Kerry Group grew business volumes by 3.7% in first quarter

Dairy giant Kerry Group grew its business volumes by 3.7 per cent during the first quarter of the year, it said in a trading update.

The company, which held its annual general meeting on Thursday, said business volumes grew by 3.7 per cent and pricing increased by 0.9 per cent in the quarter, ended March 31st.

It said revenues increased by 0.1 per cent, reflecting the aforementioned business volume growth and positive pricing, an adverse transaction currency impact of 0.1 per cent, contribution from acquisitions of 4 per cent, and an adverse translation currency impact of 8.4 per cent.

In terms of group performance, Kerry said the rate of consumer-driven change and its impact within the industry and along the supply chain “continues at pace”.

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“Key consumer trends that continued to evolve and develop included authentic world tastes, new snacking formats, sugar reduction, meat-free and clean label,” it said.

“Kerry’s long-standing integrated solutions capability is helping customers as they continue to innovate to meet these fragmented consumer preferences.”

The group maintained its trading profit margin, reflecting a 20 basis points improvement in its taste and nutrition division, with underlying margin improvement in the consumer foods division offset by the sterling transaction impact, resulting in a 60 basis points margin reduction.

At the end of March, net debt remained unchanged from year-end at €1.3 billion. The group’s consolidated balance sheet “remains strong” which will facilitate the continued “organic and acquisitive growth” of its businesses.

Future prospects

In terms of future prospects, Kerry reaffirmed its full-year 2018 guidance of adjusted earnings per share growth of 6-10 per cent on a constant currency basis.

Kerry Gold chief executive Edmond Scanlon said the company was "pleased" with the start it had made to 2018.

“It is in line with our expectations as communicated in February,” he said. “The group continued to deliver healthy volume growth and underlying margin expansion.

“The acquisitions completed over the past year are performing well and integration is progressing to plan.

“Our industry-leading business model and ‘from-food for-food’ heritage are ever more relevant in today’s marketplace and continue to underpin a strong innovation pipeline.

“In summary, we are encouraged by the start to the year and reaffirm our full-year 2018 guidance of adjusted earnings per share growth of 6-10 per cent in constant currency.”