Flow Statement and related notes;
• disclosures in respect of transactions with wholly owned subsidiaries;
• disclosures in respect of capital management;
• the effects of new but not yet effective IFRS; and
• disclosures in respect of the compensation of key management personnel.
As the consolidated financial statements of the Company and its subsidiaries include the equivalent disclosures, the Company has also
availed of the following disclosure exemptions under FRS 101:
•
• certain disclosures required by IFRS 13 Fair Value Measurement and IFRS 7 Financial Instrument Disclosures.
IFRS 2 Share Based Payments in respect of group settled share based payments; and
The financial statements have been prepared in euro and presented in millions. The accounting policies set out below have, unless
otherwise stated, been applied consistently to all periods presented in these financial statements.
Going concern
The Company is in a net current liabilities position at 31 December 2022. The Company and its subsidiaries (the “Group”) is profit-making
and cash generative, having made a profit after tax of €256.8 million and net cash inflow from operating activities was €298.3 million in
2022. The Company made a profit of €236.0 million in 2022 (2021: €145.9 million). The Group expects to continue to be profitable and
cash generative for at least 12 months from the date of approval of these financial statements based on approved budgets and
strategic plans. The Company has control over its subsidiaries, it can therefore direct its subsidiary entities to distribute or make
available funds to the parent company to ensure that the Company can repay its creditors as they fall due. The Directors have a
reasonable expectation that these funds will be available within the Group based on current budgets and strategic plans. Accordingly,
the financial statements of the Company for the financial year ended 31 December 2022 have been prepared on a going concern basis.
Investments subsidiaries
Investments in subsidiaries are held at cost less, if any, accumulated impairment. The Company assesses investments for impairment
whenever events or changes in circumstances indicate that the carrying value of an investment may not be recoverable. If any such
indication of impairment exists, the Company makes an estimate of its recoverable amount. When the carrying amount of an
investment exceeds its recoverable amount, the investment is considered impaired and is written down to its recoverable amount. In the
opinion of the Directors the shares in the subsidiaries are worth at least the amounts at which they are stated on the balance sheet.
Other financial assets
The Company classifies and initially measures its investments in equity instruments at fair value and are subsequently adjusted to fair
value at each reporting date. If the market for a financial asset is not active or unquoted, the Company establishes fair value using valuation
techniques. The investment in BDO Development Capital Fund is fair valued by reference to the latest quarterly report available to the limited
partners. Changes in their fair value are recognised in the profit and loss account unless management has elected to present changes in fair
value through other comprehensive income (“FVOCI”) on an investment by investment basis. When an election is made for an investment,
there is no subsequent reclassification of fair value gains and losses related to the investment to profit or loss following the derecognition of
the investment. Dividends from such investments are recognised in profit or loss when the Company’s right to receive payments is
established.
Financial assets are derecognised when the rights to receive cash flows from financial assets have expired or have been transferred and
the Company has transferred substantially all the risks and rewards of ownership.
Trade and other receivables and payables
Receivables and payables are recognised initially at fair value except trade receivables that do not contain significant financing
components which are recognised at transaction price. They are subsequently measured at amortised cost using the effective interest
method less any allowance for expected credit loss for receivables.
240 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Impairment
The Company applies the simplified approach under IFRS 9 to measure ECL which uses a lifetime expected loss allowance for all trade
receivables. A loss allowance for receivables is estimated based on expected credit losses. To measure ECL, historical loss rates are
calculated based on historical credit loss experience. The loss allowance based on historical loss rates is adjusted to reflect current
information and forward-looking information on macroeconomic factors if there is evidence to suggest these factors will affect the
ability of the counterparty to settle the receivables. Trade and other receivables are written off when there is no reasonable expectation
of recovery such as a debtor failing to engage in a repayment plan with the Company.
The Company’s intercompany receivables at 31 December 2022 amounted to €10.4 million (2021: €13.7 million). There is no material ECL
in respect of intercompany receivables as at 31 December 2022 or 1 January 2022.
Cash at bank and in hand
Cash includes cash, in any currency, in hand or deposited with financial institutions repayable without penalty on notice of not more than
24 hours.
Non-current assets held for sale
Non-current assets and disposal groups are classified as held for sale if their carrying amounts will be recovered through a sale
transaction rather than continued use. This condition is regarded as satisfied only when the sale is highly probable and the asset or
disposal group is available for immediate sale in its present condition. Management must be committed to the sale, which should be
expected to qualify for recognition as a completed sale within one year of the date of classification.
When the Company is committed to a sale plan involving disposal of an investment in a joint venture, the investment in joint venture that
will be disposed of is classified as held for sale when the criteria described above are met. The investment in joint venture in Glanbia
Ireland DAC was classified as held for sale as at 1 January 2022.
Non-current assets and disposal groups classified as held for sale are measured at the lower of the carrying value and the fair value less
costs to sell.
Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity
as a deduction from the proceeds. Repurchase of the Company’s own equity instruments is recognised and deducted from equity with a
transfer between the own shares reserve and retained earnings when they are cancelled. No gain or loss is recognised in profit or loss on
the purchase, sale, issue or cancellation of the Company’s own equity instruments.
Own shares
Where the Employee Share Trust and/or the Employee Share Scheme Trust (on behalf of the Company) purchases the Company’s equity
share capital, under the 2018 Long-term incentive plan, the 2019 Restricted share plan, and the Annual incentive deferred into shares
scheme, the consideration paid is deducted from distributable reserves and classified as own shares until they are re-issued. Where
such shares are re-issued, they are re-issued on a first-in, first-out basis and the proceeds from the re-issue of own shares are
transferred from own shares to retained earnings.
Dividends
Dividends on ordinary shares to the Company’s shareholders are recognised as a liability of the Company when approved by the
Company’s shareholders. Interim dividends are recognised when paid. Proposed dividends that are approved after the balance sheet
date are not recognised as a liability but are disclosed in note 13 of the Group financial statements.
Bank borrowings
Bank borrowings are recognised initially at fair value and are subsequently stated at amortised cost.
Foreign currency translation
The functional and presentation currency of the Company is euro. Transactions in foreign currencies are translated at the rates of
exchange ruling at the transaction date. Monetary assets and liabilities denominated in foreign currencies are translated into euro at
the rates of exchange ruling at the balance sheet date, with a corresponding charge or credit to the profit and loss account.
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
241
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Notes to the Company Financial Statements continued
1. Accounting policies continued
Dividend income
Dividend income is recognised in the profit and loss account on the date the entity’s right to receive payment is established.
Share-based payments
The Company operates equity settled share-based payment arrangements. The arrangements include a long-term incentive plan and
a restricted share plan whereby share awards in the Company are granted to Executive Directors and senior management. The
Company also operates an annual incentive scheme whereby a portion of the annual incentive will be settled by way of shares. The
Company recharges the costs of these plans to its subsidiaries and the balances are settled in cash.
Taxation
The tax expense for the year comprises current and deferred tax. Tax is recognised in the profit and loss account except to the extent
that it relates to items recognised in other comprehensive income or directly in equity, in which case the tax is also recognised in other
comprehensive income or directly in equity, respectively.
A provision is recognised for those matters for which the tax determination is uncertain but it is considered probable that there will be a
future outflow of funds to a tax authority. The provisions are measured at the best estimate of the amount expected to become payable.
Current tax is calculated on the basis of tax laws enacted or substantively enacted at the balance sheet date in countries where the
Company operates and generates taxable income, taking into account adjustments relating to prior years.
Deferred tax is determined using tax rates and laws enacted or substantively enacted by the reporting date. Deferred tax is provided on a
non-discounted basis, using the balance sheet liability method, providing for temporary differences on the reporting date between the tax
bases of assets and liabilities and their carrying amounts in the financial statements. However, deferred tax is not accounted for if it arises
from initial recognition of an asset or liability in a transaction, other than a business combination, that at the time of the transaction
affects neither accounting nor taxable profit or loss. Deferred tax liabilities are not recognised to the extent they arise from the initial
recognition of goodwill not having full tax basis. Deferred tax assets are recognised to the extent that it is probable that future taxable profit
will be available against which the temporary differences can be utilised.
Critical accounting judgements and estimates
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations
of future events that are believed to be reasonable under the circumstances. There were no critical accounting estimates or significant
judgements used in the preparation of these financial statements for 2022.
2. Investment in subsidiaries
At the beginning of the year
Additions
Impairment
Disposals
At the end of the year
2022
€’m
581.9
–
–
(0.3)
581.6
2021
€’m
585.6
0.2
(3.9)
–
581.9
Details of the Company’s principal subsidiaries are set out in note 37 of the Group financial statements. At the reporting date, the
carrying amount of the investment in subsidiaries is assessed for impairment when indications of impairment exist. Impairment of nil (2021:
€3.9 million) was recognised where the recoverable amount was determined based on the estimated cash flows generated by the
underlying assets of the subsidiaries.
3. Other financial assets
At the beginning of the year
Additions
Disposals/redemption
Fair value adjustment
At the end of the year
2022
€’m
1.3
0.1
(0.4)
0.6
1.6
2021
€’m
2.6
0.1
(1.1)
(0.3)
1.3
Other financial assets at 31 December 2022 comprised equity instruments designated at FVOCI - €1.3 million and €0.3 million in BDO
Development Capital Fund and Farmer Business Development plc respectively. The prior year balance comprised an equity instruments
designated at FVOCI (BDO Development Capital Fund) of €1.1 million and a financial asset at amortised cost (a loan note receivable
from Ornua Co-operative Limited) of €0.2 million.
242 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
4. Trade and other receivables
Amounts owed by subsidiaries
Amounts owed by Tirlán Co-operative Society Limited
Prepayments
2022
€’m
10.4
0.1
0.3
10.8
2021
€’m
13.7
0.2
–
13.9
5. Share capital and share premium
At 31 December 2022, share capital and share premium were €16.3 million (2021: €17.2 million) and €443.1 million (2021: €443.1 million)
respectively.
The movement in the share capital was due to cancellation of ordinary shares on the share buyback programme (note 22 of the Group
financial statements). The difference between the Company and Group share premium is due to the merger of Waterford Foods plc now
named Waterford Foods DAC and Avonmore Foods plc now named Glanbia plc since 1997 and €0.2 million of issuance of shares during
the prior year. Refer to notes 23(a) and 22 of the Group financial statements respectively.
6. Trade and other payables
Amounts owed to subsidiaries
Accruals
2022
€’m
41.3
14.3
55.6
2021
€’m
55.3
14.5
69.8
7. Joint venture held for sale
The joint venture held for sale at 1 January 2022 related to the interest in Glanbia Ireland. The Company announced its intention to sell its
40% holding in Glanbia Ireland to Tirlán Co-operative Society Limited (formerly Glanbia Co-operative Society Limited) (the “Society”) for
€307.0 million in November 2021 (the “Transaction”). Members of the Society approved the Transaction on 17 December 2021.
Accordingly, in the prior year, the Company treated the joint venture investment in Glanbia Ireland as an asset held for sale as at
1 January 2022.
The Transaction was completed on 1 April 2022 for €307.0 million cash following the approval of the independent shareholders of the
Company and receipt of regulatory approvals. As part of the terms of the Transaction, the Company paid Glanbia Ireland a contribution
of €8.0 million related to pension obligations, separation and rebranding costs and has committed to a maximum additional €1.5 million
re-imbursement of rebranding costs in connection with the Transaction.
8. Contingent liabilities
Any Irish registered wholly-owned subsidiary of the Company may avail of the exemption from filing its statutory financial statements for
the year ended 31 December 2022 as permitted by section 357 of the Companies Act 2014 and if an Irish registered wholly-owned subsidiary
of the Company elects to avail of this exemption, there will be in force an irrevocable guarantee from the Company in respect of all
commitments entered into by such wholly-owned subsidiary, including amounts shown as liabilities (within the meaning of section 357 (1) (b)
of the Companies Act 2014) in such wholly-owned subsidiary’s statutory financial statements for the year ended 31 December 2022.
Within the scope of benefitting from the exemption related to the filing of the statutory financial statements for the financial year
ended 31 December 2022 of Glanbia Foods B.V., the Company has guaranteed the liabilities ensuing from legal acts performed by this
subsidiary from 1 January 2022 in accordance with and to the extent as set out in section 2:403.1(b and f) of the Dutch Civil Code.
Therefore Glanbia Foods B.V. is exempt from the obligation to publish its statutory financial statements and its obligations to file
statutory financial statements has been fulfilled by means of the publication of the declaration of consent and the declaration of liability.
Within the scope of benefitting from the exemption related to the filing of the statutory financial statements for the financial year
ended 31 December 2022 of the Luxembourg subsidiary, Glanbia Luxembourg SA, the Company has guaranteed the liabilities of this
subsidiary in respect of any losses or liabilities (as provided by Article 70 (c) of the Luxembourg Law of 19 December 2002 on the register
of commerce and companies and the accounting and annual accounts of undertakings) for the financial year ended on 31 December
2022. This subsidiary avails of the exemption from filing of their statutory financial statements, as permitted by Article 70 of the
Luxembourg Law of 19 December 2002 on the register of commerce and companies and the accounting and annual accounts of
undertakings. It is noted that the two other Luxembourg subsidiaries, Glanbia Luxfin SA and Glanbia Luxinvest SA were liquidated on
5 December 2022.
The Group’s financial liabilities are guaranteed by the company. Expected credit loss allowance in relation to these guarantees is not
material.
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
243
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION
Notes to the Company Financial Statements continued
9. Related party transactions
Refer to note 7 for details of the Transaction. During 2022, dividends of €26.7 million (2021: €25.8 million) were paid to the Society and its
wholly owned subsidiaries based on their shareholding in the Company. The Company received nil dividends (2021: €12.2 million) from its
former joint venture, Glanbia Ireland during 2022. Non-Executive Directors fees of €0.2 million (2021: €0.5 million) were recharged from
the Company to the Society during 2022.
10. Statutory information
The following table discloses the fees paid or payable to Deloitte Ireland LLP:
Statutory audit*
Other assurance services
Tax advisory services
Other non-audit services
2022
€’m
–
1.1
–
–
1.1
2021
€’m
–
0.8
–
–
0.8
* The audit fee for the Company is €40,000 (2021: €38,000) and is payable to Deloitte Ireland LLP, the statutory auditor.
Directors’ remuneration is disclosed in the Remuneration Committee Report on pages 120 to 140 and in note 35 of the Group financial
statements.
11. Events after the reporting period
Refer to note 36 of the Group financial statements.
244 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Other
Information
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
245
GOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATIONSTRATEGIC REPORT Glossary
Key Performance Indicators and non-IFRS performance measures
NOT COVERED BY INDEPENDENT AUDITOR’S REPORT
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.
These non-IFRS performance measures may not be uniformly defined by all companies and accordingly they may not be directly
comparable with similarly titled measures and disclosures by other companies. 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 are:
G 1. Constant currency
G 2. Revenue
G 3. EBITA (pre-exceptional)
G 4. EBITA margin % (pre-exceptional)
G 5. EBITDA
G 6. Constant Currency Basic and Adjusted Earnings Per Share (“EPS”)
G 7. Net debt
G 8. Financing Key Performance Indicators
G 9. Volume and pricing increase/(decrease)
G 10. Like-for-like revenue increase/(decrease)
G 11. Effective tax rate
G 12. Average interest rate
G 13. Operating cash conversion
G 14. Operating cash flow and free cash flow
G 15. Return on capital employed (“ROCE”)
G 16. Total shareholder return (“TSR”)
G 17. Dividend payout ratio
G 18. Compound annual growth rate (“CAGR”)
G 19. Exceptional items
These principal non-IFRS performance measures are defined below with a reconciliation of these measures to IFRS measures where
applicable.
A number of the non-IFRS performance measures below have been re-presented to reflect continuing and discontinued operations in
line with the presentation adopted in the Group income statement.
G 1. 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 year-on-year change, the results for the prior year are retranslated using the average
exchange rates for the current year and compared to the current year reported numbers.
The principal average exchange rates used to translate results for 2022 and 2021 are set out below:
1 euro =
US dollar
Pound sterling
2022
1.0534
0.8527
2021
1.1826
0.8596
246 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
G 2. Revenue
Revenue comprises sales of goods and services to external customers net of value added tax, rebates and discounts. Revenue is one of
the Group’s Key Performance Indicators and is an IFRS performance measure.
G 2.1 Revenue:
Nutritional Solutions
US Cheese
Glanbia Nutritionals
Reference to
the Financial
Statements/
Glossary
Note 4
Note 4
Note 4
Americas
Note 4
International (including Direct-to-Consumer) Note 4
Glanbia Performance Nutrition
Revenue
Note 4
Note 5
2022
Reported
€’m
1,126.6
2,890.1
4,016.7
1,098.0
527.7
1,625.7
5,642.4
2021
Reported
€’m
2021
Retranslated
€’m
Constant
currency
growth
%
Like-for-like
growth
(G 10)
%
877.4
2,016.4
2,893.8
872.3
430.8
1,303.1
4,196.9
966.3
2,263.9
3,230.2
978.0
449.0
1,427.0
4,657.2
16.6%
27.7%
24.3%
12.3%
17.5%
13.9%
21.2%
12.6%
27.7%
23.1%
12.3%
16.3%
13.5%
20.2%
G 3. EBITA (pre-exceptional)
EBITA (pre-exceptional) is defined as earnings before interest, tax and amortisation. EBITA references throughout the annual report are
on a pre-exceptional basis unless otherwise indicated. EBITA (pre-exceptional) is one of the Group’s Key Performance Indicators.
Business Segment EBITA (pre-exceptional) growth on a constant currency basis is one of the performance conditions in Glanbia’s
Annual Incentive Plan for Senior Management. Refer to note 5 of the financial statements for the reconciliation of EBITA (pre-
exceptional).
G 3.1 EBITA (pre-exceptional):
Nutritional Solutions
US Cheese
Glanbia Nutritionals
Glanbia Performance Nutrition
EBITA (pre-exceptional)
Reference to
the Financial
Statements/
Glossary
Note 4
Note 4
Note 5
2022
Reported
€’m
2021
Reported
€’m
2021
Retranslated
€’m
128.2
36.8
165.0
182.1
347.1
101.1
24.4
125.5
145.1
270.6
113.5
27.6
141.1
164.8
305.9
Constant
currency
growth
%
13.0%
33.3%
16.9%
10.5%
13.5%
G 4. EBITA margin % (pre-exceptional)
EBITA margin % (pre-exceptional) is defined as EBITA (pre-exceptional) as a percentage of revenue. Refer to G 2.1 and G 3.1 for
reconciliations of revenue and EBITA (pre-exceptional) respectively. EBITA references throughout the annual report are on a pre-
exceptional basis unless otherwise indicated.
G 5. EBITDA
EBITDA is defined as earnings before interest, tax, depreciation (net of grant amortisation) and amortisation. EBITDA references
throughout the annual report are on a pre-exceptional basis unless otherwise indicated.
EBITA (pre-exceptional)
Depreciation*
EBITDA (pre-exceptional)
Reference to
the Financial
Statements/
Glossary
G 3.1
Note 5
G 8.1, G 14
2022
€’m
347.1
67.5
414.6
2021
€’m
270.6
63.0
333.6
*
Includes depreciation of property, plant and equipment of €48.7 million (2021: €44.9 million) and depreciation of right-of-use assets of €18.8 million (2021: €18.1 million).
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
247
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Glossary continued
Key Performance Indicators and non-IFRS performance measures continued
G 6. Constant Currency Basic and Adjusted Earnings Per Share (“EPS”)
G 6.1 Constant Currency Basic Earnings Per Share (“EPS”)
Basic EPS is calculated by dividing profit after tax attributable to the equity holders of the Company by the weighted average number of
ordinary shares in issue during the year, excluding ordinary shares purchased by the Group and held as own shares (see note 23). Basic
EPS has also been calculated on a continuing basis (excluding Glanbia Ireland) in line with the presentation of continuing and
discontinued operations in the Group income statement.
Profit after tax attributable to equity holders of the Company
Less: profit after tax attributable to equity holders of the Company –
Reference to the Financial
Statements/Glossary
2022
Reported
€’m
2021
Reported
€’m
2021
Retranslated
€’m
Group income statement
257.6
167.0
197.0
discontinued operations
Group income statement
(57.2)
(26.4)
(26.4)
Profit after tax attributable to equity holders of the Company –
continuing operations
Weighted average number of ordinary shares in issue (thousands)
Basic Earnings Per Share (cent) – continuing operations
Basic Earnings Per Share (cent)
Constant currency change – continuing operations
Constant currency change
Note 12
Note 12
Note 12
200.4
140.6
170.6
275,761
290,059
290,059
48.47
57.57
58.82
67.92
72.67
93.42
23.5%
37.5%
G 6.2 Constant Currency Adjusted Earnings Per Share (“EPS”)
Adjusted EPS is defined as the profit after tax attributable to the equity holders of the Company, before exceptional items and intangible
asset amortisation and impairment (excluding software amortisation), net of related tax, divided by the weighted average number of
ordinary shares in issue during the year, excluding ordinary shares purchased by the Group and held as own shares (see note 23). The Group
concluded that adjusted EPS is a better measure of underlying performance than Basic EPS as it excludes exceptional items (net of related
tax) that are not related to ongoing operational performance and intangible asset amortisation, which allows better comparability of
companies that grow by acquisition to those that grow organically. Adjusted EPS has also been calculated on a continuing basis (excluding
Glanbia Ireland) in line with the presentation of continuing and discontinued operations in the Group income statement.
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 and in Glanbia’s Long-term Incentive Plan.
Profit after tax from continuing operations
Exceptional charge – continuing operations
Profit after tax from continuing operations (pre-exceptional)
Non-controlling interests
Amortisation and impairment of intangible assets (excluding software
amortisation) net of related tax of €8.0 million (2021: €7.0 million, 2021
retranslated: €7.8 million) – continuing operations (pre-exceptional)
Adjusted net income – continuing operations
Profit after tax from discontinued operations
Exceptional credit – discontinued operations
Profit from discontinued operations (pre-exceptional)
Amortisation and impairment of intangible assets (excluding software
amortisation) net of related tax (2021: €0.2 million) – discontinued
operations
Reference to the Financial
Statements/Glossary
Group income statement
Group income statement
Group income statement
Group income statement
Group income statement
Group income statement
Group income statement
2022
Reported
€’m
2021
Reported
€’m
2021
Retranslated
€’m
199.6
35.8
235.4
0.8
50.6
286.8
57.2
(57.2)
–
–
141.0
42.8
183.8
(0.4)
42.4
225.8
26.4
(0.7)
25.7
1.3
171.0
38.5
209.5
(0.4)
47.5
256.6
26.4
(0.7)
25.7
1.3
283.6
Adjusted net income
286.8
252.8
Weighted average number of ordinary shares in issue (thousands)
Note 12
275,761
290,059
290,059
Adjusted Earnings Per Share (cent) – continuing operations
Adjusted Earnings Per Share (cent)
G 17
Constant currency growth – continuing operations
Constant currency growth
77.84
87.15
88.46
97.77
104.02
104.02
17.6%
6.4%
248 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
G 7. Net debt
Net debt is calculated as current and non-current borrowings less cash and cash equivalents.
Cash and cash equivalents
Current borrowings
Non-current borrowings
Net debt
Reference to the Financial Statements/
Glossary
Group balance sheet
Group balance sheet
Group balance sheet
Note 25, G 14
2022
€’m
(438.6)
258.2
639.8
459.4
2021
€’m
(231.0)
136.5
697.2
602.7
G 8. Financing Key Performance Indicators
G 8.1 Net debt: adjusted EBITDA
Net debt: adjusted EBITDA is calculated as net debt at the end of the period divided by adjusted EBITDA. Net debt is calculated as
current and non-current borrowings less cash and cash equivalents. Adjusted EBITDA is calculated in accordance with lenders’ facility
agreements definitions which adjust EBITDA for items such as exceptional items, dividends received from joint ventures, acquisitions or
disposals and to reverse the net impact on EBITDA as a result of adopting IFRS 16 “Leases”. Adjusted EBITDA is a rolling 12 month measure
(a period of 12 consecutive months determined on a rolling basis with a new 12 month period beginning on the first day of each month).
Reference to the Financial Statements/
Glossary
Net debt
EBITDA
IFRS 16 adjustment
Adjustments in accordance with lenders’ facility agreements
Adjusted EBITDA
Net debt: adjusted EBITDA
G 7
G 5
Note 30
2022
€’m
459.4
414.6
(19.1)
16.5
412.0
1.12
2021
€’m
602.7
333.6
(21.6)
40.8
352.8
1.71
G 8.2 Adjusted EBIT: adjusted net finance cost
Adjusted EBIT: adjusted net finance cost is calculated as earnings before interest and tax adjusted for the IFRS 16 “Leases” impact on
operating profit plus dividends received from joint ventures divided by adjusted net finance cost. Adjusted net finance cost comprises
finance costs less finance income per the Group income statement plus borrowing costs capitalised into assets and excludes finance
income/costs on remeasurements of call options and contingent consideration and interest expense on lease liabilities. Adjusted EBIT
and adjusted net finance cost are rolling 12 month measures (a period of 12 consecutive months determined on a rolling basis with a new
12 month period beginning on the first day of each month).
Operating profit
Exceptional charge
Operating profit (pre-exceptional)
Dividends received from related parties
IFRS 16 adjustment – interest
Adjusted EBIT
Adjusted net finance costs
Adjusted EBIT: adjusted net finance cost
Reference to the Financial Statements/
Glossary
Group income statement
Group income statement
Group income statement
Group statement of cash flows
Note 10
Note 10, Note 14
Note 30
2022
€’m
223.7
48.4
272.1
14.5
(2.6)
284.0
16.7
17.0
2021
€’m
158.3
48.4
206.7
33.9
(2.5)
238.1
15.8
15.1
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
249
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Glossary continued
Key Performance Indicators and non-IFRS performance measures continued
G 9. Volume and pricing increase/(decrease)
Volume increase/(decrease) represents the impact of sales volumes within the revenue movement year-on-year, excluding volume from
acquisitions, on a constant currency basis.
Pricing increase/(decrease) represents the impact of sales pricing (including trade spend) within revenue movement year-on-year,
excluding acquisitions, on a constant currency basis.
G 9.1 Reconciliation of volume and pricing increase/(decrease) to constant currency revenue growth:
Nutritional Solutions
US Cheese
Glanbia Nutritionals
Glanbia Performance Nutrition
2022 increase % – continuing operations revenue
Reference to
the Financial
Statements/
Glossary
Volume
increase/
(decrease)
G 2.1
G 2.1
G 2.1
G 2.1
G 2.1
(3.5%)
4.3%
1.9%
(2.9%)
0.5%
Price
increase
16.1%
23.4%
21.2%
16.4%
19.7%
Acquisitions
4.0%
–
1.2%
0.4%
1.0%
Revenue
increase
16.6%
27.7%
24.3%
13.9%
21.2%
G 10. Like-for-like revenue increase/(decrease)
G 10.1 Glanbia Performance Nutrition (“GPN”) like-for-like revenue
GPN like-for-like revenue represents the sales increase/(decrease) year-on-year, excluding the incremental revenue contributions from
current year and prior year acquisitions and the impact of a 53rd week (when applicable), on a constant currency basis.
GPN like-for-like branded revenue represents the sales increase/(decrease) year-on-year on branded sales, excluding the incremental
revenue contributions from current year and prior year acquisitions and the impact of a 53rd week (when applicable), on a constant
currency basis. Like-for-like branded revenue increase/(decrease) is one of the GPN segment’s Key Performance Indicators. Like-for-like
branded revenue increase/(decrease) is one of the performance conditions in Glanbia’s Annual Incentive Plan for GPN Senior
Management.
G 10.2 Glanbia Nutritionals like-for-like revenue
This represents the sales increase/(decrease) year-on-year, excluding the incremental revenue contributions from current year and prior
year acquisitions and the impact of a 53rd week (when applicable), on a constant currency basis.
G 11. Effective tax rate
The effective tax rate is defined as the pre-exceptional income tax charge divided by the profit before tax less share of results of joint
ventures.
Profit before tax – continuing operations
Exceptional charge
Profit before tax (pre-exceptional) – continuing operations
Less share of results of joint ventures (pre-exceptional)
Income tax
Exceptional tax credit
Income tax (pre-exceptional)
Effective tax rate
Reference to the Financial Statements/
Glossary
Group income statement
Group income statement
Group income statement
Group income statement
Group income statement
Group income statement
Group income statement
2022
€’m
225.3
41.5
266.8
(15.4)
251.4
25.7
5.7
31.4
12.5%
2021
€’m
158.0
50.4
208.4
(19.2)
189.2
17.0
7.6
24.6
13.0%
G 12. Average interest rate
The average interest rate is defined as the annualised net finance costs (excluding capitalised borrowing costs, finance income/costs on
changes in fair value of call option and contingent consideration and interest expense on lease liabilities) divided by the average net debt
during the reporting period.
G 13. Operating cash conversion
Operating cash conversion is defined as Operating Cash Flow (“OCF”) divided by pre-exceptional EBITDA. Cash conversion is a measure
of the Group’s ability to convert adjusted trading profits into cash and is an important metric in the Group’s working capital
management programme.
250 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
G 14. Operating cash flow and free cash flow
Operating cash flow is defined as pre-exceptional EBITDA net of business sustaining capital expenditure and working capital
movements, excluding exceptional cash flows.
Operating cash flow is one of the Group’s Key Performance Indicators. Operating cash flow is one of the performance conditions in
Glanbia’s Annual Incentive Plan.
Free cash flow is calculated as the net cash flow in the year before the following items: strategic capital expenditure, dividends paid to
Company shareholders, loans/investments in joint ventures, exceptional costs paid, payment for acquisition of subsidiaries, proceeds
received on disposals, purchase of own shares under share buyback and currency translation movements.
Earnings before interest, tax, depreciation and amortisation (pre-
exceptional EBITDA)
Movement in working capital (pre-exceptional)
Business sustaining capital expenditure
Operating cash flow
Net interest and tax paid
Dividends received from related parties
Payments of lease liabilities
Other (outflows) /inflows
Free cash flow
Strategic capital expenditure
Dividends paid to Company shareholders
Purchase of own shares under share buyback
Loans/investment in joint ventures
Exceptional costs paid
Proceeds from sale of property, plant and equipment
Proceeds from disposal of Glanbia Ireland DAC
Payment for acquisition of subsidiaries
Net cash flow
Exchange translation
Cash acquired on acquisition
Net debt movement
Opening net debt
Closing net debt
Reference to the Financial
Statements/Glossary
G 5
G 14.2
G 14.4
G 14.1
G 14.3
Group statement of cash flows
Group statement of cash flows
G 14.5
G 14.4
Group statement of cash flows
Note 23(e)
G 14.6
G 14.7
Group statement of cash flows
Group statement of cash flows
Group statement of cash flows
Note 25
Note 25
Note 25
Note 25, G 7
G 14.1 Reconciliation of operating cash flow to the Group statement of cash flows in the Financial Statements:
Cash generated from operating activities before exceptional items
Less business sustaining capital expenditure
Non-cash items not adjusted in computing operating cash flow:
Cost of share-based payments
Difference between pension charge and cash contributions
Reversal of impairment of property, plant and equipment
Other items
Operating cash flow
G 14.2 Movement in working capital:
Reference to the Financial
Statements/Glossary
Note 32
G 14.4
Note 32
Note 32
Note 32
G 14
Reference to the Financial
Statements/Glossary
Movement in working capital (pre-exceptional)
Net write down of inventories (pre-exceptional)
Non-cash movement in allowance for impairment of receivables
Non-cash movement in provisions
Non-cash movement on cross currency swaps
Movement in working capital
G 14
Note 32
Note 32
Note 32
Note 32
Note 32(b)
2022
€’m
414.6
(39.9)
(19.4)
355.3
(81.4)
14.5
(16.5)
(3.3)
268.6
(49.5)
(84.4)
(173.5)
(18.2)
(21.3)
3.4
307.0
(54.9)
177.2
(34.8)
0.9
143.3
(602.7)
(459.4)
2022
€’m
393.0
(19.4)
(18.8)
0.5
–
–
355.3
2022
€’m
(39.9)
(13.6)
(0.4)
(1.0)
(2.6)
(57.5)
2021
€’m
333.6
16.5
(15.9)
334.2
(51.5)
33.9
(19.1)
6.4
303.9
(61.6)
(80.5)
(91.3)
(10.7)
(55.9)
1.5
–
(95.0)
(89.6)
(23.6)
4.4
(108.8)
(493.9)
(602.7)
2021
€’m
358.0
(15.9)
(15.9)
6.4
1.4
0.2
334.2
2021
€’m
16.5
(6.1)
–
(8.7)
0.8
2.5
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
251
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Glossary continued
Key Performance Indicators and non-IFRS performance measures continued
G 14.3 Net interest and tax paid:
Interest received
Interest paid (including interest expense on lease liabilities)
Tax paid
Interest paid in relation to property, plant and equipment
Net interest and tax paid
G 14.4 Capital expenditure:
Business sustaining capital expenditure
Strategic capital expenditure
Total capital expenditure
Reference to the Financial
Statements/Glossary
Group statement of cash flows
Group statement of cash flows
Group statement of cash flows
Group statement of cash flows
G 14
Reference to the Financial
Statements/Glossary
G 14
G 14
Purchase of property, plant and equipment
Purchase of intangible assets
Group statement of cash flows
Group statement of cash flows
Total capital expenditure per the Group statement of cash flows
2022
€’m
1.5
(23.2)
(59.7)
–
(81.4)
2022
€’m
19.4
49.5
68.9
31.9
37.0
68.9
2021
€’m
2.1
(18.8)
(34.3)
(0.5)
(51.5)
2021
€’m
15.9
61.6
77.5
49.0
28.5
77.5
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 Group to keep operating 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.
G 14.5 Other (outflows)/inflows:
Cost of share-based payments
Difference between pension charge and cash contributions
Loss/(profit) on disposal of property, plant and equipment
Proceeds from disposals/redemption of FVOCI financial assets
Payments for FVOCI financial assets
Proceeds from issue of shares
Purchase of own shares by Employee Share (Scheme) Trust
Proceeds of sale of shares held by subsidiary
Non cash movement on disposal of leases
Reversal of impairment of property, plant and equipment
Reference to the Financial
Statements/Glossary
Note 32
Note 32
Note 32
Group statement of cash flows
Group statement of cash flows
Group statement of cash flows
Note 23 (e)
Group statement of cash flows
Note 32
Note 32
Total other (outflows)/inflows
G 14
G 14.6 Loans/investments in joint ventures:
Reference to the Financial
Statements/ Glossary
Loans advanced to joint ventures
Proceeds on repayments of loans advanced to Glanbia Ireland DAC
Group statement of cashflows
Group statement of cashflows
Total loans/investments in joint ventures
G 14
G 14.7 Exceptional cash paid :
Cash outflow related to exceptional items – operating activities
Cash outflow related to exceptional items – investing activities
Group statement of cashflows
Group statement of cashflows
Total exceptional cash paid
G 14
Reference to the Financial
Statements/ Glossary
2022
€’m
18.8
(0.5)
0.4
0.4
–
–
(23.4)
1.4
(0.4)
–
(3.3)
2021
€’m
15.9
(6.4)
(0.1)
1.1
(0.1)
0.2
(2.7)
–
(0.1)
(1.4)
6.4
2022
Reported
€’m
2021
Reported
€’m
(47.0)
28.8
(18.2)
(10.7)
–
(10.7)
2022
Reported
€’m
2021
Reported
€’m
(13.3)
(8.0)
(21.3)
(55.9)
–
(55.9)
252 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
G 15. Return on capital employed (“ROCE”)
ROCE is defined as the Group’s earnings before interest, and amortisation (net of related tax) plus the Group’s share of the results of joint
ventures after interest and tax divided by capital employed. Capital employed comprises the sum of the Group’s total assets plus cumulative
intangible asset amortisation and impairment less current liabilities and deferred tax liabilities excluding all borrowings and lease liabilities,
retirement benefit assets, cash and acquisition related contingent consideration and contract options. It is calculated by taking the
average of the relevant opening and closing balance sheet amounts. ROCE has also been calculated on a continuing basis (excluding
Glanbia Ireland) in line with the presentation of continuing and discontinued operations in the Group income statement.
In years where the Group makes significant acquisitions or disposals, the ROCE calculation is adjusted appropriately, to ensure the
acquisition or disposal are equally time apportioned in the numerator and the denominator.
ROCE is one of the Group’s Key Performance Indicators (see pages 18 to 19). ROCE is one of the performance conditions in Glanbia’s
Long-term Incentive Plan. See Remuneration Committee Report on pages 120 to 140 for more information.
Operating profit
Exceptional charge
Operating profit (pre-exceptional)
Tax on operating profit
Amortisation and impairment of intangible assets net of related tax of
€11.5m (2021: €10.0m) (pre-exceptional)
Reference to the Financial
Statements/Glossary
Group income statement
Group income statement
Group income statement
Share of results of joint ventures accounted for using the equity method
Group income statement
Return – continuing operations
Profit after tax from discontinued operations
Exceptional credit
Group income statement
Group income statement
Profit after tax from discontinued operations – pre-exceptional
Group income statement
Return
Total assets
Current liabilities
Deferred tax liabilities
Less: cash and cash equivalents
Less: current financial liabilities (borrowings)
Less: call option over non-controlling interests
Less: acquisition related liabilities
Less: short term lease liabilities
Less: retirement benefit assets
Plus: accumulated amortisation
Capital employed before adjustments
Adjustment for acquisitions
Adjustment for joint venture held for sale
Capital employed after adjustments
Average capital employed
Adjustment for discontinued operations
Average capital employed – continuing operations
Return on capital employed – continuing operations
Return on capital employed
Group balance sheet
Group balance sheet
Group balance sheet
Group balance sheet
Group balance sheet
Note 29
Note 28
Group balance sheet
Group balance sheet
Note 16
G 15.1
G 15.2
G 15.2
2022
€’m
223.7
48.4
272.1
(34.0)
63.5
15.4
317.0
57.2
(57.2)
–
317.0
3,860.1
(1,113.7)
(129.7)
(438.6)
258.2
–
25.3
17.8
(3.0)
513.3
2,989.7
49.4
(234.0)
2,805.1
2,855.0
–
2,855.0
11.1%
11.1%
2021
€’m
158.3
48.4
206.7
(26.9)
53.9
19.2
252.9
26.4
(0.7)
25.7
278.6
3,627.6
(887.4)
(144.4)
(231.0)
136.5
(0.5)
–
14.5
(2.9)
392.5
2,904.9
(12.0)
(18.5)
2,874.4
2,751.7
(215.0)
2,536.7
10.0%
10.1%
G 15.1. Adjustment for acquisitions
This adjustment is required to ensure the capital employed of the acquisitions Sterling Technology (2022), LevlUp and PacMoore (2021)
are appropriately time apportioned in the denominator.
G 15.2. Adjustment for discontinued operations
This adjustment is required to ensure the capital employed of the joint venture held for sale (Glanbia Ireland) is appropriately time
apportioned in the denominator.
The adjustment for discontinued operations removes the average capital employed of Glanbia Ireland to calculate the return on capital
employed for continuing operations.
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
253
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Glossary continued
Key Performance Indicators and non-IFRS performance measures continued
G 16. Total shareholder return (“TSR”)
TSR represents the change in the capital value of a listed quoted company over a period, plus dividends reinvested, expressed as a plus
or minus percentage of the opening value.
TSR is one of the Group’s Key Performance Indicators (see pages 18 to 19). TSR is one of the performance conditions in Glanbia’s Long-
term Incentive Plan. See Remuneration Committee Report on pages 120 to 140 for more information.
G 17. Dividend payout ratio
Dividend payout ratio is defined as the annual dividend per ordinary share divided by the Adjusted Earnings Per Share. The dividend
payout ratio provides an indication of the value returned to shareholders relative to the Group’s total earnings.
Adjusted Earnings Per Share
Dividend recommended/paid per ordinary share
Dividend payout %
Reference to the Financial
Statements/Glossary
G 6.2
Note 13
2022
€ cent
104.02
32.21
31.0%
2021
€ cent
87.15
29.28
33.6%
G 18. Compound annual growth rate (“CAGR”)
The compound annual growth rate is the annual growth rate over a period of years. It is calculated on the basis that each year’s growth is
compounded.
G 19. Exceptional items
The Group considers that items of income or expense which are material by virtue of their scale and nature should be disclosed
separately if the Group financial statements are to fairly present the financial performance and financial position of the Group.
Determining which transactions are to be considered exceptional in nature is often a subjective matter. However, circumstances that
the Group believes would give rise to exceptional items for separate disclosure are outlined in the accounting policy on exceptional
items in note 2. Exceptional items are included on the income statement line item to which they relate. In addition, for clarity, separate
disclosure is made of all items in one column on the face of the Group income statement. Refer to note 6 for an analysis of exceptional
items recognised in 2022.
254 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Shareholder Information
Stock exchange listings
The Company’s shares are listed on the main market of the Euronext Dublin Stock Exchange as well as having a premium listing on the
main market of the London Stock Exchange.
Managing your shareholding
Computershare Investor Services (Ireland) Limited (“Computershare”) maintains the Company’s register of members. Should a
shareholder have any queries in respect of their shareholding, they should contact Computershare directly using the contact details
provided below:
Contact details:
Computershare Investor Services (Ireland) Limited, 3100 Lake Drive, Citywest Business Campus, Dublin 24, Ireland. Telephone number
01 247 5349 (within Ireland), +353 1 247 5349 (outside Ireland), or by logging on to: www.investorcentre.com/ie/contactus.
Share price data
Share price as at financial year end
Market capitalisation as at financial year end
Share price movements during the year:
– high
– low
2022
2021
€
11.92
3,245.7m
€
12.30
3,532.2m
13.00
9.98
15.11
9.88
The current share price of Glanbia plc ordinary shares can be accessed at: https://www.glanbia.com/investors/share-price-
information/detailed-share-price.
Shareholder analysis
Geographic Location*
Institutional
North America
UK
Rest of world
Retail
Tirlán Co-operative Society Limited
* This represents a best estimate of the number of shares held by geographic locations at 31 December 2022.
North America – 19.9%
UK – 8.7%
Rest of the World – 16.3%
Retail – 27.4%
Tirlán Co-operative Society Limited – 27.7%
Number of
shares held
% of total
54,177,805
23,759,124
44,114,801
74,698,325
75,537,305
19.9
8.7
16.3
27.4
27.7
Share capital
The authorised share capital of the Company at 31 December 2022 was 350,000,000 ordinary shares at €0.06 each. The issued share
capital at 31 December 2022 was 272,287,360 ordinary shares of €0.06 each.
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
255
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Shareholder Information continued
Substantial Shareholdings
The table below details the major shareholdings (3% or more) in the Company’s ordinary share capital that has been disclosed to the
Company at 31 December 2022 and 23 February 2023 (the latest practicable date prior to the signing of the Financial Statements) in
accordance with the requirements of Regulation 14 of the Transparency (Directive 2004/109/EC) Regulations 2007 and Rule 13 of the
Central Bank (Investment Market Conduct) Rules 2019.
Shareholder
Tirlán Co-operative Society Limited
Franklin Mutual Advisors, LLC
Black Creek Investment Management,Inc1
Shareholder
Tirlán Co-operative Society Limited
Franklin Mutual Advisors, LLC
Black Creek Investment Management, Inc.1
No. of ordinary
shares as at
31 December
2022
% of issued
share capital as
at 31 December
2022
75,537,305
11,130,742
10,721,341
27.74%
4.09%
3.94%
No. of ordinary
shares as at
23 February
2023
% of issued
share capital as
at 23 February
2023
75,537,305
11,130,742
8,054,877
27.74%
4.09%
2.96%
1 Black Creek Investment Management Inc. (“Black Creek”) is an investment management company. The shares are beneficially owned by 16 separate funds and
clients which Black Creek advises regarding their investment portfolios. Shares held directly are by funds for which Black Creek also acts as investment fund
manager. None of the funds or clients by itself reaches or exceeds the 3% threshold. The funds and clients give a proxy to Black Creek who can exercise the voting
rights for the shares in its own discretion.
Employee share schemes
The Company operates a number of employee share schemes. At 31 December 2022, 1,711,322 ordinary shares were held in employee
benefit trusts for the purpose of the Group’s employee share schemes. While any shares in the Company are held by the Trustees, the
Trustees shall refrain from exercising any voting rights which may attach to the shares save that if the beneficial interest in any share has
been vested in any beneficiary the Trustees shall seek and comply with any direction from such beneficiary as to the exercise of voting
rights attaching to such shares.
Dividend payments direct to your bank account
An interim dividend of 12.93 cent per share was paid in respect of ordinary shares on 7 October 2022.
Subject to shareholders’ approval, a final dividend of 19.28 cent per share will be paid in respect of ordinary shares on 05 May 2023 to
shareholders on the register of members on 24 March 2023. All dividend payments will be made by direct credit transfer into a nominated
bank or financial institution. If a shareholder has not provided their account details prior to the payment of the dividend, a shareholder will be
sent the normal tax voucher advising a shareholder of the amount of their dividend and that the amount is being held because their direct
credit transfer instructions had not been received in time. A shareholder’s dividends will not accrue interest while they are held. Payment will
be transferred to a shareholder’s account as soon as possible on receipt of their direct credit transfer instructions. For the past number of
years, dividends have been paid in sterling to shareholders whose address, according to the Company’s share register, is in the UK (unless
they have elected otherwise). On 15 March 2021 this structure changed and a default currency of euro is applied to all new shareholders who
come on to the Company’s share register, regardless of their registered address. Where an existing shareholder holds shares in certificated
(i.e. paper) form and has previously received sterling because their registered address is in the UK or because they have previously elected to
receive sterling, they will continue to receive sterling unless they elect otherwise. All other shareholders will from 15 March 2021 automatically
be paid in euro unless a sterling currency election is made (including those shareholders who hold their shares in uncertificated (i.e.
dematerialised) form).
Shareholders holding their shares via the central securities depository operated by Euroclear Bank or CREST will receive dividends
electronically via such systems. To avail of these facilities, shareholders should follow the applicable rules and guidelines issued by the
operators of these systems form time to time.
Irish Dividend Withholding Tax (DWT) must be deducted from dividends paid by an Irish resident company, unless a shareholder is entitled
to an exemption and has submitted a properly completed exemption form to the Company’s Registrar. DWT is deducted at the standard
rate of Income Tax (25%). Non-resident shareholders located in countries with a double tax treaty with Ireland and certain Irish companies,
trusts, pension schemes, investment undertakings and charities may be entitled to claim exemption from DWT. Copies of the exemption
form may be obtained from the Company’s Registrar. Shareholders should note that DWT will be deducted from dividends in cases where
a properly completed form has not been received by the market deadline for the dividend. Individuals who are resident in Ireland for tax
purposes are not entitled to an exemption. If shares are held via Euroclear Bank or CREST, the owners of the shares will need to contact the
intermediary through whom the shares are held in order to ascertain arrangements for tax relief to be applied at source.
Electronic copies of current and past annual and half-yearly reports can be downloaded from the Glanbia website. Current and historic
share prices, news, updates and presentations may also be obtained. Shareholders may also register to receive future shareholder
communications electronically.
Shareholders may visit: https://www.glanbia.com/investors/shareholder-information for up-to-date investor information.
256 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Electronic communications
The Transparency (Directive 2004/109/EC) Regulations 2007 recognises the growing importance of electronic communications. The
Group, therefore, provides documentation and communications to all shareholders via our website unless a shareholder has specifically
elected to receive a hard copy.
Using electronic communications enables fast receipt of documents, helps the environment by significantly reducing the amount of
paper used to communicate with shareholders and reduces associated printing, mailing and distribution costs.
Shareholders who hold their shares in certificated form can also vote online for the next Annual General Meeting (“AGM”) via:
www.eproxyappointment.com. Holders of CREST Depository Interests (“CDIs”) and/or participants of Euroclear Bank SA/NV (“Euroclear
Bank”) system should refer to the voting arrangements with Euroclear Bank on page 258.
Financial calendar
Announcement of 2022 Full Year Results
Ex-dividend date
Record date for dividend
Expected latest time for return of voting instructions by CDI holders
Record date for AGM
Latest time for return of voting instructions by Euroclear Bank participants
Latest time for return of voting instructions by holders of certificated shares
AGM
Dividend payment date
01 March 2023
23 March 2023
24 March 2023
27 April 2023
30 April 2023
02 May 2023
02 May 2023
04 May 2023
05 May 2023
AGM
The AGM will be held on 04 May 2023. The notice of meeting, together with details of the business to be conducted at the meeting will be
available 20 business days before the meeting on: www.glanbia.com/agm
The voting results for the 2023 AGM, including proxy votes and votes withheld will be available on our website shortly after the meeting at
the following address: www.glanbia.com/agm
Conditions for participating in a meeting
Every shareholder, irrespective of how many Glanbia plc shares they hold, has the right to attend, speak, ask questions and vote at the
AGM. Completion of a proxy form will not affect a shareholder’s right to attend, speak, ask questions and vote at the meeting in person.
The quorum for a general meeting of the Company is constituted by two persons entitled to vote upon the business of the meeting, each
being a shareholder or a proxy or corporate representative for a shareholder.
The right to participate in the AGM is subject to the registration of the shares prior to the date of the meeting (the record date). For the
2023 AGM the record date is to be determined in accordance with sections 1087G and 1105 of the Companies Act 2014.
Appointment of proxy
Where a shareholder is unable to attend the AGM in person, a proxy (or proxies) may be appointed to attend, speak, ask questions
and vote on their behalf. For this purpose a form of proxy is posted to all shareholders. Copies of these documents may be requested
by telephoning the Company’s Registrar on 01 247 5349 (within Ireland), 00353 1 247 5349 (outside Ireland), or by logging on to
www.investorcentre.com/ie/contactus or by writing to the Group Secretary and Head of Investor Relations at Glanbia plc, Glanbia House,
Kilkenny, Ireland.
Alternatively, a shareholder may appoint a proxy electronically, by visiting: www.eproxyappointment.com and submitting their proxy
details. They will be asked to enter the Control Number, the Shareholder Reference Number (“SRN”) and PIN and agree to certain terms
and conditions. The Control Number, the SRN and the PIN can be found on the top of the form of proxy.
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257
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Shareholder Information continued
How to exercise shareholders’ rights
Shareholders have several ways to exercise their right to vote at the AGM:
• by attending the AGM in person; subject to Covid-19 applicable restrictions;
• by submitting a validly completed proxy form appointing the chair of the meeting or another person as a proxy to vote on their behalf;
• by visiting www.eproxyappointment.com and submitting their proxy details;
• via the Broadridge global proxy voting service if you hold CDIs via CREST;
• EB Participants may send electronic voting instructions to Euroclear Bank via SWIFT or to EasyWay Corporate Actions; or
• EB Participants may send a proxy voting instruction to Euroclear Bank to appoint a third party (i.e. other than Euroclear Nominees
Limited or the chairman of the meeting) to attend and vote at the AGM.
In the case of joint holders, the vote of the senior holder who tenders a vote, whether in person or by proxy, will be accepted to the
exclusion of the votes of the other registered holder(s) and, for this purpose, seniority will be determined by the order in which the names
stand in the register of members.
The passing of resolutions at a meeting of the Company, other than special resolutions, requires a simple majority. To be passed, a
special resolution requires at least 75% of the votes cast to be in favour of the resolution.
Voting Arrangements with Euroclear Bank
If you hold your interests in the Company’s ordinary shares through a participant account in the Euroclear Bank System you can either
send:
• electronic voting instructions to Euroclear Bank via SWIFT or to EasyWay Corporate Actions; or
• a proxy voting instruction to Euroclear Bank to appoint a third party (other than Euroclear Nominees or the chair of the AGM), subject
to any Covid-19 restrictions, to attend and vote at the AGM;
If you hold your interests in the Company’s ordinary shares as CDIs through CREST you can either send:
• electronic voting instructions to Euroclear Bank via Broadridge Financial Solutions Limited (“Broadridge”); or
• appoint a proxy via the Broadridge Global Proxy Voting service.
Persons who hold their interests in the Company’s ordinary shares as Belgian law rights through the Euroclear Bank System or as CDIs
should consult with their stockbroker or other intermediary at the earliest opportunity for further information on the processes and
timelines for submitting proxies and voting instructions for the AGM through the respective systems. For voting services offered by
custodians holding Irish corporate securities directly with Euroclear Bank, please contact your custodian.
Tabling agenda items
A shareholder, or a group of shareholders acting together, who hold at least 3% of the issued share capital of the Company, has the right
to put an item on the agenda of the AGM. In order to exercise this right, written details of the item to be included on the 2023 AGM agenda
together with a written explanation why the item is to be included on the agenda and evidence of the shareholding must be received by
the Group Secretary at Glanbia plc, Glanbia House, Kilkenny, Ireland or by email to groupsecretary@glanbia.ie no later than 23 March
2023 (i.e. 42 days before the AGM).
An item cannot be included on the AGM agenda unless it is accompanied by the written explanation and received at either of these
addresses by this deadline.
Tabling draft resolutions
A shareholder, or a group of shareholders acting together, who hold at least 3% of the issued share capital of the Company, has the right
to table a draft resolution for inclusion on the agenda of the 2023 AGM subject to any contrary provision in company law.
In order to exercise this right, the text of the draft resolution and evidence of shareholding must be received no later than 23 March 2023
(i.e. 42 days before the AGM) by post to the Group Secretary and Head of Investor Relations at Glanbia plc, Glanbia House, Kilkenny,
Ireland or by email to groupsecretary@glanbia.ie. A resolution cannot be included on the 2023 AGM agenda unless it is received at either
of these addresses by this deadline. Furthermore, shareholders are reminded that there are provisions in company law which impose
other conditions on the right of shareholders to propose resolutions at the general meeting of a company.
How to ask a question before or at the meeting
The AGM is an opportunity for shareholders to put a question to the Group Chairman during the question and answer session. Before the
2023 AGM, a shareholder may also submit a question in writing by sending a letter and evidence of shareholding at least four business
days before the 2023 AGM (i.e. 27 April 2023) to the Group Secretary and Head of Investor Relations, Glanbia plc, Glanbia House, Kilkenny,
Ireland or by email to groupsecretary@glanbia.ie.
Dividend rights
The Company may, by ordinary resolution, declare dividends in accordance with the respective rights of shareholders, but no dividend
shall exceed the amount recommended by the Directors. The Directors may also declare and pay interim dividends if it appears to them
that the interim dividends are justified by the profits of the Company available for distribution.
258 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
Distribution on winding up
If the Company shall be wound up and the assets available for distribution among shareholders shall be insufficient to repay the whole of
the paid up or credited as paid up share capital, such assets shall be distributed so that, as nearly as may be, the losses shall be borne by
shareholders in proportion to the capital paid up or credited as paid up at the commencement of the winding up on the shares held by
them respectively. Further if, in a winding up, the assets available for distribution among shareholders shall be more than sufficient to
repay the whole of the share capital paid up or credited as paid up at the commencement of the winding up, the excess shall be
distributed among shareholders in proportion to the capital at the commencement of the winding up paid up or credited as paid up on
the said shares held by them respectively.
Dematerialisation
Under the EU Central Securities Depositories Regulation (EU) 909/2014 (“CSDR”), there is a requirement for all securities in Irish issuers
which are admitted to trading or traded on trading venues in the European Economic Area to be represented in book-entry form by
1 January 2025. Book-entry form means an electronic record of ownership such as an entry in an electronic register, without the need for
any further document, such as a share certificate, to be issued to a shareholder to evidence share ownership. In accordance with CSDR,
from 1 January 2023, all new issues of shares in the Company must be held in book entry form, with all remaining shares to be held in
book-entry by 1 January 2025. Therefore, share certificates for shareholders who currently hold their shares in certificated form will
remain valid until 1 January 2025.
GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
259
STRATEGIC REPORTGOVERNANCEFINANCIAL STATEMENTSOTHER INFORMATION Contacts
Group Secretary and Registered Office
Group Secretary and Head of Investor Relations
Glanbia plc
Glanbia House
Kilkenny
R95 E866
Ireland
Stockbrokers
Davy Stockbrokers
49 Dawson Street
Dublin 2
Ireland
Morgan Stanley & Co International plc
20 Bank Street
Canary Wharf
Floor 08
London, E14 4AD
United Kingdom
Barclays Bank plc
1 Churchill Place
Canary Wharf
London, E14 5HP
United Kingdom
Auditor
Deloitte Ireland LLP
Deloitte & Touche House
Earlsfort Terrace
Dublin 2
Ireland
Solicitors
Arthur Cox,
10 Earlsfort Terrace
Dublin 2
Ireland
Pinsent Masons
3 Colmore Circus
Birmingham B4 6BH
United Kingdom
Principal Bankers
Allied Irish Banks, plc
The Governor and Company of the Bank of Ireland
Barclays Bank Ireland plc
Danske Bank A/S, Irish Branch
Coöperatieve Rabobank U.A.
Citibank N.A., London Branch
BNP Paribas S.A, Dublin Branch
HSBC Continental Europe
Registrar
Computershare Investor Services (Ireland) Limited,
3100 Lake Drive,
Citywest Business Campus,
Dublin 24,
Ireland.
260 GLANBIA PLC | ANNUAL REPORT AND FINANCIAL STATEMENTS 2022
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GLANBIA PLC
Glanbia House
Kilkenny
Ireland
R95 E866
Tel: +353 56 777 2200
Email: ir@glanbia.ie
WWW.GLANBIA.COM