Reported2011?m2010?mChange?mOperating profit25.221.6+ 3.6Finance costs (4.7)(4.7)-Income taxes(6.2)(6.8)+ 0.6Share of results of Joint Ventures & Associates14.310.1+ 4.2Directors' Report: Divisional performanceGlanbia plc Annual Report 2011Joint Ventures & Associateswww.glanbia.com41Operating profit was broadly in line with 2011 and the operating margin declined as outlined above. In 2012 Southwest Cheese's performance is expected to be similar to 2011. Glanbia Cheese: 2011 performance and 2012 outlookGlanbia Cheese had a good year in 2011. Revenue, operating profit and operating margin improved year-on-year. The business benefited from good mozzarella demand, continued operational enhancements and strong customer relationships with leading foodservice pizza companies and frozen pizza manufacturers. While volumes are expected to be strong in 2012, margin challenges are expected. As a result this business is expected to deliver a somewhat lower performance in 2012.Nutricima: 2011 performance and 2012 outlookNutricima delivered an improved performance in 2011. Revenue, operating profit and operating margin increased. A step change in volume growth was underpinned by enhanced sales capability and distribution. Nutricima is expected to continue to improve its performance in 2012, although operating profit and operating margin growth will be constrained by planned investment in brand building and promotion.Constant CurrencyReported20112010Change2011ChangeRevenue(1)?541.0m?416.6m+ 29.9%?524.2m+ 25.8%EBITA ?26.0m?21.6m+ 20.4%?25.2m+ 16.7%EBITA margin 4.8%5.2%- 40 bps4.8%- 40 bpsOperating profit ?26.0m?21.6m+ 20.4%?25.2m+ 16.7%Operating margin 4.8%5.2%- 40 bps4.8%- 40 bpsEBITDA ?33.6m?27.8m+ 20.9%?32.6m+ 17.3% (1) Not included in Group revenue. Reconciliation of operating profit to share of results per the income statementJoint Ventures & Associates results

42Glanbia plc Annual Report 2011Directors' Report: GovernanceGroup Chairman's Introductionwww.glanbia.comDear Shareholder,At Glanbia we are committed to achieving the highest standards of corporate governance and believe that effective governance is achieved through a combination of strong leadership, collaboration, openness, transparency and robust governance structures which we continue to enhance in line with the UK Corporate Governance Code and the ISE Annex.It has been another busy and successful year for the Board. We continued our programme of detailed reviews across the Irish and international businesses which included on site US visits. The Board has been significantly engaged at a strategic level during the year which included the decision to acquire BSN® in January 2011 and the ongoing evaluation of the implications of the potential for Irish milk output expansion which can occur when EU milk quotas are eliminated in 2015. In 2011, I conducted an evaluation of the performance of the Board, its principal Committees and individual Directors. This evaluation concluded that the adoption in 2010 of the new organisational framework set out opposite had enhanced the Board's effectiveness. A key area identified for action is the further development of succession planning processes including the issue of diversity which the Board has adopted plans to consider during 2012. In addition, the Board intends to engage an external party in a review of its effectiveness during 2012. Additionally during the year we completed a thorough analysis of our remuneration policy. The key changes are set out in the Remuneration Committee Report on page 53 and include proposed amendments to the 2008 Long Term Incentive Plan which will be put to shareholders at the 2012 Annual General Meeting for approval together with the 2011 Remuneration Committee Report for the purposes of an advisory non-binding vote.The 2012 Annual General Meeting will be held on 9 May 2012 and I look forward to meeting those shareholders who are able to attend and answering any questions they may have on these governance reports and other matters covered by the resolutions to be put to the meeting.Liam HerlihyGroup Chairman Group Chairman's introduction to corporate governance