Glanbia plc

Liam Hennigan - Head of Investor Relations Siobhan Talbot - Group Managing Director Mark Garvey - Group Finance Director

Karel Zoete - Kepler Cheuvreux Cathal Kenny - Davy Arthur Reeves - Societe Generale Ian Hunter - Investec Fintan Ryan - Berenberg Heidi Vesterinen - Exane BNP Paribas Martin Deboo - Jefferies James Targett - Berenberg Jason Molins - Goodbody Stockbrokers

Good morning and welcome to the Glanbia 2017 results presentation and call. Before we start, I would like to remind everyone on the call that this presentation and some of the comments made on this morning’s call will contain forward-looking statements.

These statements will be made by the Directors in good faith on the information available to them up to the time of this call. Due to the inherent uncertainties, including both economic and business risk factors underlying such forward-looking information, actual results may differ materially from those expressed or implied by those forward-looking statements.

The Directors undertake no obligation to update any forward-looking statements made on today’s call or contained in today’s presentation, whether as a result of new information, future events or otherwise. I’ll now handover to Siobhan Talbot, Group Managing Director of Glanbia plc.

Good morning, ladies and gentlemen. Delighted to welcome you to the Glanbia full-year 2017 results call.

I’m joined on the call by Mark Garvey, our Finance Director. I’ll give you an overview of performance for the 2017 year, Mark will then speak to some further detail on the finances, and I’ll return to speak to strategy and outlook.

Firstly, we’re pleased to report a good performance for the Group overall delivering on a pro forma constant currency basis as per our guidance, our eighth-year of double-digit adjusted earnings per share growth. Our pro forma EBITDA, which assumes that the Dairy Ireland transaction had been in place since January 2016 was up 8.6%, with growth across all segments of the Group.

The fundamental drivers of growth were good volume growth in our wholly-owned businesses overall reaching 5.3%, driven by our GPN branded platform and our nutritional ingredient solutions with volume and margin expansion in our joint ventures. Our balance sheet is strong, and we remain very ambitious to continue our growth journey that will be a blend as previously of organic investments and M&A.

We’ve announced this morning that we have formalized a dividend payout ratio of between 25% and 35% of adjusted earnings per share. For the 2017 year, this will represent 65% increase in the dividend payments to 0.22 cents per share.

2017 was also a year of further evolution of our strategy. We have reshaped the Group portfolio with a clear focus on the wholly-owned segments of GPN and GN on value adding nutritional ingredients and branded consumer products, aimed at both the performance and lifestyle consumers.

These business segments are complemented by our three strategic joint ventures, focusing on different aspects of primary dairy processing in Europe and in the U.S. The key part of this evolution in 2017 was the sale in July of 60% of the Dairy Ireland segment to Glanbia Co-operative and the integration of this business with Glanbia Ingredients Ireland to create a new JV, Glanbia Ireland.

Glanbia Ireland is an integrated focused business aligning all aspects of the growing, sustainable Irish dairy supply base. In GPN also, we were very pleased with the addition of Amazing Grass and Body & Fit to the brand portfolio.

And I comment later on – further on it was we refreshed our overall corporate strategy in 2017, very much focused on continuing growth. And while there will always be marketing challenges, we believe that the strength of our two platforms in GPN and GN, coupled with our strategic joint ventures positions us very well to continue on a journey of long-term sustainable growth for our shareholders.

This next slide highlights the scale and current shape of the Group on a pro forma basis. GPN with EBITA of €170 million grew 7% constant currency in 2017, driven by an overall top line growth of 13.7%, and we were particularly pleased with the like-for-like volume growth of 8%.

While we had some challenges in North American in 2017, as we’ve spoken about previously, it was a year of very strong growth in other markets, particularly emerging markets like Brazil, India and China. Glanbia Nutritionals with EBITA of €114 million grew 4.1%, again, constant currency with strong growth in Nutritional Solutions.

This growth was somewhat offset by challenges in the US Cheese component of the segment. Nutritional Solutions is a key platform for us and we continue to deepen our customer relationships and expand our product offerings in both dairy and non-dairy.

Of course, at the forefront of dairy market dynamics, the joint ventures had a strong 2017 performance, particularly Glanbia Cheese UK and Glanbia Irelands, where we had volume growth and margin expansion. As mentioned earlier, 2017 was an important year of strategic execution for the Group.

We invested €168 million in the acquisitions of Body & Fit and Amazing Grass, both businesses contributing almost €80 million in revenue for 2017. Both brands are very strong in areas that are very much on-trend with global consumers.

Amazing Grass is a strong brand in the high-growth on-trend food category of organic green, super food. Body & Fit is more of a step-out acquisition for us, and it brings a whole new digital capability to the GPN organization.

We are very pleased with the creation of Glanbia Ireland in July and again, I speak a little bit further on that shortly. Overall, we received €209 million for the disposal of the 60% interest, and together with Glanbia Co-op, we are very ambitious for the new joint venture as we look forward to supporting the growth ambitions of our Irish dairy supply base.

In Southwest, we also continue to expand and we are the operation and commercial partner of that business to our Glanbia Nutritionals business. We are currently ramping up the commissioning of a 25% expansion, which as you know, involved an investment of $140 million, and we expect that commissioning to be completed by quarter three of this year.

As we noted in prior updates in July, we sold a 60% interest in Dairy Ireland to Glanbia Co-op. Dairy Ireland was then integrated with our existing partnership, Glanbia Ingredients Ireland to form one integrated business encompassing all of Glanbia’s Irish-based dairy processing and agri business activity.

Glanbia Ireland is 60% owned by Glanbia Co-op and 40% owned by the plc, essentially broadening and deepening the partnership we have had since 2012. The strategic logic of this is compelling and remains compelling.

The majority of Glanbia plc’s primary dairy processing is now in joint ventures with strong business partners and robust business models. These joint ventures each with their own strength and ambitious growth plans are very complementary to the two wholly-owned platforms, where we continue to drive forward the higher margin branded performance nutrition brands and nutritional and function ingredients.

From a portfolio perspective, the sale of the 60% of Dairy Ireland clarified and simplified our business model and also increased our margin profile by 120 basis points to 11.9% for the full-year 2017. Turning then to the operational review and firstly, Glanbia Performance Nutrition.

Overall, we had a good performance in GPN. Revenue was €1.1 billion, was up 13.7%, with total branded revenue up 15% and like-for-like branded revenue up 6.3%, particularly important metric for us.

We had volume growth across all geographic regions with like-for-like branded volume growth up 8% for 2017. The volume momentum that we saw on quarter three continued into quarter four, as a number of our customers prepared for New Year initiatives with their consumers.

EBITA was up 7% and EBITA margin, as guided previously, was 15.1%, down 100 basis points due to the net effect of higher raw material input costs, some brand investment and innovation support and indeed the delusive effect that we’ve mentioned previously of recent acquisitions. Innovation was a key feature of 2017.

We opened the new GPN R&D center in Chicago early in the year and are particularly pleased with our developments in the ready-to-eat platform. The launch of Cake Bites under the Optimum Nutrition brand and thinkThin brands and indeed the BSN Syntha-6 bars have performed very well.

We also continue to innovate around price points and formats to meet consumer demand for high-quality product at affordable prices, particularly in some of our developing markets, such as Brazil. As noted earlier, we’re pleased to add Amazing Grass and Body & Fit to the GPN brand portfolio.

Amazing Grass is a strong brand in that high-growth on-trend category. It’s a growing brand that complements our overall portfolio helping us to broaden our appeal to the health conscious lifestyle consumers that are seeking plant-based nutrition.

Body & Fit, as I said earlier, is more of a step-out acquisition for us. Consumers of Performance Nutrition have embraced the online channel in a number of our markets, and Body & Fit is a strong brand in that space in its heartland in Benelux.

Body & Fit is very complementary to our portfolio and we will be investing behind it going forward. By building our people and systems capabilities and using the brand experience, we can leverage the platform to increase and deepen consumer engagements right across our GPN portfolio.

GPN is a global leader in the Performance Nutrition industry, with a portfolio of eight brands now producing a range of products with broad consumer appeal from what you might call hard core fitness enthusiasts to those seeking a healthier lifestyle. North America continues to be a significant element of our portfolio.

However, strategic decision made in prior years to investment and extending the geographic reach of our branded portfolio delivered strongly for us in 2017, with strong growth in key geographies in EMEA, Oceana and emerging economies, such as Brazil, India and China. The market dynamics in North America were undoubtedly more challenging as we’re not completely insulated from the disruption being experienced by some of our retail partners, particularly in specialty channels.

We’re responding very robustly to these challenges to support our growth agenda. On a global basis, as you can see on this chart, North America represented 62% of the GPN revenue in 2017 and the rest of the word is 38%.

You can also see on this chart that we have a very broad channel reach with our brands on a global basis. GPN has expanded rapidly in the past decades through innovation and acquisition.

This has resulted in a diverse channel mix around the full spectrum of performance orientation to lifestyle consumers. GPN brands are distributed in over 100 countries and we have a direct presence in 22.

2017 total revenue was €1.1 billion, as I mentioned earlier. Of that 30% reached our consumers through distributors.

We work closely with distributors as key partners in many countries, including where the cash agreed is less mature or the route to market is complex. Online was a fast-growing channel for us in 2017 under the key driver of category growth representing 26% of GPN revenues.

We will continue to invest in developing our digital marketing capabilities, a strategy complemented by the recent acquisition of Body & Fit. Food, drug, mass and club retailers represented 16% of the GPN 2017 revenues.

This is an important channel for the thinkThin, Amazing Grass and Nutramino brands. GPN products in this channel are typically ready-to-consume formats, such as bars, snacks and drinks.

Indeed this is the channel, where the lifestyle consumer tends to purchase GPN brands. Finally, the specialty channels accounted for 28% of GPN 2017 revenues.

Specialty retail remains a key channel for performance orientation consumers and in many cases, consumers continue to rely on in-store expertise to a product selection. As a result, specialty is an important channel for innovation, where our new products can be trialed by consumers.

For 2018, we prioritized the business focus on driving revenue through volume growth. We will invest across geographies and our brands to achieve this.

We will invest in building the talent and infrastructure capabilities to support our long-term growth ambitions in this increasingly digital age. This investment will be funded by reinvesting as appropriate, the expected reduction input costs and by driving operational efficiencies in the business.

Overall, our target for 2018 in GPN is to deliver mid to high single digits like-for-like volume growth in the branded portfolio, with mid-teen margins broadly in line with 2017 levels. We will invest early in the year to drive business momentum, while this is expected that the input costs benefit will largely accrue in the second-half.

As a result, we expect the overall GPN result for 2018 to be weighted towards the second-half of the year. Turning then to Glanbia Nutritionals.

Glanbia Nutritionals had a good year in 2017, with revenue up 5.4% and EBITA up 4.1%, driven by strong momentum in our Nutritional Solutions components of this business. U.S.

Cheese performance, as mentioned previously, was somewhat challenged by dynamics in the U.S. markets.

Those challenges most notably around supply and demand imbalances in the barrel cheese format. Our strong customer relationships helped us somewhat mitigate the impact of this.

The Nutritional Solutions component of the business continue to perform well, with increased pricing and volumes and growth across our dairy and non-dairy-based nutrition systems. Our focus here too is on innovation and really being that partner of choice for our customers as they expand both regionally and globally.

Overall, margins in GN remained robust at 9% very marginally down. At 42% of total GN revenue, Nutritional Solutions is a key growth engine for both GN and indeed for Glanbia.

Building on strong foundations, we’ve developed a number of technologies to assist our customers in addressing key consumer trends from health and wellness to convenience to clean labeling. Protein delivery systems has a clear organizational strength, but innovation is at the core of Nutritional Solutions, and we’ve extended our protein expertise into areas that invest indeed all of the above trends that I have mentioned.

This capability drove revenue growth in Nutritional Solutions of 10.9% in 2017. Volume growth of 7.2%, which was broadly based across customers, geographies and categories.

We have price growth of 3.7%, reflecting relatively stronger dairy markets versus 2016. In recent years, we’ve continued to build both our dairy and non-dairy solutions capability and dairy now represents 39% of the Nutritional Solutions revenue and non-dairy 61%.

With a strong expertise in sports and Performance Nutrition as an ingredient supplier, we have solutions across a broad range of cash categories from functional beverages to clinical and medical nutrition and a range of formats from ready-to-mix, ready-to-drink and ready-to-eat. Glanbia, as you know, is a number one player in the U.S.

Cheese markets, and our wholly-owned business performance was satisfactory for 2017, as revenue increased 1.8%, which was largely volume driven. Pricing and performance was more challenged, particularly as I mentioned in the bar and cheese formats, where supply exceeded demand as more supply was brought on stream in the markets.

We think of our US Cheese business though through the lens of our customer, because effectively we bring to market a range of formats across block and barrel cheese. We deliver those formats to an innovative partnership model for our wholly-owned business in Idaho is strongly complemented by the fact that we are the operational, technical and commercial partner for the Southwest Cheese joint venture.

The output of which is commercialized entirely by the GN commercial team. This model is seamless from the perspective of our customers and our scale and industry knowledge makes us a partner in innovation delivering unique flavors and innovative inclusions, for example, in our cheese.

This model meant that we were the natural partner for dairy farmers in Michigan, as they explored opportunities for capacity expansion. Our conversations are progressing well and we remain very much on track for commissioning of new plants in 2020.

Overall, for GN, for 2018, like GPN, our focus is on volume-driven revenue growth, particularly in Nutritional Solutions. Pricing trends are likely to be negative as global diary markets reduced in the latter part of 2017 and into 2018.

Again, this will particularly impact the first-half performance of GN. These number includes 40% of the results from Dairy Ireland in joint ventures for the 2nd of July, following the disposal of 60% of Dairy Ireland to Glanbia Co-op.

The results are Dairy Ireland to the date of this transaction are included in discontinued operations. As I mentioned, our joint ventures are at the forefront of global dairy markets.

And therefore, performance improves and global dairy markets are relatively stronger as they were in 2017. Volume growth is also a feature, particularly in Glanbia Ireland and Glanbia Cheese UK.

Our overall share of JV’s revenues grew strongly by 35.7% versus the prior year. This was driven by pricing up 17.1% as a result of those positive dairy markets, volume growth of 4.3% and the Dairy Ireland transaction itself increased the revenue of these JV’s by 14.3%.

Our share of EBITDA up significantly to €63.4 million. Looking very briefly is the individual joint ventures, Glanbia Ireland delivered a good performance in 2017, with volume and price improvements.

Milk processed increased by 9% to a total milk pool here now in Glanbia Ireland of 2.6 billion litres. GI has a strategy in place to leverage the benefits of the significant growth plans of our Irish dairy supply base and plans for in the strategic investment of between €250 million and €300 million between 2018 and 2020 to both increased processing capacity and drive capability for value-added products.

This investment will largely be funded by debt facilities sourced in Glanbia Ireland itself. Southwest too, as you know, is a large-scale producer of American-style cheddar cheese and whey ingredients in the U.S.

As noted earlier, it work very closely with Glanbia Nutritionals as a route to market for all its cheese and whey ingredients. Southwest Cheese had a somewhat reduced performance in 2017, primarily a certain dairy product pricing dynamics increased milk cost at a faster pace than selling prices.

Business is still very much on track strategically at $140 million investment in the expansion, as I mentioned, is due for commissioning by quarter three of this year. Again, that has been financed directly by the Southwest Cheese business.

Glanbia Cheese is a large-scale mozzarella cheese producer with two facilities in the United Kingdom. Glanbia Cheese had an excellent performance in 2017, which is a very good commercial position in mozzarella in Europe and it had strong revenue and earnings growth.

This was driven mainly by higher volumes and relatively higher product pricing. As I previously mentioned, our joint ventures remain very complementary to our wholly-owned business.

And each joint venture has ambitious growth plans underpinned by robust business models agreed with our partners. Business models of the joint ventures are such that the aim is that their investment plans would be largely funded on a standalone basis within each business.

For 2018, we do anticipate the dairy market dynamics will be more challenging, particularly in the first-half, and we do expect an overall reduced performance from the joint ventures for the year. I will now handover to Mark, who will take us through the financial review.

Thank you, Siobhan, and good morning to everyone on the call. I’ll now take you through our 2017 financial performance.

We’re pleased to report a good set of results again in 2017 wholly-owned revenues for the continuing businesses for €2.4 billion, up 9.2% constant currency. Wholly-owned EBITA was €283 million, up 5.8% constant currency, with each segments delivering good EBITA growth.

EBITA margins were 11.9%, down 30 basis points. Walking down through the income statement, intangibles amortization was €43.1 million, that’s up from €37.4 million last year, primarily due to the acquisitions of Amazing Grass and Body & Fit in the first quarter of 2017.

Net finance costs were €23 billion, a marginal increase on last year. Our average interest rate was 3.9%, excluding the impact of the make-whole interest incurred on the repayments of some of our private placement debt, which compares to 3.8% last year.

The plc share of profit after-tax of joint ventures and associates was €42.8 million, a significant increase compared to €26 million in 2016, with good results coming through from Glanbia Cheese and Glanbia Ireland. And the income tax charge was €38.3 million, down from €39.3 million last year.

Our average tax rate for the year was 17.6%, compared to 18.4% last year, representing the geographic spread of our earned income. Adjusted earnings per share for the year on a pro forma basis, as if the Dairy Ireland transaction had occurred at the beginning of 2016 was 87.11 cents, that’s up 10.2% constant currency and 8.3% on a reported basis.

On a reported basis, including Dairy Ireland, which is 100% owned for the first-half 2017 and 40% owned for the second-half. Adjusted earnings per share was 89.17 cents, an increase of 5.3% constant currency of 3.7% reported.

Looking at the results by segments, you can see that Glanbia Performance Nutrition had another strong year with revenues growing 13.7% constant currency to €1.1 billion. Like-for-like branded revenues grew 6.3% and the acquisitions of Amazing Grass and Body & Fit added 8.1% to revenues.

Contract sales were down year-on-year. EBITA was €169.7 million, up 7% constant currency in 2016, while EBITA margins were 15.1%, down 100 basis points from prior year, but in the mid-teen range as anticipated.

The primary reason for the lower margins was higher year-on-year input costs and additional brands and innovation investment. Glanbia Nutritionals revenues were €1.266 billion, up 5.4% constant currency on last year, primarily driven by volume and price increases in Nutritional Solutions.

Glanbia Nutritionals delivered EBITDA of €113.5 million, up 4.1% constant currency from 2016. EBITA margins were in line with prior year at 9%.

As I mentioned, wholly-owned revenue was up 9.2% constant currency from €2.2 billion just under €2.4 billion. As you can see in the slide, Glanbia Performance Nutrition was the primary driver of revenue growth this year.

For the continuing businesses, volumes were up 5.3%, driven by good like-for-like branded volume growth in Performance Nutrition, as well as volume growth in Nutritional Solutions. Group-wide price was marginally up on last years, price increases in Nutritional Solutions were mostly offset by declines in Performance Nutrition.

Acquisitions increased wholly-owned revenues by 3.7%. Now I would like to speak to the revenue dynamics in our two wholly-owned segments.

Revenues in Glanbia Performance Nutrition grew from €1 billion to just over €1.1 billion, an increase of 13.7%. Amazing Grass and Body & Fit, both acquired during the first quarter of 2017 were important contributors of revenue growth for the year, representing 8.1% of this growth, adding approximately €80 million to revenues in the year.

The business segment volumes are up 7.1% with like-for-like branded volumes up 8% while contract volumes declined. In 2017, contract sales represented less than 10% of overall segment sales.

Like-for-like brand revenues increased 6.3%, as volume increases were somewhat offset by price investment, primarily due to input cost increases over the prior year, as well as increased brand investment in innovation. Non-U.S.

revenues, which now represent almost 40% of total Performance Nutrition revenues had good growth, particularly in Australia, India, China, Brazil, the UK and France, showing the importance of our investments in our global markets. Revenues in Glanbia Nutritionals increased by 5.4% in 2017.

Total revenues were €1.266 billion, of which €532 million were Nutritional Solutions revenues and €734 million were US Cheese revenues. Nutritional Solutions revenues increased 10.9% from €488 million in prior year, representing good volume growth of 7.2%, which was broad-based across customers, geographies and categories.

Pricing was also positive with growth of 3.7%, primarily due to stronger dairy markets in 2017. In addition, we have disclosed a 61% Nutritional Solutions revenues are non-dairy-based, representing vitamin and mineral blends, functional beverages, plant-based solutions and flavors, all important growth categories for this business.

US Cheese revenues were up 1.8% constant currency, with volume of 1.7% due to increased milk processed and improved yields, whereas price was essentially flat year-on-year as increased pricing for block format cheese was offset by barrel format weakness. I’d now like to take you through the exceptional items we reported.

Total exceptional items for continuing and discontinued operations for 2017 amounted to a credit of €98 billion, compared to an expense of €15 billion in 2016. The most material exceptional item relates to the profit on the disposal of 60% of the dairy yard segment, following the closing of the transaction in July 2017.

The net of tax profit on disposal was €82.4 million, which is also net of transaction-related costs of €13.3 million. And this amount has been included in our reporting of discontinued operations.

Following review of the useful lives of capitalized internally generated research and development costs for newly developed products, we determined it was more appropriate to reduce the estimate of useful life for from six years to three years to reflect the dynamic environment for new product launches in the early development stage. This change resulted in a once-off amortization charge of €19.4 million.

We also incurred rationalization costs of €5.4 million, which were primarily organizational and rationalization costs. Following the Dairy Ireland transaction and in light of our new group structure, we are reviewing our corporate and functional activities and associated costs and have taken some decisions to reduce costs going forward resulting in these charges.

This review is continuing into 2018. Also, following the Dairy Ireland transaction, we have reviewed and restructured our outstanding debt to ensure it is appropriate for the continuing businesses.

As a result, the Group repaid €169 million of our – $169 million of our $325 million private placement debt, which is due in 2021, resulting in €14.1 million of one-off interest costs and fees due to early settlement. As a result, we expect our net finance costs in 2018 to be below €20 million, should our net debt profile remain broadly similar to the end of 2017.

And finally, following a review of the recent taxation legislation in the U.S., which in particular reduced the U.S. federal corporate tax rate from 35% to 21%, we have reduced our wholly-owned deferred tax liabilities by €38.7 million in our year-end balance sheet.

In addition, in our Southwest Cheese joint venture, there was a reduction in deferred taxes of €8.7 million, which has been reflected at year-end. Now turning to cash.

Operating cash flow for the year on a pro forma basis, excluding the impact of the Dairy Ireland segment was €185 million, which came in below our expectations. This was due primarily to a working capital outflow of €123 million, following three years of inflows.

This was driven by increases in trade receivables balances of €76 million due to the seasonal increase in revenues in the fourth quarter. We have been collecting our receivables as normal in the early part of 2018 in accordance with our customers normal credit terms.

And although inventory levels were somewhat higher than the end of 2016 at the end of 2017, this was primarily due to increased business activity in acquisitions. Inventory levels are, in fact, down significantly from the half-year 2017, when I discussed some issues we were working through at that time and which are now mostly resolved.

There’s a sustaining capital expenditure for the continuing businesses was €20 million. Consequently, operating cash flow EBITDA conversion was approximately 56% in 2017 and below our target levels.

This compares to 101% to 2016. For the coming year, we have a target to achieve operating cash flow conversion of around 80%, and we will continue to be focused on working capital management.

We had outflows of €58 million related to non-exceptional interest and tax and received dividends from our joint ventures of €16 million. Free cash flow therefore, we should measure prior to strategic capital expenditure and acquisition and disposal activity was €137 million.

Capital expenditure for the year amounted to €73 million in 2017, of which €49 million was on strategic projects and the remainder of business sustaining. The more material capital expenditure items related to the build out of an innovation center for Glanbia Performance Nutrition, an additional processing technologies for Performance Nutrition and Glanbia Nutritionals, as well as IT implementation costs.

In 2018, we expect capital expenditure to be approximately €75 million to €85 million. In the first quarter, we announced two important acquisitions within the GPN segment, Amazing Grass and Body & Fit, which Siobhan spoken to earlier.

These acquisitions are the total purchase price of approximately €168 billion. Return on capital employed is 13.4%, down from 13.9% in 2016, primarily due to the initial dilutive effect on return on capital employed of recent acquisitions.

We have ended 2017 with a strong balance sheet. Net debt was €368 million, compared to €438 million at the end of 2016.

The net debt to adjusted EBITDA ratio was approximately 1 time compared 1.2 times last year, providing the Group with good headroom to use debt for future investments. Interest cover excluding the once off private placement early settlement interest was 11 times.

We have available debt facilities of over €830 million maturing in 2020 and 2021 and sufficient capacity to pursue strategic capital projects and acquisition targets. Finally, net pension obligations were €42 million at year-end, a decrease from €110 million in 2016, primarily as a result of the Dairy Ireland transaction, which is further strengthened our balance sheet.

As I touched on previously, the Tax Cuts and Jobs Act were signed into U.S. law in late December 2017.

Although there are many aspects to this law, one of the primary changes is the reduction of U.S. federal corporate tax rate from 35% to 21%.

When we reviewed our deferred tax balances related to U.S. taxes, we made a determination to reduce our deferred tax liability by €38.7 million at year-end and we have recognized this benefit as an exceptional gain in our financial statements.

We have made our best estimate of the impacts of this new legislation at year-end and recognized that as the new tax law continues to be interpreted and certain provisions are further clarified, there could be some further changes to our deferred tax balances and our effective tax rate in 2018. At this time, we expect our effective tax rate in the coming year to be in a range of 16% to 17.5%.

In late 2017, the Board conducted a review of our current dividend policy, including a review of the dividend policies of our peers, our balance sheet strength and our desire to appropriately return cash to shareholders, while in addition ensuring there is sufficient capacity for organic investment and growth through acquisition. Following this review, the Board has decided to continue a progressive dividend policy and to set a dividend payout ratio going forward in the range of 25% to 35% of adjusted earnings per share.

2017 therefore, this change will result in a 2017 dividend of 22 cents per share, an increase of over 65% in prior year and represents a payout ratio of just over 25% on the 2017 pro forma adjusted earnings per share of 87.01 cents. This new policy reflects our confidence in the strategy and growth trajectory of the Group, and we are pleased to improve the cash returns to our shareholders.

And with that, I’ll hand it back to Siobhan to discuss our strategy and outlook for 2018.

Thank you, Mark. And as we turn then to strategy, I think, the execution of the Glanbia strategy to-date has resulted in a stronger and very focused product portfolio and geographic footprint.

In 2017, we refreshed our strategy, reaffirmed nutrition at its core, and then we restating our ambition to deliver long-term sustainable growth. Our purpose and vision are clear and we continue to participate in markets, where consumer trends are fundamentally positive around being such a health and wellness, on-the-go convenience food and beverage, digital connectivity and clean labeling.

We are now an organization with leading nutritional market position, market-leading Performance Nutrition brands, global reach and a strong balance sheet. Our refreshed strategy focuses on three strategic pillars: protecting and growing our core, selectively building and scaling beyond the core, and embedding enablers right across the Group.

The essence of these pillars are a clear focus on our strength to optimize our current positions in core areas by selectively and intentionally pushing our boundaries outside our core as we drive forward for growth. These strategic pillars we’ve translated into strategic priorities and they are both maintaining and growing our leadership position in GPN, sustaining current and driving further ingredients market leadership in Nutritional Solutions, growing through organic investment programs and acquisitions and partnerships with complementary businesses, and of course, all of these priorities delivered by a very clear and committed focus on developing our talent, our culture and our value system in line with our growing and global scale.

For 2018, our outlook is positive and we aim to continue our Group’s journey. Growth will be driven by continued momentum in GPN and the GN portfolios, offsetting an expected weaker performance in the joint ventures.

As I’ve mentioned earlier, we will invest to deliver volume-driven revenue growth, and that will be the theme of 2018. And this investment will be across our innovation agenda, our brands, our physical assets, and indeed our people.

We are targeting mid to high single digits like-for-like branded volume growth in GPN under the Nutritional Solutions component of GN. With margins in both GPN and GN, as I said earlier, expected to be broadly in line with 2017 levels.

Maintaining our basis for guidance as constant currency as recent years, we expect to deliver pro forma adjusted earnings per share of 5% to 8%. Growth is expected to be delivered in the second-half of 2018, as comparison to dairy dynamics as planned investment right across the business would adversely affect performance in the first-half of 2018.

But overall, remain very ambitious to continue our long-term growth agenda. I do know, we guide in constant currency and we report in euro and a significant portion of our earnings are generated in U.S.

dollars. We incur foreign exchange impact on translation and reporting versus the constant currency results.

And given the significant movement in the U.S. dollar in recent months, we expect an approximate 8% translational headwinds, if the euro dollar race stays around the current level of 124 to 125.

Finally, ladies and gentlemen, I’m delighted to announce that we will be hosting a Capital Markets Day on the 23rd of May in the U.S. in our newly opened innovation center, and more details are in our investor section of the glanbia.com website.

I’d like to thank you this morning for your time and attention. And now we will handover to Q&A.

Yes. Good morning, all.

I have a couple of questions. The first one is with regard to the how you shared the updated strategy, but the long-term ambitions you still have in place – that those end in 2018.

Can you talk about the financial ambitions you have for the medium-term related to the strategy? The second question is on GPN.

The Group cruising speed for volume growth in the second-half seems now 10%-plus at this point. Can you highlight the importance of innovations that lifted the growth and looking at the guidance for 2018, that seems a bit below the current cruising speed.

So what’s the thinking behind that? And then lastly, on the joint ventures, the 2018 will be a more difficult year, but you also highlight the growth initiatives that are in place within the joint ventures.

What is the medium-term earnings power, excluding the impact of the dairy cycle you think of the current joint ventures you have? Thank you.

Good morning, Karel. Thank you for that.

Fundamentally, I would say that our long-term growth ambitions are very strong. We continue to be an organization that is very focused on growth and we are not changing our overall long-term guidance in that context.

But of course, we are doing the right thing, I believe in 2018 with that overarching long-term ambition. And that is taking a decision to invest specifically around in various areas with that long-term journey in our minds.

And so as I’ve mentioned, our focus on investment in 2018 will be right across the portfolio. It will be investing in everything from our people capability, it will be investing behind, as we said, when we acquired this Body & Fit and that digital space.

It will be investing in our brand and bringing our brands further and deeper across channels and indeed geographies. And I would look back to indeed the strategic decision we made a number of years ago, where we spoke with many shareholders about a decision to very specifically invest in bringing brands internationally outside the U.S.

market and that has delivered really well for us and delivered particularly well in 2017. So we’re remaining very strong and would look at 2018 in that context.

For GPN, yes, you’re absolutely right. The second-half volume momentum was very good.

And in fact, when we look to through 2017 and indeed 2016, we’re finding that seasonality now in the business, where the second-half is particularly strong and that has a logical sense to it. I think, when you think across a number of our channels and the extent to, which our customers do a lot of consumer activity in the performance and lifestyle space around New Year New You and all of those various pieces.

As we look to the full-year of 2018, we’re guiding mid to high single-digit volume growth, again, because that’s a full-year context. As always, we will remain very ambitious to drive our branded portfolio forward.

We are really focusing on that volume piece for 2018. And as we said today that we’re very comfortable with that guidance.

Again, a very good question on the joint ventures. And dairy can be a volatile space.

I think, the thing – the piece of our dairy that is really continue to ebb and flow around supply and demand dynamics, but fundamentally, we would remain very positive about the long-term prognosis for dairy. There is a global landscape, there’s an increasing population, there is an increasing divergence between regions of the globe that can produce dairy versus regions that desire to consumers.

So we are very confident in our investment plans. I think from the plc shareholders perspective, it’s positive that with our partners our large business models are very robust.

So the insulators are quite a bit from dairy markets, which you can still see it. We’ve enhanced, while we might be quite insulated over a full-year basis and we will continue to invest behind driving long-term growth.

Suffice it to say though, that’s why we do have that ambition and we’ll invest in the joint ventures, a primary utilization of the capital of our shareholders will be put work in the wholly-owned businesses of GPN and GN.

Okay. Thank you.

Thank you.

Good morning, Siobhan. Good morning Mark.

Couple of questions in my side. Just firstly, thanks for the disclosure in terms of GPN between regional channels.

Just focusing on the channel components just the distributor piece, perhaps you could just add –give us a little bit more color in terms of what sits behind that? Is that primarily the rest of the world,or is there component in North America?

And then just related to the channel piece as well, just as we look into the future around the FDMC channel, just how do you think about that in terms of your product suite, promotional strategies revenue model? And finally, a question for you Mark, just on working capital.

And when we possibly get a sense in terms of the broad shape of that outflow by division roughly for 2017? Thank you.

Thank you, Cathal. And the distribution piece actually has an element in North America, as well as in the non-U.S.

geography. Of course, it is as you’re rightly say, predominantly outside the U.S.

But we do use distributions in a number of instances in right across our markets have a lot of longstanding relationships there and particularly internationally it makes a lot of sense where the route to market can be complex. The FDMC channel, as we said previously, remained the channel of significant interest to us.

We’re equally very cognizant, Cathal, that it is a slightly different consumer in that channel. The price points are different, the product offerings are different.

We have I think clarified our minds a lot now on our strategy for that channel, acquisitions like thinkThin and Amazing Grass and the Nutramino here in Europe playing very much into that space, and Innovation will continue to be a core part of our key strategy. And a lot of our innovations would be dedicated to that.

I think the overall model will be an evolution, too, and we will continue to evolve right across the different channels hopefully. But this chart gives everybody is a sense that we are already across a range of channels.

I think, you will see over the next number of years, our brand – certain brands playing across all of those channels, certain brands maybe being more specific to specific areas. And we will continue to manage that pricing volume innovation dynamic indeed to drive forward that total consumer franchise, because fundamentally, we believe that we have an absolute right to play and indeed would hope to win across that core performance nutrition consumer, but equally those lifestyle consumers.

I now will pass to Mark on the working capital.

Yes, on the working capital, Cathal, we don’t break down by division. But a number of things clearly receivables was the biggest area in terms of outflow and a lot of that was driven just through the fourth quarter, so the timing worked out this year versus last year.

But in addition, there is increased business activity, which would have led to that increase as well as the acquisitions we had of course, we had Body & Fit and Amazing Grass acquisitions, so their receivables will be in there at the year-end also. We had predicted an outflow for the year.

But certainly, it was a bit more than we had expected primarily just in the way the momentum worked through in the fourth quarter for us in terms of sales.

Thank you. Siobhan, just kind of come back on the channel these just in the context of your ambitions around D2C, particularly in Europe.

I know you’ve called out a planned investment within GPN overall. Would the majority of that investments sits within that D2C opportunity in 2018?

I think what’s good about having looked at the strategy, Cathal, is that it will be broadly based. But yes, there would be a very specific elements to it that is will be around that D2C and digital capability.

We spoke when we bought Body & Fit, but we were very clear both about our ambition, but equally acknowledging that there’s lots of things that we don’t know yet, because it is a whole new capability for us. And I think it was a measure of our ambition that we were willing to step outside traditional areas and really look at developing that whole D2C capability.

So the short answer to your questions like, yes, it’s a strong component part of it. But we will actually invest behind the totality of the brand portfolio as well as we look through 2018.

That’s very clear. Thank you.

Good morning. Thanks for taking my call.

My questions are about GPN. Congratulations on getting there in the second-half.

But what was the like-for-like growth in the second-half of the expensive pricing and margin? And do you know if all your sales have reached consumers yet.

And then picking up on Cathal’s point in FY 2018 guidance in this business, won’t the fourth quarter of 2017 make a very difficult comps. And can you run through again why FY 2018 in the business are going to be second-half weighted?

Just what are you expecting on import prices? And can you give us a bit more detail about what you’re expecting on half – on half profit split?

And then my second question is around M&A. What’s your current thinking on M&A?

Do you see opportunities for GPN M&A, or are you looking wider now? Thank you.

Thank you, Arthur. And firstly, talking about GPN and the pricing margins split, we did get very good volume growth as we mentioned.

We did invest in pricing, in fact, interestingly that investment was somewhat higher in quarter three, in fact, than it was in quarter four. And as I said, I think, probably a number of times now, we will strategically invest where we think it is the right thing to do to drive that value momentum.

But we are about assessing this both technically and strategically, so we will do the right thing of that context. Our margins, it wasn’t surprising to us, I think, we’ve spoken about at the half-year that the reality is input costs were significantly against GPN for 2017.

So there was going to be that element of margin dilution, I think, a 15.1% we’re very squarely in that mid-teens margin that is our ambition. So I think, you can look at the volume growth in that context.

As we look to full-year 2018, of course, we’re all very conscious of quarterly comps. And we do understand that it can be sometimes frustrating in that our business is lumpy.

And in truth, that is the nature of the business because of the nature of our customers and the channels in which we operate, you will get periods of lay in a particular product for seasonal type agendas like I mentioned. And in the round, we are really going to drive that top line volume momentum, as I mentioned.

We guided mid to high single digits. The reason that we’re not fully calibrating the pricing components just now is that, there is this piece around input costs.

So as I mentioned, we will invest to drive top line growth. We will invest to build out our capabilities organizationally.

Essentially, that will be funded by those input costs benefits and the funding by driving organizational efficiencies in GPN, which the team have already been doing through 2017. That probably leads me to answering the other part of your question, which is about the [indiscernible].

Within a GPN environment, we just by nature of some of the arrangements we have on input costs, the bulk of that benefit we see coming in the second part of the year, but we will to get momentum invest in the first-half. So it is really that juxtaposition between those two pieces that you’re seeing albeit somewhat cautious about the first-half performance.

We believe that is the right thing to do. We believe that the – we have a sufficient clarity on the input costs that make the investments absolutely the right thing to do for both 2018 and long-term volume momentum.

If I move outside GN, GPN rather in terms of the first second-half, the reality is for 2017 dairy markets are coming down pretty hard. We’ve seen it through the latter part of 2017, and as we come into 2018.

The joint ventures are really don’t see the brunt of that. We had very strong joint venture performance in the first-half of last year.

And by many of our business models, as I mentioned, are very robust on a full-year basis, we’re going to see that particularly in the first-half and we do in truth expect them to be back indeed even over the full-year. GN likewise, there isn’t as much of a lag between markets and cost of goods in GN, as there is GPN, so we’re going to see that piece, again, probably more on the dairy side of GN in the first-half.

But fundamentally, our story is about writing through those ebbs and flows of dairy markets and continuing to build out our consumer franchise as a great partner with our customers in Nutritional Solutions under the great brand ownership in partner with our customers in GPN on a global basis. In terms of M&A, yes, we would really like to continue to acquire, I think, the strategy that we’ve had for a number of years, where our growth is a blend of organic investments and acquisition is a model that we would absolutely be very keen to continue.

It’s always very hard to be prescriptive on where acquisitions would land. Our priority focus areas are GPN under the Nutritional Solutions component of GN, and we would be equally ambitious actually across both of those areas different opportunities can emerge different points in time.

But as Mark alluded to, we have strong capability. We have a great balance sheet now.

So we can find the right assets at the right price. For our shareholders, we would absolutely execute on this.

Thank you. Just following up how’s the year started in GPN?

And is your guidance really for first-half profits to lower in FY 2018 than in FY 2017 constant curency?

We’re not overly – yes, we’re not totally calibrating the actual first-half of this point, Arthur. But given the joint venture performance, it’s not beyond possibility that that could be the case, but our year, it starts, fine.

Okay. Thank you.

Good morning, Siobhan. Good morning, Mark.

Maybe a question for Mark this time, I mean there has been a lot of thought being put into the working capital and the movements in that over this year and into the year-end. I’m just wondering, Mark, if you give us an idea on the inventory side of things?

Are we just looking at new levels given the size of the business or this is something you are going to be working to reduce down to see capital inflows in the coming years? And then maybe back to Siobhan, within your rest of the world is now 38% of GPN revenue and you call that went to the main players like Brazil, et cetera.

And I know you don’t like breaking this down. But is there any idea you can give us that – well an idea of maybe in terms of South America, Europe, APAC as the breakdown of – for the rest of the world is?

And then again, you said, you are present in – well, sorry, yes, the products are in 100 countries, but you’ve got a direct presence in 22. And I’m presuming the distributors are a fair bit of the business in the countries, obviously you don’t have a direct presence.

And I’m just wondering what level of business do you need to get within a country before you decide to go direct rather than going through distributors, or is there some other formulas used to decide whether you’re going to go direct or use a distributor?

Good morning, Ian. I’ll take the working capital question specifically in relation to inventory.

You might recall at half year, I spoke quite at length just around inventory in terms of some challenges you’re having after implementing systems changes et cetera, and just executing and making sure we have the right raw materials and finished goods on hand depending on what was needed for customer service levels. That’s almost all been completely resolved at the end of the year.

At half-year inventory was €411 million, it’s now €321 million, for example, at the end of the full-year. It’s a little bit off from where we were at this time last year, I think, we were €304 million this time last year for the continuing businesses, but that wasn’t really an unexpected amount.

We had expected little bit of a working capital outflow on inventory during the year, as I said, during the year earlier. So I think, going forward, we’ll continue to manage this very well to balance our customer service levels and also to balance the international markets that we’re selling into the more we do internationally that comes from the U.S.

There is a bit of a longer supply chain there as well. But I feel actually quite comfortable right now, where we’ve ended the year from an inventory perspective.

Ian, to your question about the rest of world, I prefer not to calibrate it any further at this point. But it is fair to say that both the European countries and indeed what we call LAPAC are both very important component part of that rest of world.

And obviously, individual geographies will play out specifically within that. I think, as we’ve – as we said previously, the UK is a big market for us in growth; Australia, India China and Brazil.

So lots of those, I think, doing really good things and the teams were very strong. Yes, very good question around the distributor model.

And I suppose, I would say to you that fundamentally there are no hard and fast rules. It really depends on a number of factors., it depends on the complexity of the geography.

It can depend on routes to market. It can depend on physical infrastructure that a distributor might have much more efficiency that we would create.

I think what I would say to you is our history will show that we are quite flexible actually in the model. So if you take Australia, for example, we were working through a distributor in that geography.

And then our scale and ambition was such that actually we were probably outgrowing that capability and we walked to distributor and now we do that. So you can actually have even at – even with the direct presence in country.

You can have a distributor relationship. But your core point is, Ian, that obviously the countries outside the 22 would be largely distributors.

So I would say, agile and fluid on that, Ian. And we have great teams right across the different geographies and we’re willing again to look at well what’s the best way to reach into the largest number of consumers.

Okay. Thanks very much.

Thank you, Ian.

Thank you, Ian.

Good morning, Siobhan. Good morning, Mark.

And just a few questions please in regards to the margins within the global Nutritionals business of the same strong organic sales growth within Nutritional Solutions in 2017 and the outlook is for that 2018. And I was surprised that we’re not seeing much of an incremental improvement in margins for the division as a whole.

And could you give us a sense in terms of where margins are as for each of the subdivisions and what we expect to see for those in 2018, and this also imply – this also imply that maybe, I think, the margins within the Cheese business are structurally lower than they were up to two years ago? Thank you.

Good morning. And structurally, as we’ve said a number of times, the margins in the cheese business are lower than the Nutritional Solutions.

We would prefer not to overly calibrate this beyond that. But I think it is fair to say, you’re going to be more in that mid single-digit range on the cheese side.

In terms of margins looking forward, your point of course is correct, as pricing comes back in the Nutritional Solutions, you might naturally expect the percentage margins. And I think that will ebb and flow as we go through the year.

There are a number of factors, too. As I think, we continue to monitor again, I come back to the point we said earlier around investment, for instance.

There will be anumber of areas that would be investing in a Nutritional Solutions as well that is all about driving that volume growth. But and so this core – sorry for Nutritional Solutions, in particular, we tend to actually focus more on the earnings in truth rather than the percentage margin, because to your very point dairy market themselves will make that percentage ebb and flow.

And we will be very optimistic about our capabilities within Nutritional Solutions. We have great customer relationships.

I think, as you’ve seen on the chart today, we have a span of capability that is both dairy and the non-dairy. And as I mentioned there, we would also like to complement our organic growth with further acquisitions.

Having said all that, too, we have a very fine U.S. cheese business, particularly complements by the fact that we are the innovation, operational, and commercial partner with the joint ventures.

But it is structurally that little bit different in profile, as you rightly said.

Okay. Thank you very much.

HI, good morning. So starting with GPN margins, you’re guiding for flat.

Can you comment on whether you expect gross margins there to be flat as well? And then two questions on Nutritional Solutions.

Are you at all exposed to the issue in the C-trial chain at the moment that’s impacting vitamin production and prices. And then lastly, you had an initiative to move towards more systems and away from bulk product, I suppose.

What is the current split of systems and bulk in the Nutritional Solutions business? Thank you.

Good morning, Heidi. We refer not to calibrate gross margin movements actually.

We’re comfortable with the overall guidance that we’re giving on net margins. And as we said, we will continue to manage through the year that will be skewed of innovation investment volume pricing and margins.

Again, it will ebb and flow through a year depending on how the input costs comes through. And the reason that you’re seeing, in fact, the margins holds despite that investment is the fact that we will have hundreds of pieces coming around input cost.

So we will – we’ll manage that through the piece, as we said. Yes, your point on vitamin pricing is valid.

We are – there has been inflation in pricing for a number of components and we’re working through that costumers and we’ve taken all of that into account when we speak into ambition in Nutritional Solutions. You’re also correct in terms of our ambition on the dairy side.

It is about driving forward what we call our systems and solutions business. We’re still on that journey.

Again, we prefer not calibrate to a definitive split. But it’s fair to say with the investments that we’ve done in recent years, we are increasingly reducing the elements of what we would call the commodity wheys and increasingly prioritizing both the higher and wheys as straight products, but also and very importantly, for us blending that maybe with other dairy products are indeed other ingredients and then really developing our capabilities across different formats.

Our Nutritional Solutions have particularly some capabilities and things like the bar format and have evolved further capabilities in ready-to-mix and ready-to-drink.

So on this inflation in Nutritional Solutions, can it be passed on systematically or could there be a lag when we think about the first-half? What typically happens with inflation in this segment?

Yes, lot – I guess like any of these things, Heidi, can be a mix of both. I would say to you largely passed on with some other elements of lag.

Thank you.

Good morning, everyone. It’s Martin Deboo of Jefferies.

I got three questions, one of which is quite short. Siobhan, I wanted to just go to the JV line, which is clearly very buoyant in 2017 and what lies behind the questions trying to understand the moving parts of that and the implications for 2018.

Obviously, there’s a lot going on there most obviously is sort of inorganic contribution of Dairy Ireland. But what surprises me is percentage margins have gone up in a rising price environment in the JVs, which seems counterintuitive, you sort of expect percentage margins to compress a bit.

So sort of what’s gone well there, I guess, is the question? And also it’s obvious that it’s Glanbia cheese UK that is being they saw organic performer in the JVs and would apparently be very good I would have thought.

So I just want to understand why that was so good and what might happen in 2018 in that? Second question is just where do we think capacity utilization is in cheese and whey processing in the U.S., given the challenging year you’ve had with US Cheese and Southwest Cheese?

And the final question, just given some of your comments to office question is, what do you think is happening to WPI and WPC 80 prices at the moment? It’s not obviously difficult for us to get so rely on you really for the feel, which sort of goes to the question of where inputs are going to go in 2018?

Total three. Thank you.

Thanks, Martin. You’re absolutely right in terms of the joint venture, the standout performance was Glanbia Cheese.

It can sometimes happen and varies in aspects of the dairy portfolio that you can get a particular set of market dynamics that are particularly favorable to the cost of the business. We have a great mozzarella cheese business with our partner.

The dynamics around butter pricing, around cheese pricing in 2017 were particularly favorable for Glanbia Cheese. I have to say, too, there is a great team in Glanbia Cheese and we have very good customer relationships there.

But that and that will be reduced in 2018. So that is probably at its simplest.

In the capacity utilization, our assets are very well utilized. We will sometimes say that the volume will ebb and flow a little on the cheese sides, but nothing overly dramatic.

We tend to run our assets hard and we run them at 365 days a year during 60 days a year. And so the percentage movement that you will see will just be around milk availability or good decisions that we make around maintenance, et cetera.

So assets are very well utilized. The point that I was making on the US Cheese really goes to the fact, there’s a competitor in the barrel side, brought on significant volume in 2017, that creates an anomaly in the markets between barrel pricing and block pricing and that just impact us our pricing and indeed our performance.

We have a very good model for pricing in the U.S., but again, no model is entirely perfect and that did actually hurt us a little in 2017 and that that dynamic is still a little bit there as we look into 2018. On your question on high-end whey prices.

Global dairy, as I mentioned, came back quite significantly at the back-end of 2017 in a general sense. For whey, it’s really an 2018 phenomenon, and I think the directional trend is down.

Again, you don’t have full visibility for the latter portions of the year. But structurally, as you know, we remain a net buyer of high-end wheys.

And so structurally, that scenario where high-end whey is relatively lower or higher than our joint ventures maybe and Glanbia Nutritionals business, whey is structurally positive for our Performance Nutrition business. Hence, our earlier comments about the full-year piece.

So directionally, down at this point in time. These things can ebb and flow as new capacity comes on.

There’s nothing we dramatically see on the horizon and there will be capacity coming on in 2018. But we do think for the year that will be lower year-on-year.

And, Siobhan, very quick follow-up, because WPC 34 is the one we can see publicly you’ve said in the past that WPC – the WPI is not following WPC 34 as directly. Would you still hold to that view?

In other words, it’s not going to come down as much as WPC 34?

So I think it’s fair to say that at this point in time that it may not come as much as 34 globally. There is – powder has been very weak.

There is stocks of skim milk powder and intervention that is somewhat of an overhang on the market. So that will keep 34, I think, relatively low and we’ll see how that relatively plays out then Martin, through the year.

Okay. Thank you for that, Siobhan.

Thank you.

Thank you.

Hi, good morning, everyone. Couple of questions from me.

Just firstly, on the volume outlook for GPN mid-to-high single digit branded. Are you prepared to say what you expect the U.S.

like-for-like branded volumes to be within that? And then secondly, also in GPN, in terms of mass and your strategy there, how kind of critical are acquisitions for you in mass or – and how much do you think you can continue to use your existing portfolio to drive growth in the mass category channel, sorry?

And then thirdly, and finally, just on the EPS range, the 5% to 8%. Trying to get a better idea of what’s going to get it from the 5% to 8% level is the main delta really – is the volume be out term, I mean, how input costs land or where the tax rate lands.

Try to update what’s the real sensitivity there? Thanks.

Hi, James. No, we guide on the total portfolio and prefer not to calibrate it right down to the different regions.

On the GPN mass question, yes, it’s an interesting and evolving piece for us. I think, we are becoming very clear now on the role that the different brands we play.

We already have great brands in that space, thinkThin and Amazing Grass. And as I mentioned in Europe, we have Nutramino.

That’s not to say, we’re not interested in acquiring. So I think, it will continue to be that blend of the existing brands that we have, maybe even other brands with our portfolio in particular format.

And if there was opportunities in formats, where we’re not currently strong to acquire a capability absolutely interested to do with that as well. So I think, it is that blend.

On the question of 5% to 8%, I’m going to hand it to Mark.

Yes, on the 5% to 8%, James, I would say the important drivers for us there clearly going to be the mid to high volume growth targets that we set for both our performance Nutrition and our Nutritionals business. So they will be key for us in terms of wholly-owned business.

And you are right, there are some other things going on obviously in the P&L. You will see potentially some benefit from tax-based on the tax guidance I gave you, as well as interest, but then joint ventures contract that’s significantly.

So for us really that the important driver of growth next year will be our two wholly-owed businesses Performance Nutrition and Nutritionals.

Okay, that’s great. Thanks.

Hi, good morning. Just one, Mark.

And few questions if you don’t mind, just on pricing. Within GPN the price investment that you’ve done particularly in the second-half of 2017, how should we think about that dynamic in 2018?

And should we sort of expect a similar run rate to what you had in the second-half of the year? And where does that sort of leave you in terms of benchmarking against your competitors, particularly in the U.S.

market? That would be helpful.

And then in terms of the margin impact that you saw the 100 basis points decline in GPN. Can you give us a sense of how much of that was driven by some of the acquisitions that you’ve made that might have – that you completed this year or last – sorry, 2017 that might have been a sort of lower contribution, and what sort of sense that has hurt you on the margin front?

And then just finally, a quick one on the working capital. Obviously, the €120 million outflow – and how much will you expect to reverse should we see an inflow of any size or magnitude this year would be helpful?

Thanks.

Hi, Jason, good morning. On the pricing, it’s difficult to calibrate that completely at this point.

It’s fair to say that I do believe there will be pricing investments, because it comes to the second part of your question, we are in a competitive set. We’re particularly in a competitive set in North America, because input costs will be that bit lower in 2018.

It is that question that we will exclude again of how our competitors would respond. We have no desire to race to the bottom on pricing.

We’re very clear on that. So I think there will be some element of pricing.

But I think, we calibrate that more for you as we go through the year when we will have far more visibility and as ourselves. In the roundabout as we said, net-net, we’re comfortable to guide the margins in around, where it is for 2017 and that will be an element – holding an element of that input costs and potentially reinvesting it.

And we reinvested in whatever form, we feel is more appropriate to drive volume, because of that terms or marketing, whatever that might be. In terms of the margins and the impact of acquisitions, yes, it wasn’t insignificant.

Let me put it that way in the 2017 year. As we said when we bought Body & Fit in particular and we would have a number of years, where the profitability of the brand will be reinvesting and driving further top line momentum.

So very much part of the story as you suggest us.

Yes. And Jason, in terms of the working capital points, obviously, we expect to see a significant improvement in 2018.

And that’s why I put the target out there in terms of 80% operating cash flow conversion to EBITDA. Again, I’m sure as we get towards the end of the year, we’ll have some of the seasonality that we have to manage based on – what Siobhan said earlier, just how we look at now what happens in our Performance Nutrition business particularly, but and we should expect to see a significant improvement in 2018.

Thanks very much, guys.

Thank you.

Thank you very much. Again, just like to thank all of you for your time and attention this morning, and we shall talk soon.

Thank you all.