DAVY VIEW

Headline EBITA was c.5% behind our forecast, driven by Glanbia Performance Nutrition (GPN). International route-to-market challenges persisted through the period driving significant negative operating leverage, with GPN margin delivery of 3.7% (Davy: 5.0%). Of note, GPN EBITA in North America was broadly flat year-on-year (yoy). Glanbia Nutritionals delivered a resilient performance, with US Cheese the stand-out. On first glance, our FY 2020 EBITA expectations look too optimistic, driven largely by our GPN margin forecasts (10%). Model adjustments are likely to prompt a c.10% revision to our full-year EPS forecast, constant currency.