Type: Research Essays
Sample donated: Randy Gonzalez
Last updated: December 29, 2019
Introduction:Aspart of my CILT Finance and Logistics module, I have been asked to prepare ashort report on two companies; Glanbia Plc and Kerry Group Plc. As part of this report, I will introduce eachcompany, giving a brief overview of their histories and current marketinterests.
I will then analyse each company using ratios before comparing thecompanies to each other using their income statements and balance sheets forthe years 2013-2016.Aspart of my report, financial data was taken from income statements and balancesheets for the years 2013-2016, which were provided as part of the assignmentmaterial (Byrne, 2017). The key ratios were calculated using an excel spreadsheet,copies of my workings can be found in the appendix to this report (Appendix Aand Appendix B). Section1(a) – Introduction to Glanbia:GlanbiaPlc is a global nutrition group founded in 1997, which employs over 6000 peopleacross 32 countries. The global headquarters are located in Kilkenny. Glanbiacurrently produce products sold and distributed to over 130 countries. They area global market leader in sports nutrition, cheese and dairy products.
Since2015, the group has focused its vision to be “One of the world’s top performing nutrition companies, trusted toenrich lives every day” (Glanbia, 2018).OnSeptember 4th 1997, Waterford Foods plc (formally Waterford Co-opSociety) and Avonmore Foods plc (formally Avonmore Creameries) merged to formthe Avonmore Waterford Group plc (AWG). At the time AWG was the fourth largestdairy processor in Europe and the fourth largest Cheese producer in the world.In 1999, following approval at an Extraordinary General Meeting and SpecialGeneral Meeting, the group’s name was changed to Glanbia, which means “purefood” in Irish.
Towardsthe end of the 20th century and from the beginning of the 21st,Glanbia implemented significant changes within their corporate structure inorder to lay the foundations for future growth. The group scaled backsignificantly within Ireland and the U.K and closed or sold a number ofsubsidiary companies. These included interests in fruit juice, beef processingand milk production. This strategy was aimed at cost saving measures, reducingcommodity exposure and focusing at higher margin lower risk sectors. In linewith a significant increase in the demand for nutritional products, the healthand wellness sectors were targeted as the future focus of the company.From2004, Glanbia focused on the acquisition of nutrition based companies such as KortusFood Ingredients Services in Germany and Seltzer Companies Inc. inAmerica.
In 2008, Glanbia purchased Optimum Nutrition and in 2011, Bio-EngineeredSupplements and Nutrition were added to the group’s growing and now significantsports nutrition brand.In2013, Glanbia appointed a new executive team charged with continuing theacquisition and investment programme of the previous years. The Glanbia businessmodel was redefined and ambitious targets were set forth to both enhance thevalue in their existing business and increase the potential for futurebusiness. The group have two main and complimentary platforms from which itlooks to grow market share, Global Performance Nutrition and GlanbiaNutritionals. In 2014, these platforms combined to account for over 75% of theGlanbia group’s total profits. Section1(a) – Introduction to Kerry Group:Kerry Group Plc is a global provider of technology-basedingredients and solutions for the food, beverage and pharmaceutical markets, foundedin 1972. The group currently produces over 15,000 different products, which aresold and distributed to over 140 countries.
The global headquarters are locatedin Kerry. They are a world leader in the global food industry, employing over24,000 people across 28 countries.Initially founded under the name, North Kerry MilkProducts Ltd (NKMP) as a joint project by eight independent co-operatives fromKerry, the Irish State owned, Dairy Disposal Company and The Erie Casein Companyfrom the US, the Kerry Group’s foundations were to supply milk protein forexport to the US. When Ireland joined theEEC in 1973, many small dairies in Ireland merged in order to form companiescapable of competing with the larger European dairies and to be able to takeadvantage of the now larger market. In January 1974, NKMP, through capital invested bylocal milk suppliers formed the Kerry Co-operative Creameries Ltd. The largeEEC market brought the need for increased volumes, allowed for better milkprices and improved farm income in Ireland. The summers of 1979-80 providedharsh climates for milk production in Ireland and resulted in a near 20% dropin the Kerry Co-ops milk supply.
Concern from their reliance on diary, showedthe companies governance that if they were to continue to grow and develop thenthey would need to venture into new products. In 1980, a new 5-year plan wasdeveloped which was based on research and development, expansion into newmarkets and acquisitions in order to develop into a large-scale food business. In 1986, the Kerry Co-op was acquired by Kerry Group Plc,which was founded by the Kerry Co-op directors in order to expand the companyand bring in additional financial investors. To this end, the newly foundedKerry Group was listed on the Dublin stock exchange. In 1988, Kerry Groupacquired Beatreme, a speciality food ingredient supplier in the US; thisallowed the group access to new markets and provided the platform for thecompany to diversify into a leading global food ingredient provider.
Throughoutthe 1990’s Kerry continued to expand in both the North American and EU marketswith the acquisition of established companies such as Malcolm Foods, DairylandProducts and Tingles Ltd. The 1994acquisition of DCA Food Industries was followed in 1998 by the purchase of thefood ingredient division of Dalgety. Acquisitions by the group continued into the 21stcentury and allowed the group to develop a portfolio that encompasses manysuccessful brands around the world. This has allowed the group to grow in linewith its mission statement is to be “a world leader in Taste and Nutritionserving the food, beverage and pharmaceutical industries, and a leadingsupplier of added value brands and customer branded foods to the Irish, UK andselected international markets” (Kerry Group, 2018).