Glanbia Regulatory News (GLB)

2010 Full Year Results

2 March 2011

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Results ahead of Expectations; 24% INCREASE IN ADJUSTED EARNINGS PER SHARE

11% TO 13% ADJUSTED EARNINGS PER SHARE Growth EXPECTED IN 2011

2 March 2011 - Glanbia plc ('Glanbia'), the global nutritional solutions and cheese Group, announces its results for the full year ended 1 January, 2011.

2010 full year results summary

·; Improved global dairy markets and good demand in key nutritional markets underpinned an excellent year;

·; Dairy Ingredients Ireland returned to profitability, after a first time loss in 2009;

·; Strategic cost management programmes in Ireland delivered targeted annualised savings;

·; Organic revenue growth in Global Nutritionals significantly outpaced market growth rates;

·; Revenue increased 18.4%; up 15.6% on a constant currency basis;

·; EBITA margin up 20 basis points to 7.0%, up 40 basis points to 7.2% on a constant currency basis;

·; Operating profit grew 22.8%; up 22.8% on a constant currency basis;

·; Operating margin improved 20 basis points to 6.3%; up 40 basis points to 6.5% on a constant currency basis;

·; Adjusted earnings per share increased 24.1% to 38.07 cents and

·; Dividend increased by 10% to 7.52 cents per share.

(1) Revenue including Glanbia's share of the revenue of Joint Ventures & Associates was €2.6 billion for the full year, compared with €2.1 billion for 2009. Share of results of Joint Ventures & Associates, reported in the income statement, is an after interest and tax amount.

(2) Adjusted earnings per share is calculated as the profit for the year attributable to the equity holders of the parent before exceptional items and amortisation of intangible assets (net of tax).

(3) Adjusted EBITDA for the purpose of financing ratios reflects Group EBITDA plus dividends from Joint Ventures & Associates.

(4) Return on capital employed is calculated as EBITA, including share of Joint Ventures & Associates EBITA, (post tax) over capital employed. Capital employed is defined as non current assets plus working capital.

John Moloney, Group Managing Director, said:

"Glanbia had an excellent year with results ahead of expectations. The Group benefited from strong organic revenue growth in our three nutritionals' businesses, a return to profitability in Dairy Ingredients Ireland and the delivery of our strategic cost reduction programmes in Ireland. We delivered strong revenue and earnings growth and our 2010 performance reflects the strength and diversity of our businesses.

The Group is well positioned for 2011. Our current expectation is that the trading environment for 2011 will be broadly positive. Global dairy markets are expected to remain firm, underpinned by robust demand, particularly from Asia, and demand-led growth in key nutritionals sectors. In January we acquired BSNâ, a leading US sports nutrition business which is an excellent strategic fit with our Performance Nutrition business. For 2011, given our strong market positions and growing portfolio, we are forecasting 11% to 13% growth in adjusted earnings per share, on a constant currency basis."

2010 full year results

For the full year ended 1 January 2011

Market commentary

Overall global dairy markets were positive for most of 2010. In the first half global milk supply lagged growing international demand, which was driven by developing economies. Supply increased somewhat in the second half and dairy markets absorbed the increase in milk production with relatively limited price fluctuations. Fundamental to the relative stability in dairy pricing was continued strong demand in Asia, particularly China, increased demand from Pakistan, India and re-emerging demand from Russia. A further boost to dairy markets and more specifically to EU markets was the controlled management of the release of intervention stocks into the market, at prices closely aligned to prevailing market conditions. During the year dairy farm incomes across the globe did recover from the prior year as higher dairy commodity prices were reflected at the farm gate. For 2011, global dairy markets are forecast to remain firm, underpinned by robust demand particularly from emerging markets and China.

US Cheese & Global Nutritionals

US Cheese: In 2010, a combination of factors influenced the performance of the US Cheese business. In the first half, a milk deficit existed in Idaho leading to tight supply conditions and while US cheese market prices recovered to reach historical average levels they did not achieve the equivalent price increases of other dairy products. Tight supply and competition with other dairy product classes gave rise to a situation where payment of milk premiums was required to secure supply. As the year progressed, US cheese prices became volatile with prices trading higher than expected in the third quarter but declining steadily in the fourth quarter. A significant cheese price rally began in early 2011 and has continued year to date. There are a number of variables that could impact the sustainability of this rally but US domestic demand is solid and export demand is strong. Milk supply continues to be tight in Idaho and milk price competition is expected to be a feature of 2011, as butter and skimmed milk powder prices continue to outpace cheese prices.

Global Nutritionals: In 2010, there was strong global demand for whey. This growth was underpinned by structural market changes such as an increased focus on health & wellness; a growing understanding of the link between diet and exercise to weight management and active ageing; a greater emphasis on healthier and more nutritious food options in convenience formats; and strong demand from Asia and developing economies. Demand was strong across all key nutritional sectors including performance/sports nutrition, protein fortification and new products for mainstream bars and beverages. Good demand and tight supply drove whey prices up in 2010 and the market is expected to continue to be firm throughout 2011.

Dairy Ireland

As the bulk of output of the Irish dairy industry is exported, the key market dynamic impacting the performance of Dairy Ingredients Ireland is the global dairy market, which also indirectly impacts the performance of Agribusiness as a supplier of key farm inputs to Irish farmers. Dairy Ingredients Ireland benefited from the improvement in global dairy markets in 2010 despite higher input costs. This performance is expected to be sustained in 2011, based on a current positive outlook for global dairy markets. With improving farm incomes, demand for Agribusiness farm inputs was good in 2010 but price competition was a significant feature of the trading environment. These trading conditions are expected to prevail again in 2011.

The trading environment for the Consumer Products business is dictated by the combination of factors in the Irish retail market and the indirect impact of global dairy markets on input costs. The environment for Consumer Products was very challenging in 2010. Irish consumers remained very cautious as a consequence of a difficult economic situation. This was reflected in their food shopping behaviour, creating a further market shift towards value and promotional deals, and a channel shift away from convenience shopping. The trading environment is expected to remain challenging in 2011.

Proposed disposal of the Irish Dairy and Agri Businesses

Following an approach from Glanbia Co-operative Society Limited, the Group's 54.5% shareholder, on 20 April 2010, the Group announced a proposal to dispose of its Irish Dairy and Agri Businesses. At a meeting on 10 May 2010 the required approval of the Society members was not achieved and therefore the transaction did not proceed. The Group believes that this project is unlikely to be re-visited by the Society in the medium term.

Operations review

US Cheese & Global Nutritionals

Analysis on a constant currency basis

In 2010, US Cheese & Global Nutritionals revenue increased 22.6% to €971.5 million (2009: €792.4 million). Operating profit pre exceptional increased 4.3% to €93.9 million (2009: €90.0 million). Operating margins pre exceptional decreased 170 basis points to 9.7% (2009: 11.4%). EBITA pre exceptional increased 4.3% to €104.6 million (2009: €100.3 million). EBITDA pre exceptional increased 6.2% to €116.8 million (2009: €110.0 million).

US Cheese: 2010 performance and 2011 outlook

US Cheese performed reasonably in the year, however profits and margins were lower than 2009. Good revenue growth was achieved mainly as a result of better cheese market prices, which improved on the historical lows reached in 2009. Market demand was solid and export demand grew strongly from a relatively low base. For the full year, production volumes were lower as a consequence of the planned major refurbishment of the smaller of the Idaho cheese plants in the first half. In addition, following a very difficult farming environment in 2009, milk production was tight particularly in the first half. This placed pricing pressure on securing supply, necessitating the payment of milk premiums during the year. Overheads were also higher as the business invested in supply chain management, technical services to cheese customers and risk management services to milk suppliers. While supply pressures eased somewhat into the second half cheese markets were volatile and difficult, particularly in the fourth quarter when markets declined sharply. This was due to a combination of relatively high US cheese stocks and softer buyer demand.

A strong rally commenced in the US cheese markets in early 2011, as a result of a perceived overcorrection in the fourth quarter of 2010. While overall milk supply is expected to grow modestly in 2011 we expect other dairy product prices to outpace cheese prices and as a result the milk procurement environment will remain very competitive. US Cheese continuously monitors the balance of milk cost to milk availability as part of risk management and has continued its strategy of reducing its exposure to US cheese market price volatility through hedging mechanisms. Glanbia is forecasting steady domestic demand with expanding exports to international markets in 2011. Overall an improved performance is expected for US Cheese this year.

Global Nutritionals: 2010 performance and 2011 outlook

Global Nutritionals had a good year with strong volume and revenue growth outpacing general market growth rates in all three business units. There was strong demand globally for sports nutrition and protein fortified products for weight management, healthy ageing, infant formula and fortified bar and beverage products. Ingredient Technologies had a good year as higher and broader demand, both geographically and by sector, together with higher global whey prices drove good revenue and profit growth and margin expansion. Performance Nutrition also had a good year driven by strong volumes and innovation. Revenue growth significantly outpaced market rates but margins declined due to increased investment in marketing and management together with the impact of higher input costs. Customised Premix Solutions achieved good revenue growth in key market segments and continued to develop further customer specific solutions for core end markets globally; revenue, profits and margins were ahead of 2009.

Glanbia's core nutritional sectors have strong structural market growth drivers that are expected to continue to gather pace in 2011 and beyond. The new customer collaboration centre in Idaho is contributing to building joint development plans with key customers for Global Nutritionals, supporting business growth objectives. It is expected that Global Nutritionals will perform well overall in 2011.

Acquisition of Bio-Engineered Supplements and Nutrition (BSNâ)

On 19 January 2011, Glanbia announced the acquisition of BSNâ for a total consideration of $144 million (€108 million). BSN significantly enhances and extends Glanbia's Performance Nutrition portfolio and continues to develop Glanbia in line with its international growth strategy. The business was acquired on a debt free basis and was funded through Glanbia's existing banking facilities. BSNâ is a leading developer, provider and distributor of nutritional products and builds on the Group's scale position in the attractive, high growth, higher margin, sports nutrition sector. The integration of this business is progressing well and it is expected to be earnings enhancing in 2011.

Dairy Ireland

Dairy Ireland made a good recovery in 2010, compared with a very difficult 2009. Revenue grew 10.7% to €1.1 billion (2009: €1.0 billion). Operating profit pre exceptional increased 81.3% to €43.5 million (2009: €24.0 million) and the operating margin pre exceptional increased 150 basis points to 3.8% (2009: 2.3%). EBITA pre exceptional increased 74.2% to €47.9 million (2009: €27.5 million). EBITDA pre exceptional increased 48.0% to €66.9 million (2009: €45.2 million).

Dairy Ingredients Ireland: 2010 performance and 2011 outlook

In 2010, market conditions improved across all dairy product categories in line with firm demand and tight supply conditions. This delivered an improved performance in Dairy Ingredients Ireland, despite higher milk costs during the year. This business recovered from being loss making for the first time in 2009 although margins were at the lower end of the historical range. There was a strong focus on cost management during the year and targeted saving initiatives both at gross margin and overhead level were achieved. Dairy Ingredients Ireland was recognised as 'Innovation Exporter of the Year' by The Irish Exporters Association for the successful commercialisation of the specialist milk protein product called Solmiko. Dairy markets have risen further to date in 2011 and are currently expected to remain firm throughout the year. Dairy Ingredients Ireland is expected to perform well in 2011.

Consumer Products: 2010 performance and 2011 outlook

Market conditions for Consumer Products remained very challenging in 2010 and overall revenue, operating profit and margins were lower than 2009. Consumer confidence declined as the year progressed and value remains the key focus in all food categories. Consumer Products had a mixed year across its portfolio. The highlights include market share gains for Avonmore milk and a good performance in particular by the value added branded milk products. The trading environment for fresh dairy products was difficult in 2010 driven by intensive price promotion activity. For the food business overall it was a difficult year with margin pressure both on pricing and input costs. Significant cost reductions were achieved in the operational cost base driven primarily by headcount reductions and process re-engineering. While underlying volume trends have stabilised for Consumer Products the market remains fragile and the trading environment for 2011 is therefore expected to continue to be difficult. Subject to regulatory approval, Consumer Products has agreed to acquire the Limerick-based liquid milk business of Kerry Group plc. This will enable Consumer Products to expand its successful liquid milk business. In 2011, Consumer Products plans to continue to drive cost reductions to offset input and promotional cost pressures. Overall performance for 2011 is expected to be broadly in line with 2010.

Agribusiness: 2010 performance and 2011 outlook

In 2010, the recovery in milk and grain prices boosted farm incomes. This supported good volume growth across key categories of feed and fertiliser in Agribusiness during the year. The business performed broadly in line with 2009. In 2011, the Group expects a marginal improvement in performance through an improved product mix and continued tight management of the cost base.

Joint Ventures & Associates

(1) Not included in Group revenue.

Analysis on a constant currency basis

Joint Ventures & Associates had a reasonable year. Revenue and operating profit improved as a result of market price increases in US cheese and European mozzarella markets. Glanbia's share of revenue grew 34.8% to €401.1 million (2009: €297.6 million). Glanbia's share of operating profit increased 18.4% to €20.6 million (2009: €17.4 million). Operating margins declined 70 basis points year-on-year to 5.1%, mainly as a result of lower margins in Southwest Cheese, which was challenged by the significant decline in cheese markets in the last quarter of the year. The Group's share of profit after interest and tax was €10.1 million, down marginally from €10.2 million in 2009. The following table reconciles operating profit with share of results of Joint Ventures & Associates, as reported in the income statement.

Glanbia expanded its US cheese position in 2010 to become one of the largest US manufacturers of American-style cheddar cheese, following the 40% expansion of output of Southwest Cheese in New Mexico which was completed on time and on budget in April 2010. Overall operating performance was in line with expectation for 2010.

Glanbia Cheese in the UK, the Group's European mozzarella cheese joint venture, benefited from good pizza demand across Europe, particularly in the home delivery segment where strong customer relationships and unique technologies have underpinned growth. This business increased revenue, operating profits and operating margins in 2010.

Nutricima in Nigeria continues to make steady progress. Revenue growth in the year was in line with expectations. However, margin pressure was a feature of the second half, as increased dairy commodity prices were not fully recovered in the retail market. There is a strong pipeline of new product development in the Ready-to-Drink sector, a key growth market for the business.

In 2011, Joint Ventures & Associates are expected to deliver some growth relative to 2010 with a good cash return to the Group through the forecast dividend.

Other Business

The Group's Other Business segment includes a small dairy ingredients operation in Mexico and Glanbia's property unit. An improved performance by this business unit is mainly as a result of the benefit of the recovery in global dairy markets to the dairy related business in Mexico.

2011 outlook

The Group is well positioned for 2011. Our current expectation is that the trading environment for 2011 will be broadly positive. Global dairy markets are expected to remain firm, underpinned by robust demand, particularly from Asia, and demand-led growth in key nutritionals sectors. In January we acquired BSNâ, a leading US sports nutrition business which is an excellent strategic fit with our Performance Nutrition business. For 2011, given our strong market positions and growing portfolio, we are forecasting 11% to 13% growth in adjusted earnings per share, on a constant currency basis.

2010 finance review

Revenue, profitability and margins as reported(1)

(1) Pre exceptional items. (2) Given the nature of Group acquisitions in recent years, EBITA is an accurate reflection of underlying cash generative operating performance. (3) Reported results exclude Joint Ventures & Associates. Share of results of Joint Ventures & Associates in the income statement is an after interest and tax amount.  

Segmental analysis including Joint Ventures & Associates

Glanbia is organised into four segments. The largest segment by revenue is Dairy Ireland which represents 44% of total Group revenue (2009: 48%) and 28% of total Group EBITA pre exceptional (2009: 19%). US Cheese & Global Nutritionals contributed 40% of total Group revenue (2009: 37%) and is the largest division by EBITA accounting for 60% of total Group EBITA pre exceptional (2009: 70%). Joint Ventures & Associates amounted to 16% of total Group revenue (2009: 14%) and 12% of total Group EBITA pre exceptional (2009: 12%). Other Business is a very small division representing less than 0.5% of total Group revenue.

Analysis of reported results

Group revenue increased 18.4% to €2.2 billion (2009: €1.8 billion). Total Group revenue, including share of Joint Ventures and Associates, grew 21.4% to €2.6 billion (2009: €2.1 billion). The strong growth in revenue is attributable mainly to the improvement in global dairy and US cheese markets in 2010 and continued strong organic volume growth in Global Nutritionals. Revenue in US Cheese & Global Nutritionals was up 29.0% to €1.0 billion (2009: €792.4 million). Revenue in Dairy Ireland grew 10.7% to €1.1 billion (2009: €1.0 billion). Revenue in Joint Ventures & Associates grew 40.0% to €416.6 million (2009: €297.6 million).

Group EBITA pre exceptional increased 21.3% to €151.6 million (2009: €125.0 million). Total Group EBITA pre exceptional, including Joint Ventures and Associates, grew 21.6% to €173.2 million (2009: €142.4 million). This improvement in performance is driven by the return to profitability of Dairy Ingredients Ireland with EBITA pre exceptional for Dairy Ireland improving by 74.2% to €47.9 million (2009: €27.5 million). US Cheese & Global Nutritionals delivered reasonable year-on-year EBITA pre exceptional growth, underpinned in particular by a good performance by Global Nutritionals. US Cheese & Global Nutritionals EBITA pre exceptional grew 4.2% to €104.5 million (2009: €100.3 million). Group EBITA margin pre exceptional grew 20 basis points to 7.0% (2009: 6.8%). Total Group EBITA margin pre exceptional, including Joint Ventures and Associates, was in line with 2009 at 6.7%. Dairy Ireland EBITA margin pre exceptional at 4.2% grew 150 basis points (2009: 2.7%), driven by the strong recovery in Dairy Ingredients Ireland following a loss in 2009, offset by margin pressures in Consumer Products. US Cheese & Global Nutritionals EBITA margin pre exceptional declined 250 basis points to 10.2% (2009: 12.7%). Lower margins were as a result of higher input costs, significant brand and people investment by Global Nutritionals, volatile market conditions and milk cost premiums in US Cheese.

Group operating profit pre exceptional, including Joint Ventures & Associates, increased by 22.9% to €158.1 million (2009: €128.6 million). Group operating margin pre exceptional, including Joint Ventures & Associates, increased 10 basis points to 6.1% (2009: 6.0%).

Taxation

The 2010 tax charge pre exceptional increased by €6.4 million to €25.5 million (2009: €19.1 million) reflecting the increased Group profitability. The Group's effective tax rate in 2010, excluding Joint Ventures & Associates, was 22.3% (2009: 21.9%).   

Exceptional items

In 2010, further revisions to the Group's pension arrangements for three additional Irish pension schemes were finalisedreflecting the planned continuation of the revision to pension arrangements which commenced in 2009. This gave rise to a further net reduction in pension liabilities and resulted in an exceptional credit (pre taxation) of €10.2 million.

Basic earnings per share

Basic earnings per share (EPS) decreased 4.2% to 36.86 cents (2009: 38.46 cents), as a year-on-year reduction in net exceptional credit items of €25.2 million was partly offset by an increase in Group profit after tax of €20.7 million.

Adjusted earnings per share

Adjusted EPS is calculated as the profit for the year attributable to the equity holders of the parent before exceptional items and amortisation of intangible assets (net of tax). Adjusted earnings per share increased 24.1% to 38.07 cents (2009: 30.68 cents) driven mainly by the improved performance of Dairy Ingredients Ireland and good organic growth in Global Nutritionals.

Dividend

The Board is recommending a final dividend of 4.49 cents per share (2009: final dividend 3.95 cents per share). This brings the total dividend for the year to 7.52 cents per share (2009: 6.84 cents per share), an increase of 10%. Subject to approval at the Annual General Meeting dividends will be paid on 20 May 2011 to shareholders on the register of members as at 8 April 2011. Irish withholding tax will be deducted at the standard rate where appropriate.

Balance sheet and cash flow

Net debt decreased by €34.5 million in the year to €408.1 million (2009: €442.6 million). The reduction in net debt, which is after an adverse foreign exchange movement of €16.8 million primarily on USD denominated debt, is due mainly to an increase in EBITDA performance.

Free cash flow decreased year-on-year by €0.6 million to €65.5 million (2009: €66.1 million). This is after charging working capital movements and business sustaining capital expenditure, but before dividends received from Joint Ventures, loans repaid by/advanced to Joint Ventures, strategic capital expenditure, restructuring costs, and equity dividends. In 2010, dividends received from Joint Ventures & Associates were €11.2 million (2009: €17.9 million) and reflect a sustainable level of cash return to the Group from key strategic joint ventures. Loans advanced to Southwest Cheese during 2009 of €21.5 million, to fund the capacity expansion, were repaid during 2010. As the Group conserved cash during 2010, strategic capital expenditure reduced by €7.4 million to €16.2 million (2009: €23.6 million).

Return on capital employed is a post tax measure of the returns earned by the Group on capital invested including Joint Ventures & Associates. This return increased 170 basis points in the year to 12.9% (2009: 11.2%), due to the improved level of operating performance of the Group.

Financing

The Group has total committed debt facilities of €734.2 million incorporating bank facilities of €670.7 million and €63.5 million cumulative redeemable preference shares. Bank facilities are held with nine banks under bilateral arrangements with common documentation and terms. €160.7 million of the facilities are renewable in July 2012 and €510.0 million in July 2013. The €63.5 million cumulative redeemable preference shares mature in July 2014. The Group continues to operate comfortably within its banking covenants. The Group's net debt: Adjusted EBITDA at year end was 2.1 times (2009: 2.6 times) compared to a covenant of 3.3 times. Glanbia will be reviewing overall Group financing in 2011 as part of the normal renewal process.

1 Including €63.5 million cumulative redeemable preference shares

2 Adjusted EBITDA reflects Group EBITDA plus dividends from Joint Ventures & Associates

3 Adjusted EBIT reflects Group EBIT plus dividends from Joint Ventures & Associates

Financing costs declined €1.9 million to €22.1 million (2009: €24.0 million). In 2010, adjusted EBIT to net financing cost cover improved to 6.7 times (2009: 5.4 times). The Group's average interest rate for the full year of 2010 was 4.2% (2009: 4.3%). Glanbia operates a policy of fixing a significant amount of its interest exposure with approximately 75% of year-end debt currently contracted at fixed rates for 2011.

Pension

At 1 January 2011 the Group's net pension liability under IAS 19 'Employee benefits', before deferred tax, decreased by €37.2 million to €48.6 million (2009: €85.8 million). A strategic review of the Group's pension arrangements was completed during 2009 following which the Group revised benefits under the main Irish defined benefit schemes giving rise to an exceptional gain and corresponding reduction in the pension deficit of €100.1 million. During 2010, revisions to the Group's pension scheme arrangements for three additional Irish pension schemes, consistent with the revisions made in the Group's main pension schemes, have been finalised. This gave rise to an exceptional gain in the year of €10.2 million.

The fair value of the assets of the pension schemes at 1 January 2011 was €389.3 million (2009: €349.2 million) and the value of the scheme liabilities was €437.9 million (2009: €435.0 million).

Annual General Meeting (AGM)

The Group's AGM will be held on Wednesday, 11 May 2011 in Lyrath Estate Hotel, Kilkenny. On the same day Glanbia will issue an Interim Management Statement.

Principal risks and uncertainties affecting the Group's performance in 2011

The Board of Glanbia plc has the ultimate responsibility for risk management. The performance of the Group is influenced by economic growth, global dairy and US cheese markets, and consumer confidence in the markets in which it operates. Economic uncertainty or excessive volatility in global dairy pricing represents a material change to the Group's trading environment.

In 2011, the principal risks and uncertainties affecting the Group's performance are:

·; The potential effect of any significant change to supply or demand dynamics in major markets on the fundamentals of pricing in global dairy markets;

·; The impact that any potential imbalance in the pricing of dairy products may have on the availability or cost of milk procurement for the US Cheese business; and

·; The effect of a further deterioration in consumer confidence on the competitiveness of the Irish retail market.

The principal risks and uncertainties will be outlined in detail in the 2010 Annual Report.

Cautionary Statement

This announcement contains forward-looking statements. These statements have been made by the Directors in good faith based on the information available to them up to the time of their approval of this report. 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 these forward-looking statements. The Directors undertake no obligation to update any forward-looking statements contained in this announcement, whether as a result of new information, future events, or otherwise.

Glanbia plc ___________________________________________________________________________________________________Group statement of comprehensive incomefor the financial year ended 1 January 2011

Goodwill previously written off amounting to €93.0 million (2009: €93.0 million) is included in opening and closing retained earnings, see note 9.

 Glanbia plc _________________________________________________________________________________________________________________

Group statement of financial position

as at 1 January 2011

Glanbia plc ______________________________________________________________________________________________ Group statement of cash flows for the financial year ended 1 January 2011

1 Basis of preparation

The financial information has been prepared under the historical cost convention as modified by use of fair values for available for sale financial assets and derivative financial instruments, and the accounting policies that the Group has adopted for 2010.

The financial information set out in this document does not constitute full statutory financial statements but has been derived from the Group financial statements for the year ended 1 January 2011 (referred to as the 2010 financial statements). The 2010 financial statements have been audited and have received an unqualified audit report.

Amounts are stated in euro thousands (€'000) unless otherwise stated.

The financial information is prepared for a 52 week year ending on 1 January 2011. Comparatives are for the 52 week year ended 2 January 2010. The statements of financial position for 2010 and 2009 have been drawn up as at 1 January 2011 and 2 January 2010 respectively.

The financial statements were approved by the Board of Directors on 1 March 2011 and signed on its behalf by L Herlihy, J Moloney and S Talbot.

2 Segment information

In accordance with IFRS 8 - Operating Segments, the Group has four segments as follows: US Cheese & Global Nutritionals, Dairy Ireland, Joint Ventures & Associates and Other Business. These segments align with the Group's internal financial reporting system and the way in which the Chief Operating Decision Maker assesses performance and allocates the Group's resources. A segment manager is responsible for each segment and is directly accountable for the performance of that segment to the Glanbia Operating Executive Committee which acts as the Chief Operating Decision Maker for the Group.

Each segment derives their revenues as follows: US Cheese & Global Nutritionals earns its revenue from the manufacture and sale of cheese, whey protein and other nutritional solutions; Dairy Ireland incorporates the manufacture and sale of a range of dairy products and the sale of feed, fertiliser and other farm inputs; Joint Ventures & Associates revenue mainly arises due to the manufacture and sale of cheese, whey proteins and dairy consumer products. Each segment is reviewed in its totality by the Chief Operating Decision Maker.

The Other Business segment refers to all other businesses which comprise the Property business unit and a small dairy processing operation in Mexico which was disposed of in September 2010.

The Glanbia Operating Executive Committee assesses the trading performance of operating segments based on a measure of earnings before interest and tax. This measure excludes exceptional items.