FDBusiness.com

Kerry Group, the global taste, nutrition and consumer foods business, has reported a 10.7% increase in revenue to €3.6 billion for half year ended 30 June 2019, reflecting volume growth of 3.3%, neutral pricing, contribution from acquisitions of 4.7%, and a favourable translation currency impact of 2.7%. Trading profit rose by 12.6% to €382.9 million and group trading margin improved by 20bps, reflecting good growth driven by operating leverage, portfolio enhancement, efficiencies, impact of foreign currency and acquisitions, partially offset by Brexit risk management costs, investments for growth and increased net investment on the KerryExcel business development programme.

Kerry Group’s Taste & Nutrition business reported revenue of €2.92 billion with 3.8% volume growth for the period as trading margin grew by 20bps to 13.3%.

The Consumer Foods business reported a 0.6% increase in revenue to €689 million, reflecting volume growth, pricing, and a translation currency tailwind. Consumer Foods trading margin was maintained at 7.0%

Edmond Scanlon, chief executive of Kerry Group.

According to Kerry Group, the food and beverage industry and end-to-end supply chain continue to evolve at pace, as consumers are demanding more and are challenging traditional business models. Market volumes in some developed economies experienced softening in the period due to the impact of higher prices at a consumer level. Developing markets continued to change rapidly, with localisation, regulatory changes and home delivery driving increased new product development.

Major global consumer trends such as plant-based diets, authenticity, healthfulness, convenience, clean label, sustainability and premiumisation, tailored to local consumer preferences continue to generate increased innovation opportunities.

Edmond Scanlon, chief executive of Kerry Group, comments: “We are pleased with business performance in the period, as the group continued to deliver volume growth ahead of the market while expanding trading margins in line with expectations. While heightened consumer pricing and uncertainty impacted market volume growth rates in some developed markets, our unique and industry-leading business model and integrated taste and nutrition positioning continued to deliver significant value for our customers in meeting rapidly evolving consumer needs. We are excited by the ongoing enhancement of our product mix and the development of our innovation pipeline. Good progress has been made on the integration of recent acquisitions, which are performing very well. We are updating our guidance and expect to achieve growth in adjusted earnings per share of 7% to 9% in constant currency.”

During the period, Kerry Group completed three acquisitions at a total cost of €327.2 million including Ariake USA and Southeastern Mills’ North American coatings and seasonings business.