Glanbia plc (GL9) Earnings Call Transcript & Summary

Good morning, and welcome to the Glanbia Q3 2024 Interim Management Statement Call. During today's call, the directors may make forward-looking statements. These statements have been made by the directors in good faith based on the information available to them up to their time of their approval of the interim management statement. 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. Directors undertake no obligation to update any forward-looking statements made on today's call, whether as a result of new information, future events or otherwise. I'm now handing the call over to Hugh McGuire, CEO, Glanbia plc.

Thank you, Liam. Good morning, everyone, and welcome to the Glanbia Quarter 3 2024 Interim Management Statement Call and Presentation. On today's call, I will provide an overview of our performance for the first 9 months of the year, and I'm joined by my colleague, Mark Garvey, who will cover the financials and outlook. At the end of the presentation, we will be happy to take your questions. I'm pleased to report that the group delivered a good performance with strong volume growth across the group's portfolio of better nutrition brands and ingredients. In GPN, we continue to see good consumer demand for our performance in healthy lifestyle brands with continued revenue growth in the third quarter. We're particularly pleased with the continued growth momentum in Optimum Nutrition and Isopure, which both delivered double-digit volume growth in the period. In Nutritional Solutions, we also saw good customer demand across the end-use markets driving an acceleration in volume growth across our premix and protein solutions businesses. The group is in a strong financial position, and we remain focused on shareholder returns. In terms of capital allocation, year-to-date, we've returned EUR 88.6 million to shareholders via share buybacks, and we've completed the acquisition of Flavor Producers in April. Today, we're announcing that the Board has approved a further EUR 50 million share buyback authority to commence in early 2025. We are also announcing the separation of our Glanbia Nutritionals businesses into 2 new segments. In 2025, the group will operate 3 segments: Performance Nutrition, Health & Nutrition and Dairy Nutrition. The new structure is designed to further simplify our business and position ourselves for the next phase of growth. As part of this change in our operating model, we are commencing a group-wide transformation program, which will allow us to realign the group's functions to support the 3 segments to fund and drive growth. I will speak more about this shortly. Looking ahead to the remainder of 2024, we continue to focus on driving growth across our portfolio of leading brands and ingredient solutions. Based on the current market environment and expectations for the remainder of the year, we reiterate our full year guidance of 5% to 8% growth in adjusted earnings per share. Turning to GPN. Revenue grew by 1.7%, driven by volume growth of 3.2%, a price decline of 4% and the 53rd week impact delivering an increase of 2.5%. We're pleased with volume growth, which was driven by our Optimum Nutrition and healthy lifestyle nutrition brands. The pricing was largely driven by our promotional activity and some specific tactical pricing initiatives where we have seen a good volume uplift. From a regional perspective, Americas revenue was broadly in line with last year due to the weight management headwind and increased competition. Excluding the weight management impact, Americas revenue growth would be 5%. Our international business delivered growth of 4.7%, driven by strong volume growth in the Optimum Nutrition brand across key markets. This was supported by increased distribution, marketing investment and the scaling of our market capabilities. Optimum Nutrition continues its strong global momentum, delivering like-for-like growth of 6.4% and double-digit volume growth. As a leading brand in the category, we're focused on driving recruitment broadening the brand's appeal through education, broad reach media and highly visible partnerships. We continue to grow our household penetration and expand the brand's physical availability. We're currently in the process of executing new distribution with FDM retailers as they reset their shelf sets, dedicating more space to the brand. This commenced in the third quarter and will continue into the fourth quarter. During the third quarter, we also began rolling out the new packaging design in U.S. Retail. The new design features an enlarged Optimum nutrition logo, the callout of protein in the product descriptor, highlighting the product benefit and a bigger flavor call out in front of pack as we broaden our appeal to new consumers. We've also launched a number of line extensions in the quarter across our protein and energy offerings, including new flavors of our flagship gold standard protein powder creating an amino energy. U.S. consumption grew by 1.1% as we continue to see some softness in the Specialty channel. Excluding the Specialty channel, consumption growth in the last 13 weeks would be approximately mid-single digits. Our healthy lifestyle portfolio of Isopure, think! and Amazing Grass brands, delivered like-for-like revenue growth of 3.5%, delivering a strong growth in the third quarter and 13-week consumption growth of 1.2%. We're particularly pleased with the performance of Isopure, where we continue to attract new consumers to the brand. We're driving reach as we invest behind the brand [indiscernible] to more campaign, and we're seeing strong growth in household penetration as new consumers enter the category. In the fourth quarter, we will begin shipping the newly renovated Isopure product, which includes new branding and formulation. The new design significantly increases the Isopure branding drives appetite appeal and connects to different product offerings under the Isopure family. The new formulation delivers an improved taste profile using our own NutraShield microencapsulation technology from Nutritional Solutions. As we look to the rest of 2024 and into next year, we remain focused on driving growth. Despite lapping a strong fourth quarter compared from 2023 and a highly competitive landscape, we expect to deliver good growth in the fourth quarter. This will be driven by distribution, including the increased distribution in FDM and new product launches as we expand our energy offering. As we've outlined earlier this year, we are seeing whey, a key input in GPN trend upwards and hitting record prices as we go into 2025. Mark will speak further about these trends we're seeing, but I would like to highlight the dairy markets and cycles, which we've navigated in the past. And with new supply coming online in late 2025, we expect that whey prices will reduce through the second half of 2025 and into 2026. Performance Nutrition is a great category for continuing significant consumer interest. We'll continue to invest in increasing brand awareness and penetration while executing necessary short-term pricing actions, leveraging our revenue growth management tools and cost management initiatives to navigate the spike in whey input costs next year and be well positioned when those costs reverse. Moving to our second growth platform of Nutritional Solutions, where pro forma revenue grew by 14.4% in the first 9 months. This was driven by a 5% increase in volume, a 0.9% decline in price, a 7.2% increase driven by the impact of acquisitions and a 3.1% increase driven by the 53rd week. The volume growth was driven by good performance in our premix and Protein Solutions businesses, while the price decline was driven largely by the impact of year-over-year market pricing. Demand remains strong in our priority end use markets with sustained demand from customers for vitamin and mineral fortification and high-protein healthy snacking. We're seeing good growth in the functional beverage category in international, particularly EMEA and good demand for our high-protein crisp offering to bar and cereal applications as consumers continue to seek higher protein in a range of convenient formats. We continue to invest in innovation and capacity to ensure we have the best solutions to meet the growing needs of consumers and customers. The recently acquired flavors and bioactives businesses are performing well with the integrations on track. As I mentioned earlier, today, we've announced a change in our operating model from 2025, where we will separate Glanbia Nutritionals into 2 new segments to allow greater focus on our higher-margin growth priorities, further simplifying our business and better serve our growing customers and end-use markets. The Health & Nutrition segment will comprise primarily the premix solutions and flavors platforms and will focus on growth priority end-use markets such as vitamins, minerals and supplements, active lifestyle nutrition and functional beverages. This is a business we've grown organically and via acquisitions in recent years to become a scale operator. We are the product development partner for both established and emerging brands with our ability to combine flavors with key function ingredients and application science, providing a unique proposition for our customers. We will continue to target acquisitions to further grow this segment. The Dairy Nutrition segment will combine our current U.S. Cheese and Nutritional Solutions protein portfolios. This platform is largely one integrated manufacturing footprint with a high supply and operational interdependency and is also the route to market for our joint venture supply of whey and cheese ingredients. This segment provides a scale leadership position in dairy as the #1 producer of whey protein isolate and the #1 user of American style cheddar cheese. As a leader in the industry, we will deliver differentiated expertise in dairy nutrition underpinned by key competitive advantages such as our scale and protein innovation capabilities. This platform will seek to optimize performance through operational efficiency and advanced dairy insights. This new structure will provide enhanced visibility on the impact of whey across our ingredients and consumer businesses and give better visibility to the different margin and growth profiles of both businesses. As a result of the change in our operating model, we're also commencing a group-wide transformation program designed to support the next phase of growth. This is part of continuous evolution journey we've been on the last few years, and the goals of the program will be to support the setting up of our new fit for purpose operating model, accelerate our digital transformation, enhancing our capabilities to enable growth and identify opportunities to enhance productivity and drive efficiencies across our operations. I'm confident that our new structure and transformation program will drive future opportunities and I'm looking forward to talking to you in more detail about these early next year. And with that, I will hand over to Mark.

Thanks, Hugh, and good morning to everyone on the call. The group has a strong balance sheet. And at the end of the third quarter, net debt was $620 million. We have committed facilities of over $1.3 billion with an average maturity of over 4 years. At year-end, we expect net debt to EBITDA to be approximately 1x. Capital expenditure, both strategic and business sustaining for the year is expected to be between $80 million and $90 million, with investments primarily related to new systems implementations, capacity enhancements and acquisition integration. The group is currently in the process of executing a EUR 100 million share buyback program. And year-to-date, 5.24 million shares have been repurchased and canceled at an average price of EUR 16.90, a total of EUR 88.6 million completed so far. The Board has approved an additional EUR 50 million buyback program, which is expected to commence in early 2025. As Hugh has outlined, we are creating 2 new operating segments from 2025 and Health & Nutrition and Dairy Nutrition. We will publish 2023 and 2024 pro forma financial information for these new segments in conjunction with our year-end results in February. For reference, for full year 2023, the new Dairy Nutrition segment on a pro forma basis, reflecting revised commercial arrangements with our joint venture would have had revenues of approximately $1.3 billion with high single-digit EBITDA margins and the new Health & Nutrition segment on a pro forma basis, including the acquisition of Flavor Producers, would have had revenues of approximately $600 million with high teens EBITDA margins. Also announced today is a group-wide transformation program focused on enhancing productivity and driving efficiencies across the group. In early 2025, we will provide an update on the expected costs and benefits associated with this program. Now turning to outlook. And today, we are reiterating our 2024 guidance. In GPN, revenue growth is expected to be between 2% and 5% as previously guided, including the 53rd week, with mid-single-digit volume-driven revenue growth expected in the fourth quarter. Pricing investment for the full year is expected to be between 3% and 3.5% with somewhat reduced promotional activity in the fourth quarter. Optimum Nutrition is expected to deliver high single-digit volume growth for the full year. We continue to expect GPN EBITDA margins to be in the 16% to 16.5% range compared to 15.7% in 2023. At our half year results in August, we had procured whey up to January 2025 with higher cost evidence. Whey procurement has now been completed through April of '25, and we continue to navigate an environment of higher whey costs which we expect will peak towards the end of the first half. We expect whey costs will reduce during the second half of '25, as we have seen in prior cycles, facilitated by capacity shifting into high-end whey production as well as additional whey supply coming to market in late '25 and into '26. We are utilizing all available actions to mitigate short-term inflation through pricing and revenue growth management actions, focusing on productive marketing spend and an overall targeted approach to managing costs. We will provide more detail on our '25 outlook at our full year results in February. But at this point, we expect full year '25 GPN EBITDA margins to be broadly in line with second half '24 EBITDA margins. Nutritional Solutions volume growth is expected to be between 3% and 5% for the year, and EBITDA margins are expected to be between 18% and 19%. We are seeing some benefit from higher whey prices in Protein Solutions in the second half and would expect that to continue into the first half of '25. Operating cash flow conversion is expected to be over 80% for the year, and we are reiterating our adjusted earnings per share guidance of 5% to 8% growth for the full year. And with that, Hugh and I will be happy to take your questions.

[Operator Instructions] We will now take our first question from the line of Patrick Higgins from Goodbody.

Patrick Higgins here. A couple of questions on my side, if that's okay. Firstly, just on GPN. I think at the H1 point, you noted and your distribution gains, and you mentioned in the presentation there just in terms of the distribution gains for a healthy lifestyle [ LON ]. And could you just give a bit more color on how that's progressed? And was it always going to be a Q4 kind of ramp up in terms of delivery on that new distribution points? The second question that I have is just around the performance in international markets for GPN, it looks a little bit softer versus H1 when you strip out the extra trading week. Maybe just a little bit more color on performance across your core, kind of, international markets, please?

Sure. Just speaking into -- I'll answer both questions or speaking to GPN and distribution. The simple answer is yes. The new distribution plans we called out would have been 13% [ on ON ] and higher than I'm an ice for healthy lifestyle. And there will be really a transition across the broader food drug mass. We've seen some of that going in across quarter 3 or quarter 4. There's also just in terms of a process transition, we're shifting from bags as well to [ tubs ],and that's just take -- that's just in terms of how the retailers deal with that transition as well as taking a little bit of time. But overall, we're happy with progress and you'll see the benefit of that as we go into quarter 4. In terms of international markets, probably quite similar to what we said at half year results, Patrick, continue to see strong growth in India, in China and the Middle East markets, which you recalled out before. Actually seeing good growth in Continental Europe as well. The pullback for us really is where we see the most competitive pressure in some of our bigger markets, such Tier 1 markets such as the U.K. And then as we called out, we'll continue to see competitive pressures in the online channel as well, primarily in Europe, but overall, I'm happy with the volume growth of just over 5%.

Our next question comes from the line of David Roux from Morgan Stanley.

So just a couple from my side. On GPN, I think the implied growth for Q4 to reach at the bottom end of your guidance is low to mid-single digits. Could you perhaps just talk about what gives you the confidence you can achieve that relative to what you saw in Q3? The second question is just what was the like-for-like growth for SlimFast for the 9 months? And then just lastly, on the share buyback, the EUR 15 million incremental buyback, should we see this as a top up to your usual sort of EUR 100 million per year? Or is this is this just slightly brought forward in terms of your usual cadence?

Just in terms of your questions in terms of GPN, yes, we expect to have mid-single-digit volume growth in the fourth quarter. As you said, some of this is timing in terms of distribution coming through. we expect the promotional activity to be moderated into the fourth quarter. We did see more pricing than you might have expected as a 1/3 -- 1/3 of that actually is related to tactical price reductions on things like creatine. However, very comfortable with the margin profile, just passing that back to folks. So for us, that's rather promotion, it's more of a pass back on input costs. So we feel fairly confident in terms of where we get to for the full year. In terms of SlimFast, I think what Hugh pointed out was [ ex-SlimFast ] our growth in North America was 5% for the overall period. So from that perspective, that gives you a view to where SlimFast is coming out. On the share buyback program, again, you should regard that as a top-up by the Board actually in terms of how we came to the end of the year, very comfortable with our cash flow program and obviously, it fits nicely into our overall capital allocation as well.

Our next question comes from the line of Alex Sloane from Barclays.

Just the first one, in terms of the reorganization, would you say that to have any impact on customers of NS who might be buying both protein and some of the functional ingredients and flavors from you? Is this more about how you're internally organizing and setting up and shouldn't have too much impact from a customer point of view? That's the first one. And the second one, I guess, in a world with potentially more tariffs. How are you thinking about the GPN footprint internationally? Do you have sort of sufficient production outside of the U.S.? Or could this be something that you look to adapt to situations change on this front?

Alex, thank you for the questions. You kind of answered the question on reorganization in the reality that around bringing focus on 2 parts of our business our Dairy business and our Health & Nutrition business, but with different scale, different margin profiles. And it's really around priorities and growth opportunities. In terms of how we engage a customer, it still will be one face to customer. We'll be working on that operating model and how we present that over the course of the next few months. But the goal of this is to bring absolutely focused on prioritization around our growth opportunities, it isn't to duplicate cost. So we'll be setting that structure up as we move into 2025. In terms of tariffs question, yes, look, I suppose what I'd say is we're all waking up to interesting news this morning. We've been here before. So in terms of our overall global manufacturing footprint, we clearly reacted to tariffs back in '17 and '18 by moving our manufacturing in local -- to local manufacturing for GPN and the likes of India and China. We have manufacturing for Europe. And obviously, our scale and manufacturing in the U.S. the same as the GN side, we continue to look at local manufacturing opportunities. And I think when we think about synergies and opportunities across the broader group as part of the transformation project, that's an area we'll be looking at too as well. It's how do we facilitate more kind of vertical integration of our operations across some of these international markets. But what I'd say generally is part being a global businesses, we react to these tariff changes if they're ro materialize over the course of the next year or 2.

Our next question comes from the line of Nicola Tang from BNP Paribas Exane.

The first was on GPN margins into next year. I think if I caught you, you said 2025 margin should be in line with the second half of this year, which I think implied by your guidance is around 15%. Firstly, did I hear that right? And secondly, given your comments on inputs easing in the back half of next year based on the new capacities coming online. Can you just run us through some of the other moving parts, which mean that you won't necessarily see any sequential change in margin versus H2 this year? And then linked to that as a kind of longer-term question, with what you the measures that you're looking to implement with this group-wide transformation program, how should we think about the midterm profitability in GPN going forward? And then as a kind of second question around capital allocation. Mark, I listened to your recent podcast interview and you were talking about this focus on cash generation. And also how to use cash. Obviously, we've seen you announce this incremental buyback today, but you also talked about M&A. So I was wondering if you could give us some color on the M&A pipeline at the moment?

Sure. Nicola, thank you for those questions. And hopefully, I'll get them off in the order in terms how you ask them. Firstly, in terms of GPN margins, I mean, your math is reasonable based on what I said, it is early. I think we're obviously so we procured right up until April. And we do expect things to peak at the half year and normal cycles would expect that come back down. And I think that will be our perspective at this point. And based on how we see that progression, we feel very comfortable giving you that view in terms of what next year's margins should look like Clearly there will be a first half, second half view, but that's how we would think about it. In terms of the levers on that, clearly, we've got a number of things we can look to in terms of pricing, and we are looking at that right now as we head into next year, particularly in some of our markets. We obviously have ways to look at trade and promotional expense as well. We'd expect that to be more ameliorated, frankly, as we sort of have a different cost environment. and we have some ability to work on marketing as well. And we have marketing right now at about double digits actually in terms of a percentage of sales, and there is some flexibility in that as we sort of look at particularly working marketing that we can use. So we have a number of levers that we're comfortable that we can use to ensure that we're comfortable that margin guide that we gave you. I let Hugh talk about the transformation, but I'll just come back to our capital allocation. In terms of capital allocation, I would say, yes, very comfortable here in terms of our ability to do the buyback, clearly and the Board are very much supporting us doing that. In terms of M&A, we clearly have capacity of $1.3 billion in terms of facilities. Net debt to EBITDA of 1x at the end of this year. And we have flexibility to go up to 3, 3.5x. So again, a lot of capacity here as we look to grow our businesses. That is clearly a focus. And Hugh announced the changes even in the segmentation today, you can imagine that sort of clearly shows a focus we will have there too. From an M&A pipeline perspective, we continue to look at opportunities in our, I would say, GPN area as well as our Health & Nutrition area. And we have a number of things we continue to look at. As you know, it depends how processes work out as to whether there will be a specific thing that happens. But clearly, very much in our agenda, and we have the capacity to do that.

Yes. Just actually, maybe just add to Mark, one comment on the whey protein as well, like the fundamental driver of pricing and the input cost is to match. We're obviously competing in strong categories with strong consumer demand and lots competitive activity. So demand that was fundamentally driving it. It will take until kind of late '25, early '26 for supply to catch up. We have visibility of supply coming online, which that's one of the reasons it gives us comfort, particularly at the back end of the year and into '26 that we'll see some of these prices alleviate and Mark spoke to all the different levers that we'll be working on to navigate our way through what our record prices for high-end whey protein. I think the other thing just to say is obviously, the benefit of the group is we see some of that positivity on the -- in the Dairy Nutrition side of the business with good volume and good pricing in the offer as well as they meet the demand for increased protein. In terms of transformation as well as a simple answer, our major guidance will be back to you next year on that. We'll be working our way through the transformation project, the separation. Obviously, a lot of work there. and we've committed to be back to in half 1 next year with more midterm guidance on what we see as the opportunity from that transformation project.

Our next question comes from the line of Karel Zoete from Kepler Cheuvreux.

I have a couple of questions. The first one is just a follow-up on where you ended with regards to the remark on the ability to take price, in terms of price elasticity, as you see it, should -- has anything changed compared to the previous up cycles in whey, or do you expect more or less the same responses by the consumer and competitors? Then the other question is on Nutritional Solutions. Clearly, very good momentum here. What do you see in terms of costs here from the nondairy side, particularly vitamins have gone up a lot? And then the third point, which we don't often discuss here, given the importance of whey prices. The other cost of goods sold elements here, I think particularly about freight, but also some others been quite inflationary. Is this going to be a source where you may have efficiencies ahead looking at the transformation program? Or how is that generally looking?

Yes, look, in terms of pricing, I think what we're evaluating at the moment is all of our levers across the P&L. So what I would say, actually, what's different to the last the price increases over '21, '22, where we put through more than 30% price increases on our new brands. Obviously significant. I think what's changed now is consumer and consumer affordability. So we're doing a lot of work on price pack architecture revenue growth management. So our pricing will be a mixture of shelf price increase, reduction of trade looking at our pack sizes as well, just in terms of dollar affordability or euro affordability. So there's a lot of work on that. I think at this point in time, we would have to assume if we price decrease will have similar elasticity in the past. I have no view to change my mind in that. And the last point around competitors, I think the competitive environment continues to be strong. We've seen scale players come into the market as well. but we are starting to see price increases, particularly in international, but also starting in the U.S. given the scale of inflation of the protein raw material. I think in terms of -- I think you're kind of question 2 and 3 specific to nutrition supplies our Nutritional Solutions and ultimately, our Health & Nutrition business is potential increased costs. Look, we'll navigate that as we go through next year or we're currently in budget in the budget process. We wouldn't be seeing anything of the scale that we're seeing in our dairy protein input cost increase. And freight, yes, absolutely. I think that's where you could see -- you will see opportunity. I think that's the areas we'll be looking at in terms of synergies, whether it be global procurement rate, et cetera, across the group. And how do we think about that maybe to drive synergies.

Our next question comes from the line of Cathal Kenny from Davy. \

A couple of quick ones. Firstly, any comment on inventory within GPN North America, that's my first question. Secondly, on NS, obviously exceptionally strong Q3, just how you're thinking of the Q4 volume picture in the context of that performance? And finally, here, on transformation, is the goal here to reinvest any of the productivity or efficiency gains back into the business rather than let that drop through to the bottom line? They are my 3 questions. .

I'll answer the second and third one. I think in terms of -- and Mark first, I think in terms of transformation, yes, but that will be the goal. This is around funding growth, but also potentially funding opportunity in terms of across the P&L. So we'll be back to you in the new year with better clarity on what the goals and objectives are. But primarily, the goal of the transformation project is prioritizing our growth initiatives, getting the operating model fit-for-purpose operating model, as I call that drive that growth. supported by digital transformation and efficiency and synergies. So we would be looking as part of that to free up funds, we are able to invest behind our growth opportunities. In terms of nutrition, yes, very happy with quarter 3, very strong, particularly in dairy, but also in our premix solutions business. In terms of quarter 4, we're up against a strong comp last year. and that's the primary reason for a little bit of conservatism in quarter 4. It's just come from last year.

Yes. And Cathal, I would say from an inventory perspective, relatively normalized in North America right now, as you know, customer to customer can vary. But overall, we would say it's pretty normal.

Our next question comes from the line of John Baumgartner from Mizuho Securities.

Maybe just to revisit the transformation program and specifically that reference to funding the next phase of growth. I think you've been comfortable with the existing investment levels in the business. And I guess, along those lines, how do we think about that incremental spending? Are you, at this point, revisiting your assumptions about the appropriate spending to drive growth? Or is this now a larger focus on R&D and maybe noncustomer-facing expenses?

I would say, John, look, it gives us an opportunity here because of the fact that we've just announced this reorganization that we could take a relook. Right now, we'll be very comfortable we've got the right investment across the board in terms of what we're doing from an R&D or from a marketing perspective, for example, in all businesses. However, I think by sort of focusing dairy, the way we're sort of talking about it and focusing Nutritional Solutions, it allows us to push growth and allows us to see cross group where there might be opportunities. First to, a, increase margin; and b, fund additional investment, which can further drive growth. So that's how we're thinking about it. We will come back to you with more detail on this by the time we get to our results in February, and we'll just give you more flavor for it, but that is how we're thinking about it.

And then just a follow-up. When you highlight the benefits in H2 from the distribution growth in FDM. And I'm curious, just given the nutrition categories expansion across that channel these last few years, across the product format and the additional brands coming into the category, how do you think about the desire or the need for retailers at this point to sort of rationalize some of these lower-performing SKUs on the shelf. I mean is there an expectation for any movement with rationalization that benefits your brands and then the velocities as well as distribution going forward?

Yes, it's a great question, John. I think, first and most, I'd say there's probably different questions different answers by different regions. I think you would be specifically talking about the U.S. market, We continue to see expansion of shelf space. But as you know yourself, when you go into your local grocery store or mass channel, it can be fairly chaotic. So I think there's an opportunity there, which we're working on as well as how we think about that in terms of the broader category. We think about how we present our shelf to customer. So I think there is an opportunity. I think it's not land and grab, because it's a competitive category because it's a growth category. So we've seen lots of new entrants. But I do think the category itself and some of the smaller brands, there is an opportunity to consolidate across the category. And I think -- so that's -- when you look at Europe, per se as well. We're actually starting to see that as well. And in fact, some of our wins in grocery in Europe has been with a broad range of Optimum Nutrition products, kind of a fuller brand block. And that's the way we're moving as well, and we could have called out at the half year. But I think generally, look, it's a growth category. We've lots of competition, and it will be -- it's like any category lots of competition, will be winners and losers over the next number of years.

Our next question comes from the line of Deirdre Mullaney from Deutsche Bank.

So the first one is on the 3% like-for-like for the healthy lifestyle brands. I'm just wondering can you comment on how the market shares are progressing for these brands? And then secondly, on the split of the GM side of the business, what are the category growth rates that we should be expecting for the Health & Nutrition business and then the Dairy Nutrition business as well?

Yes. I'll take the second question first. Sorry, first question for I'd like to like. Very happy with the kind of acceleration in healthy lifestyle in quarter 3 in our like-for-like good shipments and that's primarily driven by Isopure. So strong double-digit growth in Isopure. When you look at our consumption numbers in North America go back a little bit, that will be primarily Amazing Grass, which you called out the half year results we just opportune to see challenges within that category, significant competitor investment and spend. But there are think! that our tank brand within that would be flat year-on-year in terms of consumption, but good opportunities as we go into the back end of the year. So in terms of -- I think Mark kind of referenced, we didn't talk about growth rates. We probably have more clarity on that for you early next year when we break out Health & Nutrition and Dairy Nutrition in more detail for you.

[Operator Instructions] Next is a follow-up question from the line of Karel Zoete from Kepler Cheuvreux.

I want to come back to the capital allocation and the ability to do M&A. Is the area of Sports Nutrition, Performance Nutrition is still a priority given the strong momentum you have, particularly with the 2 big program brands today. Are you still looking to do M&A here and potentially internationalize that business further?

Yes. Simple answer, Yes. Our priority business is now for M&A with your Health & Nutrition segment and our performance Solutions segment than more nutrition continues to be a growth category up from nutrition as our priority brand globally. Isopure has significant opportunity for us in the U.S. market. But they're going to continue to evaluate broader adjacencies and opportunities whether the format or product type in the space. And we would be ambitious for acquisitions across both of those segments within Glanbia.

I'm showing no further questions. I'll now turn the conference back to the CEO, Mr. Hugh McGuire, for his closing remarks.

Just say thank you very much for your questions and look forward to chatting to you early next year full year results.