It wasn’t exactly a roasting but Glanbia‘s top brass were left in no doubt about where they stand with shareholders. Somewhere between incompetent and “not worth it”.
The latter reflects the fact that not only has the company’s share price halved in the last 10 months (it’s now back at €11 – where it was 12 years ago) but management has continued to award itself generous salaries and bonuses on the back of this dismal performance.
The company’s AGM in the Kilashee Hotel in Co Kildare also took place in the heat haze of a recent profit warning, blamed on Trump’s tariffs and fears for margins over higher-than-expected prices for whey protein, Glanbia’s main input, that also left investors rattled.
But as shareholder after shareholder noted, the problems with the company’s yo-yoing (and ultimately disappointing) share price stretch back much further than the last 10 months.
Roland French, of Penman Securities, said Glanbia’s market valuation had declined by over €2.5 billion since 2015 with the total shareholder return, including dividends, estimated at a negative 36 per cent.
That’s an eyesore for any executive team.
Institutional investors tended to highlight Glanbia’s complex corporate structure which attempts to control and manage three disparate businesses – sports nutrition, ingredients and dairy – and from Ireland when most of the business is elsewhere, mainly in the US. They want the company broken into its constituent parts.
Others highlighted the company’s poor M&A (mergers and acquisitions) record, culminating in the purchase of weight loss brand SlimFast, now the subject of a fire sale auction, for $350 million in 2018.
The company said it racked up a non-cash impairment charge of $91.4 million last year relating to declining sales at SlimFast.
In reality, SlimFast was a poor purchase, a cheap product that runs contra to today’s wellness vibe. It calls into question not only the company’s ability to manage brands but to see where the market is going.
One investor said the company had also failed to leverage its dominant position in the protein powder market to tap into the fast-growing protein drinks and bars segment, where it had now seemingly missed the boat.
Sitting in silence during all of this was Glanbia’s largest shareholder Tírlan, owner of the group’s legacy dairy business here. The farmer-owned co-op hasn’t indicated what it thinks of all this criticism but with 29 per cent of Glanbia shares, it holds the reins of power.
